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JOHN KING, USA

Syria's Violence; Roller Coaster Wall Street; Economic Future

Aired August 9, 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: Good evening everyone.

Up first tonight major breaking international news, two administration sources telling me tonight the Obama White House is now prepared to explicitly call for the Syrian president, Bashar Al-Assad to step down. The call for regime change these sources tell me is planned for later this week, after United Nations Security Council meeting on the Syrian crisis set for tomorrow.

These administration sources say the call for Assad to step down will be packaged with new Treasury Department financial sanctions designed to tighten the screws on President Assad, his family, and Syrian businesses with close ties to the regime. Human rights activists say at least 2,000 people have been killed in the regime's brutal crackdown on anti-government protesters over the past several months.

As the crackdown has played out, the administration has gone from urging Assad to stop the violence and implement reforms himself to of late saying the Syrian dictator has lost legitimacy, but until now the administration has stopped short from demanding he yield power. Here's how the U.S. ambassador to the United Nations described Assad's behavior right here on this program last week as she promised to push for more aggressive international response.

(BEGIN VIDEO CLIP)

SUSAN RICE, U.S. AMBASSADOR TO U.N.: It's horrific. It's appalling. He's massacring his own people who are coming out simply to express themselves peacefully. It's absolutely unacceptable, appalling behavior, and it deserves not only the condemnation but the full force of the international community.

(END VIDEO CLIP)

KING: And today at the State Department, this public hint, U.S. patience with Assad had run out --

(BEGIN VIDEO CLIP)

VICTORIA NULAND, STATE DEPARTMENT SPOKESWOMAN: If you offer engagement and rather than taking up engagement your partner chooses to spend their time and energy repressing and violating the human rights of their own citizens, in any situation, there are limits to what the U.S. can do. (END VIDEO CLIP)

KING: Let's get some perspective on tonight's breaking international news from CNN's Fareed Zakaria. Fareed, how significant, I'm told by Thursday morning the Obama administration will finally explicitly say Assad must go. How significant is that?

FAREED ZAKARIA, HOST, CNN'S "FAREED ZAKARIA GPS": Well, it's taken them a long time to get there. Some of us have been urging that they say it a while ago. I'm not quite sure why it had to be this meandering dance to what was an inevitable conclusion which was that it was impossible for the United States to support a hostile regime, an anti-American regime that had been brutally massacring its own people. It wasn't ever clear to some of us why we were taking so long to do it when we were willing to say that Mubarak had to leave and it was a pro-American regime, and a friend of ours, in the face of similar protests.

Now, I think what is significant is that it puts the screws even further on Assad. But I think it doesn't -- it is not the beginning of the end. John, what we've realized about many of these regimes is they're real police states, really brutal, really tough, and they're tough to crack. Sanctions didn't get rid of Saddam Hussein. Sanctions and a no-fly zone so far have not gotten rid of Moammar Gadhafi and I doubt that sanctions will get rid of President Assad in Syria.

KING: And when you look at the growing list of outrage, you have now the United States saying he must go, you have tough words finally from leading Arab nations including Saudi Arabia, but on the U.N. Security Council, Russia and China still reluctant to get tough and Assad has in his back pocket the biggest wild card which is Iran, right?

ZAKARIA: Precisely. And you put it exactly right, tough words. There's finally a lot more tough words, but tough words are not going to do very much. I think that President Assad probably looks at this and says sticks and stones will break my bones, but names will never hurt me. All that's happening is that people are calling him a lot of names.

The sanctions don't matter that much because Syria is a pretty isolated economy. See, for sanctions to work, you need an economy that is deeply integrated into the international system. Countries like Iran, Syria are not particularly integrated. Syria needs some source of capital, and it has that in Iran, but it's limited because mostly Syria's, against (ph) a state. It has a lot of, you know there's a lot of black market economy.

There's a lot of smuggling. It gets a certain amount of its revenue and hard currency from Iran. That's all it needs to survive certainly in the short run.

KING: Some European nations though still do energy business with Syria. Is it possible that a tougher line from the Obama administration could bring tougher European sanctions as well? ZAKARIA: They could bring tougher European sanctions. And you're right, there's a modest amount of energy business in Syria, but it all -- the money all flows directly to the regime, and that might make a difference. But look at Libya.

We have an all-out civil war. We have a no-fly zone supporting the rebels. We have some covert assistance being provided certainly by France and some other European countries, perhaps by the United States, and still you don't have -- you don't have any signs that that regime is cracking. These guys have spent decades building up a structure of power that is entirely about regime preservation.

While other regimes worry about raising standards of living and building infrastructure, these regimes are obsessed with staying in power. So, it's going to take a lot more than one more ratchet of a sanction screw to get them out of power.

KING: Let's continue the conversation now with Fouad Ajami; he's a senior fellow with Stanford University's Hoover Institution and Syrian human rights activist Mohammad Al-Abdallah. Fouad to you first, we've talked about this for weeks and the question has been why won't the administration do more? Is this enough in your view to be at the point where they're going to have new financial sanctions and I'm told an explicit call for Assad to step down?

