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THE SITUATION ROOM
Dow Plunges; Palin Probe Gets Green Light
Aired October 9, 2008 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN ROBERTS, CNN ANCHOR: Happening now, breaking news: plunging stocks and rising fears. The Dow sinks almost 700 points to a five- year low. Many Americans are watching their investments vanish and dreading when the next shoe drops.
Barack Obama is portraying John McCain erratic and risky for the economy, while some John McCain supporters are getting angrier by the day and openly venting at campaign rallies. The best political team on television is standing by.
Plus, a first for Sarah Palin's husband. He is publicly defending his position in the controversy involving an Alaska trooper and his ugly divorce from the governor's sister.
Welcome to our viewers in the United States and around the world. Wolf Blitzer is off today. I'm John Roberts. You're in THE SITUATION ROOM.
It is another painful and stunning blow to Americans' waning confidence in the economy, the Dow Jones industrials falling more than 670 points today, tumbling below 9,000 for the first time in five years.
The Standard & Poor's 500 and the Nasdaq composite also hit by big sell-offs.
Senior business correspondent Ali Velshi is following all of the breaking news from Wall Street and around the world.
Ali, is there any sense of how close we are to the stocks finally bottoming out here?
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: In a reasonable world, there's some sense of it. In a reasonable world, we might actually be very quickly approaching what a lot of professionals are considering the bottom to this market.
I say that because so much has happened that does not actually seem reasonable. Let's look at how the Dow has done just today. It started off the way we have seen things off. It's kind of a little bit of a dip at the bottom. It's been up and down all through the course of the day and then in that last hour of trading, look what happens. It just falls off of a cliff.
And this drop, though it was not as big as the one we saw two Mondays ago, 777 points, as a percentage basis, it was actually bigger than that. And that is what matters to you, because the percentage loss that you have seen has been fairly substantial in your 401(k).
Let's take a look at the whole year. This has been a very, very rough year for the stock market. Ironically, it was one year ago today exactly that the Dow hit the highest point it has ever hit, 14164, and it has gone down all the way fairly consistently, all the way until this point here, which, as you said, is the lowest point in five years.
Now, once again, we have another day, we have another idea floated by the administration that is meant to instill some confidence into the banking system. And let me tell you a little bit about that. The administration seems to be floating the idea that they may directly invest in banks. Now, this is part of the $750 billion bailout program.
And the way it would work is that the federal government would invest money directly into U.S. banks, but, in exchange for that -- this would not be a loan -- in exchange for putting that money in, they would get stock in those companies.
What does that mean? Well, it means they will have some control or say. They don't want to buy these banks out and control them, but they may have some say, particularly as to the executive compensation there, but more importantly if the money that is invested as part of that $700 billion goes to these banks and if it works and these banks make money, theoretically, the federal government makes some money on that because they own stock. So, if there is profitability, the taxpayer gets to share in it.
Again, it is one of many ideas that continue to be floated. We are not entirely sure that it's going to happen. The Treasury has said it is one of many options they are thinking about. We are not expecting any announcements on that any time soon, because, yesterday, Henry Paulson said the first of that money won't be spent for several weeks.
So, again, all of these efforts to instill confidence, but, John, like you said, there are some people who think that you have to wait for this market to bottom out, and that might be in the next few days, before professional investors start to move in.
And I should remind you that, even when we think we have a bottom, they don't put out a press release for that sort of thing. You don't actually know it is there. You start to see people buying with some conviction and some volume and there's still ups and downs, but markets tend to recover several months before a recession. As I say, at least that is the way it typically works.
ROBERTS: And then there's that phenomenon called the dead cat bounce, where the markets come up a little bit, and then they go down even further.
VELSHI: And you have to be prepared for that. At this point, if you are still in this market after having lost 35 percent, you have got to weigh your options, right?
ROBERTS: Right. Ali, thanks very much for that.
ROBERTS: President Bush is going to make another attempt to stop the market meltdown. In response to today's big sell-off, he plans to deliver a statement from the Rose Garden. That will be tomorrow morning. The White House says the president will assure Americans that economic officials are taking every action possible to stabilize the financial system. And CNN of course will carry his remarks live tomorrow.
As the markets keep melting down, Barack Obama is trying to convince voters that John McCain cannot be trusted to protect their money. Today, he once again portrayed his Republican opponent as erratic.
Listen to this.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: His first response to this crisis in March was that homeowners shouldn't get any help at all. That is what he said in march. Then, a few weeks ago, he put out a plan that basically ignored homeowners.
Now, in the course of 12 hours, he has ended up with a plan that punishes taxpayers, rewards banks, and won't solve our housing crisis. You know what? Here is my point, Cincinnati. You can't afford that kind of erratic, uncertain leadership in these uncertain times.
(END VIDEO CLIP)
ROBERTS: Obama is barnstorming across the critical battleground state of Ohio. Our senior political correspondent, Candy Crowley, is in Portsmouth, where she joins us live. And how is that message playing out there on the campaign trail, Candy?
