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JOHN KING, USA

Gadhafi's Desperate Bid to Hold Power in Libya

Aired February 23, 2011 - 19:00   ET

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


JOHN KING, HOST: Thanks Wolf and good evening everyone. There is dramatic breaking news in Libya tonight as more of this oil-rich country falls into the control of anti-government forces and strong man Moammar Gadhafi imports African mercenaries by the thousands in a desperate bid to keep his grip on power.

Look at this remarkable scene in Libya's second largest city, Benghazi, as CNN's Ben Wedeman and his crew rode into a town celebrating its break from the Gadhafi regime.

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UNIDENTIFIED GROUP: (INAUDIBLE)

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KING: Now Benghazi, if you look at closer map of Libya, Benghazi is here in the east -- you see some of the other cities here in the eastern part of the country -- Tunisia over here to the left -- the Libyan border along here. Look at this scene right along the Libya/Tunisia border from earlier today.

Libyans streaming in to escape the violence and the uncertainty in a country Gadhafi has ruled for more than 40 years and who now says he would rather die a martyr than yield power peacefully. Italy's foreign minister says he believes at least 1,000 people may have been killed in this vicious crackdown by forces loyal to the regime and at the White House a short time ago, President Obama ended days of personal silence on the Libya crisis.

The president said Secretary of State Hillary Clinton would attend an emergency meeting of the United Nations Human Rights Council, that the administration is mulling sanctions and other options and he condemned Gadhafi's promise that anti-government protesters would be executed.

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BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: The suffering and bloodshed is outrageous and it is unacceptable. So are threats and orders to shoot peaceful protesters. And further punish the people of Libya. These actions violate international norms and every standard of common decency. This violence must stop.

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KING: More on the president's statement and U.S. options in a moment. And we are tonight closely tracking a ferryboat now up here in Tripoli scheduled to take Americans to safety in Malta (ph), but it is at the pier in Libya overnight because of bad weather. Let's first though get an up-close look at what many now see as the beginning of the end of the Gadhafi regime.

Our Ben Wedeman joins us now from Benghazi and Ben, I've looked at the remarkable video that you and your crew Fed in. You have this huge crowd when you ride into town -- I could call it a mob except it's a friendly mob and they literally, literally extend the olive branch to you. Describe that moment.

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, basically we came into town and there was this large demonstration going on right outside the courthouse which is essentially the ad hoc headquarters of the government that exists here. And I felt -- and I've said this before -- I felt like I was in the first American jeep that entered Paris after its liberation in 1944. People were shaking our hands, clapping, welcoming us, throwing candy and dates in the car window.

They were incredibly moved by the fact that we were the first television crew to arrive on the scene. And I think -- and they seemed to think that our arrival is sort of a sign that the west cares about them, that maybe -- I don't know what they're expecting to come next, but they clearly feel that the world is watching, that the world cares. And there is hope because people are very concerned that if the situation remains as is with essentially the east under the control of anti-Gadhafi forces and the west under the current government in Tripoli that eventually Moammar Gadhafi will as he has threatened counter attack and send his forces into here.

And I can tell you, Benghazi is not very well protected. On the streets you see young boys 16, 17, 18 years old with shotguns, with machetes, with bowie knife (ph), which aren't going to do much good if Gadhafi comes in here with his tanks and his mags (ph).

KING: And so you have -- you have part celebration, part apprehension. And as that plays out, what do they want from their neighbors in Northern Africa? What do they want from the international community including the United States or have they not had time in the revolution, if you will, to think about that?

WEDEMAN: Well they are thinking about it and every Libyan you talk to says we need the help of the West. We need the help of the United States. They're very disappointed with, for instance, the Italian position. They feel that Prime Minister Silvia Berlusconi (ph) has been far too close and sympathetic to Moammar Gadhafi.

They're worried that the western economic interests, certainly oil and gas, in Libya trump the western principles of freedom and democracy and human rights. More than anything, they would like to see the West put its money where its mouth is and not just talk about human rights and democracy, but stand up and demand that Moammar Gadhafi respect those principles -- John.

KING: And what are you seeing, Ben, in a place that has been ruled for four decades with an iron fist by an unpredictable and sometimes irrational -- certainly we've seen in recent days a rambling leader. Do you see a fracturing in the country, in the military, in what is largely a state controlled media, in the society itself? Are you beginning to see a fracturing that it clearly delineates to you the effort to break away clearly from this regime?

