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Solyndra Investigation; Energy Independence; GOP Primary Calendar; Missing Baby Lisa; Interview With Gene Sperling

Aired October 14, 2011 - 19:00   ET


ERIN BURNETT, HOST: We're on the "Front Line" in China with tiger kids. Can America's kids compete? Plus, we can't resist a vial stink bug invasion on a Friday nigh and the "Bottom Line" on foreign oil.

All candidates say America must kick the habit but what will it take for America to be energy independent? We run the numbers.

Let's go OUTFRONT.

Breaking news tonight from Washington, the White House deciding not to send Congress all the internal documents related to the Solyndra loan. Jessica Yellin joins us live now. Jessica, I know you broke the story and this has to do with the president's e-mails himself, doesn't it?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Yes, that's right, Erin. This means that members of Congress are not going to get a glimpse of what is on the president's BlackBerry or any more internal documents from the White House itself related to the Solyndra loan. So let's back up and do the big picture here for one second.

Two of the Republicans investigating this loan controversy had asked the White House to release all of the internal documents, anything that mentioned the Solyndra loan whatsoever and send them up to Capitol Hill. And what has happened now is that the White House Council has sent a letter to them this afternoon -- we got a copy of it -- and it says we're not going to do this.

We're not going to send you all of these documents because you've gotten 70,000 pages of documents from agencies, another 900 pages from inside the White House, and to be just bottom line it for you, Erin, this is consistent with other administrations. We've always heard about executive privilege. The president always protects traditionally the right of their advisers to give them unvarnished advice. So this really isn't that big of a surprise but expect political fireworks any way -- Erin.

BURNETT: All right, well Jessica, thank you very much. Let's bring in John Avlon and Jeffrey Toobin to talk about that. John, first what Jessica is saying, political fireworks. We're definitely going to get some because in addition to the news Jessica broke, we're also seeing an Energy Department adviser who pushed for this Solyndra loan, also apparently raised half a million dollars for the president's election campaign.

JOHN AVLON, CNN CONTRIBUTOR: Look, Solyndra stinks and all the e-mails that have come out really do show a great deal of culpability and some doubts about the wisdom of making these loans. However, to this piece of breaking news --


AVLON: As Jessica said, the White House has already turned over 70,000 documents and 900 documents from the White House. The issue here at hand is what to do with the president's BlackBerry. It's unprecedented new technology territory. And that's one of the reasons why I think it makes sense to invoke executive privilege because to stop this from becoming a political fishing expedition.

BURNETT: Interesting. What do you think about this, the BlackBerry, the new precedent here?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Remember when Obama became president people said don't carry a BlackBerry. People will wind up subpoenaing it. Well it took 2.5 years and that day has finally come. Look I think this is a very predictable response. By the way (INAUDIBLE) it's just like the old days in the Clinton administration. Bad embarrassing news comes out at 6:30 on Friday, but I don't think it's going to wind up --

BURNETT: There isn't a company or government in the world that doesn't use that one.

TOOBIN: Exactly. But I don't think this is going to be all that legally controversial. If it's about the BlackBerry, this is the core of presidential decision making, his (INAUDIBLE) his diary, that is not something that any court is going to turn over unless there's very direct proof that there's something relevant to criminality and it's far from clear there's any criminality even here.

BURNETT: Right -- right. And let me ask you this then on the political side of things, how much more political fallout is there? I mean the Solyndra loan is something a lot of people are familiar with and they know that it's bad.


BURNETT: That there's something bad about it, so how much more pain is there to come?

AVLON: Solyndra is becoming political kryptonite. It's becoming shorthand for questions about wasting taxpayer money on green jobs. So this issue will resonate throughout the electorate. It's hit that point where people know what it means and it's become a symbol for a problem in this administration.

TOOBIN: The problem is political I think.

AVLON: Right.


TOOBIN: It's far from clear that it's a legal problem. You said culpability. I mean I think maybe political culpability.


TOOBIN: But in terms of you know look, this is a program to give loan guarantees for green jobs. Some companies succeeded. This one failed. That in and of itself does not suggest a legal issue but it raises the question of whether the government should be spending money this way.

BURNETT: Right and I guess then there is of course a quid pro quo problem here. You have an administration that wanted to push green jobs --


BURNETT: -- and they wanted to do it by using the private sectors. So they used the loan guarantees, so by definition you're going to have the problem of quote, unquote, "political culpability with a failed one".

AVLON: Exactly right and here -- I mean look half a billion dollars isn't nothing in these tough times, so it's become really a symbol that Republicans are using. The question is will this political symbol become so toxic that it actually stops America's long-term investment in green jobs. That's a practical implication that goes way beyond the politics of it in the near --

BURNETT: All right, well thanks very much to both of you, Jeff Toobin, John Avlon. John is going to stay with us because this fits perfect with the analysis we were doing today. The Solyndra loan story all began with the president's goal of energy independence and a push for green jobs. But he is far from the only one with that goal. Rick Perry today said his jobs plan was all about making America energy-independent.