FOUAD AJAMI, SENIOR FELLOW, HOOVER INSTITUTION: Well, John, for me I think it's a very important moment for President Obama, because President Obama came into office in 2009 with the promise of engaging the regime both in Damascus and in Tehran, and I think we are not a country like other countries. We are the United States of America. And the people in Syria look to us.

They look to us for inspiration. They look to us for leadership, and they were terribly disappointed in the utterances and the statements and the policies of both President Obama and Secretary of State Hillary Clinton. We have now come to a very fundamental morally tenable position which is to call on this butcher in Damascus to quit. And this is not an idle moment, nor is it just any moment nor is it any country in the world doing this.

KING: And so, Mohammad, Fouad makes an important point. It's a morally important moment. Will it be a politically important moment? The escalation of outrage whether it's the United States saying he's lost legitimacy, whether it's King Abdullah in Saudi Arabia saying he is violating Ramadan. He's a killing machine. He has thumbed his nose so far at everything, why will this be enough?

MOHAMMAD AL-ABDALLAH, SYRIAN HUMAN RIGHTS ACTIVIST: No, it's going to be very important, because as President Obama is saying he has to step down. That will encourage more European leaders and international leaders to do so and say the same thing and that's going to encourage the major -- the silent majority in Syria to protest more and that is going to encourage high ranking officials in the army and the government to start defecting.

Unfortunately there's this idea in the Syrians' minds that the Americans did not say he has to step down, that he's to stay, so it's very important to listen (INAUDIBLE) to hear those words from President Obama that is going to encourage the protests (INAUDIBLE) more and more. If I may give a comment why and Fareed Zakaria comments why the U.S. did not say he has to step down for this long time and we asked this question directly to Secretary of State Hillary Clinton and she said, we don't want to recognize a revolution, but after five months of protesting alone and with this huge and massive human rights violation, it's more acceptable to international (INAUDIBLE) intervene in Syria.

KING: And Fouad the question is though will it be the beginning of a domino effect, will a tougher line from the United States, an explicit call for Assad to step down will it get, say, the European nations some of whom still have energy business with Syria, will it get them to stop? Will it get the Arab League and the Saudis in the Arab League to go beyond just calling it a killing machine but to taking formal steps to doing something about it?

AJAMI: Well John, all this is important, but I'm thinking of Syrian in (INAUDIBLE). I'm thinking of the Syrian in the embattled city of Hama (INAUDIBLE) thinking about the world. Now, remember the Syrians have been giving names to the Fridays. There was one Friday your silence is killing us. Another Friday, God is with us.

Means only God is with them. I think it's important that they know they are not alone, that they don't live in solitude, that they don't live in isolation. That's the lesson from the great revolutions of 1989 which swept communism out of power. The message that the United States stands for liberty, that we don't believe the arguments about the balance of power. We don't believe that Bashar Assad is a force of civility in the region, that we have come to a fundamentally important political and strategic conclusion that this man has to go, that he has become a source of violence and a force of instability.

KING: What do we know about his assets in the sense that in addition to this call for him to step down; I'm told that I'm going to read from a note that I received from a senior American official. "Treasury is preparing to announce additional sanctions targeting major elements of Syria's financial and commercial infrastructure that are providing critical support to the regime." We saw in the case of Gadhafi, for example, billions in accounts frozen, businesses blacklisted. What does Assad have at his disposal in terms of money around the world?

AL-ABDALLAH: There's no exact number (INAUDIBLE) he has billions as well. He (INAUDIBLE) 40 or 50 years his father and himself doing this stealing the government money and send it out of the country and to European and American banks and now we're glad to hear that the government will impose more, tougher sanctions because there are (INAUDIBLE) businessmen who is pro-government and they're financing the (INAUDIBLE) pro-government militias attacks civilians in Syria and imposing oil and gas sanctions going to be a very good and important step as 50 percent of the GDP is from tourism, which is zero this year and 50 percent is from the oil and gas companies and when we saw -- met with the Canadian foreign minister we told him (INAUDIBLE) about the Canadian oil and gas companies that's working in Syria, and he said not going to be a problem (INAUDIBLE) us and Europe started oil and gas sanctions, so we expected that and we are calling for that more and more.

KING: Fouad, you've studied the butcher. You rightly call him the butcher and his friends very well over the years. What are the danger if a rabid animal is backed into a corner, that rabid animal often lashes out? What is the danger that President Assad seeing much of the world including now the United States saying he must go, what is the fear that he will strengthen his alliance with Iran and strengthen his attacks on his own people?

AJAMI: Well, I think you ask a very important question and you raise a very important point, but, remember, this regime is a mafia regime. Yes, it's a killer regime, but it is also a regime which is manned by people who have money abroad, who have interests abroad, they want to live, they want to enjoy it, they've had this incredible racket, not only in Syria, John, but also in neighboring Lebanon where, by the way, a lot of their money is.

