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ANDERSON COOPER 360 DEGREES
President Obama Blasts Insurance Giant AIG; Small Business Lifeline
Aired March 16, 2009 - 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: Good evening, everyone, from Los Angeles.
We're here at L.A. Live Nokia Plaza, right across from the Staples Center, reporting on the road to economic rescue, here and across the country, all week. We will tell you about where we're going later in the program.
Today, hundreds of people showed up right here for just 40 jobs -- 500 applications handed out in about half-an-hour for 40 jobs. You see the line, people there applying.
More than one in 10 Californians right now out of work, people looking for jobs, looking for answers, frankly. Tonight, we hope to bring you some of those.
In just a few moments Dr. Phil McGraw will be here with some advice on how to survive and even thrive in these hard times, but, first, a question that millions of Americans are asking right now, President Obama included: How can the insurance giant AIG, which already has $170 billion of your bailout dollars, be awarding massive bonuses?
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is a corporation that finds itself in financial distress due to recklessness and greed. Under these circumstances, it's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. I mean, how do they justify this outrage to the taxpayers who are keeping the company afloat?
(END VIDEO CLIP)
COOPER: Or, as Obama adviser Austan Goolsbee put it, these guys shouldn't be allowed to order dinner at a restaurant, let alone collect bonuses, or, amazingly, as Iowa Senator Chuck Grassley told a local radio station, AIG executives, he said, should apologize for taking bonuses, resign, or -- get this -- follow the Japanese example, his words, and commit suicide.
More from Joe Johns tonight, following the money.
(BEGIN VIDEOTAPE) JOE JOHNS, CNN SENIOR CORRESPONDENT (voice-over): American International Group, the bailout king, you, the taxpayer, have already kicked in $170 billion to keep this outfit afloat.
Why? Because it almost certainly has its tentacles in your community, no matter where you live. Pension plans, life insurance, banking and financial institutions, you name it, AIG is everywhere.
But this company that you're paying to keep afloat says it will pay $165 million in retention bonuses to just 400 employees at AIG Financial Products division, the very same division that ramped up credit default swaps that threw the financial markets into turmoil. The bonuses range from $1,000 to $6.5 million. Seven employees get more than $3 million.
Even now, the departed founder of AIG is outraged.
HANK GREENBERG, FORMER CEO, AMERICA INTERNATIONAL GROUP: I share the outrage, because -- for several reasons. The retention bonus is not going to keep people very long. You pay the retention, and then, after they get the bonus, and they stay for a period of time, then what? Then they're gone. If they're going to go, then why not save the retention bonus?
JOHNS: So, why the bonuses? AIG declined an interview, but claims that, if it doesn't pay now, it will get hit with a bigger bill later. The company agreed to this payout to senior managers well before the bottom fell out.
(on camera): Now it's risky to back out. The law in Connecticut, where AIG Financial Products is based, says, people whose wages are improperly withheld can collect double damages. So, if AIG backs out on the $165 million payment now, it might have to pay $330 million later.
(voice-over): Still, the question is whether there's even a way to cut off the bonuses. Proposals include changing the IRS code, even going to court.
REP. BARNEY FRANK (D-MA), FINANCIAL SERVICES COMMITTEE CHAIRMAN: The federal government says, wait a minute. We, in effect, own this company. And we're not going to pay bonuses to people who lost money for the company that we had to take over.
JOHNS: AIG also says it's worried that failing to pay on a large obligation like this would allow companies it does business with to back out of deals early, charging, AIG broke a contractual promise.
And the companies AIG has already had to pay include massive financial operations with names like Societe Generale, Deutsche Bank, Goldman Sachs, Merrill Lynch. All got billions, and 20 states getting $7 billion more of taxpayer dollars, underscoring the stakes if AIG were to fail.
Joe Johns, CNN, Washington.
COOPER: You know, chances are, before all this, you never heard of AIG. And maybe you think the meltdown of AIG doesn't affect you directly. But take a look at this.
I want to show you this graphic right here. AIG starred last year at $58.38 a share -- $58.38 a share -- ended a year -- the year at $1.57. It closed today at $0.83 -- $0.83 a share. Now, even if you don't own individual shares, if you're not invested in the stock market, well, you may be hurt anyhow. Fifteen percent of all mutual funds held shares of AIG at the start of 2008.
Since then, 10 mutual funds with the highest percentage of AIG shares in their portfolio are down an average of 58 percent. So, by comparison, the S&P 500, it's down 46 percent over the same period.
This hits home. We're taking questions now from some people in our audience here, "Digging Deeper."
Chief business correspondent Ali Velshi joins us in New York.
Ali, there's sort of a lot of outrage certainly from a lot of people over here about this AIG bonus.
I just want to talk to one member of our audience.
Lisa Ephron (ph), you had a question about AIG.
UNIDENTIFIED FEMALE: Well, it's very simple, Anderson. I just want to know why they need government stimulus money, if there seems to be enough money for very large bonuses and trips. and, I mean, I think that money needs to be, you know, allocated properly. Why do they need government money?
COOPER: Ali, it's a Good question. Why do they need the government money.
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes, Lisa is absolutely...
