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Starting Point with Soledad O'Brien
October Jobs Numbers to be Released; Presidential Race Remains Close; Interview with Grover Norquist; Final Jobs Report Before Election; Sheila Bair Endorses Elizabeth Warren; Storm Kills At Least 92 Americans; Storm Cleanup; Battleground Blitz; Surviving Sandy; Penn State Scandal; Shuttle Atlantis Retired; Jobs And The Election
Aired November 02, 2012 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SOLEDAD O'BRIEN, CNN CORRESPONDENT: Good morning. Welcome, everybody. Our "Starting Point" this morning, the crucial employment report. The most critical jobs report of President Obama's time in office will be released in 90 minutes. Final report before Election Day. We'll take a look at the state of hiring and the unemployment number and the impact on the presidential election.
Plus, the president and Governor Romney both take their final battles to the state of Ohio with just four days left to the election. How will voters there react to the new numbers?
And Sandy's destruction still far from over. Millions of people still in the cold and the dark. Many don't have food, don't have a place to live. Gas lines getting out of control there so long. We're going to have live reports for you this morning.
All over these stories with complete coverage from our own business correspondent, Christine Romans, chief business correspondent, Ali Velshi. Sheila Bair, she's the former chair of the FDIC. Grover Norquist is the president of Americans for Tax Reform.
It's Friday, November 2nd, and STARTING POINT begins right now.
Welcome, everybody. Our "Starting Point" this morning, we wait for those final economic hurdles before Tuesday's election. It's the October jobs report from the government will be released in just about 90 minutes.
Both the Obama campaign and the Romney campaigns hope that the numbers will boost those economic arguments that they've been making through this campaign and right into the final days of the race.
We have complete coverage of what to expect this morning. Let's begin with Christine. She's got a look of what we could see in this report.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: We could see an unemployment rate that ticks up to about 7.9 percent. That's the forecast of economists surveyed by CNNMoney, Soledad, 125,000 jobs added overall for net new job creation. The important thing here is the trend. And it is the trend that has been so important to American families, American workers, and the two political campaigns, quite frankly. The president took office with unemployment rate at 7.8 percent, Soledad and then embarked on a massive stimulus plan and unemployment rate kept rising to 10 percent, but then started to come down. It started to come down and is now back at 7.8 percent. And we got that number, of course, last month. And that was a big surprise overall.
You look at the job creation. This is something that the Obama administration talks about a lot. The president took office, there were losing hundreds of thousands of jobs at the end of the Bush administration into the Obama administration. And now the fight has been, the political fight has been over the durability of the recovery and jobs since then. When you go to the right of that chart you can see we have been adding jobs now for two years, but we haven't been adding necessarily enough jobs to every month keep up with the increase of people in the working-age population and to recover all of those jobs that had been lost.
So that's where we stand right now, 125,000 jobs is the forecast for today in about an hour and a half, and 7.9 percent is the unemployment rate. It's the last big hurdle before the election, the last big piece of economic news for both campaigns, and for people to weigh before they make the decision on who to vote for.
O'BRIEN: Of course it's not just economic news. It has all the political implications, especially in the final days. That chart we've seen on the political campaign on both sides of the debate. Christine, thank you, obviously going to stick around with us all morning as we wait to get the numbers.
Let's go to Ali Velshi, our chief business correspondent. He's in Toledo, Ohio this morning. No surprise on the Ohio thing, absolutely, positively, critical state.
ALI VELSHI, CNN BUSINESS CORRESPONDENT: Absolutely, absolutely positively dead heat. The same number of people on both sides, statistically, and the same number of people split in the middle. There's a very small slice of undecideds here. They are waiting to see which of these two presidential candidates can deliver on the promises they've made.
The promises are almost identical when it comes to the number one issue, and that is job creation. Both presidents have said that 12 million jobs will be created under their watch in four years. That's 250,000 jobs a month. You heard Christine saying our expectation for this morning is that 125,000 jobs were created in October. If the number is substantially higher than that you will hear President Obama saying all the jobs lost under his watch have been -- have been -- have come back, and more, obviously. What you'll hear Mitt Romney saying is that the -- those jobs, the quality of those jobs is not what they were before they were lost. They tend to be more part-time, lower-paying jobs, fewer benefits, and that he can do better.
The question is whether or not a presidential candidate can ultimately influence private sector hiring. When you see that number, 125,000 or whatever it is at 8:30, you'll notice a portion of that will be government higher, a small portion, 10,000 or 15,000 jobs. Most hiring in this country is private sector hiring. Mitt Romney's argument is that the private sector won't hire under President Obama because they're fearful of higher taxes. They're fearful of all those kinds of things. President Obama makes the argument that demand, more people working, will create demand and that will create more hiring. So this thing going to be relevant for about ten minutes and after that it's going to devolve into spin for the rest of the weekend.
