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Gadhafi Surfaces Despite Manhunt; Rebuilding Libya from Scratch; Libyan Frontiers Head for Gadhafi Stronghold; 9/11 Cancer Link at WTC Site

Aired September 1, 2011 - 19:00   ET


CANDY CROWLEY, CNN HOST: Thanks for joining us. I'm Candy Crowley, John King is off tonight.

There's breaking news from Libya where despite an intense manhunt and even the bombing of suspected hideouts by NATO forces, Moammar Gadhafi keeps surfacing and taunting the world.

Earlier today NATO bombed a barracks in Bani Walid, a desert town south of Tripoli where some reports say Gadhafi may be hiding. If he is, they didn't get him.

A few hours later Gadhafi or presumably his voice turned up on a sympathetic TV network Al Rai.


MOAMMAR GADHAFI, LIBYAN LEADER (Through Translator): We're not going to give away -- give way or give up ourselves to them. We're not stupid. You know, we're not a coward. The Libyan people are brave.


CROWLEY: A few hours ago, the voice was back. This time Gadhafi called on his followers to start an insurgency like the one that nearly destroyed Iraq after the fall of Saddam Hussein.


GADHAFI (Through Translator): We will fight against you wherever you are. We will sacrifice our lives so that the sand of Libya will become and the stones of Libya will become fire and fight against you. You'll never have peace of mind inside our land.


CROWLEY: CNN's senior international correspondent, Nic Robertson, is with us tonight in Tripoli.

Nic, is anybody listening to these tapes?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: There probably are some people that are listening to it. I just met with the National Transition Council main military commander here in Tripoli. He says that he believes there are still some people out there who will listen to Gadhafi.

I asked him about Gadhafi's sons' claims to have 20,000 fighters in Sirte, the place that Gadhafi has now said in this latest speech is now the center of the resistance. He said he doubts that very much. But he's not under any illusion, the military commander here, that Gadhafi's message will have some people still listening to it.

I also asked him specifically, do you know where Moammar Gadhafi is right now? And he said, he believes that he was somewhere between the towns of Bani Walid and Sirte. Bani Walid, about 150 miles southeast of Tripoli, Sirte on the coast about 250 miles east of Tripoli.

Clearly didn't give me a pinpoint accuracy location, and I still get the impression from -- from military commanders here on the rebel side, they just don't know exactly where he is right now -- Candy.

CROWLEY: Nic, you began to answer, I think, one of my other questions for you tonight, and that is, we know that there are rebel leaders meeting in Paris with other nations, talking about how they're going to put together a government in Libya.

Are there signs on the ground that a government is beginning to take over there?

ROBERTSON: I think what we're seeing on the ground is sort of if you will the reverse process of a government. Normally you think of a government starting, forming at the top, you know, Cabinet government and then trickles down.

But what we're seeing here, when we go to the Foreign Ministry, when we go to principal hotels, when we go to former offices and buildings belonging to the regime, we'll go to the port as I did today, you're finding that groups of local residents who have been organized by local action committees, local national transitional council committees, to protect their neighborhoods, to protect buildings, to make sure there's no looting.

This is completely different to Iraq in 2003 where we saw widespread looting, where there was essential anarchy on the streets. Here you've got this roundup organization, so there's a sense it's beginning.

Fuel beginning to be delivered to gas stations, albeit, the lines are still long, they're still slow, but the fuel's starting. The port, there's now a port master, a harbor master there. There are dockers turning up to help off-load some of the ships, so it's beginning, but more from the ground up we're seeing here than the top down yet -- Candy.

CROWLEY: Nic, in the short minute that we have left, can you give me a best-case, worst-case scenario based on what you're seeing as to the future of Libya in the next month or so? ROBERTSON: The worst case is that laid out by Gadhafi, an insurgency that will -- that will begin and grow over a longer period of time than perhaps a month. There is a concern amongst some military commanders here that this additional week given to the Gadhafi loyalists to put down their weapons is going to backfire. It will give them time to dig in and feel that they've got a rationale and a reason to fight.

The best-case scenario is that there are political agreements that Gadhafi is cord or compromised and handed over, and that the political agreements lead to the beginning of a transition to a stable government and control over the whole country. But we're still far from that. I think there's going to be a middle ground between the two scenarios sometime to go -- Candy.

CROWLEY: Thanks so much, Nic Robertson, I always learn so much when I talk to you, in Tripoli tonight.

While Moammar Gadhafi was taunting the world from his hiding place, the men who will now be running Libya were in Paris meeting with world leaders including Secretary of State, Hillary Clinton.

Senior officials told CNN Clinton intended to deliver some tough love to the new leaders, telling them in effect we want to help, but you have to lead.