GOV. RICK PERRY (R), PRESIDENTIAL CANDIDATE: America should not be -- and when I'm the president of the United States -- will not be held hostage by foreign oil.


BURNETT: It's a familiar refrain. Herman Cain made a promise in his interview on OUTFRONT last night.


HERMAN CAIN (R), PRESIDENTIAL CANDIDATE: I want by the end of this decade for the United States of America to not be dependent upon these oil-rich countries.

(END VIDEO CLIP) BURNETT: But wait. It's even less of a big deal than it seems already.


UNIDENTIFIED MALE: We will lay the foundation for our future capacity to meet America's energy needs from America's own resources.

UNIDENTIFIED MALE: Reduce our dependence on foreign energy supplies.

UNIDENTIFIED MALE: Our dependence on foreign oil will be stopped dead in its tracks.

UNIDENTIFIED MALE: Fully deregulate natural gas to bring on new supplies and bring us closer to energy independence.

UNIDENTIFIED MALE: Make our nation more secure and less dependent on foreign oil.


BURNETT: OK. It's almost a joke, right, but here's the thing. Why hasn't it happened? Well a combination of factors, American oil, first of all, is pretty expensive to extract versus say Iraqi oil which one oil CEO told me recently is like drinking oil out of a straw. I've been told by people who drill oil that getting it out of the ground in Iraq it can cost $2 a barrel, in the Gulf of Mexico it can cost 20.

We also have more environmental restrictions and we have historically valued our national parks there too much for drilling. So we end up importing about half of our oil, according to the Energy Information Administration. But what if we went for it and really committed to finally doing it, ripping out the heroin needle, becoming energy independent. Well, here's the thing.

We don't have enough domestic oil supply to last indefinitely. We'd have to produce eight times current levels, according to Citi's Anthony Ewing (ph). But we do have other options. Not just green but switching to something we have a lot of like coal or as Ronald Reagan said, natural gas. We had a lot then and we still have a lot now.

Chris Jarvis (ph), an analyst from Cap Rock (ph) tells OUTFRONT that going all in on nat gas, which means 100 percent domestic supply, overhauling the electric grid and upgrading every single gas station in the United States of America would cost up to $1 trillion. Now it would take best case 10 years, but get this, he thinks it would create 10 million jobs.

John Avlon stays with us as promised, senior columnist at "Newsweek" and "Daily Beast". Amy Jaffe is director of the Energy Forum at Rice University's Baker Institute joins us as well. Thanks so much to both of you. Amy, what's your take? Can we really do it?

AMY JAFFE, WALLACE S. WILSON FELLOW IN ENERGY STUDIES AT RICE UNIV.: Well, you know, the oil industry is another innovation success story, just like Steve Jobs. We are now able to produce natural gas and increasingly oil from solid rock and we have a lot of oil and gas in solid rock in the United States. So when all those presidents made those statements years ago, it wasn't so possible. But now actually the truth is we have a lot of potential.

BURNETT: So, John Avlon, what do you think politically here? Amy is saying technically we now have the potential, politically though there are all sorts of issues, environmental issues being among them.

AVLON: Sure and that's not the biggest one in the current environment at all. Look, this has become a hallowed promise that as you showed every president has trotted out for 40 years. It was easy --

BURNETT: Should be a joke except for it's not funny.

AVLON: It's not remotely funny.


AVLON: And energy dependence polls well. People want to move away from our addiction to foreign oil. But here's the fact. There is no silver bullet. The only thing approach that really could work is an aggressive all of the above approach, trying to expand our domestic resources, but also investment in future technologies. That's how we solve problems in America. We innovate our way out of them. So ultimately a responsible plan is going to have diversification, conservation, and innovation. And some of the plans we're hearing from the presidential candidates are solely based on drill baby drill.

BURNETT: Right, drill baby drill, or all in on coal or other things you know we're hearing. But Amy, it would seem like that the current president tried to get it right by saying look, if you're going to go look at innovative ideas or green, I don't want to pick which is going to be the winning technology. We'll give you loan guarantees. We know we'll get a lot of failures, but that's how we'll end up with the next great industry. Did he do it right?

JAFFE: Well, I would sort of pick a bone with the president. I think that if he had taken that half a billion dollars and put it into real R&D, so in other words let's not subsidize someone who's producing old technology for solar cells. Would it make sense to subsidize a land line telephone company to make rotary telephones? No. We want to be promoting innovation in solar because the current technology is not efficient enough. So I would say, where I would criticize the White House is in the allocation of how many resources we're going to give to existing companies with old technology and how much money are we going to spend on innovation.

BURNETT: All right. Well thanks very much to both of you. We appreciate it. John and Amy and we're going to be talking a whole lot more about this, Solyndra and beyond. Well OUTFRONT next, Jon Huntsman boycotts Nevada -- he spoke to OUTFRONT -- a new search for baby Lisa and did a nuclear accident contaminate hundreds of thousands of kids?


BURNETT: The number tonight, 52. That's how many years old Barbie is. And she's just as appealing, sexy -- I know all terms are loaded when it comes to Barbie. But as ever Mattel the maker of Barbie products reported that sales for the iconic doll rose 17 percent in the third quarter. That is the biggest gain in over a decade.

