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ISSUES WITH JANE VELEZ-MITCHELL

What Should Obama`s Economic Team Do?

Aired November 24, 2008 - 19:00:00   ET

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


(BEGIN VIDEOTAPE)
JANE VELEZ MITCHELL, HOST (voice-over): A new day, a new team unveiled, a new New Deal to rescue America`s crumbling economy. America at a turning point. Is it time for a new way of living? We`ll show you how the crisis is sparking new shopping, new spending and new savings habits that could change your life.

And a teenager broadcasts his own suicide live on the Web as viewers egg him on. I`ll examine the Internet`s culture of death.

Plus, Eliot Spitzer`s hooker finally speaks. You won`t believe what she says about drugs, sex, and cold, hard cash. I`ll take your calls to hear what you have to say about Ashley Dupre and Hookergate.

These issues and lots more tonight.

(END VIDEOTAPE)

VELEZ MITCHELL: A Florida teen commits suicide live in front of a Web cam as Internet viewers just sit back and watch. I will have the details of the shocking, disturbing tape.

And the woman at the center of the Spitzer scandal sits down with ABC`s "20/20." Call me and tell me what you think of Ashley Dupre`s story in just a bit.

But first, it`s a brand-new day, we hope. President-elect Obama announced his economic team today amid the worst financial crisis since the Great Depression. Their task: to rescue America`s crumbling economy.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: I am hopeful about the future. I have full confidence in the wisdom and ingenuity of my economic team and in the hard work, courage, and sacrifice of the American people. Most of all, I believe deeply in the resilience and the spirit of this nation. I know we can work our way out of this crisis, because we`ve done it before.

(END VIDEO CLIP)

VELEZ MITCHELL: Many describe Obama`s plan as the beginning of a new New Deal. If it works, I`m all for it, but I hope these guys and gals are wearing capes and can leap tall buildings in a single bound, because they have to clean up corporate irresponsibility that borders on villainy.

Yesterday our government bailed out another bank that was too big to fail. This time, Citigroup got the hail Mary, with the treasury investing $20 billion to ward off a collapse. This is the very same bank, by the way, that already got $25 billion of your tax dollars in October.

Wall Street cheered the latest bailout by gaining 388 points today, but I hear Main Street screaming, "Enough already!"

Here`s my issue. The crumbling economy does have a silver lining. It`s forcing Americans to change the way we live. Wasteful spending and credit-card debt are out. Saving and economizing are in. The way I see it, America really is at a turning point. We voted for change, but now we, the people, must lead by example. We all must change our habits if we want to get out of this mess. Bottom line: less is more.

Now, I`d love to hear what you at home have to say about all of this, so give me a holler, give me a call, 1-877-586-7297. That is 1-877-JVM- SAYS, with your questions and opinions on the economy.

Bur first, let`s bring in Ali Velshi, CNN`s chief business correspondent; Debra Borchardt, reporter for TheStreet.com TV; and Joel Makower, executive editor of GreenBiz.com and co-author of "Strategies for the Green Economy" -- I`m wearing green today -- "Opportunities and Challenges in the New World of Business."

First off, Ali Velshi, we were introduced to a new economic team by the president-elect. But is there a new plan to go along with it?

ALI VELSHI, CNN CORRESPONDENT: it`s like my Yankees. It`s a great team. It`s an all-star team. They put the best team together that he can. But my Yankees haven`t been able to close the deal for a few years.

What is the game that they`re going to play? How do they play together? And what are they going to do? That`s what we are waiting for. That`s what we continue to wait for.

This is a very big plan. You know, you mentioned Jane, the new New Deal, possibly, a way to put millions of people back to work. We`ve lost 1.2 million jobs. We`ll lose another, at least, a half a million before the end of the year. We could be into two, three even more millions of jobs lost.

Barack Obama has a plan that he says could put 2.5 million people back to work by 2011. This is elaborate. We need to know what the details of this are. For people who are losing their jobs, they want to know it earlier.

I think your point that you made earlier was correct, though, that for those of us who aren`t sure what this is going to be, it is changing our habits. Four-dollar gas changed some of our driving habits. I don`t think -- I hope they don`t change back.

But the bottom line is we can`t wait for the government to do this, so it`s making people try to protect themselves right now, because that`s all you`ve got.

VELEZ MITCHELL: Now, Debra Borchardt, the economy is in turmoil, but the market reacted very positively to today`s news, jumping up 388 points today. We`re all happy about that, I think, but...

DEBRA BORCHARDT, REPORTER, THESTREET.COM TV: Right.

VELEZ MITCHELL: ... we`ve seen the roller coaster. Is this the turning point or is it just more of the same ride?

BORCHARDT: It`s just more of the same. This is what you always see in a bear market. You see these crazy rallies. And then tomorrow, we all come back down to earth and realize what we`ve done.

And that`s what we`ve got with this whole Citigroup deal. This is a horrible deal for the taxpayer. I mean, you mentioned the $20 billion. What about the $306 billion that we`re going to back stop of all their awful junk that they took on, the horrible decisions they made?

