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WOLF BLITZER, CNN ANCHOR: ... he said the countries that support bin Laden -- described as the prime suspect in the attacks -- will be held accountable.
And Pentagon sources say America's war against terrorism will be fought with unprecedented secrecy. Sources tell CNN the fewest number of people possible will have access to classified war plans.
Work continues at the site of the World Trade Center towers tonight, search for the missing and cleaning up the debris. Crews have removed almost 40 tons of rubble, but many times that amount remain.
The latest casualty figures from New York Mayor, Rudolph Giuliani, 201 people confirmed dead, and more than 5400 missing.
Mayor Giuliani was back at ground zero today touring the site, along with New York Governor George Pataki and members of the state's congressional delegation.
The stock markets reopened in New York today with a moment of silence. Then, trading began with a virtual free-fall across the board. By the end of the day, the Dow was down 684 points to 8920, the biggest one day point drop in history. The Nasdaq fell 115 points, closing at 1579.
Airlines in the United States face difficult times ahead. Although planes are flying again, the impact of last week's attacks on air travel is forcing carriers to make severe cuts. U.S. Airways announced, today, it would lay off about 11,000 workers. American and Northwestern are both expected to announce layoffs later this week. Continental has already said it was laying off 12,000 people. Most airlines are expecting no more than 80 percent of the traffic they had before the trade center attacks.
Still, the administration is trying to put a positive light on the unsteady U.S. economy. Treasury Secretary, Paul O'Neill, said that he thinks history will reward the people who bought stocks today.
(BEGIN VIDEO CLIP)
PAUL O'NEILL, TREASURY SECRETARY: I think that's right, you have to always remember -- when you're looking at markets -- for every seller, there's a buyer. And, therefore, every buyer, there's a seller.
My guess is that when we look a year down the road, the people who bought today are going to be the happy people; the people who sold will be sorry they did it.
(END VIDEO CLIP)
BLITZER: President Bush says he has great faith in the nation's economy, while also admitting that thing's are tough right now.
We turn now to CNN White House Correspondent, Kelly Wallace, for more on the administration's approach to the economy.
I take it, Kelly, they're pretty worried over at the White House.
KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: Wolf, they definitely are; definitely quite concerned. And that is why President Bush met with his economic advisers today. He also met with his staff to discuss the ailing airline industry.
So look for the White House to do a couple of things in the days ahead. Number one, Mr. Bush is said to be committed to a multi-billion dollar aid package to the airline industry. Airline executives will be meeting tomorrow with Transportation Secretary, Norman Mineta, and also with the president's Economic Adviser, Larry Lindsey (ph). The big question will be the size of the package and just what it looks like.
Number two, Mr. Bush also saying that he's working with Congress on an economic stimulus package, maybe something along the lines of increased government spending and a capital gains tax cut.
Wolf, everyone in the White House expected today to be a jittery day in the market. So the big question will be: what happens in the days ahead -- Wolf.
BLITZER: Kelly, an extraordinarily tough talk from President Bush today, as far as Osama bin Laden is concerned. What are your sources at the White House saying about this thrust of this approach of talking tough about Osama bin Laden?
WALLACE: Well, you've seen, Wolf, the president sort of ratcheting up the rhetoric in the days since Tuesday's deadly attacks. People really feel like no talk can be tough enough.
There is some concern, though, that maybe this is sort of too tough in the sense that the president's singling out the prime suspect, who he called Osama bin Laden. And that the old campaign against terrorism could weigh on whether or not the U.S. manages to get Osama bin Laden. You see the president managing a couple of roles there, going over to the Pentagon to meet with troops, talking with military planners about the call-up of up to 35,000 reservists. But then, of course, the bluntest language to date: the president talking about Osama bin Laden and was asked if he wanted him dead or alive.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Osama bin Laden is just one person. He is representative of networks of people who absolutely have made their cause to defeat the freedoms that we take -- that we understand. And we will not allow him to do so.
QUESTION: Mr. Bush ...
QUESTION: Do you want bin Laden dead?
BUSH: I want him -- hell, I want -- I want justice. And there's an old poster out West -- as I recall -- that said, "Wanted, dead or alive."
(END VIDEO CLIP)
WALLACE: And that comment had reporters asking White House press secretary, Ari Fleischer, if the administration is moving away from a decade's old directive that bars the United States from participating in assassinations overseas. Fleischer saying that directive is still in effect, but he also said it does not effect the U.S. from acting in self-defense.
Wolf, back to you.
BLITZER: Kelly Wallace, thank you very much.
And within hours, Afghanistan's top Islamic clerics -- now facing increasing pressure to hand over Osama bin Laden -- will meet to decide what to do with him. A Pakistani delegation delivered word to the ruling Taliban, today, to release suspected terrorist bin Laden, or else face a U.S. military attack.
CNN Senior Analyst, Jeff Greenfield, joins me now live from New York -- Jeff.
JEFF GREENFIELD, CNN SENIOR ANALYST: Wolf, thank you very much.
You've all heard it all day. This was the day America tried to get back to normal. But what does that mean, now that we know the most chilling warnings of terror that might be brought home were, in fact, overtaken by reality?
