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THE SITUATION ROOM
Iraq Troop Timeline in Doubt; U.S. Captain Tries to Escape Pirates; Critics Fire Harsh Words at President Obama; Assessments Could Spark Panic
Aired April 10, 2009 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: To our viewers, you're in THE SITUATION ROOM.
Happening now, an escape attempt by that American ship captain held hostage by Somalia pirates -- his desperate effort to swim to safety.
Also, computer mayhem spreading -- a virus infecting as many as 12 million machines is mutating and is being passed on in a cunning scam.
And an undercurrent of extraordinary arranger at President Obama beginning to bubble to the surface -- could it boil over to a real political problem for the new president?
I'll ask our senior political analyst, David Gergen.
I'm Wolf Blitzer.
You're THE SITUATION ROOM.
It's Al Qaeda's last urban stronghold in Iraq and the violence there is increasing to disturbing new levels. It's the northern city of Mosul. And the situation there's now so serious, it could put the time line for drawing down U.S. troops in jeopardy.
CNN's Brian Todd is working the story.
BRIAN TODD, CNN CORRESPONDENT (voice-over): June 30th is the deadline for U.S. combat troops to withdraw from Iraqi cities. But the top U.S. commander tells "The London Times": "The decision, I am worried about it, is really about Mosul."
General Raymond Odierno is confident about pulling out of most Iraqi cities, including Baghdad. But up north, he says: "It is it's going to be a very difficult political decision for Maliki to decide whether the U.S. remains inside the city in Mosul or not. We will wait. There are still about 75 days..."
Not as certain about withdrawal as Vice President Biden was when he spoke to Wolf Blitzer this week.
(BEGIN VIDEO CLIP) BLITZER: How worried are you that the time line that you've put forward for a withdrawal of U.S. combat forces is not going to be able to be materialized?
JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: I'm not worried about that at all. We will drawdown along the time line we suggested.
(END VIDEO CLIP)
TODD: Just this week, demonstrators in Baghdad kept up the pressure for American troops to leave. But given recent trouble in Mosul, Iraq's top general there recently told CNN he thinks American forces may need to stay past July.
President Obama has promised a complete combat troop pullout by August of 2010.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It is time for us to transition to the Iraqis. They...
TODD: But will the first milestone be met?
MICHAEL O'HANLON, BROOKINGS INSTITUTION: It, frankly, would not be the first time that we saw some flexibility in the interpretation of that June 30th deadline. I think the Iraqis know that they need to pacify Mosul and that it's not done yet and that we're only two-and-a- half months from that deadline.
TODD: A White House official now tells us Vice President Biden was talking about President Obama's withdrawal plan. That is combat troops out by August of next year. He said this June's deadline does not throw into question the president's commitment to that August 2010 deadline and the fact that General Odierno talked about the possibility of extending that June deadline for withdrawal, possibly, from the northern cities, does not mean there's any daylight between the White House and their chief commander -- Wolf, this is all, of course, given more urgency by the fact that a suicide bombing today killed five U.S. soldiers in Mosul -- the deadliest toll in about a year for American forces.
BLITZER: Yes. I heard about that.
All right, when will a decision be made, do you think, about staying longer in Mosul?
TODD: Well, we spoke to an aid to General Odierno in Iraq today. He says the protocol dictates that it's up to the Iraqi prime minister, Nuri Al-Maliki, to decide whether he's going to ask for an extension of U.S. troops in those northern cities. So far, Al-Maliki has not spoken publicly about this. U.S. forces -- U.S. commanders have not weighed in.
That could come any time between now and the end of June. BLITZER: All right, Brian.
Thanks very much.
This programming note to our viewers. CNN's John King will be asking General Odierno about the time line and a lot more when the general joins him on "STATE OF THE UNION," Sunday morning, 9:00 a.m. Eastern and then Sunday night at 8:00 p.m. Eastern.
American held hostage -- a U.S. captain tried to escape pirates, but was recaptured.
Let's go to our Pentagon correspondent, Barbara Starr.
She's joining us now in Bahrain, the home of the U.S. Navy's Fifth Fleet, which is in charge of dealing with this crisis -- Barbara, as we take a look at this situation, he tried to escape, but -- but he was not able to get away. The pirates re - recaptured him.
What do we know about this incident?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, you know, Wolf, by all accounts, what transpired here overnight was a very desperate, very quick attempt by Captain Phillips to make a break for freedom -- to go over the side of that lifeboat and potentially try to swim to the U.S. Navy warship standing a short distance away.
But this was all over before it really got started. The pirates very quickly fired off a couple of shots, we are told. And Captain Phillips was taken back into that lifeboat.
So what do we have here?
We basically have pirates with a couple of AK-47 rifles versus the power of the U.S. Navy. A warship standing nearby really unable to help Captain Phillips in that break for freedom.
They didn't have a helicopter overhead. It was nighttime. They couldn't simply get to him fast enough to try and help him get to freedom.
So it's a real mismatch here -- the pirates versus the U.S. Navy. And right now this standoff continues -- Wolf.
