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Volatile Trading on Wall Street as Investors React to Yesterday's Fed Announcement; 'Super Committee' Members Being Named; Battle Over Dog in Court; Interview With Alan Simpson; Saving Starving Children; Talk Back Question; Dreamliner Unveiled

Aired August 10, 2011 - 11:58   ET

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

SUZANNE MALVEAUX, CNN ANCHOR: Top of the hour. I am Suzanne Malveaux. Want to get you up to speed.

Buckle up, today's ride down Wall Street is a bumpy one. Dow stocks fell 400 point in the first hours of trading today. Right now, blue chips are down, we're looking at, 371 points.

CNN's Alison Kosik, she's at the New York Stock Exchange.

Alison, we have all been watching very closely. On one hand, the stocks were way down on Monday, way up yesterday, way down today. What are investors thinking? What are they doing? Can they make up their minds?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: You know, it looks like they cannot make up their minds. Although, hey, let's look at the good news, we are off our lows of the session.

You know, the reason we're seeing so many wild swings, Suzanne, is because what you are seeing is not necessarily rational trading. You're seeing fear gripping investors and trading on that fear, trading on emotion.

You know, the fact of the matter is a lot of investors feel like they are flying blind. No one has an idea of what is coming next, they don't know where the economy is headed, and that's why you're seeing such volatile trading right now.

You know, usually the market trades on fundamentals, when an earnings report comes out and we're not seeing that trading today. And we're not seeing that kind of trading today, so that's why it's so volatile.

But what you're seeing is more reactionary as well to what the Fed said yesterday. It downgraded the forecast for the U.S. economy for the third time this year saying get ready for more slow growth, and you are seeing that concern played out on Wall Street here today -- Suzanne.

MALVEAUX: All right, Alison, thanks. We'll be keeping a close eye on the markets throughout the morning and afternoon.

Republicans have just named their six members of the Congressional Super Committee. That panel is supposed to find $1.5 trillion in spending cuts by late November.

The Republicans are Senators Jon Kyl of Arizona, Pat Toomey of Pennsylvania, and Rob Portman of Ohio. From the House, Republicans chose Congressman Jeb Hensarling of Texas, Dave Camp, and Fred Upton, both of Michigan.

Democrats have named Senators Patty Murray, Max Baucus and John Kerry to the Super Committee. Republicans are complaining that Murray shouldn't get a seat because she is too political. She is in charge of fund-raising for Senate candidates.

Well, Republicans keep control of the Wisconsin state Senate after this bitter recall election. Democrats only took two of six Republican seats. They needed three to take charge of the Senate. The recall was largely seen as a referendum on Republican Governor Scott Walker. You may recall he angered Democrats when he pushed through a bill that ended collective bargaining rights for most state workers.

NATO says an air strike has killed the Taliban insurgents who shot down a U.S. helicopter last weekend. The chopper went down in flames in northeastern Pakistan, killing 30 Americans and eight Afghans.

CNN has just learned that the Pentagon will make the names of the dead American service members public. That is unusual, because 22 of those killed were U.S. Navy SEALs, and they operate in secrecy.

Riots spread to Birmingham and other cities in England overnight, but a heavy police presence in London's streets helped keep a lid on the violence there. British Prime Minister David Cameron says that police will get everything they need to restore order, and he says the rioters are nothing but thugs.

(BEGIN VIDEO CLIP)

DAVID CAMERON, BRITISH PRIME MINISTER: We needed a fightback, and a fightback is under way. We have seen the worst of Britain, but I also believe we have seen some of the best of Britain.

(END VIDEO CLIP)

MALVEAUX: Syria's brutal crackdown is expected to draw a tough new response from the United States this week. Government sources tell CNN that the Obama administration is ready to demand that Syrian President Bashar al-Assad step down. Activists say more than 2,400 people have been killed in the five-month uprising against the Syrian regime.

Police in Aruba are questioning a man about the disappearance of this American woman. Robin Gardner (ph) of Maryland was last seen August 2nd. Now, police say the suspect told him he and Gardner (ph) were snorkeling when he signaled her to go back to the beach. Well, she never showed up. Gardner (ph) disappeared from the same Aruban town as Natalee Holloway, the Alabama teenager who vanished in 2005. Well, the small town of Haymarket, Virginia, is a long way from the North Pole, but there's a Santa Claus in Haymarket. The town recently found out it had a $700,000 surplus. It is refunding the money to business and homeowners. Checks range from $150 to several thousand.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I don't believe it.

UNIDENTIFIED FEMALE: Yes, it's hard to believe. It was like, are you sure?

UNIDENTIFIED MALE: It's an indication that the town is doing their job, they're spending their money wisely.

UNIDENTIFIED MALE: I think that this is just a good indicator that if a little town like this can do it, who knows what the big towns can do?