It seemed, to us, the best way to answer that question was to ask people who had understood this danger long before it was brought home, as well as someone who has had to chart a normal life in a place where terror has long stalked citizens on a daily basis. That's what I did a few hours ago.
Joining us now from Denver, Colorado, former U.S. Senator and presidential candidate, Gary Hart. Two years ago, Senator Hart, along with former Senator, Warren Rudman, co-chaired the U.S. Commission on National Security in the 21st Century, and issued a report whose first sentence read: "Attacks against American citizens on American soil, possibly causing heavy casualties, are likely over the next quarter century."
And with me here, in New York, Jessica Stern, a lecturer at Harvard's John F. Kennedy School, a former staff member of the National Security Council and the author of "The Ultimate Terrorist," a book about the threat of chemical, nuclear and biological warfare.
Also, here in New York, Lisa Beyer, a senior editor at "TIME" magazine. She was, for nine years, Time Magazine's Jerusalem bureau chief.
Senator Hart, as a young college student, John F. Kennedy wrote a book called, "Why England Slept." Given what happened when you issued your report, you think there'll be a book someday called, "Why America Slept?
GARY HART, FORMER U.S. SENATOR: Well, that's very odd that you would ask that question. That same though occurred to me over the last three or four days. Someone will surely write that book.
Unlike, say Pearl Harbor, the United States was warned in this case. We just didn't follow the warning. Now, could we have known the details of this attack? Well, certainly, we could have. But, was this the most likely kind of terrorist attack? I would say not.
I think the method used was almost a total surprise to everyone. But the fact that such an attack was imminent, I think was on the minds of an awful lot of people.
GREEENFIELD: Well that's what's so curious. This report -- you were -- former United States Senator, Warren Rudman -- you had a former Speaker of the House, Newt Gingrich, on the commission.
And I'm wondering if part of the reason it got so little attention was that we Americans simply could not get our minds around the possibility of being attacked on our own soil, no matter how eloquent the report.
HART: I think that's -- I think that's in large part true. But the method we proposed to deal with this problem was an institutional one. We called for the creation of a national homeland security agency, which required the combination of a lot of different parts of the federal government. And there was great bureaucratic resistance to that.
I think the new administration -- which received this report -- our prediction of a major terrorist attack actually occurred two years ago, in September of 1999. But our solution for dealing with that was delivered to the new president, and I think the sense of urgency simply did -- was not there. There were a lot of other domestic and startup considerations. And so this was just deferred.
GREENFIELD: And that leads me to the last question before I turn to our other guests -- I mean, the last question for now -- which is that your recommendations were, indeed, institutional. Here's how to reorganize government answers. But I think what a lot of us have on our mind -- quite candidly -- is how much will doing what we have to do change the way we live? Can you give us and our viewers some sense of your own understanding of that?
HART: Well, I think that's already happened. I think for a long, long time to come, Americans are, in effect, going to be looking over their shoulder wondering when they enter a tall building whether something may happen, beginning to wonder whether dark-skinned people wearing different kinds of head gear may, in fact, be terrorists. That's going to permeate our society for a long, long time.
And, so, in a way, our life has already changed and will continue to change. And I think the real question is the degree to which we're going to have to give up civil liberties to increase our local security, our domestic security.
GREENFIELD: I'm going to get back to that in a second, but I want to turn to Jessica Stern, whose work on the National Security Council brought this to your attention. Your book takes a very careful look at the -- at the probable threat of weapons of mass destruction.
One thing you say caught my eye, because you wrote this book obviously a while ago. You say that religious terrorists may be more likely to use weapons of mass destruction that others. Why?
JESSICA STERN, FORMER MEMBER OF NATIONAL SECURITY COUNCIL: Well, many terrorists are -- have -- a clear political constituency. In fact, they're a lot like politicians. They're trying to win the hearts and minds of a large group. And a mass casualty attack is not a good way to win hearts and minds of a large group. So it seemed to me very likely that groups that are seeking revenge or have a religious objective -- groups that are not seeking power in a particular country -- might be more drawn to mass casualty attacks.
GREENFIELD: There's some hair-raising stuff in your book. What could happen if a one kiloton nuclear device was exploded in the middle of New York. Is there anything in your studies that we might take some heart from? That we could say, "Oh, OK" -- perhaps I ought to prompt you in the interest of not having everybody, you know, run for the shelters.
You did suggest that some of these things in terms of delivery systems are not the easiest thing in the world to do.
STERN: That's right. That's right.
To deliver -- to determine -- biological agents over a large area, for example, which could be extremely deadly, is very difficult to do. To detonate a nuclear device is very difficult to do.
What these terrorists did is the equivalent, in fact, of a one kiloton nuclear device, but with a low-tech delivery system.
GREENFIELD: Here's what occurs to me as a (UNINTELLIGIBLE) non-expert: You live in Boston; you get up and go to work every day; you see your friends; knowing what you know, how often does it intrude into your thoughts, your daily life? Looking up and thinking, "I know what's out there."
Well, Ms. Beyer, this brings me to your nine-year experience as living in Jerusalem.
LISA BEYER, "TIME" MAGAZINE: I wish I had that answer.
GREENFIELD: Well that's what I wondered. I mean, you lived there for nine years; you had a job, I think at the time, you were the mother of small children?