CNN's senior international correspondent Jim Bittermann is in Paris.

Jim, first, I want to show you and our audience something that you saw, a powerfully symbolic piece of video. That's French president Nicolas Sarkozy on the right of your picture, walking out to greet the new leaders as they arrive for the conference.

National Transition Council chairman Mustafa Abdul Jalil is the man in the center. The council's prime minister Mahmoud Jibril is on the left.

So, Jim, I think the first obvious question is, are we looking at the new leadership in Libya? Who are these guys?

JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, I think basically we probably are, unless something happens here -- between here and there. I mean they came here with the message that they're going to hold democratic elections 18 months down the line, and in the meantime they're going to be in charge of things.

CROWLEY: Is there any feeling among those who have come to try to help Libya put a government together about what should happen to Moammar Gadhafi beyond his capture, which still hasn't happened?

BITTERMANN: Well, I'm sure there will be a lot of -- there will be a lot of people that want him dead, but the fact is that most sort of sensible, civilized thing that could be done is to establish some institutions, some rule of law, and then put him on trial and then try him in a court to sort of show everyone how this works. I think to some extent that's what happened in Iraq.

But I think that kind of thing is what will say more to the Libyan people than if it's just a simple revenge killing, if Gadhafi's tracked down and shot on the streets, that really is not going to advance the idea that this transitional council is in charge of things and that it's going to sort of watch over this transition to the new Libya in a way that's going to ensure rights for everybody.

CROWLEY: You know, French president -- French President Nicolas Sarkozy, Jim, said that it was an honor of France to be in the lead of trying to help Libya, but we know how quickly these things can evolve, particularly in a nation that's known one leader for four decades.

Is there -- what is the sense that you get there among these leaders about the chances that something that is so wholly new, they have to build a government from the ground up among these tribal factions that you talked about.

Is there any sense on the chances this can happen?

BITTERMANN: Well, I think everybody -- that's a question they would probably try to avoid. They would like to say that what we want to do is give everyone the best chance, and then see what happens. And the best chance is what they've come at tonight. They've already unblocked about $15 billion worth of frozen Gadhafi assets, and they're going to put those to use. The transitional council says they want to put it to use to address the immediate concerns of the people, water, food, housing in some cases.

So that's going to be something that will help them a lot. And then this nation-building exercise at the United Nations, Ban Ki-Moon was at this conference and he said -- the secretary-general of the United Nations. He said that they're going to be there all the way along the line, helping to establish institutions, helping to establish a justice system.

Whether any of this will take place, like you say, the world's experience in this has not been very good. It has happened, but in some cases -- the case of Iraq, for example -- it has taken quite a long time.

One thing that they're hoping to avoid, by the way, with this quick action is what some people have said was the mistake in Iraq, and that was that disbanding of the military and disbanding of the Baath Party. Here they're going to try to keep some of these institutions in place like the military.

And today a huge shipment of Libyan bank notes was sent to Libya basically to pay the civil servants and pay the military and keep them on board so that you have at least some kind of structure to work with -- Candy.

CROWLEY: It sounds like they did learn from lessons from Iraq. Our Jim Bittermann in Paris tonight, watching along with us a government being built from scratch essentially.

Thanks so much, Jim.

BITTERMANN: Yes, you bet.

CROWLEY: Back in Libya, fighters are closing in on towns still held by pro-Gadhafi forces. As we said, NATO bombed barracks in the desert town of Bani Walid south of Tripoli, just about the same time CNN's Frederik Pleitgen was with a convoy of anti-Gadhafi forces as they headed for the town.


FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT (on camera): We've managed to get behind of the actual front line of the rebels. We're past the last outpost that they have.

This is a small detachment that's going to go on patrol in the contested area between the rebels and the Gadhafi forces. We're in the vicinity of Bani Walid, which is one of the final Gadhafi strongholds, and these guys are actually gearing up for what could be one of the last offensives in the Libyan civil war.

As you can see, they have quite a bit of firepower at their disposal. But right now they're going on patrol as they're gearing up to try and take Bani Walid, a very strategic town.

UNIDENTIFIED MALE (Through Translator): We are ready. We aren't afraid. God willing, we will enter Bani Walid.

PLEITGEN: So we're now driving in a convoy inside the contested area. This is a place where really both the rebels and Gadhafi forces have some equal.

Now the rebels say they have about 200 guys here in this area. They have several checkpoints along this contested area. They tell us they have both the manpower and the firepower to move into Bani Walid, one of the last Gadhafi strongholds, but it's not something they necessarily want to do because there's longstanding tribal feuds between the people of Misrata, which is where these guys are from, and the people of Bani Walid who are of course still holed up in that town over there.