(END VIDEO CLIP)

MALVEAUX: We're getting more details on the newest members named to that debt super committee. Nine of the 12 members have now been chosen, and the panel is going to try to slash the deficit by $1.5 trillion.

For more on who these folks are, the challenges they face, want to bring our CNN's Joe Johns back in. He's in Washington.

Joe, explain to us the members here on this panel so far and how this political chess game we think is going to play out.

JOE JOHNS, CNN SENIOR CORRESPONDENT: Right.

Senate Republican Leader Mitch McConnell selected, for starters, Senator Jon Kyl of Arizona. He is, among other things, the minority whip. He's also a member of the Senate Finance Committee, and that's important for a lot of reasons.

But what is very interesting about it is he did not select Senator Orrin Hatch, who is the top Republican on that committee. Hatch is in a tight re-election race back in his home state of Utah. So, so Kyl is a leader, he has the leadership's ear, and that's part of the reason why he came on also, because he knows about the Finance Committee.

Pat Toomey is another very interesting person, Senator Pat Toomey of Pennsylvania, a freshman. He is a former head for the Club for Growth. And anybody who knows the Club for Growth knows that is an organization that is very concerned with cutting spending and scaling back taxes in the United States. So Toomey is one of those conservatives who is going to stand up for the idea that the problem is on the spending side, not on the revenue side.

Senator Rob Portman of Ohio -- a lot of representation on this committee from the Midwest. Rob Portman is a former budget director under President Bush. He is a guy who really knows the numbers very well. And he is also a guy a lot of people are able to talk to.

So, those are three interesting people that come on the Senate side.

Now, the House side, Suzanne, these are the choices from House Speaker John Boehner. He put in the Republican Conference chairman, Jeb Hensarling. Hensarling is a conservative from Texas.

Hensarling actually put out a statement. He's one of the co- chairs of this committee. His statement says, in part, "The debt crisis, a legitimate concern, and the American people cannot afford to wait any longer on this issue." He says everyone can agree that we have to stop spending, and the time to act is now. So it sounds like he is raring to go.

And the other interesting thing I think I have to say here is that there are two members on this committee both from Michigan. That's Dave Camp and Congressman Fred Upton, the chairman of the Energy Committee. So, the Midwest, well represented.

MALVEAUX: And Joe, do we expect anybody from the Democratic side to really take issue with some of the Republicans who have been selected?

JOHNS: Well, all is fair in love and war. And we do know that on the Senate side, when the choices from Harry Reid came out, the Republicans immediately started yelling about the senator from Washington State, who had actually been brought in there. You see her, Patty Murray.

I would expect to hear some grumbling and griping. But at the end of the day, the House and Senate make their own rules. They decided this was the way they were going to do this. They're going to put 12 members on, six from each side. And what are you going to do about it?

MALVEAUX: Sure. And we know that Nancy Pelosi, she's got three that she's got to appoint as well. Do we expect that she's going to make any announcements anytime soon?

JOHNS: Been asking a lot about that. It's a little different on the House side from the Senate side, and that's because the Senate, there are some members who have to worry about re-election and some who don't. Because you know the way it cycles in and out.

MALVEAUX: Sure.

JOHNS: But over on the House side, everybody has got to worry about re-election. So, whoever you put on that committee is actually going to have to fight it out and try to get their job back if they want it.

MALVEAUX: All right. Well, we know you will be following the fights, the food fights that are happening there. Thank you, Joe. Appreciate it.

JOHNS: That's for sure. You bet.

MALVEAUX: Here is your chance to "Talk Back" on one of the big stories of the day. Rioters in Britain hit the streets for the fourth night of violence despite a huge police presence there. So, today's question: Could what's happening in Britain actually happen here?

Carol Costello, she's joining us from New York.

Carol, I know a lot of people are kind of confused by what's taking place there. They don't understand what even initiated all of this violence that's occurring.

CAROL COSTELLO, CNN CORRESPONDENT: Oh, you're right, Suzanne. It is the great mystery of the day.

Why are people rioting in London and beyond?

Is it over the shooting of a black man after he was pulled over by police? Is it opportunism? Is it because so many young British people don't have jobs? Or is it entitlement?

Listen to Britain's prime minister.

(BEGIN VIDEO CLIP)

DAVID CAMERON, BRITISH PRIME MINISTER: It is a complete lack of responsibility in parts of our society, people allowed to feel that the world owes them something, that their rights outweigh their responsibilities, and that their actions do not have consequences.

(END VIDEO CLIP)

COSTELLO: British blogger Laurie Penny degrees. She writes on Jezebel.com, "The people running Britain had absolutely no clue of how desperate things have become. They thought that after 30 years of soaring inequality, in the middle of a recession, they could take away the last little things that give people hope, the benefits, the jobs, the support structures."

Wow. If that's true, it sure sounds a lot like us.

