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Stocks Rebound after Bloodbath; London Burning; Devastating Loss for Navy SEALs; Will Jobs Cost President Obama His Job?; Unemployment Rate Predictor in Whether Incumbent Presidents Will be Elected Again; Somali Hunger Crisis; 'Strategy Session'

Aired August 09, 2011 - 17:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, HOST: Thanks very much, Brooke.

Happening now, stock prices rebound after a day of wild swings and anxiety about yesterday's bloodbath. We're tracking the market and the new moves by the Federal Reserve that are influencing today's trading.

Also, London burning -- police are bracing for another night of rioting consuming pockets of the city and beyond.

Can authorities put an end to the sickening scenes of violence, vandalism and looting?

And new evidence that one party is paying a bigger price for the recent showdown over the federal debt. Stand by for our bad news CNN poll numbers on Congress and whether members deserve to even be reelected.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

It's enough to give all of us whiplash -- Wall Street following one of its worst days ever with some of the biggest gains in the year. The Dow Jones Industrials were up more than 429 points at the closing bell an hour ago, after plunging more than 600 points and earlier. The S&P 500 and the NASDAQ also rebounded.

It was a volatile trading day, the Dow on a roller coaster all day, after the Federal Reserve's afternoon announcement about interest rates and future economic conditions.

Let's bring in Poppy Harlow of CNNMoney.

She's watching what's going on -- all right, Poppy, what happened today, because it was wild.

POPPY HARLOW, CNN BUSINESS CORRESPONDENT: It was such a wild day, Wolf, swings of more than 600 points, some of them hundreds of points within a minute. Literally, you just showed the numbers green across the board won't take that.

The Dow Industrials, in the last hour of trading, rising more than 300 points. This is a very good sign. It is the exact opposite of the sell-off that we saw on Monday. It's encouraging that we're seeing these investors coming in at the end of the trading day, buying up stocks in droves, saying I'm willing to hold these stocks overnight. That is a very good sign.

And just to give you some indication of the amount of money we're talk about here, today overall in the U.S., we saw paper gains of about $700 billion. That's a lot, Wolf. But we lost a trillion yesterday alone in market value. So we still have a long way to go to make up for the losses we've seen over the past few weeks.

What was critical and what every investor was waiting to hear today was the Fed's decision at 2:15 Eastern time.

When that came out, we knew that central bankers were going to keep interest rates steady at the exceptionally low level of 0 to .25 percent. What we didn't know is what they would say. And that is that they will keep those low interest rates exceptionally low, until 2013, until the middle of 2013, so, really, for the next 24 months.

Here's what the Fed issued in their statement, what really stood out to us. They said they expect a somewhat slower pace of recovery. They also acknowledged that the unemployment rate in this country is going to decline only gradually. And they also said that the down side risks to the economy and the economic outlook have increased. They're saying the situation is worse than when they met a few months ago.

Something that they didn't say, Wolf, that we were all looking for is whether or not there would be another stimulus program for -- for the economy, a QE3, if you will. They made no indication of that.

Many people say, politically, that's just not viable right now -- more spending, buying up more bonds. But that is something that we didn't see.

What was so interesting to watch the market today, Wolf, is right after the Fed made their announcement, stocks fell. The Dow up 91, fell down 60 points, then fell 200 points and then bounced back in this huge late afternoon rally -- Wolf.

BLITZER: So where are we seeing people, investors, put their money -- Poppy.

HARLOW: They're putting their money in gold. It's amazing to watch gold and the -- and the converse relationship that it has with stocks. Gold prices again today rising over $1,700, that record high that we hit yesterday. People believe that this hard commodity is a safety net. They're falling into gold. They're also going into bonds of emerging economies. They're looking elsewhere.

But we are still, interestingly -- and we didn't know if this would happen after the S&P downgrade -- seeing a lot of people continuing to invest in U.S. Treasuries. So that the investors saying what S&P didn't, that they believe the U.S. is still good to fully pay back their loans.

One thing I would caution, Wolf, as we see all of these people moving into gold, is that when you see gold at these record high levels, what traders tell me is that it is not a flight to safety, as people hear so much. This is a very volatile market for gold. So not necessarily the safest investment.

But we'll take this market up 429 points -- Wolf.

BLITZER: Poppy wearing yellow today.

A sunny day on Wall Street. I knew she -- that's why she decided to wear yellow.

Poppy. Thanks very much.

HARLOW: Thank you.

BLITZER: Let's bring in Richard Quest to dig deeper a little bit right now.

You were up on Wall Street all day today -- Richard, the -- the decision by the Federal Reserve to announce low interest rates through 2013 -- mid-2013 -- I -- I assume that's the major factor in causing this rebound today.