GREENFIELD: So how did -- so you have a different response to this than what Ms. Stern told us? Was it in your thoughts?
BEYER: Well, since -- you mean, since the ...
BEYER: Oh, before ...
GREENFIELD: I mean while you were in Jerusalem.
BEYER: Sure. It was in my thoughts often.
In the period that I was in Jerusalem, terrorism was cyclical. And it would be in your thoughts when it was going on, and not so much in your thoughts when it wasn't going on. But for the last year, in Jerusalem, it's been anything but cyclical. It's been completely constant.
And I know from talking to friends of mine who are still there, that it is constantly in their thoughts. I mean, it's never outside of their thoughts. It's one of the reasons that Israelis are so insane about their cell phones. They're always on the phone to people that they care about. "I'm here now. I'm going there. It's going to take me 20 minutes. I'll call you when I get there."
I used to think that was sort of a quirk of Israeli life. It's not. It's a way of knowing what's going on and knowing where people are so that if something happens, you know whether they've been involved and you know how to reach them quickly.
GREENFIELD: Now, that sounds -- you may not mean it that way -- but that almost sounds a likely prediction of how our lives will change. I mean, we're already wired into our cell phones a lot. But I take it you're saying that people are going to be checking in with their loved ones a lot more, perhaps, even than they were.
BEYER: I think it will. I think that's what's happening here, in New York now, certainly.
But there are all sorts of ways that Israelis are vigilant, suspicious, and even nosy. That are ultimately going to be methods of dealing that we -- that we need to have here. There's no such thing in Israel as a school or a mall or a cinema that doesn't have a security guard in front of it, checking everybody who comes in and checking their packages.
Any place that people gather in large numbers, you would have that sort of person. And you also have people avoiding those places.
GREENFIELD: Senator Hart, you know -- as well as anyone having spent your life in public life -- what an opened and self-confidant and vibrant country this. I mean, we -- and in part, because I think we've been historically exempt from the kinds of dangers that other societies have dealt with.
You've already described the way that this country has changed. Is it your sense that this will inevitably leech into almost every part of our public life; that we will think of ourselves differently, carry ourselves differently?
HART: Well, to answer that question, I have to -- I have to pour more sad news into the discussion. And that is: I don't think this is the end of it. I think this is just the beginning of the new style of warfare. And I think it would be the greatest blessing in this country's future if we -- if we knew this was the last terrorist attack. But it certainly is not.
I have to think about -- in answering that question -- what if a year from now, two years from now, or two weeks from now, another attack occurs somewhere in the heartland, using chemical or biological weapons -- however difficult it is to deliver those -- in the center of this country?
I mean, think back to Oklahoma City. If this becomes a series of events -- maybe not every week or every month, but you never know when the next one's going to occur -- it will fundamentally change the nature of this society. The way we look at ourselves; the way we look at our society. The way we live our lives. And, particularly, for children. That's what concerns me.
GREENFIELD: It's probably a good time to take a break. And we will continue our discussion in a moment when we come back.
GREENFIELD: We are back with former Senator, Gary Hart, who joins us from Denver; former National Security Council Staff Member, Jessica Stern; and Lisa Beyer, of "TIME" Magazine, here in New York. And we are discussing what it means to try to get back to normal in a time that's anything but.
Ms. Stern, today was the day -- I mentioned this in my introduction -- that America said it was going to get back. People flew airlines, but there were long lines at the airport. People went back to baseball games, but the mood was anything but celebratory. The stock market reopened, but with massive security.
So, based on what you know, if I said to you, "All right, say something to Americans about how they can protect themselves."
STERN: Well I hope this doesn't sound flip, but what I would say is that you should wear a seat belt and stop smoking.
GREENFIELD: Now you obviously don't mean that to protect us from weapons of mass destruction. But you -- so what are you getting at with that?
STERN: What I mean is that the likelihood that you will -- that if we want to extend our lives, we should think about more ordinary threats. The likelihood that we will get in a car crash or get lung cancer is significantly higher than the likelihood that we will be blown up by a bomb.
GREENFIELD: Now, could you think that way when you were in Jerusalem? Could you -- I mean, I asked you this before, but let me put Jessica Stern's spin on it. I mean, I could understand a society saying, "Why am I going to wear a seat belt and give up smoking, when any minute somebody in a car bomb could blow me and my family to smithereens?"
BEYER: Well, I don't smoke and I already wear a seat belt, so I need something more. And, certainly, in the time that I was in Israel, there are many, many ways in which Israelis protect themselves. And I want to preface all of what I'm about to say by saying that a lot of this can't possibly apply to our society because of the nature of our society.
But, for example, in Israel, there's no such thing as an unattended package. If someone leaves a bag or a package on a street somewhere or on a bench, within minutes somebody will see it, they'll report it to the police, the police will call the bomb squad, the bomb squad will clear the area and blow the package up. It happens with great regularity; I've seen it dozens of times. It's just a common thing.
Israelis are very clear about who the enemy might be. If it's a Jewish state, then anybody who's Arab or Muslim is a potential enemy and is looked at accordingly.
GREENFIELD: Which is impossible here.
BEYER: Which is impossible in this country.
