Return to Transcripts main page

THE SITUATION ROOM

Dems Despite for Economic Hope?; Getting Away from the Economy; "Our Town Was Obliterated"; How Feds Can Secretly Track You; Runaway Helicopter Near D.C.

Aired August 26, 2010 - 17:00   ET

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


SUZANNE MALVEAUX, CNN HOST: Thanks, Rick.

Happening now, many Democrats are desperate for a ray of economic hope.

Will the nation plunge into a second recession before election day and will it cost the president's party control of the House?

Also, the shocking way the government could be watching you right now -- why agents can legally attached -- that's right -- a GPS device to many Americans' cars without notice or a search warrant.

And what drove a film student to allegedly stab a Muslim cab driver?

The victim is speaking out about anti-Islamic anger in New York City.

Wolf Blitzer is off today. I'm Suzanne Malveaux. And you're in THE SITUATION ROOM.

At a time when many Democrats are running scared because of the state of the economy, they are clinging to any snippet of upbeat news that they can find.

Well, here's what they got on the important issue of jobs. The number of first time filers for unemployment benefits dipped under a half million. Now, that is a better showing than economists predicted. But it's still not the kind of progress that the Obama administration has been hoping for. Now here's on the home front. Hopes are fading for a rebound in the housing market this year. Now new figures out this week show the sale of new homes fell more than 12 percent in July. Federal Reserve Chairman Ben Bernanke could send more chills down Americans' spines tomorrow. He's going to give a speech describing the Fed's outlook of the economy amid growing fears that we may be headed into a second recession.

I want to bring in our CNN chief business correspondent, Ali Velshi -- Ali, the latest polls show that most Americans say that the economy will be important to their vote in November, with about 56 percent saying it's going to be extremely important. We are now hearing that many Democrats are getting more concerned about keeping control of the House.

Could there be any significant improvement in the economy by November?

What are we actually expected to see over the next couple of months?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: I think, Suzanne, it will be a win if there isn't a deterioration in the economy between now and November. I don't know what we can think about improvement. Keep in mind that Americans have rated the economy as issue number one since about October of 2007. That has been the biggest issue to them.

But if you look at that poll number again, the second thing is unemployment. That's the big deal. So we did get a lot of stats this week.

But how would I describe this, Suzanne?

They're like warthogs. They're -- they're ugly, but they're relatively small. The hippo of -- of economic stats will come out next Friday and that's the unemployment number. That is the one that matters to everyone.

Now this week, you just talked about the jobless claims. We also had those home sales numbers, new homes and existing homes.

Why that's important because it's not just about buying a home. It's about when you buy a home, you -- you get carpeting and you buy furniture and you buy a dishwasher. People are not spending money right now on large ticket permanent items. They are worried that they will not have a job a year from now because of that persistent unemployment number.

So I don't know that we'll see a substantial increase between now and November. I think the Democrats are concerned that it doesn't get substantially worse. If it were just a hold, that would probably be a win.

MALVEAUX: So what about this -- we keep hearing about this double dip recession.

Is that the hippo that we are worried about that we might actually see?

How close are we to that?

VELSHI: I don't think we're there. I think that there's a difference between how people feel and what the stats say. The issue here is that if people worry that we're getting a double -- going to do a double dip recession, they don't spend. We have evidence of that, Suzanne. We have credit card debt being paid off in this country. We have people saving more than they have saved in years.

These are generally good things, right?

Except we're not out there spending, which means companies are not expanding, which means they're not hiring people, which is -- which means we're stuck in the status quo. I don't think the status quo leads us to a double dip recession. It may mean that the bottom of this recession hangs around for a long time.

I will tell you, Suzanne, there is real evidence of things happening in a positive sense. There are companies buying other companies for billions of dollars. There are things -- there are some factories opening up. There are things happening. It just doesn't feel like things are happening and that's why people are worried about a double dip recession.

I don't think we're there yet, but we'll have to keep talking about it.

MALVEAUX: And, Ali, when Alan Greenspan used to speak, people would listen. They would -- and the markets react.

VELSHI: Yes.

MALVEAUX: What do we expect out of Ben Bernanke's speech tomorrow?

VELSHI: Well, I think -- I think Ben Bernanke has learned the lessons from 2007 and 2008 of not painting too rosy a picture when things might be bad. I think he will also do what -- what a lot of economists are doing and try to keep it in perspective and say there are statistics that are indicating a difficult economy and a slow recovery. And there are dangers to the economy, but dangers and -- and slow recovery does not equate to double dip recession. And I think he will reiterate that the Fed stands ready to do everything to try and help this recovery.

The problem, as you know, Suzanne, is that what can the Fed do?

They've already pushed interest rates down to basically zero. If people will not buy a house with a 4 percent mortgage, I don't know what more you can do to convince them to buy a house. They're worried about their jobs and that's why people are putting their money in their pocket.

MALVEAUX: All right, Ali.

Thanks so much.

We'll be paying very close attention to that speech tomorrow, Ben Bernanke, obviously to give us some major economic news. Well, given everything that we just heard from Ali, you might think that President Obama is going to focus on the economy like a laser beam, as Bill Clinton used to say.