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, it obviously plays well here and in other spots that Obama has gone to, because these are Obama crowds.
But a lot of the sound bites as you play them are meant for a broader audience. Listen to some of these words we have heard today not just from Barack Obama, but from Joe Biden as well, describing McCain as lurching from one thing to another, describing him, as you pointed out, as erratic and risky.
So, this is the framework that the Obama campaign is using here to describe McCain, really basically on the economy over the last three weeks. Obama brings up multiple examples he says that are an example of McCain being erratic. So, this is clearly a theme that they are pushing out there in a way to begin to frame John McCain as really not steady enough to be at the helm of a country in an economic crisis -- John. ROBERTS: Candy, we learned just a short time ago that the Obama campaign is buying 30 minutes of network television time near the end of this month. What is that all about?
CROWLEY: Well, that's about having enough money to do it. We are talking about 30 minutes of prime-time coverage on the broadcast networks just for Barack Obama.
It is likely -- it is less than a week before the election, October 29. He is looking, I would imagine, to put out a very positive and very sort of specific agenda, and use that half-hour to kind of end on an upbeat note.
So, look, this is a -- this is a sign of a campaign that does have the money to spend to do these sorts of things.
ROBERTS: Do we know, Candy, exactly what form it will take? Will it be a 30-minute address? Will it be some sort of pseudo- documentary? We have seen them put these things on their Web sites. Do we have any idea what exactly they are planning on doing with that 30 minutes?
CROWLEY: I do not know the details. I do know because they are still I think working it out, because not all these deals have been arranged yet, but in the past when we have seen sort of long-form Obama advertisements, they are things when he talks directly to the camera and says, here is what I am about, here is what is at stake, that kind of thing.
Now, it has not been in that expansive of a time. But we did see him in Iowa, for instance, talk to people directly in the final days of the campaign. So, if I had to guess, I would say this would be Obama and the camera and the voters.
ROBERTS: All right. Candy Crowley for us in Portsmouth, Ohio, for us -- Candy, thanks very much. Barack Obama's recent gains on John McCain have left some McCain supporters downright angry. They have vented about Obama, the media, and McCain's slide polls at a rally in Wisconsin today.
CNN's Ed Henry traveled with the McCain camp. An awful lot of hostility in the crowd today, Ed.
ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Well, John, Republican voters are fired up right now. They are not happy with the state of the race. They are not happy with the media coverage over the race and they're not shy about expressing it.
HENRY (voice-over): At a dramatic town hall in Wisconsin, John McCain was confronted by Republican voters wondering how he could be losing to Barack Obama and urging McCain to get tougher with his opponent.
UNIDENTIFIED MALE: And we're all wondering why that Obama is where he's at, how he got here. I mean, everybody in this room is stunned that we're in this position.
HENRY: The questioner angrily suggested the media is giving Obama a pass on questions about his ties to former terrorist Bill Ayers, sparking wild applause from the raucous crowd.
(CHEERING AND APPLAUSE)
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: The point is Senator Obama said he was just a guy in the neighborhood. We know that's not true. We need to know the full extent of the relationship because of whether Senator Obama is telling the truth to the American people or not.
HENRY: His running mate, Sarah Palin, who has been highly selective about the interviews she grants, attacked the mainstream media for not pressing Obama.
GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE: I am like you, and I wonder, too, when will the questions be asked and when will we get the answers?
HENRY: But another voter pointedly urged McCain to stand up to Obama.
UNIDENTIFIED MALE: It is absolutely vital that you take it to Obama, that you hit him where it hurts. We have the good Reverend Wright. We have -- we have all of these shady characters that have surrounded him. I am begging you, sir. I am begging you, take it to him.
HENRY: Unlike the Ayers question, McCain did not jump on the Reverend Wright. He instead offered only a general promise to scrutinize Obama. And perhaps mindful of the danger of the town hall meeting looking too angry, reminded supporters they also need to present a positive agenda.
MCCAIN: Yes, I will do that, but I also, my friends, want to address the greatest financial challenge of our lifetime with a positive plan for action.
HENRY: Now, McCain aides say this will be their strategy from now until Election Day, raise one question after another about Obama's candor on a whole range of issues -- John.
ROBERTS: Ed Henry covering the McCain campaign for us -- thanks so much, Ed.
His wife is accused of misusing her political power in Alaska. Now Governor Palin's husband defends his role for the very first time public. It's a newly released affidavit.
Imagine you go to vote on Election Day and you're told you can't. Something is happening in some states that is giving people that very nightmare. And in one Ohio town threatened with crushing job losses, the mayor is determined to keep it from becoming a ghost town, but one of his constituents is not so sure.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: They are taking away everything from me, my family, my friends, this whole town. I'm sorry.
(END VIDEO CLIP)
ROBERTS: Jobless claims dropped last week from a seven-year high, but still came in higher than economists had estimated. Jobs, of course, a major issue for voters in this election. Mary Snow is in Wilmington, Ohio, for us tonight. Mary, why is the jobs picture so bleak there?