WEDEMAN: Well, what we're seeing -- I mean for instance just a little while ago, I was watching state TV and it certainly has a shrill tone to it, a tone almost of panic, as if they realize that their days may be numbered. They're very sort of threatening and very scathing when speaking of the United States, for instance, and its policy in the Middle East.

As far as the military goes, I had a chance to speak with some soldiers who were captured by the anti-Gadhafi forces in the eastern part of the country and what's obvious is that morale within the Libyan Army is collapsing rapidly and we had this one officer who made an appeal through CNN to his fellow officers who are still loyal to Moammar Gadhafi to join the revolution, to break away from the past, to realize that things have changed.

That the people of Libya have rejected Moammar Gadhafi and that they should come over to the side of the revolution. So certainly the military is looking shaky. The entire tone coming out of Tripoli, whether it's Moammar Gadhafi's long rambling and somewhat incoherent speech of the media all indicates that things are becoming very uncertain and very shaky in Tripoli -- John.

KING: Historic days in Libya and breathtaking work by our Ben Wedeman and his crew. Ben thanks so much for your help.

Let's take a closer look again so we can show you exactly where our correspondents are reporting from. Ben Wedeman, we just spoke to there, he's here in the eastern part of Libya in Benghazi. Over here in Tunisia just across the border from Libya is where we find our CNN senior international correspondent Nic Robertson and he is watching the stream of Libyans coming out of the country into Tripoli. And Nic tell us about that scene. As they come across, what are you hearing from those who have decided it is in their best interests to flee their country?

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: Well, we saw more people coming across today, John, and the stories that they're coming with are quite dramatic. They're talking about what sounds to them like a raging war on the streets. They're talking about demonstrators being shot at by the police, large groups of police shooting at groups of demonstrators.

But what they're also telling us is a sort of mass exodus that's going on, thousands of people crowding the airport, trying to get out of the country. So much so that some of them gave up on the airport and drove down the road to cross the border. They're talking about a checkpoint, multiple checkpoints as they leave the city. But perhaps some of the most dramatic images we're getting from people is the days of riots and the fighting have sort of stopped as Moammar Gadhafi's speech has had some effect and he's rallied his security forces on to the streets which means that people of Tripoli are now living in such absolute and dire fear that they dare not come out of their houses and go out on the streets.

So there's a sort of apparent appearance of calm, but it belies the reality that this is a calm being thrust upon a people who are too scared to go out of their houses. And people say that they're fleeing because they are fearing some big conflict less -- kind of dissimilarity to what Ben is experiencing. People in Tripoli fearing that the anti-government forces will come into Tripoli and attack Gadhafi's loyalists and there will be essentially in their minds a blood bath and they'll be caught in the middle of it. That's the big fear right -- there right now -- John.

KING: And Nic, in your reporting, you're picking up I'm told fascinating details that suggests that the regime is taking careful steps to try to destroy any evidence of atrocities.

ROBERTSON: It's quite incredible. This was a recurring theme from people we talked to today. They tell us about 20 different checkpoints on the main road which is perhaps about 100 miles from Tripoli to the border, from the capital to the border and they say at each of those checkpoints they're asked to take out their cell phones and systemically the SIM card and the memory cards from their cell phones are removed, which means any video they might have recorded on their cell phones, and we've seen people here recording everything that goes on around them, all these -- all the violence that goes around them, they've recorded it on cell phones, so what the regime is clearly doing is trying to tidy up its image.

It is stopping people getting out the atrocities that are happening, evidence that might be used against the regime in a possible war crimes court later on, anything that might show how bad the situation is. They're systemically stopping people getting this video out of the borders. It is essentially tidying up their mess and keeping it hidden from the world -- John.

KING: It is -- it is disgusting for lack of a better term, Nic, and pathetic that the regime would go to such lengths. Nic Robertson for us in Tunisia -- fascinating reporting Nic, we'll keep in touch. Thanks.

Let's get some perspective from CNN's Fareed Zakaria whose program "FAREED ZAKARIA GPS" of course airs on Sunday.

Fareed, you hear from the president of the United States across the Obama administration and from leaders around the world, President Sarkozy of France, for example, talking about sanctions now against Libya -- Sarkozy talking about international sanctions as well as perhaps France suspending its commercial relationship, financial relationship. Is there anything in Gadhafi's history that leads us to believe that sanctions will convince him to choose a different path?

FAREED ZAKARIA, HOST, "FAREED ZAKARIA GPS": It's highly unlikely. Libya has been a rogue state for most of its existence and remember it's one of the original state sponsors of terrorism. It's lived under sanctions for decades. It was only recently that the sanctions were lifted. It is also an oil state. This is important.