And I think now Bashar Assad looks at the region. The Arab world is already against him, and there have been interesting statements, by the way, from Turkey. The Turks are talking about -- they are just suggesting possibly that there might be a Turkish military intervention, not so much an invasion of Syria, but a move inside Syria to establish a security zone where Syrian refugees can come without burdening Turkey.

And so I think as this man looks around him, his prospects are not terribly encouraging. One point the American ambassador went to the city of Hama on July 8th and the city of Hama received him heroically because he wasn't just any other ambassador. He was the American ambassador and our message to the Syrian people is of tremendous consequence. Because there are many people sitting on the fence and a statement from President Obama will make all the difference.

KING: Do you believe that, that a moral statement from the president of the United States, a direct call for Assad to step down, will it change the dynamic on the ground? Already we've seen in recent months, heroic, brave people risking their lives. Will this intensify?

(CROSSTALK)

AL-ABDALLAH: I do believe that. I think people are -- the silent majority waiting to hear the statement and the high-ranking officials of the government yesterday. We have witnessed that there is sign or that government (INAUDIBLE) Assad kicked or fired the head of the army and he replaced him and that's another sign that the armies are going to defect (INAUDIBLE). And we're really waiting this magic word from President Obama to go further on this.

KING: Mohammad, Fouad, appreciate your coming in tonight to help us with this breaking news story, we'll stay on top of it throughout the week as the administration prepares now I'm told to call for President Assad of Syria to step down in addition to new sanctions. We'll stay on top of that.

And when we come back, other breaking news today, a roller coaster day on Wall Street, on the one hand smile. It ended up. On the other hand, if you read the Federal Reserve statement that led to that rally in the end and you live on Main Street America, there's a lot of sober news -- be right back.

(COMMERCIAL BREAK)

KING: Another roller coaster day on Wall Street that even some of the so-called experts are finding it hard to explain. The Dow was down more than 200 points at one juncture. Then it rallied to even. Then it dropped again after the Federal Reserve delivered a stay the course message promising to keep interest rates low, but the ride wasn't over. Then came a furious final-hour rally and at the closing bell the Dow was up just short of 430 points.

If the markets belatedly found something in the new Fed statement to like, I'm willing to bet if you read it over and over and over like I did today, you'd come away discouraged. The Fed now forecasts even slower growth than it did just two months ago and it projects high unemployment, well, as long as the eye can see. Alison Kosik was at the exchange all day and takes us behind the numbers tonight. Are you dizzy?

ALISON KOSIK, CNN CORRESPONDENT: Just a little bit, John, yes, yes. You know what's funny is this session was kind of like a seesaw on top of a roller coaster, you know, and a lot of that volatility came after the Fed's decision, and you talk to some traders and they say what you ended up seeing was a relief rally that the Fed finally acknowledged that the economy is weak, but that it's going to go ahead and continue to give the economy support for reinvestments from its previous investments.

You know it also says it's going to go ahead and keep interest rates near zero for another two years. That is really what got -- what got stocks going today. Now the bad news, of course, the Central Bank sharply downgrading its view of the economy for the third time this year. It said growth is considerably slower, but I don't think we needed the Fed to tell us that -- John.

KING: And Alison, on that point of the Fed giving us specific dates through at least mid-2013 of keeping interest rates low, when they have these meetings usually they say for the foreseeable future. How unusual is it -- you say it was reassuring for the Fed to stretch out its target that far down the road?

KOSIK: Yes, I mean it is unusual for the Fed to give a specific time frame, but do you know what, these are unusual times. You know what the Fed essentially did is say you know the economy is going to be pretty weak for the next couple of years, so what it's doing is creating a situation where there's certainty for these really low, short-term interest rates for consumers, investors and businesses who want to borrow money, so at rates this low, it's kind of like free money, and the thinking is the low rates can boost spending. So it's really an effort that the Fed is trying to make to rev up growth by taking the training wheels off and letting the economy at least try to do its thing and move forward -- John.

KING: And I hesitate to ask the question given the volatility of recent days, but was this viewed as a one-day blip or was it viewed, you say the market was -- happy is the wrong word -- but satisfied that the Fed has a more reasonable outlook by the market standard on the long-term economic forecasts, was it a blip or is it a building block?

KOSIK: I never try to predict the markets. I'll say just buckle up and get ready for tomorrow's opening bell.

KING: Buckle up and get ready for tomorrow's opening bell. Alison Kosik for the markets for us, appreciate your insights tonight and glad you survived today's ride.

KOSIK: Yes.

KING: Let's take a closer look now with Neel Kashkari. He's the former assistant secretary for the treasury who oversaw the TARP bailout, the Wall Street bailout program. Now he's a managing director at the PIMCO Investment Management Company. If you read this statement I'm holding up from the Fed, it is hard -- it is hard. I'm an optimist by nature and I read it and read it and read it and it's hard to find anything to be excited about. It says that the economic growth so far this year has been considerably lower than the Fed expected at its last meeting which was just two months ago. It says unemployment will remain high for quite some time to go. It also says here the downside risks to the economic outlook have increased. They're saying that things are much worse now than just a couple months ago, why?