MARY SNOW, CNN CORRESPONDENT: Well, John, the largest employer here is restructuring and people here are staring at what they call an economic catastrophe. And because they live in a crucial swing state, they made sure to grab the attention of the candidates.
SNOW (voice-over): This airfield represents the lifeline of Wilmington, Ohio, but it is now become its biggest problem, threatened with the loss of at least 8,000 jobs.
Cheri Barrett (ph) who works here along with her husband, is giving up hope jobs can be saved if the air delivery company DHL pulls up stakes as part of her restructuring.
UNIDENTIFIED FEMALE: They are taking away everything from me, my family, my friends, this whole town. I'm sorry.
UNIDENTIFIED FEMALE: We are the, if you will, poster child for, please help us. Please figure out how what to do.
SNOW: Mary Hotalen (ph), a McCain supporter, took her plea straight to straight John McCain at a town hall meeting in July, in hopes of saving her husband's job as a pilot. She told him about how German-based DHL announced a restructuring that includes a deal to work with rival UPS. This is after DHL bought another competitor, Airborne Express, five years ago.
McCain visited Wilmington and offered help. And the Obama camp fired back.
(BEGIN VIDEO CLIP)
NARRATOR: In Washington, John McCain helped paved the way for foreign-owned DHL to take over an American shipping company.
(END VIDEO CLIP) SNOW: It pointed out that McCain aide Rick Davis was a lobbyist who aided DHL in its initial deal in setting up shop in Ohio. The ads blamed McCain for the current job mess, which FactCheck.org said was a stretch.
Both candidates have called for the Justice Department to begin an antitrust investigation. Both met with workers, including the leader of the union that represents many of the pilots.
UNIDENTIFIED MALE: I think our only hope at this point is for the Justice Department to step in and weigh the antitrust issues involved here.
SNOW: Cheri Barrett took her case to Obama, and is a supporter. She doesn't think the deal will be stopped. The town's mayor is refusing to give up hope.
UNIDENTIFIED MALE: It's never going to be a ghost town. This community has the pluck and the drive and is such a great community. Neighbors help neighbors here. This is never going to be a ghost town.
SNOW: Now, there have been two House hearings on this deal on Capitol Hill, but time is running out. A spokesman for DHL says the company expects to complete its contract with UPS, saying the company has no other alternatives because it's losing money.
It also says, John, it understands the impact on this town and it says it's trying to mitigate the losses -- John.
ROBERTS: Mary Snow in Wilmington, Ohio -- Mary, thanks for that.
As bad as unemployment is in Ohio, several states have it even worse. Almost nine percent in Michigan, 8.5 percent in Rhode Island, and 7.7 in both Mississippi and California. The states with the lowest unemployment rate, South Dakota, Nebraska, and North Dakota, all well under four percent.
It's not what is supposed to happened in a democracy. And it is a nightmare to voters everywhere. You try to register to vote or actually go to vote on Election Day and you're told you can't. Should voters -- or could voters, rather, be shut out of their right to vote?
CNN's Brian Todd joins us now with what is becoming, Brian, a very real concern for some people.
BRIAN TODD, CNN CORRESPONDENT: It sure is, John.
We're told that some states are really struggling to upgrade their voter databases in time for Election Day, a struggle that is compounded because voter registration is such a huge issue this year.
(BEGIN VIDEOTAPE) TODD (voice-over): By most accounts, record numbers of voters will turn out on November 4, but many of them may be turned away. A "New York Times" investigation finds tens of thousands of voters have been taken off the rolls or blocked from registering by methods that the paper says appear to violate federal law. The reports caught the candidates' attention.
MCCAIN: You have seen, these are serious allegations, my friends, and they must be investigated, and they must be investigated immediately, and they must be stopped before November the 4th, so Americans will not...
MCCAIN: ... will not be deprived of a fair process in this election.
TODD: "The Times" reports, the problem has cropped up in at least nine states, including six considered so close, they could go either way, the swing states of Colorado, Indiana, Ohio, Michigan, Nevada, and North Carolina.
According to the paper, the shutout of voters doesn't appear to be coordinated by one party or the other. And it doesn't look like anyone intentionally broke the rules. But experts say the situation could present a nightmare on Election Day.
DOUG CHAPIN, PEW CENTER ON THE STATES: If there's a problem at the front of the line, and there are 10 people in line, it's an inconvenience. If there are 100, it's a problem. If there are 1,000, it's a crisis. And given the level of interest we're seeing in this election, we may have our share of crises on Election Day.
TODD: In some states, according to "The Times," officials seem to be improperly using Social Security information to verify new voter applications.
And it says that, in at least two states, they're removing voters within 90 days of the election, not allowed, according to "The Times," unless voters die, are declared unfit, or tell state officials they have moved. Officials say voters who are shut out can cast provisional ballots. The problem with those?
ROSEMARY RODRIGUEZ, U.S. ELECTION ASSISTANCE COMMISSION: Those aren't always counted. So, we're encouraging all voters to check their status in advance of the election.