The American middle class and the poor also thinks their government has no clue, and they worry it's about to take away Social Security, Medicare, and Medicaid at a time so many depend on them to survive. For many Americans, what's happening in Britain is like looking in a mirror. They're so much like us.

But riots in the street? "Talk Back" question today: Could what's happening in Britain happen here?

Facebook.com/CarolCNN. I'll read your responses later this hour.

MALVEAUX: All right. Thank you, Carol. Here's a rundown of some of the stories that we're covering over the next hour.

They're in charge of making the hard choices after the debt deal. But can Congress' super committee find compromise? We're going to talk with former Republican senator Alan Simpson, who knows a lot about that.

And a bizarre accident in Houston drivers just can't turn away from.

Also, does the volatile economy spell disaster for the president's re-election bid.

And why defense attorneys say this Golden Retriever unfairly helped a little girl -- or, rather, just a grown girl get through some tough times and some tough testimony.

And how to save the children in Somalia's deadly famine. Dr. Sanjay Gupta talks to doctors in a race against time.

(COMMERCIAL BREAK)

MALVEAUX: Time to reveal today's "Choose the News" choices. Text 22360 for the vote, the story you'd like to see.

First, shining shoes may be a dying business, but one New Yorker is trying a unique way to keep the industry alive. See his unique hard sell that is turning heads and feet his way.

Second, it is called the 787 Dreamliner. It's supposed to revolutionize air travel. The plane was recently unveiled, and we'll show you why it's drawing so much attention.

Or third, 13,000 miles, 14 countries, an ultra marathoner attempts to run from the North Pole to the South Pole.

So you can vote by texting 22630. Text 1 for "Shoe Shine Worker"; 2 two for "Dreamliner Unveiled"; or 3 for "Ultra Marathoner."

Our winning story is going to air later this hour.

Well, Texas authorities have just released a new mug shot of Warren Jeffs. He is the polygamist leader who was sentenced yesterday to life in prison, plus 20 years. He was found guilty of sexually assaulting two girls he claimed were his spiritual wives.

In New York, a legal battle that you might not expect. Caught in the middle of this is a Golden Retriever named Rosy (ph). She is a therapy dog, and she was allowed to be in the witness box to comfort a teenage girl who was testifying that her father had raped and impregnated her. The man was convicted, and now his lawyers plan an appeal, claiming that the dog may have influenced the jury.

Sunny Hostin, she is a legal contributor for "In Session" on CNN sister network truTV. She joins us from New York. Sunny good to see you.

You know, first of all, I've never heard of a dog being allowed to be present at a court proceeding other than a guide dog. How common is this? Is this something new?

SUNNY HOSTIN, LEGAL CONTRIBUTOR, TRUTV: It is not something new. I wouldn't say it's unique, but it isn't uncommon.

This started about in 2003, and that's about the time, Suzanne, that I left the U.S. Attorney's Office. And as you know, I used to try child sex crimes, and there was a movement when I was at the U.S. Attorney's Office to try to figure out a way to make child victims, witnesses, more comfortable, because one of the most difficult things when you are prosecuting these kinds of cases is to get a child victim on the witness stand, in a courtroom, to face the person that has been abusing them sexually and physically.

And so, typically, there are child victim witness advocates in the courtroom, but they are not seated right next to the witness, they are seated in the courtroom. And many children have reported that that made all the difference.

Well, this, I think, is probably a natural extension of it. So, it is used in a lot of courts. It's used in Arizona, Hawaii, Idaho, Indiana. And it started in around 2003. And it's sort of that natural extension of victim witness advocates.

And also, believe it or not, there have been court cases about children holding teddy bears. And in 1994, a court said that that was OK. And so while I think this is probably news to so many of our viewers, it is a growing trend.

MALVEAUX: Sure. And Sunny, does the lawyer who is appealing now, does he have a case, do you think, when he says this might have influenced the jury, sympathy from the jury in some way?

HOSTIN: I think he really does, actually. And this is the first time that a therapy dog has been allowed in New York. As I've mentioned, it is allowed in other jurisdictions, but courts have grappled with this, because a defendant's constitutional rights when accused are typically paramount.

And there have been some studies done that viewers -- rather, jurors do have some empathy towards victims when they see this sort of dog therapy, a therapy dog with a witness. And so there is I think a valid legal argument.

Who knows how the court will decide? But I will say this -- this is an extremely important, important case for victims, victims' rights.

MALVEAUX: Well, let us know how it turns out. Thank you very much, Sunny. Appreciate it.

HOSTIN: I will. MALVEAUX: Well, turning to tough budget decisions. We now know the names of nine of the 12 members Congress' new debt super committee. We're going to talk with former Republican senator Alan Simpson about whether he thinks that the bipartisan group is going to be able to find a compromise.

But first, what if the super committee fails to reach agreement or Congress fails to pass whatever the committee recommends? Well, then what happens? We're going to tell you.