RICHARD QUEST, HOST, "QUEST MEANS BUSINESS": Well, yes and no. I -- I take a slightly different point on this. All today's rally did was return us to the status quo ante that we were at when we saw -- before we had that very sharp fall on Monday, and then not some.

If you actually look at that statement that Poppy was talking about, frankly, it's quite depressing. It talks about disappointing growth levels. It talks about unemployment not coming down.

So the overarching view on the U.S. economy and its medium-term trend is not good. So that is the scenario you've really got to focus on. Forget the volatility of yesterday and today. There was no reason for yesterday, for the market to fall out of bed. Similarly, there's no reason for it to have rallied back up again.

You've got to keep your eye on the fundamentals to -- to that extent, Wolf. And on that ground, I am afraid the Fed was less than optimistic.

Look, put it another way. The Fed isn't keeping interest rates low until 2013 because things are going well. They're doing it because they are seriously worried because that there's a second leg downturn that's about to hit -- Wolf.

BLITZER: You mean a double dip recession, is that what you're seeing?

QUEST: No. Well -- well, not that much. You don't have to go all the way down into two quarters of negative growth. You can simply be trudging through the trough of miseries, of slow growth, high unemployment, poor manufacturing numbers. Now, the -- the low interest rates are -- are necessary, but they may not be sufficient. The Fed may have to do more to try and get growth going. And that statement absolutely acknowledged that today, when it talked about the dual mandate of low inflation, price stability and employment growth.

So that's what I would suggest you keep an eye on. It was better today that we were up than down, no question about it. You're not going to get me arguing with Poppy Harlow on that. But don't let's be too concerned here. Let's keep our eye on why interest rates are remaining low and why the market just rallied back to where it was and slightly under.

BLITZER: Good analysis, Richard.

Stand by for a moment.

I want to quickly turn to the fiery riots in Britain right now. It's just after 10:00 p.m. in London. Sixteen thousand police officers are on the streets, more than twice as many as the night before. They're trying their best to try to prevent new clashes. There's been a lot of vandalism, arson and looting, the unrest spreading over the past three days, right in the heart of London and beyond.

Here's what Londoners are saying and seeing.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's just a travesty. I have no idea how it flared up so much. A bottle of whiskey got thrown through my next door neighbor but one's window at 1:00 in the morning. She lives all alone. Through the upstairs window, a full bottle of whiskey, which just missed her. I mean it is seriously putting people's lives at risk.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I can't believe this is happening. You know, I'm going to give out some extreme views, but I think they should bring the law down, show these people what real guns and real bullets are all about. This has got nothing to do with anything that happened last week. This is just opportunists that are breaking into shops and taking what they can. They're doing what they do best and that's stealing.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Obviously, people are angry, angry, frustration. There are no jobs and everything, complaining about police (INAUDIBLE) and everything.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What went on, I don't like, right. I ain't got the answers, right, as to -- I -- I -- as to all of this, right. I know it's embarrassing. It's not good for the area. Maybe part of it is the government's fault, because I mean there's not a lot going on for everybody. They're taking away everything right from the people who have nothing. It is not justifiable to mash up there and to do what they've been doing. It's not.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: People are actually saying, I mean, people are saying, actually, because someone got shot by the police. OK, fair enough. Someone got shot by the police and that's probably unjust. But that's no reason to ruin people's livelihood, you know, burning down houses, going and breaking people's shops. At the end of the day, that's not going to solve anything. That's not going to stop the police from, you know, being unjust.

(END VIDEO CLIP)

BLITZER: And let's bring back Richard Quest, who lives in London, even though he's in New York right now -- Richard, how much is this violence -- and it's unbelievable, the pictures, the images that we're seeing.

How much is it just random looting, if you will?

But how much is related to the austerity measures, the economic distress that the people of England have been going through --

QUEST: It's --

BLITZER: -- recently?

QUEST: It's both. No doubt, the disenfranchised, the poor, the youth who have got no jobs and those who believe that there is no future at the moment, particularly with so many cutbacks, no doubt their grievances are real and they are strong. And that might have been the precursor to all of this.

But just as much as in this country, you get a riot or a fight underway and the hooligans will come out at the opening of an envelope and will join in. And that is what's really -- has -- has been the accelerant in what's taken place in Britain, the -- the criminality aspect of it.

There are some very serious issues of austerity, poverty and a disenfranchised youth that do not see the future for jobs.

But they have been egged on. And the riots that you have seen have largely been at the behest of those who would really have a fight over anything.