BLITZER: Well, the U.S. is sending a lot more firepower to the area. There are a lot -- many more ships are on the way, is that right, Barbara?
STARR: Well, that's exactly right. And people might be asking, well, why are they doing that?
That's the point that is raised, which is if you're sending all these warships, but yet the Navy is not really able to do much about all of this, what's really going on? By all accounts, Wolf, the military strategy that is evolving here is the warships are shadowing other pirate ships in the neighborhood, trying to keep them from getting to the Bainbridge and to the hostage and trying to bring some settlement to this issue -- Wolf.
BLITZER: All right, thanks, Barbara.
We're going to get back to you.
Barbara is in Bahrain, home of the Navy's U.S. Fifth Fleet.
Let's go to Jack Cafferty.
He's in New York.
He has "The Cafferty File" -- Jack.
JACK CAFFERTY, CNN ANCHOR: Aren't we starting to look a little silly?
They have, what, six guys in a lifeboat holding the United States Navy hostage?
What is that about?
BLITZER: I think it's four guys.
CAFFERTY: How many?
CAFFERTY: Well, if it was six.
CAFFERTY: Water shortages are threatening two of the world's largest cities and could soon become a reality for many more of us.
Mexico City has turned off a main water pipeline, shutting off water to five million of the area's 20 million residents. Water reserves there have reached historic lows -- less than 50 percent now, thanks to low rainfall totals last year and a leaky infrastructure system. It's the third time this year Mexico City has temporarily turned off the tap in order to conserve water.
Then there's Los Angeles, where the city council unanimously rejected a plan to ration water. This came despite a drought emergency directive by Governor Arnold Schwarzenegger to cut water use 20 percent this year. If the city fails to take action, the agency that supplies most of the water to L.A. could impose rationing. And, as a UPI piece points out, the problem reaches much farther than Mexico City or Los Angeles. Beijing has a serious water shortage. The Israelis and Palestinians fighting over control of aquifers -- key ones. Many U.S. cities could face water shortages in the next five to 10 years because one key aquifer in the Midwest has been hugely depleted.
There's no question that waster shortages can also be traced to the world's exploding population, which is now 6.8 billion people. It has tripled from 80 years ago. This rapidly increasing growth seems to be putting an unsustainable demand on resources like water and the environment and will eventually begin to create shortages of food.
None of this is good news.
So here's the question: What's the answer to the world's exploding population?
Go to CNN.com/caffertyfile and post a comment on my blog.
If we don't get our reproduction under control, we're going to do ourselves in, I think -- Wolf.
BLITZER: A great question, Jack.
President Obama accused of fascism by some of his harshest critics.
QUIN HILLYER, "WASHINGTON EXAMINER": It first started with the takeover of the banks. And when you start taking over banks, you've done the very first step that Mussolini did.
(END VIDEO CLIP)
BLITZER: It's part of an undercurrent of anger at the president that's quickly rising to the surface.
Could it snowball?
I'll ask our senior political analyst, David Gergen.
Also, an alleged Ponzi scheme that may not be as big as Bernard Madoff, but is more shocking considering the scheme's mastermind is a former Mormon Church official.
Plus, millions of computers infected with a devious virus and it's spreading right now through a scam that could pop up on your computer screen at any time.
BLITZER: Critics of President Obama and his administration are now turning up the heat and they're now turning up the rhetoric. In print and over the airwaves, their language has been -- begun harkening back to some of history's most infamous dictators.
Here's CNN's Carol Costello.
OBAMA: This plan will require significant resources from the federal government.
CAROL COSTELLO, CNN CORRESPONDENT (voice-over): That's the sound of big government. You would expect conservatives to compare the president and his economic rescue plan with maybe...
(BEGIN VIDEO CLIP, COURTESY NATIONAL ARCHIVES)
FRANKLIN D. ROOSEVELT, FORMER PRESIDENT OF THE UNITED STATES: A new deal for the American people.
(END VIDEO CLIP)
COSTELLO: FDR and the New Deal.
But what's up with this?
(BEGIN VIDEO CLIP FROM "THE GLENN BECK PROGRAM")
UNIDENTIFIED MALE (SINGING): Oh, hail the messiah, Obama, Obama.
(END VIDEO CLIP)
COSTELLO: Linking the president with the old communist Soviet national anthem?
(BEGIN VIDEO CLIP)
GLENN BECK, HOST, "THE GLENN BECK PROGRAM": We're into socialism now. Well, that's not our final destination. Our final destination is happy face fascism.
(END VIDEO CLIP)
COSTELLO: That's right, fascism. The big F-bomb has been dropped by Beck and others.
Quinn Hillyer, writing in "The American Spectator," compares Obama's rescue plan to the economic policies of fascist Italy.
HILLYER: It first started with the takeover of the banks. And when you start taking over banks, you've done the very first step that Mussolini did. And -- and again, every time you centralize power in that way, you start to erode freedom.
COSTELLO: Liberals were quick to poke fun.
(BEGIN VIDEO CLIP, COURTESY COMEDY CENTRAL) JON STEWART, HOST "THE DAILY SHOW WITH JON STEWART": That's not tyranny, that's democracy.