(COMMERCIAL BREAK)

MALVEAUX: So what if Congress' new debt super committee can't come to agreement on what to cut in the federal budget? Well, what then? A trigger mechanism will force steep across-the-board cuts in government spending, including the military.

Within the last hour, we learned the names of six more members of the debt super committee. Nine of the 12 members have now been chosen. House Minority Leader Nancy Pelosi, she still has to name her three picks.

Members of the committee, they have got a tough job ahead of them, of course. We want to get some perspective from someone who has been there, done that. Former Republican senator Alan Simpson, he served as co-chairman of President Obama's Deficit Reduction Commission, and he joins us via Skype from Cody, Wyoming.

First of all, Senator, thank you very much for joining us here on CNN NEWSROOM.

You spent a good deal of time, 10 months, co-chairing a bipartisan commission to tackle the deficit, led to your 67-page report called "The Moment of Truth." It had recommendations that not even the president ended up endorsing.

So, what do we make of this, this new committee, yet another committee? Are they going to be able to get anything done? What do you think?

ALAN SIMPSON (R), FMR. U.S. SENATOR: It's going to be a tough hall. And the reason I am holding this to my ear is because my ear has been chewed off by various people throughout the United States in these last months.

But, no, let me just say I'm watching the acceleration of the selections of who's coming on, and there are some very good people there. I mean, you get Rob Portman, and you get Camp, and you get Hensarling, and Baucus, who was on the commission, even though we didn't concur. In fact, Max didn't really participate greatly in the commission work. I think he has some difficulty with Kent Conrad, but that's something for them to iron out.

But John Kerry realizes the import. Patty Murray was in the Senate when I was. She's highly partisan and she chairs the Senatorial Campaign Committee for her party. So that's going to be a tough haul.

MALVEAUX: Yes. What do you think of that? I mean, there have been some folks who have already started to complain about her selection, that she's not going to be really productive, she's not an appropriate choice because she is so partisan. And you put that against someone like Pat Toomey, who used to be head of Club for Growth, who's definitely against tax increases, how do you bring those two sides together?

SIMPSON: Well, we'll see.

You know, when we started, they said that Andy Stern? Wait a minute, Andy Stern? You mean -- what kind of a guy? Tom Coburn? Not Dr. No? You don't mean him?

And let me tell you, Andy Stern and Tom Coburn became good friends and worked together, and gave us the suggestions we used on how to get some money out of the Defense Department without hurting the security of the U.S. And there is plenty of fat in there, I will tell you.

MALVEAUX: Well, Senator, how do you do that?

SIMPSON: We've (ph) asked Leon Panetta. He'll whittle out what he needs to find.

There are some good people, but it's going to be -- oh, man, when you see the extremes in there, it's going to take them a while to establish trust. But they don't have three months to establish trust like we did on the commission.

They are going to jump in here, and by Thanksgiving, they will be thankful it's Thanksgiving, because it's going to be a rough hall. And they're going to really have to do more than they have been requested to do if they're really going to succeed.

MALVEAUX: Senator, what do they do? What do you recommend they do? Because you're absolutely right, they have got less time, it's a partisan group of people.

You guys managed to come up with some recommendations, the bipartisan group. What do these guys, what do these women need to do when they sit down and talk to one another? What needs to happen?

SIMPSON: Well, first, they just sponge away any need to get more information. Just say look, we've got an Obama plan, we've got a Gang of Six plan, we've got the Bowles-Simpson plan, we've got the Boehner plan, we've got the Reid plan. We don't need to sit around here and gather more information.

We have the actuaries report. We know exactly what is going to happen to Social Security in 75 years or 30 years. No more fun and games.

We know exactly that whether you call it Obamacare or Jack Benny care, or I don't care, you have got to do something with a totally unsustainable thing on automatic pilot. That's what you sit down and start mucking around in.

And the defense budget. And you talk about TRICARE, and you talk about premiums, and you talk about affluence testing, you talk about people who are on Medicare who could buy this whole county, and they get a heart operation and they don't even get a bill. That's what they're going to be talking about. It's going to be tough.

MALVEAUX: You know, you said it's going to be tough. You said, as a matter of fact, that it's going to be very painful. You used a metaphor, saying that it's going to be like giving birth to a porcupine.

SIMPSON: Childbirth to a porcupine, which is even worse.

MALVEAUX: Yes, childbirth. Well, you know, you even made some of them men on our show team cringe but when they heard that.

But what are you talking about there when you say painful?

SIMPSON: I've often offended people. Political correctness has never been my strength.

MALVEAUX: I know. I know that's true.

Is it going to be tax increases? Does that need to happen? Or is it more about cutting services?

SIMPSON: It's going to be tax reform. If they're doing anything, they've got to realize that these tax expenditures which are on the books, we were stunned -- it didn't matter what party -- stunned to find $1.1 trillion of tax expenditures in the code, no oversight, no nothing, all backed by some of the toughest lobbying groups that you have ever dealt with.

