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ANDERSON COOPER 360 DEGREES

Dow Drops; Presidential Campaign Turns Negative

Aired October 6, 2008 - 22:00   ET

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


ANDERSON COOPER, CNN ANCHOR: Breaking news tonight on Wall Street and beyond. The bailout that was supposed to stop the bleeding in the markets hasn't so far, not yet, anyway.
Asian markets plunged a short time ago. And the Dow took a breathtaking nosedive today, plunging 800 points at one point, its biggest drop ever during a trading day. It regained some ground, but still closed below 10000 for the first time in nearly four years, down almost 30 percent from its all-time high just a year ago.

As the market were convulsing, the campaign trail was getting ugly. New attacks were launched today. We will get to all of that.

But here's what both candidates said about the economy.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: I have got news for the McCain campaign. The American people are losing right now. They're losing their jobs. They're losing their health care. They're losing their homes. They're losing their savings. I cannot imagine anything more important to talk about than the economic crisis.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: Our economy is still hurting. Working families are worried about the price of grocery, the price of gas, keeping their jobs and paying their mortgage. Further action is needed, and it must be done. We need to restore confidence in our economy and in our government.

(END VIDEO CLIP)

COOPER: A new CNN/Opinion Research poll shows the majority of Americans expect things to actually get worse. Nearly six in 10 people surveyed said they believe another economic depression is likely.

That's depression with a capital D. One financial analyst said today -- quote -- "It's hard to exaggerate how bad things are" -- no exaggeration tonight, just the facts.

Let's start out with CNN senior business correspondent Ali Velshi.

Ali, President Bush signed this bailout on Friday. It passed. The markets did what they did today. Why?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Not supposed to happen.

This was not supposed to be the reaction we saw. This is unbelievable. Take a look at how this market started. It started the day going down, went further down. Look what happened after 2:00. It was down 800 points.

And the bottom line is, you have made your first investment in the stock market around there, you actually saw it go up 400 points, to end the day 369 points lower. Why did this happen, Anderson, you're asking?

Well, the credit bailout was supposed to fix the credit freeze, which in fact operates very differently than the stock market does. The stock market makes money when the companies in the stock market make money. And those companies make money when regular people spend money.

Now, how do regular people spend money? They have to feel they have got enough of it. That means they have got a good job. That means their wages are going up or their home price is going up. And, right now, these things aren't happening.

We saw on Friday, Anderson -- you and I talked about this -- three-quarter-of-a-million jobs lost this year so far in America. We should have 1.5 million added by this time this year. Because jobs are being lost, wages are going down. And we all know that home prices are going down.

When you put all of this together, you end up with this mess in the stock market unrelated to the credit freeze, stock markets going down because companies aren't making money -- Anderson.

COOPER: When asked about economic conditions in a new CNN poll, 84 percent of people said the economic conditions are bad. How is that impacting the stock market and the credit markets?

VELSHI: We're in October. We're almost entering the final quarter of the year, the place where Americans spend all their money. It's called Black Friday at Thanksgiving, because that's the day that most companies in America went into the black.

When you're feeling this economic pinch, you are just not going to spend that kind do of money. Companies are counting on the fact that Americans are holding on very tight to their money right now. And until they loosen it up, you're not going to see profitability in American.

COOPER: I want to show our folks something that Jim Cramer from CNBC said today on "The Today Show." It freaked a lot of people out, frankly. Let's play this.

(BEGIN VIDEO CLIP, "THE TODAY SHOW")

JIM CRAMER, HOST, "MAD MONEY": Whatever money you may need for the next five years, please, take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market.

(END VIDEO CLIP)

COOPER: Scary stuff. Is he right? I mean, it is kind of the advice we heard from Suze Orman...

VELSHI: Right.

COOPER: ... but maybe not so stark.

VELSHI: Well, with Cramer, you know, people watch him because they trade stocks. And what Cramer is saying is, if you need that money within five years, either for retirement or for your kids' college, that money that you need in the short term shouldn't be in the market.

That's actually pretty standard, sage advice. You just don't really hear it from Cramer, because he's not in the market for people who want general investment advice. Cramer caters to stock buyers. And, basically, he's sending a message to his stock buyers who watch him. If you're going to need this money, don't play it in the stock market. It's very sound advice.

COOPER: All right. Ali Velshi, thanks.

For weeks now, we have been hearing that huge subprime mortgage losses have caused a massive logjam in the credit markets. That's a big part of what is threatening the economy. The $700 billion bailout package that Congress passed on Friday was supposed to get credit flowing again, but so far, the jam has barely budged and the Dow is down, as we said, almost 30 percent from it's all-time high a year ago.

So, let's bring in Andy Serwer, managing editor of "Fortune" magazine.

Andy, there are a lot of people out there right now scared about their life savings. Their retirement funds are getting decimated. First off, I mean, in your sense, has this bottomed out? Is this the bottom, or have we not even come close yet?

ANDY SERWER, MANAGING EDITOR, "FORTUNE": Well, sadly, I mean, there's no indication that it's bottoming out.

And, in fact, that's one reason why the stock market went down today, Anderson, because there's fear that the crisis is spreading. Indeed, there are more troubling signs from Europe. The situation seems to be spreading there.