VELSHI: Let me break it down and tell you how it works. The government's given over about $170 billion to AIG and they have given, over all of 2008, about $1.2 billion in bonuses.
The -- the part in question here is this $450 million that's gone to people who were employed by this very unit, as Joe Johns said, that -- that caused a lot of the problems, all of the problems, at AIG.
Now, the reality here is that AIG is, whether you agree with it or not, too big to fail. It's not just the shares that you talked about, Anderson. It's the fact that it insures much of the world in terms of personal policies or business policies. And it is so tied into business, because it insures things that we don't even think about, airplanes against crashes. It insures hurricanes against rigs. It insures movies against their movie stars getting sick and not being able to make the movie.
So, AIG is important to keep afloat. The government has still got more money that it is going to give over to AIG, another $30 billion. And I think what you're going to see is the administration putting some rules on that money and saying, if something doesn't change here, that you may not be able to get the rest of that money.
The issue is, like much of what has happened, money has been given out without strings. I think you're going to start to see those strings attached, because people are very frustrated, like Lisa is.
COOPER: Have you all been following this AIG thing today? Does it make any -- does it make any sense to you, why these guys are getting bonuses?
UNIDENTIFIED MALE: Not at all.
UNIDENTIFIED FEMALE: Not at all.
COOPER: Anybody support them getting bonuses here?
COOPER: All right, I just wanted to check. It would be a brave person in the crowd who said they did, if they did. All right.
A lot more questions for Ali and others, including Dr. Phil. He's going to be here a little bit later on.
You can also weigh in at AC360.com. Check out Randi Kaye's live Webcasts during the breaks tonight.
Up next; President Obama taking action to help small businesses. And, as you will see, there's really nothing small about it when it comes to the role these businesses play in trying to get us out of a recession. We will look at some of the opportunities tonight.
Also, the new Bernie Madoff mug shot and a new multimillion- dollar list of goodies the government wants him to cough up, including fancy silverware worth $65,000, a bracelet worth nearly $3 million, and a string of multimillion-dollar houses. Should his wife be allowed to keep a lot of this stuff? We will find out.
And, later, what the stimulus package has to do with the gang wars being fought here and in streets across the country -- that and much more as we travel down "The Road to Rescue."
We will be right back.
COOPER: We're in Los Angeles tonight, all week in cities across the country, bringing you stories and useful information, we hope, from America's "Road to Rescue." It's the title and purpose of our coverage, really, a "CNN Survival Guide," part of our focus tonight, the country's small-business men and women -- President Obama today recognizing their contribution to the economy, unveiling new policies aimed at boosting small-business lending and cutting taxes on investment.
(BEGIN VIDEO CLIP)
OBAMA: So small businesses are not only job generators, they're also at the heart of the American dream. After all, these are businesses born in family meetings around kitchen tables. They're born when a worker takes a chance on her desire to be her own boss. They're born when a part-time inventor becomes a full-time entrepreneur or when somebody sees a product that could be better, or a service that could be smarter, and they think: "Why not me? Let me try it. Let me take my shot."
(END VIDEO CLIP)
COOPER: Joining us now is Ali Velshi.
Ali, why is it so important for the president to provide aid to small businesses right now?
VELSHI: Well, small businesses are a much bigger deal than most people know about.
They're most of the businesses in America. And, for the last decade or so, they have been somewhere between 60 and 90 percent of all new jobs created. Small businesses are more nimble than large businesses.
They can react to things a little bit better. But, in an environment where we're losing jobs, Anderson, you need to count on small businesses to be able to -- to generate those jobs. And that's why -- and there's been a lot of criticism that not enough has been done for small businesses in all of the stimulus. So, that's the importance here.
We have got to, got to, got to focus on getting small businesses. Forty-five percent of the payroll of the entire private sector, by the way, is people -- are people who work in small businesses.
COOPER: It's amazing -- 99.7 percent of U.S. companies are small business. I hadn't realized that.
So, how exactly does the president propose to -- to help the businesses?
VELSHI: Well, there are a few ways, Anderson, that the president's proposing his help.
One of them is that, right now, between 75 percent and 85 percent of a loan that a business gets through the Small Business Administration is guaranteed. And that's why these businesses can sometimes get loans. So, you go to a normal bank. And if you get a loan that's -- that's guaranteed by the SBA, you're more likely to get it, because, if you were to default, the bank gets paid by the government.
The government is now upping that guarantee to up to 90 percent of the loan. And that means that some banks will take more of a risk than they would have had otherwise.
The SBA -- that's the Small Business Administration -- is also eliminating fees that lenders and borrowers pay on these loans. And the government is putting aside $15 billion to buy up these loan bundles, very much the same way that Fannie or Freddie buy up mortgages -- so, three measures to try and get people to lend to businesses. Hopefully, it works -- Anderson.
COOPER: All right.
Well, I have got some more questions, also some "Raw Politics."
Joining me now, as well as Ali, is the Money Coach, personal finance expert Lynnette Khalfani-Cox, also Frans Johansson, innovation consultant and author of "The Medici Effect," and senior political analyst David Gergen.
Appreciate you all of you being with us.
David, let's start with you.