O'BRIEN: Which means it will be relevant in a completely different way all the way until sometime Tuesday night for sure. Ali Velshi also going to stick around with us all morning. We appreciate that, Ali.
We've been talking, of course, about jobs, jobs, jobs, as Ali said the race there in Ohio, virtual dead heat. Across the nation, much of the nation as well, President Obama, Mitt Romney, are going to fan out across the battleground states over the next four days. Both candidates will spend lots of time in Ohio, because as Ali pointed out, it's a dead heat. President, three events there. He's going to be talking jobs, and a national public radio poll 57 percent of those surveyed said economic issues are the most likely to affect their vote. We go to CNN's Brianna Keilar. She is live in Grove City, Ohio, this morning. Good morning.
BRIANNA KEILAR, CNN CORRESPONDENT: Good morning to you, Soledad. We do know that President Obama will be addressing those jobs numbers when he speaks here. Actually I should say, we are in Hilliard, Ohio, very close to Grove City, just outside of Columbus. So we know that he'll be addressing those jobs numbers. The big complication for him would be if the numbers were worse than expected, especially if they tick up to eight percent, because that was an important sort of mental hurdle that the country cleared last month.
And then for Mitt Romney, obviously, the complication would be if they're better than expected, because he's been making the argument that this economic recovery is not on the right path. And also, that it's not happening quickly enough.
We're not really expecting the messages from these two candidates to deviate. And the other thing you have to consider is we're in Ohio. This is where the election could hinge. And one of the factors in the political landscape here has been that the unemployment rate is significantly lower than the national average, seven percent here. So you could argue that barring some dramatic swing from what is expected, that it may not really matter. It may be continuing to be a lot about the auto bailout, which President Obama supported and which he's going to be touting here today in this event in Hilliard, Ohio, Soledad.
O'BRIEN: Brianna Keilar for us in Hilliard, Ohio. Thank you, appreciate it.
I want to get to Grover Norquist. He is the president of Americans for Tax Reform. He's also the author of "Debacle, Obama's War on Jobs and Growth and What we can now do to Regain our Future." Thank you for being with us.
GROVER NORQUIST, PRESIDENT, AMERICANS FOR TAX REFORM: Good to be with you.
O'BRIEN: Thank you, appreciate that. You heard some of the predictions with Christine starting out with those actual numbers. What do you think we're going to see today?
NORQUIST: The key number to look for is not simply the unemployment rate, which is the number of people who are unemployed divided by the number of people who are looking for work. Take a look at the number of people who've left the workforce. In 2009, more people were looking for work and in the works for. If that number had been consistent, the unemployment rate today would be 10.7 percent. The problem we have is that people have given up and left the workforce. There are fewer people in the workforce today than when Obama took office.
O'BRIEN: So let me stop you there for a second, Grover. I think we have that chart. Let's throw that up on the screen, if we have it. Christine, what does that number of people who've left the workforce number look at?
ROMANS: I think you're looking at the labor force participation rate.
ROMANS: These are people who have given up and who have left. They've left the workforce. That number is 63.6 percent and it is the lowest since 1981. So it's something we've heard candidate Mitt Romney, Governor Romney talk about on the campaign trail. We talked -- we've heard a lot of conservatives talk about, hey, if you looked at the unemployment rate, and used that as your basis, we'd have an unemployment rate much higher. That one hasn't been budging.
So this has been a standard sort of talking point for Romney supporters. Grover, you have an unemployment rate that is coming down. Do you acknowledge there are these signs of job creation and the unemployment rate at least are moving in the right direction?
NORQUIST: Look, the unemployment rate moving in a lower number is good, if it's moving because more people are working. But last month, where Obama was bragging that the number got a little better, the reason it got better is not because of the number of people getting jobs but the number of people who have left the workforce. The ratio got better because of the people who were not looking for work. That's very unhealthy.
During normal recoveries, the workforce participation goes up. As people say, hey, there are jobs, I wasn't looking. I'm going to go back into the workforce. This recovery is the first one in ordered history where people leave the workforce during a period of technical growth.
O'BRIEN: Besides looking at that number, and I know we'll be talking as soon as these numbers come out, we'll be crunching those different elements of this report, I want to talk to you about the various op- eds that are out. President Obama wrote an op-ed, Governor Romney wrote an op-ed for CNN.com, wrote it for us. And I want to read you a little chunk of them.
"Governor Romney, together with Paul Ryan has put forward an economic recovery plan consisting of five central elements that will in four years create 12 million jobs." As you know, there are many people who take exception to that. He goes on to list those five elements. I'll do them in a nutshell, "achieve North American energy independence, retrain the workforce for jobs now, make trade work for America, restore fiscal sanity, we'll champion small business." Can this, in fact, in four years, you believe, create 12 million jobs? And I'll warn you, Ali Velshi is going to say no possible way. Go ahead.