It is different from Tunisia and Egypt. It doesn't need the world. It doesn't need trade. The government gets 75 percent of its revenues from the sale of petroleum. So as long as people on the world market and everybody buys it -- buy their petroleum, the Libyan government has a certain kind of isolation. So it's highly unlikely that sanctions by themselves would matter.

KING: We're going to ask Fareed to stand by. We're going to take a quick break. When we come back, we'll continue our conversation with Fareed Zakaria. Also ahead in the program, our exclusive conversation with the president's top political adviser, David Axelrod, who tells us new details of the president's re-election campaign plans.

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KING: Let's continue our conversation with CNN's Fareed Zakaria about the implications of the crisis in Libya and the broader unrest across the Middle East and North Africa.

Fareed, what gets fascinating when you watch and gets scary in fact when you watch what's happening in Libya is we see this fracturing right now. Gadhafi is still in control of parts of the country but clearly opposition forces, anti-government forces seem to be in control of other parts of the country. Do you see the possibility of a fracturing? Libya was once fractured into -- it was three nations back in the day and a fracturing in a country that has significant oil resources.

ZAKARIA: Well there obviously a danger of that. As you said, Libya was many different tribes, three different regions, was unified by the Italians. In fact the term Libya is an Italian word -- name that the Italians (INAUDIBLE) Greek term to describe North Africa. So the whole thing at some level is artificial, but that's true of many developing countries. That's true of many countries in Africa.

I think that the more likely scenario is that over time Gadhafi's hold will weaken. It is clear that there is a very large and organized popular outcry against him. The problem is he still has a lot of guns and he still has parts of the army, parts of the intelligence service firmly under his control. Remember this is a pattern (INAUDIBLE) there are probably hundreds of thousands of people who have made their living off Gadhafi and his entourage.

So they seem ready to fight to the bitter end. And that could provoke an enormous amount of violence. I think Gadhafi's ship is going to go down. It may take months, but the problem is it could be a hell of a ride for the Libyan people.

KING: And the question then is what next. Throughout the Egypt crisis, the United States, the administration's -- well its handling was criticized from time to time, but there was a constant line of communication with the Egyptian military, which the administration trusted, which the administration has decades long relationships with. There are no such relationships in Libya and there in fact seem to be no such institutions in the sense that a paranoid Gadhafi has a military that is fractured. And so what happens if he loses his grip?

ZAKARIA: You're exactly right, John. There are two big differences between this and Egypt or Bahrain. The first is the United States has no clear lines of communication with some institution, the royal family, the military, whatever it may be. The second is the state itself is a kind of rump (ph) fractured state. Gadhafi never created those kinds of institutions.

Libya was always run in this chaotic fashion, a very brutal repressive and weird dictatorship. It had its own culture revolution. It had coup attempts and then counter coups. So it is quite possible that the whole thing will collapse. But there wasn't much there in the first place, so in the case of Libya, post-Gadhafi, we may have that unusual moment of genuine nation building.

You know and people usually use the term nation building, it's not true. Afghanistan is a nation. Iraq is a nation. But in Libya, there is not much there. And so you might post-Gadhafi find yourself in the position of doing nation building and state building and economic building all at the same time.

KING: And whose responsibility would that be? People in the United States might hear that and say, oh, no, does that mean more U.S. military involvement? Does that mean more heavy investment on a diplomatic initiative overseas? Does it mean more taxpayer dollars at a time people in the United States many of whom look at Iraq and Afghanistan and even if they supported the wars don't like the long term costs?

ZAKARIA: No, rest assured I think we should tell our viewers there's very little prospect of any taxpayer money going for any of this. Libya is not a vital interest of the United States. More importantly, Libya is a rich country. Libya has enormous oil wealth in comparison and in proportion to its tiny population.

It's only six million people. The tragedy of Libya is that Gadhafi and his family and his entourage have squandered that money for decades, have spent it on themselves, ferreted it in bank accounts, funded revolutionaries and terrorists. Very little of it has been invested in the people. But there is plenty of money for reconstruction. This is a small country with very large oil reserves.

KING: And as we watch this play out, another thing that makes it so strikingly different from Egypt, you have the wealth in Libya, which Egypt does not have. Egypt has the cultural traditions, which we've talked about it, and the political traditions that made it a beacon, if you will, in the Arab world. Libya, on the other hand, has frankly a rather bizarre unpredictable and at times not only a despot (ph), but a terrorist leader.