The real concern, of course, is job losses. And, you know, we probably haven't seen the worst of that. When someone like Jim Cramer is talking about selling stocks, he believes, as many do, the stock market is only going to get worse from here. So, it's not a pretty picture at all.

COOPER: Should people hold off on spending now, wait to see where things go in the near future? That obviously adds to -- I mean, if people aren't spending money, and there's no consumer confidence, that obviously adds to the problem, big-picture.

SERWER: Well, that's right. And it all feeds on itself, Anderson. You're absolutely right. I mean, if you have a good job, if you feel secure, if you feel good about things, if your kids need stuff, of course you have to go out and buy it.

It's never a good time to add $50,000 worth of credit card debt on to your high -- high-cost credit cards. I mean, it's never a good time to do that. The party's over for those kinds of things. But, if you need stuff, you are going to have to go out and buy it. People are insecure, particularly about their jobs...

(CROSSTALK)

COOPER: Where are we in this entire process? And I guess the scary thing is we don't probably really know where we are. But, if the bailout was step one, how many more steps are there?

SERWER: There are a lot more steps. I mean, we have -- we have got the bailout passed. That is step one, you're right. And it's a good thing. We need to keep moving forward here.

Treasury Paulson -- Treasury Secretary Paulson, you know, has appointed a guy, a point person now. There are actually steps being taken in terms of buying up these assets and putting money back into the system.

But, you know, we haven't bottomed out yet at all, and we need to restore confidence. We need to make sure that things aren't getting worse. And I think what we have to do, you know, the economy is like a patient, right? The patient is sick. And we have got to stop fighting about things like, you know, which doctor we have. Are we in the right hospital? Should we have a private room or not?

You know, I think we need to trust Secretary Paulson right now and his people to move forward and do things and stop bickering.

COOPER: Today, on Capitol Hill, the former CEO of Lehman Brothers, who is now bankrupt, got grilled by lawmakers over executive pay. Well, let's play some of that.

(BEGIN VIDEO CLIP)

REP. HENRY WAXMAN (D-CA), GOVERNMENT REFORM COMMITTEE CHAIRMAN: Your company is now bankrupt, our economy is in a state of crisis, but you get to keep $480 million. I have a very basic question for you. Is this fair?

REP. ELIJAH CUMMINGS (D), MARYLAND: Do you regret spending $10 billion in Lehman's cash reserves on bonuses, stock dividends, and stock buybacks, as your firm faced a liquidity crisis?

REP. DENNIS KUCINICH (D), OHIO: Did you mislead your investors? And I remind you, sir, you're under oath. RICHARD FULD, CEO, LEHMAN BROTHERS: No, sir, we did not mislead our investors.

(END VIDEO CLIP)

COOPER: Now, I mean, there's no doubt this is political grandstanding. A lot of these same are the ones who supposedly were watching over this stuff for the last couple years on Capitol Hill and just allowed this -- these people to run rampant and allowed legislation that just didn't happen.

That being said, is this issue of CEO compensation, is that a legitimate issue in terms of the big picture?

SERWER: It is a legitimate issue. And I agree with you about these televised congressional hearings, Anderson.

I mean, you know, first of all, you know, I'm not sure why we do them. I mean, I think it's perfectly proper to investigate Lehman Brothers and all these other companies, see if there's any criminal behavior or fraud. I don't know what we get out of these sort of show trials, but, OK, they make for good television. It's pretty interesting.

It's sort of tertiary to focus on that now. We really need to focus on fixing the economy. I think it's perfectly proper to limit CEO pay, especially in these companies who are going to get bailed out, absolutely. But, you know, to sort of point fingers, let's move on. Let's solve things here.

COOPER: Andy Serwer, appreciate it. Andy, thanks.

In the days ahead, though, we are going to be looking at exactly who is to blame for this financial fiasco, looking at politicians, looking at people on Wall Street, looking at people all around the country, because a lot of people had their hands in the cookie jar on this thing, and we're going to be "Keeping Them Honest" on that in the days ahead.

But let's us know what you think. Who do you think is to blame? I'm blogging throughout the hour. I'm about to log on.

Join the conversation at AC360.com. Also, you can check out Erica Hill's live Webcast during the break at AC360.com.

Just ahead on this program: as Obama widens his lead, the McCain campaign shifting its strategy. Governor Sarah Palin has gone on the attack, at one point saying Obama was palling around with a terrorist. with just four weeks to go, how dirty is this going to get, and could that actually backfire? We will talk about that.

And, ahead, the latest electoral map changes and what it means for tomorrow's presidential debate. This time, it's a town hall meeting. The candidates will be practically elbow-to-elbow with voters. We will preview what may happen. And guilty as charged -- O.J. Simpson convicted of armed robbery and kidnapping, 13 years after his acquittal on double murder. Did the so-called trial of the century shape how the jury saw him?

All that ahead -- when 360 continues.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL NOMINEE: He didn't know a few months ago he had launched his political career in the living room of a domestic terrorist?

(AUDIENCE BOOING)

PALIN: So, what's next, claiming their ticket doesn't define higher taxes as patriotic?

(END VIDEO CLIP)

COOPER: Governor Sarah Palin at a rally today in Florida.