People talk now about our applying El Al style security at our airports. Well, some of the stuff that El Al does, or the Israel security does, makes sense. They have the sky marshals on the airplanes who wear plain clothes and have guns. But the principal thing that the Israeli Airport -- the International Airport -- does to prevent terrorist attacks is it figures out who's Jewish and who isn't. And if you're Jewish, have a nice flight. If you're not Jewish and you're not a Muslim -- you're a regular gentile -- you'll get a 45-minute interrogation, which is what I got on a regular basis at the airport.
But if you're an Arab or a Muslim of some other kind, you better get there four hours in advance and be prepared for a strip search. I'm not sure that kind of ethnic profiling is something that this country's prepared to do.
GREENFIELD: Senator Hart, this leads, I think, to a broader question about what -- not just what we're prepared to do -- but what our leaders are prepared to do. One of the burdens of leadership is to rally a people who may feel frightened or tired or beaten or, if I may be blunt, petrified about some of the possibilities the report you co-authored sets before us.
One of these was Winston Churchill, and now, I think, Giuliani, is that they seem to have carried themselves that's been straight with us and reassured us. So how does a leader simultaneously tell this country -- this up to now blessedly protected country -- A, you could be the target of horrific attacks; and B, you'll be protected, so lead a life with some confidence and some energy? How do you do both those things?
HART: I was never very good at answering "how" questions.
GREENFIELD: Well I thought we'd give you the tough one.
HART: That has a lot to do with one's personality and style, obviously, and that's why some leaders were so great at it. Whether George W. Bush will turn out to be one of those Churchillian figures, remains to be seen.
But I think you've pretty much given the formula, and that is: try to help -- try to find a balance between the kind of discussion we're having here: watch out for packages, don't really trust anyone. But on the other hand, have a nice day, and god bless America.
I think if I had to reduce it to a single sentence it would be: be as blunt and direct and informative of the American people as you possibly can be, without revealing serious intelligence sources. Don't hide -- I mean, virtually, don't hide anything. If there is the possibility of an attack, I think we're going to have to let the American people know that.
GREENFIELD: Ms. Stern, if you were -- well you have actually advised leaders -- but right now given the drastically changed circumstance, if the president came to you and said, "What should I tell Americans about the threat of this kind of attack that is ..." -- let's take Senator Hart's formula -- "that is both blunt, but doesn't send us, you know, hiding in a hole for the rest of our lives?" What can our leaders tell us that is both true and that at least gives us something to go by?
STERN: I think the most important thing at this time is for us to remember our most fundamental values, which include religious tolerance, no ethnic profiling. And that we should live our lives. If we don't go on and live our lives in a normal way, the terrorists have won.
GREENFIELD: But, Ms. Beyer, what Israel -- or what you suggested Israel has done -- is, in fact, in some sense, to show no tolerance because of the nature of the state. Isn't it possible that the United States -- if we say, "Look, what happened to the Japanese Americans was an outrage." Certainly, German Americans weren't rounded up. But federal authorities -- after Pearl Harbor -- did keep a very close eye on the German American bond (ph).
I mean, at some level, if this war is being waged by a fringe of radical Islam, doesn't the United States have to take account of that and make some legitimate distinctions?
BEYER: I'm afraid so. I mean, I hate to be the one on TV to say that, but we know -- as you say -- that this is a threat that comes from radical Islam. We need to keep a very close eye on this country on follower of radical Islam.
GREENFIELD: And, Senator Hart, you may have noticed today, the president went to a mosque in Washington and he has been extremely outspoken, as has Mayor Giuliani, about the need not to discriminate against or try to take drastic action against Arab Americans, against Muslims.
But when you say how America has changed, it certainly would seem that the freedom with which people can enter and move about this country -- even when there is reason to be suspicious of them, based on their past conduct -- may have to undergo some pretty serious revision, no?
HART: The way people go about -- I think I missed the rest of the question.
GREENFIELD: Well, in other words, people ...
HART: There was a story -- there was a story today of a -- I think an Afghani restaurant owner -- I can't remember. An Arab restaurant owner in San Antonio who was beaten, attacked. And word got out that this had happened and people queued up outside his restaurant to go into his restaurant. I think that's the best response.
GREENFIELD: Well, let me just put this on the table. We have a couple of minutes left. This one story that absolutely put my hair on end -- last June, in New York, the Federal Protective Service Police took into custody someone taking pictures around a federal building in New York. They detained him, confiscated the film, let him go, before they developed the film. I mean, you can get film developed in one hour at any Photomat. It took the -- it took this group days. And then they found this fellow was taking pictures of security cameras, police posts, security checkpoints, exits and entrances.
Does that not suggest that there has been a certain -- what shall we call it -- complacency among the people that are supposed to protect us?
HART: Well, sure. Well -- I mean, all the stories, now, are about how easy it is to go through airport security. Of course, we've been very lax; again, compared to Israeli standards or someone else's standards. I think all of that's going to change or, much of that's going to change.
Whether in a society of 280 million people -- the size ours is -- that's going to be sufficient to protect us, I don't know. I doubt it.
GREENFIELD: Would that help, Jessica Stern, in minimizing -- or helping to minimize -- the risks that you worried about? Is that something that can actually make a difference?