ZAKARIA: Yes and somebody who is -- it's unclear that he's even in charge of his own country. I interviewed him a year and a half ago and I have to tell you, John, I thought he was on drugs. I thought he was hallucinating. I thought -- it was free association. And it led you to wonder whether this man was really in charge of the country or whether there is a power structure behind him, perhaps his sons, perhaps the intelligence service, and that again gets to the key issue here which is what is going to happen in that elite.

Are there going to be splinters? Are there going to be fractures? Right now the Libyans who are defecting are frankly minor people. They don't run the country. The generals and the heads of the intelligence service, who actually run the country who are ordering these helicopter gunships, who are ordering these people to go out there and fire on protesters, what is going to happen with them? If one of them decides that they are going to defect and takes a significant part of the army or intelligence service with them that's when the regime begins to genuinely crumble.

KING: As always, thanks for your insights Fareed Zakaria.

ZAKARIA: Pleasure, John.

KING: Still to come tonight David Axelrod, the president's top political adviser, sits down with us exclusively and tells us when and how the president will kick off his re-election campaign and ahead still much more on the Libya political crisis including when a country like this so rich in oil infrastructure and oil production has so much turmoil, we'll show you the impact on oil prices right here at home and financial markets.

And up next, who is Moammar Gadhafi? How do we explain his erratic unpredictable behavior? And when President Obama spoke at the White House today, was his caution the right policy or should the president have been more bold?

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KING: President Obama's statement on the Libya crisis tonight and his five days of personal silence on the unrest in the North African nation. The president spoke for seven minutes, never mentioned Libyan dictator Moammar Gadhafi by name and cautiously avoided specifics. In the Egypt crisis, for example, the president explicitly called for President Mubarak to begin a transition to a new government, but there was no specific call tonight for a regime change in Libya.

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OBAMA: This is not simply a concern of the United States. The entire world is watching. And we will coordinate our assistance and accountability measures with the international community.

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KING: Too timid or is the president's caution prudent here? And what do we know about the unpredictable Gadhafi? Robert Kagan studies the region for the Brookings Institution and CNN national security contributor Fran Townsend, who is a member of the CIA External Advisory Committee. Last year she visited high ranking Libyan officials at the invitation of the Libyan government. She's traveled to Libya many times and met with Gadhafi twice.

Fran, let's start there. Who is Gadhafi? You just heard Fareed in our last segment say that when he interviewed him it appeared that he was on drugs. We know he is unpredictable. We know he at times is irrational and we have seen again sadly in recent days and hours that he can be vicious and violent against his own people.

FRANCES FRAGOS TOWNSEND, FORMER BUSH HOMELAND SEC. ADVISER: And John let's remember Americans have suffered at the hands of this vicious dictator, going back to whether it's the Labelle (ph) disco bombing and it was our service men or it was Pan Am 103. And so this is not a shock to U.S. policymakers nor to Americans to see just how brutal Gadhafi can be.

As you mentioned, when I met with him, he was not particularly rational. He often will speak to you and he won't make eye contact. He'll ramble. He'll cover -- he'll jump from subject to subject, none of which have are at all connected. So this is not new. I mean this is -- multiple administrations have been dealing with this. But what we must understand about him is just the level of violence that he's capable of and I think he will be true to his word. He will die -- he intends to die in Libya and fight to the bitter end.

KING: And die in Libya and fight -- die as a martyr he said and fight to the end is something he said in a very rambling speech on state television yesterday, rambling at times, but quite explicit in what he meant. I want you to both to listen to an interview he did with Larry King -- this is back in 2009 -- September 2009 -- just to get a sense of how he's a tad on the unpredictable side.

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LARRY KING, CNN'S LARRY KING LIVE, SEPTEMBER, 2009: Did you say he should be president forever?

MOAMMAR GADHAFI, LIBYAN LEADER (through translator): I hope so. I wish that.

L. KING: Why?

GADHAFI (through translator): Because the vision he has with serve America, will serve the world.

(END VIDEO CLIP)

KING: Bob Kagan that is Gadhafi there talking about President Obama, not long after President Obama had taken office, an endorsement I'm sure they would rather not have at the White House. But when you're trying to figure a policy here, what to do now, you heard the president of the United States tonight. He's sending Secretary Clinton to a meeting in Geneva. The world community is trying to come up with either sanctions or some diplomatic pressure. When you're trying to set a policy and you know that's the guy on the other end, what do you do?