CROWLEY: One important footnote to the Libya story, it is 42 years to the day, September 1st, 1969, since Moammar Gadhafi seized power in Libya. And, yes, he talked about that in his second audio blast a few hours ago.


GADHAFI (Through Translator): After 42 years, the imperialists are trying to occupy Libya once again, very openly and clearly, and in order to take Libyans' wealth from the Libyans' hands in order to make their own people enjoy the wealth of the Libyan people.

(END OF VIDEO CLIP) CROWLEY: Up next, a shocking new study reveals some 9/11 First Responders have a significantly higher risk of getting cancer.


CROWLEY: Breaking news tonight about health problems among the firefighters and recovery crews who spent months cleaning up after the 9/11 terror attack in New York.

A study just published in the medical journal "The Lancet" says New York firefighters who were exposed to dust and chemicals at the World Trade Center site are more likely to have cancer than their colleagues.

The study also says even though 10 years have passed 9/11 rescue and recovery workers continue to suffer a high burden of physical and mental illness.

CNN's chief medical correspondent Dr. Sanjay Gupta has been investigating the health of these workers for over a year now. He joins us now from Atlanta.

You know, my first reaction to this, Sanjay, was I felt like we knew that, but what shocked you about this report?


I think that there was all sorts of different studies in the past that have shown the health impacts of breathing in that dust, but they were mainly respiratory problems, and as you know, Candy, there's been a lot of back-and-forth about whether or not there was a cancer connection. Never a definitive study showing one way or the other.

Now at the 10-year mark they have the luxury of being able to look back over this 10-year period and really being able to examine what happened to these first responders, and specifically the study that just came out, just over the last hour, shows that in the firefighters, specifically firefighters who are first responders, they had at least a 19 percent increased risk of cancer.

That is a very significant increase, Candy, among this population of people. Again, where there was believed to be no cancer link. And if you include all cancers, even cancers that developed quickly after 9/11, the number is actually as high as 32 percent.

Again that is brand-new data. I think it's surprising and shocking to a lot of people because even as recently, Candy, as you know, as of July of this year, they said, look, we found no link between the World Trade Center dust and cancer. This study seems to contradict that.

CROWLEY: Sanjay, I know you've been working on a special called "TERROR IN THE DUST" when you examined exactly what was in that dust. What did you find, and what other health ramifications have been found to be inside those particles? GUPTA: Right. Well, it a wholly unique situation in the way that all these chemicals sort of became amalgams together, so that, you know, you would get benzene mixed with asbestos, all of it clinging to the dust which hung like a mist over the air. People were breathing that in.

And again, we know if you look and sort of try and decipher what happens to the body when someone starts to breathe in that dust, those particles start to affect, you know -- start to cause health impacts right away. The World Trade Center cough was something that you heard of, everyone heard of, but it went beyond that.

After the respiratory problems, it started to cause inflammation within the body as well and that inflammation within the body as well and that inflammation may be the genesis of these cancers.

Again, now shown by the study, you know, a well-designed study, really definitively for the first time.

One thing I will say, Candy, as well, is that if you think about what was happening in the couple of days right after these attacks, there were lots of gases that were released into the air, you know, from the jet fuel and other volatile compounds. Those things just disappeared. There was no recording of them.

We don't know exactly how much of those substances were also breathed in by these First Responders. We can only look at the dust and examine it, but the whole picture in terms of what they were breathing in, we may never know. What we're seeing, though, is the ramifications.

CROWLEY: There were responders who had hoped that their health care coverage stemming from problems out of 9/11 would be covered under the 9/11 Bill that Congress passed. Could this study change who is covered?

GUPTA: That's a great question and a very controversial one. As recently -- you know, just a month and a half ago, the answer seemed to be with respect to cancer, the answer was no, they seemed to say there was no evidence that the dust caused cancer.

This was a big study. It looked at fire department first responders over the last, you know, 10 years. And really this lead study author who talked to me about this said there's no question in his mind that if a fire department responder developed cancer a few years after 9/11, there's a very good chance it was related to their work on the pile.

So it very well may change, you know, it's going to be controversial. There's going to be fights. There's going to be debates. They'll review this study. But I think by the time that they review this whole process again next year, this study may put an exclamation point on this and people with cancer may get some compensation.

CROWLEY: Thanks, Sanjay. You all can see Dr. Gupta's full investigation of the health fallout from 9/11 and also rare never-before-seen footage in his documentary, "TERROR IN THE DUST", this Wednesday, 11:00 p.m. Eastern right here on CNN.

Joining us now from New York, retired firefighter Rocco Chierichella who worked at Ground Zero in the days following 9/11.

Thank you so much, Mr. Chierichella, for joining us. What's your reaction to hearing what over 10 years is a remarkable increase in the risk of cancer for many -- for all of you, frankly, the risk, that were there that day on Ground Zero and the many days thereafter?