TODD: We contacted officials in all nine states cited by "The Times."
In Colorado, Indiana, Michigan, Georgia and Louisiana, officials denied that anything improper was done. Officials in Alabama and North Carolina did not get back to us. An Ohio official said they're still looking into some of this. And, in Nevada, they told us that Social Security and driver's license numbers had been mistakenly entered into the wrong templates in the computers. They say that problem has been resolved and no one will be shut out on Election Day -- John.
ROBERTS: And we will keep watching it closely just to make sure that that does not happen. Brian Todd for us -- Brian, thanks so much for that.
A new development in the trial of Senator Ted Stevens. We will tell you about the big-name witness on the stand.
And more people are making sure that their money is safe. And that is sparking booming business for one industry in these not-so- booming times.
And they are the moments that the candidates and their running mates might prefer to forget, if only they were not so memorable.
ROBERTS: Less than a month before America votes now, the stock market in freefall, the breaking news is leaving a big hole in your wallet and a big mark on the presidential race.
Sarah Palin's husband breaks his public silence about the investigation weighing on his wife right now. Todd Palin's role in it all finally revealed.
And can you tell Joe Biden and John McCain apart? An Obama/Biden supporter's embarrassing and "Moost Unusual" mistake.
ROBERTS: You are in THE SITUATION ROOM.
Happening now, breaking news: stunning losses on Wall Street today, $900 billion in stock value wiped out, as the Dow, the Nasdaq, and the S&P 500 all plunge to five-year lows. The Dow alone lost almost 700 points.
Also, new developments in an investigation dogging Sarah Palin's campaign. The Alaska Supreme Court weighs in and new details emerge about her husband's role.
Plus, Barack Obama, race and the impact on the vote -- new insight from a new poll, all of this plus the best political team on television.
I'm John Roberts in New York. Wolf Blitzer is off today. You are in THE SITUATION ROOM.
Within about the last hour, we have learned that the Alaska Supreme Court has cleared the way for a probe of Governor and vice presidential candidate Sarah Palin to move forward. At issue, did she and her husband, Todd, pressure a state official to fire their ex- brother-in-law, an Alaska State Trooper.
Todd Palin has given an affidavit in the case and we are learning new details about it.
CNN justice correspondent Kelli Arena joins us now live.
Kelli, what is Todd Palin's side of the story?
KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, John, Todd Palin defends his role as a close adviser to his wife, but denies charges that he abused that relationship to get her ex-brother-in-law fired.
ARENA (voice-over): He is usually right by his side. The two are very close, but Todd Palin says that does not mean that he stepped over the line.
For the first time publicly, Todd Palin defends his role in the controversy swirling in Alaska around a state trooper. In a newly released affidavit, Palin makes no apologies for wanting to protect his family just weeks before the election.
MARK PRESTON, CNN POLITICAL EDITOR: They want to try to manage this and keep it all within Alaska. They don't want it coming down here in to the lower 48.
ARENA: The Palins are accused of pressuring Alaska's public safety commissioner, Walt Monegan, to fire a state trooper who divorced Sarah Palin's sister. Monegan claims that, when he didn't do what they wanted, he was fired instead.
WALTER MONEGAN, FORMER ALASKA PUBLIC SAFETY COMMISSIONER: I believe I was fired because I did not fire Mike Wooten.
ARENA: But Governor Palin says she fired Monegan over budget issues and his failure to fill trooper vacancies.
Here is what she told ABC.
PALIN: I never pressured him to hire or fire anybody.
ARENA: Todd Palin described Wooten as a "threat, dishonest." He says Wooten "threatened to kill Sarah's dad" and admits he was frustrated Wooten kept his job. But he says he never pressured anyone to fire him, including his wife.
"Anyone who knows Sarah knows she's the governor," he said, "and she calls the shots."
In fact, Todd Palin says his wife told him to drop it and stop talking about the Wooten issue.
PRESTON: I think Sarah Palin has bigger issues that she needs to deal with than this Troopergate issue, as far as it comes to this campaign.
ARENA: Todd Palin had been resisting a subpoena by lawmakers looking into Monegan's firing since mid-September. His answers now allow him to get out his side of the story just before the prosecutor who is conducting the inquiry is expected to release his report -- and, John, that report should be out tomorrow, if all goes as planned.
ROBERTS: All right. Kelli Arenas for us in Washington. Kelli, thanks for that.
And joining us now to talk about Todd Palin's affidavit and more on the political front, Tara Wall, she's the deputy editorial page editor for "The Washington Times;" CNN's senior analyst Jeffrey Toobin; and CNN's Ed Henry. They're all part of the best political team on television. Tara, let's start out with you.
First of all, this idea that Todd Palin was involved in all of this, according to this affidavit, what was he doing involved with it at all?
TARA WALL, FORMER SPOKESPERSON, DHS GULF COAST REBUILDING EFFORTS, FORMER RNC PRESS SECRETARY FOR OUTREACH: Well, I think it actually reveals what Sarah Palin, from the beginning, has said, is that no wrongdoing actually took place. She didn't have any wrongdoing. It's my understanding that Monegan even said that was he didn't -- that she wasn't the one that pressured -- was, you know, pressured him to be fired or put pressure on anyone to fire him.