Well, our White House correspondent, Dan Lothian, he's covering the president on vacation at Martha's Vineyard -- Dan, as we know, there's a lot of questions about the president's agenda when their family's vacation ends. And a lot of people still wondering, turning to this president for assurance that things are going to get better.

What do we expect to hear from in the days to come?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, that's right. You know, during these difficult times, the White House says that the president will continue to focus on fixing the economy. But that hasn't stopped a lot of critics from asking why, when the president returns to Washington from his vacation, will his agenda be so heavy on foreign policy.

Is it just timing or something more?

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): After recharging his batteries during his Martha's Vineyard vacation, President Obama's back to work week may just leave him asking for more down time. On his schedule, a major prime time Oval Office address on Iraq, a visit to U.S. troops in Texas, then two days of Mideast peace face-to-face talks in Washington. But as fears of a double dip recession linger and foreign policy dominates his public schedule, some Republicans see a tactical decision to deflect.

BRAD BLAKEMAN, DEPUTY ASSISTANT TO PRESIDENT GEORGE W. BUSH: What went through my mind is typically what presidents do when they have trouble domestically is they switch to an area that they have much more control over and that's foreign policy.

LOTHIAN: In fact, the big foreign policy push started here on Martha's Vineyard, when the president's counter-terrorism adviser, John Brennan, briefed reporters on a Mideast peace talks breakthrough.

JOHN BRENNAN, WHITE HOUSE COUNTER-TERRORISM ADVISER: There's a strong sense that these talks can succeed.

LOTHIAN: Then, days later, touted progress in Iraq ahead of the drawdown deadline.

BRENNAN: We are confident the Iraqis are going to be able to fulfill their responsibilities and obligations.

LOTHIAN: Other recent presidents like George W. Bush, Bill Clinton and Ronald Reagan were, at times, accused of focusing on stronger policy issues as a diversion tactic. And Brant Blakeman, deputy assistant to President George W. Bush, says with the midterm elections around the corner, the economy is a hard sell.

BLAKEMAN: It's all about the economy. That's all it will ever be between now and election day. So the president is really doing a Hail Mary on foreign policy, hoping against hope that the American people will give him credit for achievement.

LOTHIAN: But deputy White House Spokesman Bill Burton says the president is focused on world events as they happen and that fixing the economy remains a top priority.

BILL BURTON, WHITE HOUSE DEPUTY PRESS SECRETARY: He'll be meeting with his economic advisers when we back next week. So I assure you that alongside all the other things that are on the president's plate, he's continued to focus on the economy.

(END VIDEO TAPE)

LOTHIAN: And Burton said that even while here on Martha's Vineyard, that the president received daily briefings on the economy. Now, asked whether or not the president would be making address any time soon on the economy, he said that it would happen soon, but did not give any specifics -- Suzanne.

MALVEAUX: All right, Dan.

Working hard there on the vineyard.

Good to see you.

Obviously, President Obama will be working hard, as well.

Thank you, Dan.

Stay with CNN for complete coverage of President Obama's address on Iraq and the war against terrorism. That is happening on Tuesday night.

CNN will carry his remarks from the Oval Office live beginning at 8:00 p.m. Eastern.

Well, if you've ever worried that Big Brother is watching you, wait until you hear about the way law enforcement can keep tabs with you with a GPS -- and without a search warrant.

Also, a suspected serial killer in court -- are there any new clues about a motive in a stabbing spree across three states?

And they are in Pakistan to help flood victims. Now, U.S. aid workers reportedly are being threatened.

Is it the work of the Taliban?

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

MALVEAUX: Jack Cafferty is here with The Cafferty File -- hey, Jack, what are you working on?

JACK CAFFERTY, CNN CORRESPONDENT: Hi, Suzanne.

This weekend will mark five years since Hurricane Katrina slammed into the Gulf Coast and all but destroyed the city of New Orleans. The horrible images that came in the days and weeks following Katrina are unforgettable -- a major American city literally underwater; people stranded on rooftops, at the Superdome, wading in floodwater with their belongings and families in tow in the sweltering heat. It was just awful.

The dismal response from the Bush administration only made things worse and left many wondering what was wrong with our federal government. Five years later, despite the death and destruction, in some ways New Orleans is better than ever. There are actually more hotels and restaurants in The Big Easy now than there were before Katrina. And much of the city's major infrastructure has new or rebuilt facilities. A lot of federal money was poured into the schools there. And that's good. They were dysfunctional before the hurricane. And the public health system in New Orleans is also getting better.

As for the levees and water control systems, the work on those continues, but they're improving.

Nevertheless, some worry that even the best levees won't be enough to withstand another storm like Katrina. New Orleans, as you know, is below sea level.

Also, crime remains a huge problem. Several police officers are on trial for shooting unarmed civilians in the days following Katrina and then allegedly covering it up. Housing is a major concern, as well, especially in the poor neighborhoods where a lot of peoples' homes destroyed and a lot of the lots remain empty. A lot of people left their homes never to return.