STEWART: See, now you're in the minority. It's supposed to taste like a (EXPLETIVE LANGUAGE).
(END VIDEO CLIP)
COSTELLO: The removal of General Motors' president was particularly upsetting to conservatives.
HILLYER: When you have the president of the United States, in effect, firing the head of a private company, you all of a sudden are no longer dealing free enterprise.
COSTELLO: Which raises the question -- how will any of this name calling play on Main Street?
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: To say fascist, autocrat, communist, dictator, those are very extreme terms. Most Americans don't buy that.
COSTELLO: So far, at least, that's backed up by CNN's latest poll. Sixty-five percent of all Americans say the increased government involvement in how businesses are run is just about right or could be increased.
(on camera): And often that extremist rhetoric generates big ratings on TV and on the radio. And that translates into big money -- another reason to keep the rhetoric heated.
Carol Costello, CNN, Washington.
BLITZER: To discuss what we just heard, our senior political analyst, David Gergen, is joining us now from the Kennedy School up at Harvard -- what's going on here, David, because that rhetoric is pretty harsh?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST, FORMER PRESIDENTIAL ADVISER: It sure is, Wolf. It -- it's getting very extreme.
Listen, conservatives have legitimate and sharp differences with President Obama and the directions he's taking us, whether it's on economic policy or on health care or on climate, and, indeed, in his overseas policies.
So we have seen steadily, in the public opinion polls, even as Democratic support for the president hovers steadily around 90 percent, Independent support hovers steadily around 60, 61, 62 percent, support among self-identified Republicans has dropped about 14 percent since he was -- came into office. And we've opened up -- we have, again, this wide gap. A polarization that we saw under George W. Bush is now revisiting President Obama.
What I think is new and strikingly different is the tone of the rhetoric. And they've just stepped it up. And this kind of firebrand rhetoric can help you with the ratings. Ultimately, I think, it backfires with the general public.
BLITZER: And, you know, you're hearing now one member of Congress -- we heard -- we reported in the last hour, suggesting that there are, you know, what, 16, 18 socialists in the Congress. He's got a list, supposedly -- reminiscent of another era.
GERGEN: Well, it sure is.
I mean, are these 16 card-carrying socialists, as Joe McCarthy would have said?
You know, it certainly does echo the kind of argument that Joe McCarthy made. And there again, Joe McCarthy got a lot of attention. He got a big audience for a while. But he self-destructed over time.
And it's a -- you know, I would think, for a lot of Republicans, it must be concerning that even as the president holds steady among Democrats and, very importantly, Independents, the support for Republicans overall seems to be going down. There -- the support and identification of the Republican Party is at one of the lowest levels in some years.
So there's a big, big question of whether this is healthy for conservatives to engage in the name-calling. I'm not sure whether we're supposed to think that Barack Obama is a fascist like Hitler one week and the next week he seems to be, you know, a weakling like Neville Chamberlain. And, you know, Hitler and Chamberlain were on different sides of the table back in the 1930s.
BLITZER: What do you make of Arizona State University's decision to invite President Obama to deliver the commencement address, but to be sitting up on that dais -- on that podium there when they give -- confer honorary degrees on a whole bunch of others, but you know what, they don't believe he's worthy of an honorary degree?
GERGEN: It's astonishing. And it's -- it's only -- and I think it's -- I think it's not helpful for Arizona State, it must be embarrassing for the people on the faculty there to be in this situation, because this is a university, after all, it has had had some famous honorary degree winners.
But, you know, they -- they gave an honorary degree to the vice chairman or vice premier of education in China now -- and they're not going to give one to the president of the United States?
They ought to be ashamed of themselves.
BLITZER: Yes. We have a whole list of some recent honorary degree recipients at Arizona State. We're going to have that list coming up later here in THE SITUATION ROOM.
But it's pretty shocking when you see who they've given some of these honorary degrees to and yet they don't think that the first African-American president of the United States is worthy of getting that degree. It's pretty shocking.
GERGEN: It is. And I -- you just have to believe that they must have -- there must be a lot of regrets inside. Arizona State has done some good things. I know some of the people on the faculty out there. And it's a -- it's a good school, in many ways.
But this is the kind of bone-headed decision you sometimes see in universities and everybody looks back and says, what in the hell were they thinking about?
BLITZER: They still have time to reconsider.
GERGEN: I hope so.
All right, David.
Thanks very much.
Be sure to join us tomorrow right here in THE SITUATION ROOM, Saturday. You'll see the entire exclusive interview that Gloria Borger and I did with the vice president, Joe Biden, earlier in the week -- tomorrow night, 6:00 p.m. Eastern, only on CNN.
We also have reaction to that interview from former Vice President Dick Cheney's national security adviser -- his former national security adviser, John Hannah. He'll be here in THE SITUATION ROOM, as well. I think you're going to want to see that.
A change in tone from the top -- President Obama now talking about glimmers of hope in the economy.
What's behind his sudden optimism?
Plus, the reason behind this huge celebration in North Korea and what it tells the U.S. about its leader, Kim Jong Il.
BLITZER: Let's go right back to Don Lemon.