NEEL KASHKARI, FORMER INTERIM ASST. SECRETARY FOR FINANCIAL STABILITY: Well I think it is because of those stimulative measures that are running their course and now concluding. So we had the economic stimulus bill. We had the home buyer tax credit. We had cash for clunkers. We had the Federal Reserve's quantitative easing program. Those are all now running their course.

KING: And so if you look around the country manufacturing data, unemployment, consumer confidence, now this very sober outlook from the Fed, add in the downgrade of the U.S. credit rating which you write say suggests the U.S. downgrade has the potential to be as bad or perhaps worse than the Lehman shock. That's a tough sentence to read. You lived through those days. Do you see the possibility of a double-dip recession on the rise?

KASHKARI: It is definitely a possibility. I think the odds have really increased over the past couple of months. The economic data has been so weak. It's not my base-case forecast, but it certainly is very possible. And add to this the dysfunction in Washington is a real problem. In a sense Washington is telling the American economy, you're on your own. You cannot look to us for any leadership, neither Republican leadership nor Democratic leadership nor the president.

It's just going to be gridlock in Washington, so markets, investors, Americans you're on your own. And that's why the markets are reacting the way that they are, and until we see real leadership out of Washington to try to tackle our spending, to try to tackle our tax code, I think we're going to see markets that continue to be nervous and continue to be volatile.

KING: You mentioned the nervous, volatile markets. So the president spoke yesterday. They stayed quite nervous and volatile. The Fed speaks today. They stay quite nervous and volatile. I want you to listen -- you mentioned the dysfunction here in Washington. There is a debate over what to do next. Here's a bit of the president's view.

(BEGIN VIDEO CLIP)

BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: If Congress fails to extend the payroll tax cut and the unemployment insurance benefits that I've called for, it could mean one million fewer jobs and half a percent less growth. This is something we can do immediately. Something we can do as soon as Congress gets back.

(END VIDEO CLIP)

KING: In your view, are those steps more small-ball, short-term steps or are those steps that would get the economy back on a path to sustained long-term growth?

KASHKARI: Unfortunately that's more nibbling around the edges. You know, the president created a bipartisan fiscal commission a year and a half ago, Simpson and Bowles did very serious work, came up with a serious bipartisan package, and then he ignored the proposal and then the Congress ignored the proposal. If I were to offer the president my humble advice, I would say go take the Simpson-Bowles proposal. Go take it to the Congress, say pass this right now, I'm ready to sign it.

We need long-term, multiyear structural measures to make our economy grow again, to get control of our spending and reform our tax code. Bold, long-term measures are what are needed, not simply one- year Band-Aids, one year stimulus measures. We've tried this now for a couple of years and it has not led to long-term economic growth.

KING: In your sense, what is the clock ticking toward, meaning when do the markets, when do the people need to know that Washington is serious? They have this super-committee. It is supposed to report by Thanksgiving. If that is a credible product, is that enough? Does Washington have to act faster?

KASHKARI: I think if the super-committee were to be as bold as the Simpson-Bowles proposal and come up with bipartisan, a comprehensive grand bargain, I think that that would be a shot of adrenaline for the markets and for the economy and, then that could lead to long-term economic growth. You know, our corporations have a lot of cash. They've become very profitable, big companies. They're holding back.

They want to invest, but they're afraid. If Washington could come together and show real bipartisan, structural leadership, I believe our businesses are ready to do their part, ready to invest, ready to create jobs and get our economy growing again. But the world, not just America, the world is screaming for American leadership.

KING: Neel Kashkari, appreciate your help tonight.

KASHKARI: Thank you, John.

KING: Thank you.

And as the president plots his next move on the economy it's worth noting he has a different and a smaller economic team than at the beginning. Dr. Christina Romer, she was with us last night, she was a top White House economic adviser. She's now back in academia. She left a few months ago and was replaced by the man who was her deputy Austan Goolsbee. Well he just left the White House recently, no replacement announced there yet.

Peter Orszag was the budget director at the beginning of the administration. He stepped down and was replaced by Jack Lew. He is in place. Jared Bernstein worked in the vice president's office as an economic adviser, but he was close to the White House economic team. He has left the administration.

Just today Ron Bloom, he was the manufacturing czar essentially to advise the president on manufacturing policy. The administration announced he was leaving his position today. At least as of now, no replacement announced. Larry Summers was a top White House economic adviser early on in the administration. He left as well. Gene Sperling, who was a counselor to Treasury Secretary Tim Geithner, Gene Sperling moving over to the White House.

Now you have Jack Lew, Gene Sperling, Secretary Geithner who announced this week he will stay at least through the presidential election, so this is a smaller team of those there at the beginning of the administration. Jack Lew a newcomer as the president plans his next move on the economy, the issue number one to you.

When we come back, the president left Washington today for Dover, Delaware, a very sober day for him as commander-in-chief and for the country. The president traveling there to welcome home the remains of those 30 Americans killed in the deadliest day in the 10-year Afghan war.