And there they are, $1.1 a year. And we said look, get rid of them all. That will be a real stroke. They can't do that.

But take $100 billion and drop it into debt reduction, and take the other trillion and give people what they've been shrieking for. Broaden the base, lower the rates, getting spending out of the code.

Well, a merry Christmas we gave them. We said zero to $70,000, you pay eight percent tax. Seventy thousand dollars to $210,000, you pay 14 percent. Everything over $210,000, you pay 23, and take the corporate rate to 26 from 36 and go to a territorial system.

Now, if that isn't the recommendation that they're going to have to look at, that's got to come. They're going to have - and if that's called a tax increase by Grover Norquist and his happy band of warriors, that is, as Tom Coburn says, ludicrous. It's not only that, it's deceptive.

MALVEAUX: All right. Well, we're going to have to see if the bipartisan commission actually goes that route when they are actually looking at this, whether it's going to be tax code reform or not. We know your committee, your commission had a lot of very detailed, specific recommendations. Ultimately, did not go anywhere. So we are certainly hoping to see what comes out of this next bipartisan commission.

SIMPSON: And the reason it didn't is because it's specific. And that's when the groups come out of the woodwork, when they finally see theirs come up on the screen after they've been given this babble. That's when they go crazy.

MALVEAUX: All right. Senator Alan Simpson, thank you very much for your perspective. Really appreciate it.

SIMPSON: Thank you.

MALVEAUX: Thank you.

We've got some breaking news here. I want to bring in our Brian Todd out of Washington.

I understand that we have an update on the fugitive siblings that were basically on the loose. I understand that perhaps they have been captured.

Brian, what do we know?

BRIAN TODD, CNN CORRESPONDENT: Well, Suzanne, I just got off the phone with Kirk Taylor. He is the sheriff of Pueblo County, Colorado.

And he tells me that they do in fact have all three of these siblings in custody. The names, Ryan Edward Dougherty, 21 years old; Lee Grace Dougherty, 28 or 29; Dylan Dougherty Stanley, 26 years old. He's a half sibling of the other two.

Sheriff Kirk Taylor says they do have them all in custody right now. He told me that this began today as a high-speed chase south of Pueblo, in Colorado City, Colorado.

He said they spotted the three in a white vehicle and made off after them. He says the vehicle then took off and a high-speed chase ensued.

He said the vehicle went about 20 miles south on I-25 in Colorado, and that the vehicle crashed. And at that point, he said one of the three got out on foot.

I asked if any of them tried to flee, and he said he did not believe they did. He is getting these reports, of course, from his officers.

So this has apparently come to an end in an area south of Pueblo, Colorado. He says they went through the town of Walsenburg, Colorado. I believe that's in southern Colorado, off I-25.

He said some shots were fired during this high-speed chase, or at least during this prolonged incident this morning. He said he has unconfirmed reports, unconfirmed that there is one person injured. He said it's not a law enforcement officer, and he says the injury, if there is an injury, is not life-threatening.

But he does say that these three fugitives, wanted in connection with a bank robbery in Georgia, with the attempted murder of a police officer in Florida, all three of these Dougherty siblings are now in custody. That is according to the Pueblo County, Colorado, sheriff.

MALVEAUX: And Brian, it may be too soon to know the answer to this question, but since they were arrested in Colorado, but they were committing crimes in Florida, in Georgia, I wonder where they might be tried. Do we have any sense of which jurisdiction, or is that still something that they got have to sort out?

TODD: I imagine, Suzanne, that's got to be something that they have to sort out, what jurisdiction might get priority over this. Maybe they might base it on the degree of the severity of the crime committed.

In that case, what is the more severe crime, an armed robbery in Georgia or the attempted murder of a police officer in Florida? I'm not sure about that.

Plus, whatever the incident was that occurred today in Colorado, the sheriff did tell me that shots were fired. So, you know, we are not quite sure how serious that incident was. So they might have put up some resistance in Colorado. So you've got possibly three states here, and who knows whether there may be more states involved? They clearly made their way at least halfway across the country, so you have got a lot of jurisdictions to sort out here.

MALVEAUX: All right. This family, the siblings have now been captured. They've been arrested. Brian, thank you very much for the breaking news. We will obviously get back to you if we get some more answers around that.

Thanks. We'll be back after the break.

(COMMERCIAL BREAK)

MALVEAUX: President Obama's toughest opponent in the 2012 election may be the job market. Historically, presidents don't usually get re-elected when unemployment is on the rise. Our CNN's Tom Foreman tells us that could mean trouble for the president.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN NATIONAL CORRESPONDENT: Forget about all the polls for a minute and jut consider the possibility that jobless numbers may be one of the better barometers on whether or not someone can get re-elected. And let's look at a lot of president going back many decades just in their re-election bids, and I will show you something very interesting.