So I think it certainly clears up what she has said from the very beginning. And I'm sure, you know, it is -- they're glad that it's out there. And, actually, I really don't think it's much of an issue in the scope of everything else that's going on, in the same way that the Ayers' issue and the Wright issues with Barack Obama is not much. I mean it's interesting. It's legitimate to raise.
But at the end of the day, how much are voters actually paying attention to this?
WALL: And she, again, said there's been no wrongdoing on her part. And by all accounts, there hasn't been.
ROBERTS: Jeffrey, do you agree with that, that it's not much of an issue, it's in same realm as William Ayers and others?
JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST, "NEW YORKER" MAGAZINE COLUMNIST: I do think, given the fact we're in this middle of a crisis of American capitalism, what went on in the Alaska State Police does seem kind of peripheral. I don't agree that all the questions are answered.
Here was this guy was fired when Todd Palin, by his own account, was having hundreds of conversations about this state trooper he was upset about. I don't think it is clear why this -- the head of the Alaska Public Safety was fired. I don't think that's a settled question at all.
But voters care about it today, frankly, I do doubt that they do care much.
ROBERTS: Yes. Well, Ed, what about the fact that the Supreme Court in Alaska has ruled that this legislative investigation of all of this can go forward? Is that going to be a little cloud hanging over the McCain campaign for the next 25 days?
HENRY: A little bit of a nuisance. I thought it was interesting today, I was at this rally with Sarah Palin and John McCain here in Wisconsin. And at one point, Sarah Palin was lashing out at the media, saying that they're not asking tough questions of Barack Obama and she's waiting for Barack Obama to give answers, when Sarah Palin herself has been very careful about what media interviews she does. And when she gets pretty friendly venues, she doesn't really get these tough questions about an investigation like this.
So coming from her, it's kind of interesting. But I think in the long run, it's very unlikely we're going to get very many of these answers before the election. And, as Tara said, when your 401(k) is losing 10 or 20 percent of its value I'm not really sure this is going to be the top one, two or three issues that the American people are going to look at.
ROBERTS: You know, Ed, you're out there on the trail with the McCain campaign. A rather interesting day today. A lot of voter anger at a campaign event, a partial town hall. A lot of people were asking some questions. Let's take a look at how that event unfolded today.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: When you (INAUDIBLE) on Obama, Pelosi and the rest of the hooligans up there to run this country, we've got to (INAUDIBLE), that you two are representing us. And we are mad!
UNIDENTIFIED MALE: No, you're right. You have all of the shady characters that are surrounding them. (INAUDIBLE) and voter (INAUDIBLE). I am begging you, sir.
UNIDENTIFIED MALE: I'm begging you (INAUDIBLE).
(END VIDEO CLIP)
ROBERTS: An awful lot of voter anger there, talking about the Democrats, asking why John McCain wasn't taking it to them more, please take it to them, upset that he is sliding in the polls in some states.
Tara Wall, I mean we talked about intensity here being an important part of turning out to voters to the polls. We certainly saw an awful lot of that there at that campaign event. WALL: Yes. And that gentleman, I mean, essentially, he was telling McCain bring it, bring it. You know, and as much as, you know, John McCain has been criticized for being on the attack and making attacks, I think he has made some selective attacks -- you know, again, there was those questions raised about why doesn't he bring up the Reverend Wright issue. And you could talk about whether that's, you know, he should or not.
But I think there's a sense among conservatives, at least his base, in light of everything that's gone on with this huge financial mess and the bailout, that he is not sticking to some of these core conservative principle and values and the things that make the party get fired up.
And that's why you see he's relied on Sarah Palin a lot, because of her personality and her ability to energize the base.
So there is that frustration among some of his core, core constituents, his core group of supporters, and, in some cases, rightfully so.
ROBERTS: You know, Ed, I spent a lot of time out on the campaign trail covering two or three campaigns. And, you know, you see one or two people who sort of stand up and they're a little bit fiery, a little bit pointed when ask a question. But I've not seen anything like that.
HENRY: That's right. And in the last couple of days, we've also seen some surrogates, some people who are introducing, you know, sort of warming up the crowd, I should say, before John McCain speaks or Sarah Palin, saying Barack Hussein Obama and throwing that out there, as well.
These voters are angry. They're very frustrated at the media. They don't think John McCain is getting a fair shake. They don't think tough questions are being asked of Barack Obama.
And I think the most fascinating part, when you take a step back, is I saw John McCain today as he listened to all of this anger sort of struggling with what he's going to do about it, how negative is he going to go?
HENRY: Is he going nuclear? I mean the reason why he's not really going after the Reverend Wright issue is that he's pretty much vowed that he wouldn't do that.
HENRY: But yesterday, Cindy McCain, out of nowhere, brought up Jimmy McCain, the McCain son who is serving in Iraq.