It is clear the McCain campaign is launching a new offensive against Senator Obama. And the line of attack is -- well, it's anything but new. You just heard a key part of the strategy, trying to link Obama to a former '60s radical, Bill Ayers.

Palin went so far as to say that Obama palled around with a terrorist. She's now kind of pulling away from that, after facing some criticism for those remarks. We will look at the facts, though, about that particular story in a moment.

First, though, we're on the trail with a look at how McCain is turning up the heat on Obama.

Here's CNN's Dana Bash.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): John McCain says, you don't really know Barack Obama, and that should worry you.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: What does he plan for America? Who is the real Barack Obama? But, my friends, you -- you ask such questions, and all you get in response is another angry barrage of insults.

BASH: One month to go, polls dropping, McCain aides say his central goal now is to sow doubts about Obama.

MCCAIN: For a guy who's already authored two memoirs, he's not exactly an open book. And where other candidates have to explain themselves and their records, Senator Obama seems to think he's above all that. BASH: Instead of playing up his own prescriptions for the ailing economy, McCain accused Obama of lying about his record, especially Fannie Mae and Freddie Mac.

MCCAIN: To hear him talk now, you would think he had always opposed the dangerous practices at these institutions. But there is absolutely nothing in his record to suggest he did. Nothing. Zero. Zippo. Nada.

(CHEERING AND APPLAUSE)

BASH: Obama's spokesman responded with words chosen to paint their caricature of McCain, calling him "the one truly angry candidate in this race" and accusing him of "unleashing another frustrated tirade against Barack Obama."

In McCain's quest to label Obama as too risky, he mostly stuck to policy, while his running mate's task is more personal. For three days, it's been about William Ayers, a 1960s radical whose group bombed U.S. buildings. In 1995, then a college professor, Ayers hosted a campaign meeting for Obama.

PALIN: This is someone who sees America as imperfect enough to work with a former domestic terrorist who had targeted his own country.

BASH: Sarah Palin toned down her initial accusation that Obama palled around with Ayers, and the Obama campaign's explanation changed, too.

DAVID AXELROD, CHIEF OBAMA CAMPAIGN STRATEGIST: When he went, he certainly -- he didn't know the history.

BASH: A senior adviser who had said the two were friendly now tells CNN, when Ayers helped Obama, he didn't know about his radical past.

Meanwhile, Palin also suggested, Obama's controversial pastor, Jeremiah Wright, is fair game, even though McCain has called him off- limits. She told conservative columnist Bill Kristol, "I don't know why that association isn't discussed more, because those were appalling things that the pastor had said about our great country."

Palin was careful to say, it's John McCain's call as to whether the campaign brings up Jeremiah Wright as an issue.

(END VIDEOTAPE)

COOPER: It's funny. She said to Kristol, you know, it's up to John McCain whether or not to bring it up as an issue, but she just brought it up as an issue.

BASH: Absolutely.

And she absolutely could have said, you know what? John McCain said it's off-limits. I am going to leave it there. But, instead, she was very meticulous in what she said. She said the talking points that we heard during the Democratic primary, which is, this is a guy who sat -- Barack Obama sat in this guy's church, in those pews for 20 years.

So, she knew what she was doing. And, you know, it's interesting, Anderson. In talking to McCain's advisers recently, privately, of course, what they say is, many of them say they're actually a little bit frustrated that their own candidate kind of put the political handcuffs on them, because they think that, if you're talking about associations, as both candidates are doing right now, that they think who's more fair -- frankly, more fair than -- than William Ayers, than somebody like Jeremiah Wright, who actually has a real relationship -- or at least had a real relationship, a very long relationship, with Barack Obama.

COOPER: Fascinating stuff. Dana Bash, thanks.

BASH: Thank you.

COOPER: Coming up: more of John McCain and Sarah Palin's line of attack on Obama, Palin trying to tie her -- tie Obama to this '60s radical group and questioning his love of country. Take a look.

(BEGIN VIDEO CLIP)

PALIN: I am just so fearful that this is not a man who sees America the way that you and I see America, as the greatest source for good in this world.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

COOPER: All right.

Ahead, we're going to check the facts. Who's really telling the truth about Obama and this guy Bill Ayers? We're "Keeping Them Honest."

We will also look at new polls and where the Electoral College map now stands. The numbers are in Obama's favor? So, how will that impact strategy at tomorrow night's presidential debate? A "Strategy Session" ahead -- with the best political team on television.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PALIN: It turns out one of his earliest supporters is a man named Bill Ayers.

(BOOING)

PALIN: And, according to "The New York Times," he was a domestic terrorist and part of a group that -- quote -- "wants to campaign of bombings that would target the Pentagon and our U.S. Capitol." (END VIDEO CLIP)

COOPER: Well, that, of course, is Sarah Palin today on the stump spearheading this new effort by the McCain campaign to raise doubts about Barack Obama.

Now, critics say they're simply trying to change the focus from the economy to this issue back on Obama. But, in this case, they're linking him to a '60s radical, Bill Ayers. Supporters of the McCain campaign say, look, this is all fair game.

In a debate earlier this year, Barack Obama described Ayers as -- quote -- "a guy who lives in my neighborhood" and with whom he served on a board.

Now, the Obama campaign is clearly trying to play down any allegations of a relationship between these two men. And, just as clearly, the McCain is trying to play up allegations of a relationship. So, what's the truth?