In almost every case, the truth is if the numbers are moving in their favor in terms of the jobs, they get re-elected. If they're not, it's not true. Look, Dwight Eisenhower over here, 1956, unemployment was moving down and it was at 3.9 percent, he was re- elected. 1964, this was Johnson over here. He was re-elected; unemployment moving down at 5.1. 1972, Nixon, re-elected, moving down. Ford, defeated - it was moving down, but remember, he is a special case because we were coming out of the Nixon years. That was a little bit different.

You get into Carter, unemployment was moving up. He was defeated. You get into Reagan. Unemployment moving back down again, and he was re-elected. You go to Bush. It was moving up, he was defeated. Clinton, moving down, re-elected. Bush, moving down, re- elected.

And something I think is important to note here is that this is a relative thing. These are fairly big numbers here, certainly compared to 3.9 percent over here with Eisenhower. And yet because the trend line was moving their direction, they were re-elected.

So, what does that mean to President Obama? Well, let's look at the trend line in his case. He came into office, and unemployment was already coming up before this point when he went into office. But then look what happened after he took office. That trend line just kept soaring, and it is has gone way up here to the nine percent, 10 percent level. And it's pretty much stayed there the whole time.

This is a very difficult thing for any sitting president to deal with. It's not just a number of nine percent. As I said, it's a relative sort of thing.

Let's move him aside and look at Ronald Reagan for a moment. Ronald Reagan also had terrible numbers at one point. Look at this. Soaring up, up, up, 10 percent, almost 11 percent. But before he had to be re-elected, look what happened. It fell, fell, fell, fell, fell, and the trend line for America looked positive.

So, the question is, does the trend line hurt President Obama? The numbers will suggest it probably does at this point. Can he triangulate it by hitting certain key states. Maybe, but even there the problem seems difficult. Look at some of these big numbers in key states.

And more importantly, look at the trend line. Iowa, six percent, not bad but moving up. Here is somewhere it's moving down. And Minnesota is promising, because it's moving down, and it's a small number. But look at Michigan. There is it moving down, but gosh, the numbers are terrible. It's still 10.5 now, and what did it moved down from? 11.3 percent.

Take all of those numbers, look at those in unemployment and push the polls aside, and you can see why President Obama has a big challenge on his hands.

(END VIDEOTAPE)

MALVEAUX: We will talk to Alison Kosik and David Gergen more about the president's challenge after this brief break. (COMMERCIAL BREAK)

MALVEAUX: It's not just the job market, but the economy in general that could hurt President Obama's bid for re-election. And we want to take a closer look at the economics as well as the politics of all of this.

Alison Kosik joins us from the New York Stock Exchange, and CNN senior political analyst David Gergen joins us from Cambridge, Massachusetts.

Alison, I want to start off with you first. So, we know unemployment is a strong indicator of how Americans are going to vote. But what about other factors like inflation? You have the Federal Reserve board yesterday coming out saying that that's one of the factors really hurting the economy.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Well, actually, Suzanne, the Fed's biggest concern is still overall economic growth. Now, the Fed did mention inflation yesterday, saying prices rose after the earthquake in Japan hit America's purchasing power but it was just a temporary factor. The Fed still sees inflation stabilizing over the coming quarters, so the long-term focus for the Fed and voters is still likely to be jobs and the economy, Suzanne.

MALVEUAX: And Alison, did the Fed in keeping short-term rates near zero for another two years, did they do enough? Could they have done more to reassure investors?

KOSIK: You know, first you have to look at what the Fed has done up to this point. It kept interest rates low. It injected $2 trillion into the economy over the past few years with these bond buying programs.

The question is, was all that enough? That of course, is up to debate and controversial. Some say no, it has not done enough.

But the Fed may not be finished yet. You know, there's a lot of speculation about more stimulus coming. And look at yesterday's statement. It said, quote, "The committee discussed the range of policy tools available and is prepared to employ the tools as appropriate." So, the translation here, we're here to do more if needed. That's what the Fed is saying. And we saw something similar before we got the latest bond buying program that ended in June. And Goldman Sachs says this language hints that there could be more stimulus on the way.

MALVEAUX: All right. I want to bring in David Gergen. Thank you, Alison.

David, if the Fed just manages to stop the bleeding, is that enough for the president to win another term?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: No, absolutely not. Look, the president has two problems on his hands. One is a lousy economy, and secondly a growing perception that he is ineffectual in dealing with it. And it's that second part that he's got to address very soon. And the best way, frankly, to win reelection is to stop campaigning and start leading. Pull people in from the Congress, kill the jobs deal, cut a deal with the Republicans. Try to bring more certainty and stability; people are scared now.

MALVEAUX: A lot of people that we talked to, a lot of supporters of the president, quite frankly, felt the moment the U.S. credit rating was downgraded was really a fatal blow for the president, that he was likely to become a one-termer. Do you think that kind of thinking is premature right now?