NORQUIST: Well, we don't have to guess. We can look when Ronald Reagan had a recession, which had double digit inflation, 20 percent interest rate, in many ways much more devastating, higher unemployment, much more devastating than the one that Obama has. When you went out three years plus, the same length of time that Obama's had since we've been in technical recovery, the economy grew 20 percent. Obama's has grown seven percent, a third the strength of Reagan's. Job creation much higher under Reagan. What did Reagan do? All the things that Romney and Ryan are talking about, lower marginal tax rates. Obama wants to raise them. Less spending. Obama added $5 trillion of debt.
We're supposed to have 6 percent unemployment, according to Obama, if he spent $5 trillion. That's not what we got. We know that Obama's plan put us in the worst position, fewer people working, fewer people in the workforce. People have given up on job opportunities. There's very weak economic growth.
O'BRIEN: You know, I think a lot of voters, too, are sort of frustrated by the lack of anybody in Congress working together. And John, earlier you were talking about the severe partisanship. And some people point to you in this taxpayer protection pledge, which I have on me. I don't know if people can see it clearly. You have everyone sign for the house of reps, "I pledge I will oppose any and all efforts to increase the marginal income tax to oppose any net reduction or elimination of deductions." This one is for the Senate. This one is for governors. This one is for state legislatures. You have a whole list, mostly Republicans, almost every Republican, actually who has signed onto that. There are people who say when you start from there you create an environment where it's impossible to have any kind of negotiation. If you're ready to sign to say, "I will not," you're in a problem already.
NORQUIST: The problem we have is the government's spending too much money. So raising taxes isn't part of solving the problem of reducing overspending. As a matter of fact, if you raise taxes we know from history, in '82, the Democrats said if you raise taxes it will help you cut spending. Taxes were raised. Spending went up, not down. In '90 the Democrats in Congress promised President Bush, if you raise taxes we'll cut spending. Taxes were raised. Spending was not.
O'BRIEN: But didn't the president -- forgive me. Let me just walk through this slowly. Didn't President Bush cut taxes, right? And Christine jump in and help me out if I'm getting something wrong, and if you look at, and President Bush cut taxes and we went from having a surplus to having a deficit. So I think there's -- I mean if you look at the Tax Policy Center they basically said it's very hard to see evidence of exactly how raising taxes figures into all of this.
NORQUIST: Several things. I was talking about President Bush 41 in 1990 when they raised taxes and it was supposed to help us reduce the deficit. In fact, Congress just spent all the money that came in. When politicians raise taxes, whether it's in California, we've seen the devastation there. Illinois, we've seen the damage to that economy, Maryland. When politicians raise taxes instead of cutting spending, you have lousy economic growth.
Those states, and you can compare either the Reagan recovery, lower taxes, spending restraints, less regulation versus the very weak Obama economy, wore where he did all the opposite things of Reagan and got everything that an economist would tell you gets bad in an economy.
Let's compare state by state. California versus Texas, Illinois versus Florida. You cut taxes you get more growth. You raise taxes you put people out of work and you bankrupt your state.
O'BRIEN: We have you for the whole two hours so I want to get to a quick piece of President Obama's op-ed because we already did Governor Romney's op-ed. I'll have you comment on it and then we're going to continue to chat about this all morning.
He writes this, "By the end of President Clinton's second term our economy created 23 million new jobs, incomes rose, poverty fell, deficits became the biggest surplus in history." And what his point in part of this op-ed is if you look to the last Democrat who he says he's shaping himself in that, in that image, if you will, you know, he was successful in that kind of a strategy.
NORQUIST: The first two years of President Clinton's administration weren't terribly interesting. The economy didn't do very well. However, in November of 1994, when the Republicans won the House and the Senate, all of a sudden the stock market started going up, job creation started going up. We got a cut in the capital gains tax, a cut in the capital gains tax, and all of Clinton's spending programs were eliminated. All of the things he was going to spend money on.
He was planning on having deficits $200 billion a year, if you look at his budget from '93 and '94. What changed was he lost control of Congress and all of his spending plans were taken off the table. That's when the economy turned around.
It's a lot more question of who's in Congress than who the president is. And they're two very different parts of the Clinton administration, one when he had a Democratic congress, not a very good economy. One when the Republicans took the house and Senate. That's when the economy took over.
O'BRIEN: We're going to continue, obviously, we have all morning to talk about this as we wait for these big job numbers with huge political implications to come out. Grover, thank you for talking with us. You're going to be sticking around with us, as well. As I mentioned Ali Velshi in Ohio is going to be joining our conversation, too. Christine and John up here as well. Everybody is on the conversation.
We showed you a little bit of each op-ed. You can take a look online, go to CNN.com and read the entire op-ed from President Obama. Read the entire op-ed from Governor Romney. It's only on CNN.com.
Other stories making news, John Berman's got that.