As for what Katrina and the fate of New Orleans means for the rest of us, a new Pew Poll shows 57 percent of Americans say the nation is no better prepared now for hurricanes or other natural disasters than it was five years ago. Witness the recent Gulf oil spill.

Here's the question then -- five years after Katrina, what can the rest of us learn from New Orleans?

Go to CNN.com/CaffertyFile and post a comment on my blog.

I'm going down there in October.

I absolutely love that city.

MALVEAUX: I'm glad you are, Jack. A lot of my family is down there and many of them are doing much better so I'm glad you're going to be visiting.

CAFFERTY: Oh, yes. No. That's -- a lot of the -- a lot of the parts of the city have -- have made leaps and bounds forward. I -- my youngest daughter graduated from Tulane, so I was down there a lot in the -- in the years after Katrina. And it is remarkable what's happened in large chunks of that city. It's all good.

MALVEAUX: All right, Jack.

We'll check back with you in a little bit.

CAFFERTY: All right.

MALVEAUX: In communities all along the Gulf Coast, there are countless stories similar to New Orleans.

Our CNN's Tom Foreman found the destruction and fortitude that followed in one of them particularly compelling.

TOM FOREMAN, CNN CORRESPONDENT: Hey, Suzanne, you know how much we've talked about all of the losses over here in New Orleans. And, of course, they were unbelievable. But the real epicenter of this storm -- the place where the storm itself struck with the most violence was over on the Gulf Coast, in Mississippi, where people are also building up.

(BEGIN VIDEOTAPE)

FOREMAN (voice-over): Of all the towns ripped by Katrina, none suffered more than Waveland. And no one knows it better than Mayor Tommy Longo.

TOMMY LONGO, MAYOR, WAVELAND MISSISSIPPI: We lost our residential structures. We lost our commercial structures. We lost our governmental structures. Every city building was gone.

Our town was obliterated. We were wiped off the face of the earth.

FOREMAN: And yet, ever since, Waveland has been steadily building up.

(BEGIN VIDEOTAPE)

FOREMAN (voice-over): Of all the towns ripped by Katrina, none suffered more than Waveland. And no one knows it better than Mayor Tommy Longo.

MAYOR TOMMY LONGO, WAVELAND MISSISSIPPI: Lost our residential structures, lost our commercial structures, lost our governmental structures. And every city building was gone. Our town was obliterated. We were wiped off the face of the earth.

FOREMAN: And yet, ever since Waveland has been steadily building up. A hundred million dollars in federal disaster aid has rebuilt community centers, libraries, roads, schools, parks. Churches have reopened, 65 percent of the businesses have returned. Not as much as the city wants, but good enough to bring two-thirds of the people back to.

CNN's Anderson Cooper first met the Kearney family right after the storm.

(VIDEO CLIP, SEPTEMBER 2, 2005)

ANDERSON COOPER, CNN HOST, "AC360" (on camera): You vacuumed your house.

UNIDENTIFIED FEMALE: I vacuumed my house to the moon.

(END VIDEO CLIP)

FOREMAN: They lost the homes for three generations of Kearneys. It was overwhelming. GERMAIN KEARNEY, WAVELAND, MISSISSIPPI: This has blown me away, it really is. You know, but I mean, this happens to other people and they come back from it. So -- we're going to come back from it, too.

FOREMAN: And they did. Rebuilding and resettling, not far from the empty lot where they used to live.

UNIDENTIFIED MALE: This was our tree house here which actually made it through the storm.

FOREMAN: Reclaiming their town has not been easy.

ANN KEARNEY, WAVELAND RESIDENT: I'm not complaining but it is harder to do what we have to do. The school is not around the block. The school is ten miles away.

UNIDENTIFIED FEMALE: There is no shopping as women know shopping. There's nothing like that. But that is so immaterial. We're coming back as a community.

UNIDENTIFIED FEMALE: Hey, I found something.

FOREMAN: And sometimes the children still dig reminders out of the weeding. But day by day, the past grows dimmer; the future, brighter.

UNIDENTIFIED MALE: Slow, very slow but it's happening.

FOREMAN: And for so many here that is enough to keep battling on, building up.

LONGO: Never did it never cross my mind that we're finished. You know, that it's done.

FOREMAN: And indeed, they are not.

(END VIDEOTAPE)

FOREMAN: The mayor absolutely believes that they have to restore the core of that town, get the old Main Street back up and running, it was completely taken off of the planet. So one of the big goals right now to get the new city hall opened after more than five years and hope that draws more people, parades, festivals, a celebration of building up back to Waveland -- Suzanne.

MALVEAUX: Thanks, Tom.

There are now two Iowa farms at the center of the country's massive egg recall for salmonella and investigators are zeroing in on the source of the contamination.

Also, we look at cutting-edge machinery that could win a war, solve a crime or even save a life.

(COMMERCIAL BREAK)

MALVEAUX: Fredricka Whitfield is monitoring some of the other top stories that are coming into THE SITUATION ROOM right now.

Hi, Fred. Good to see you.

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Good to see you, too, Suzanne. Hello, everyone.