Well, there has been turmoil in the GOP primary calendar and it's now having some really important consequences. It all started in Florida when they cut the line jumping ahead of the four states that were slated to go ahead. The traditional first in the nation primary, of course, is New Hampshire. (INAUDIBLE) kind of squeezed out.

Now it's fighting for a spot, hey, OUTFRONT. Well now five of the presidential candidates say they support New Hampshire and are boycotting the Nevada caucuses -- Herman Cain, Michele Bachmann, Newt Gingrich, Rick Santorum, and Jon Huntsman. Today Jon Huntsman came OUTFRONT. He told us he will even boycott the CNN debate next Tuesday in Las Vegas.


JON HUNTSMAN (R), PRESIDENTIAL CANDIDATE: We have decided to boycott Nevada because they are leap-frogging the primary schedule, which jeopardizes the all important New Hampshire primary which I think is critical to the success of our democracy and if you're going to boycott Nevada in terms of participating in the caucus then you need to do it fully and that includes the debate.


BURNETT: Scott Stanzel is a former deputy press secretary for President George W. Bush joining us from Seattle. Robert Zimmerman is a Democratic strategist and here with me in New York tonight. All right, thanks to both of you -- Scott, let me start with you -- New Hampshire now in the position of having to move their primary back to December. It's become this sort of race early unless Nevada relents. How will this be resolved?

SCOTT STANZEL, REPUBLICAN STRATEGIST: Well, I think the main way that this will be resolved, Erin, is if Nevada actually chose to go just three days later than the date that they've announced, which is the 14th. If they were to go to the 17th of January, then that would provide a week space between them and New Hampshire on January 10th and a week space between New Hampshire and my home state of Iowa, which is going to have its Iowa caucuses on January 3rd. Both of Iowa and New Hampshire work very closely together to coordinate these dates and they are in sync and the presidential candidates know that and --

(CROSSTALK) STANZEL: -- are going to campaign aggressively in those two states.

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: Scott, the bigger issue -- the bigger issue is that these candidates don't want it to be resolved. Jon Huntsman can't avoid plane fare to go to Nevada the way his campaign is running and Michele Bachmann knows as well that she's not --


ZIMMERMAN: -- competitive there. So they want to try to make a play for New Hampshire because that's the only play they've got to proceed with their campaign.

STANZEL: I don't disagree with you, Robert, and I would say that Nevada has mismanaged their dates in the past. They have mismanaged their caucuses in previous years. They don't have the tradition of New Hampshire. They don't have the history of Iowa --

ZIMMERMAN: Let's be realistic, Scott --

STANZEL: And so therefore it makes sense --

ZIMMERMAN: The tradition of New Hampshire -- the tradition of New Hampshire and Iowa is about making money.

STANZEL: It makes sense, Robert, for those candidates to skip Nevada.

BURNETT: I'm curious, Robert, why this hasn't happened before. I mean if you're an important state, i.e., an early state, you have undue or undue -- whatever -- you have a lot more influence than a later state --

ZIMMERMAN: That's right.

BURNETT: -- so why is it happening --


ZIMMERMAN: Look, New --


ZIMMERMAN: Actually it has happened in the past. There's always been positioning between Iowa and New Hampshire. Under state law, New Hampshire, under their own state law comes first.


ZIMMERMAN: And in fact --

BURNETT: I'm talking about Florida and Nevada and all of the states that are now fighting now.

ZIMMERMAN: Well there's always -- in my party, the Democratic Party there's always a battle.


ZIMMERMAN: In fact, last year, Florida and Michigan were discounted from the primary process --


ZIMMERMAN: -- and lost delegates so they tried to jump the calendar.


ZIMMERMAN: So there's always -- but let's understand the great tradition we're talking about here. The enormous economy that this -- the enormous economic boost this means to New Hampshire and Iowa --


ZIMMERMAN: Iowa being the first caucus, New Hampshire between the first primary. Let freedom ring.

BURNETT: A lot of money spent in your state.

UNIDENTIFIED MALE: That's for sure.

BURNETT: Scott, let me ask you about Herman Cain. He was on our show yesterday and he's got a lot of momentum, we know that, the man of the moment, if not more, a big surge. Mississippi's Governor Haley Barbour out saying he can quote "sweep the south". Do you think Herman Cain can go the distance?

STANZEL: I think it's certainly possible. You take a look at this year and people are really hungry for some fresh ideas that are not of Washington. People are very tired of slick package politicians and Herman Cain like it or not has come in and with the fresh idea of the 9-9-9 plan and it's really taken over the debate in the Republican primary field, and it dominated this week's debate. It was the topic of discussion.

ZIMMERMAN: You know Scott --

STANZEL: And he does have a very likeable personality that really comes through and does resonate with voters.

ZIMMERMAN: You know Scott, if you examine --

BURNETT: Go ahead.