You say President Obama's announcement on small businesses was smart, but he's playing defense. How so?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, he's playing defense, Anderson, because a lot of small-business people, you know, pay taxes as high-income taxpayers. They're in the $250,000-plus.
So, there are a number of them who felt like they are going to be facing crushes taxes. So, he, in effect, I think had to respond to this sort of growing alienation in the business community.
I thought he did it smartly. But he got overwhelmed today on the AIG front. That's, by far and away, the biggest -- not only the biggest economic story, but the biggest political story, possibly a turning point in this whole effort for bailouts.
COOPER: A turning point how?
GERGEN: Well, in the sense that this is igniting so much public anger. Just -- your AC360 blog site tonight is filled with people who are expressing anger.
There is -- there -- I think the president is in an -- is in an awkward position, because he wants and he may need to continue bailing out big banks, big institutions, the car companies. But there's so much anger over this, that people may say: The hell with it. I don't care what happens to these people. Let them go. They are abusing us. They're mis -- you know, they're taking our money and exploiting it.
So, I think, today, he's -- I think he was walking a tightrope and I think it was very difficult for him. He was tougher than his own people over the weekend, who said, we have got to enforce these contracts. He came back today and said: No, we don't. Let's figure out some ways to see if we can't abrogate these contracts.
COOPER: Yes. Yes, not a lot of people want to talk about the sanctity of contracts right now.
Frans, I know you think there are actually opportunities for people to use this recession. How can people stand out, actually get ahead at a time like this?
FRANS JOHANSSON, AUTHOR, "THE MEDICI EFFECT": Well, the key -- the key about standing out and actually growing your business at a time like this, when -- when everything else seems to be contracting, is to find a way to do something that is very different from what everybody else is doing in your industry.
I mean, the -- the usual thing that we tend to revert to, as -- as business owners, is to actually look around and say, well, what is everybody else doing, and how can I kind of copy that? Because I -- I want to build a business. I want to learn from others. I want to benchmark with what other companies are doing.
Well, that is the exact wrong strategy. Now is the time to actually differentiate. You have to find a way to stand out. And you do that by actually doing something different, whether it's advertising or your marketing or how you actually print new products and sell those.
And many of these lessons can be learned from other industries. They can be learned from other cultures, looking at what are others doing outside of my industry, bringing some of those points in, some of those concepts in, and try to integrate into your own business.
COOPER: Lynnette, we have got a question for you from -- actually from a small-business owner.
Your -- your name is?
UNIDENTIFIED FEMALE: Natalie Kohl (ph).
COOPER: Natalie Kohl (ph).
What -- what's your question?
UNIDENTIFIED FEMALE: My question is -- I'm a small-business owner in Los Angeles, California. And I know that President Obama has a focus on infusing dollars to new businesses and to businesses to do -- for expansion capital.
But I'm only just trying to survive the current economic downturn, because we're in this global recession. So, what is the package -- or what is the plan for small businesses, like myself, to survive the economic downturn that we're experiencing?
COOPER: Lynnette ?
LYNNETTE KHALFANI-COX, THE MONEY COACH.NET: I think one way that he's trying to help small-business owners like yourself survive is by streamlining that loan process.
One of the things that him and Tim Geithner were talking about is expediting the loan processing time. Right now, a lot of folks who go through the Small Business Administration lament the fact that it takes way too long. So, they're trying to cut down on the amount of time that it takes for -- between you getting an application in and then actually getting word as to whether or not that loan gets, in fact, confirmed, or, hopefully, accepted. That's one way.
Some of the other things they're talking about doing, of course, are providing tax incentives to small-business owners, in effect, giving people a tax rebate, because they're going to allow you to write off losses, any losses you might have had, for businesses that make up to $15 million. And you probably fit into that category. But any losses from the last five years can be written off on your current tax return. So, that's one way to effectively put dollars back in your pocket today.
COOPER: Frans, we have a question for you from another small- business owner.
UNIDENTIFIED FEMALE: Hi. Toni Golden (ph).
COOPER: What's your question?
UNIDENTIFIED FEMALE: My question for Frans is, is -- it relates to the real estate profession and those that are involved in the financial services industry.
We are typically the ones that have taken a lot of the responsibility, unfortunately, for the downturn in our industry. What are some of the ideas, some of the marketing strategies, re-branding strategies that you could impart upon this industry at large to help to unstain and unmartyr the reputation that's been taken on by the real estate and financial services industry?
JOHANSSON: Yes, it is -- it's tricky, because trust is one of those things that takes a long time to build and can erode very, very quickly.
And, when you're in an industry like real estate or finance, you're actually in an industry that has tore down, essentially, the trust for everybody. So, if you're in it, you have to actually find a way to, I think, basically do two things.
One is keep on doing what it is that you have been doing. The -- the fact that trust takes a while to build, well, that's not going to go away. Work with customers to help them actually -- or clients -- to help them achieve what it is that their goals are. And make sure you stay ethical. All these things, sort of none of that changes. Trust still has to be built.
But, on top of that, there are ways for you, as a -- as a business owner, to perhaps look at, how can you actually partner up with somebody that has some trust already, somebody that is willing to lend that trust out to you, and, in that way, leapfrog some of these issues that -- that many companies and many individuals in the real estate market face and in the financial sector face?