Well as if matters couldn't get worse in Pakistan, officials are calling on a half a million people to evacuate to avoid possible flooding similar to what's plagued their region for the past month. The warning was issued after rising waters breached an embankment of the Indus River. Pakistan's massive flood disaster has claimed 1,600 lives and affected 17 million people.

And law enforcement officials say a third person is in custody in connection with an investigation in Canada of an alleged cell plotting to attack targets. Today, two men appeared in court in Ottawa. Both face conspiracy charges, one faces additional terror-related charges.

And a German pop star who's HIV positive has been found guilty of charges stemming from her failure to tell sexual partners about her infection. A court sentenced 28-year-old Nadja Banyatsa (ph) to a two-year suspended license plus 300 hours of community service. One partner became infected with the AIDS virus. The former singer in the girls band No Angels allegedly has known of her HIV status since 1999.

And the Catholic League plans to demonstrate this evening in New York to protest the Empire State Building's decision not to honor Mother Theresa on what would have been her 100th birthday. Officials cited a policy on religious requests. Several marquises in Times Square will glow blue in the Nobel prize-winning nun's honor. She was born in Macedonia August 26, 1910 and devoted her entire life to India's poor -- Suzanne.

MALVEAUX: Thank you, Fred.

Well imagine if a police officer could sneak into your driveway and stick a GPS device on your car. Stand by to find out why it could happen and why it could be legal.

And later, new weapons technology on display. The benefits and risks of waging war with unmanned drones.

(COMMERCIAL BREAK)

MALVEAUX: You're in THE SITUATION ROOM.

Happening now, a Muslim cab driver comes under attack in New York. Who is the young film student accused of trying to kill him?

And investigators narrow down the source of a salmonella outbreak that forced the recall of millions of eggs. Could it push a food safety bill in Congress forward?

Wolf Blitzer's off today. I'm Suzanne Malveaux and you're in THE SITUATION ROOM. OK. Many of us use a GPS device to find our way around new places or new cities. But get this, in a number of states the government can use a GPS to keep tabs on you without your knowledge, without a warrant and it's perfectly legal.

Our Brian Todd is looking into this for us. And, Brian, this is amazing. I don't understand how this could happen. Tell me, a lot of people don't and worried about this.

BRIAN TODD, CNN CORRESPONDENT: A lot of people don't, Suzanne. They are.

This is from a very controversial court ruling in the western U.S. which gave law enforcement some very important new leeway to track suspects. But it's also added to a long-running debate on how far public security can go before it becomes Big Brother.

(BEGIN VIDEOTAPE)

TODD (voice-over): It's not much bigger than a soda can and in some states law enforcement can stick a GPS on your car while it's in your driveway and track almost every move you make, and they don't always need a warrant according to a recent ruling by a federal court handling the western U.S.

In 2007, drug enforcement agents in Oregon hid a GPS on the Jeep of Juan Pineta Moreno (ph) suspected of growing marijuana. How watchful an eye could it keep on you?

(on camera): Where's the best place for that you think?

MIKE O'CONNELL, PRIVATE INVESTIGATOR: Basically, the frame of the car.

TODD: OK.

O'CONNELL: Or the truck as we're here with.

TODD (voice-over): I tested a GPS tracker on our CNN vehicle with veteran private investigator Mike O'Connell. He's been using them for years, mostly to track spouses suspected of infidelity. His GPS may not even have the same capabilities used by law enforcement.

(on camera): Now Mike's going to show me just how sophisticated the device is. He's going to track me from his office right up there as I get into the car and drive away.

I've got Mike on the phone here.

TODD (voice-over): O'Connell follows me at every turn while I question him on speakerphone.

(on camera): How far can you track me on this thing, Mike?

O'CONNELL: I can track you throughout the country with this device. Also, if you were to get on some sort of boat or yacht and went to an island, it would -- it would continue tracking you.

TODD: And for how long can you track someone on this device?

O'CONNELL: This device has a life battery for about two weeks until I have to recharge it.

TODD (voice-over): When he was charged, Pineta Moreno objected to the GPS saying it was an invasion of privacy, an unreasonable search.

Marc Rotenberg of the Electronic Privacy Information Center agrees.

MARC ROTENBERG, ELECTRONIC PRIVACY INFORMATION CENTER: I think the law is actually pretty clear on that. If it's your driveway, it's your private property.

TODD: But in Pineta Moreno's case, the court said an individual does not necessarily have a reasonable expectation of privacy in their driveway.

Former Justice Department official David Rivkin says placing a GPS on your car in your driveway is no different than tailing you with a helicopter or a chase car.

DAVID RIVKIN, FORMER JUSTICE DEPARTMENT ATTORNEY: Any kind of surveillance that involves you being in public and the people who are following you being in public, of course, does not require any warrants.

(END VIDEOTAPE)

TODD: But privacy advocate Marc Rotenberg says this ruling is at odds with cases in other regions including Massachusetts, New York and Washington, D.C. where courts did require officers to get warrants to stick GPS on cars. Rotenberg hopes this will get appealed to the Supreme Court -- Suzanne.

MALVEAUX: So is there a difference between the rules for private investigators and, say, police officers?