ZIMMERMAN: If you examine Governor Barbour's comments, he was talking about Herman Cain, but he was also sending a message to Mitt Romney that he was just not going to follow the crowd and be taken for granted. Because if you examine the Herman Cain surge, the reality is this is a campaign running on political Viagra. By that I mean this surge is about as artificial and temporary as the Trump, Bachmann, and Perry surge. Of course if it lasts more than four weeks -- STANZEL: I don't think so, Robert --

ZIMMERMAN: -- a metaphor, you might as well go to your campaign doctors.

STANZEL: With all due respect, you haven't been a voter probably in a Republican primary or caucus and --


STANZEL: -- you may not know that Republicans are hungry for somebody with some of that outside experience willing to tell it like it is and Herman Cain is capturing some of that energy for sure.

ZIMMERMAN: But we both know primaries and caucuses are about a very intense organization. It requires funding. It requires on the ground grass roots activism and right now we see Herman Cain selling books in Tennessee.

STANZEL: That's --

ZIMMERMAN: That's an organizing enigma (ph).

BURNETT: It's actual -- but it is grass roots.





BURNETT: It's getting --

UNIDENTIFIED MALE: It's definitely grass roots.

BURNETT: -- people that need all of that. All right, let me ask you all about immigration, the immigration law that passed in Alabama and I know we've all been talking about that, but this is really amazing stuff. An appeals court in Atlanta today blocked a part of that law which was the part that actually required teachers to collect information on whether their students were illegal immigrants, and 2,000 kids have stopped going to school.

We know that there have been a lot of issues with agriculture in the state. I want to ask you, Scott, first, what does this mean, putting immigration or keeping immigration in the center of the national conversation, just when it's a topic a lot of these Republicans don't want to talk about in the primaries?

STANZEL: Yes, it's interesting, Erin, because this is a topic that when I worked for President Bush at the White House we worked on very aggressively. We actually worked across party lines to try to get some real comprehensive immigration reform put into place. Unfortunately, because of Harry Reid, that did not happen. But these states are just reflecting the desire out there for someone to do something about the problem. Interestingly, Alabama, in that case, they actually -- one part that was upheld was that police officers could actually detain someone that they stopped lawfully if they suspected that they were an illegal immigrant, so --



STANZEL: So parts of that were upheld and other parts that were not.


STANZEL: But this topic, we have to reduce the volume --

ZIMMERMAN: Scott, we have to recognize --

STANZEL: -- of the discussion in order to bring people together --


STANZEL: -- and unfortunately leaders of both parties pander on it.

ZIMMERMAN: Scott, we've got to put the talking points away and recognize this is a bipartisan disgrace. My party when they had -- during the first two years of the Obama presidency, my party did not show the leadership to get the job done despite the rhetoric --


ZIMMERMAN: And your party had six years with President Bush and a Republican House and Senate and also didn't step up to do the job.

STANZEL: And we had --


STANZEL: We had an opportunity in 2007, Robert.


STANZEL: It failed because of Democrats --


ZIMMERMAN: -- talking points, Scott --

STANZEL: And it failed to move forward with President Obama because of Democrats --

BURNETT: We'll leave it --

STANZEL: -- not because of the leadership of Republicans.

BURNETT: We'll leave it -- all right, well thanks very much to both of you. We appreciate it.



BURNETT: Nothing wrong with sparring on a Friday night. All right, well 11 days and still no sign of 11-month-old Lisa Irwin. There were new videos released today of the toddler -- 10 months old -- not a toddler -- with the hope someone will come forward with information leading to her return. Ed Lavandera is in Kansas City, Missouri with the latest for us tonight.

ED LAVANDERA, CNN CORRESPONDENT: Erin, baby Lisa is now 11 months old, but she has been missing for almost two weeks now. This is the family's front yard. People have come by, left some teddy bears, signs of support and hopes that she is found safely. Her parents despite having made many public statements in the early days after baby Lisa's disappearance have kept a very low-profile in the last week or so, despite now being -- having brought on a high-profile private investigator by the name of Wild Bill Stanton.

He came from New York to help out the family. His service is paid for by what's described as a wealthy benefactor. He announced today that an anonymous donor has put up a $100,000 reward for baby Lisa's safe return and/or any information that leads to her abductor's conviction. Having said that, the one thing that has not changed in the almost two weeks that this story has been going on here in Kansas City is that police have no solid leads as to where baby Lisa might be.

They continue searching areas around here, wooded areas, rock quarries, creek areas, but still no sign of where baby Lisa might be and those investigators are keeping information very close to the vest. No sign of where baby Lisa might be or any hopes that anyone might be arrested in this case -- Erin.

BURNETT: All right Ed Lavandera thanks very much.

Well, OUTFRONT next, it is that time. We can't resist, tonight it is the creeping fear of the stink bugs that is under our skin and later, Nancy Grace on the Michael Jackson trial.


BURNETT: Now a story that we simply cannot resist to exist (ph). According to Congressman Roscoe Bartlett, we are under attack from a terrorist. It could inflict a plague of biblical proportions on this country and the federal government seems to agree. They have committed 5.7 million to fighting this threat. It's no Solyndra, but what is it? Well it is the Brown Marmorated stink bug.