VELEZ MITCHELL: Oh, yes.

BORCHARDT: This is a bank that they just sent out letters to their credit card holders, jacking up their rates 25 percent. They`re going from 9 percent to 25 percent on their credit cards.

So, Geithner should have been saying, "You know what? We`ll give you this money, but take it easy on the credit-card people."

VELEZ MITCHELL: Joel, I want to get to you in a second, but I`ve got to go back to the Citigroup nightmare with Ali Velshi. And I want to be careful about what I say, because I read an article in the "Sunday Times"...

VELSHI: Yes.

VELEZ MITCHELL: ... that essentially said that the reason this problem erupted at Citigroup is that the guy who was supposed to be in charge of risk management, overseeing the people who were doing these crazy mortgages, the -- what do they call them? Collateralized debt obligations. They were buddies, and they used to ride to work and back. So basically there was no oversight of the risks that was being taken, so the risk got wildly out of control.

VELSHI: Yes. Clearly, there was a lot of oversight missing in general in Wall Street. Yet to be seen what specific things caused these companies to suffer.

But you mentioned at the beginning of the show, Citigroup got $25 billion of the $125 billion that was given to nine banks that were considered to be systematically important. It`s one of those companies with tentacles into so many places that it`s considered to be systematically important.

And you know what they didn`t do? Congress authorized that $700 billion in part to go to companies. When they decided it was going to banks, the idea was it was going to trickle through and give people more access to loans and mortgages. More small businesses could get loans.

VELEZ MITCHELL: Yes.

VELSHI: Citi announced very quickly after they got the money it will not use any of the money for that purpose. It will use the money to acquire other banks. So it did the wrong thing with the first $25 billion, and now there`s 20 more. Unfortunately -- I hope I were as systematically important as Citibank right now.

VELEZ MITCHELL: Yes. I just want to know, if there`s going to be -- and we can`t answer this question right now, but should there be a criminal investigation into all of these banks?

Remember Enron. People went to jail because of what happened with Enron. And I think in this debacle, there should be an investigation, and people should be sent to jail if they engage in corporate corruption and irresponsibility.

VELSHI: You know what, Jane, the interesting thing is at Enron, we knew they broke laws. What we learned here is our regulatory -- the regulatory system wasn`t strong enough. So we`re not even sure that some of these people that did bad things actually broke laws. I think we`re going to have to investigate, but what we found out is the laws weren`t strong enough to protect us.

VELEZ MITCHELL: All right.

BORCHARDT: They just said three weeks ago they wanted to try to buy Wachovia.

VELSHI: Right. How could that happen? Right.

BORCHARDT: How could they have the money to buy Wachovia when our government is helping them, when three weeks later they`re broke?

VELSHI: Right.

BORCHARDT: They don`t have the money to put in the ATM machines, but -- but...

VELEZ MITCHELL: And the bailout was supposed to be for loans, and it turns out a lot of these banks are using it to buy other properties and consolidate.

Stay right there, lady and gents. I`ve got to take a very quick break. I will take your calls when we return in 30 seconds.

(COMMERCIAL BREAK)

VELEZ MITCHELL: We`re back, talking about America`s financial turmoil, and I want you at home to join the discussion: 1-877-586-7297 right now. That`s 1-877-JVM-SAYS with your questions for my panel.

And back with me is my fabulous panel: Ali, Debra, and Joel.

Joel, you`ve been very patient. Going straight to you. You`ve heard all this. Now I want to ask you about the green angle, because we`re talking about a stimulus plan that could be anywhere from $500 billion to $1 trillion. But part of our problem in this world today is that we`re all consuming too much and buying too much junk that we do not need.

So, my question to you is, how can we create a productive, successful economy without inspiring people to go out and buy a whole bunch of junk that they don`t need? That`s going to ruin the environment.

JOEL MAKOWER, GREENBIZ.COM: You know, part of that is buying less junk, but part of that is that the stuff we`re buying can be a lot more efficiently made. What we`re seeing is that companies are learning how to squeeze out the waste and inefficiency, the excess wasteful materials in the water and the carbon and the toxicity and replace them with much more efficient processes.

But that`s not the way that we`re going to get the economy back on track. There`s a much better way, which is -- we have not just a New Deal but a new Green Deal, where we can spend some of this money on not just simply bailing out the mistakes of the past but bailing in hundreds of thousands of people who haven`t been part of this, who can take up a caulking gun and -- and start retrofitting buildings and make our homes more energy-efficient and make our schools more energy-efficient so they can spend more on education than on energy, and our hospitals and our office buildings.

And these are not bailouts; these are not government giveaways. These are simply investments. Actually, we`ve all been (ph) funds that can be repaid to the government, because these things pay for themselves back and reduce energy savings within a couple years, and then -- at which point every homeowner who does this gets a $600 to $1,000 rebate.

VELEZ MITCHELL: I know what you`re saying. Basically, you`re saying not just a new New Deal but a new Green Deal. I love the sound of that, and let`s hope it happens.

The calls are coming in. Let`s go to Michael from Tennessee.