He's monitoring some other important stories incoming into THE SITUATION ROOM right now -- Don, what's going on?
DON LEMON, CNN ANCHOR: Hello, Wolf.
Thousands of protesters returned to the streets in the Republic of Georgia today, demanding the resignation of Georgian President Mikheil Saakashvili. It was the second straight day of demonstrations against Saakashvili. Protesters accused the Georgian leader of breaking his promises for democratic reform. Saakashvili is rejecting calls to set down, but -- to step down, I should say -- but says he wants to have a dialogue with his critics.
It was just a few weeks ago that Alaska's Mount Redoubt erupted. Now word that the federal government is using some of the $787 billion in stimulus money to improve the country's volcano monitoring system. Interior Secretary Ken Salazar says his department will use $15 million to modernize systems to do a better job of warning the public and airlines of volcanic eruptions.
Tens of thousands of North Koreans turned out today to celebrate the re-election of their president, Kim Jong Il. Yesterday, the reclusive leader appeared before the North Korean parliament for the first time since suffering a reported stroke. Kim's public re-emerge comes as North Korea celebrates what it calls a successful missile launch. U.S. defense officials say the missile failed to reach orbit -- Wolf.
BLITZER: A very high turnout in North Korea for those elections of Kim Jong Il.
BLITZER: All right. Thanks very much for that, Don.
U.S. banks -- they're undergoing, right now, some government- sponsored stress tests.
Let's go to Mary Snow.
She's taking a look at this story -- Mary, a lot of us know that if there's some heart problems, the doctor wants you to go through a stress test, to get up there and see how your heart is doing. Well, now the federal government wants the banks to do the same thing.
MARY SNOW, CNN CORRESPONDENT: Absolutely. And banks are so vital to an overall economic recovery. There's going to be a lot of attention on banks next week -- this as some major ones report earnings.
But as you mentioned, Wolf, a lot of anticipation about those stress tests being conducted to see how banks will fare in a deeper recession.
SNOW (voice-over): President Obama and his money team with a status report.
OBAMA: What you're starting to see is glimmers of hope across the economy.
SNOW: But he warned the economy is still under severe stress. A big test to come -- banks. While Wells Fargo had good news Thursday, saying it expects a better profit than anticipated for this recent quarter, another measure of the financial health of banks -- the results of so-called stress tests. As Citigroup and JPMorgan Chase prepare to report earnings next week, media reports surfaced that federal regulators ordered them not to discuss their test results. The banks declined comment.
One banking analyst says a request like that isn't surprising.
STUART PLESSER, STANDARD AND POOR'S: I think their concern is that if it was found out that a bank may not be passing a stress test, then depositors could be nervous and -- and there could, I guess, ultimately be a run on that bank, when that certainly wouldn't be what the government would want as the outcome of -- of their stress test.
SNOW: The tests are being done to determine whether banks will need more bailout money. And the Treasury secretary has said he looks at the grading this way.
(BEGIN VIDEO CLIP)
TIMOTHY GEITHNER, U.S. TREASURY SECRETARY: It's not pass/fail. You know, when a quarterback throws the football, he throws to where the receiver is going, not to where the receiver is. And that's how the markets judge risk in institutions. And we need to try to get ahead of that process.
(END VIDEO CLIP)
UNIDENTIFIED FEMALE: Can I help you?
SNOW: But one industry group says posting results is a challenge.
CAMDEN FINE, INDEPENDENT COMMUNITY BANKERS OF AMERICA: Very tricky, because the Treasury does not want to be seen as picking winners and losers.
SNOW: Now the stress test on the nation's 19 largest banks is expected to be concluded at the end of the month. And, Wolf, after that, we can expect to hear how those banks fared.
BLITZER: Let's hope they're all strong.
BLITZER: We'll see.
Thanks very much.
We've heard it before and we're hearing it again.
(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: We had all our money invested in him and we took a monthly draw to live on. And we have nothing left.
(END VIDEO CLIP)
BLITZER: It's not Bernard Madoff's work, but the damage is just as devastating to those who lost it all. Under investigation this time, a Mormon Church leader.
And driven by wind, wildfires -- they're wreaking havoc in Oklahoma and Texas. You're looking at live pictures right now. People dead, homes destroyed -- what's going on?
Officials now say some of the fires were deliberately set.
And it didn't just spread as expected on April Fool's Day, but a potentially very damaging computer virus may still be lurking out there.
BLITZER: To our viewers, you're in THE SITUATION ROOM.
Happening now, tornadoes take their toll on the Southern United States, causing death and massive destruction.
And one Congressman is calling out some of these colleagues. He says some of them are socialists.
I'm Wolf Blitzer.
You're in THE SITUATION ROOM.
"Progress," "glimmers of hope" -- they're words we haven't heard much lately. During a meeting with his economic team today, President Obama sounded almost sunny about the pace of the recovery -- a lot more upbeat than earlier.
Let's bring in our senior political correspondent, Candy Crowley.
Is there a legitimate sense of optimism underway?
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, I wouldn't go quite that far. But, you know, from the very first weeks of this administration, President Obama has issued stern warnings and grim assessments on the economy. But recently, the rhetoric has turned around. And today it did hit a new high -- with some caveats.