Originating in Asia, this particular stink bug was accidentally introduced to the United States in Pennsylvania back in 1998. But, then, the hearty stink bug spread to a dozen states including New Jersey, Delaware, Connecticut, New York, and the great state of Maryland. But still, it's just a smelly bug, right? Can it possibly be that serious? We wanted to, you know, investigate ourselves and go OUTFRONT, see how serious the threat really is.

So we spent the day looking through Web sites and message boards created by victims of what Representative Bartlett called the bug from hell. What we saw shocked us, post after post about the destruction and the odor, quote "seeing them clinging by the multitudes on your window screens, it's like a horror movie." Actually that does sound pretty disgusting.

Well a good thing we got that federal grant but we cannot resist imagining what would have happened if we did not. So here now to illustrate the future that the government imagined and prevented for us is a clip from the 1977 horror movie "Empire of the Ants".





BURNETT: I'm sorry. We just couldn't resist. By the way, it takes a lot of squashing to get the real stink effect of a stink bug coming from the state of Maryland.

Well still OUTFRONT the president touts his jobs plan in Detroit. So we asked the White House about jobs, China, and this crucial word, manipulation. And, then, will Conrad Murray take the stand in his own defense? A close court watcher tells us.


BURNETT: We start the second half of our show with stories we care about, we focus on our own reporting, make the calls, and find the "OUTFRONT 5."

First up: presidential campaign Rick Perry unveiling his plan to create jobs by making America energy independent.

So, we did the math. And if you take natural gas as an example, Chris Jarvis, an analyst from Caprock, tells us that going all in, that would mean 100 percent domestic supply, overhauling the grid and upgrading every gas station in the United States, it would cost up to $1 trillion and take five years. Sound unrealistic, maybe. But it would create, he says, 10 million jobs.

Number two: as we mentioned earlier, Mississippi Governor Haley Barbour said Herman Cain would, quote, "sweep" the South if he were the Republican nominee. OUTFRONT spoke with Barbour's spokeswoman who said that despite the statement, the governor has not endorsed a candidate formally. However, Barbour's wife Marsha says she'd vote for Cain. Number three: the iPhone 4S officially went on sale today and as typical Apple fashion, people lined up for hours. Sprint says that its best sales day ever and so did AT&T.

But we spoke to an industry analyst who says Sprint's deal with Apple, 30 million iPhones sold over four years, according to "Wall Street Journal" will be nearly impossible to reach for Sprint, even given today's sales.

Number four, the enthusiasm for iPhone's not isolated. Retail sales rising to their highest level in seven months. Sales 1.1 percent higher in the month of September, better than expected.

And PIMCO's Tony Crescenzi tells OUTFRONT this data helps counter the idea that America is going into another recession.

Need the good news where we can get it. Because number five, it has been 70 days since the U.S. has lost its top credit rating. What are we doing to get it back?

Well, there was a big jump on Wall Street today. Optimism really ruled the entire week. Stocks now up for the year and after this week's jump, 4.9 percent for the Dow is the weekly jump, 7.6 for the NASDAQ, 6 percent for S&P.

Movement on Wall Street, though, does not mean more jobs, at least not yet.

The director of the president's National Economic Council is Gene Sperling and joins me tonight from the White House.


BURNETT: I want to start off with some pretty good news. We were talking retail sales, Americans are still spending, and we have the strike team of CEOs and investors on this show -- 17 out of 20 say that a double-dip recession is not inevitable. There's a lot more optimism than you might expect from those guys.

Are things really getting better?

GENE SPERLING, NATIONAL ECONOMIC COUNCIL: Well, I think we've had some better numbers this week, in the last eight, 10 days, than we've expected. But let's not kid ourselves. Things are not nearly good enough.

You know, Erin, we have, you know, historic long-term unemployment challenges in our country. Truly a crisis of long-term unemployment. We still have the blue chip projecting only 2 percent growth for next year and unemployment at 9 percent.

And when you have even if it's just a small risk of a double-dip recession or even projections, that growth could stay weak and unemployment could stay this high, it's just imperative that we take action to ensure this recovery takes hold and that we get stronger job growth over the next 12 or 18 months. BURNETT: I wanted to ask you something that came out of the Treasury Department today, Gene, if we could. They delayed a ruling on whether China was manipulating its currency and it may sound nerdy. But obviously, it matters a lot to every single person watching tonight.

At current levels, China's currency keeps Wal-Mart prices low. It raises our standard of living. But it also makes it cheaper to make things in China instead of in the United States.

So, is re-evaluating the Chinese currency, given that it could come with the trade war, on balance, really the right thing for America to do or to push for right now?

SPERLING: I think it's absolutely right for us to push for a more market-determined currency from China. Yes, they have taken steps that have seen their currency appreciate some since the middle of last year.


SPERLING: But I don't know any serious economist who thinks it's enough. And that does mean that our workers, our companies are not getting a level playing field.

And the president does believe, and I think a lot of the international community, does believe that we need to see China let their currency be market determined. All American workers, American companies have ever wanted is a level playing field and a fair ability to compete.