And just to put this in perspective, I'm heading back to the U.K. tonight. I'm heading to London tonight, Wolf. So I'll be able to talk to you more about that and take on that further tomorrow night.

BLITZER: We'll check back with you tomorrow, for sure -- Richard, one final question. The unemployment here in the United States right now, nationally, at 9.1 percent.

What is it in England?

QUEST: It's lower, anywhere between 7.5 and 8.5, depending on what your definition is for unemployment. The problem is, as the austerity measures are kicking in, so the future for job growth is very low. And there are many who will actually be losing their jobs, particularly at the lower end, as government cutbacks in the civil service and beyond. That's the important thing at the moment. It's what the outlook is. And, frankly, if the cuts continue and the government says they are adamantly sticking to them, then we will see more job losses and more poverty in the UK.

BLITZER: Richard Quest, thanks very much.

We'll check in with you in London tomorrow.

It's one of the most elite and important units in the United States military. Now the Navy SEALs have lost 22 of their finest -- a whopping 10 percent of that elite unit. We're taking a closer look at the impact of that deadly chopper shoot down in Afghanistan.

And a crackdown on brutal random attacks -- guess where -- in the streets of Philadelphia.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN CONTRIBUTOR: London is burning along with other parts of England. And the United States may want to take note.

More than 560 people arrested in London alone after the last three nights of violence. The city's jails are full.

When you look at some of these pictures, it's hard to believe this is London. This is one of the great cities in the world, not some Third World outback with a ragtag government -- civilized.

Looting, fires, rioting, attacks on police -- residents say it's like a war zone and that there is a carnival atmosphere surrounding these gangs of hooded youth.

This all started after the shooting death of a 29-year-old black man at the hands of police in London last week. The shooting is still under investigation.

But it's almost like that was the spark that ignited an explosion of anger and frustration from Britain's young and unemployed. There are reports of kids as young as seven years old participating in the violence and the looting.

Britain's prime minister, David Cameron, has cut his Italian vacation short. He's recalling parliament from theirs. He's vowing that tough action will be taken to stop the violence.

Sixteen thousand police officers will report for duty on streets of London tonight.

Critics say the cops have been missing in action so far, but apparently they'll be around in force this evening.

It's not just London, either. Violence has broken out in cities like Liverpool, Birmingham and Bristol.

There are a lot of culprits for what's going on here, including ethnic tension and the absence of law enforcement. But make no mistake, it's no coincidence that these riots are happening just as the global economy hangs off the edge of a cliff. Income inequality in England is greater than at any time since the 1920s. And this rioting began in one of the poorest parts in London -- Tottenham, where unemployment is simply devastating.

So here's the question, are England's riots a sign of things to come here?

Go to CNN.com/caffertyfile and post a comment on my blog.

BLITZER: I hope not, Jack.

All right, thank you.

The commander-in-chief on hand today when the remains of 30 American troops were brought back to the United States. The victims of a helicopter shoot down in Afghanistan over the weekend. The president was joined by top Pentagon officials at Dover Air Force Base in Delaware.

The shoot down by Taliban insurgents is the greatest loss of American lives in one incident since the start of the war in Afghanistan nearly a decade ago.

Let's bring in CNN's Brian Todd.

He's working this part of the story for us.

Most of dead, 22, I believe --

BRIAN TODD, CNN CORRESPONDENT: Right.

BLITZER: -- were Navy SEALs.

Brian, I know you just came back from Virginia Beach, Virginia --

TODD: Right.

BLITZER: -- where you saw family members, the survivors. And that community is devastated.

TODD: it is, Wolf. These were, of course, SEALs from the same unit on the bin Laden raid. But we're told that none of the SEALS killed over the weekend were part of that bin Laden raid.

Still, this is already a very small, very elite group. And the deaths of 22 SEALs from a very famous unit have a huge impact on the SEAL forces.

(BEGIN VIDEOTAPE)

TODD: (voice-over): A devastating loss for families, friends and teammates. The 22 SEALs killed in Afghanistan were part of a unit that's elite even among the SEALs themselves. It's officially known as the Naval Special Warfare Development Group. At various times it's been called SEAL Team 6.

(on camera): How tough is it going to be to fill the void of these 22 guys on SEAL Team 6?

COMMANDER RYAN ZINKE (RET.), FORMER MEMBER, SEAL TEAM 6: Well, it's going to be a challenge, there's no doubt. I mean just to be a U.S. Navy SEAL, from the point you had volunteered until you're in combat the first time is about three-and-a-half years.