Michael, what are your thoughts about this economy?

CALLER: Well, first of all, my comment is I can`t -- I think it`s absolutely absurd that our government would take and bail a company out that`s done something wrong and give them $200 [SIC] billion of our tax dollars that we work hard for and then tell us that, when the bank goes out of business, we only get $100,000 back if we have more than that in our account. I think that`s horrible.

VELEZ MITCHELL: Well, Debra Borchardt, you`re with TheStreet.com. You`ve been monitoring the Citigroup problem. It seems like all of these banks took unnecessary risks, really went out on a limb. And yet they are -- they are so unapologetic about the whole thing. I don`t hear anybody apologizing and saying, "We messed up. We did some bad things. You know, we deserve a spanking."

BORCHARDT: It is infuriating, because they`ve not only had one hedge fund go under; they`ve just had another hedge fund go under last week for $900 million. It`s -- it`s crazy.

They were told by the government that they were running the bank into the ground. Earlier this year, a report was written. Did they do anything? No. They took so many outrageous risks, and no one was watching them. The regulators, where were they? They should have been watching them, and they were out to lunch, apparently.

VELEZ MITCHELL: Yes. I think we`ve got to look into the possibility that there was some real villainy going on here.

You know, I want y`all to think about this, and we`ll talk about it more when we come right back, but I`m going to get back to the fundamental question. Is how do we rescue the economy without sabotaging the personal lives and the personal finances of average Americans?

So many Americans have credit-card debt. So many Americans have no savings. Now maybe a tiny little bit of savings. So we`re going to stimulate the economy and get everybody spending again. Isn`t that what got us into that problem? Ali, Debra, Joel, I want your thoughts on that.

And I also want the people at home to weigh in. Do you have an opinion on the bailout? Or maybe just a question on how to change your spending habits? Call 1-877-JVM-SAYS. I want to hear what you think. That`s 1-877-586-7297.

(COMMERCIAL BREAK)

VELEZ MITCHELL: The horrific case of a teenager who killed himself live in front of a Web cam as people watched from home, some of them making fun of him. I`ll examine the Internet culture of death in just a bit.

But first, today, President-elect Obama unveiled his economic team and revealed how he intends to get the economy back on track. The stock market liked what it saw, finishing up almost 400 points. So, is the worst over? I`m hoping.

I`m taking your calls, and our panel is standing by: Ali Velshi, CNN chief business correspondent; Debra Borchardt, reporter for TheStreet.com TV; and Joel Makower, executive editor of GreenBiz.com, co-author of "Strategies for the Green Economy." The phone lines lighting up.

Ed from Arizona, your thought or question, sir.

CALLER: Yes. On the bailout, this if they`re going to bail out the American public or help out with the bailout of homes, then the American people need the money. But they need to start buying American products so that the money stays here in our economy. Also...

VELEZ MITCHELL: You are right. Go ahead.

CALLER: Also, another comment about the banks. Why are we, the people, with our taxpaying dollars helping these banks monopolize the businesses in buying other businesses? It`s not right.

VELEZ MITCHELL: Well...

CALLER: There should be an investigation into this.

VELEZ MITCHELL: I think you`re absolutely right. There should be an investigation. And, again, Enron people went to jail. Let`s see if anything untoward has happened in this case. We do not now.

But Ali, can you address his first comment of this caller?

VELSHI: Yes. Doesn`t make any sense at all. If you want to take everything that isn`t made in the United States and stop buying it, you`ll have no electronics, probably very few clothes and no furniture. That`s impractical.

If you buy a Toyota, you buy a Honda in this country, they`re probably made in this country. This is part of the problem. And it`s -- the problem is that it weighs down a good argument about why we should bail out the autoworkers or why there should be an auto industry. It`s not because we`re not buying American products.

We`re in a completely different world now, where we are in a world of free trade. We have to be able to make products that others want to buy and Americans want to buy. It`s not good enough to make a product that only Americans want to buy. So our auto industry should be making cars that Americans want to buy over the -- you want to buy the Malibu over the Camry.

You can`t do it because you think you should. You have to do it because you`re going to get the same value, you`re going to get the same quality, and that other people are going to want to buy that Malibu, as well. That`s the problem. We can`t go back onto nationalistic views about this thing. We actually have to be competitive with the rest of the world. And that`s what we have to do.

We buy a lot of things and it improves our lifestyle, because we buy things that are made inexpensively in other places of the world. But the tradeoff is we have to make things that other people want to buy, and that`s where we have failed dramatically.

VELEZ MITCHELL: How about, Joel, making things that other people need? I mean, we have all these products. I made a vow once: I`m not going to buy anything new, new toys, before I use my old toys. I`ve got bikes; I`ve got roller blades; I`ve got guitars. I`ve got -- everybody in America has got -- we have stuff coming out of our ears.

But yet, the other side of the world, there are so many people who have nothing that need things. They need cell phones. They need basic communications. Why can`t Americans make stuff that the world needs?

VELSHI: Right.

VELEZ MITCHELL: Joel?