COOPER: All right.
David Gergen, Lynnette Khalfani-Cox, Frans Johansson, thanks very much.
A lot ahead in this hour -- following stimulus money into the streets, where they hope, here in Los Angeles, that they're going to use some of it to try to control criminal gangs here in the city.
Also tonight, former Vice President Cheney slamming President Obama, and the White House slapping back hard today. Was the vice president out of line? Was the White House disrespectful? You can decide for yourself.
We will play for you what they said. And, later, Dr. Phil joins us with advice for turning anxiety and economic adversity into opportunity and maybe even a good night's sleep, for a change.
We will be right back.
COOPER: So, what does fighting crime have to do with fixing the economy?
Well, consider this. Under the $787 billion stimulus package, state and local police departments will receive some $4 billion in federal aid. Some of that money is going to go to gang prevention. With an estimated one million gang members active in the United States, it's a big problem for towns and cities across the country, especially here in Los Angeles, ground zero in the gang war.
As part of the rescue plan, the city hopes to put about $7 million from Washington to be used in L.A. gang-prevention efforts. But how will stemming street violence actually lead to jobs?
For answers, I went to the front lines in this battle.
Here's my "Up Close" report.
COOPER (voice-over): Watts in Los Angeles is one of the city's most crime-plagued neighborhoods, where rival gangs fight over turf.
(on camera): How big are the gangs in this neighborhood? GREGORY THOMAS, CO-FOUNDER, KUSH: Oh, very big. This particular neighborhood is comprised of the biggest gang -- Blood gang in the city of Los Angeles, the Nickerson Gardens Bounty Hunters.
COOPER (voice-over): Gregory Thomas is the co-founder of a local gang prevention group called Kush. With stimulus money, he hopes to create after-school and job-training programs and hire dozens of gang outreach workers.
(on camera): If you had more money, you would have -- you would hire more people to go out and try to work with gangs, get people out of gangs?
THOMAS: Absolutely, not just get them out of it, but also intervene in high-risk gang situations, where gang members are most likely to shoot and kill.
COOPER (voice-over): Gang violence has dropped in Los Angeles in the last few years, but remains a major problem.
(on camera): The Los Angeles Mayor's Office estimates there are some 400 gangs in and around the city. That's about 40,000 gang members. Last year, they estimate nearly half of all homicides were gang-related.
REVEREND JEFF CARR, GANG REDUCTION AND YOUTH DEVELOPMENT TASK FORCE: So, we're in Nickerson Gardens.
COOPER (voice-over): Reverend Jeff Carr heads up the city's task force on gang prevention. He's convinced, even a little stimulus money would have a big impact in a community like Watts.
CARR: We're going to get a -- a double bottom line, if you will, a double benefit from, I -- from this stimulus money, I think, because not only does it provide jobs for people who will then spend those wages into the community, but we believe that's part of how we're going to be able to reduce the violence even further.
He says, to bring this country and its economy back, tax dollars should be used to invest, not just in infrastructure, physical capital, but also in human capital.
CARR: I think it's shortsighted to say that we shouldn't invest in -- in human capital as well. And, you know, surely, if we can still pay out, you know, bonuses to bankers on Wall Street, it seems to me we can use some of these dollars to actually invest in poor communities that have been overlooked and overpassed for decades.
COOPER (on camera): You're investing in -- in human capital?
THOMAS: Absolutely. And what we're talking about is, we're talking about the capacity to empower young people from challenged communities to take their community back, to invest in the -- the social ills that have been prevalent in our society for over 30 years.
COOPER (voice-over): Antoine Griffith is one of the young men Gregory Thomas has been working with, trying to keep him away from gang life.
(on camera): Why do people join gangs?
ANTOINE GRIFFITH, RESIDENT OF LOS ANGELES: Probably because no mom, no father figure. Only person -- father figure is a person that's on the streets already in a gang. So, that would be your next best thing to turn to, because he's the only person looking out for you, or you're -- making sure you're straight.
THOMAS: A couple of years ago, if you would have asked the question, I would have told you I don't know if Antoine's going to be alive a year from now.
COOPER (voice-over): Antoine is looking for a job. But Thomas says, with money from the federal stimulus, there are many other at- risk young people he could help.
(on camera): What do you want to do, ultimately? What kind of a job what you want to do?
GRIFFITH: I want to be a small-business owner, a successful young black man.
COOPER: A successful young black man.
Go to AC360.com for more information about the Kush gang prevention group and the important work that they're doing, if you want to help them in their work.
Joining us tonight for our "Road to Rescue" report, a familiar face, Dr. Phil McGraw, talk show host, life strategist. He will be with us throughout this evening for some important advice about how to cope how to and deal with the economic crisis.
Let's start with the money for the gang-prevention program in Watts.
Does it surprise you to hear that they want to use federal money to -- for something like that?
DR. PHIL MCGRAW, LIFE STRATEGIST: No. I'm glad to hear that, actually, because, look, these people are looking for somewhere to belong.
I mean, they want to be able to say, look, I have control of my own life. I'm doing things here that -- that set up my future. And, if there are no jobs, if there's no money for the small businesses that can hire them, then the gang life begins to look appealing to them, because they come and make promises. They seduce them and say, this is going to be a good thing for you. We're going to take care of you. You're going to have money. You're going to have status.