JOHN BERMAN, CNN ANCHOR: So much going on today. It's been nearly four days since super-storm Sandy slammed into the east coast and this morning in many areas, it is still a dire situation. The death toll from the storm has been raised to 92 people in the U.S. 3.5 million customers along the eastern seaboard are still without power this morning. And the economic losses are just staggering, an estimated $30 billion to $50 billion.
Right now rescue agencies are trying to get food and water to those in need. Gasoline in very short supply in parts of New York and New Jersey, long, long lines, now a common sight at many gas stations in the region, people waiting two, three, four hours to get to the pumps, sometimes just to find there's no gas left. And yes anger is starting to spill over. Some gas station owners have been closing their businesses to let tempers cool down. They're calling in police for help. It's not a good situation.
Homeland Security Secretary Janet Napolitano and top FEMA officials will visit Staten Island today to get a look at the devastation there caused by hurricane sandy. Yesterday police found the bodies of two young boys, ages two and four, who got swept away by floodwaters. Their mother says she begged a man in a nearby house for help but he wouldn't come outside or let her in. The homeowner says he thought there was a man outside his door.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: He didn't ask to come in. He asked me to come out and help him.
UNIDENTIFIED MALE: Did you help him?
UNIDENTIFIED MALE: What could I do to help him? I'm wearing the same clothes. I have these shorts on. I had a pair of shorts on with flip-flops and I was going to come out --
UNIDENTIFIED MALE: You did not see a woman and two children?
UNIDENTIFIED MALE: No, sir.
UNIDENTIFIED MALE: You saw a man?
UNIDENTIFIED MALE: Yes, sir.
(END VIDEO CLIP) BERMAN: Allen said after he heard the noise from outside he sat with his back against the kitchen door all night long.
Clint Eastwood talking about his empty chair speech at the Republican National Convention where he dressed down an invisible President Obama, that empty chair. Last night Sean Hannity from FOX News asked Eastwood where that magical idea came from.
(BEGIN VIDEO CLIP)
CLINT EASTWOOD, ACTOR: The chair idea, that just came out of the air, you know. I was sitting there and the guy behind the stage said here you want to sit down. And I said no but why don't you take that out and sit it next to the podium. He said oh, you want to sit down? I said no, no, just put it there. At the time I thought, that was really stupid, why did I do that? But then afterwards, you know, people decided to come up and say, well that was fun.
(END VIDEO CLIP)
BERMAN: Well there you go. The vice president shifting from campaign mode to comedy mode last night. He rattled off David Letterman's top ten list and here are three of the top ten good things about voting early, this according to Joe Biden.
(BEGIN VIDEO CLIP)
JOE BIDEN, U.S. VICE PRESIDENT: Single and looking to mingle? Find that special someone in the early voting line.
If you vote early you don't have to pay taxes.
BIDEN: I'm sorry, I'm being told that's not accurate.
Honestly, don't you want this election over with already?
DAVID LETTERMAN, LATE NIGHT TALK SHOW HOST: Yes, we do.
(END VIDEO CLIP)
BERMAN: I got to say, sometimes it is hard to tell when the vice president is joking.
O'BRIEN: I thought the same thing, as well. Does he know this is comedy? OK. Thanks, John.
Ahead this morning on STARTING POINT. You saw some of the images that John is talking about, people desperate for gas, in the devastating aftermath of hurricane sandy. We're going to talk to Rob Marciano this morning on the ground updating that story and much more.
(COMMERCIAL BREAK) O'BRIEN: Welcome back, everybody. A new problem stirring up in Sandy's wake. We were just talking about it with Christine's personal problems, finding gas, extremely long lines for fuel, for cars, and also for generators.
ROMANS: Waited an hour and a half and got nothing.
O'BRIEN: Frustration turns into anger. Sometimes it's just out and out rage. One man was charged with pulling a gun on another driver, happened in queens when the guy tried to cut in the line. The shortages might not end for another week. Rob Marciano is following all this rush. It's really getting ugly, isn't it, Rob?
ROB MARCIANO, METEOROLOGIST: It is. It's day four now into this crisis, and food and water and other supplies, certainly at a minimum. But the gasoline situation for people who are just trying to get out and around, go to work and such, is certainly becoming a bad deal. Gas stations that don't have power obviously can't pump gas. But the ones that do have power don't have the gas because Jersey shut down a lot of their gasoline refineries before the storm, and many of those were damaged.
So Governor Chris Christie has actually said, hey, for the first time, we can buy gasoline from out of state to try to help this supply situation. But damage done for the most part. We tried to track down a gas station. Had to go to 145th street, by the time we got there, we were almost out of gas, lines a half mile to a mile long. Here's what it looked and sounded like yesterday in upper Manhattan.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I got to make three trips to this gas station.
UNIDENTIFIED MALE: Got to fill it up three times.
UNIDENTIFIED MALE: Just to go home.
UNIDENTIFIED MALE: And still might not make it.
UNIDENTIFIED MALE: Any other gas station with gas?
UNIDENTIFIED MALE: No other gas station with gas.