MAKOWER: Well, you know, the one thing -- the one thing that we can be doing that the world needs right now that we have is we can be creating energy out of America. And we have this -- thousands, hundreds of thousands, maybe even a million or two million jobs creating more efficient homes and offices, electric grids, and new infrastructure for our mass transit.

You know, and we`re buying all this energy from -- from the Middle East, and we`re borrowing money from China to do that. We`re bankrupting our entire nation, not just a few banks. Why aren`t we making those kinds of investments?

And the thing that`s important to remember about this is that these are jobs for welders and electricians and plumbers, maybe even one named Joe.

VELEZ MITCHELL: Yes, I agree with you. A lot of people think, you know, that`s elitist, and it`s only going to make certain people wealthy. And actually, going to a green economy will provide jobs for average working Joes. Remember Joe the plumber? Yes.

OK. Robert from Florida, your question or thought. Hey, Robert, you there still?

CALLER: Yes, yes, most definitely here. I agree with you guys, definitely, on Citigroup with the investigation. I mean, that`s Obama`s future money for our -- you know, for our stimulus. You know, just take it away from that.

And on top of the big three, there`s a plan for a -- a green plan for the big three. Real hydrogen fuel comes from water, H2O. In case no one`s, you know -- have we all forgotten about, John Kansas, the guy from Florida, I believe Naples? He created, I guess, fuel burning from saltwater. What ever happened to that?

VELEZ MITCHELL: Yes.

CALLER: Why aren`t these ideas being used?

Robert, I love you. Debra Borchardt, you know, why is it that we`ve been sold this bill of goods that anything environmental is expensive and - - it`s not. It`s the exact opposite.

BORCHARDT: Right. And you`ve really hit on a point that Americans are very innovative people. I mean, we came up with the iPod. We came up with the iPhone. We come up with so many brilliant things in this country. So we definitely have the intellectual technology. It`s available. We have the people. It`s really just making it to where, unfortunately, those green products make money.

And there are car companies, lots of them out in California. They`re very small, but they`re growing. And really, that`s where, you know, we can start to focus our attention, is on some of these innovative people.

VELEZ MITCHELL: Yes. Hang in there. We`re going to get back to this issue in a second. I`m taking more calls: 1-877-JVM-SAYS. Tell me what you are doing to weather this financial storm. That`s 1-877-586-7297.

And a little bit later, the mom of that 8-year-old boy suspected of gunning down his dad and another man speaks out. I`m going to show you what he [SIC] has to say, and it`s shocking. In a sec.

(COMMERCIAL BREAK)

VELEZ MITCHELL: We`re back, taking your calls with my fantastic panel: Ali Velshi, CNN chief business correspondent; Debra Borchardt, reporter for TheStreet.com TV; and Joel Makower, executive editor of GreenBiz.com.

And we have got Larry from Ohio. What is your question or thought, sir?

CALLER: Yes. We have lowered the prime rate for -- for these banks multiple times, and then we turn around and give them this big bailout. Why is it that, no matter how many times owe we do this, the interest rate stays the same?

I think if they would lowered the interest rate, the home prices could stay the same and then people could go into the bank and negotiate lower interest rates. Well, you know, get -- once they get the interest rate lower, people could go in and renegotiate their loan or whatever. And, you know, that would reduce their payment. And, you know, if they -- if they can get lower interest rates, why can`t we get lower interest rates?

VELEZ MITCHELL: I think that`s brilliant. And Ali, I`ve always wondered...

VELSHI: Great question. Great question.

VELEZ MITCHELL: ... why at the start of the mortgage mess they didn`t just refinance a lot of these people.

VELSHI: OK. First of all, prime rate is a direct pass through from what the Fed does. So when the federal lowers rates, the prime rate goes lower. That`s always the case. Now what happens, the charges you "X" amount above prime. That spread hasn`t been lowered in many cases. In fact, in many cases, it`s been increased.

When it comes to mortgages, though, a fixed mortgage is financed a different way. And a rate for a 30-year fixed mortgage for people with good credit hasn`t actually increased very much. It`s still under 6.5 percent. It`s been down, you know, in the fives at some point, so the issue is, if you have a mortgage, you need to get yourself into a fixed rate. If your credit is not good enough, you need to work on fixing your credit so you can get into that.

But you`re right: the spread between prime rate and what the bank charges you, prime rate goes down when the Fed cuts rates. But they are charging increased spreads above prime for your consumer loan, and that`s a problem.

You know, Jane, had they just done more stuff to keep people in their homes, the banks would be better off.

VELEZ MITCHELL: Oh, yes.

VELSHI: It might have been worth taking a cut on the front end and not suffering through this today.

VELEZ MITCHELL: Absolutely. And I got to tell you, I just re-fied, and they put me through the wringer.

VELSHI: Yes.

VELEZ MITCHELL: I mean, it was every question under the sun. I couldn`t believe it.

Let`s go to Lucy from New York. What`s your question?