ROCCO CHIERICHELLA, RETIRED NEW YORK FIREFIGHTER: Well, it's, like you said, beginning your program before the doctor was on, you said we've kind of expected that -- and figured that this would be -- be par for the course, what went on down at Ground Zero with 2500 known contaminants in that area, it's nice to start hearing that there are studies that are backing what we're -- what many firefighters and rescue workers and construction workers are suffering with.

And it's about time that these studies coming out of the federal government are challenged and challenged quickly and decisively so that the firefighters that responded to a war zone, not a general fire, are -- and the rescue workers, include them -- I include everybody, are compensated for it.

CROWLEY: Have you stayed in touch with your fellow firemen -- and I know you're retired now -- and other first responders in a way that you could tell me, what is -- what is their morale, the morale of that community which really it became that day?

CHIERICHELLA: Well, you know, when you give of yourself in this type of job capacity, 99.9 percent of us love this job, and to know that when you were called upon that day, I was on the first wave of that -- I was -- I came in later that night, but to know that your city, your nation stands behind you in the aftermath and the post problems that are occurring, that we all know of, is -- is very needed and needs to be supported, the firemen need to be supported like this.

To start hearing reports from the federal government saying cancer is not any relation to Ground Zero -- I'm not an expert, I've been at some of the hearings. I've heard some of the dialogue going back and forth. And to say that pulverized glass and asbestos and sheetrock dust and dioxins from the fire that burned for three months afterward isn't an effect on the firefighters and rescue workers is pure insanity.

CROWLEY: I want to take you back to that day, just one particular moment, actually, this was -- this was later on. It wasn't on the day of September 11th. But you were the firefighter who famously called out the President Bush who was standing on top of the rubble, talking to you all, saying we can't hear you. And he responded, I can hear you. The rest of the world hear you, et cetera, et cetera. And taking you back to that day, there was a very -- throughout the country -- this just feeling of togetherness and resolve. And I wonder if you feel with some of these health things and other things that have happened that your country has let you down.

CHIERICHELLA: Well, when you go back to that day, Candy, you have to remember, we were all in a state of shock. We didn't know what to think, and when our president did come down, we have to recall the time and stepped on that crushed fire truck. He brought the country together at that moment, whether it was from the -- I can't hear you shout to his response to it, it seemed to galvanize what we needed to do as a country.

To only find out later that some of our -- the politicians were pushing us to get back to that area and saying it was safe and whatever reports they were getting or who was making the decisions, it seems as though that, you know, we had to continue doing our job, find our brothers that we lost and the people that were lost in that building -- those buildings, but we had to stay focused.

So we couldn't get involved in the political minutia that was going on around us. But now to find out when federal studies are coming out saying there's no cancer leak, it tends to test your nerve.

CROWLEY: I imagine it does, sir. A lot of things that happened that day that changed all of us, especially I think the New York City firefighters and police.

Thank you so much, Rocco Chierichella. We appreciate your time.

CHIERICHELLA: Thank you, Candy.

CROWLEY: They're evacuating oil-drilling platforms in the Gulf of Mexico today. Next, the latest on what could be the next tropical storm.


CROWLEY: In the Gulf of Mexico today, oil companies evacuated workers from offshore drilling platforms and New Orleans -- yes, New Orleans -- began preparations for possible flooding and heavy rain. All because of a potential tropical storm that hasn't actually officially formed yet.

We want to get a look from CNN meteorologist Bonnie Schneider.

Bonnie, what are you seeing?

BONNIE SCHNEIDER, AMS METEOROLOGIST: Well, Candy, right now we're seeing the beginning of a lot of rain for the southeastern parishes of Louisiana and southern Mississippi.

I'll show you right now what's happening on the radar and you'll see those thunderstorms rolling on in. And I wish I could say this will just last through tonight and your weekend is going to be great, but it's not. This area of disturbed weather continues to bring the rain in and strong winds as well, and it's likely to develop into a tropical system maybe and even within the next 30 minutes.

We're getting reports that possibly for the 8:00 advisory, the National Hurricane Center may upgrade this from just an area of disturbed weather possibly to a tropical storm. The next name on the list is Lee, incidentally.

So here to our satellite perspective, notice the bright reds and oranges and purples, that indicate the higher cloud tops where we have thunderstorms. And they're pretty widespread across the northwest Gulf of Mexico. A lot of it is hitting the Alabama and Mississippi coast right now.

Some wind shear breaking it up, but you have to realize the water temperature throughout much of this region is about 88 degrees. So the atmosphere is very ripe for something to develop and I think that is what's going to happen.