CROWLEY (voice over): Springtime in Washington and the president is pretty chipper.
OBAMA: What you're starting to see is glimmers of hope across the economy. CROWLEY: Michael Santoli, senior editor of Barron's, the Dow Jones business and financial weekly doesn't think the president is wrong, but he puts it differently.
MICHAEL SANTOLI, BARRON'S: Well, the economy seems to be declining at a slower pace, maybe we're kind of stabilizing a little bit.
CROWLEY: Glimmers cited by the president: a big increase in home loan financing that puts money in people's wallets and hopefully helps stabilize the housing market; a 20 percent increase in the small business administration's loan program, that may mean some small businesses stay open and new ones will create jobs; not to mention Wall Street has been on a tear since early March.
OBAMA: I'm saying we're seeing progress.
UNIDENTIFIED MALE: Thanks, guys.
OBAMA: I have said that we're seeing progress.
CROWLEY: The president is a man who watching his words and for good reason. Some things have not progressed. Some things are not so glimmery.
SANTOLI: House prices keep going down at a relatively quick pace. That's been the underpinning for many of these problems we have been seeing, obviously it makes the banks' balance sheets worse.
CROWLEY: And unemployment continues to climb, though looking at the glass half full, it did not rise as much last week as the week before which adds up to a president who is more careful than chipper.
OBAMA: Now, we have always been very cautious about prognosticating and that's not going to change just because it's Easter. The economy is still under severe stress.
CROWLEY: And the problem with glimmers is they can disappear. Tentative signs of recovery can merely be bumps along the bottom.
CROWLEY: Beyond the economic numbers a political note, there has been talk that the economy might need more stimulus or more bailout money for the financial industry. If that turns out to be the case, the president will likely need to show Congress that the first infusion of taxpayer money is paying dividends and apparently he thinks it has.
BLITZER: All right, Candy. Don't go away. I want to expand this conversation.
Joining us now, Chris Kofinis, former communications director for John Edwards' presidential campaign and Nicole Wallace, former advisor to McCain's campaign -- former communications director over at the White House under President Bush as well. Guys, thanks very much. Does President Obama run a risk now by suggesting that there are glimmers of hope that if things deteriorate, he looks silly?
CHRIS KOFINIS, FORMER EDWARDS COMMUNICATIONS DIRECTOR: I don't think so. The way I would describe the white house strategy is direct and honest. I think they made a calculation that they're going to be very direct with the American people about the seriousness of the economic crisis that we face and honest about the type of solutions that we need to pursue in order to address them.
I think that's the smart strategy and I think what you're seeing from the polls is a reaction, not only, I think, of the Obama strategy, but also kind of a reaction to what happened during the Bush White House where they felt that they weren't being honest with the American people, so I think it's the right strategy to follow.
BLITZER: Because if things, we hope, they don't turn around get worse -- but if they were to get worse, then people would say it's sort of like Bush when he said mission accomplished and obviously we all know mission wasn't accomplished.
NICOLE WALLACE, FORMER WHITE HOUSE COMMUNICATIONS DIRECTOR: I don't think so. I'm going to go out on a limb here and say I think he got this just right. I think we are seeing glimmers of hope and I think that in his first weeks it was President Clinton who had to remind Barack Obama to show some optimism, to show some confidence in our economy. I actually think he got it just right in pointing to some glimmers of hope. I think that's what most people see
BLITZER: Is there a sort of a political risk though here, Candy?
CROWLEY: Well, look, he didn't go -- I mean, glimmers of hope sounds great in that one little bite, but as we played later in there, he said, look, it's still pretty serious. We still have a few of these --
BLITZER: People don't always remember that after the mission accomplished banner was up on the aircraft carrier -- if you read the whole speech that President Bush aboard the "Abraham Lincoln," the aircraft carrier, there was a lot of caution there. There's going to be rough days ahead and all of that, but everybody remembers the mission accomplished banner.
CROWLEY: I'm not sure glimmers of hope translates into, "Ok, job done, let's move on. The economy's ok." So I think the wording was fine.
BLITZER: Yes, I think everybody agrees. Everybody agrees on that.
Nicole, here is something that everybody's not going to agree with you on. You wrote a little column on the "Daily Beast." Among others you said this. "Europeans aren't better than Americans so I can't figure out why our president is saying sorry to them instead of explaining what makes our country great."
Explain what you had in mind.
WALLACE: I'm not sure who would disagree with that, and the point, what I laid out in this piece on the "Daily Beast" was that this is an honest philosophical divide in America. This is one of, I think, the last big divides between right and left, that I think most people on the left found Barack Obama's rhetoric in Europe refreshing.
I mean that when he stood there and said that at times America has been arrogant, dismissive and derisive toward Europe a lot of liberals found that refreshing. Every Conservative and Republican that I know found that deeply offensive. And I think that most Republicans still go straight to the shining city on the Hill when they think of American exceptionalism.
I think we understand that while we are a perfect country, we are far more off than the solution, not the impediment to progress and to solving the world's problem.