UNIDENTIFIED FEMALE: I'm broke down. I can't get out. No gas.
(END VIDEO CLIP)
MARCIANO: So there you go. Cars are stranded on the roadways and may very well limit the number of cars that can be coming over this bridge. The Brooklyn Bridge, this blockade set up because if you have less than three people in your car they turn you around and ship you back to Brooklyn. There will be a lot of foot traffic as there was yesterday. Just one more thing, Soledad, is the gas. And it's turning out to be a very, very big deal.
O'BRIEN: Huge deal, it's what everybody is talking about this morning. All right, Rob, thank you very much. Still ahead this morning on STARTING POINT. They're safe but our key to the election and the president candidates are vying very hard for their votes. How will people in swing states react to this new jobs report? We'll check those numbers in just about an hour, and just four days before going to the polls. That's ahead. Stay with us.
O'BRIEN: Welcome back, everybody. We're welcoming Sheila Bair to our STARTING POINT team. She is the former chairwoman of the FDIC, author of "Bull by the Horns." We're waiting for those October employment report numbers. They'll come in right at 8:30 this morning. We're going to talk a little bit about how that could have political implications. Obviously, Ohio, Florida, Virginia, it's a very big deal. Sheila, let me start with where you think these numbers are going to come in?
SHEILA BAIR, AUTHOR, "BULL BY THE HORNS": I think, Christine is probably right. I think for undecided voters it's probably still going to be a big deal. There aren't many undecided voters yet but they're important in a race that's close. Since the political issue is really all about the economy, you know, a slight bump up in unemployment probably is not going to help Mr. Obama.
O'BRIEN: Is that because of the spin or do you think voters look at what's happening in their state? Do you really think people watch the number and say now I know how to vote, it's picked up one percent? Really?
BAIR: I think if you're still undecided you're going to be looking at anything, any kind of signal of what's going on with the economy. Absolutely what's happening with your neighbors is simply the most important.
O'BRIEN: Swing states?
BAIR: In swing states going to be looking at what's going on with them. If they're undecided they're looking to whether the economy is really improving or not.
O'BRIEN: We're going to talk about it all morning, because obviously not only is the jobs numbers as Christine's pointing out there are huge implications politically. We're expecting those numbers right at 8:30 this morning. We've got to take a short break. Still ahead we're going to talk about jobs, going to talk about this report. And we're also going to ask Christine to update us a little bit on what to expect, and not just the number to expect but really what's happening behind that number.
Here's a question, why does the -- now for something really different. Why did the Salman cross the road? Apparently the Salman did. Crazy. We're back in just a moment.
O'BRIEN: Welcome back, everybody. You're watching STARTING POINT. All about jobs today, we're one hour away from the release of the government's October jobs report. It is the last major economic report that will be due out before Tuesday's election.
And whatever the numbers are, there's no question they will have an impact on the presidential race. CNN's Christine Romans is watching this very closely. All right, let's talk about jobs in America right now.
ROMANS: All right, jobs in America right now. We're expecting, you know, 7.9 percent for the unemployment rate, 125,000 jobs created overall.
And what you're going to hear a lot of people talk about, especially on the Republican side, is the underemployment rate. You know, this is sometimes called the real employment rate. It's 14.7 percent.
This is people who are unemployed, people who are discouraged, people who are not working, have stopped looking for work in the past year, but would look if they thought that there was something out there for them and people who are employed part-time for economic reasons.
So you hear sometimes the real unemployment rate of 14.7 percent. But it is going to depend -- it is going to depend on where you live, quite frankly. And across the country in the swing states, the differences are pretty dramatic.
I mean, you look at Nevada, for example. 11.8 percent unemployment. Look at Colorado. It has 8 percent unemployment. You look at some of the other swing states where the unemployment rate has been drifting lower.
Ohio, for example, a very big, important state on Tuesday, 7 percent unemployment and when you look at Ohio's jobless rate you can see that it has been coming down a little bit, and the polls, John, weigh in on the polls.
The polls are so interesting because the most recent poll that we have the CNN/ORC poll shows Obama with a little bit of a lead over Romney where in a state where this unemployment rate --
BERMAN: Most of the polls in Ohio show consistently for the president somewhere between two and four points. Ohio is interesting as you said the unemployment there below the rest of the country.
So the economic argument in Ohio hasn't been about good economy/bad economy, they kind of micro-targeted in some cases, which is why the Romney campaign focusing on the issue of coal for instance, hitting the issue of coal hard instead of the macro numbers here.
ROMANS: And the micro-targeting is so interesting because every state is different. It has a different economic fingerprint, if you will. So if you look at Florida, where housing is a very big deal in Florida.
In Florida, it's been kind of a pretty stubborn unemployment rate. I think it's still stuck near where it was before, 8.7 percent today. That's exactly where it was when the president took office.