CALLER: I`m hearing about all these bailouts and all these tax funds going to these banks. And what happened to -- what happens to the consumers that got taken for a ride when they were foreclosed on by the same banks that now my tax dollars are going to help bail out?

VELEZ MITCHELL: Yes, Debra. Debra Borchardt. Ma`am, that`s an excellent point. I mean, these are the same people who are foreclosing, and yet they`re getting the bailout, and the homeowners aren`t getting the bailout.

BORCHARDT: Right. And it`s just so maddening. And I feel like what they should have been doing, too, with these banks is, when they gave them these handouts and these special loans and all these -- these helping hands, that they should have been saying, "Oh, yes, and, by the way, there`s a consumer out there that you are just hosing with 25 percent interest rates on their credit cards. Give them a break and freeze those rates. Maybe freeze them at a reasonable amount. Freeze those late payment fees that have gone through the roof and help the consumer out."

It`s not going to hurt them that much. I mean, at this point, if they`re going to get bailouts, then they should do something for the consumers that they`re now currently ripping off.

VELEZ MITCHELL: All right. Well, listen, we have to go, but I thank you so much for a fabulous discussion, and I hope to continue it. Please all come back.

And again, you know, I think the one silver lining in all this is that now it`s not cool to be overspending and over wasting, and that frugality is back in. Isn`t that great? The new fruges, that`s what I call us.

Ashley Dupre, the hooker who brought down Eliot Spitzer, talks. And you won`t believe what she has to say about sex and money and drugs. Give us a call.

(COMMERCIAL BREAK)

VELEZ-MITCHELL: The call girl behind the Spitzer scandal tells her story. Wait until you hear what Ashley Dupre said about bringing down the former New York governor.

Plus, I`ll be taking your calls at 1-877-JVM-SAYS; that`s 1-877-586- 7297. It`s your turn to sound of on Hookergate in just a bit.

But first, a very sad story here. 19-year-old Abraham Biggs committed suicide online. That`s right. He took his own life with a deadly dose of prescription pills while online viewers watched from the comfort of their own home.

People who say they witnessed the event claimed in online postings they tried to get help from Website moderators who did not take the situation seriously. Several people also said it was difficult to determine whether the footage was real and whether the suicide threat was serious because they claim he had made similar threats before.

Police found Abraham Biggs Jr. dead in his father`s bed 12 hours, 12 hours after he first declared on a web channel for bodybuilders that he planned to take his own life.

Anita Kay is a former prosecutor and Keith Whitworth is a professor of sociology at Texas Christian University.

Anita, the victim`s father says the Website is responsible along with viewers who egged his son on. And he is completely shocked that nobody from the site appeared to be monitoring the content. Who do you think is ultimately responsible here?

ANITA KAY, FORMER PROSECUTOR: I do have issues with the Website, but part of the problem we have is these onlines or live sites are not monitored. I have more of an issue with the people who were watching, who were egging him on to do this because those people need to take a personal responsibility for what they did as well as criminal responsibility for what they did. I actually blame them more than I do the Website for what they did individually.

VELEZ-MITCHELL: Well, I want to say that Justin TV`s CEO issued a statement saying, "We regret that this has occurred and want to respect the privacy of the broadcaster and his family during this time." That`s the only statement they`ve issued.

I went on the site and the site in general has so many different what you might call channels or feeds or streams and they`re coming from all over the place. Some are, like, puppies or little babies playing. I don`t know if it`s technically possible to monitor all of that 24/7, 365. That sounds like quite a job.

But nevertheless, I think I agree with you that the shocking part of this -- and Dr. Keith Whitworth, perhaps you can weigh in -- is the attitude of these people who were watching. They were making fun. They were egging him on, even 12 hours later when the police burst in, some of them were like lol, which means laughing out loud, ha, ha, ha, ha, ha. This is a guy who died!

DR. KEITH WHITWORTH, PROFESSOR, TEXAS CHRISTIAN UNIVERSITY: Thank you Jane. To put this in a context is that suicide in the U.S. is a societal concern. Every 16 minutes someone takes his or her own life. In the case of Mr. Biggs, his age group, demographically, last year, 2007, we saw an eight percent increase in the number of suicides, which was the highest percentage jump in 15 years.

So, this goes beyond just the technology and the Internet and the tragic incident of Mr. Biggs. I think you made an important point a minute ago. It is very difficult to monitor this 24/7.

VELEZ-MITCHELL: I agree with you. And let me tell you one other thing. I think that there`s something called the Kitty Genovese Syndrome, and that was this young woman who was murdered many years ago in New York City and there were all a bunch of neighbors who saw it and nobody took action.

KAY: Right.

VELEZ-MITCHELL: They`ve actually come up with a theory; it`s called diffusion of responsibility. The more likely people feel that other people are going to do something; the less likely they are to do something. So, when something happens on the Internet or in a large group, actually diminishes the chances of somebody jumping in and helping, Anita.

KAY: Right. Now, part of the -- we`ve seen this in different cases. Can if you remember that movie "The Accused" with Jodie Foster, they prosecuted people who were egging other people on. There becomes this mob mentality or group mentality.