Now when you take a look at the computer models, a lot of them are taking the storm a little bit further off to the west. Here's Lake Charles in southwest Louisiana and into Texas. It would be great if we can get all of the models pushing towards Texas because Texas really needs the rain, but there is quite a bit of divergence into where this storm will go and when it will actually get there.

It's possible it could just meander in the Gulf of Mexico for the next few days and that is very bad news for cities like New Orleans, because when you have a storm just sitting there in the gulf, it can continue to pump a lot of rain into this region, and some of the computer models are showing we could see up to 10 inches of rain easily by the time we get to just the latter part of the weekend if the system does sit and spin in the Gulf of Mexico.

But right now we're still monitoring it. The track could change, and it's something to keep watch on. But, no, we may have another tropical storm in the Gulf of Mexico as early as this evening. We will keep you up to date -- Candy.

CROWLEY: This the season, I guess, as they say.

Bonnie Schneider in the CNN Weather Center. Thanks so much.

Now a much different concern in Texas. Firefighters are battling several major wildfires. The largest west of Dallas has burned dozens of homes but firefighters may be getting the upper hand.

CNN's Jim Spellman joins us from the frontlines.

Jim, yesterday you were pushed back because it was seen as you were too dangerously close to the fire and it does sound like now the firefighters are advancing on the fire as opposed to the other way around.

JIM SPELLMAN, CNN CORRESPONDENT: Yes, that's right, Candy.

Now, they're saying it's 50 percent contained. We were right here yesterday as fire was coming across this ridge right here, and spot embers were coming across the reservoir, and they were concerned a fire would break out on this side. They had to strike the command center, us with it.

Right now, just what you can see this helicopter doing, they've been working all day doing water drops on this fire, and they feel happy they feel like they've really had made some progress. But they're going to keep at it. Still 50 percent -- only 50 percent contained. So, they want to just keep at it until this fire's completely out, because all those factors still remain, the extreme heat, high winds, and drought, Candy.

CROWLEY: Can people go back at least to the areas that are not still on fire? Can people go back to their homes, or what's left of them?

SPELLMAN: Yes, they're allowing some of the people back, the people that were evacuated yesterday. The areas where the 40 or so homes that burned, they're not letting people back there yet. There's only one way in and one way out of a lot of these communities. They want to be sure that all the fires are completely out before they let those people back in, Candy.

CROWLEY: Sure. It's a big tourist area, too. What's the outlook for Labor Day?

SPELLMAN: They're really trying to get it open. There are already parts of the lake reopened now. By Saturday, they want the whole lake open.

And, listen, Candy, I wanted to show J.K., USA viewers this, they call this Possum Kingdom, "P.K, USA." And they have shirts made up here. There are some John King fans and they wanted us to be sure we got this to him. So, we'll send this on when he gets back. I'm sure he'll enjoy the little Possum Kingdom souvenir there, Candy.

CROWLEY: I will have him check his mailbox. Jim Spellman of Possum Kingdom Lake, Texas -- thank you.

Next up, outrage in Congresswoman Gabrielle Giffords' Arizona district over a Republican fundraiser. Stay with us to find out what they are auctioning off.


CROWLEY: Welcome back. Here's the latest news you need to know right now:

Outraged Democrats in Congresswoman Gabrielle Giffords' Arizona district are accusing Republicans of, quote, "something that pulls a scab off of a wound." As a fund-raiser, the Republican Party held a raffle for a Glock handgun. It is the same make of gun Jared Loughner is charged with using to shot Giffords and kill six others last January. The Republican Party chairman defends the raffle, telling CNN they have done it for years.

"The Los Angeles Times" reports Chinese investors are putting up part of the money in a $1.2 billion cash offer to buy the L.A. Dodgers. There's no deal yet.

Libya is an oil-producing country, but right now, they have a gasoline shortage, and gas lines. CNN's Dan Rivers waited in one along with some Tripoli residents.


DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, the fuel situation in Tripoli is still pretty bad. There are still incredibly long queues. It's better than it used to be. But check it out, this is the back of the queue for gas. I want to show you just how long it is.

This queue just goes on and on and on. It's ironic because Libya actually has the largest oil supply in the whole of Africa, the ninth largest in the world. Experts say it has some 23 years of oil reserves. And before the war, it used to pump about 1.3 million barrels a day.

But now, all the people in this queue care about is when these petrol queues are going to subside. Some of them say they've been waiting in the scorching heat for hours.

And finally, this is the front of the queue! The coastal road is open, so it means some supplies are coming in, but you get the idea of just what an agonizing wait. It is simply to fill up your car.


CROWLEY: Goodness, like water, water, everywhere. Only it's oil, oil everywhere but nothing for your car.

"ANDERSON COOPER 360" is coming up at the top of the hour. Anderson, did you see that long line of cars?