CNN Special Investigations Unit correspondent Drew Griffin is "Keeping Them Honest."

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT (voice-over): Bill Ayers and his wife, Bernadine Dohrn, in the 1960s and '70s, were radicals, members of the Weather Underground, an anti-Vietnam War group that bombed federal buildings, including the U.S. Capitol and Pentagon.

On the run for years, the case against them was thrown out due to illegal wiretaps and prosecutor misconduct. Ayers has never repented and has said, as late as 2001, he wished he had done more to stop the war.

Barack Obama confirmed during a primary debate that he knew Ayers, and, when pressed, said they served on a charitable foundation board together. And Obama condemned Ayers' support of violence. But the relationship between Obama and Ayers went much deeper, ran much longer, and was much more political than Obama said.

ANITA DUNN, SENIOR OBAMA CAMPAIGN ADVISER: What they are arguing is that, somehow, the fact that these two people who served, both educational reformers in Chicago, both of whom did have their paths cross professionally, as well as -- as neighbors occasionally, that, somehow, this association is a problem for Barack Obama because of Bill Ayers' past and things that happened in the 1960s, when Barack Obama was 7 years old. And that's just wrong. And, frankly, it's quite unfair.

GRIFFIN: One place their paths repeatedly crossed, according to a CNN review of board minutes and other records, was Chicago's Annenberg Challenge Project, where a $50 million grant from the Annenberg Foundation matched locally raised funds to improve schools. According to participants and project records, Bill Ayers fought to bring the Annenberg grant to Chicago. Barack Obama was recruited as its chair.

For seven years, Bill Ayers and Obama, among many others, worked on funding for education projects, including some experiments supported by Ayers.

Stanley Kurtz, a conservative researcher for the Ethics and Public Policy Center, has also been reviewing the recently released records of Chicago's Annenberg Challenge.

STANLEY KURTZ, SENIOR FELLOW, ETHICS AND PUBLIC POLICY CENTER: Instead of giving money directly to schools, they gave men to what they called external partners. And these external partners were often pretty radical community organizer groups.

GRIFFIN: And the board gave hundreds of thousands of dollars to Bill Ayers' small schools project promoting alternative education, like the Peace School, with a curriculum centered around a United Nations theme, and another school where the focus was African-American studies.

(on camera): And this was directly funded by Annenberg?

KURTZ: Oh, yes.

(CROSSTALK)

GRIFFIN: Under Obama's chairmanship?

KURTZ: Oh, yes. And the specific job of the board of directors was to give out the money.

GRIFFIN: While continue work on the Annenberg Challenge, Barack Obama and Bill Ayers also served together on a second charitable foundation, the Woods Fund. Among its recipient, Jeremiah Wright's Trinity United Church, where Obama attended, and a children and family justice center where Ayers' wife work.

Ayers has strong defenders in Chicago, among them Richard Daley, the mayor, who called Ayers a valued member of the Chicago community. The city gave Ayers its citizen of the year award in 1977 for his work on the Annenberg Project.

For Obama, the chairmanship of the $100 million Annenberg board helped vault him from South Side Chicago lawyer to political player. And that, too, has another connection to Bill Ayers. In 1995, months after the little known Barack Obama became Annenberg Project chair, State Senator Alice Palmer introduced the young Obama as her political heir apparent.

Where was that introduction made? At the home of the '60s radicals Bill Ayers and Bernadine Dohrn. The Obama campaign again says it is just a coincidence. DUNN: A Democratic state senator organizes a meeting of her supporters at the house of another one of her supporters. What is the problem here, Drew? It is the worst kind of inference and the worst kind of politics to say that, somehow, that says something about Barack Obama.

(END VIDEOTAPE)

GRIFFIN: Anderson, this meeting at Bill Ayers' home has been classified in many different ways. What I can tell you from two people who were actually there is, number one, former State Senator Alice Palmer says she was in no way organized this meeting. She was invited and attended it briefly.

And, Dr. Quinton Young (ph), a retired doctor, told us this indeed was Barack Obama's political coming-out party and it was hosted by Bill Ayers.

COOPER: So, Drew, if Obama and Ayers worked together with others to, I guess, improve schools, what exactly is the McCain/Palin camp saying is wrong with -- with this relationship, or this working relationship, or however you want to characterize it?

GRIFFIN: Well, Anderson, I haven't contacted the McCain campaign on this issue.

What they're saying on the stump is the same thing that Hillary Clinton brought up during the primary campaign. It is the issue of trust. By raising this issue of Bill Ayers, and whether or not Barack Obama was hanging around with him, palling around with him, or just working with him, Bill Ayers, in the '60s, had a very, very different view of the United States that many Americans did.

A lot of Americans were against the Vietnam War, but not a lot of Americans formed a group and started bombing things because of it. Now, they're trying to say that that raises judgment issues on Barack Obama, which has been the tag other campaigns, now McCain's, have been trying to peg on him ever since he started running for president.

But Barack Obama has publicly stated he does not agree with this guy, correct?

GRIFFIN: Well, he has said that he does -- I forget his exact words, but he certainly deplores the -- the violence in the past.

COOPER: Right.

GRIFFIN: I haven't been able to ask him directly about the relationship he has or had with -- with Bill Ayers.