And, if there are no other options, that doesn't sound so bad. But, if you can get a job and you can create your own life, then, all of a sudden, you have -- you have got some hope and you're moving in a legitimate way.
COOPER: Well, they hope to get about $7 million. So, we will be watching to see what happens with that.
We're going to talk to you throughout this hour about opportunities in this recession, these tough times, maybe try to get ahead or -- or even try to make the most out of the situation...
MCGRAW: There is a silver lining here; I promise.
COOPER: All right. We will talk about that ahead, something to look forward to.
Next on 360, we will also look at winners and losers of the crisis, from winemakers, who are doing pretty well, actually, to producers of green vehicles -- the surprising list of which industries are actually seeing profit and who's losing a fortune, that ahead.
Also tonight, Bernie Madoff's treasure chest, including a $65,000 silverware set, millions of dollars in jewelry, just some of the prized possessions the feds want to take from the convicted fraud. We have got the list and whether or not his wife is going to be able to keep some of this stuff. We will also have the prices of these things coming up.
We will be right back.
COOPER: We are back in Los Angeles at L.A., live Nokia Plaza, right outside the Staples Center. There was a job fair here today. There were 40 jobs available. About 500 applications were handed out in about an hour. Hundred of people waited on line for just about 40 jobs.
There was a job fair over the weekend at Dodgers Stadium. Some 10,000 people showed up for that.
We're "On the Road to Rescue" all week, traveling the country, looking at how different cities are trying to use stimulus money. Looking at success stories, groups that are thriving, individuals that are thriving. We're going to talk to Dr. Phil who says there is a silver lining for some folks in all of this. We'll talk to him about this throughout this hour.
The big question right now: when will the industry downsizing and job bloodletting end? No one, of course, knows for sure except perhaps the chairman of the Federal Reserve, one of the most powerful men in government.
Here's Ben Bernanke's prediction last night on "60 Minutes."
(BEGIN VIDEO CLIP) BEN BERNANKE, CHAIRMAN, FEDERAL RESERVE: We've seen some progress in financial markets, absolutely. But until we get that stabilized and working normally we're not going to see recovery.
But we do have a plan. We're working on it. And I do think that we will get it stabilized. And we'll see the recession coming to an end probably this year. We'll see recovery beginning next year, and it'll pick up steam over time.
(END VIDEO CLIP)
COOPER: Well, let's say the recession does come to an end at the end of the year, as he predicts. It's still a long time until then with countless more jobs lost. But for all those jobs that disappeared, there are some gained.
Continuing our CNN survival guide, here's Tom Foreman with some of the losers and the winners of this long and grueling recession -- Tom.
TOM FOREMAN, CNN CORRESPONDENT: Yes, hi, Anderson.
We've been talking so much about small businesses tonight. We want to show you that some of them are emerging as winners, even though they're in the middle of industries that are losing fortunes. And all we have to do is swing right up the West Coast where you are, Anderson.
A big loser: manufacturing. We've all heard about this: 168,000 manufacturing jobs lost last month nationwide. But some small manufacturers are succeeding because they can innovate; they can adapt quickly; and they can specialize.
For example, not far away from where you are, Anderson, in Harbor City, California, the Balcon Corporation manufactures heavy-duty electric trucks. And they just celebrated the grand opening of a production plant with designs on creating hundreds of jobs making these green vehicles for, among other things, the port of Los Angeles.
Another big loser we've all heard about: the construction business, 104,000 jobs last month. But guess who is hiring? That's right. Renovation and remodeling companies.
Up in Portland, Oregon, I talked to the folks at Stanley Home Renovation. Little, small company. And they say calls from homeowners are up about 50 percent in the past two months. The owner says he's heard the same thing over and over again from so many people. They can't afford to move, but they can afford a new kitchen, a new bath. We're hearing reports like this from all over the country. A big winner in the midst of this construction bust.
And finally, yes, the restaurant business. It's way down. We know that. Folks feel like they just can't afford to drop big dollars on fancy meals.
But the wine trade is up. The people at Bogle Vineyards near Sacramento says home wine sales are doing great, because people are dressing up their home-cooked meals with a bottle of wine, and it's still cheaper than eating out.
So there are winners out there, for all the losers in this economy -- Anderson.
COOPER: Also, I guess they're drinking away their sorrows.
FOREMAN: I guess so.
COOPER: Thanks, Tom.
Still ahead, the man who tells us to keep it real. A difficult thing to do sometimes in an economy that's gone over the cliff. Dr. Phil is coming up, talking about silver linings in this recession.
But first Randi Kaye joins us with the "News & Business Bulletin" -- Randi.
RANDI KAYE, CNN ANCHOR: Hi, there, Anderson.
The sweet life may soon be over for Bernie Madoff's family. The convicted swindler is in a Manhattan jail until his sentencing in June. Now prosecutors are going after Madoff's assets trying to recover anything they can for the victims of a massive fraud that could total $65 billion. Several multimillion dollar homes, cars, boats, jewelry and more are up for grabs, plus tens of millions of dollars in bank deposits and securities.