GERGEN: I do. Erin Burnett has pointed out on CNN over the last few days that in several countries, a downgrade has been followed by actual economic growth, prosperity within six to nine months.

So, I don't think it's permanent. It's an albatross for him. I think the critical thing that most people's minds are is if he can get the economy moving and creating jobs. That's the number one concern for most Americans. And right now, when the president goes out, they put him out -- I think it was a mistake to put him out there on 2:00 on Monday to sort of stabilize things and then market goes down significantly.

He's got to be seen and actually doing - be -- a leader. He has to be in a situation where he is not presidential candidate 2012. He is president of all the people, trying to find answers with the best minds in the country and coming up with an action program.

MALVEAUX: But David, how does he do that? Because how much is the economic recovery is -- really out of his hands and out of his control?

GERGEN: Well, the way Washington has been acting, it is out of their control and the markets is running things now. The question of leadership is trying to reassert control and reassert influence on where it goes.

The public psychology - consumers are going to be spooked by what's going on in the markets and by this debt deal. And it's the president's job to help bring hope and help bring more confidence back. Franklin Roosevelt could not solve the Depression. He could not get us out of the valley rapidly, but he did build a bridge of hope across the valley. That's what good presidents do.

MALVEAUX: All right. David Gergen, thank you very much. And Alison Kosik as well.

GERGEN: Thank you.

MALVEAUX: Thank you.

A reminder to vote for today's "Choose the News" winner. Text 22360 to vote for the story you would like to see. Text 1 for shoe shine worker. A man trying to save a dying industry with a unique hard sell that's turning heads and feet his way. Text 2 for Dreamliner unveiled. This is a look at a new plane that is supposed to revolutionize air travel. Or text 3 for ultra-marathoner. A man tries to run 13,000 miles from the North Pole to the South Pole. Amazing.

Winning story will air later this hour.

(COMMERCIAL BREAK)

MALVEAUX: It is hard to imagine. Hundreds of thousands of children face death from starvation right now in East Africa. Many of them are being taken to the Dadaab Refugee Camp in Kenya. Now this satellite image gives you an idea of just how massive this camp is. It is the largest one in the world. Our chief medical correspondent, Dr. Sanjay Gupta, is there and he's focusing on efforts to save some of the sickest kids.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Suzanne, that number, 600,000 people potentially at risk of starving to death. It really boggles the mind. Thirty thousand people, mainly women and children, have died over the last three months for the same reason. If you heard those numbers just about anywhere else in the world, other than Eastern Africa, it would make international headlines. But not here for some reason.

We're seeing the tragic consequences and we're also visiting doctors and places that are trying to turn those awful numbers around.

(BEGIN VIDEOTAPE)

GUPTA (voice-over): In the middle of a famine, the sickest of the sick come here. Like Ahmed. He's six years old and he's just spent 10 days walking under the East African sun. His tiny prone body, robbed of nutrition for too long. His doctor can only hope he arrived in time.

GUPTA (on camera): What happens to a child like this if you weren't here? If he wasn't at this facility?

DR. HUMPHREY MUSYOKA, INTERNATIONAL RESCUE COMMITTEE: This child, probably in a few weeks or so, we would have lost this child.

GUPTA: You would lose this child?

MUSYOKA: We would lose this child.

GUPTA: You know, when the doctor talks about death by starvation, I can tell you, it's neither quick nor its painless. When you come to a place like this, you see it just about everywhere. You can hear it sometimes as well. And you can also smell it. It's in the air. It's this acrid sweetness that is a reflection of the body literally starting to digest itself.

GUPTA (voice-over): Little kids, like Ahmed, simply stop growing. They become stunted in time. And the tools to save him are basic. It's not like they have much choice, but they do work.

GUPTA (on camera): I want to show you something else that I think is very important here. And this is what doctors use, a simple measuring device to try and determine if a kid needs acute medical care. You can tell if a kid is malnourished simply by using this. This is Ion (ph). She's eight months old. You simply take this. You put it around her arm about 10 centimeters down from her shoulder. And you measure. Just measure this. And if the number comes back below 11, that means a kid is in real trouble. In Ion's case, you can see here the number is actually about 9.5. That's part of the reason she's getting these feedings through an NG tube into her nose.

GUPTA (voice-over): Amed's was 10.5. One in five kids will not survive with a reading that low. It's grim duty for Dr. Musyoka, the only doctor caring for all these children.

GUPTA (on camera): I have three kids. You have a five year old.

MUSYOKA: Yes.

GUPTA: How do you -- how do you do it? I mean how do you -- how do you see these kids who are suffering so much?

MUSYOKA: It's difficult, especially seeing the kind of suffering they're going through and it really translates (ph) with your own kids. But what keeps you going is that you have to come back and do something great for them -- for them to survive.

GUPTA (voice-over): Ahmed was one of the estimated 600,000 kids on the brink of death by starvation. But today, that may have changed. Ahmed may have been saved. He made it here, just in time.