COOPER: All right, Drew Griffin, thank you very much.

Coming up, we will talk about that with the panel, the best political team on television.

Also, Sarah Palin's strategy, is it working? David Gergen, Gloria Borger, and John King weigh in next.

And debating the economy -- a preview of tomorrow's presidential debate.

And, later, O.J. Simpson in the slammer, and possibly for life -- the final chapter of the Simpson saga ahead.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MCCAIN: My opponent has invited serious questioning by announcing a few weeks ago that he would -- quote -- "take off the gloves." Since then, whenever I have questioned his policies or his record, he's called me a liar.

(END VIDEO CLIP)

COOPER: John McCain on the trail today in New Mexico.

Just 29 days until the election, the McCain camp finds itself down in the polls and it's going on the offensive, trying to raise doubts about Barack Obama, his personal -- personal doubts, while attacking Obama's links to '60s radical Bill Ayers. That's one way they're doing it.

Let's dig deeper.

Joining us, CNN senior political analyst and former presidential adviser to both Republicans and Democrats David Gergen, CNN senior political analyst Gloria Borger, and CNN chief national correspondent John King.

David, Senator McCain used some very strong language against Obama today, even asking, who's the real Barack Obama? Obama's commercials have called McCain a liar in the past. So, there's strong language on both sides. But is what the McCain campaign doing -- it comes with some risks, given people's concerns about the economy right now, doesn't it?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Huge risks, Anderson.

It's almost as if we're living in two different universes. Most Americans are deeply, deeply concerned about the economy and their -- and their pocketbooks and their savings accounts, worrying about the proverbial 401(k) turning into a 201(k).

And we've got this other universe about the candidates wondering down historical roads. They seem irrelevant to most Americans. Who cares very much about, you know, where Barack Obama was associating with 15 or 20 years ago or Barack Obama raising today in a Web cast about John McCain's association with Charlie Keating on the S&L scandal of, you know, 20 years ago.

Most Americans care deeply about what's -- what these candidates are going to do in the next 20 months. And they're not hearing that. And they're going to penalize who harps on these personal things of the past and does not respond to and present a plan for economic future.

COOPER: It's interesting, Gloria, because Palin during the debate with Biden, "Oh, Joe, you're still talking about the past," when he's talking about the war and how we got into the war. But now talking about, you know, the past of Bill Ayers seems fair game, and the Keating Five as David mentioned, for Obama.

BORGER: What the McCain campaign is trying to do is raise doubts about Barack Obama in any way they can, because that's probably the last card they've got.

COOPER: Is this like the kitchen sink strategy? That Clinton once did?

BORGER: This is essentially say -- raise questions in people's minds: can you trust him to manage this economy?

But I agree with David, because I do think this is a big issue election. People are already angry. Only 12 percent of the country thinks we're headed in the right direction. So you risk getting them angrier, because they're not talking about what you care about, which is your pocketbook and your family's future. So I think it's dangerous on both sides.

COOPER: John, though, I guess the McCain campaign would say, "Well, look, we are talking about the economy. It's just the media happens to focus on, you know, what we say about -- about Barack Obama."

KING: Well, John McCain's own advisors will tell you privately, and certainly other Republicans will tell you publicly, Anderson, the campaign has been all about tactics and not about a broad strategy in recent days. They've gone back and forth themselves.

What they're trying to do is something that Hillary Clinton tried to do against Barack Obama something the Republicans have tried to do against every left-of-center Democrat in our lifetime, to try to say that on policy, on cultural issues, just on who they are, they're not like you. That's what they're trying to sell to small-town America.

And as Gloria noted, right now the polls are breaking against him. I'm standing tonight in Ohio. Our own polling shows Barack Obama ahead here. There's a new "Washington Post" poll out tonight that shows Barack Obama again here. No Republican has ever won the White House without winning the state of Ohio.

In small-town America, they're trying to push Obama to the left by guilt by association, trying to also hit him on policy. It's all part of a puzzle. They need raise more doubts about him, because right now voters have more doubts about McCain on the No. 1 issue, and that is the economy.

COOPER: It's interesting, David, because I mean, you were giving advice last week, that the McCain campaign needed to come up with something new on the economy, kind of something that they could be talking about, and they seem to have gone in a complete opposite direction.

GERGEN: What's new about that? The -- a couple things. One, they clearly -- they need to present an economic plan tomorrow night. And some of the major economists raised tonight, another conversation I had, an interesting idea, and that is that both candidates in this particular case are senators, so that right after the election, in fact, as a Senator, you could lead an effort to really bring some economic reforms. The winner can.

And so it would be really good to hear from them, not only what they would do as president but what they might do in the next three months. If you just opened this show by saying the next three weeks are really critical in the credits, you know, with the things feeding each other.

But let me make one other point, Anderson, on that. It is not the media that is smothering their effort to get out an economic message on either side. The McCain campaign said very clearly in a conference call with the reporters late last week, we want to turn the page away from the financial crisis and back to these personality issues.

And then right away, Sarah Palin goes out and accuses Obama of palling around with a former terrorist. Now, there is no -- there is no disguise here about what's going on. They clearly want to change the subject.

And today, Obama hit back. Now Obama may be -- you know, he's in danger of getting down in the mud with him if he's not careful. This could boomerang on both of them. The man who gets blame for diverting this is going to get -- is in a real risk.