The White House firing back at former vice president, Dick Cheney, who yesterday bashed President Obama for stopping torture and military trials of terrorist suspects at Guantanamo Bay, while planning to close the prison camp. Here's what Cheney said in an interview with John King.
(BEGIN VIDEO CLIP)
JOHN KING, CNN CORRESPONDENT/ANCHOR: Do you believe the president of the United States has made Americans less safe?
DICK CHENEY, FORMER VICE PRESIDENT OF THE UNITED STATES: I do. I think those programs were absolutely essential to the success we enjoyed of being able to collect the intelligence that let us defeat all further attempts to launch attacks against the United States since 9/11.
I think that's a great success story. It was done legally. It was done in accordance with our constitutional practices and principles. President Obama campaigned against it all across the country. And now he's making some choices that, in my mind, will, in fact, raise the risk to the American people of another attack.
(END VIDEO CLIP)
COOPER: Today White House spokesman Robert Gibbs responded by saying President Obama is keeping the nation safe and dealing with problems George Bush's administration did not.
He also added, talking about the former vice president, quote, "I guess Rush Limbaugh was busy, so they trotted out the next most popular member of the Republican cabal."
Dick Cheney's wife, Lynn, was released tonight from a Philadelphia hospital, where she was taken after fainting in her hotel room earlier today.
Anderson, back to you.
COOPER: All right, Randi.
Time now for our "Beat 360" winners, our daily challenge to viewers. A chance to show up our staffers by coming up with a better caption for the picture we post in our blog every day.
So tonight's picture? Take a look. Treasury Secretary Tim Geithner standing by as President Obama addresses small business owners and community lenders in the White House today.
Our staff winner tonight is Kirk. His caption: "Nobody puts Timmy in the corner."
(SOUND EFFECT: GROANS)
COOPER: Our viewer winner, David. His caption: "Mr. Geithner standing just outside the president's inner circle."
(SOUND EFFECT: DRUM BEAT)
COOPER: You're not wrong about that, David. Your "Beat 360" T- shirt is on the way.
And Randi, I should point out, we actually have a 360 viewer here, Carolyn (ph), right? You play "Beat 360" every night? Is that correct?
UNIDENTIFIED FEMALE: I do, and I've never won.
COOPER: You've never won?
UNIDENTIFIED FEMALE: Apparently, I'm not funny enough.
COOPER: But you want the T-shirt, right?
HILL: Give her a T-shirt.
UNIDENTIFIED FEMALE: I would love a T-shirt. I'd really love one.
COOPER: I don't think we have any T-shirts around. I'm not sure I'm allowed to give you one. I'll look into -- I'll check the bylaws. And if we're able to, I'll give you one.
UNIDENTIFIED FEMALE: I love your show. COOPER: All right. Well, keep -- well, keep playing. Thanks very much. All right, thanks.
All right. Just one of our viewers who never seems to win. Oh, well.
Up next, "On the Road to Rescue," our CNN survival guide. Experts answer your questions on how best to survive this long and bitter recession. People around me have some questions. We'll be right back.
Also later, losing sleep over losing a job. Dr. Phil is here with tips on coping in these uncertain times. That's ahead on our "Road to Rescue."
COOPER: The "Road to Rescue" begins with jobs, and so many Americans are looking for one. More than 11 million people are unemployed. That's roughly equivalent to the entire population of Ohio.
Those who are working are very wary of the future. A new CNN/Opinion Research poll tells the -- the story. Just 22 percent of those surveyed are very confident they'll find a good job if they have to leave a current employer. That's just 22 percent.
A lot of anxiety, both at the office and on the unemployment lines. The question: how do you cope? How do you keep your confidence up? And what can you do to make sure you still have a paycheck?
Here to help with some advice, let's bring back Dr. Phil and Ali Velshi and bring in "L.A. Times" business reporter David Colker.
Dr. Phil, you said there is a silver lining to all this? What is it?
DR. PHIL MCGRAW, TALK SHOW HOST: First off, we've been living really fast. I mean, we've kind of been in a consumptive chic (ph): living -- living large, the big house, the big cars, and being in the laser lane.
And one of the things that I've heard from so many of my viewers, saying that now that we can't take some of these vacations, we can't buy those Xboxes, that they're actually being forced to have some time with their kids, be out in the yard throwing things around, going and having a picnic instead of going to Disneyland or something.
So maybe, just maybe it's causing us to slow down and focus on what really family is all about again. And I'm not saying I want anybody to lose their job or have economic hard times. But maybe it's forcing us to get back to some of the basics that family's really all about. And I think that can be a good thing for us.
COOPER: David, there's actually a lot of free stuff out there for people who are needy.
DAVID COLKER, REPORTER, "L.A. TIMES": You know, people are capitalizing on this like crazy. Every time you turn on the radio, go past a bus there's an ad for loan modifications, you know, "We can help you."
And yet, what people don't realize is they've paid for this help. There's a lot of government-backed help. If they go to the HUD site, www.HUD.gov, and click on just "finding a counselor," there are counselors all across...
COOPER: For free?
COLKER: For free. All the question is having a mortgage. You can be the richest person in town. You can be the poorest person -- well, not the poorest person. You don't have a house. But the poorest person with a house. You know, you can walk in with that mortgage and they will help you. They'll look at your papers. They'll evaluate the situation.