So it's come down from the peaks, but still basically where the president took office. And then in Virginia you've got an unemployment rate that is also essentially gone up and come back down and it's essentially flat in Virginia, too. It also depends on if there's a Republican governor, as well.
BERMAN: That's one of the very interesting things about the political dynamic. Each of these states has a Republican governor who is a key surrogate for Mitt Romney. That governor is unwilling to make the economic argument that times are awful because they're in office right now. So it's --
O'BRIEN: You can't say doom and gloom if you're trying to run for re- election later. Let me ask you, Sheila, about what you have said with both candidates. You've said you're disappointed in both. Walk me through why.
BAIR: Well, I don't think either one of them has given us details about what they'll do in the next four years. What the economic plan is. I don't think they've been honest about acknowledging the serious problems and the hard choices we have to make.
On the issue of financial reform, which obviously is near and dear to my heart, neither has really made that a priority. And the reason we still have these economic struggles is because of the financial crisis.
And I'm concerned we still don't have a stable financial system. And if we don't have that we won't have a sustained economy.
O'BRIEN: Many people will say it's -- it's small business that drives the American economy. So if you can put all your energy and effort into small business then you can fix the American economy. But it sounds like you're saying actually it's the banks.
BAIR: Well, it's -- heavily drives job growth. But small businesses still have a hard time getting credit these days and you still have a lot of risk averse banks and a lot of legacy loans.
We never really made them clean up their balance sheets. Industry policy, frankly, is also exacerbating the problem, you get a very low return on your loans when you make them.
In a certain economic environment you throw out all these legacy issues and it's weighing heavily on why we don't have more credit extension for small businesses, which would be a driver of job growth.
O'BRIEN: Grover Norquist was talking about President Reagan and sort of highlighting, which I think is very much President Reagan's reputation of being a big tax cutter, and tax rate was very high before he came into office.
And he did cut the tax rate, but he also raised taxes years in a row, right. I mean, he raised it in '82, '83, '84, '85, and got rid of tax loopholes, which you know, would work to raise taxes. What do you think of what Grover Norquist has done in terms of this as we face the fiscal cliff and having everybody sign a pledge or whoever wants to, sign a pledge that they will not raise taxes, or put the taxes on the table?
BAIR: I don't think it's helpful. We need people to come together and start working together and have flexibility in these negotiations. I don't know the difference between raising rates and raising revenues.
There's a lot of inefficiency in our taxes. An inefficient tax code, the resources, closing loopholes, even if it raises revenues is not something people should be against.
O'BRIEN: Interesting. All right, we're going to continue to talk about that -- let me talk about -- she's a Democrat.
BAIR: You know, I have a lot of confidence, we probably don't agree on a lot of the fiscal issues, but on financial reform we do. Most importantly I think she's the person who is going to be independent and do what is in the interest of the state of Massachusetts.
And we need more independent thinkers like that in Washington, people who will be against special interest. This much lobbying is also really impairing the ability to decision making.
BERMAN: You know what's so interesting? Mayor Michael Bloomberg is supporting Scott Brown, the Republican in that race for exactly the same reason you just said because he said he supports independent thinkers.
BAIR: I think they do have two good candidates. But I know Elizabeth well and I think she will be independent. I think if you look at her sources of campaign support, she's got a huge base of small donors. She really is smart and she'll be a player from day one if she gets elected, looks like she will.
O'BRIEN: Out on the edge supporting a Democrat.
BAIR: For the first time --
O'BRIEN: Yes, yes, yes. Let's get to some other stories making news. John has got that.
BERMAN: All right, Soledad, thanks very much. The hard numbers in the aftermath of superstorm Sandy are just so great. At least 92 Americans dead, 3.5 million power customers still in the dark, estimated losses up to $50 billion.
A lot of residents in hard-hit Staten Island, New York, they're just very angry that the New York City Marathon will still be held on Sunday. The race actually starts on Staten Island, and they say resources should not be diverted from the recovery efforts there.
Meanwhile, Homeland Security Secretary Janet Napolitano will visit Staten Island later today. Nearly half of the city's 41 victims died in that borough and cleanup has barely begun in the Jersey Shore town of Seaside Heights. The storm destroyed two piers that held amusement parks there. Rides ended up in the ocean including an entire roller coaster.
The other kind of race, the race to the finish, the Obama and Romney campaigns descending on battleground states in a campaign frenzy over the final four days. The president making three stops today in Ohio.
Mitt Romney delivers what his campaign is calling a closing argument speech in Wisconsin before heading to Ohio himself for two late campaign rallies.
U.S. intelligence officials are refuting a news report and insisting that CIA officers were not barred from helping Americans under attack in Libya in September.
Four Americans died in that assault on the consulate in Benghazi including the U.S. Ambassador Christopher Stevens. Yesterday, a senior official released a minute by minute time line on how the CIA claimed it responded.
Take a look at this lab, retrieving some fresh sushi you might say outside Seattle. Every year the river there floods while the salmon are spawning. They end up swimming not just upstream but across the street.