(COMMERCIAL BREAK)

KING: Welcome back. If you're just joining us, here's the latest news you need to know right now. Late today the Senate Majority Leader Harry Reid made his three appointments, Democrats Max Baucus, Patty Murray and John Kerry to that super-committee that will hash out deeper cuts to the U.S. deficit. The Republican National Committee already complaining about Senator Murray selection because she heads the Political Campaign Committee.

Two passengers on American Airlines flight from Miami to Washington, D.C. ended up in Charleston, South Carolina hospital this afternoon. Their plane ran into severe turbulence, had to make an emergency landing.

The Los Angeles City Council today unanimously approved a plan to build a privately financed $1.2 billion stadium, an attempt to lure an NFL team to the city.

China's news agency says the country's first aircraft carrier left its shipyard early Wednesday to start sea trials. North Korea says at least 10 people are dead and 2,400 acres of farmland damaged in the wake of a tropical storm that came ashore on Monday.

Turning now to a country reeling from famine, CNN's Anderson Cooper is in Somalia's dangerous capital Mogadishu where thousands (INAUDIBLE). Anderson, you arrived in Mogadishu today. Just give us a sense of the situation on the ground there.

ANDERSON COOPER, CNN ANCHOR: John, this is probably one of the strangest cities in the world. I mean there has been now 21 years of conflict in this city. There is not a street, there is not a building in this city that did not bear the marks of bullet holes in all the walls, destroyed, destroyed homes, destroyed buildings. Virtually nothing has been untouched by war here. It's an extraordinary situation. You now have more than 100,000 internally displaced people, Somalis who have come here to this war-torn city because they are looking for food. They're looking for aid. And we got some very alarming news from the World Food Program today. They say they maybe out of food supplies, food stocks in about three weeks given the current level of donations, given the current level of donations, given the current level of international aid promised by countries around the world. That is an extremely serious situation because the drought here is expected to last not just three weeks but several more months, and famine is believed to be spreading in the south of Somalia, where you have this group al Shabaab, an extremist group -- a terrorist group, according to the United States -- a group of militants still in control of the country, have kicked out aid workers, who have stopped allowing children to be vaccinated, to be inoculated, so diseases like measles are killing little children here, tens of thousands of kids have already died. Many more are likely to die in the coming days and weeks.

It is an urgent situation. In Mogadishu, there has been some good news, John, al Shabaab actually left Mogadishu on Friday. The fighters who have been here now since 2007 are battling African Union peacekeepers, just picked up and left the city.

They say it was a tactical retreat. They say they're going to come back, they're going to launch waves of suicide attacks. They've certainly done that before. There was a suicide attack last year close to the place where we're broadcasting from tonight.

So, the situation in Mogadishu, there is an opportunity for change here. But it is a very desperate situation, a very tenuous situation. We'll have a lot about it tonight on "360" at 8:00 p.m. Eastern and again at 10:00.

KING: And you mentioned the bleak, dire situation now. You were there two decades ago -- if you can -- different times, maybe a different disaster, but give us a comparison.

COOPER: Well, you know, I remember going out on patrol with U.S. forces -- U.S. troops, who were patrolling the streets on foot in Mogadishu. I remember that was part of Operation Restore Hope. It then became a hunt for Somali warlord Mohamed Farrah Aidid, "Black Hawk Down," more than 40 U.S. troops were killed overall in Operation Restore Hope.

They did bring humanitarian aid. They opened up corridors for food to be delivered safely. But it certainly did not end the way that the U.S. hoped.

You now have a situation where we have about 9,000 African Union peacekeepers who have been here fighting since 2007, not just doing peacekeeping but peace enforcing. They have -- especially in the last year -- taken the battle to al Shabaab. Ad today, for the first time, they took us to the marketplace that al Shabaab has controlled now for years. It was the first time these African Union troops have actually been inside that market and it was extraordinary to see them being able to get to areas that they have never been in before.

They say this is a real opportunity if the international community responds right now to get some more African Union peacekeeping troops in here to really stabilize the situation and perhaps -- perhaps -- give Somalia chance.

But this is a country that has had chanced in the past. Those opportunities have been missed. It is -- it is the most unusual city I have ever been in, John. It was unusual -- it was unusual 20 years ago when it was reeling from two years of war. It is now been 21 years and it is just extraordinary to see what is left of this city.

KING: Anderson Cooper on the ground live in Mogadishu, "A.C. 360" coming up at the top of the hour, then again at 10:00 in the East. Anderson and his team are doing fascinating reporting. Stay with us for that. Thank you, Anderson.

When we return here, the president is back at the White House today after one of his most sober, somber duties as commander in chief, traveling to Dover Air Force Base in Delaware to welcome home the remains of 30 Americans -- 30 Americans -- killed in the deadliest day in the 10-year Afghan war. That's next.