TODD: (voice-over): And, says Ryan Zinke, at least another two years of (INAUDIBLE) in the 1990s. Zinke and other former SEALs tell us SEAL Team 6 members are taken from the ranks of other existing SEAL teams and that half of the men who try out for the team washout. These are commandoes who routinely go on very precise capture or kill- kill missions for high value targets like Osama bin Laden.

(on camera): How do they think on the battlefield that's different from other SEALS?

What do they do that's different?

ZINKE: Well, you know, a large part of it is you have to identify a threat. And oftentimes, it's at a moment's notice. It's in an instant. You have to determine whether or not that individual is a threat or -- or whether he's not. And if he is, you have to engage. These individuals can shoot exact aim. And they make that -- that judgment in an instant and -- and they're lethal at what they do.

TODD: (voice-over): According to former SEALs, there are about 200 members of SEAL 6. That means the helicopter crash in Afghanistan took away about 10 percent of the unit.

I spoke with military analyst, Lieutenant Colonel Anthony Schaffer, about how the team in Afghanistan could be shored up.

(on camera): Are they going to have to shuttle guys in from elsewhere, from other SEAL units?

LT. COL. ANTHONY SCHAFFER (RET.), CENTER FOR ADVANCED DEFENSE STUDIES: There's one of two ways they'll deal with the replenishment. First off, they may have to degrade the mission in Iraq to bring people out of the existing mission there and move them over to Afghanistan. The problem with that, of course, is things in Iraq have not been as stable as people would like them to be. Therefore, you're degrading that mission.

The more likely scenario is that they will move one of the standby units which are training up to go in, they'll move them in ahead of schedule.

(END VIDEO TAPE)

TODD: But Schaffer and others say that carries significant risks in missions that are as dangerous as these, risks of mistakes and even possibly burnout -- Wolf.

BLITZER: Brian, there's SEAL Team 6, but then there's the -- all of the units of the SEALS.

How many are there?

TODD: Well, that's -- that's right. It's a finite group overall. We're told that there are about 2,500 SEALs overall. And even when they're at full strength, I mean this is a finite group of guys shuttling in and out of very dangerous combat situations with a lot of stress. And if they have to accelerate the deployment now of some who are in the rear, coming up to the front, they could get burned out. And it's -- it's a dangerous situation.

BLITZER: It's very dangerous.

All right, Brian, thanks very much.

TODD: All right.

BLITZER: Our heart goes out to the families -- the survivors -- the surviving family members of these SEALs and all of the other U.S. troops killed in that crash.

Meanwhile, new DNA evidence just back in the case of a notorious mystery hijacker. After almost 40 years, have authorities finally found D.B. Cooper?

And voters are sending Congress an angry message. Here's the message to members of Congress -- watch your backs. Our stunning new poll numbers -- that's coming up, as well.

(COMMERCIAL BREAK)

BLITZER: A new development in the case of the notorious missing hijacker, D.B. Cooper.

Lisa Sylvester is monitoring that and some of the other top stories in THE SITUATION ROOM right now.

What do you have -- Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: Hey there, Wolf.

Well, the FBI says DNA from the missing hijacker does not match that of a new suspect in the case. The testing was done after a woman came forward saying her uncle could be responsible. In 1971, a man calling himself Dan Cooper hijacked a plane, but he escaped after getting $200,000 in ransom. He was never found and his fate remains unknown. Despite the failed link, authorities aren't yet ruling this suspect out.

A Texas jury has sentenced polygamist leader Warren Jeffs to life in prison for sexually assaulting children he considered his spiritual wives. Jurors deliberated for just 30 minutes before reaching the decision. Jeffs, who headed the fundamentalist Church of Jesus Christ of Latter Day Saints, was charged after a 2008 raid on his ranch. He argues his faith is being persecuted.

And Philadelphia's mayor is calling the city's stiff curfew on young people a case of tough love. The move follows a string of alleged flash mob attacks, where teenagers choose a meeting place online, then they show up and brutally assault local residents. Failure to obey the curfew could result in fines up to $500.

And buying health insurance could soon be as easy as going to your local drugstore. Walgreen's is reportedly planning to begin selling it to customers this fall. The company won't deny or confirm the move, but says in light of health care reforms, it's looking at new options. Other private companies are expected to do the same before federal and state funded mandates take effect in 2014 -- Wolf.

BLITZER: Under the new federal laws. Thanks very much for that, Lisa.

We watched as Congress played a dangerous game of chicken. Now, it's taking a political toll.

Which party do Americans blame the most?

We have brand new poll numbers.

And "Newsweek" magazine is calling Michelle Bachmann the, quote, "queen of rage."

Does the cover on the Republican presidential candidate cross the line?

James Carville and Alex Castellanos, they are standing by.