TODD: Well, there could be. And again, it's a little bit sticky. This private investigator who we interviewed, Mike O'Connell, says he can place a GPS on a car that's considered marital property, that's any car that was bought while a couple was married. Remember, he deals mostly with married couples and suspected infidelities.

MALVEAUX: True love stories.

TODD: Yes, well -- anyway, it doesn't matter whose name the car is in. He can place a GPS on that car if it's marital property.

As for whether he can stick it on a car that's on private property, he says he can if it's in the couple's driveway. Again, often that's marital property. Now if the car is on a private driveway that is not owned by one member of the couple or both, he says he can still stick it on a car there if there is a sign out in front saying -- unless there's a sign out in front saying private property, keep off. That what keeps him away from a car on private property.

MALVEAUX: I think a lot of people will be surprised to hear about this.

TODD: That's right.

MALVEAUX: All right, thank you, Brian.

TODD: Thank you.

MALVEAUX: We are just now learning about a scary situation involving a runaway helicopter. Not far from the nation's capital a U.S. Navy spokesman says that a military test facility lost control of an unmanned helicopter for about 20 minutes.

Now the drone took off from southern Maryland, entered the restricted air space about 40 miles from Washington. Aviation officials were notified about this and the military eventually re- established communication with the drone, reprogrammed it and returned it to base.

Unmanned weapons are changing the way that U.S. military wages war, and some of the newest technology has been showcased at a fascinating conference in Colorado. That's where CNN's Reynolds Wolf went.

REYNOLDS WOLF, CNN METEOROLOGIST: Suzanne, there are hundreds of incredible machines on the floor of this convention center. They're all boasting the very latest technology.

It's really the scientific right stuff that may one day help us win a war, solve a crime or save a life.

(BEGIN VIDEOTAPE)

WOLF (voice-over): Take a look at this incredible machinery. Built to serve on land, sea and air. The primary purpose? Waging war.

COL. GREG GONZALEZ, U.S. ARMY: These aircraft fly 24 hours a day, day in and day out both in Iraq and Afghanistan. And they are the -- the eyes and ears of the brigade commanders who are down at the -- in the tactical operations every day.

WOLF (on camera): General Petraeus made a statement recently saying that they can't have enough drones overseas. They need more. Your thoughts on that?

UNIDENTIFIED MALE: The general's always right.

WOLF (voice-over): And not just more of these. The Global Hawk has been the battlefield eye in the sky in Iraq and Afghanistan. And this stealthy carrier launch unmanned craft could be the next to visit the war zone.

This is billed as the world's largest unmanned systems exhibitions. It's an annual event where contractors of all sizes come to sell their wares. And these massive machines aren't the only ones featured. There are many others that are much smaller.

WAYNE PICKELL, ADAPTIVE FLIGHT: UNIDENTIFIED MALE: It's so small and lightweight that it doesn't -- you know, people almost perceive it as a toy. It is not a toy.

WOLF: While many shoppers do the job from above, gizmos like this one spy from the ground up.

(On camera): It's kind of like playing a video game. But it's not a video game. It's a rolling moving camera.

(Voice-over): This is equipped with a machine gun and grenade launcher. It's essentially a motorized soldier.

(On camera): What kind of damage can something like that withstand in the field?

BRENT AZZARELLI, NAVSEA: Boy, that's a good question. I can't answer that.

WOLF: We don't know yet.

AZZARELLI: We don't know yet.

WOLF: As long as it's a robot out there and not a human being, (INAUDIBLE) and burning fire.

AZZARELLI: You've got to believe that a robot can sustain a lot more damage than a human, absolutely.

WOLF: And that's the point.

AZZARELLI: That's the point.

(END VIDEOTAPE)

WOLF: The main objective of this event is very simple. To promote machines that will some day tackle the dirty, dull and dangerous jobs keeping us all safe.

Suzanne, back to you.

MALVEAUX: Thanks, Reynolds.

A rough landing lands some airline passengers in the hospital. We're going to have an update from California.

And questions and controversies as an alleged serial killer lands in court. What are we learning about possible motives? (COMMERCIAL BREAK)

MALVEAUX: Fredricka Whitfield is monitoring some of the other top stories that are coming in THE SITUATION ROOM right now.

Hey, Fred, what are you working on?

FREDRICKA WHITFIELD, CNN ANCHOR: Hello again, Suzanne. Hello, everyone.

Well, four people have been transported to the hospital after a JetBlue airliner made a hard landing at Sacramento International Airport in California this afternoon.

Officials are trying to determine what happened in terms of reported fire and tire blowouts aboard Flight 262. Airport fire officials are on the scene.

The flight originated in Long Beach.

And former President Jimmy Carter is in North Korea. He arrived there today on an official -- unofficial, rather, trip, although experts believe that he went there to meet with North Korean president Kim Jong-Il.

Trouble is, he reportedly left on an unexpected trip to China late yesterday. His departure has fueled speculation of a diplomatic snub of the former president who is trying to win the release of a jailed American.

Carter's trip has now been extended by a day.