(COMMERCIAL BREAK)

KING: About an hour ago, Marine One brought President Obama back to the White House after an emotional day at Dover Air Force Base, where the president paid tribute to U.S. troops killed over the weekend in Afghanistan, including the 30 who died when a U.S. helicopter was shot down Saturday.

No pictures were released, but we're told the president were in with both planes that returned the dead and then met with about 200 of the victims' colleagues and their family members.

The Defense Secretary Leon Panetta accompanied the president, has been asked by commanders not to reveal the troops' names out of concerns their families could be in danger.

With us now to discuss this, John McGuire, who was a Navy SEAL for 10 years, along with CNN national security contributor Fran Townsend, who advised President Bush and is now on the external advisories boards of the CIA and the Department of Homeland Security.

John, I want to start with you, because there are competing interests here. We should want to honor these heroes. And yet there are pressures from commanders to the defense secretary saying in 22 of these cases, there are Navy SEALs, your comrades and colleagues, who covert units and could their families be at risk if the names are publicly disclosed.

What's your take on that?

JOHN MCGUIRE, FORMER NAVY SEAL: I think the commanders are absolutely right. You know, we do what we do. We're not looking for thank yous. You don't need to know a soldier's name to pray for a soldier. You don't need to know a soldier's name to say thank you. But the problem is operational security -- if you know their names, you could put pieces together and then our men and women who serve have a threat at home or maybe their families. So, I think the operational commanders are absolutely right.

KING: And so, Fran, how do you deal with the competing interests in the sense that some of these families themselves, because they want us to know the stories of their loved ones, some of them do want to speak out. Do they -- it's a tough one especially with this latest incident so raw -- do they need to be counseled by the Pentagon: please be careful, it's your own safety you could be putting at risk?

FRAN TOWNSEND, CNN HOMELAND SECURITY CONTRIBUTOR: Well, certainly, John, the Pentagon has got a responsibility. Commanders have a responsibility to advise the families of the risks.

But then it really is their decision. You know, I really think, John, in many of these cases, we've heard these heart-wrenching memorials from the family members and children, and it's part of the catharsis. It's part of the grieving process.

And, frankly, the nation is so fascinated and so taken with the service and sacrifice of the Special Operations community, it's understandable that there are people who want to hear these details. But it's different coming from the families than it is from the government. It shouldn't come from the government.

I also agree. I think the commanders are absolutely right. The government needs to keep the amount of information they put out there to a minimum. And leave it to the families to make personal decisions.

KING: Do you believe that the government in the case of the bin Laden raid -- it was SEAL Team 6. We talked about at the time. Obviously, this horrible tragedy in Afghanistan.

Is the government by reflex too transparent, too open, too willing to disclose names, information, even acknowledging that these were Navy SEALs, for example, in Afghanistan?

MCGUIRE: Well, in missions like this, we don't like to acknowledge this unit or units like that. I think that we do know too much. I think they should know that we took care of a problem and that the United States will not stand for terrorism.

KING: And when -- take us inside the culture a bit. This is a culture within a culture. Some people may think they understand the military culture, but they might not understand these top secret, covert units who are asked to do the most secretive, the most sensitive, the most difficult missions.

What were your communications back and forth with your own close friends and family members when you were serving for 10 years about what you were doing?

MCGUIRE: Well, you know, one of the things that special -- we are Special Operations forces, as we can blend in in society. And when you know the name of our fallen, then it kind of hampers our ability to blend in, which puts our lives at threat. So, you know, only our buddies know, and we keep -- even our wives don't know where we're going to go, when we're going to be back for safety and security of our nation and our brothers.

KING: And so, Fran, I know you think that too much has come out, both in the case of the bin Laden raid and now this tragic incident over the weekend in Afghanistan. If you're back in the government or if you're asked by friends in the government, what needs to be changed, how do you specifically draw up a policy in a country that is designed to be open, transparent? And as I said at the beginning I think all Americans want to honor the heroes. How do you -- what do you need to rewrite the rules?

TOWNSEND: Well, look, you know, this is the best example is -- look, you don't deny that there's been a tragedy of this magnitude. You don't deny that the helicopter went down and the numbers of U.S. troops that were lost. But you don't need to identify the unit. You don't need to identify the mission that they were on.

I mean, there are -- you can give enough information, John, that the public feels informed without giving the details that put other operators -- we're going to have other people who are going to be asked on immediate reaction forces and quick reaction forces and go into firefights to help other soldiers. And so, what you don't want to do is give out too much information.

I want to be clear, though -- I mean, this is not me saying that we don't honor the fallen. We absolutely honor them. But every man and woman who puts a uniform on, whether they're in the Special Operations community who are asked to do very difficult things or whether they're in a regular unit or brigade serves and deserves our -- both our thanks, our praise, and the honor that Americans are showering now on those we've lost.

So, it's not about not honoring them. It's about doing it in a way that doesn't put other soldiers at risk. KING: Amen to that.

Fran Townsend, John McGuire, appreciate your insights on this horrible tragedy. We hope we learn lessons from it.