(COMMERCIAL BREAK)

BLITZER: So many voters are fuming about the high unemployment in the United States. The jobs crisis is a huge weight on President Obama and his campaign for a second term.

Let's bring in CNN's Tom Foreman.

He's got an in-depth look at jobs, presidential politics.

This is going to be a huge, if not the biggest, part of the campaign.

TOM FOREMAN, CNN CORRESPONDENT: Yes, absolutely. You can even put aside a lot of the polls?

In a lot of cases, I think this is what it is, Wolf.

If you look at how presidents have fared when they've looked at reelection -- and that's all we're looking at here is just reelection years for all of these presidents, going back many decades now.

Look at this trend that appears here. In every case where the trend is down in unemployment, reelection happens -- not absolutely, but very close -- Eisenhower, Johnson, Nixon. All of these in a row, the trend was down. They got reelected.

Ford was not reelected but, look, the rate was much higher. And remember, this was the backwash of Nixon. This is a different thing. It's not quite like any other reelection bid.

Carter, unemployment went up, he was not reelected. Reagan got it, unemployment back down, reelected, even though, relatively, the number is high compared to what you saw right here.

Unemployment up for George Bush, not reelected. Down for Bill Clinton, reelected. Down for second George Bush, reelected.

So, when you look at all these, the question is, what happens now to President Obama as he faces all of this? And look at this trend, Wolf. You've seen this from all along.

This is what happening before he came into office. Unemployment starting coming up, up, up, up, up, up, up. And here's the point where he went into office. And you know what happened after that, right? Up more.

And here's the problem. It got up here to the 9 percent, 10 percent level, and it has stayed there. A little bit up, a little bit down, but by and large, nothing has changed.

That might be something that is going to really haunt him, because if you look at another president who had big numbers like this, Ronald Reagan came into office, and look what happened with his unemployment. Also way up, higher than it has been with President Obama, almost to 11 percent.

But then look what happened. Down, down, down, down, down, and the trend went a different way. So it's not so much the absolute number as the trend line that seems to bother voters when you look at that voting there. Can he find a way through? Can President Obama find a way through it by targeting certain states where he has some difficulties and taking advantage of them? Maybe.

But look at this. Here are key states, Florida, Ohio, Iowa, Nevada, all with red arrows going up. It's down in Minnesota, but Minnesota, which is also a key state, wasn't that bad to begin with.

But look at Michigan. It's down there, but here's the problem, down to 10.5 percent, still above the national average. And down from what? Down from 11.3 percent.

Add up all these number, Wolf, and this may tell you an awful lot about what's behind the polls and why President Obama has to keep looking at the unemployment rate, because it is almost a sure predictor of whether or not a president can be reelected.

BLITZER: Yes. Issue number one, jobs, jobs, jobs.

All right, Tom. Thank you.

After weeks of bitter political fighting over the debt crisis here in Washington, voters are now making their voices heard, and lawmakers might not necessarily want to hear what the voters have to say.

Let's bring in CNN's Joe Johns. He's looking at some surprising new CNN/ORC poll numbers.

What are you seeing here, Joe?

JOE JOHNS, CNN CORRESPONDENT: Wolf, a little more than one year to go from next November's election, and it's really starting to look like the public is in a foul mood when it comes to the Congress.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): Incumbents watch your backs. The voters are angry. The most stunning number in our new CNN/ORC poll is the percentage of people who say their member of Congress deserves reelection, only 41 percent. Forty-nine percent said their member of Congress does not deserve reelection.

We started asking this question two decades ago, and these are the worst results we've ever seen for incumbents. So why are people so angry right now?

Eighty-nine-year-old Joseph Hall, at this sidewalk cafe just a few blocks from the Capitol, said he got fed up with the Congress in the uproar and confusion over the debt ceiling.

JOSEPH HALL, VOTER: It goes way, way, way back. They should have solved this a long time ago.

It's not the debt ceiling. It's the debt. I mean, if you lived like they live, like they have this country live, they would throw us out of our house. They would cut your electric off. You have to pay your bills. It's that simple.

JOHNS: And which party are the people maddest at? The poll shows support for Republicans in Congress has plummeted.

Republican House Speaker John Boehner's favorability rating dropped 10 percent. Senate Republican Leader Mitch McConnell's favorability rating dropped seven percent.

Favorable views of the Republican Party as a whole have dropped eight points since July, to just 33 percent. And 51 percent of respondents had an unfavorable view of the Tea Party movement.

Student Rebecca Barrow.

REBECCA BARROW, COLLEGE STUDENT: It's like they're not getting it, you know? I mean, I think there's extremes on both sides.