HENRY: Previously, the McCains said they didn't want him part of the campaign. Now, all of a sudden, they're using him as a political issue. It's going to get very interesting what they choose to use and not use.
WALL: And, John...
ROBERTS: Hey, Tara, let me let...
ROBERTS: Let me let Jeff jump in here.
ROBERTS: Jeff, you know, we have seen some of this unfolding out on the campaign trail there over the last couple of weeks, where some people are getting so upset that, on occasion, they are shouting some intemperate things. Are things going too far here?
TOOBIN: Well, I don't know how far they're going. But it's certainly a losing technique. When was the last time an angry candidate was elected president of the United States? How did it work for Bob Dole? I mean this is frustration.
TOOBIN: This is not the way to win a campaign. Bill Clinton always says the biggest candidate always wins, the candidate who has the largest, most positive, most optimistic message. A bunch of people screaming about the media, screaming about Bill Ayers and Jeremiah Wright, that is a recipe for disaster for the Republican Party.
ROBERTS: We've got to take a quick break here, but we've got lots more coming up on the other side. Folks, stay with us.
Barack Obama's race -- will it help him or hurt him come election day? We get new insight from a new poll.
Plus, the controversy over this magazine cover -- why some people say well, it's just a little too realistic.
ROBERTS: New insight from a new poll on race in the campaign.
We are back with the best political team on television -- Tara Wall, the deputy editorial page editor for "The Washington Times"; CNN senior analyst, Jeffrey Toobin; and CNN White House correspondent, Ed Henry.
You know, we talk about this idea of race in this campaign and what it might cost Barack Obama at the polls. A recent AP poll found it might be worth as much as six points to the negative for Barack Obama. But let's take a look at what a recent Gallup poll found. Look at this. Over there on the far right, "Would you be less likely to vote for this candidate because of their race?"
There's that 6 percent. But there's also a 6 percent for John McCain. And then you move over to the left, 9 percent of respondents say that they would be more likely to vote for Barack Obama because of his race, 7 percent for John McCain. So it's a net plus 1 for McCain, but a net plus 3 for Barack Obama.
Tara Wall, could Barack Obama's race actually be a plus for him on November 4th?
WALL: Well, you know, look, I don't know how much -- you know, you look into this whole race issue. I think, obviously, it's a factor. And let me just say for the record, you know, listen, you can't be black in America and not be proud of Barack Obama. I'll say that. I've said it before, I'll say it again.
But that doesn't mean he is the best president for America, for many reasons. For the people that are voting -- that will vote against him, of which the least among them will be because of race. And I think that he has acknowledged even just recently, now that he's ahead, that most of the folks that are voting for him are white voters.
And so I think, you know, there will be many factors that people don't vote for John McCain. For example, ageism, maybe sexism because he selected Sarah Palin. How much that factors in, I think, is small in comparison to the other issues that are much more important to Americans, like the economy, like health care, big government, small government. All of those issues, I think, outweigh any small percentage that, you know, may use something as negative as someone's race or even as positive.
WALL: I mean 95 percent of -- 90 percent of, you know, black voters aren't going to vote for John McCain.
WALL: So that doesn't go in his favor.
ROBERTS: Ed Henry, what do you think that 9 percent more likely comes from?
HENRY: It's really fascinating, because the Obama campaign has been saying privately for a long time that they think in states like North Carolina, for example, it may actually help them, as you're suggesting from those poll numbers, because of a surge of African- American turnout. That might not just help Barack Obama in the presidential, but it could also help Democrats in that Senate race, for example.
You have Republican Elizabeth Dole in a very tight race. She's already struggling and then if, all of a sudden, you have a surge of African-American turnout, down ballot -- not just at the top of the ticket -- it could really help Democrats.
ROBERTS: But what do you think, Jeffrey, is it just African- Americans who are more likely to vote for him because of race? Or would there be some white voters out there who say, hey, it's finally time to try to move America to a post-racial society?
TOOBIN: Boy, this is really one of the great mysteries of this campaign. And the problem is polling data is inherently suspect when you come to this question, because there is a history, at least, of voters not being fully candid about their racial views with the pollsters. You know, the famous Bradley effect, going back to 1982, when voters apparently lied to pollsters about whether they were going to vote for a black candidate for governor of California.
It does seem to be that that's not happened a lot in this election. The polling data, at least in the Democratic primaries, turned out to be pretty accurate.
My own sense, for what it's worth, is that race is not going to be an enormous factor in this race, that the polls are going to be pretty accurately predicting what goes on. But we'll know on election day.
ROBERTS: I want to move on to one final little issue here. And this is a minor one, but it's an interesting one, because a lot of Republicans are making a lot of noise about this.
The latest cover of "Newsweek" magazine, Sarah Palin here up close -- really up close and personal, in an unretouched photo that, Tara Wall, some people are saying is unfair. You can see every pore, every little pimple, even a tiny little bit of a mustache there. What do you think of this?