And amid the heart-wrenching story emerging on that devastating loss in Afghanistan, a 10-year-old boy that contacted CNN to speak up for his father, one of the fallen soldiers. He's from Kansas City area and he lost his father in the weekend crash in Afghanistan. For days now, he's been watching tributes to the Navy SEALs who die.

Well, Braydon Nichols wanted to tell the world, please don't forget about my dad. So, Braydon posted this to our Web site. "My father was one of the 30 U.S. soldiers killed in Afghanistan yesterday with the SEALs' rescue mission. My father was the pilot of the Chinook. I've seen other pictures of the victims from the deadly mission. I wish you would include a picture of my father. He is the farthest one to the left" -- and we will show you that photo -- "Sincerely, Braydon Nichols, 10 years old, Kansas City, Missouri."

Braydon, thank you for contributing. Thank you for paying tribute to your father and we honor his service and we certainly pray for you at this time of loss.

We'll be right back.

(COMMERCIAL BREAK)

KING: Tonight for the fourth straight night, there's rioting reported in Great Britain. And tonight, it has spread beyond London. We heard reports trouble in Manchester, Birmingham, Liverpool. You see here, these pictures we're showing you are from Manchester.

CNN's Dan Rivers tonight is in London, which by the standard of recent days, appears to be more relatively, anyway, quiet.

Dan, what's the latest?

DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, John, it's a lot, lot quieter in London today. This is in sort of the Hackney Northeast London where things have calmed down a lot. The Turkish community sort of around here have been out protecting their own businesses to try and prevent a repeat of the kind of violence that we've seen.

There have been some minor low-level clashes over in the east of the city, but really nothing that -- that compares at all to the stuff that's been going on over the last 24 hours.

KING: And, Dan, talk of using rubber bullets, giving the police, the prime minister said he'll put 10,000 extra police on the streets. The talk of using rubber bullets -- would that be unprecedented within England?

RIVERS: That would be unprecedented on the mainland here. They've been used in Northern Ireland before, but never on the mainland here.

And talk of sort of water cannons we're seeing discussed. Some people have been calling for the army to be deployed.

But, in fact, what's happened is that they've flooded the city with 16,000 police officers drawn from all over the country, and, certainly, here in London, that seems to have worked. It kept a complete lid on the -- on the violence. The police we've seen firsthand complete zero tolerance approach, any sign of trouble, they've been on it immediately. And that seems to have calmed things down in the capital.

But as you said, elsewhere, Manchester, particularly, we're hearing, this evening there has been further trouble and further incidents.

KING: Dan Rivers on the streets of London, reporting live for us tonight. Dan, thank you.

For more now on the riots and the reasons for the unrest, we're joined by the London bureau chief of "The New York Times," John Burns.

And, John, on night three, things appear to be spreading, according to your reporting. Tell us the latest.

JOHN BURNS, LONDON BUREAU CHIEF, THE NEW YORK TIMES: Well, they are and they aren't. In London, there are only minor flare-ups tonight, but there are much more considerable flare-ups in Manchester, Birmingham and Liverpool, three other major cities. So, it's something of a shell game going on here, because the Cameron government has moved large numbers of police officers into London, 16,000 people out there, police out there tonight, compared to 6,000 on Monday night, and that appears to have had -- made a positive effect of tamping things down in London. But the situation looks fairly serious in the other cities.

KING: And let's listen a bit to the prime minister. He cut short a vacation. He came home and as you mentioned, he says he'll put 10,000 more police on the street.

Listen to these tough words.

(BEGIN VIDEO CLIP)

DAVID CAMERON, BRITISH PRIME MINISTER: I have a clear message for the people who are responsible for the wrongdoing and criminality: you will feel the full force of the law. And if you are old enough to commit these crimes, you are old enough to face the punishment.

(END VIDEO CLIP)

KING: Tough words now. But was he caught a bit flat footed being on vacation as this played out?

BURNS: He was. And it's the second time in a month that's happened. He was very slow on the pickup as the Murdoch newspaper phone hacking scandal developed. He had to fly home on that occasion from leading an official business delegation to India. He was in to doing that and returned to find that his only option was in effect to sign on to proposals that were put to him by the leader of the official opposition here, Ed Miliband.

This occasion, he didn't come home for two days, hesitated until the rioting got completely out of hand last night. And then was outside Downing Street on Tuesday morning, taking control and vowing that the government is going to take extremely tough action.

So, it's been a bad month for him.

KING: The spark was the shooting death of a 29-year-old black man. But is it about more than that, John Burns, as this plays out?

BURNS: Well, first of all about the shooting of the black man, the Independent Police Complaints Commission, an independent regulatory body, announced tonight that both shots fired in that killing came from police pistol, that there was at this time no evidence that the man shot -- though it seems pretty clear that he was a gang member and did have a gun with him -- that he did not fire. His weapon has not been fired.