While criminally you don`t have to stop someone, you can watch someone kill themselves or commit a crime, you don`t have a duty to stop them. Morally and ethically we would all say, yes, you do have some sort of ethical responsibility.

But what`s different here is when you all of a sudden are egging someone on to do this, you`re no longer just a bystander. You`re a participant in my opinion, and there needs to be laws as we see things on the Internet.

We talked about it last week with Megan Meier. Technology is new for us, it really is, in the criminal world. We need to react.

VELEZ-MITCHELL: I think you`re right, but it does open a Pandora`s Box when you start regulating the Internet, do you want to create suppression like for example what goes on in China. It`s a tough subject, but I will say the level of discourse on the Internet is very low and sometimes very callous and that`s got to change.

Thank you so much for, Keith, your insight. Anita, please stay right there. We`ve got another subject we want you to weigh in on as well.

Stunning new developments in that tragic case of the 8-year-old boy in Arizona suspected of gunning down his dad and his dad`s friend. The boy`s mom, Erin Bloomfield, appeared on ABC`s "Good Morning America" today.

Now, she says her young son is being isolated, left alone in his cell at a juvenile detention center. She also reacted to the tape released last week of her son being grilled by the cops.

(BEGIN VIDEO CLIP)

ERIN BLOOMFIELD, MOM OF 8-YEAR-OLD ARIZONA BOY: A scared little boy; that`s what I hear. Someone who`s very afraid of what`s going on.

UNIDENTIFIED FEMALE: Do you feel he was admitting something? Do you think he was trying to please them? Make you want to run in and be with him?

BLOOMFIELD: It does.

UNIDENTIFIED FEMALE: Can you tell us about his relationship with his dad?

BLOOMFIELD: He had a very good relationship with his father. He -- he did a lot with him. He -- you know, they did everything together. He loved his dad.

UNIDENTIFIED FEMALE: So, as far as you know, there was no anger there, there was no stress there?

BLOOMFIELD: No, not at all.

(END VIDEO CLIP)

VELEZ-MITCHELL: Wow. That mom`s suffering a lot. Wendy Murphy, author of "And Justice for Some" is with us now as well as Anita Kay.

Wendy, The boy`s mom says he`s an 8-year-old child and he cannot be judged by adult standards. Meantime, the family of the second man shot is very upset, saying it`s outrageous that this child is being allowed to go home with his mom for Thanksgiving for 48 hours.

Where do we draw the line? Where does sound judgment come in here?

WENDY MURPHY, AUTHOR, "AND JUSTICE FOR SOME": You know, he`s too young to be treated like an adult. But as tough as I am a prosecutor, he is just a very little kid. The common law from which we get our laws has always said you don`t even get moral judgment, such that you can be judged in a court of law, even in a juvenile court of law, until you`re 7. He`s barely over that edge.

There`s something weird about this mother. I was just scrunching -- my whole body was tense watching her because she`s saying he`s a scared little boy, he`s alone behind bars. Yeah. There`s something worse than that. He killed two people. And oh, by the way, she called him --

VELEZ-MITCHELL: Allegedly.

MURPHY: Allegedly, fair enough. But he confessed and we`ve all seen it, and she said he was just an ordinary little boy. You know what, Jane? He is so not ordinary.

VELEZ-MITCHELL: Okay. I hear you, Wendy. And when you say that we`ve got to go easy on a defendant, I know that we`ve got a real issue because you are a tough prosecutor.

Anita Kay, a couple things. First of all, Phil Spector, who was accused of killing Lana Clarkson way back in 2003 has not spent a night in jail with his trial and retrial dragging on. And this kid has already spent several nights in jail. Something`s totally wrong with that.

But here`s another shocking development. Prosecutors filed a motion, have just filed a motion to dismiss one of the two murder charges against this boy, specifically the charge involving the death of his father. No explanation offered.

It just says basically that will serve justice. That`s very suspicious to me. They know something. There`s something going on here when they say they`re going to drop the charge on killing the dad.

KAY: Absolutely. And there`s a gag order, so we`re only getting limited information. If there weren`t a gag order in this case, we would know for sure why the prosecutor was dismissing. And we can speculate that maybe they realized this tape would get thrown out or there`s further investigation to do, because my understanding of the dismissal is they`re going to be able to re-file.

So, maybe they`re not ready to proceed on this and they`re going to proceed on the other victim first. There`s lots to speculate.

VELEZ-MITCHELL: Let me say this, Wendy. Put your detective cap on because remember this boy said he at one point in the interview he shot his dad because his dad was suffering and he didn`t want him to suffer. Connect the dots here. Something doesn`t add up.

VELEZ-MITCHELL: Yes. You know, let me just admit up front; this is rank speculation, but I`ll say this from what we`ve been able to read -- the bits that are coming through, he apparently allegedly shot his father first in an upstairs bedroom or upstairs somewhere, then came downstairs as the other guy was coming home from work.

And there was a local news story that said he was on the phone with his wife and the wife could hear the boy in the background saying, come on in the house, come on in the house. And when he opened the door, pow. That`s what I`ve read in the local sources.