And the attorney for Robert Blagojevich says that he was in shock to learn that prosecutors had dropped all four charges against the brother of former Illinois governor Rod Blagojevich.

The attorney says prosecutors told a judge today that they were dismissing charges, quote, "in the interest of justice".

Rod Blagojevich's defense team says he still faces a retrial after the first of -- next year for allegedly trying to sell Barack Obama's Senate seat.

And for football star Chad Ochocinco two reality shows. An upcoming season of "Play" and now his own cereal. The all-pro wide receiver with the Cincinnati Bengals is releasing the cereal called Ochocincos. It will come in a limited edition collector's box, of course, and proceeds will go to the charity Feed the Children.

Ochocinco was a contestant, as you know, on "Dancing with the Stars" and has a dating show as well on VH1.

(LAUGHTER)

MALVEAUX: My goodness. He has a lot going on. Ochocinco.

WHITFIELD: He has a lot going on.

(LAUGHTER)

WHITFIELD: Ochocinco.

MALVEAUX: All right. Thank you, Fred.

WHITFIELD: Eighty-five.

(LAUGHTER)

MALVEAUX: Sarah Palin declares that Senator John McCain has seen the light on conservative issues. So he fights to keep his Senate seat in Arizona. Does his former running mate's remarks sound like a glowing endorsement? We're going to hash it out in our "Strategy Session".

And later, a Muslim cab driver is stabbed in New York. What could have sent this accused attacker over the edge?

(COMMERCIAL BREAK)

MALVEAUX: As Senator John McCain of Arizona fights to keep his Senate seat, his former vice presidential running mate Sarah Palin has gone on record with an endorsement that some might consider a bit backhanded.

I want you to listen.

(BEGIN VIDEO CLIP)

SARAH PALIN (R), FORMER ALASKA GOVERNOR: I think that Senator McCain certainly has evolved into the more of a fighter for conservative principles than ever. And certainly, Senator McCain -- and I think that he would be quite admitting of this, too. He's seen the light in some respect on some of these issues.

(END OF VIDEO CLIP)

MALVEAUX: Joining me for today's "Strategy Session" are two CNN contributors, Democratic strategist James Carville and Republican strategist Ed Rollins.

First of all, Ed, I want to start off with you. This doesn't sound like a ringing endorsement to me. What do you make of it?

ED ROLLINS, REPUBLICAN STRATEGIST: Well, John McCain needed her, obviously, to win the primary and she certainly went down there very willingly.

You know she -- he's never been as conservative as she is. She energized the political base of the party when she was the nominee. She gave him two or three good weeks afterwards in which when the base had real serious doubts about him.

And I think to a certain extent the course of the last 10 years, 12 years of John's career, he's kind of been all over the place. He's been fairly conservative the last two years. He ran as a conservative this particular election. I think what she said is what she feels.

MALVEAUX: James, obviously, McCain survived the Republican primary. Does he need Sarah Palin or does she need him?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: Well, I tell you what. He sure needed her in that primary. Her endorsement did him a lot of good.

Look, she's a real power in the Republican Party. She's feeling her oats. And she's kind of enjoying slapping some of these old boys around a little bit and saying, you know what? I showed you the light. I think she's appropriately feeling just how powerful she is.

MALVEAUX: I want you guys to also take a listen to what she said when it comes to, I guess, slapping around senator from Massachusetts, Scott Brown, over a moderate Republican.

She says, "They're going to put up with Scott Brown and the antics there but up here in Alaska and in so many places across the U.S., where we have a pioneering independent spirit and an expectation that the representative in D.C. will respect the will of the people and the intelligence of the people."

Obviously, she's talking about the candidate that she backed, Joe Miller, in Alaska for that Senate race.

Do you think that moderate Republicans -- do they have something to worry about when Sarah Palin goes after them?

ROLLINS: I don't think so. I mean, obviously, we all Republicans cheered when Brown got elected. He was a very critical vote for us and he gave some momentum to our party and a Sarah Palin or a Joe Miller probably couldn't get elected in Massachusetts.

It's a pretty liberal base and Brown will have to do everything he can to get re-elected in two years. So I don't think -- we need moderates. We need every -- I'm about addition. Every Republican we can get, I hope the base is conservative. But I would -- I'll take a few moderates if that gives us 60 votes.

MALVEAUX: James, does it help the Democrats, perhaps Sarah Palin attacking Scott Brown and other moderates?

CARVILLE: Well, look. What the truth of the matter is that they're, you know, count the number of moderates in the Republican Party. Just very few. This is a conservative party. This is a party that the Tea Party is more influential in the Republican Party than these organized labor and African-Americans combined are in the Democratic Party.

And Sarah Palin has shown herself to probably be the most powerful, valuable Republican there is in the country right now, and I think the rest of the country can look at that and they're going to have to decide if they think that her brand of conservatism is what the country wants as a whole but let me tell you.

She is -- she's slapping around who she wants at will. If it's John McCain, if it's Scott Brown, she is -- she's the ruler of that party right now. And you can see it in her comments. You can see it in her endorsements. She can say who's winning this election. It's really quite remarkable the power that she's amassed.