(END VIDEOTAPE)

GUPTA: And what we know is, right behind Ahmed, there are many more coming to these camps. They estimate about 2,000 people per day in a camp that already has 400,000 people. But the aid is coming, but is slow to come. And there's been some news this week that the World Food Program, one of the major providers, may run out of funding, may run out of food within the next three weeks. That's something obviously where hopefully a difference can be made.

Suzanne, back to you.

MALVEAUX: Thank you, Sanjay.

You can catch a special edition of "Sanjay Gupta MD" this weekend, on the "Front Lines Of Famine." Sanjay will take you inside a Somali refugee camp to report on the humanitarian crisis in East Africa. That is Saturday and Sunday at 7:30 a.m. Eastern. And don't forget to watch "Anderson Cooper" tonight live from Somalia at 8:00 p.m. Eastern.

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MALVEAUX: It was a fourth night of riots in Britain despite a strong police presence. And that brings us to today's "Talk Back" question. Carol Costello, she's here with your responses.

Hey, Carol.

CAROL COSTELLO, CNN CORRESPONDENT: Hi, Suzanne.

The "Talk Back" question today, could what's happening in Britain happen here?

This from Sharalyn. "Wake up and smell the coffee. I saw a newsman interviewing a rioter in London. He asked, ' why is this happening?' The rioter answered, 'people are poor!' I hope the super Congress considers the possible ramifications of cutting social benefit programs while we're watching the middle class evaporate in America right now."

This from Talia. "Honestly, yes. And it should. Apparently rioting around the world is 'getting somewhere.' That's what is wrong with America, we don't stand up and protest this sorry excuse for a government we have. We need to stand together and get something done because our government isn't going to do it."

This from Pete. "Yes, but I would rather seen an Egyptian type revolt. A hundred thousand people at each end of the Mall, Times Square and similar locations in each state could possibly bring an end to our government's way of doing business."

And this from Joshua. "Carol, I am fearful that things are going to get worse for America in the several months ahead of us. We are being pushed to the edge of extreme conditions. We are all born with a fight or flight reaction instinct, and if people do not feel safe, they will choose one of the two."

Please keep the conversation going, facebook.com/carolcnn. And thanks, as always, for your comments.

MALVEAUX: Thank you, Carol.

Well, you told us what you wanted to see. Your "Choose The News" story moments away.

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MALVEAUX: You voted. We listened. Here's your "Choose The News" winner. CNN's Patrick Oppmann shows us the unveiling of a new plane that is supposed to revolutionize air travel.

(BEGIN VIDEOTAPE)

PATRICK OPPMANN, CNN ALL-PLATFORM JOURNALIST (voice-over): Better late than never for Boeing's 787 Dreamliner. On Saturday, the company unveiled the new passenger plane. It's three years overdue and billions of dollars over budget. The 787 was finally ready for its close-up.

SCOTT FANCHER, BOEING 787 V.P. AND G.M.: Today we're rolling out the first delivery airplane. The first 787 to be delivered to a customer. That's an amazing thing for those who have worked on the program five, six, seven years here at Boeing and our partners around the world.

OPPMANN: There is no other commercial airliner like the 787. It's carbon composite makeup, a super durable plastic, promises a lighter, more fuel efficient and cost effective plane for the airlines. And a potential game changer for the Japanese airliner that will fly the first 787 fleet.

MITSUO MORIMOTO, ALL NIPPON AIRLINES: We intend to use the Dreamliner to expand our business, particularly our international route. We are aiming to increase our revenue from the international operation significant.

UNIDENTIFIED FEMALE (voice-over): Ladies and gentlemen, welcome aboard ANA Boeing 787 Dreamliner.

OPPMANN (on camera): Reports (ph) what most people care about is what's inside the plane. And Boeing is promising to revolutionize the way we travel with touch screen entertainment panels in business class and throughout the plane more natural light, more humidity and, yes, more leg room.

OPPMANN (voice-over): The plane's cutting edge technology and reliance on third-party companies meant long delays. Logistics that still have to be fine-tuned before Boeing speeds up 787 production.

JOHN OSTROWER, EDITOR, "FLIGHTBLOGGER": Well, I think it's an extraordinary challenge. I think that no one has ever built a wide- body aircraft at a rate of 10 per month before. So I think the -- Boeing has its work cut out for it.

OPPMANN: Work that means, for most of us, having to wait a little longer before you can take off on Boeing's new dream plane.

Patrick Oppmann, CNN, Everett, Washington.

(END VIDEOTAPE)

MALVEAUX: If your choice didn't win or you just want to check out the runner-up and have links to them on my page at facebook.com/suzannecnn.

CNN NEWSROOM continues right now with Randi Kaye.

Hey, Randi.

RANDI KAYE, CNN ANCHOR: Hi there, Suzanne. Thank you very much.