But, you know, I`ve got to tell you, dismissing that charge against the father makes me think -- again, rank speculation here -- that it`s because they believe there`s a defense of self-defense that is valid. We heard early reports of abuse, nothing more than that, early accounts that there was something about abuse. We have not heard more.

I think that`s shameful that there was a gag order. The mother gets to go on "Good Morning America" and say he`s a great kid and we get nothing.

VELEZ-MITCHELL: You know what? This is a fascinating case. Thank you both for your insights. We`re going to go back to that story again and again.

The Spitzer scandal, meantime, just won`t go away as his hooker sis down with Diane Sawyer. Ashley Dupre tells her story.

And now it`s your turn to weigh in. Call 1-877-JVM-SAYS; that`s 1- 877-586-7297 and tell me what you think of Hookergate right after the break.

(COMMERCIAL BREAK)

VELEZ-MITCHELL: There she is, Ashley Dupre, the prostitute or as she would say escort who brought down the governor of New York. Now the 23- year-old at the center of the Spitzer scandal finally tells her side of the story on ABC`s "20/20."

It`s a rare glimpse into the dark and secretive world of escort services. But what`s shocking is to hear what motivated her to enter this dangerous profession.

We want to know what you think about Ashley and her former profession. So, give us a call, 1-877-586-7297. But first, listen to Ashley explain her motivation.

(BEGIN VIDEO CLIP)

ASHLEY DUPRE, ESCORT: It wasn`t about the money. It was really a place that I could emotionally disconnect myself rather than be in a relationship and get hurt and be vulnerable.

(END VIDEO CLIP)

VELEZ-MITCHELL: Fascinating stuff. What does she mean about wanting to disconnect emotionally? Joining me now, NYU psychiatrist Carol Bernstein; good to have you on board; and former prosecutor and author of "And Justice for Some," Wendy Murphy.

Carol, we have to start with shrink on this one. Is it possible that for these escorts the scariest thing is the emotional intimacy so they actually go into prostitution for impersonal sex where they don`t have to worry about being vulnerable and intimate and real?

CAROL BERNSTEIN, PSYCHIATRIST, NEW YORK UNIVERSITY: I think you`re absolutely right about that. Of course, it`s really difficult to know what her particular motivation was. But there is evidence to suggest that people, when they enter into relationships like this, which are so impersonal, really do it so that they can distance themselves from real intimacy.

VELEZ-MITCHELL: You know what I find so fascinating, Wendy Murphy, is that all the prostitutes always use the same argument. They say when a woman goes out on a date with a guy and he buys her dinner, he expects something, so what I`m doing is just more honest and that`s exactly what she said.

Now, you know, the problem is that you don`t get to choose your partner when you`re a prostitute, whereas presumably when you go out to dinner you get to choose which guys you`re going to go out to dinner with.

MURPHY: Among other differences -- you know, look, I`m since convinced now that she truly is lacking in brain matter. She was a little dumb last time we talked about this when she said she didn`t know the governor of her own state as she`s laying naked in bed with him doing God knows what.

The thing that cracks me up about this lady, she says I was an escort, not a prostitute, as if they were sitting around having deep, intellectual conversations. Wasn`t this the same guy that she said this guy refused to wear a condom? Now I`m just curious Jane, what part of his body was he not wearing that condom on? He does have a big nose.

VELEZ-MITCHELL: She said the difference is that it`s more about the time spent and a lot of it is spent talking, but some of it is not spent talking.

Tiffany in North Carolina, your thoughts on Ashley.

TIFFANY, CALLER FROM NORTH CAROLINA: Yes. I just want to know if she is a paid hooker, if she was doing drugs and all these foolishness while we`ve been sensationalizing her first of all, how come she`s not facing any jail time?

VELEZ-MITCHELL: Well, excellent questions all the way around. And I`ve got to go back to Wendy Murphy on that. Now, what we hear is that she had a deal and that she got immunity in exchange for testifying. But if they`re not going after Eliot Spitzer, why do we need to give her immunity?

MURPHY: Well, that`s a good question. I don`t know that they knew at the time they gave her immunity that they weren`t going after him. Remember, there were all kinds of questions about where the money was coming from and if those kinds of charges might have come up.

But the caller is absolutely right. We shouldn`t be glamorizing this. I have to tell you, I`m trying my damnedest to shame this woman; I`m not trying to glamorize. I want her to hang her head in shame and go to college and learn a few things.

VELEZ-MITCHELL: I think one of the reasons we discuss this is it is a window in our society, a window on our culture, how we treat women, how we treat men, and how we deal with members of the opposite sex in general.

Now, take a listen. Ashley is responding to a question about intimacy. This is fascinating stuff.

(BEGIN VIDEO CLIP)

DIANE SAWYER, ABC HOST, "20/20": What was sex to you then?

DUPRE: Well, I don`t -- I think by not having my father and my brother around, I really -- I felt like I missed something, whether it`s a father`s supposed to -- whether a father -- sorry -- is supposed to be there for a child and to have a certain level of respect for yourself.