I'm still in awe of the lab right there, one of the new places where drivers have to swerve -- pretty impressive. Wow.
O'BRIEN: That's hilarious. That's funny.
All right, still ahead this morning on STARTING POINT, barrier beach community of Southern New Jersey is trying to cope with this. That's sand in their homes.
We're going to take you there to talk about how the people who survived sandy are now coping with the aftermath. That's straight ahead.
O'BRIEN: Welcome back, everybody. You're watching STARTING POINT. The barrier beach communities along the Jersey Shore are among those hardest-hit by Hurricane Sandy.
While many people did follow the orders to evacuate, there were some who chose to stick it out. Jim Clancy joins us from Long Beach Island, New Jersey this morning. Hi, Jim. Good morning.
JIM CLANCY, CNN CORRESPONDENT: Good morning to you, Soledad. An icy wind is cutting across this largely abandoned island. The only people who are here are construction workers, emergency crews, and the National Guard, as well as police.
Residents have mostly abandoned the island. There are a few, a few holed up who refuse to leave, including a 93-year-old woman, we are told. But there's no gas on this island. There's no electricity on this island.
We came here in the cold, darkness, and there wasn't a light to be seen almost anywhere except the emergency headquarters that's been set up for the people who are trying to put this island back together again, 18 miles long, some 18,000 homes and all of them, all the owners, waiting to see how much damage they sustain.
A lot of wind damage, some water damage, of course, but not the heavy kind of damage we've seen in some of the other areas here along the Jersey Shore. At the same time the residents who want to get out here have been told that it will be a matter of days until they are able to come out here.
As we said, they're trying to secure the area, to make it safe. Many of the roads are impassable because of the sand. And there are some earth movers that are out this morning trying to push that sand out of the way.
When it's possible, authorities are going to allow people to come back and inspect their properties. But right now the National Guard and the police have it completely sealed off, an abandoned island, an entire island today.
O'BRIEN: Jim, can I ask you a quick question? We're looking at these aerial pictures. Can you throw that back up again of the sand in the homes? How deep is that? I can't tell if it's a foot or three feet of sand that's just gone --
CLANCY: It could be five feet in some areas. There's a lot of sand that's shifted. It's just -- Sandy just blew that right across the island. With it came a lot of water, as well. The water has receded in all the areas that I have seen.
I haven't seen the entire island yet, but we're hoping to do that. But you're right, the roads are impassable. Our vehicles can't get through some of these roads. And that's why residents have to be patient in order to wait and see.
A lot of them say, you know, the longer it sits there with water in it, there could be more damage. People are working as fast as they can to get them, to allow them to come in and help put things back together -- Soledad.
O'BRIEN: You can imagine why people would not be patient. Jim Clancy for us this morning. Thank you, Jim. Those pictures are so dramatic. Again it's salt water, right. So that just destroys everything.
If you want more information about superstorm Sandy or what you can do to help those who have been affected, go to cnn.com/impact. It's a great way to be able to help people out who desperately need your help today.
Ahead this morning on STARTING POINT, our coverage continues. We're looking at the final jobs report before voters go to the polls just four days from now. It's due out in less than an hour. We're going to talk about how it could impact the election. That's straight ahead. Stay with us.
BERMAN: Welcome back to STARTING POINT, everyone. A quick look at some of the top stories this morning. Former Penn State President Graham Spanier and two other ex-Penn State officials are now facing charges that they conspired to cover up years of child sex abuse by former football coach Jerry Sandusky.
Prosecutors say Spanier, ex-athletic director, Tim Curley, and former vice president, Gary Schultz, will each be arraigned on charges including perjury, conspiracy and endangering the welfare of children.
Meanwhile it is the end of the line for NASA's space shuttle program. Today the shuttle "Atlantis" will officially be retired, but, this time there won't be any high profile, fly around or parades or anything like that. "Atlantis" will simply be towed 10 miles over the Kennedy Space Center's visitors complex where it will go on display.
O'BRIEN: All right, we've been telling you that we're less than an hour away from the release of the October employment report. Depending on what those numbers are, it could tip the balance in the favor of one candidate or the other candidate in what has become a very tight presidential race.
Christine has a look at the role of the jobs in the election picture.
ROMANS: And tipping the candidate is such a great way to put it because each candidate will look at the job chart that they prefer to look at because there's so much data in there that they can spin.
Let's take a look first at two charts that the president's supporters will focus on, saying that this shows he's doing a good job. You can see the national unemployment rate has come back down to 7.8 percent, which is right where it was when he took office.
You remember that in February 2009, we had a big stimulus that took a while to get that money pushed out into the economy. The unemployment rate still rose to 10 percent, but it is now declining.
Now look at job creation, you'll hear the president's supporters say again and again when he took office, he inherited a disaster of the jobs front from the Bush administration and he went from 800,000 jobs being lost in the beginning of his presidency to creating jobs for two years in a row.