BURNETT: Does that mean, Gene, you support the word manipulator?

SPERLING: Oh, you know, words -- you know, I'll let other people to choose --

BURNETT: That word is really important.

SPERLING: -- I'll let other people choose the words. But I'll tell you this -- we think it is -- it is not fundamentally valued at a market-determined way and that is, we believe, putting our workers and our companies at an unfair advantage and that's something that the president has pressed and will continue to press in international forums going forward. And we think it will be better for China as well as the rest of the economy for them to have more market- determined currency.

BURNETT: All right. I'll let it go at that, although we'll let the manipulators stay at it. Obviously, for those watching, that's a very loaded word that matters a lot.

But let me ask you this, Gene. The president was in Detroit talking about foreign car companies and how they're creating American jobs, with the president of South Korea. But Americans obviously are still dealing with our own car companies' problems. We talked to the Treasury today about General Motors and the TARP situation. Taxpayers put $51 billion into G.M. Currently, taxpayers are $26 billion in the red. Taxpayers own 32 percent of G.M. shares.

So, we're still on the G.M. TARP bailout. Will American taxpayers make money on G.M. ever?

SPERLING: Well, I don't think anybody could have imagined or even hoped as much as how well things have gone for the American automobile industry. I'm not going to comment on what the exact financing and projections will be. I think if you look at the money that's put in since President Obama has come into office, it is a very, very positive story. And, you know, on banks we are at already at a point where the taxpayer is making a profit.

But what's just as important and critical is that the president is at a plant today employing 1,750 workers, making American cars. That very plant was slated to be closed before the restructuring effort that President Obama's team took forward with G.M. We have a very competitive big three that is competing, creating jobs, and keeping manufacturing strong in the United States, and I think that is a great tribute to them and the workers, but a great tribute to President Obama for doing one at the time was very unpopular, but now, I think everyone agrees is paying off for our economy.

BURNETT: I don't know that everyone agrees. But you make a good point.


BURNETT: Gene, thank you very much. Appreciate it. Have a good night.

SPERLING: Thank you.


BURNETT: All right. Well, President Obama is sending about 100 troops to Central Africa to help battle a violent rebel group called the Lord's Resistance Army. The administration says rebels have terrorized the region for over two decades.

Chris Lawrence is at the Pentagon for us tonight.

And, Chris, what role will American military personnel play?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, Erin, these are mostly Green Berets, but they are not going in there to engage these rebels. We're told that they'll only attack if in self-defense they have to. But basically they are going there to try to give strategy tactics to the African nations that are affected by this rebel group, to help beef them up.

Basically, the United States has given between $30 million to $40 million to these nations over the past few years. It hasn't done much to slow these rebels down. Now, the Green Berets will be going in to give more direct assistance to try to stop this rebel group. BURNETT: All right. Well, thanks very much, Chris. Appreciate it.

Well, still OUTFRONT: an update on the nuclear disaster in Fukushima, Japan. Three hundred fifty thousand children live near the plant.

Dr. Sanjay Gupta joins us to talk about a new health risk that is rising there.

And then the latest from the Michael Jackson death trial. The defense starts its case next week.

And we go to China with the tiger kids.


BURNETT: This is Shanghai, the best in the word when it comes to math and reading. But what about when it comes to fun and creativity? Meet Shanghai's kids, coming up.



BURNETT: We do this at the same time every night, our "Outer Circle" where we reach out to our sources around the world.

And tonight, we begin in Bangkok, Thailand, where devastating floodwaters have killed more than 250 people. The worst isn't over, though.

And Paul Hancock is in Bangkok.

Paula, what can you tell us about what's to come?

PAULA HANCOCKS, CNN CORRESPONDENT: Paula, the center of Bangkok, so far, appears to be protected and the flood gates are holding. But there's something like 35 billion cubic feet of water hitting the capital every single day. And that has to go somewhere.

At this point, it's going into the suburbs and it's the suburbs that are being sacrificed -- many are already underwater.

Now, the death toll for the whole of the country at this point is more than 280 and at least 8 million people across the country have been affected by these floods -- Erin.

BURNETT: Paula, thank you.

And now we go to Italy. The wily Italian Prime Minister Silvio Belusconi survived the confidence vote.

Barbie Nadeau is Rome.

And, Barbie, does the vote leave his coalition weaker? BARBIE NADEAU, CNN CORRESPONDENT: Well, Irene, yes, it does. Italy is facing a dire situation economically and Silvio Berlusconi's parliament needs to be focused on fixing that. They need to be passing strong austerity measures. They need to be focused on a renewal of the economy.

And without a strong majority in parliament, he's going to have a difficult time, according to many political analysts, pushing through these tough measures -- Erin.

BURNETT: Barbie, thank you.

And now to London, a growing scandal forcing the resignation of the Defense Secretary Liam Fox. His close personal friend is under scrutiny for allegedly receiving improper payments and gifts and Fox allowed him to pose as an adviser.

CNN's Max Foster is covering the story tonight.