(END VIDEO CLIP)

VELEZ-MITCHELL: Mm. Speaking of respect, what about having respect in a relationship? Listen to her strange philosophy on dating.

(BEGIN VIDEO CLIP)

DUPRE: -- difference between going on a date with someone, you know, in New York and him taking you to dinner and expecting something in return, I really thought it was more of a tradeoff.

(END VIDEO CLIP)

VELEZ-MITCHELL: Hmm. Quite a tradeoff. Now, the phone lines are lighting up. Everybody wants to talk about Ashley.

Michelle from New Hampshire, what are your thoughts?

MICHELLE CALLER FROM NEW HAMPSHIRE: I think they should legalize this escort thing because there`s so much money in it that it would make this banking problem that we have in the United States look like minimum.

VELEZ-MITCHELL: I think the caller, Michelle, thank you, raised a very good question. Obviously, Eliot Spitzer gets away with this. He is not going charged and she also gets away with it. But there are other people who have not gotten away with it, who faced jail time.

I think we`re at a crossroads here, Dr. Bernstein, with our society. Either we legalize prostitution and decriminalize it or we start charging the johns, which is not tradition. Usually, the customers walk away scot- free.

BERNSTEIN: Well, I think we really have to leave it up to the legal folks to figure out how they want to handle this.

VELEZ-MITCHELL: No! They`re messing it up, no.

They`re messing it up.

BERNSTEIN: I think there probably are a lot of issues, social issues that have to do with whether people are engaged in prostitution or whether they get involved more at the level of a call girl where you see somebody like this particular woman who had gotten involved --

VELEZ-MITCHELL: Carol, you heard her talking about -- she was very confused about dating and intimacy. What are your thoughts on where she stands? Get inside her head.

BERNSTEIN: I can`t get inside her head. That`s really not appropriate but I think that people have a lot of different reasons for engaging in behavior like this that one could consider herself self- destructive. It seems like she was a very -- you know, she had a lot of advantages. She`s a bright woman who was working and one would have to wonder about whether she was doing this for some reason to really hurt herself.

VELEZ-MITCHELL: And we want to continue trying to get in her mind when we come right back. More of your calls on Hookergate

(COMMERCIAL BREAK)

VELEZ-MITCHELL: Back with Carol Bernstein and Wendy Murphy.

More on Ashley Dupre, the escort who brought down a governor. Let`s get a guys perspective. John in Pennsylvania, your thoughts?

JOHN CALLER FROM PENNSYLVANIA: My thought is everybody is picking on this girl but nobody`s bringing up the fact that Eliot Spitzer didn`t even get convicted of anything, and he`s a dirty pig.

VELEZ-MITCHELL: Well, we`ve been talking about it and I know Wendy feels very strongly about this. I want to add -- and it`s nice to hear a guy kind of take another guy to count. I thought maybe you`d defend Eliot Spitzer.

Wendy, give me your opinion on this. In Russian Malloy the column "The New York Daily News," reports another high-priced call girl is writing a memoir where she reportedly outlines wild drug deals, exhibitionistic behavior where these two women, she and Ashley would make out and draw a crowd of men, "Ashley really knew how to get the guys in a frenzy," end quote.

This isn`t just about money. This is also -- and that was time off. That wasn`t on the clock, apparently. This is about a deeper need for attention and adulation, I think.

MURPHY: You know, who knows? Look, one thing we know -- I can`t even respond to that story. I was so glad to hear a guy make that point. Good for him.

Look, people get into prostitution for a ton of reasons. We know that the vast majority, over 90 percent, were raped themselves and abused as children.

VELEZ-MITCHELL: As she was.

MURPHY: As she was and she admitted it. Maybe she is psychologically troubled. But you know, a lot of people have psychological troubles, bad families, their father left home, and they don`t do this.

I can`t feel bad for this woman. She was making, what, $5,000 every time and she was living the high life. So don`t tell me she didn`t like the money. She loves the money.

But I have to say this about legalization. There is no question we can have a healthier society without legalized prostitution. There are so many reasons not to legalize. We don`t sell babies, for example. Why? Because we want to treat humans with humanity and respect. We don`t even sell -- let me make one point, Jane.

VELEZ-MITCHELL: We`re out of time and I know you are against legalizing prostitution. We respectfully disagree. Baby is one thing. That`s a child. But an adult can make your own decisions.

MURPHY: We can`t even sell kidneys.

VELEZ-MITCHELL: I do feel that if we decriminalize it we could have the police spending time on other issues that count and then we wouldn`t have the -- you know, the guys in charge getting arrested for doing the same thing they`re putting people in jail for. Wendy, Carol, thank you.

You know, there are a lot of people talking on television but too few of them are saying anything that helps you make sense of the world. I am trying to change that by keeping it simple and keeping it real.

I`m Jane Velez-Mitchell. I`m going to see you tomorrow night at 7:00 eastern. We have some more "ISSUES" to go over then. Until then, have a very, very wonderful evening. Good bye.

END

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