ROBERT KAGAN, SR. FELLOW, BROOKINGS INSTITUTION: Well obviously the administration is very worried about the possibility of American hostages being taken and I think that's reasonable. But I'm a little bit amazed at how slowly both the United States administration and European governments are moving in this situation. I do not understand, for instance, why we aren't having a meeting at NATO. The national security interests of Europe are involved. This could turn into a military contingency. Whether we like it or not we may need help rescuing our people, if it were to come to that. I think it's great that Secretary Clinton is going to Europe, but next week she's going and she's going to the Human Rights Council. I think that we could be facing a much more serious crisis in the near term. I'm a little surprised the administration hasn't taken steps along those lines.

KING: So Fran, come in on that point. You've been at the White House at a time of international crisis. Is the administration moving too slowly and as Bob questions is it moving in the wrong direction?

TOWNSEND: Well you know it's true, John, having been there your impulse is to want to act and act decisively and quickly. And when the president spoke, I had sort of the same questions Bob did, but I spoke to White House officials after the president's speech and in fairness, John, you know until you get your people out, they thought that they would have had Americans leaving before the president's speech.

Because weather delayed that ferry, they were in the uncomfortable position of do you go another day and be silent or do you temper the president's remarks. Look, I think they did the right thing. I think we needed to hear from the president. I think he had to be cautious because he hadn't gotten Americans out of there yet and we don't want to be in a position where we provoke them into taking hostages.

Look, it's an -- Gadhafi and Libya's conduct at this point is outrageous, but what you don't want to do is throw gas on a match on that already simmering fire. Look we have very little leverage here. The president will do things like the old sanctions that were in place, things like the travel ban and asset freezes and all those sorts of things, but in the end, Europe -- to Bob's point, Europe is going to have to lead here. They are the ones who have the real commercial interests that are lining the pockets of Moammar Gadhafi and the regime and they're going to have to assert the power that is within their control.

KING: So is it then, Bob, if -- let's accept the White House explanation. This is Americans at risk in Libya. They want to get them out first before they do anything that might be viewed as provocative to Gadhafi. If you can get all the Americans out, then what in your view -- international sanctions -- Gadhafi has been under sanctions so many times over the past 40 years. There's not a lot of optimism that the world is saying you know be nice is going to work.

KAGAN: Well there's a whole list of things that we can do and should do.

KING: No fly zone?

KAGAN: Let's start with the no fly zone.

I was a little bit startled. I met with a very senior Pentagon official very recently, the last couple of days and they didn't even quite know where their ships were. I know that there's no big ship in the Med right now. There's no carrier. The (INAUDIBLE) Sarge (ph) is apparently in the Red Sea. I don't know why we aren't at least moving things around in case something happens. I don't know why we're not talking to NATO. But, yes, a no fly zone.

If they're using migs to strafe and bomb civilian populations, we can easily make sure that they don't do that, but there are other things. Talking about international criminal court, warning anyone who's involved in these massacres that they will be held accountable.

There are banking things that can be done on freeze assets immediately and also get the European nations who were buying Libyan oil to stop buying. Those would be I would think the first steps you'd want to take.

KING: Fran, to the oil point, Fareed made that point as well saying that as long as they can make some money, the regime has no impetus, no reason to listen to anyone else. Can the United States convince those who buy Libyan oil to stop? And if the answer to that is no, should the United States blockade it?

FRANCES FRAGOS TOWNSEND, CNN CONTRIBUTOR: Well, I mean, this is going to be -- these are all -- I think when the president is alluding to what the options are that he has his administration working on. These are all the things that the Pentagon, the State Department and others are working on.

I don't think there is any doubt the president was talking about how outrageous the conduct was and people would be held accountable. That was an illusion to an international criminal court action.

And so I suspect, we are going to have to wait until the Americans are out to see which of the tools in the arsenal that Bob so rightly articulate they're prepared to us. But in the end, we are going to have to get Europe on board.

You know, we're not us alone and having sanctions is not going to be effective. It hasn't in the past, it won't now. The Europeans are to going to have to get -- stop using the oil and sign on to this program.

KING: Is there a risk, Bob, that if the regime collapses under the current circumstances, that -- could you have terror groups, could you have groups unfriendly to the United States take over at least part of the country and part of those oilfields?

ROBERT KAGAN, SENIOR FELLOW, BROOKINGS INSTITUTION: Well, that's why I keep emphasizing being prepared for various contingencies. You could have terrorist groups. You could have a bloody civil war, which produces a humanitarian catastrophe.

And right now, I mean, you earlier said Americans don't want to get involved in this kind of thing, but, you know, if there is massive killing, it's possible that both Europe and the United States will decide that we need to get involved.

There are a lot of things that could happen in Libya right now, which will require some kind of U.S. and European involvement.