JOHNS: Views of Democrats in Congress seem to be holding steady at 47 percent. Views of Harry Reid and Nancy Pelosi remain unchanged, though respondents to our poll aren't exactly fawning over either party right now.

Judy Mainieri sides with Democrats, but it's Congress that frustrates her.

JUDY MAINIERI, VOTER: It's really sad that our Congress is overlooking the needs of the middle class, the disabled, the seniors. I'm going to be a senior soon, and they're talking about reducing what I get. And I need help. I really do. And I feel like there's a disinterest.

(END VIDEOTAPE)

JOHNS: Anti-incumbent sentiment is so strong that most Americans are no longer willing to give their own representative the benefit of the doubt. If that holds up, it could be an early warning of an electorate that is actually angrier than any time in memory.

BLITZER: Yes, it's fascinating, because almost always, all the time I've been reading these polls, a lot of people say when you like Congress, you don't like Congress, they don't like Congress, but they like their own member of Congress. And now they're beginning to say, you know what? I don't like my own member of Congress either.

JOHNS: Right. It's pretty stunning, actually. I mean, I've never seen anything like that.

BLITZER: Yes.

JOHNS: Everybody likes their member of Congress. It's always the other guys. Not right now.

BLITZER: Right. Good point. Thanks very much. Good poll. There's controversy brewing over a "Newsweek" magazine cover story on Republican presidential candidate Michele Bachmann. We're going to talk about that, we're going to show you the photos that didn't make the cut as well.

And our own Dr. Sanjay Gupta. He's on the front lines of famine in Africa. He's with some of the most heartbreaking and desperate victims of the crisis -- children.

(COMMERCIAL BREAK)

BLITZER: Now to the devastating drought and famine in East Africa, where the World Food Program is accelerating efforts to try to get aid to the millions of people struggling to survive.

Our chief medical correspondent, Dr. Sanjay Gupta, is at the world's largest refugee camp in Kenya with some of the youngest victims.

Sanjay, tell our viewers here in the United States and around the world what you're seeing.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, you know, some of those youngest victims are also some of the most resilient victims as well, Wolf. But the question does remain, how do you take care of so many people, 400,000 people, in a space designed to really hold 90,000 people? How do you feed them? How do you clothe them? How do you provide them medical care?

Well, we show you through the story of a father's love for his boys.

(BEGIN VIDEOTAPE)

GUPTA (voice-over): What you're looking at may best be described as the most desperate place on earth, vulnerable children, thick with misery.

(on camera): Another thing you can tell right away when you see a little baby over here, you can take a look here. The baby's fontanelle is so sunken in. This is what happens when essentially babies have no food, no water. So dehydrated.

(voice-over): Basic, basic necessities so hard to come by. Dust and starvation, nearly everywhere you look.

(on camera): This is also what happens when you're at the world's largest refugee camp. All these folks waiting to see one doctor over here.

(voice-over): As you look at these images, consider this simple fact: these are the lucky ones. Lucky, because they made it here at all. This family of five made it out of Somalia just yesterday.

(on camera): I came out here to the middle of a desert to give you a real idea of what this family went through. They walked for 30 days and 30 nights, primarily walking at night because it was cooler, carrying those three kids. Sometimes carrying a kid, going back and getting another kid, and then just doing this over and over again in the desert. Thirty nights worth.

They cross the border, and then they get robbed. Bandits take what little possessions they actually have.

(voice-over): But the bandits didn't take this father's dream and his drive to keep his kids alive. It's not going to be easy.

(on camera): So this is another thing you see here quite a bit. This child obviously now -- Mohammed -- he's 3 months old. He's looking very listless, just not very active at all.

But look at his breathing specifically. He's breathing with his abdomen, not so much with his chest. This is something that's very tiring for a baby.

He also has whooping cough. That's because the child was never vaccinated either.

(voice-over): He will need a hospital, oxygen, antibiotics and yes, food and water. All of it may come too late.

So painful to realize that every sniggle one of his ailments could have been prevented. Unfortunately, though, that hardly ever happens in the most desperate places on Earth.

(END VIDEOTAPE)

GUPTA: And what they think, Wolf, is that over the next month, 2,000 people a day will be arriving at this refugee camp. Those numbers actually increasing.

I can tell you, there are some bright spots. They seem to be getting more resources and more aid. And there's more of a structure to this camp as well.

But talking to people on the ground, Wolf, the real key in some ways as far as taking care of so many of these people is to try and get some of these resources into Somalia, directly to where people need it so they don't have to make these incredibly long, arduous journeys. I mean, again, 30 days, 30 nights, as you just heard there, for that one family -- Wolf.