BORGER: And don't you guys think it's late for this to happen. Usually, this kind of mud slinging happens some time over the summer, not a few weeks before the election. Not -- you know, not 29 days before an election. It seems to me that it's so risky.

COOPER: Twenty-nine days with all this other stuff going on. I think that's, in particular, what makes it feel so -- or at least is giving it so much attention.

We'll have more with our panel coming up.

New polls in the presidential race: how real is Obama's lead and what do the numbers tell us about the battleground states? The latest numbers ahead and how they may impact the strategy in tomorrow night's debate.

And later, O.J. Simpson guilty, going to prison, possibly for the rest of his life. The strange case that led to his conviction and what happened in the courtroom when the verdict was read. Ahead.

(COMMERCIAL BREAK) SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: Rather than answer his critics, Senator Obama will try to distract you from noticing that he never answers a serious and legitimate questions he's been asked.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: Senator McCain and I have a debate tomorrow. And obviously, the American people are going to be anxious to hear from one of the two people who's going to be the next president and responsible for dealing with this economic mess, what their plans are.

(END VIDEO CLIP)

COOPER: Both men gearing up for tomorrow's debate in Nashville. Round two will be a town-hall setting with questions from the audience. You can watch it, of course, here on CNN. And the post- debate 360 starts right afterwards.

We have two new polls to show you right now. The latest CNN/Opinion Research poll gives Obama a 53-45 percent lead among likely voters. That's double the amount from last month. And a new CNN national poll of polls, which is a survey of several polls, has Obama leading McCain by six points: 49 percent to 43 percent.

Now those aren't the only numbers that Obama is aware of going into tomorrow night's debate. Candy Crowley has the "Raw Politics."

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CANDY CROWLEY, CNN CORRESPONDENT (voice-over): Barack Obama sails into Tuesday day night's debate atop an intimidating set of numbers: 370, the drop in today's Dow. Sixty-eight, the percentage of Americans confident in Obama's ability to handle a financial crisis. Fifty-six, the percentage of registered voters who say the economy is the most important issue to their vote.

He would really have to blow the debate to sustain critical damage, though it can be done.

ALAN SCHROEDER, AUTHOR, "PRESIDENTIAL DEBATES": This is a television show. And so a lot of what happens here are the theatrics, is the performance aspect of it. And so I do think that the style points and image points become very important in presidential debates.

CROWLEY: A 5 o'clock shadow can look sinister. A glance at a watch can signal disinterest. An exasperated sigh may sound condescending.

This debate is a town hall meeting. Barack Obama has done hundreds of them. He is thoughtful and thorough, but it's not always his best forum. He can seem removed.

One New Hampshire supporter described a myriad health problems in her family, which forced her husband to join the military as the only way to get insurance.

UNIDENTIFIED FEMALE: He is going off to war and leaving behind a wife and two children, so that he can provide a living for us.

OBAMA: Well, look, I wish your story was unique, and it's not.

CROWLEY: In debate, moments matter?

MCCAIN: First of all, thank you for being here.

CROWLEY: His numbers falling as the days disappear, John McCain has the most to gain in the town hall. He is a master in the forum: engaging, funny, direct. And the Obama campaign has been busily jacking up the stakes. McCain, said an Obama aide, is the Michael Phelps of town halls, but the senator can be edgy and what he claims is humor can backfire in front of the uninitiated.

UNIDENTIFIED MALE: Do you ever worry that, like, you might die in office? Or get Alzheimer's?

MCCAIN: Thanks for the question, you little jerk.

CROWLEY: In truth, they both need to watch it. They are in the midst of a nasty season, the hostilities ever more personal. It may work in short sound bites in front of adoring crowds; it does not work over the course of an hour and half in front of the cameras. It does not work with uncommitted voters asking questions within feet of the candidates.

Style matters. Victory may go to the candidate who keeps his cool.

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COOPER: Candy, Palin has really been attacking Obama on the trail the last couple of days. McCain basically implying that Obama is a liar; hasn't been quite so blunt as Palin. What happens tomorrow? Do we know what the strategy on -- for the McCain campaign?

CROWLEY: Well, the McCain campaign has to do both, frankly. It has to keep casting those doubts on Barack Obama. Thirty days left, it is very hard to jack up your own approval ratings. It is a lot easier to drive down the other guy's.

So that definitely is something that McCain has to do. But he also has to put forward, you know, some sense that he understands the middle class, that he understands what they're going through and that he has a plan, which by the way, is also what Barack Obama has to do.

COOPER: Well, Candy, stay right there. We're going to look more at this debate, a town-hall style debate. He is slipping in the polls, John McCain is. What can he do tomorrow? Dialing up the heat on the trail. Could tomorrow night's debate actually change the electoral map? We'll take a look at that with John King, as well.

And O.J. Simpson facing possible life imprisonment. But was the jury tainted? We'll have that and what happened in the courtroom when the verdict was read. "Crime & Punishment" ahead on 360.

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MCCAIN: In short, who is the -- who is the real Barack Obama?

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COOPER: Well, it may be hard to hear when McCain asked the crowd who's the real Barack Obama guy, and the crowd screamed out "terrorist."