BLITZER: Was it appropriate for the president to say those words abroad?
KOFINIS: Well, understand what the president was doing. Republicans like to criticize the trip, which by the way I think got universal accolades. But the reality is the way you can describe that trip and I call it "cleaning up the Bush mess tour."
Basically, I will never understand this, why Republicans see allies or having allies or close relationships with allies is a negative. Why they see rebuilding our public image around the world is somehow weakness. After eight years of the Bush White House, we had frayed relationships with our allies.
That trip was about rebuilding. What I think you saw were very strong signs that those relationships are coming back. They're going to be critical for us not only to deal with the economic crisis but the national security crisis.
WALLACE: I would just say that the Democratic obsession with looking backward is the inexplicable thing to me.
WALLACE: I cannot understand why Liberals and Democrats are so obsessed with looking back and blaming the one man who is despite whatever else you say, you can agree with David Axelrod, he said George Bush is the example of grace and the example of a states man at this hour.
WALLACE: George Bush has set the bar.
KOFINIS: This is not about criticizing what President Bush has done since he left office. This is criticizing what the president did when he was in office for eight years. It is a fact that we had worse relationships with our allies. It is a fact that our public image suffered.
So the notion that that somehow...
BLITZER: Let me ask Candy, is it smart for the President of the United States to be saying these kinds of things when he's outside the country.
CROWLEY: We'll see, because what we don't know yet, these are two very different presidents. What we do not know is whether the olive branch and the "yes, we've made mistakes" and all of that is actually going to get him something.
Will the NATO allies at any point step up and send some combat troops to Afghanistan? If they do that, well then it worked. Will Europe pour more money to help the world economy? If they do that, then it worked. Will Iran sit down and say, "Ok we'll get rid of our nuclear program?" If they do, it worked.
I just don't think we know.
BLITZER: Proof is in the pudding.
We'll see what happens in the months to come, guys. Thanks very much.
KOFINIS: Thank you.
WALLACE: Thank you, Wolf.
WALLACE: An American ship captain held captive by Somali pirates inside a lifeboat from his own ship. We're going to show you what the conditions are like for him right now.
Plus, a mutating computer virus now being spread by a scam with as many as 12 million computers infected around the world.
BLITZER: More now on the U.S. ship captain being held hostage by Somali pirates. He was recaptured today after jumping out of the lifeboat in which he is being held and tried to swim to a nearby U.S. Navy warship.
CNN's Jason Carroll shows us exactly what it's like inside that lifeboat.
(BEGIN VIDEO CLIP)
JASON CARROLL, CNN NATIONAL CORRESPONDENT: I wanted to give you a firsthand look at the type of lifeboat vessel that Captain Richard Phillips is in right now. It's one very much like this one; it's about 30 feet long. You can see it's covered on the top. There's a sliding door here on the front to keep the water out. Once you step down inside, you can get a sense of just how tight their quarters are. You can see a very low ceiling here. You can see there are seat belts that line the inside of the lifeboat vessel so passengers can sit down and strap themselves in.
This over here is the back section of the lifeboat vessel. And even though it's covered, there is a seat back here that's elevated where someone could sit and steer the boat from this particular vantage point. Also up above, there are several little windows here where you can see out and see exactly what's happening above you.
I want to give you another vantage point where the other side of the lifeboat vessel as I crawl through here. There's another sliding door here on my left, more seat belts here for passengers to strap themselves into. Now moving my way to the front of the lifeboat vessel, there is a hatch above me you can push out, look out and see above you, you can escape from this hatch as well if need be.
Once again, just a quick look at the conditions at the lifeboat vessel that Captain Richard Phillips finds himself in right now.
Jason Carroll, CNN, Buzzard's Bay, Massachusetts.
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BLITZER: We're going to have a lot more on this story coming up at the top of the hour.
Meanwhile, it appears that wildfires which swept through Oklahoma and Texas last night were not an act of nature. The fire chief in Midwest City, Oklahoma says, "It appears that while there's no evidence so far of malice the fires were intentionally set."
Driven by high wind, the flames are blamed for three deaths, dozens of injuries and the destruction of more than 100 homes.
Let's go there. CNN's Ed lavender are checks out the aftermath -- Ed.
ED LAVANDERA, CNN CORRESPONDENT: Wolf, firefighters across Oklahoma and Texas raced to save what they could. Some homes like this one came dangerously close to going up in flames. But as you can quickly find out, not everyone around here was that lucky.
LAVANDERA (voice over): Valerie Waxenfelter and her two children were home alone when smoke started filling up her backyard. Her husband Matt, a Navy officer was deployed to Iraq less than two weeks ago.
VALERIE WAXENFELTER, WILDFIRE VICTIM: I kept watching out my back window and watching the smoke get heavier and heavier. The next thing I know there's a volunteer fireman in my backyard.
LAVANDERA: Valerie says she couldn't get the sprinklers or hoses to work. Seconds later, a firefighter was knocking on her door telling her to get out of the house fast.
WAXENFELTER: By the time we were pulling out of the driveway, the whole front yard was covered.