BLITZER: Are these hundreds of thousands of people at this refugee camp where you are, Sanjay, simply going to stay there for the foreseeable future? Is there any hope at all they could ever go back home?

GUPTA: That's a great question. And I can tell you, Wolf, as you know, this part of the world is complicated, but this camp has been around for a long time. And there have been camps that have been here for 20 years. There have been refugees that have lived in this camps for 20 years. So, the answer to your question is, I don't know about these most recent people who came over the border from Somalia. But there is a history of people coming to these camps and really having no future back in Somalia whatsoever. So they just simply stay here for a very long time -- Wolf.

BLITZER: You've been all over the world, Sanjay, and have seen some awful situations. Compare what you're seeing now to some of the other stories that you've covered for us.

GUPTA: Well, when you cover natural disasters, after the tsunami in Sri Lanka, for example, after the flooding in Pakistan, there is a sense -- although it may be some time, there's a sense that things are eventually going to get better. Here, for the reasons I just mentioned, there is this chronic upon acute upon chronic problem.

Even before this most recent drought, which is the worst drought in 60 years, this camp already had several hundred thousand people in it -- 300,000 people in it. So you see that the problem has been longstanding and there really haven't been great solutions offered.

So, at some point, Wolf, you hope that this is going to be the one that's going to inspire some sort of longer-term solution. Who knows? But I think that that's what everyone is sort of praying for -- Wolf.

BLITZER: Yes. We're praying together. Thanks, Sanjay. We'll check back with you.

And this important note to our viewers. You can catch more of Dr. Gupta tonight on "ANDERSON COOPER 360," at its new time, 8:00 p.m. Eastern. "AC 360" will be live from Somalia tonight -- Anderson is there -- only on CNN, 8:00 p.m. Eastern.

Also, to find out more about how you can help the victims of this crisis, you can go to CNN.com/impact. You'll have a chance to Impact Your World.

President Obama personally honoring the Navy SEALs and the other U.S. troops killed over the weekend in Afghanistan. The somber details of that ceremony just ahead.

And new outrage on both ends of the political spectrum over this photo of Republican presidential candidate Michele Bachmann. Did "Newsweek" magazine go too far?

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BLITZER: Joining us, two CNN political contributors, the Democratic strategist, James Carville, and the Republican strategist, Alex Castellanos.

James, you're a professional. What did you think of that Tim Pawlenty ad?

JAMES CARVILLE, CNN POLITICAL CONTRIBUTOR: Well, it wasn't out of bounds. I mean, how much good it's going to do him -- presumably, he's getting ready for the Ames straw poll. I don't know how much it's going to benefit him in that, because I suspect that everybody over there is running pretty anti-Obama spots. But it's certainly a legitimate political ad for an opposition candidate to run.

I expect the Democrats will run something like that if Bush were up for reelection in 2008, or have done it in the past. I didn't see anything that struck me as out of bounds about it at all.

BLITZER: Nothing over the top.

Is it going to help Tim Pawlenty? Because he's got to do well in Iowa if his campaign, Alex, is going anywhere.

ALEX CASTELLANOS, CNN POLITICAL CONTRIBUTOR: I think it is going to help Pawlenty. I think it's really the best ad I have seen from his campaign.

The last election, Wolf, was about hope and change. This election is about strength and certainty. The world seems to be spinning out of control. So this ad is not just about experience and getting things done, this is about a world falling apart and a guy who is ready to put it back together.

And when you get in the ring with the heavyweight champ, it means you're the number one contender. This is much smarter for Pawlenty than running against Michele Bachmann. He's running against the president of the United States. I think it's going to do him so good in these final few days before the Iowa straw poll.

BLITZER: You're grimacing, James. You don't agree?

CARVILLE: A little bit. I mean, Alex knows his party. But it's nothing about Tim Pawlenty. It's just about how much we don't like Obama, which is the people that are going to vote in that straw poll. None of them like Obama.

Look, it may work. I'm skeptical, but I certainly don't think it's out of bounds.

CASTELLANOS: You know, let me offer a different perspective. I've made a few of these ads over the years, and actually, I think there is a lot about Tim Pawlenty in there.

He is telling you he's not the guy in the White House. You sometimes define yourself by what you are. Sometimes you define yourself by what you're not. And he is -- that whole ad is about what Tim Pawlenty is not, which is a weak leader who's lost control of the government.

BLITZER: Well, he was also -- if you saw the caption at the end, "Experience matters," or whatever. That's a swipe at some of his Republican challengers as well, including Michele Bachmann. Executive experience matters.

Right, Alex? CASTELLANOS: He's trying to draw a bright line there. But again, the smarter strategy for him is, forget the other candidates, post up against the heavyweight champ.