MALVEAUX: I want to turn the corner to another discussion. The former head of the RNC Ken Mehlman who I knew covering the Bush administration. He has come out, said that he is gay and there's a raging debate now over whether or not he is a hypocrite or if he's courageous for doing so.

We heard from the current RNC chair Michael Steele who put out a statement today, saying, "I'm happy for Ken. His announcement, often a very difficult decision which is only compounded when done on the public stage, reaffirms for me why we are friends and why I respect him personally and professionally."

Now Mehlman was instrumental in pushing forward the Bush administration policies, including promoting "Don't Ask, Don't Tell" against same-sex marriage.

Should he have come out sooner? Should he have disclosed his personal life or was that something that was appropriate? Ed?

ROLLINS: That's a -- that's a very difficult decision for anyone to make. I have great respect for Mr. Mehlman. He was a great operative. That's how I knew him. He ran a brilliant campaign for President Bush.

I don't think he was one of these hypocrites in the sense that many -- many people who've eventually come out of the closet sometimes bash gays. I don't know of him ever doing that.

I think he was a very quiet operative, very much behind the scenes and very respected. I think this was probably a difficult decision for him and I respect that he did what he did.

Republican Party, though, obviously, and there will be critics in the party who will basically make some of the charges. I'm not one. I respect whatever he wants to be he can be.

MALVEAUX: James?

CARVILLE: Yes. You know, I got to disclosure. He's a -- a personal friend of mine. But I think a really -- a real decent guy. I really like him, regard and respect him. And this is a decision that he made.

And, you know, presumably he thought about it and it's what he wants to do. And I'm happy for him. And it just doesn't matter to me. I have a great deal of personal affection and professional respect for Ken Mehlman.

MALVEAUX: On the bigger picture here in terms of the political impact and covering the Bush administration for seven years, I knew gay officials in the administration who felt that it was a very gay- friendly place privately.

You had Cheney's daughter Mary openly gay. The First Lady Laura Bush very much for pro-gay rights. It was only outside of the White House publicly the policy Bush administration policies that did not promote gay rights.

Do you think that by Mehlman and others disclosing this, does that offer room for other moderate Republicans to go against the conservative base of the party? Ed?

ROLLINS: Our party is going to be for the foreseeable future, I believe, pro-marriage, meaning marriage between a man and a woman. Condemn homosexuality rightly or wrongly, but it will. And I think to a certain extent as long as the Christian right is a very strong element of our party, which it is, many of those people are going to basically object to that lifestyle.

It may change over time but one person, one former national chairman is not going to basically change the dialogue.

MALVEAUX: Do you agree, James?

CARVILLE: Well, first of all, I'm for gay marriage and I -- you know, I guess I do think there's a little bit here where it's not a gay friendly for the, you know, 50, 75 gays that work in the government but, you know, they're out fighting against basic human rights for gays, it's not. That's not good at all.

I mean, that doesn't impress me at all. And I mean, I'm sure that, you know, a lot of these people are very tolerant in the individual view but if you're a gay person, you don't want discriminated against something like that.

You look to the government to make sure that you have the right as every other American. And -- no, that doesn't sit very well with me.

MALVEAUX: All right. We're going to have to leave it there. James Carville, Ed Rollins, thank you for joining us this morning.

ROLLINS: James, you look very dapper today.

(LAUGHTER)

CARVILLE: Honest, I am. Decked out in the New Orleans --

(CROSSTALK)

MALVEAUX: Do you hear the New Orleans --

ROLLINS: Mary must have dressed you this morning. You look really sharp.

CARVILLE: Yes. That's it. (LAUGHTER)

MALVEAUX: He's enjoying that New Orleans jazz, too, I hear.

CARVILLE: Got my white bucks on if you can see them. OK.

(LAUGHTER)

MALVEAUX: We can see you, James. We got you. All right. Thanks.

Jack Cafferty is asking, five years after Katrina, what can the rest of us learn from New Orleans? He's going to be back in a moment with "The Cafferty File".

And in the midst of a massive egg recall, we're going to tell you why a bill to improve food safety can't get through Congress.

And is the flooding disaster in Pakistan leaving U.S. aid workers vulnerable to terrorists?

(COMMERCIAL BREAK)

MALVEAUX: Jack joins us again with "The Cafferty File". Hey, Jack?

JACK CAFFERTY, CNN CONTRIBUTOR: Question this hour, Suzanne, is five years after Katrina what can the rest of us learn from the city of New Orleans?

Denny writes from Washington, "It means that the government that we financially support and at times defend with our lives is often not there when we really need it."

Steve in Virginia says, "The big lesson to be learned is that when we as Americans act collectively for each other's common good toward a common goal, we can overcome anything. We ought to focus less on party affiliation, race, gender and sexual orientation and focus on the common good of this great country."

Susan writes from Idaho, "There's no place like home. The residents have proven that they're made of the right stuff and they've given us all a reason to respect them. I've been to New Orleans many times and what I have seen after Katrina is that they were down, but never out."

Jeff in Houston, "The same thing we learned during the Bush regime. If you're not a rich while male with corporate and/or political connections, then you really don't matter. Go ahead and die, one less pesky minority type thinking they have rights. What nerve."