ANDERSON COOPER, HOST, "ANDERSON COOPER 360": Yes, incredible. And in Libya of all places.


COOPER: The irony is obviously -- hopefully that will change soon.

Candy, we're keeping them honest tonight on "360." The stories told by Syria's Assad regime exposed for what they are, what we've known they are all along, lies. While Syrian security forces were shooting people in the streets and burying them in mass graves or snatching children and mutilating their bodies. While these atrocities were going on, Syrian government officials were claiming this was not happening. They're still saying it's not happening, telling the outside world it's not what appears to be.

Well, tonight, keeping them honest, we're going to hear from a high-ranking government official couldn't lie any longer. He resigned from the government and went into hiding, but he isn't running from the truth. Also tonight, the aftermath from Hurricane Irene, cleanup costs could run a billion dollars in New York state alone, according to Governor Andrew Cuomo, we're going to take you to where the governor call the hardest hit town, Prattsville, New York. We're going to talk to a volunteer firefighter who says his town looks like it was hit by a category 5 hurricane.

Also up close tonight, a "360" investigation we're calling "Ungodly Discipline." Gary Tuchman went into a secluded property in a town in northern Indiana, town where for years, girls were allegedly abused at a boarding school run by a fundamentalist Baptist.


GARY TUCHMAN, CNN NATIONAL CORRESPONDENT: We've had a lot of people claim they were physically and mentally abused at your house. Can you give us a comment about that?

UNIDENTIFIED MALE: Well, I would rather not.

TUCHMAN (voice-over): Our conversation did not end there. But, first, let us introduce you to Susan Gratti (ph), who is now 45, but spent 2 1/2 years there starting when she was 15.

UNIDENTIFIED FEMALE: There's going to be gardening and crafts and singing and just a chance to heal.

TUCHMAN (on camera): That's what your parents thought the school was going to be.


TUCHMAN: And was it in any way correct?

UNIDENTIFIED FEMALE: No, no. And I knew that the minute the door shut behind me.


COOPER: We'll have those stories and more and tonight's "Ridiculist" at the top of the hour, Candy.

CROWLEY: Wow. Looks like a great show. We will be there at the top of hour, about 20 minutes from now. Thanks, Anderson.

Home prices are one of the biggest drags on the U.S. economy. Next up, will things ever get better?


CROWLEY: A brand-new report from the Obama administration says nearly 3 million homes have been repossessed since 2006. Another 5 million are in danger of foreclosure.

So, will home prices ever get back to normal? And by the way, what is normal? HGTV host Mike Aubrey is a licensed realtor.

We have seen in an S&P index that the huge housing crash that we all knew was happening --


CROWLEY: in '08, '09 started to go back up, and everybody said, OK, they've stabilized. They're going back down again. What's happening?

AUBREY: You know, I think that this is not rocket science, not rocket science at all. Things got better and that hand in hand went with the first-time home buyer tax credit and the move-up tax credit. I think people started to believe again a little bit.

CROWLEY: Stimulus package, right?

AUBREY: Correct. I mean, it was propped up synthetically, basically. Things got much better and then in the wake of that, we saw unemployment higher than we've seen it in a long time.

A simple fact exists. When people don't have jobs or are afraid that they're not going to have jobs, they're not buying houses. We're seeing a drop again.

I mean, you know, all due respect to the Case-Shiller index, I think I could have told you this even if I had a blindfold on that we were going to see this coming.

CROWLEY: So, what is your feel for this? Is it going to go back down to the levels we saw earlier, a year, a year and a half ago? Is there some point where you think I think they'll stabilize, or is it all tied to the unemployment rate?

AUBREY: I don't think it's all tied to it. I mean, you know, the first time that we saw a drop, I think that that drop was based on the very unstable nature of the real estate market itself, how propped up it gotten. Basically, economics --

CROWLEY: So, sort of basically overinflated prices of homes and people aren't able to pay for them, what caused the crash to begin with.

AUBREY: I think economics 101. It was supply and demand. There were more people who wanted homes than there were available homes for them to buy. That, then, caused it to go through the roof and what you saw was John Q. public decided to be a real estate investor and they decided to buy properties they had no intent of ever living in, and they got caught holding the bag when we saw the crash happen.

I think this time, it's far more insidious. I think what we're seeing this time is external factors to the real estate market are causing it to go back down again and, you know, I guess to address your question, what I'm concerned about is that there are so many balls in the air that are affecting this thing right now, it becomes an extremely complex equation to decide exactly how we're going to cure it or when it's going to stop.

Do I think that we're at the bottom yet? Probably not. Do I know exactly where the bottom's going to be? Maybe not so much. I mean, that may be a question better to ask secretary Geithner, because I think that's the guy right now who has the toughest job in America.