And, Max, what are the implications for Prime Minister David Cameron?

MAX FOSTER, CNN CORRESPONDENT: Erin, this comes after a week of immense pressure on Liam Fox and the Prime Minister David Cameron has stood by him throughout. He said he was very sorry to see the defense secretary go today.

Liam Fox is a very senior member of the conservative party. He represents traditionalists and that power base has now been lost from David Cameron's cabinet -- Erin.

BURNETT: All right. Thank you very much, Liam.

Well, in Japan, news today that the nuclear disaster in Fukushima continues. Three hundred fifty thousand children living near the Fukushima nuclear plant are being checked for thyroid problems after a survey found irregularities in the small number of children.

Our chief medical correspondent and host of the "SANJAY GUPTA, M.D." was in Japan. He's covered the ongoing effects of the radiation leak and joins us now.

Sanjay, I just wanted to start off with, first of all, what do thyroid abnormalities mean? I mean, what are some of the health repercussions?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, the thyroid gland is a major source, Erin, of hormones in the bodies. So, one of the first things people may notice if the thyroid gland is not working is they have, you know, problems with -- just feeling tired. They may start to have blood pressure abnormalities. There's all sort of different things that it can regulate.

The problem is a lot of people don't realize that it's a thyroid problem. You know, they look for all sorts of different causes. And if it's a thyroid problem specifically, that has to be treated. What is so interesting here and what we've seen throughout history, Erin, is when you talk about radiation, you're talking about all sorts of different particles. But some of those particles are things that are taken up into the body and then concentrated in the thyroid gland. The thyroid gland concentrates these various isotopes and that's why the thyroid gland often times is the first place that a cancer or some sort of irregularity may develop.

So, sort of think about the thyroid gland as a canary in the coal mine after a nuclear problem like this. That's why they're looking there.

BURNETT: And so now that we're seeing unofficial survey, 10 of 130 children evacuated had irregularities in their thyroids, are you surprised? And is this canary in the coal mine indicative that we could see a whole lot of other problems coming out of people affected by the Fukushima leak?

GUPTA: Well, you know, what's interesting to me, Erin, if you think about the Three-Mile Island and Chernobyl, for example, when you think of nuclear disasters, that's usually what brings to mind -- you would be hard-pressed, Erin, to prove that there was even a single case of thyroid cancer, other cancer, after the Three-Mile Island disaster, which I think is surprising to people because, obviously, you know, a lot of people were concerned about it.

In Chernobyl on the other hand, which was -- in some ways worst in Japan and in classification system, you had 6,000 cases of thyroid cancer that developed in the years following.

So, this seems to be going more the way -- there's concern more the way of Chernobyl. Could these early thyroid irregularities actually turn into cancer later on down the line?

With these kids -- it's amazing, Erin, they are going to screen 350,000 children. So, it's a huge population of people potentially affected. They are going to screen them every two years until the age of 20 and then every five years after that.

You know, it's a good in one hand that they have learned from these previous nuclear disasters. They want to find these cancers early if they are going to develop.

BURNETT: All right. Well, it's unfortunate it's going in the way of Chernobyl than Three-Mile Island. That's for sure.

But, Sanjay, thank you very much for explaining it.

GUPTA: Thanks, Erin. You got it. Thank you.


BURNETT: Two weeks into the trail of Dr. Conrad Murray, the prosecution is set to rest its case as early as Monday. But have they proven that Michael Jackson's doctor is actually responsible for his death? Nancy Grace has covered Michael Jackson for years, every trial, every controversy. Of course, she's famous for her show on HLN and she's here with us to break down the case.

Nancy, thanks so much. Appreciate it.

Here we are, the prosecution has laid out a substantial case. A lot of pretty damning evidence. Is it possible for the defense to turn it around at this point?

NANCY GRACE, HOST OF HLN'S NANCY GRACE: Well, of course, anything is possible. Anything can happen in a courtroom.

But strategically speaking I do not think that it's probable and I think that Conrad Murray has turned out to be his own worst enemy, Erin, because when he spoke to police, it was all recorded and that audio was played line for line by the jury and in that audio, we hear him torpedoing the time line. What he told police is absolutely impossible based on cell records and, of course, the jury is going to play the cell records of Dr. Conrad Murray.

And they're about to let him have it on another point, where he told police about this big scene where he comforted all the children. The children said that never happened.

Now, does that touch on the actual homicide? No. But it does prove Conrad Murray to be a liar.

And under our jurisprudence system, the judge will give the if you disbelieve the defendant or a witness in any portion of their statement, you are allowed to disbelief e the entire statement. So his credibility has been attacked successfully.

BURNETT: Do you think that -- so you're talking about the tapes which, of course, extensive. Do you think then that the defense has no choice but to put Conrad Murray on the stand next week? Do you think they're going to go for a Hail Mary pass like that?

GRACE: You know what? You're right about that. That would be a Hail Mary pass, but I don't think that pass is going to be effective. And I'll tell you why.