COOPER: For loan -- for loan problems?
COLKER: For a loan counselor. They changed the name.
COOPER: Even for small business owners there's free advice out there?
COLKER: Yes, there is. You know, we just recently wrote about that in our small business pages. Just came out Tuesday in "The L.A. Times." Now, my colleague, Cindy -- Cindy Azuela (ph) -- I always get this name wrong -- she wrote about the fact that many universities, including many in the Cal State system right here in California, will send business students out to be your consultant. Who can afford a consultant when you're just starting out?
COLKER: They'll come; they'll help design a marketing system.
COOPER: They actually send consultants out?
COLKER: They send them out. The kids come out. They help you. They get the experience. You get -- they get the experience; you get the expertise, the enthusiasm. It's a terrific system.
COOPER: We've got some questions -- actually, if you could just stand up for a second.
COOPER: We've got one question for Ali Velshi. Michelle, you're a schoolteacher, right? UNIDENTIFIED FEMALE: I am a secretary, actually.
UNIDENTIFIED FEMALE: And we're facing potential layoffs. And (UNINTELLIGIBLE)...
COOPER: That's what you want to know?
UNIDENTIFIED FEMALE: We are running out of time.
COOPER: Let's ask Ali Velshi. What do we know about that? Do we know how stimulus money here in California is going to be allocated?
ALI VELSHI, CNN CORRESPONDENT: Yes, we do. California, what a tough time for people in the education system.
Yesterday, by yesterday there were about 20,000 or more warnings, layoff warnings sent out to teachers in the system. Now, every year by March 15, the government of California has to send out those warnings. Most years they're rescinded, so most people don't get laid off. But in this case the budget shortfalls are so serious.
Now, California is getting about $31 billion from the federal stimulus, and about $8 billion of that is going to go to education. So hopefully, that's going to be able to save a lot of those jobs. But far more teachers than normal got those pink slips and school employees. And more people are worried that it actually translates into layoffs.
California is a big recipient of federal stimulus money, so we're hoping that some of that money is going to go to education. I think your job and those of your colleagues will be safe.
I should tell you, Anderson, education, teaching, anything in education is still one of the growing industries in this country. It remains very portable. So hopefully, if you get through this rough patch, it's a good future for you.
COOPER: I can also tell you, Michelle, it's not just you who are waiting to find out. It's also the governor. It's also the mayor of Los Angeles. I talked to him a couple days ago. We're going to play that in our next hour on 360. He's waiting to find out how -- excuse me -- how much stimulus money is going to be coming to the city of Los Angeles. He has big plans for that. We'll talk about that in the hour ahead.
We'll have more with Dr. Phil coming up. David Colker, thanks very much.
COLKER: You bet.
COOPER: That's Ali Velshi. Thanks, as well.
Dr. Phil is sticking around with us all night to help us. The tools you need to deal with this economy.
And as this next story is going to show, some people are going to extremes, losing sleep because of stress, popping pills just to get through the day. A warning sign for everyone. Dr. Phil's advice coming up. We'll have that.
COOPER: When I interviewed President Obama in the Oval Office he told me the economy literally keeps him up at night. He's definitely not alone. Millions of Americans right now sleeping less since the recession. We've got the startling figures for you. As you're going to see, many people awake over the crisis are turning to pills for help. But are the drugs fueling perhaps a new addiction?
Here's Randi Kaye.
KAYE (voice-over): Until last June, when this New Jersey father of four was laid off, he thought he was set.
THOM KRAUSS, STRESSED OUT FROM JOB LOSS: I kind of lived the dream. I had the money in the bank. Everything was paid for.
KAYE: Now Thom Krauss, an Ivy-League-educated investment banker who worked on Wall Street for ten years, is so stressed out he can't sleep.
KRAUSS: I'd be up at 2 looking at the clock. And then you're like, OK, 2 turns into 4 a.m.
KAYE: What keeps Thom up at night?
KRAUSS: I will run out of money in probably 11 months.
KAYE: Thom's trying to find a job. He got severance but not enough for all his expenses: his house in the suburbs, an apartment in New York City, and his ex-wife's house.
KRAUSS: It's easy to see why I might not sleep at night when I see a $25,000 to $35,000 burn rate every month.
KAYE: Plus, with four children, he thought he had college covered.
(on camera) What is your greatest fear?
KRAUSS: My worst fear is that I have to wake up and find myself in a position where I've got 30 days left of money.
KAYE (voice-over): Thom tried therapy, but that got too pricey. So even though he'd never taken prescription pills before, he asked his doctor for the sleep Ambien. That helped for a while. Now he takes Xanax to relax instead.
(on camera) Do you think the economy has turned this country into a pill-popping nation?
KRAUSS: I know this is just my case. And I'm not a pill popper. I can't imagine what's going on for people who are a little bit more liberal than I am.
KAYE: In fact, a recent poll by the National Sleep Foundation found one-third of all Americans are losing sleep over the state of the economy and their personal finances. That means more prescriptions for sleeping pills.
One health-care company that tracks this stuff says doctors wrote more than 56 million prescriptions last year, a 7 percent increase from the year before.