CROWLEY: And so, and you may have already answer -- that is what stabilizes things? Is it a more stable economy? Is it that simple?

AUBREY: Well, I think it's definitely a more stable economy. I think it's also what can we do for the people who should be buying houses who do have great credit, who do have job security, how do we make them feel better? Because we want those people to go out and get loans for as cheap as they are seeing, mortgage rates basically ever!


AUBREY: And I can assure you, we will never see rates like this again. Is it a great time to buy? It's a perfect time to buy. Why? Because however much more the market goes down, when you look at a 30- year fixed loan, what you're going to get and the gift that keeps on taking with the higher interest rate is going to more than make up for what you will lose if the market continues to go down a little more.

CROWLEY: We did a show on July 4th about the American dream and, of course, it's always been about your little nest egg, your home. Is that gone?

AUBREY: I don't think so. I think the American Dream is still there.

You know, I think that there's a pretty good parallel between the securities market and the real estate market. My broker will tell you all day long, if you're going to look at the stock pages every day, Mike, I'm not your guy. But if you put your money with me and you let it sit there for 20 years, I will assure you I'm going to show you a great return at the end.

Real estate is the same way. We have to stop seeing homes like we might see a share of Google. This is not only a place to live, not only is there emotional value to it, provided they don't get rid of the interest deduction, which I know is some concern right now, provided they don't get rid of it, home ownership will always do well. You can beat the market by owning it over a protracted period of time, and that's sort of what the American Dream was about. That's the American Dream people need to get back to.

CROWLEY: Because, you know, growing up, to me, you know, my father's mantra was always buy real estate. Forget this, it wasn't even the stock market. Buy land. Buy housing.

That's not true anymore. Now it's -- this is something you want for you. And if you want it for you and you plan to stay there, then it's a good investment, but it's not as, say, a -- this is how I'm going to make money in the short term. AUBREY: I mean, I think that it is a far different prospect to be a real estate investor than it is to be a real estate owner who has bought something to live in. I mean, you know, I'll go back to your father. I bet your father never bought a house that he didn't put 20 percent down on, did he?

CROWLEY: Right, right.

AUBREY: And I think that's sort of another one of those changes in terms of redefining the American Dream of home ownership.

CROWLEY: And, you know, when you're deciding whether to buy a home, you mentioned we had these subsidies, we had that first-time homeowner. Does more of that need to happen? I mean, the president now is looking really at jobs, and you don't often think of homes in that same category as creating jobs, but might spur construction, you know, maybe 10 years down the line, there's a lot of vacant property out there at the moment.

But do you think that more subsidies are need, more of that sort of first-time homeowner tax break?

AUBREY: You know, here's my concern -- I mean, you know, as a realtor, I want any subsidies that we can get.


AUBREY: Why? Because that's going to help me sell houses.


AUBREY: I think as a student of the game that is the real estate industry, I would suggest this to you -- this becomes the proverbial Band-Aid. Do we want to take it off slow or do we want to take it off fast and feel the pain?

My answer is, take it off fast. Get rid of the subsidies. Get rid of synthetic propping up of the marketplace. Go through the painful period. Allow the market to naturalize, and get back on our own two feet again.

I think that until we go through that painful period, which we seem to be deferring and staving off, we're never going to get through this thing and get back to a normal place.

CROWLEY: And just finally as a yes or no piece of advice to sort of a wrap this up, if you have good credit and you're in search of a home and a place to live, now is the time. Don't wait to see if you can time the housing market.

AUBREY: I agree. I think it is absolutely the time. I say this from the bottom of my heart. If you have good credit and a good job, go and buy a house right now.

CROWLEY: Mike Aubrey, HGTV real estate, thank you.

AUBREY: Thanks for having me.

CROWLEY: Next up, it took some wrangling, but President Obama does have a date for his address to a joint session of Congress. Did it have to be this hard?


CROWLEY: A quick drum roll please because House Speaker John Boehner invited President Obama to speak to a joint session of Congress at 7:00 p.m. Eastern next Thursday night. And this afternoon the president accepted. It wasn't that easy.

Now here in Washington with us now: Republican strategist Rich Galen, who's publisher of "The Mullings Report," and CNN political contributor Hilary Rosen, a Democratic consultant whose firm has worked for a number of candidates in federal congressional elections.

I mean, seriously, you want to set your hair on fire. This cannot be good for the White House or Republicans on Capitol Hill.

HILARY ROSEN, CNN POLITICAL CONTRIBUTOR: No. No process battle at a time when the country is panicked is a good thing to have. And I have to say, the White House chief of staff called the speaker, how about Wednesday? He said, OK. And there it went.