BLITZER: You want to respond to that, James?

CARVILLE: Well, yes. Look, I'm not going to get into a huge argument about this, but he would beat Obama if he was running against Obama in the Ames straw poll. But he's not running against Obama in the Ames straw poll. He's running against Bachmann and whoever else -- Romney, to some extent -- who's in there.

But look, we'll know soon enough. I generally think spots have to be about the person that's running to some extent. But if he was running against Obama, I think the spot might be more effective. But you know what? It's not a huge disagreement that we have.

BLITZER: It's very early.

All right. Look at the "Newsweek" cover. Alex, I'll start with you.

It's a cover story on Michele Bachmann. There you see it right now. The headline, "The Queen of Rage." And a lot of folks say that photo is not very flattering at all. She's looking up, she's not looking sort of straight.

Is that cover fair or not fair, Alex?

CASTELLANOS: I think when the National Organization for Women and "The New York Times" defend Michele Bachmann, you know somebody has gone too far. And I think, clearly, you see that the magazine business is kind of falling apart these days, and "Newsweek" is struggling for eyeballs. And I think they overreached a little bit here.

But look how gracefully Michele Bachmann has handled this. She's got a little bit of Margaret Thatcher in her. She's kind of ignoring this and focusing on the issues. Very gracefully done.

At the end of the day, this is not so much an issue about feminism, though I think they probably wouldn't have done this if she was a guy. This is about elitism. There's a group of people in Washington and in New York who think that the people who cling bitterly to their guns and their religion, and have primitive ideas like balancing the budget, why they're somehow gauche and unenlightened. And they're laughing at the old Nixon silent majority.

CARVILLE: I wouldn't say the Republican idea of balancing the budget is primitive. I would call it a foreign idea of the Republican Party, who racked up more debt than anybody.

CASTELLANOS: Well, that's not true, actually.

CARVILLE: But I looked at that picture for 15 minutes, and maybe somebody else sees something. And I don't need to defend "Newsweek," but she looked all right to me. I didn't see it as any kind of a sexist thing.

It was a photo, and it looked -- she's an attractive woman. I didn't see it, but maybe some other people do. But I tried to find it, but I couldn't find it.

BLITZER: All right. Ask Mary what she thinks, James, and get back to me.

CARVILLE: I will.

BLITZER: Appreciate it very much, Alex and James, as always.

Anger over a government shutdown. Today, some lawmakers may pay the price in an election which could have large national implications. We'll update you on that.

Plus, the 10-year-old boy who is pleading with the world to not forget his dad lost in that chopper shootdown in Afghanistan.

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BLITZER: Let's go right back to Jack for "The Cafferty File" -- Jack.

CAFFERTY: The question this hour: Are England's riots a sign of things to come here?

Dave in Orlando writes, "What surprises me is we haven't had any yet. We have sleazy people in Congress, lazy people in the White House, and crazy people in the Supreme Court, all of which has precipitated income disparity beyond measure. A tiny number of people who will never have a worry or want in the world, and an enormous number of people whose world is nothing but worry and hardship. If our complacency is so metastasized, we are terminal."

Jeremy in London writes, "No, Jack. While some of the same problems might exist, the U.S. is too vast and the police in the United States would put this down in a day. There is a sad underclass mentality here in the U.K. where everything is everyone else's fault. This is where the United States stands head and shoulders above places like that. No chance this could happen in the U.S."

Oh, yes?

Jennifer writes, "It's amazing to me how quickly protesters turn into rioters and hooligans in the media. It's also amazing that people have not made the connection between unemployed youth and what happened in Syria, Egypt, Libya, et al. The youth here are unemployed, too, and all it might take is a spark."

Clifton writes on Facebook, "Yes, America is headed down the path to riots and civil disorder if nothing changes in our government and if people don't get jobs soon. Wake up, people. We just lost our AAA credit rating, and that's only the beginning. Forty-six million people on food stamps is not a joke."

John writes, "Jack, have you forgotten the civil rights days? I know you're as old as I am. At least you look it."

Thank you, John.

Curtis in Philadelphia, "Excuse me, Jack, but this is America. As long as I can cable TV, can have my food delivered, have access to fast food restaurants that I can drive through using the cheapest gas in the Western world, can buy cheap stuff at Wal-Mart, can own 100 guns, and access free porn on the Internet, why the hell would I want to riot? That takes energy, my friend."

If you want to read more on this, go to my blog, CNN.com/caffertyfile, or through our post on THE SITUATION ROOM'S Facebook page -- Wolf.

BLITZER: Love that Facebook page.

Jack, thank you.