John in Alabama writes, "Have a plan for nature's disasters or manmade disasters, know how the leave the area, make sure important papers like Social Security cards, bank statements, property information are with you, and do not stay anywhere if asked to evacuate by the authorities."

Rick writes, "Number one lesson? Don't build in areas that are below sea level."

And Andy in Massachusetts writes, "Trust your neighbors to help you when you're down and out, and remember that Rome wasn't built in a day. The people of New Orleans are at spirit, and that spirit is flying high."

You want the read more about this, heart-warming stuff some of it, and some of it highly critical of the federal government, et cetera, go to my blog, CNN.com/caffertyfile.

That town, in addition to having great food and music and all that other stuff, they do have a lot of spirit down there.

MALVEAUX: Absolutely. My dad is working on a project down there to figure out if the schools are healthy for kids coming back to -- and some of those buildings -- for allergies and asthma, that kind of thing. A lot of work to be done so.

CAFFERTY: These little ones were damaged in the flooding, right?

MALVEAUX: Right. Absolutely. So there are still a lot of health problems that a lot of kids are facing, too. So --

CAFFERTY: Yes --

MALVEAUX: That's one of the things they are working on.

CAFFERTY: They are getting it done, though. Little by little, it's going to be all the way back one day.

MALVEAUX: Yes. One day. All right, thank you, Jack.

CAFFERTY: Sure.

MALVEAUX: A lot of controversy and questions surrounding an alleged serial killer accused of stabbing deaths. Ahead, what we are learning from his appearance in court in Michigan.

And how likely is Congress to pass tougher food safety regulations now that many Americans are scared to eat eggs?

(COMMERCIAL BREAK)

MALVEAUX: A suspected serial killer is back in Michigan to face charges. He was flown from Atlanta today under very tight security.

Now he has been accused of stabbing 18 people in three states between May and August. Most of them were African-American. Five of them were killed. He was arraigned this afternoon.

Our CNN national correspondent Susan Candiotti is following this case for us.

And what do we know, Susan?

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Well, not much more than we did before because we're still waiting for more evidence. But today it was time for stabbing suspect Elias Abuelazam to go home under police escort.

His alleged attacks stoked fear and anger in Virginia, Ohio and especially Michigan. There are still a million questions about him, about evidence, about motive.

(BEGIN VIDEOTAPE)

CANDIOTTI (voice-over): Handcuff, shackled and surrounded by police, serial stabbing suspect Elias Abuelazam was quick to answer when CNN asked him about the attacks.

In his words, "I didn't do anything." Police claim he did. Fingering the 6'5", 285-pound, Abuelazam as an alleged serial stabber who followed the same basic MO -- asking for help with his car late at night followed by a surprised attack.

RICHARD BOOKER, VICTIM: He basically tried to kill me.

CANDIOTTI: Richard Booker is an alleged victim. He says he didn't get a good look at his late-night attacker. But showing off his wounds, Booker has no problem remembering getting knifed in the chest and side.

BOOKER: He kind of grabbed me from behind, and had a buoy knife more or less, and just like he tried to gut me or something. He tried to stab me in the face and throat. He kind of got off of me a little bit, and I made it home and passed out on my porch.

CANDIOTTI: Unlike Booker, most of the 18 stabbing victims are black, located in Michigan, Ohio and Virginia from May to August.

SHERIFF ROBERT PICKELL, GENESEE COUNTY, MICHIGAN: This will be the cell that he'll be living in.

CANDIOTTI: Abuelazam will be checked on every 15 minutes because police are worried he might hurt himself, saying they've safety- proofed the cell down the clothes hooks on the wall.

Yet, Abuelazam appeared relaxed as he occasionally smiled during fingerprinting. Bystanders stared at him from beyond the jailhouse partition.

PICKELL: He just said that he was concerned about it. He's attracted a lot of attention. I said, yes. And then he -- when I talked about that, I said there'd be a lot of cameras down there and the lawyers will be in the courtroom, and he said, good.

CANDIOTTI: So far, Abuelazam is charged in only one case, assault with intent to commit murder. His defense attorney described his demeanor.

BRIAN MORLEY, DEFENSE ATTORNEY: It was business-like, I guess. Business-like, but a little bit nervous.

CANDIOTTI: At an NAACP town hall meeting this week, authorities denied accusations that police failed to warn people early on that blacks may have been targeted. The prosecutor calls the attacks crimes of opportunity, not necessarily racist.

DAVID LEYTON, PROSECUTOR: I believe he is not sick. He is evil.

(END VIDEOTAPE)

CANDIOTTI: Investigators say they are waiting for forensic evidence that could lead and are expected to lead to more charges.

Now because he's considered a flight risk, Abuelazam was denied bond. Prosecutors say there will be another hearing in a couple of weeks and at that time we should be hearing about more evidence, more evidence about exactly what will lead to additional charges.

Back to you.

MALVEAUX: Thank you, Susan.

You're in THE SITUATION ROOM. Happening now, a stunning new twist in the case of a Muslim cab driver brutally stabbed in New York.