STERN: Well, obviously, we need to be a lot more careful in general about security. Our government, in particular, needs to be a lot more careful. We need tighter security. But for individuals, it seems to me, the most important thing is to remember we must not scapegoat ethnic groups and we must understand that these are extremists. These are not ordinary Muslims. Islam is about peace, not terrorism.
BEYER: I think you'll find, if I may say, Jeff, that not only law enforcement authorities, but also ordinary Americans -- especially if there are more attacks -- are going to become more vigilant. And you will find people reporting instances like that -- of people having suspicious behavior -- whether they look like Arabs or they don't look like Arabs. I think that Americans are going to get that they've got to be more suspicious.
HART: I think there also has to be a good deal of common sense.
I was at the White House about a week or ten days ago seeing the national security adviser. And as I left the White House, a bunch of capital police came up to me and said, "Could we see your identification?" And I said, "I'm leaving the White House." They said, "Well, we don't know who you are." So you have to show identification going out, I guess, now.
GREENFIELD: Well, OK. I guess a dose of common sense never hurts.
On that note, my thanks to my guests: former Senator, Gary Hart; thanks, as well, to Jessica Stern, author of "The Ultimate Terrorists;" and Lisa Beyer, of "TIME" Magazine. And a final thought right after this.
GREENFIELD: Finally, if America is looking for a rallying cry, I have a suggestion. Get serious. It's a motto for our leaders. As Senator Hart and I discussed, we revere what Winston Churchill did in World War II in part because he was extraordinarily blunt with his countrymen. He told them once, "We have before us an ordeal of the most grievous kind. We have before us many, many months of struggle and suffering."
Such words might well shock a nation as protected as ours, has been but a leader who leveled us that bluntly is a leader we're likely to trust. Rudy Giuliani has already proven that. But get serious is what we have to tell ourselves. As parents, friends and citizens, we know how that we and our children will likely believe law's far less comfortable, far more burdened, far more dangerous than we could have possibly imagined.
But that is so whether we acknowledge it or not. All of us will be sneaking and listening to words and thoughts and fears that were born out of hell in an instant. Facing up to that is the first step toward living honorably and bravely in this new world. I'm Jeff Greenfield . We now go back to Wolf Blitzer in Washington for a recap of the day's events, a day when the U.S. tried to return to a semblance of the normal -- Wolf.
BLITZER: Thank you very much, Jeff. Now, more on the latest developments in the aftermath of Tuesday's terrorist attacks. It was a tough first day back for traders on Wall Street. As expected, there was a lot of selling by worried investors. The Dow plummeted 684 points, the biggest one-day point drop ever.
Airline stocks were among those falling the fastest. Today, US Airways announced it would be cutting staff because of losses stemming from the terrorist attacks. The company plans to lay off almost 25 percent of its workers, about 11,000 people. This past weekend, Continental Airlines announced it plans to lay off 12,000 employees.
And the FBI is conducting a nationwide manhunt for 185 people who may have information about last Tuesday's attacks. More than 5,000 people are still missing in the deadliest act of terrorism on U.S. soil. The long-term effects of the terrorist attacks on the U.S. economy remain to be seen. Our Brooks Jackson looks at that next, and we'll also look at the painstaking recovery effort, a trip to what's becoming known as Ground Zero. Stay with us.
BLITZER: Welcome back. About an hour before Wall Street reopened, the Federal Reserve lowered interest rates to 3 percent. Economists, however, have differing opinions on whether this will help an already sluggish U.S. economy. CNN's Brooks Jackson reports.
BROOKS JACKSON, CNN CORRESPONDENT (voice-over): The attacks hit the U.S. economy, too. Airlines could lose billions and lay off tens of thousands. With long security delays discouraging travel, many airlines already are cutting operations 20 percent. Orders for new airliners could suffer. Boeing's stock plunged as the market reopened with a big loss. Hotels braced for a reduction in travel business.
Trucking was hit. There were 12-hour delays at the Canadian and Mexican borders last week. Many factories shut down, unable to get shipments. As America mourned, stores emptied. Example: Bookseller Barnes and Noble says sales at its 569 superstores were down 55 percent on the day of the attack. The economy was barely growing before; now, many economists expect it will shrink.
JERRY JASINOWSKI, NATIONAL ASSOCIATION OF MANUFACTURERS: Business stopped last week, and it's going to be slow going this week, so the month of September is going to be a very weak month, and that probably is going to pull the third quarter into negative territory.
JACKSON: More economists now fear a full-blown spiral into recession.
(on camera): It will takes or even months before the full economic effects are known, and they could be dire. Nobody really knows or can know. But as Americans went back to work this week, there were some encouraging signs.
(voice-over): Of course, economic cheerleading. Treasury Secretary Paul O'Neill issued a rosy forecast at the opening of the stock exchange Monday and in interviews during the day.
O'NEILL: Crops are still growing in the fields and the people are still showing up in the factories and the shopkeepers are happier. Even here in midtown New York, you can begin to feel a quickening pace again.
JACKSON: Labor and business staged the show of patriotic unity in the persons of AFL-CIO President John Sweeney and U.S. Chamber of Commerce President Tom Donohue, an economic odd couple.