LAVANDERA: The Waxenfelter's home is a total loss, left in ashes and rubble. But Valerie says the Navy is already flying her husband back home.
WAXENFELTER: Just worried for us, you know, just glad that we're OK, and we're safe and we'll deal with everything when he gets here.
LAVANDERA: after violent winds sparked massive wildfires across Oklahoma and Texas, firefighters battled flames in only a few isolated parts of Oklahoma on Friday. The winds have eased, helping calm the fires.
Chester Lyles returned to his home after evacuating and discovered the two houses next door to his burned to the ground.
CHESTER LYLES, RESIDENT: I'm amazed. How it jumped from house to house and took my neighbors and left mine, I have no idea. No idea.
LAVANDERA: In Oklahoma, more than 100 homes and businesses were scorched by the fires, but in Texas the fires proved deadly. Matt Quinn, a former television reporter and his wife were killed when flames swept across their property in Montague County. Residents here say the fires moved at blazing speeds.
UNIDENTIFIED MALE: You could see it coming right over there. It looked like it was going to go around us but the winds changed direction from the west and it come right to us.
LAVANDERA: Valerie Waxenfelter seems unfazed by the loss.
WAXENFELTER: It's stuff, you know what I mean? It's stuff. My kids are having a harder time with this than I am which is understandable. But it's stuff. My kids, I have them, I'm good.
LAVANDERA: Firefighters here in Midwest City offered chilling descriptions of these fires they were battling saying at one point it seemed like fireballs were shooting across the sky into neighborhoods like this -- Wolf.
BLITZER: All right, Ed. Our heart goes out to all those folks in Oklahoma.
Thanks very much. Texas, as well.
More investors find themselves collectively bilked out of millions.
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UNIDENTIFIED MALE: We had all our money invested in him and we took a monthly draw to live on and we have nothing left.
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BLITZER: Investigators seize anything they can get their hands on, this time a former bishop of the Mormon Church is at the center of their investigation.
And a woman watches on a webcam as her house is burglarized and she turns the tables on the crew ransacking her home.
Stick around. You're in THE SITUATION ROOM.
BLITZER: It's become a familiar scene, investigators are hauling off the possessions of a suspected scam artist; another huge alleged Ponzi scheme under investigation right now in Denver.
Let's go to CNN's Susan Roesgen. She's working the story for us. Susan, who's the target this time?
SUSAN ROESGEN, CNN GENERAL ASSIGNMENT CORRESPONDENT: Well the target this time is a Denver area investment banker, Wolf. The Securities and Exchange Commission and the U.S. Attorney's office there in Colorado say that this man operated the same way Bernard Madoff did; basically he got people to trust him.
ROESGEN (voice over): One by one, the prized possessions of a Denver area investment banker hauled away by U.S. Marshals. They even drove off with a motor home as big as a bus.
JEFF REED, INVESTIGATOR: These items are being seized under court order. They do have value to them and it has to go through the court system.
ROESGEN: Federal investigators say what you see here, plus artwork, including paintings by Rembrandt, are part of the good life enjoyed by a man who spent investors' money entirely on himself.
UNIDENTIFIED MALE: We had all our money invested in him. And we took a monthly draw to live on. And we have nothing left.
ROESGEN: When the news hit the "Denver Post" this week, people couldn't belief that Shawn Merriman, a trusted Mormon bishop, had allegedly been fleecing investors for 15 years.
According to the U.S. Attorney's office, "Merriman admitted that in reality he never made any investments." Instead he used new investors' money to pay, quote-unquote, "returns to earlier investors," a classic Ponzi scheme.
The Securities and Exchange Commission accuses Merriman of swindling as much as $20 million from nearly 40 investors. Now some of those who trusted him are too devastated to say who they are. UNIDENTIFIED FEMALE: It's got to be total greed. It's got to be total greed. Total evil; it's just evil.
ROESGEN: The U.S. Attorney's office is conducting an investigation, but no criminal charges have been filed. No one knows yet how much any of the investors might ever get back.
ROESGEN: And, Wolf, I talked to Shawn Merriman's lawyer today. The lawyer says that Merriman is extremely remorseful and that he's cooperating with investigators and that he also called each of the investor who invested with him to personally apologize -- Wolf.
BLITZER: Sounds like potentially a sort of mini-Madoff in the works over there. All right, Susan, thanks very much.
Let's go back to Jack Cafferty for "The Cafferty Files."
JACK CAFFERTY, CNN CO-ANCHOR: A mini-Madoff, I like that. It's amazing how remorseful they suddenly become when they get caught.
The question this hour is: What's the answer to the world's exploding population?
James writes from Chuckey, Tennessee: "You pointed out the answer. When we run out of safe, clean water, we'll stop reproducing as if we were still living in the dark ages and had no means to prevent pregnancy. Then we'll watch disease, famine, and violence return us to the dark ages."
Marie in Ontario: "First step would be to get rid of all the religious wackos who are against birth control and sex education and continue to preach to their faithful how it is a sin to embrace these practices."