KING: That's a sober message. Bob Kagan, Fran Townsend, we'll keep in touch as we watch this unfold over the next few very consequential days. Thanks for coming in tonight.

When we come back, today's top headlines, including what some call a war on teachers in Providence, Rhode Island.

(COMMERCIAL BREAK)

KING: Welcome back. If you're just joining us, here's the latest news you need to know right now. Bad weather is keeping some Americans trapped on an evacuation ferry up here in Tripoli, Libya. Witnesses in the Libyan capital say cars are being burned and bodies can be seen in the streets.

Late this afternoon, President Obama broke his personal silence on Libya saying Secretary of State Clinton will go to an international meeting to discuss sanctions and other steps. He also says the United States will continue standing up for freedom and justice.

Also here in Washington, the Obama administration opened a new front in the culture wars today by announcing it will no longer defend the constitutionality of the 1996 Defense of Marriage Act, which forbids same-sex marriage.

Today brought no break in the protests or political gridlock in Wisconsin or Indiana where AWOL Democratic lawmakers kept Republicans from cutting state employees collective bargaining rights in an effort they say to reduce state deficits.

A similar fight is heating up in Providence, Rhode Island where every single teacher almost 2,000 just got a pink slip. Just a short time ago, I spoke to the Providence Mayor Angel Taveras.

(BEGIN VIDEOTAPE)

KING: Mr. Mayor, help explain this dramatic move. People in your city and in your state and around the country would think, wow, more than 1,m900 teachers, every teacher in the school district gets a pink slip, sounds pretty drastic and dramatic.

MAYOR ANGEL TAVERAS, (D) PROVIDENCE, RHODE ISLAND: Well, John, people have to understand Rhode Island law. Under Rhode Island law, you have to notify teachers by March 1st of what may happen to them for the next school year. Had we not done this, we would have been responsible for all the teachers for next school year.

We simply cannot do that. We need to make cuts. We don't know exactly the extent of the cuts yet and, therefore, we thought it was most prudent to give the notices to all the teachers to maintain the maximum amount of flexibility to make sure we can balance our budget for the next fiscal year. KING: So what's your guess. You have about a $57 million deficit. I think that's a ballpark number. What's your guess, 500 teachers, 1,000 teachers, more than that?

TAVERAS: Well, I'm not going to guess, John. We have a $40 million projected deficit just in the school department on a budget of $310 million in the school department. We're going to do everything that we have to do to close that budget, but to also make sure that our kids get educated.

If I knew with more certainty the number of teachers, we would have given out less notices. We would have sent out less notices today.

KING: And your teachers union just like we've heard from other public employees' unions in other places across the country, Ohio, Wisconsin, Indiana, for example, they view this as war. I want you to listen to the teachers' union president Steve Smith.

This is beyond insane. Let's create the most chaos and the highest level of anxiety in a district where teachers are already under unbelievable stress. Now I know how the United States State Department felt on December 7th, 1941, a Pearl Harbor Day essentially your teachers union says. How would you respond to that?

TAVERAS: I'm not going to respond to those types of comments. What I am going to respond to is that the law that exists now is by March 1st you have to give that notice. I invite the teachers union to join with us to change the deadline so that this doesn't have to happen again.

Mr. Smith is well aware that by March 1st I have to get that notice. In addition to that, my responsibility is to the 23,553 kids in our schools, our 175,000 people in our city and to the people of the state of Rhode Island. I'm going to do what we need to do to make sure that we educate our kids, but also balance our budget.

(END VIDEOTAPE)

KING: Up next, an exclusive one-on-one with the man planning the president's re-election campaign, David Axelrod. And among my questions, this is the map in 2008 when President Obama won big. How have all those big Republican victories in 2010 changed it for 2012?

(COMMERCIAL BREAK)

KING: Out into the targeted states. Why the urgency? Well, since 2008, so many of these states, Pennsylvania, Ohio, Michigan, and Wisconsin just to name a few blue in 2008 have elected a Republican governor. So I wanted David Axelrod's take on the new map and his early take on the Republican opposition.

(BEGIN VIDEOTAPE)

KING: Who, when you look at the list of prospects on the other side -- I won't say who fears you the most because you won't answer --

DAVID AXELROD, SENIOR ADVISER TO PRESIDENT OBAMA: Right.

KING: Who intrigues you the most?

AXELROD: Well, the whole field intrigues me. It's the most unfathomable Republican race that I've seen in my lifetime of following politics, which unfortunately I note on my birthday, has been quite a while now.