THOMAS DONOHUE, U.S. CHAMBER OF COMMERCE: We're going to put all our resources to put down those maniacs and, quite frankly, to go out and kick some economic butt.
JACKSON: More importantly, consumers were back in the malls. For many Americans, shopping was therapy.
UNIDENTIFIED MALE: We've been watching all week and need a break, so we're coming out to shop.
JACKSON: But consumers were buying lots more than candles. Barnes & Noble reported sales on Saturday and Sunday were 4.5 percent above the comparable days last year. In Washington, the president of the Retail Industry's Trade Association spent the morning gathering reports from CEOs of retail chains.
TRACY MULLIN, NATIONAL RETAIL FEDERATION: The sales over the last several days have been reasonably good, given the magnitude of the disaster that we've all faced.
JACKSON: The Federal Reserve announced another half-point cut in its key interest rate and signaled more cuts would come if needed. In Congress, leaders were drafting proposals for business tax cuts to add further economic stimulus, leading some to predict the nation would still avoid a recession and begin a strong recovery next year.
JASINOWSKI: That we would get maybe stronger growth as we move forward in 2002 than we might have gotten if this had not occurred.
JACKSON: Brooks Jackson, CNN, Washington.
BLITZER: Americans seemed determined not to let the U.S. economy become another victim of the terrorists' attacks. CNN's senior political analyst Bill Schneider joins me now for more on that -- Bill.
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, here's a surprise. People's view of the economy actually improved in the days following the terrorist attack. Just before the tragedy last Tuesday, 32 percent of Americans said the nation's economy was in good shape. Over the weekend, that number jumped to 46 percent.
Now, what's up with that? Well, it's called a rally effect. In a crisis, Americans rally to anything that symbolizes America. The president's job ratings go up. This president now has an 86 percent job approval rating, including 80 percent of Democrats. It's time to put partisanship aside. In fact, even Congress's ratings have gone up -- Congress! Americans love to hate Congress, but Congress is a symbol of national unity, and so is the economy.
Even though six in 10 believe that the economy is either now in recession or will be within the next six months, Americans still remain optimistic. Six in 10 also believe that they're going to be financially off a year from now. Americans are confident that the purpose perpetrators of this monstrous act are going to be caught and punished, and they are no less confident that the nation's economy will rebound. Almost 80 percent say the terrorist attacks will not affect their confidence in the stock market.
Well, then, you may then ask, what happened on Wall Street today? Where's the rally? The answer is the stock market reflects people's behavior, not their attitudes, and consumer behavior has been affected by the terrorism. Forty-three percent of Americans say they are less willing to fly. Forty percent say they're going to cut back on spending. Thirty percent say they're going to postpone large purchases such as automobiles and major appliances.
That's a lot of people, and it has Wall Street spooked. Right now, the rally effect has people cheering for the economy, but what Wall Street is wondering is will they put their money where their mouth is?
BLITZER: Bill Schneider, I always learn something from you.
BLITZER: Thank you very much.
BLITZER: And U.S. officials say they have evidence additional would-be terrorists are in the United States and that they may still be plotting additional terrorism, most likely bombings. Yet, there's a small but growing concern terrorists could be trying to acquire less conventional weapons designed to kill much larger numbers of people. CNN national security correspondent David Ensor has more.
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): The most likely biological killer terrorists might use, experts say, is anthrax. It can be easily found in cow pastures. Agents made from it produce fever, stomach pain, then a horrible death.
D.A. HENDERSON, JOHNS HOPKINS UNIVERSITY: It is spread -- well, let's say in a biological terrorist event, it would go by aerosol. You'd dry it and spread it as a spray and let it drift over a long way.
ENSOR: Still more terrifying, though much harder for terrorists to get their hands on, a disease that was eradicated in the 1970s -- smallpox.
MICHAEL OSTERHOLM, MINN. CTR. FOR INFECTIOUS DISEASES: (UNINTELLIGIBLE) smallpox simply means to have a device within a writing ink pen that could very easily pass at any custom's office, could very easily pass through any metal detector, and you're going to have enough smallpox in there to start the world's worst epidemic.
ENSOR: Smallpox spreads like wildfire. It is estimated to have killed 120 million people in the 20th century.
HENDERSON: Then there would be some small lesions on the skin. You wouldn't be sure what they were for maybe two, three, four days.
ENSOR: The only official stocks of the virus are in one U.S. and one Russian lab. There may be others.
JONATHAN TUCKER, AUTHOR, "SCOURGE": There is circumstantial evidence that Iraq, North Korea and Russia have undeclared stocks of smallpox.
ENSOR: In the Cold War, the Soviet Union developed smallpox and anthrax weapons that could be logged into the U.S. on an intercontinental missile. The Russians now insist they only have biological agents for vaccine research, but a defector says that is not true and that the weapons could end up in the wrong hands.
KEN ALIBEK, BIOLOGICAL WEAPONS EXPERT: In my opinion, it's a clear and present danger.
ENSOR: Still, barring leakage from Russia or help from, for example, Iraq, Osama bin Laden and his Al Qaeda group would have great difficulty getting their hands on a biological weapon.
TUCKER: We should improve our intelligence about what terrorists are doing in this area, but we shouldn't panic. I think the threat is still quite small.