Scott in Wichita: "Two-kid limit, replace you and your spouse. Make taxes significantly higher for more than 2 kids on the order of 80 percent, 90 percent increase per child, unless there are outside circumstances such as terminal illness. It would definitely put a damper on octo-mom's fame. Does anybody really care about her anyway?"
Kevin writes: Unfortunately, the only true answer is war. Although we can increase efficiency to support more people, there are limits. When we get to the point where there's not enough to go around, people are going to kill for resources. People will die, until there are enough resources to, once again, go around."
Jeremiah in Detroit: "The only answer is simple, run out of enough non-renewable resources and we'll all drop off. It has always amazed me we put fresh clean water on our lawns so it looks green when we have droughts or we build huge cities in the middle of deserts. We are our own worst enemies." And John in Effort, Pennsylvania: "We need to educate people on a massive scale about proper socially acceptable birth control methods. The exploding rural population is a sad result of mass ignorance. And mass ignorance will mitigate our fall as a species."
If you didn't see your e-mail here, you can go to my blog at cnn.com/caffertyfile. Look for yours there among hundreds of others. I know you do that each and every day, don't you?
BLITZER: I certainly do, Jack.
I know we have a lot more on this story coming up in the next hour. But I'm really anxious to get your thoughts because you grew up in Nevada, right next to Arizona.
Arizona State University invites the President of the United States to give the commencement address, but they say you know what, you're not worthy of getting an honorary degree when you're there. What do you think about this?
CAFFERTY: It's nonsense. Why did they bother to invite him? And what makes him unworthy of an honorary degree? Have you seen some of the $3 bills that get honorary degrees?
BLITZER: Yes, I have. I certainly have.
CAFFERTY: I certainly mean.
BLITZER: Some of the people that Arizona State recently gave some honorary degrees to in the next hour.
CAFFERTY: There you go.
BLITZER: You'll be interested to hear...
BLITZER: ... who was worthy of getting an honorary degree and who isn't necessarily worthy.
CAFFERTY: I can't wait.
BLITZER: I think you'll enjoy this.
All right, Jack. Thanks very much.
Don't forget, tomorrow, 6:00 p.m. Eastern, THE SITUATION ROOM, the entire exclusive interview with the Vice President of the United States, Joe Biden. You'll see it, 6:00 p.m. Eastern.
And new reaction, we're going to be speaking with John Hannah. He was the national security advisor to the vice president, former vice president, Dick Cheney; 6:00 p.m. Eastern, tomorrow, THE SITUATION ROOM.
Computer users beware. A potentially debilitating virus is mutating and spreading right now. Millions of machines are at risk.
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UNIDENTIFIED MALE: What we're dealing with here are professional criminals. This is not your mother's botnet. This is not something with a kid sitting in his grandmother's basement.
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BLITZER: Plus, pirates reinforcements are rushing to the scene of a hostage crisis off the coast of Somalia. We have some late breaking developments.
BLITZER: Remember Conficker? It was the computer worm that was supposed to inflict massive disruption on networks on April 1st. It didn't happen. But now there are new worries.
Let's go to our homeland security correspondent, Jeanne Meserve. She's been investigating. All right, what supposedly is Conficker up to right now, Jeanne?
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Well, Wolf, as you know 3 million to 12 million computers may be infected with Conficker and it is morphing, making it is even harder to stop.
MESERVE (voice over): Computer users, beware. If this ad pops up on your screen, it's a scam. For $49.95 it says it will cleanse the Conficker worm off your computer. In fact, it spreads it and steals your money, too.
DAVID PERRY, TREND MICRO: It's good evidence that what we're dealing with here are professional criminals. This is not your mother's botnet. This is not something with a kid sitting in his grandmother's basement making this up.
MESERVE: David Perry calls Conficker the Swiss army wife of Malware. It could instruct the millions of computers it has infected to send spam, steal valuable data or hijack other systems.
In a disturbing new development, it is communicating from one compute to another, rather than from a central source, making it harder to trace.
TOM KELLERMANN, CORE SECURITY: It's not only reaching out to more machines, it's reaching out in certain ways to bypass the security mechanisms that have been put in place by organizations.
MESERVE: Conficker appears to be programmed to turn off on may 3rd, but its effects will linger. Experts say it is replanting an older worm called Walladek in infected computers.
PERRY: We've got everybody looking for Conficker. And Walladek is throwing of another curveball. There's an awful lot of what's going on here, is done exactly to throw us off of their trail.
MESERVE: Because Conficker is evolving, it is very hard to eradicate, experts recommend installing patches weekly and running anti-virus software, twice a week, Wolf.
BLITZER: All right, Jeanne, thanks very much. Jeanne Meserve reporting.
To our viewers -- you're in THE SITUATION ROOM. Happening now -- the pirate drama intensifies. The captive captain risks his life to try to escape, but he can't. More U.S. warships right now on the way. Pirates seeking help, though, from other pirates in the area. What's going on? We'll have the latest.
Also, the audacity of hope. What's going on, on the economic front? President Obama says the economy is showing some glimmers of hope. But is this the beginning of the end of the recession?
And surprise, they're on candid camera. Thieves break into a home but the owners stop them from her computer at work.
All of this plus the best political team on television.