There's no doubt this race is getting nastier. If you want to know why, just look at the calendar and the Electoral College map. Joining us for a strategy session, John King joins us again, along with Candy Crowley.

John, I want to take a look at how the electoral map is shaping up. Obama pulled ahead of McCain 250 to 189 electoral votes with 99 tossup votes. How real? I mean, there's been this huge change toward Obama over the last two or so weeks. How solid is that change? How deep is that support? And could tomorrow night really make of a difference?

KING: Tomorrow night could make a difference, because John McCain is running out of opportunities to have a national change in the dynamic. We've been telling people for months and months and months pay no attention to the national polls. Well, this is a time you actually can, because Barack Obama has opened up a lead of six, seven, sometimes eight points in the national polls. If that is the case, then he is poised for a big electoral college win.

He have him leading in states with 250 electoral votes right now. That means if he can win right here where I am the state of Ohio, 20 electoral votes, and keep those other states, he's the next president of the United States.

Or he can win a combination of Colorado, New Mexico and New Hampshire or he could just win the state of Florida. John McCain has to not only win all of the Bush states still out there like Florida, like Missouri, like Ohio, like Colorado, he has to take something away from Barack Obama like a big state like Pennsylvania. The economic news has tilted the map steadily and significantly in Obama's favor, and McCain is running out of time to change it. It's that simple.

COOPER: Candy, among Obama advisors and people, I don't know if they talk about this, is there concern about the so-called Bradley effect, the people saying they're going to vote for Barack Obama. But then once they're in the poll booths not going ahead and voting, because they're afraid of how it's going to seem to some guy taking a census.

CROWLEY: Obviously, they know that there will be some people in the United States who vote that way. They don't think it will be a significant number of people.

The numbers they are looking at are the new registrations, the bulk of them from people 29 and under.

And Barack Obama has said throughout this campaign from the primary on, "Look, if I lose this election, it's because my ideas, I didn't a good enough idea -- good enough job putting my ideas across, not because I'm black."

So it's something that they know is out there. There clearly are pockets in this country who may be saying that they'll vote for him but don't intend to. But first of all, given the huge margins that we're seeing now, it would be very difficult to believe that that entire margin would disappear. And second of all, they just don't think that it's going to be a definitive factor.

COOPER: John, did these polls take into account all these new people being registered?

KING: The pollsters are doing the best they can, Anderson. You take into account party identification. You call people. You say how many are you Democrats, how many Republicans, how many independents? That number, especially the Democratic/Republican number, has fluctuated quite a bit over the year.

You try to call young people. Most of them have cell phones. So the pollsters are trying to admit in this year, we have so many new voters, so many young voters, it's a bit of crapshoot, if you will, in building the computer model that projects this out. That's why the margins are so important.

Barack Obama is leading in a lot of these close battleground states just outside or within the margin of error. But that means by three or four points in the polls. That means there's still room for them to swing back.

But time is running out for John McCain. And one of the things the Obama people are pushing, Anderson, and this is where their resource advantage matters: early voting. John McCain might deliver a great attack on the debate tomorrow night.

But what if 5,000 people here, 10,000 people there, 20,000 people somewhere else, have already voted for Barack Obama?

Now, the Republicans are encouraging that. But the Democrats have more money and more resources this year, which is a very new dynamic in presidential politics.

COOPER: Fascinating stuff. John King, Candy Crowley, as always thank you.

Still to come, tough day for a cop on the job. A driver makes a big mistake after getting a speeding ticket. We'll have the video on that. Yikes. We'll explain what happened there.

But first, O.J. Simpson facing possible life behind bars after his conviction in the Vegas armed robbery case. Our "Crime & Punishment" report will tell you what happened in the courtroom when the verdict was read. That, a whole lot more on politics and Palin, and the economy. We'll be right back.

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COOPER: In "Crime & Punishment," O.J. Simpson, right now he is in isolation in Clark County Detention Center in Nevada. Lawyers say Simpson is melancholy, which makes sense, given the armed robbery conviction. It is very possibly the end of the road for O.J. Simpson. He could get life in prison, and while his murder trial 13 years ago was watched by the nation, his latest trial barely registered.

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COOPER (voice-over): Remember the chase?

UNIDENTIFIED MALE: O.J. is here. I have O.J. in the car.

COOPER: The gloves?

JOHNNY COCHRAN, ATTORNEY: If it doesn't fit, you must acquit.

COOPER: The thanks after the verdict? And 13 years to the day since that famous acquittal...

UNIDENTIFIED FEMALE: Guilty.

COOPER: ... O.J. Simpson was found guilty of armed robbery and kidnapping.

His daughter cried in the courtroom; his sister fainted. While the cameras were there to follow him out, the nation no longer seemed so transfixed on O.J. Simpson, a man who's become a sad spectacle.

JEFFREY TOOBIN, CNN LEGAL ANALYST: The '94 case combined everything that obsesses the American people. It had sex; it had race; it had violence. It had Hollywood. It had sports. And the only eye-witness was a dog.

This case was a peculiar robbery, where there was no real appealing victim, and everyone was loathsome.

COOPER: The all-white jury of nine women and three men were convinced beyond a reasonable doubt that Simpson orchestrated a hold- up in a cheap Vegas hotel room last year. Prosecutors said Simpson and a band of cohorts used force and a weapon to get merchandise from two sports memorabilia dealers. The profanity-laced confrontation was recorded on tape.