But I -- you know, in the past the Republican Party has traditionally had a kind of pecking order and a hierarchical system where the next guy in line is the nominee and generally, that's how it happens. That George W. Bush was out, John McCain came that way, Bob Dole came that way, George H. W. Bush. I mean, that's the tradition of the Republican Party nominating process.

It's a different process now. The Tea Party has changed the dynamic, the rules are different. And there is no -- under the old rules, Governor Romney would be the likely nominee. I don't know that anybody on either side could tell you right now who the likely nominee would be.

So I'm intrigued by the whole field.

KING: Do you assume Palin runs?

AXELROD: You know, I don't know. She seems to be enjoying being Sarah Palin. Being Sarah Palin seems like a pretty good gig. Whether she wants to give that up to be a candidate is something I can't answer.

KING: You know the history, when you look at projections that say, if the president's lucky -- if the president's lucky, I use that term in the context in which I spoke it --

AXELROD: Yes.

KING: -- unemployment would be somewhere in the ballpark of eight -- people think 8.2 percent at best by October of 2012. That in and of itself makes it a more difficult map.

AXELROD: There's no question that -- you know, James Carville said famously 18 or 19 years ago, it's the economy, stupid. It's always the economy. The economy is the most important indicator.

But having said that, people do understand what we've been through and I think the sense of direction is what's important. If people feel in November of 2012 that we're moving in the right direction, that we've weathered the storm, that we're coming back, that we have a strategy to win the future, that we're -- that the future's going to be better, I think we'll be fine. If they don't, we won't.

KING: What's the most interesting, "I'm from Chicago, I don't work down the hall" conversation you've had with the president since you left?

AXELROD: I did mention to him -- you know, he was very absorbed, as he had to be, in some of the events in Egypt, and I said to him, you know, I watched the local news tonight and it took ten minutes before they even mentioned that, you know? And it's just a reminder that there are other things on people's minds that are closer to home.

And, you know, Washington has its own, as I said, conversation. So the things that people talk about there, not that they're not interested in that stuff, but when they -- when they're making judgments, political judgments, they're focused on the things that affect their lives more closer to home.

KING: Because of that will you get into sometimes the inevitable, perhaps, tug of war for the president's time and focus in the sense that he's the president of the United States? Libya is a question mark today, Bahrain is a question mark today. Maybe Iran will be next week or the week after.

AXELROD: Yes.

(CROSSTALK)

KING: And you want to talk about the economy and jobs.

(CROSSTALK)

AXELROD: Well, I think it's -- but -- but it is very, very valuable to have spent two years in the White House, because what I recognize is that you can't always control events to the degree that you'd like. You can't control the discussion to the degree that you'd like. He has a responsibility to deal with these hot spots around the world.

And they, of course, impact on us. Everybody's watching Libya now to see what impact it will have on oil prices. Oil prices will affect the economy. So all of it is interrelated.

When you're president of the United States, you don't get to pick and choose. You get served up a full plate every day and you got to deal with whatever's on that plate. And so I, you know, I'm very sympathetic to that and as I made recommendations, it's going to be with that in mind.

KING: So you're the words guy and the ads guy. What is it -- what's the button say or what's the bumper sticker say?

AXELROD: Well, that is --

(LAUGHTER)

AXELROD: -- that is part of the, being a marketing person, you know, you need to unfurl these things in stages. So I would just say stay --

(CROSSTALK)

KING: Your birthday is an (INAUDIBLE) of that.

(CROSSTALK) AXELROD: -- stay tuned.

KING: When you -- you say he starts in a couple of months, how fast do you need to get -- how fast do you need people in, you know, your 30 states or your -- ?

AXELROD: You know, I think we can have people there pretty early. We believe very strongly in grassroots organizing. We believe that elections are determined not by, you know, decisions that are made in -- political decisions made in Washington, but by decisions that people make at the grassroots, and that the most effective salespeople for a ticket or party or candidate are neighbors talking to neighbors.

And so, that is a labor-intensive process, and you know, obviously the new technology is helpful in that regard, but you also need people on the ground. So we'll have people working very, very soon.

KING: By spring?

AXELROD: I think the process will begin in the spring.

KING: You always made the point that you were not a creature of Washington and that you were dying to come back here. Not just for the good food --

AXELROD: Yes.

KING: -- but to get your life back. I mean, obviously you have family and that's important.

AXELROD: Yes. Yes.

KING: But just sort of -- just sort of with a relatively short period of time to reflect, I mean, what have you sort of scribbled down as your own list, you know, I was wrong about that, or boy, we need to do more of this? Just what -- the reset button, what lessons have been learned?