So those are the two charts that favor the president. How about the two charts that the supporters of Mitt Romney like to look at? The underemployment rate, 14.7 percent, again that is unemployed workers, discouraged workers, marginally attached to labor force.
Meaning people who are not working, they stopped locking, but they would look if they could. They're discouraged and not looking and people who are working part time.
Here is another one you'll hear from supporters of Governor Romney. You'll hear people talk about the labor force participation right. Sheila knows a lot about this one as well. It's the lowest since 1981.
Basically it means that the percentage of the civilian working age population that's looking for a job or in a job working is the lowest since 1981. That has not been improving.
Which is why Romney supporters say, look, the president can talk about 7.8 percent unemployment. But when you look at some of these bigger, longer term numbers, they're not getting better. Those are the two ways you spin these numbers today.
O'BRIEN: So when you look at that chart, which says what do say 63 something percent, what do you think of that number?
BAIR: Well, I think it's very distressing. Some of it is related to the age and population, but a lot of it is due to discouraged workers dropping out or going back to school because they don't they have good job prospects.
They're taking themselves out of the labor force. I think it's very concerning. I think the long term unemployment rate is also another number, even though they're still looking but have been out of work for six months. It's very hard to get them back into the workforce. That number is coming down a bit.
O'BRIEN: What do you think is the right answer? I mean, what is -- there's a whole side that says cut taxes. There's a whole side that says don't cut taxes. There's a side that says just cut spending, whether it's military, food stamps, FEMA. What would you if you were the president, what would you --
BAIR: If I'm a dictator -- president has to have support from Congress to get this all done, too. I think you broaden the base of the tax code, reduce rates a bit, but you still need have to pick up revenue on the tax code.
And on the spending side, I think you need to get entitlement spending under control. Health care is a problem. Medicare, I believe by 2018, you're not going to have enough money to pay the benefits.
Social Security has a little longer timeframe, but these payroll tax cuts are actually potentially exacerbating problems with Social Security funding. And the defense spending has to be on the table, too. I can't believe --
O'BRIEN: You never get elected with that platform -- you gleamed all the critical --
BAIR: If you're going to have an agreement, Republicans are going to have to give on tax revenues and Democrats are going to have to give on entitlement spending. It's as simple as that.
BERMAN: That's Bowles-Simpson.
BAIR: That is Bowles-Simpson. I have repeatedly in the past been in favor of Bowles-Simpson. It would have been nice to do it. If we kept kicking the can down the road, the debt has grown bigger and bigger. The longer this goes on, the worse the problem gets. And the more the debt goes up.
O'BRIEN: So when you see Congress sort of taking entrenched on either side -- a lot of people disliked Grover's pledge because they feel like it makes everyone feel more entrenched.
You know, is there a solution to that? What ends that? You know, you talk about independent spirit. A lot of times independent spirits, right, they don't necessarily come to the table in conversation.
BAIR: You need people who will serve in elected positions and understand their responsibility to govern. They need to make decisions. We have serious fiscal problems, serious economic problems. I'm for -- I think things that create jobs and long-term value like infrastructure improvements or job training programs, well managed, efficient job training programs are helpful.
O'BRIEN: Didn't the stimulus under Obama create jobs? I mean, the number being thrown around is sort of 1.4 million, right.
BAIR: That is the number thrown around, but a lot of it -- we didn't get anything of permanent benefit from the stimulus spending.
O'BRIEN: It was a band-aid.
BAIR: It was a band-aid, short term pop, right, it's putting a little extra money into consumer pockets through tax cuts or rebates. You know, it was not things that we got long term value on like infrastructure improvements or job training.
And I think if we do additional stimulus spending, we need to think long term. Spending money now if we're truly investing in our future, but if we're just trying to stimulate consumer spending short term --
O'BRIEN: As we head into our next hour, much more on the jobs report. You also want to listen at 9:00 Eastern Time, Christine and Ali Velshi are going to have a one-hour special going in depth on the report and its economic and political impacts.
Still ahead on STARTING POINT, continued comprehensive coverage of the jobs report. Joining us this morning, Robert Gibbs, of course, Obama's campaign senior adviser. Oregon Congressman Greg Walden will be with us. Ken Rogoff, Harvard University Economics and Public Policy professor joining us as well. That's all straight ahead. We're back right after this.
O'BRIEN: Good morning, everybody. You're watching STARTING POINT. The crucial October employment report, it is the most important employment report of the Obama administration, I think it's fair to say.
Just four days until Election Day. Hiring unemployment numbers could give fuel to both President Obama and also to Governor Romney, depending on how it comes out.
The report also has a significant meaning for all of us and our money as well. We're covering the story from all angles. A lot of expert insight from our correspondent, Christine Romans sticking around with us this morning.
Ali Velshi joins us from Ohio. Erin Burnett is with us this morning.