A lot of times the defense feels pressure. They feel like there's nowhere for them to go but to put the witness -- put the defendant on the stand. The reality is, the jury may think he's guilty, may not be sure. But once he takes the stand and makes a jack ass out of himself on cross-examination then they'll know he's guilty.

So, I think it will be best to leave the jury wondering than to know for sure when they go into jury deliberations.

BURNETT: Interesting way of putting it.

What about this whole culture, though, that this seems to embody for the sort of rich, famous celebrities, that there's, you know, a culture of enablers? You know, if not Conrad Murray, then somebody else -- that sort of does seem to be underneath this whole trial has been that feeling. Will that be something is defense could you use to affect the sentence? Maybe get a more lenient sentence?

GRACE: You know, I can only pray that they do because in effect, what that is saying is, hey, if my client didn't kill him, somebody would have. You know, that would be a horrible argument in court.

And the reality is that even if he's convicted on this extremely weak charging decision of involuntary manslaughter, he may very well get straight probation for killing the King of Pop. And I'm not saying that Jackson's life is more valuable than anybody else's. I'm just saying what it symbolizes, what you can get away with in a court of law is shocking.

So, he may get straight probation even on a conviction. It's possible.

BURNETT: That is amazing. All right. I know, hopefully, it's going to go to the jury next week at some point. So, we shall see. In the meantime, though, you're busy. So, you're out in L.A. covering the trial and a slightly awkward turn in our interview. You're doing a whole lot of dancing and spinning around.

So do you think you can win and topple Ricki Lake?

GRACE: Well, right now, and this is my dancing partner, Tristan MacManus, who's teaching me all those great moves that I bungle up on the dance floor, you know what? We're just taking it one dance at a time. I'm not ready to look at the big picture here. I think, right now, I just got to focus on the rumba which is, what, Tristan?

TRISTAN MACMANUS: This is the dance of relationships, good and bad.

BURNETT: Well, you got a good partner, Tristan. You got the best partner out there, there you are in that dress. I love it.

All right. Well, good luck, we're rooting for you both.

MACMANUS: Thank you.

GRACE: Hey, Erin, thanks so much. And remember, Erin, you can vote from your cell phone, your landline and your computer, just FYI.

BURNETT: Well, good to know. Thank you so much. Appreciate both of you taking the time.


BURNETT: Have a great weekend. Bye-bye.

MACMANUS: Thank you. Take care.

BURNETT: All right. Vote.

And then next up, we are going OUTFRONT in China. (BEGIN VIDEO CLIP)

BURNETT: What's your favorite thing about America?


BURNETT: Hear his answer, next.






BURNETT: Basketball?



BURNETT: Well, Timmy was the only child. That was his name, Timmy, who didn't say the iPhone was his favorite thing about America. We met him in a group of under 12-year-old Chinese kids at a language camp this summer.

We went to see if the tiger mom phenomenon is true.


BURNETT (voice-over): It's 7:00 a.m., time to rice and shine for Bill's son. He's at sleep-away camp for kids under 12 about an hour outside Shanghai.

Job number one? Learning English.

UNIDENTIFIED KID: English is easy and interesting because it can make me happy.

TEACHER: Good morning, everyone.

KIDS: Good morning.

BURNETT: The 23 kids started learning English at age 5 and they've got big ambition. Bill's family picked his English name in the hopes he'll end up like one very successful American.


BURNETT: It's not remedial summer school. These children are here by choice. Still, the parents say they are raising well-rounded children. (on camera): The debate over who's raising the world's future lead, China or America, is raging here. Battle hymn of the tiger mother is the bestseller on both sides of the Pacific.

(voice-over): Bill's parents, Peter and Sonny, have read this book, but only his dad speaks English.

UNIDENTIFIED MALE: Most of the real points describe (INAUDIBLE) tiger mother wrote I think are correct, but 30 percent of the opinions are not correct. For example, for modern Chinese parents, we would not say "garbage" if children make mistakes.

BURNETT (on camera): Do you think Chinese children, children like Bill, are being raised to be creative?

UNIDENTIFIED MALE: They must combine the strictness and the creativity together. That will be the best for the children's future and in general speaking, maybe for the whole country's future.

BURNETT (voice-over): The kids we saw spent more time playing basketball than badminton than studying at camp. And creativity is part of the agenda. But Chinese kids still work harder than Americans.

(on camera): How much time do you spend at night on homework?

UNIDENTIFIED MALE: So many times, I finish my homework in two hours.

BURNETT: Two hours? Two hours a night?



(voice-over): That pays off. Shanghai kids rank number one in the world in math compared to America's number 31.

Entrepreneur Bob Compton spends his time studying the Chinese education system.

BOB COMPTON, ENTREPRENEUR/DOCUMENTARY FILM PRODUCER: If they're able to bring their creativity up to a level close to America, they are going to dominate the world.

BURNETT: Only time will tell who's raising the next winning generation. But one thing is for sure, the winners will speak English, whether the next Bill Gates dreams up his invention in Shanghai or not.


BURNETT: Well, competition between the U.S. and China is a big issue. Let us know what you think about tiger moms, American or Chinese.

"360" starts now.