ENSOR: The threat is small because biological agents are so hard to produce and hard to make into weapons. By contrast, the threat of a chemical attack may be greater, but the U.S. is relatively well prepared against it. The Sarin gas attack in the Tokyo subway showed six years ago chemical agents can only affect a limited area. If U.S. troops were to head into Afghanistan, though, going after bin Laden and his group, experts say they could need chemical protection.
(on camera): According to newspaper reports, satellite pictures of terrorist training camps outside Jalalabad in Afghanistan show dead animals on test ranges, suggesting the militants may have been experimenting with various chemical agents.
David Ensor, CNN, Washington.
BLITZER: And joining us now to talk about the threat -- the potential threat of biological or chemical warfare, CNN terrorism analyst Peter Bergen.
You heard David Ensor's piece. You've interviewed Osama bin Laden, you've been there, you've seen what's going on. Is it a credible threat that he could potentially be developing?
PETER BERGEN, CNN TERRORISM ANALYST: Well, he's on the record as saying that we need to develop nuclear weapon's ourselves, and he's on the record as saying since our opponents have these kinds of weapons, we should have them.
But more to the point, that group has experimented, as David hinted at the end of the report, with cyanide gas. They've injected a cyanide into dogs. They've experimented with gassing dogs at these -- some of these training camps in Afghanistan. And while the group is in Sudan, the group sought to acquire uranium; $1.5 million was the price. It was apparently from South Africa. It's not exactly clear if the consignment was ever purchased. The man who was supposed to buy got a bonus for putting the deal together. This was in collaboration with the Sudanese military.
So (a) this group, bin Laden, himself, says that we're trying to do this; (b) there's indications they have done it; but (c), as the report indicated, the actual use of these weapons is quite complicated. It's just much easier to throw something up with a bomb.
I would add one other thing. One thing I would be very concerned is the fact that this group has stinger missiles. As you may -- as you clearly remember that the stinger missile's the most effective anti-aircraft weapons in the world. It's clear from our various testimony and trials involving bin Laden associates that they've acquired stinger missiles. It's not clear how many, but quite a few. So that is the most effective anti-aircraft and anti-helicopter weapon in the world.
BLITZER: The stinger missiles are shelter-fired missiles that go from ground to air, obviously. U.S. supplied -- U.S. made stinger missiles by and large, but bin Laden, by all accounts, has hundreds of millions of dollars, perhaps even more at his disposal. Couldn't he go out and purchase some of these weapons of mass destruction?
BERGEN: Well, certainly I know from my own reporting about you could have smuggling in the region, that there is uranium floating around for sale. Now, it's not clear -- it's probably not missile material; it's low-level uranium waste from some of the leaky reactors in the former Soviet Republics.
But there are people out shopping this stuff around. And even though you obviously can't turn that into a nuclear weapon, it would be a great big scare if, for instance, someone dumped a whole load of uranium, low-level uranium waste into the water supply of, let's say, some U.S. troops in a region or whatever. So undoubtedly, this group is trying to do this; the question is will it be effective if indeed they ever employ these weapons.
BLITZER: And if his purpose is simply to kill a lot of people, then obviously it would be crude, but it could be very effective. Peter Bergen, thanks so much for joining us once again. And just ahead, we'll take you to Ground Zero. It looks like a war zone. Will life ever be the same? Stay with us.
BLITZER: It's now day seven, and the search for any signs of life in the burnt out rubble of the World Trade Center Towers. Determined and refusing to give up hope, crews are continuing their round-the-clock efforts.
CNN's Alessio Vinci joins us now from Ground Zero in New York. Alessio, you were in Kenya right after the bombing of the U.S. Embassy there. We all know you were in Belgrade during the NATO-led strikes. Give us your impression. What do you see right now in New York?
ALESSIO VINCI, CNN CORRESPONDENT: Well, what I see here in New York compared to especially Kenya and Belgrade, Wolf, is a much bigger destruction, considering also the fact that this was one single strike that took down two 110-stories towers and all the buildings surrounding it.
Of course, neither in Kenya nor in Belgrade there is such tall buildings. Regarding Kenya, one thing I remember very vividly, Wolf, was that having spent there a couple of weeks during their search and rescue operation, I remember that the rescue efforts were digging out certainly a lot of casualty -- I think more than 200 people died there.
But after two weeks, there was an incredible scene. One woman was taken out alive from the rubble. I remember even her name. Her name was Rosa (ph), and I remember all the newspapers and everybody cheering for this woman who had endured under such an incredible conditions under the rubble for two weeks. She were telling us that the reason why she had survived so much time is because she was trapped very near a water pipe and she was able to drink some water -- Wolf.
BLITZER: Alessio, when you see what's going on -- and most of the time as our viewers know, most of your time you spent in Europe covering stories over there -- what is the impression a European has when he sees this destruction in New York?
VINCI: Well, first of all, I think everybody reacts like -- in Europe reacts the people here in the United States in that nobody could really believe that such a degree of destruction could take place on the main -- on the main here in New York and Manhattan. I think that most of the people that I've been speaking with in Europe and in Belgrade especially are telling me two things.