But what's interesting about this is that the reaction in the communities affected by this rioting, in Tottenham, where it began, dozen other communities across London, and the reaction of community leaders as well as politicians representing those areas -- many of whom are themselves members of ethnic minorities -- has been to condemn the violence outright, describe it as villainy, thuggery, criminality, as much as Mr. Cameron did, to demand it's stopped.

And so far as there's been criticism of the police, it's been that they failed to act robustly enough, soon enough, and to close it of quickly enough.

KING: John Burns of "The New York Times" -- appreciate your insights tonight.

BURNS: Pleasure.

KING: Texas Governor Rick Perry is about to jump in the Republican presidential race. We'll have two feisty Texans on the other side of the break to weigh in on his chances and your changing opinions, the Tea Party. That's next.

(COMMERCIAL BREAK)

KING: Let's close in a little politics.

The Texas Governor Rick Perry plans to get in to the Republican race. And we have a new poll tonight shows that your opinion of the Tea Party is changing.

With us tonight, the FreedomWorks chairman, the former Republican House majority leader, Dick Armey, from Texas, and CNN political contributor and Democratic strategist, Paul Begala. Two Texans with us tonight.

I want to start with this new poll. Before I get to the numbers, the Democrats don't like the Tea Party. That's no surprise. When the Standard & Poor's downgrade happened over the weekend, this became the Democrats' refrain.

(BEGIN VIDEO CLIPS)

DAVID AXELROD, OBAMA CAMPAIGN ADVISER: The fact of the matter is that this is essentially a Tea Party downgrade.

SEN. JOHN KERRY (D), MASSACHUSETTS: I believe this is, without question, the Tea Party downgrade.

HOWARD DEAN, FORMER DNC CHAIRMAN: I think they've been smoking some of that tea, not just drinking it.

(END VIDEO CLIPS)

KING: Congressman, you've been instrumental in helping the Tea Party get organized, be active the country.

Here's our new poll tonight, opinion of the Tea Party movement. Favorable, 31 percent. In July, it was 37 percent. Unfavorable, 51 percent. In July, it was 47 percent.

So, an increasingly negative opinion of the Tea Party. Why do you think that is?

DICK ARMEY, FREEDOMWORKS: Well, there's a constant drum beat, a whining about the Tea Party as if it were a political party. You know? And when people understand that this a movement in America about the essential policy requirements of America, the activists understood what needed to be done, a serious large change in spending in the direction of reduced spending, or you would not avoid a downgrade. That was validated by the action that was taken by S&P and by the whole investment community, including the IMF, that's warning America: if you don't find some way in which you can reduce this government spending and get not only the size of your government under control but your ability to manage your debt under control, you're headed for serious trouble.

So, the fact that matter is -- yes, these activists understand a hard and difficult truth and they're all -- they're fighting for the right solution to it. And for these -- those folks that want to live on easy street with other people's money, it's not a very popular movement.

But, you know, sometimes, you just have to be tough to straighten things out when a mess has been made.

KING: I'm guessing you have a different view?

PAUL BEGALA, DEMOCRATIC STRATEGIST: I do. I do. God bless Dick Armey. But, look, in fact, Dick himself -- I remember that you called Medicare -- participation of Medicare tyranny. That's the Tea Party belief. They want to essentially end Medicare as we know it. They want to turn Wall Street -- put Wall Street in charge of Social Security. How would that have worked out this week, for example?

They support a radical agenda that's had enormous damage to the country, but now to the Republican brand. And that's what we've seen in the poll.

People know what the Tea Party stands for. And they don't like it. That's what's happening.

KING: We're going to spend more time on the Tea Party in the future. But on this particular story, later in the week. But I want to get your observation.

First to you, Congressman Armey. Your governor, Rick Perry, is about to jump in to the Republican race for president. Is he the savior many Republicans want or, forgive, is he the next Fred Thompson, who gets in with all of the hullabaloo and then fizzles?

ARMEY: Well, first of all, I got to say, bless Paul Begala's heart. You know, he continues to be wholly misguided and uninformed about what goes on in the world.

But the fact of the matter is we in Texas -- and, Paul, you must agree with that, we're proud of our economy. How jobs are created. We see the governor as been a man of powerful conviction to the strength of the private sector, understanding that as a source of prosperity and having policies favorable to it.

And we think that our governor will be very competitive on the world scene and that critical area of getting the government under control so the private sector can grow and expand and get some jobs.

KING: Democrats worry about Rick Perry more than the Republican field as of now?

BEGALA: I think so, yes. Texas, frankly, has a crummy job performance -- a lot of really crummy jobs, low-paying jobs. That's the future that Rick Perry wants. He's got a lot of talent -- not a lot of brains but a lot of talent. I think that works in the Republican Party.

KING: All right. We're going to spend a lot of time on Governor Perry. We'll keep tracking the Tea Party movement. Congressman Armey, appreciate your thoughts tonight. We'll bring you back in. We have a bit more time in the future -- Paul as well.

That's all for us. We hope to see you back here tomorrow night. We'll keep our eye on the markets and developing political news.

Right now, though, "ANDERSON COOPER 360" live in Mogadishu starts right now.