WALL: As someone who has a tendency to be vain myself, I have no reason to understand why anyone would think something was wrong with that picture. I think it looks perfectly fine. And I can't even -- I don't even see a blemish, quite frankly. So I think that one's much ado about nothing.
ROBERTS: Well, I mean, certainly, there are some people who are saying, though, Ed Henry, that it's unfair, that -- you know, and "Newsweek" is saying it doesn't retouch news photographs.
HENRY: Well, who cares what I think about it? What does Tina Fey think about it?
HENRY: I think that's the real question, moving forward -- John.
TOOBIN: Well, and...
ROBERTS: Go ahead, Jeff.
TOOBIN: Well, no, I mean I just think it's a nice picture.
WALL: It is.
TOOBIN: She's an attractive woman. I don't get, what's the -- what -- like what's the controversy?
TOOBIN: You know, yes, it's a close-up picture. But, you know, few of us can stand that sort of close-up, but she can. Good for her.
WALL: And I bet you she's probably not complaining about it.
ROBERTS: You know, I took a look at it and thought it was a nice photograph, too. But, you know, who am I? Some people were upset about it. Tara Wall, Jeff Toobin, Ed Henry, thanks for joining us tonight.
ROBERTS: Appreciate it.
HENRY: Thank you.
ROBERTS: Troubled economic times, but one business is booming -- why sales are up 50 percent.
Plus, he has been called a lot of names by political rivals, but this is a whole different ball game what a supporter called Joe Biden. Wait until you hear.
ROBERTS: Lou Dobbs is getting ready for his program right at the top of the hour. He's with us now -- Lou, what are you working on?
LOU DOBBS, CNN ANCHOR: Thank you, John.
The left-wing activist group, ACORN, charged with widespread, nationwide election fraud. The Obama campaign is denying that ACORN
has any significant relationship with Barack Obama, but the Obama campaign is paying ACORN for voter registration across the country. We'll have complete coverage and find out what the coincidences are and why.
Also today, the Dow Jones Industrials plummeted more than 670 points -- all of this despite that massive Wall Street bailout concocted by the Bush administration and the Democratic leadership of Congress.
Where in the world is the leadership that this nation and our economy needs?
We'll have complete coverage tonight. And the Treasury Department finally considering a proposal that we told you about days ago -- a plan for this government to buy up a stake in this country's ailing banks.
I'll be joined by two of the best economic thinkers in the country. Please join us for that. Also, we will be joined by our political panel, as well. All of that coming to you with an Independent perspective -- John, back to you.
ROBERTS: We're looking forward to it, Lou, just a short 10 minutes from now.
The Dow plunges for the fourth straight day -- and this one was breathtakingly steep. The Dow lost more than 670 points, tumbling below 9000 for the first time in five years. In fact, it's sitting right now in the mid-8000s. All of the turmoil on Wall Street has got some people putting their money not where their mouth is, but where they're sure it's safe.
Here's CNN's Jeanne Meserve.
JEANNE MESERVE, HOMELAND SECURITY CORRESPONDENT: John, in these tough economic times, we found one type of business that is booming.
MESERVE (voice-over): Few people keep money under the mattress, but more and more are keeping their valuables in safes. Manufacturer Sentrysafe had seen a 20 percent increase in sales since the economic crisis began. Then, just last week, as the market dove, sales jumped 50 percent over the previous year.
DOUG BRUSH, SENTRYSAFE: It's almost certain that when people find themselves uncomfortable, a little bit fearful, concerned about the economy, concerned about financial institutions, that they're going to seek security. And, as a result, our business typically goes up.
MESERVE: Sales are particularly strong in parts of the country where there are troubled financial institutions.
What are people keeping in these safes?
Well, it may reflect just how deep their economic fears run.
MARK BALDINO, BALDINO'S LOCK & KEY: They have either, you know, cash they're taking out of the bank or cashing in their stock or they're actually buying gold.
MESERVE: Baldino's Lock & Key has been selling safes in suburban Washington for 46 years and has never seen sales like this.
BRUSH: This one here is a mutual gem vault. It weighs about 3,500 pounds.
MESERVE: Some homeowners are spending as much as $6,000 to buy massive commercial safes usually used only by jewelry stores.
BRUSH: Normally, we are about one week behind on deliveries. But now we're anywhere between two to four weeks behind on deliveries.
MESERVE (on camera): Just because you're selling that many safes?
BRUSH: Just because we're selling that many safes.
MESERVE: Mark Baldino believes he has seen the beginning of another trend. He says more and more people are installing security systems, afraid that as the economy goes down, crime will go up -- John.
ROBERTS: Jeanne Meserve for us. Jean, thanks for that.
Susan Roesgen monitoring stories incoming into THE SITUATION ROOM right now. She's also in Washington. What are you picking up, Susan?
SUSAN ROESGEN, CNN CORRESPONDENT: John, the end of a big banking battle. Citigroup is giving up its attempt to take over Wachovia's banking division. And that appears to clear the way for Wachovia's merger with Wells Fargo. But Citigroup says that the deal violates an earlier agreement it had with Wachovia and says it will still sue for breach of contract.