(voice-over) This doctor says in his practice, he's seen a 30 percent increase in patients who believe a pill is the answer.
DR. NABEEL FARAH, SLEEP DISORDER SPECIALIST: What I'm even seeing is younger and younger patients coming in to see me: young professionals in their early 20s who are having difficulty with keeping their jobs or being stable.
KAYE: Dr. Nabeel Farah says stress messes with the body's natural rhythm. It puts the brakes on relaxation.
Thom says he doesn't like taking pills but admits he'll probably keep taking them as long as he can afford them or until he finds a job.
Randi Kaye, CNN, Chatham, New Jersey.
COOPER: Let's hope he finds a job soon.
The "Road to Rescue" for each person is going to vary, depending on how you've been hit. Dr. Phil is next with his advice for how you can thrive, even find some opportunity in this recession.
And half of Americans in private-sector jobs work for a small business. Do you know that? We're going to tell you what President Obama wants to do to help save those jobs.
And then, the outrage over AIG giving out massive bonuses after getting $170 billion in bailout money, your money. One senator today saying AIG execs should either resign or -- get this -- commit suicide. We'll bring you the latest.
COOPER: Back with 360 in Los Angeles tonight. You're right outside the Staples Center in L.A., live, the Nokia Center, on "The Road to Rescue." That takes us to New Orleans tomorrow, Detroit on Wednesday, New York on Thursday, ending the week Friday in Miami, looking at how people are surviving in these tough times. Dr. Phil McGraw is with me right now. He's told millions to get real about their lives. For a lot of Americans losing their jobs, it's all too real, and it's the first step to losing everything: the house, the car, health insurance, losing sleep over money worries.
Dr. Phil joins me again right now.
What do you give -- I mean, how do you advise someone who's lost their job?
MCGRAW: Well, you know, here's the thing. The thing that makes people most stressed out is when they don't feel like they have any control over what's happening in their life.
And so what I encourage people to do is focus on those things they can control. I mean, if you don't have a job, then your job is finding a job, right? I mean, if you work nine hours a day on your job when you have it, you should work at least nine hours a day looking for a job when you don't have a job.
And we're at a time where people have to understand that we have to start negotiating. The bank doesn't want your house. They don't want your car. They don't want you to stop using their credit cards. But you've got to not turn away from it. You've got to get on the phone and call them and say, "Look, here's my situation. Look them in the eye over the telephone and start to negotiate."
And then people feel like, "Well, I'm doing something for myself. I'm fighting back here." And...
COOPER: It feeds on itself, though. Because once you -- if you get depressed, then you're less likely to want to put yourself out there. You're less likely to want to, you know, go for those interviews.
MCGRAW: Yes. And the worst thing you can do is pull back and start isolating yourself, Anderson.
You know, we know that the No. 1 pressure on couples and families is money. When you talk to a divorce lawyer, they say that one of the most common things they hear when somebody comes in for a divorce is "We're fighting over money." And we know now that that pressure is higher than it's ever been.
This can either be a wedge that's driven between you and your spouse or it can be the glue that binds you together where you say, "Look, we're in this together. Let's not blame each other. Let's start working on a solution together."
Domestic violence is on the rise. Depression is on the rise. Anxiety is on the rise. Alcohol and drug use are on the rise.
So the stress is starting to take its toll, and couples need to come together and not blame each other. Maybe they both made mistakes getting into this: lived beyond their means; didn't save for a tough time. But that was then. This is now. We're in this together. You got to talk about it and not point fingers and be blamers.
COOPER: And as you said, it's not just your spouse. It's with your kids and trying to use this time to maybe, you know, reconnect in a way that you haven't.
MCGRAW: Right. And I always say don't ask children to deal with adult issues. And that's like paying the mortgage, that you're having trouble paying the mortgage. But you do need to let them know that there are good times financially, and there are leaner times financially.
COOPER: If kids are wondering why you're not eating out as much...
COOPER: ... what do you tell them?
MCGRAW: It's OK to tell them that right now we're conserving money, because things are tougher right now in the economy and get them involved, even if it's a 4- or 5-year-old child. They can be on light patrol: your job is to turn off lights on any room we're not in so we can save a little money there.
You can do the recycling. You can do some of it -- you know, feed the neighbor's cat. Let them feel like they're contributing in some small way. But don't burden them with the really big issues.
And don't fight about this in front of the kids, Anderson, because they have a way of filling in the blanks to their detriment. They will blame themselves if Mom and Dad are fighting over money. You may be fighting over a $4,000-a-month mortgage payment. But they go back to the bedroom thinking, "If I didn't need school pictures for $11.25, Mom and Dad wouldn't be fighting." They personalize it, and they blame themselves.
So we've got to really talk about this and not just get into a blame game.
COOPER: All right. Dr. Phil, good advice. Thanks for coming out.
MCGRAW: Thanks so much. Good to see you, Anderson.
COOPER: Coming up at the top of the hour, AIG, President Obama lashing out at the executives who turned your bailout money into their bonuses. We're going to look at what can be done to get it back "On the Road to Rescue" in Los Angeles.
Tomorrow we're in New Orleans. We'll see you there.