AXELROD: Well, that's a lesson that's always important to re-learn. Taking the long view is -- you know, we -- we were left for dead by the side of the road so many times during the presidential campaign. So many times we were being written off by people in Washington. And we took the long view. And it's hard to remember that when you're sitting in the sort of center of all of that. Easier to remember when you leave that.

And it goes to that -- that point, that people aren't following every detail, every debate, every barb, every column. They simply don't have the time in their lives to do that. So, you know, it's best to kind of set your sight on the horizon and drive there. And you know, know where you're going and go there. And not get so caught up in the day-to-day kind of maelstrom of Washington chatter.

So I'm more -- you know, I feel that more strongly now, even three weeks or four weeks or however it is after -- after leaving.

KING: Do you get to shake the boss about that? That -- you find yourself --

(CROSSTALK)

AXELROD: He's pretty good about it, for a guy who's the center of so much speculation and discussion. He's good at keeping his eye on the ball, but he's human. You know, he's not impervious to -- you know, he may catch a column out of the corner of his eye or hear someone on television. And--

KING: I thought he didn't pay attention to the cable channels.

AXELROD: He might.

(LAUGHTER)

AXELROD: He might on his way over to ESPN.

KING: Right.

AXELROD: He may stop off and take a listen to what's going on, on your show. But he is ready pretty good at it. And that's really a strength that he has that has helped the operation. You know, we have been through -- we were through a tough two years. His steadfastness and his ability to think long and not get terribly bothered by what was going on in town was a strength for us at the White House.

KING: Mrs. Axelrod happy you're home?

AXELROD: Oh, yes. She's, really, the hardest thing about the last two years has been separation from my wife, from my family. And it's been incredibly great to be home. And you know, just the simple thing, going to the supermarket together, all of a sudden has new meaning for me. It's just -- it's just a great thing.

(END VIDEOTAPE)

KING: A couple points worst reinforcing from that exclusive conversation with David Axelrod. Number one, he said the president will file within weeks by early April the paperwork setting up the official re-election campaign committee so they can raise the money.

David Axelrod would not give me a specific number, but he said without a doubt this campaign will cost more than the last one and he shrugged when I said possibly raising as much as $1 billion. He also said he wants to get field organizers out in to the key targeted states again by early spring and one last point worth making, the food at Manny's deli and coffee shop is extraordinary. Yes, if you saw that big sandwich, somehow I ate the whole thing.

When we come back, you heard David Axelrod mention right there one of his concerns, what impact will the Libya crisis have on oil prices and then political environment here in the United States. We'll break down those numbers just ahead.

(COMMERCIAL BREAK) KING: As we watch the crisis in Libya unfold, one economic impact we're seeing immediately. Remember this is Libya here. The capital is Tripoli. One of the things you need to remember, it is one of the major oil gas and suppliers in the region and in the world.

You see the gas and oil pipelines right there, some of the installations and what has happened in recent days is a dramatic impact, not just from Libya, but including Libya on like crude oil. This goes back over the last month closed just shy of $100 a barrel today.

Also the turmoil in the region especially in Libya the last 48 hours has impacted the stock market, down 107 points today after being down yesterday as well. So we asked our Alison Kosik at the New York Stock Exchange how all the unrest in North Africa and the Middle East is affecting your bottom line.

ALISON KOSIK, CNN CORRESPONDENT: John, no one said the recovery would be a smooth one. Sure stocks have been moving higher for months, but now with the unrest in the Middle East, the rally has been put on hold and traders, they're telling me that uncertainty over how far these protests will go and into how many countries. It's really putting investors on edge.

Now, Wall Street was expecting a pull back at some point this year, but no one expected it to come this soon this fast. The Dow has lost 285 points in the last few days posting back to back double digit declines for the first time since June.

And while stocks fall, oil is going up touching $100 a barrel today. The big fear is we're going to see a domino effect where the violence could spread to bigger oil exporting countries and cause major supply disruptions, John.

KING: Alison Kosik for us at the New York Stock Exchange. We see these numbers here. Let's reinforce the point a little bit by bringing this out. This is the price of crude just over the last 30 days, the time coinciding with the unrest in the Middle East, up nearly 12 percent. Again, this is just in the last 30 days.

Now how does that translate on your prices here at home? Well, check out this map. The darker the color, this it has to go -- that doesn't want to work. That was malfunctioning right now, but we started here at $3.09. We are up here more than a 12 cent rise just in the last 30 days.

So the price of gas here in the United States something we will keep our eyes on in the days ahead. For now "PARKER SPITZER" right now.