O.J. SIMPSON, CONVICTED OF ARMED ROBBERY: Don't let nobody out of this room! (EXPLETIVE DELETED)! Think you can steal my (EXPLETIVE DELETED) and sell it?

UNIDENTIFIED MALE: No.

SIMPSON: Don't let nobody out of here. (EXPLETIVE DELETED), you think you can steal my (EXPLETIVE DELETED)?

COOPER: Throughout the trial, the 61-year-old Simpson sat and listened as four if the five men also charged in the case testified against him after accepting plea deals.

It was in 1995 that Simpson was cleared in the murders of ex- wife, Nicole Brown, and her friend, Ronald Goldman. He was later found liable for the killings in a civil suit. He defense attorney believes that jury used their own bias to condemn him.

YALE GALANTER, SIMPSON'S ATTORNEY: I told you probably the day after Mr. Simpson was arrested was whether or not jurors would be able to separate their very strong feelings about Mr. Simpson and judge him fairly, equally and honestly.

COOPER: Simpson is now spending his days in a Nevada jailhouse. He'll next be in court for sentencing. And the man who lived in the public eye for decades may very well spend the rest of his life in prison.

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COOPER: Well, coming up, our "Shot of the Day," Tina Fey challenges Sarah Palin on "Saturday Night Live."

But first, Erica Hills joins us with a 360 news and business -- Erica.

ERICA HILL, CNN ANCHOR: Anderson, as promised, Citigroup not backing down quietly from its plan to buy Wachovia. Citigroup today filing a $60 billion complaint against both Wachovia and Wells Fargo banks. And we should hear whether those two interfered in Citigroup's planned take over of Wachovia.

There is one upside to the economic downturn. Oil down 6 percent today to less than $88 a barrel. A drop in consumer demand and fears of a possible recession are believed to be responsible.

Talk about a bad day. Right after this guy gets a speeding ticket, look at that. Backed up and over the police car. Not really a wise move. The 70-year-old driver in Illinois said he just didn't realize his car was in reverse when he hit the gas.

And with both the election and Halloween on the horizon, it is time for a reality check on the real poll of the American people. And we know what that's about.

The Halloween mask. The candidate whose mask sells the best has won at least the last three presidential match-ups. So where do we stand right now? Barack Obama apparently outselling McCain masks 67 to 33 percent. Of course, there's still time before Halloween.

COOPER: Both of those masks are scary.

HILL: They are.

COOPER: They both are quite unattractive-looking masks.

Now, time for "Beat 360" winner, our daily challenge for winners to come up with a caption better than any of our staff could think of. Tonight's picture, Governor Palin and Senator Joe Biden -- excuse me, Senator Joe Lieberman on the trail together in Florida today.

Our staff winner is Gabe, who came up with this. "Feel that? Joe six-pack abs is more like it."

(SOUND EFFECT: "Ooooh!")

COOPER: The winner is Kevin, who won with this: "Lorne Michaels and Tina Fey hug after another entertaining week on 'Saturday Night Live'."

Very good, Kevin.

HILL: They may be the real winners of the convention (ph), I think.

COOPER: The "Beat 360" T-shirt is on the way. You can check out all the entries on our blog at AC360.com and play along tomorrow.

Speak of Tina Fey, up next, her latest spoof on Governor Palin. We'll see it for a moment. It's our shot.

And at the top of the hour, our breaking news, the Dow closing below the $10,000 mark. No laughing matter, that. For the first time since 2004, the ripple effect continuing around the world tonight. It's our breaking news. The latest when 360 continues.

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COOPER: Time for tonight's "Shot," Erica, the striking resemblance, of course, between Sarah Palin and comedian Tina Fey has been a big boon for "Saturday Night Live" and those who like their political satire. Watch this.

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TINA FEY, CAST MEMBER, NBC'S "SATURDAY NIGHT LIVE": I liked being here tonight, answering these tough questions without the filter of the mainstream gotcha media, with their follow-up questions, fact checking or incessant need to figure out what your words mean and why you put them in that order.

I'm happy to be speaking directly to the American people, to let them know, if you want an outsider who doesn't like politics as usual or pronouncing the "G" at the end of the word she's saying, I think you know who to vote for.

Oh, and for those Joe Six-Packs out there playing a drinking game at home, maverick.

(END VIDEO CLIP)

COOPER: Yes. They also had a Joe Biden, who you know -- I mean, it wasn't nearly as good.

HILL: It was still comical though.

COOPER: It was great, but it just doesn't -- Tina Fey looks strikingly like...

HILL: It's not quite the same. It's true. It's not quite the same, but it was enjoyable.

COOPER: It certainly is.

Coming up at the top of the hour, the latest on our breaking story. Nothing enjoyable there. After a terrifying day on Wall Street, the Dow plunging 800 points at its worst point today. New questions tonight about the cause of the financial crisis and why the $700 billion bailout package isn't calming down the markets yet.

And Governor Palin throwing some sharp punches on the trail today. She's taking care of the personal attacks while John McCain tries to raise doubts about Obama's policies and who Obama is. The new strategy and how Obama is responding, all that ahead on 360.

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