CROWLEY: Can I just ask you, do you believe that the White House didn't know that the Republican debate was Wednesday night?

ROSEN: Yes, I don't think that's really the issue, though, because the Republicans would have had a lot to talk about in response to the president if they wanted to.


RICH GALEN, REPUBLICAN STRATEGIST: I mean, we're not allowed to decide on behalf of what the debaters are going to do or not. I mean, I don't think there is any question that the White House was sitting -- we've all done this, sitting there going I know what I'm going to do and they got caught it at it. It's too bad.

But your bigger point is exactly correct. The process nonsense has got to stop. They've got to start acting like big boys and girls and stop making believe this is like a wrestling match where we're constantly measuring who's got the upper position and who has the lesser position every 30 seconds at a time.

ROSEN: The irony of it was that sort of the two people who were having the conversation, John Boehner and the White House really are the two people who were the grownups kind of this summer as well when we had the big budget fight. The question is, going into the fall, we're having all of these budget battles -- you know, when the president is encouraging the American people to encourage their members of Congress to be sensible, to come together, to come to the table, work together to move this economy forward, you know, are they going to go with the more practical John Boehner instinct, or are they going to go to the right of their party where a majority of them don't want to compromise and have already said so?


GALEN: I'm sorry.

CROWLEY: I just because -- the president, I mean, the main headline here is the president is going to talk about jobs and what he wants to do about jobs. "Wall Street Journal" editorial board had big praise for Jon Huntsman who is languishing in 1 percent of the polls here since he got in, basically, saying, boy, he ought to give the Republican response, because it's a really good program. In the end, you can have as many serious people as you want talking about this.

Is anything really going to happen?

GALEN: Well, I think there was some good news today. Senator Toomey, who is very conservative and is on the "gang of 12," or whatever they call the supercommittee, said today in Pennsylvania that he was more than willing to look at adjusting the tax code to be able as revenue raisers. I think that stopped everybody cold.

CROWLEY: And that's huge for Toomey, who comes from --

GALEN: I might have gotten -- I may not have that exactly correct. That's the sense --

CROWLEY: He'll call us later.

GALEN: The phone is vibrating in my pocket.

ROSEN: You contrast that with what is happening in the Republican presidential primary, where every one of them to a person said that they wouldn't even trade $10 of spending cuts for a single dollar of revenue increases.

GALEN: Well, that's the difference between being a candidate and having to actually make a decision. People say that stuff.


ROSEN: President Obama is not going to run out there and be a candidate next week. He is the president, and he is going to go out --

CROWLEY: But is the president -- we're just in a election cycle. The president could have given this speech from any venue he wanted to.

GALEN: And could have given it two weeks ago.

ROSEN: If the president went out in the country and gave that speech and talked about what Congress needed to do to work with him. They would have said, why are you out there campaigning, come back and talk to Congress.

Congress needs to work with the president to make this thing happen. And he is going to give some specific things that Congress should do --

GALEN: It's about time.

ROSEN: About whether Republicans will step up.

GALEN: That would be a big --

ROSEN: They have not done so for the last two years.

GALEN: That would be a great switch if the president actually came up with a concrete proposal instead of as the phrase is now leading from behind.

CROWLEY: Relatively speaking, we are in a budget-cutting mode, whether you're a Democrat or Republican. We do have Democrats pushing -- we need more money, stimulus to the economy. But by and large, everybody is about cutting.

What can the president realistically propose that we, A, haven't heard before, or B, is big enough to move these jobs numbers? Because that's what the problem is here.

ROSEN: Right. Well, a few things, because there is a lot of things that have been on the table for a long time the president has talked about --

CROWLEY: Tax reform and trade deals.


ROSEN: -- which did stimulate the economy in the 1980s --

CROWLEY: But not long-term, because we have economic reports out today --

GALEN: Today.

CROWLEY: -- that say by the way --

GALEN: Unemployment is going to say 9 percent all next year.

CROWLEY: Like 2015, it will be 9 percent for a year.

ROSEN: It may. But we can all sit back and say well none of these things are going to work, or they can actually do something and believe in some success.

GALEN: And it's up to the president to finally propose a solution.

ROSEN: Rich, you know that's not true. The president has been doing this for a last two years, and the Republicans have stonewalled all along.

GALEN: You guys owned everything for the last three years. So we haven't been doing it for two years. CROWLEY: Which is why it's hard to do anything I think at this point.

GALEN: We like each other.

CROWLEY: I know you do. I know you do. So, we'll have you back to be nice to each other at a later point. Thank you so much.

Hilary Rosen and Rich Galen, always appreciate it.

GALEN: Thanks, Candy.

CROWLEY: And that is all for us tonight.

"ANDERSON COOPER 360" starts right now.