And call it a bright spot in an otherwise dreary economy -- oil prices continue to slide, dropping more than $2.30 today, to $86.59 a barrel. In tight economic times, consumers and businesses cut back on energy consumption. And lower demand means lower prices. Oil prices have dropped about 40 percent since an all-time high of $147 a barrel back in July.
And a senior U.S. official says Libya has started putting money into a fund to compensate the families of victims of terror attacks in the 1980s. As part of an agreement to restore ties between Washington and Tripoli, the fund will be used to resolve compensation claims stemming from the 1986 bombing of a Berlin disco and that 1988 Bloomberg of PanAm Flight 103 over Lockerbie, Scotland -- John.
ROBERTS: Susan, thanks for that. We'll see you again tomorrow.
It started out like a traditional candidate introduction.
(BEGIN VIDEO CLIP)
JIM PICCILLO, OBAMA/BIDEN SUPPORTER: Please help me today in welcoming the next vice president of the United States.
(END VIDEO CLIP)
ROBERTS: You might think that there are just two ways to finish that sentence. But, well, you'd be wrong. Jeanne Moos reports on a "Moost Unusual" introduction. And what don't they want you to see?
Police in Pakistan keep members of the media away from the scene of a terrorist attack. That and more in today's Hot Shots.
ROBERTS: Here's a look at "Hot Shots" coming in from our friends at the Associated Press -- pictures likely to be in your newspaper tomorrow.
In Thailand, a protester takes part in anti-government demonstrations in front of the Government House.
In Pakistan, police attempt to keep members of the media at bay following a vehicle explosion.
In Portland, Maine, market owners drop the price of lobster, as economic conditions ruin consumer appetite.
And in Germany, a dog trained to assist those with dementia makes an appearance before the German Alzheimer's Society.
That's this hour's "Hot Shots" -- pictures worth a thousand words.
In a sense, it goes with the territory. Politicians are used to being called lots of different names. But Joe Biden probably never expected to be called this.
Jeanne Moos has a "Moost Unusual" report.
JEANNE MOOS, CNN CORRESPONDENT (voice-over): Sure they're two white guys of a certain age.
But are John McCain and Joe Biden so hard to tell apart?
Ask Jim Piccillo. It was his job to introduce V.P. pick Biden. This is how Jim ended up as fodder for Jay Leno.
(BEGIN VIDEO CLIP)
JAY LENO, HOST "THE TONIGHT SHOW WITH JAY LENO": Ladies and gentlemen, Joe Biden. I mean he practiced it, what, a hundred times, a thousand times, just so you'd get it right.
(END VIDEO CLIP)
PICCILLO: Help me today in welcoming the next vice president of the United States, Joe McCain.
MOOS: But the funny part is that Jim didn't know he blew it -- a fact that came out a few hours later during an interview on Tampa Bay's "Travis and Jenny" radio show. (BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: And did you even realize you did it?
PICCILLO: No. I had no idea. It was on ABC News?
UNIDENTIFIED FEMALE: It was on ABCNews.com.
PICCILLO: Oh my gosh.
(END VIDEO CLIP)
MOOS: Jim is a Republican supporting the Democratic ticket. He first heard his own gaffe on the radio driving home.
PICCILLO: We heard it from you guys. We thought that it was completely made it up and that somebody had maybe spliced it together. So we're sitting there at a stop sign like screaming, basically.
MOOS: Next thing you know, it's all over the Internet.
UNIDENTIFIED MALE: The next vice president of the United States, John McCain.
MOOS: Joe Biden, by the way, came out and shook Jim's hand.
SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENTIAL CANDIDATE: Let me thank Jim for that -- for that nice introduction.
MOOS: Jim says Senator Biden couldn't have heard the blooper, that it was impossible to decipher what was being said from back stage. This was actually the second flub in Jim's speech.
PICCILLO: All of that will change under Barack O'Biden and Senator Joe Bama -- Barack Obama and Senator Joe Biden's administration.
MOOS (on camera): Don't worry about it, Jim. You're not the only one adding an extra O.
PALIN: Barack Obama and Senator O'Biden, you've said no to said everything.
MOOS (voice-over): Not that we in the media ever blow a name.
(on camera): Don't worry about it, Joe -- Joe?
His name is Jim. Did I call him Joe the first two?
(voice-over): Jim doesn't have to worry about Senator Biden getting mad. After all, look how Biden introduced Barack Obama.
BIDEN: A man who will be the next president of the United States, Barack America.
MOOS: If only politicians could admit their mistakes the way Jim confessed to his, calling it a...
PICCILLO: Complete and utter American moronic brain fart moment.
MOOS: Jeanne Moos...
PICCILLO: The next vice president of the United States...
PICCILLO: John McCain!
MOOS: New York.
ROBERTS: Oh, you've got to love Jeanne.
I'm John Roberts for Wolf Blitzer in THE SITUATION ROOM.
Up next, "LOU DOBBS TONIGHT" -- Lou.