The first one they're saying well, especially in Belgrade the people who have suffered the bombing campaign, they're telling me, "Well, you Americans now understand what it means to suffer, what it means to live under hardship." And this is certainly something that a lot of the people in Belgrade and in other places that have suffered this kind of destruction are asking me whether the Americans really are reacting, how they're -- they're asking me how the Americans are reacting under these circumstances.
And the other thing is, Wolf, is that in Europe, you know, in many countries in Europe and Italy in the 1970s, but even today in Northern Ireland in the Bascar (ph) region in Corsica and indeed in the Balkans, there are terrorist attacks almost on a daily basis, and the people there really feel that now America, who used to be the world has become all of a sudden part of the world.
BLITZER: Alessio, is it your sense that the Europeans down the line are going to line up with the United States in this war?
VINCI: I think they will because it's in everybody's interest and everybody understands that in Europe, Wolf. As the president and most of the American officials are saying here, this is a war against terrorism; this is not against a religious group.
And it is, of course, in their interest of every country in Europe which has suffered terrorism in the past to line up behind the United States of America. Whether this will be a long-lasting war as the United States is saying, it will have to see how the coalition will hold together. Will -- also will depend on the extent of the bombing campaign. Everyone says no revenge -- justice but no revenge.
And this is certainly the prevailing theme in Europe that the United States -- would -- it would have to do is put up a good case and then go after those who are -- were guilty for what happened here, but not just simple revenge.
BLITZER: CNN's Alessio Vinci reporting tonight for us from New York. Thank you very much, Alessio. And today was the first day back at work for thousands of people who work on the financial markets. But for most, it was hardly business as usual. CNN's Richard Roth was there.
RICHARD ROTH, CNN CORRESPONDENT (voice-over): Bulls, bears and soldiers on Wall Street.
UNIDENTIFIED MALE: Coming in and watching National Guard's troops on the street feels like you're watching something out of a newsreel from another country.
ROTH: It was more like a Fellini movie, surreal scenes in the traditional canyons of Wall Street. Plunging prices were not the only reason to cover one's mouth. Traders reported burning in the throats and wheezing from the cloud of smoke from the disaster next door.
UNIDENTIFIED MALE: As soon as I got into my building, made sure I checked the fire escapes and the fire exits to make sure that I knew the way out.
ROTH: Brokers say there are usually two conflicting emotions on the street -- fear and greed. There was a clear winner.
UNIDENTIFIED MALE: First day back? I think it's pretty nerve wracking.
ROTH: Instead of Big Blue and Ma Bell, Uncle Sam was the preferred stock. No diversification, just red, white and blue Americana.
UNIDENTIFIED MALE: I need roast beef on a roll...
UNIDENTIFIED MALE: I need more turkey.
UNIDENTIFIED FEMALE: ... with (UNINTELLIGIBLE) and cheese (UNINTELLIGIBLE).
ROTH: Wall Street doesn't take long lunches anymore. At popular Chance (ph) take-out shop, traders ordered on jittery stomachs.
UNIDENTIFIED FEMALE: Oh, God. You're nervous, anxious all the time. I'm having trouble sitting at my desk, and I'm just real nervous about being in this whole building.
ROTH: Ritchie Robinson (ph) and Jeff Fish (ph) are regulators from the American Stock Exchange, normally not the most popular figures on Wall Street.
RITCHIE ROBINSON, AMERICAN STOCK EXCHANGE REGULATOR: Even guys from the floor were coming over and hugging me and saying, "Rich, it's really, really good to see you." You know, it was like elation when you saw somebody that you knew.
ROTH: The New York Stock Exchange is an American icon.
UNIDENTIFIED FEMALE: I think it is a challenge, you know, and I think the New York stuff (UNINTELLIGIBLE) going to be one. I don't know when, you know, but I am terrified.
ROTH: Traders were unable to work out their aggression, but coped nonetheless.
UNIDENTIFIED MALE: I just had a -- an interesting conversation with the woman I've been standing to for the next five years at lunchtime who never looked at me twice, and she started crying.
ROTH: No tears after the big Dow decline.
UNIDENTIFIED MALE: I'm not disappointed the market went down. There's a lot of other worries about -- you know, a lot of other things to worry about besides the market going down.
ROTH: No surrender yet on Wall Street.
Richard Roth, CNN, New York.
BLITZER: And what's the nation talking about? We'll take the nation's pulse just ahead.
BLITZER: Around the world, the morning papers are going online with the stock plunge sharing headlines with President Bush's Wild West rhetoric.
Another big topic, Afghanistan. "The Times of London" reports thousands of Taliban troops are massing on the border with Pakistan as Taliban leaders meet to consider the U.S. ultimatum to hand over Osama bin Laden.
In the "New York Times," John Burns reports the Pakistani officials who delivered the ultimatum are pessimistic the Taliban will change its mind. And "The Dallas Morning News" profiles San Antonio doctor Albertero Hamzi (ph), who the FBI is questioning in connection with the attacks. Neighbors describe him as "absolutely normal," right down to the family's red minivan.
And that's all the time we have tonight. I'm Wolf Blitzer in Washington. I'll see you tomorrow night starting at 7 p.m. Eastern. Until then, thanks very much for watching.
"CNN HOTLINE" is just ahead. Call 1-800-310-4CNN to give your opinions on the impact of the terrorist attacks.
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