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Wall Street Soars; New Info in Boston Investigation; The Dangers of Self-Radicalization; Kentucky Derby Steps Up Security; NRA Convention in Houston

Aired May 3, 2013 - 16:00   ET


JAKE TAPPER, CNN ANCHOR: On the heels of our reporting earlier this week about the problems with information sharing, the Department of Homeland Security resolves to close a glaring loophole in border defense.

I'm Jake Tapper and this is THE LEAD.

The national lead, Dzhokhar Tsarnaev's arrested pal allowed back in the country on a visa that should have been revoked. Now the agents who should have stopped him have new marching orders from the top.

The sports lead. The biggest spectator event since the Boston terror attacks. More than 160,000 people will attend the Kentucky Derby tomorrow. That's a lot of giant hats to search under. Is Churchill Downs ready?

And the money lead. The best day ever, the Dow hitting a historic high. If you listen closely, you can hear over the din of the closing bell on Wall Street ancient bottles of scotch being corked and Cuban cigars being circumcised.

Welcome to THE LEAD.

We begin with the money lead and a big day on the Wall Street, the market closing out the week hovering near the 15000 mark, after rising above that mark for the first time earlier in the day. That's thanks in part to a not-too-shabby jobs report. According to the Labor Department, the U.S. economy added about 165,000 new jobs in April and the unemployment rate dipped to 7.5 percent, its lowest level since 2008.

Alison Kosik is live at the New York Stock Exchange.

Alison, in the grand scheme of things, the jobs report wasn't really that great when you dive into the numbers. But, psychologically, it seemed to have had a big impact on Wall Street. Why?

ALISON KOSIK, CNN CORRESPONDENT: Yes, you make a good point, Jake.

There's something nice about those round numbers and milestones, psychological milestones that can create confidence not just in stocks here on Wall Street, but also the economy as well. And it's been a while since we have hit a new milestone like this. There was a seven- year drought between 11000 and 12000. Then it took less than a year from 12000 in October of 2006 to 14000 in July of 2007. So that makes almost six years between 14000 and for the first time 15000 during the trading day today.

And as you said, that can have a big psychological impact. Now, the problem about this. All this upward momentum is being fueled not just by some decent jobs numbers, but more so by the Federal Reserve.

The jobs picture, yes, it's improving, but it's not fabulous enough to push the Fed out of the mix, which many believe is the reason you're watching stocks rocket to these record new highs. What the Fed is doing is buying up $85 billion of mortgage-backed securities, of treasuries every single month. That's moving interest rates done and pushing investors to invest in stocks, because they seem to be the best game in town. And many believe that the stimulus is really helping to create the wealth effect that we're seeing in the market -- Jake.

TAPPER: All right, thank you so much.

So, let's get the economic pulse. Markets up? Check. Housing up? Check. Unemployment down? We will give it a tentative check.

Jim Tankersley, economic policy correspondent for "The Washington Post," joins me.

Jim, a positive jobs number, but when you dive into those numbers, 4.4 million people have been unemployed for six months or longer. There's a not lot of not-so-great news in there. This has been a slow recovery. Why?

JIM TANKERSLEY, "THE WASHINGTON POST": Well, it's been an exceptionally slow recovery and for a lot of reasons.

First of all, we had a really bad recession, it turns out.

TAPPER: Right.

TANKERSLEY: Second off, we have not had a policy working let's say harmoniously on the way out.


TANKERSLEY: When fiscal policy hits the brakes, monetary policy hits the gas, Ben Bernanke and the Fed complaining this week in their statement that fiscal policy is holding things back.

And then a third thing is just that it's taking longer for U.S. recoveries to actually restore the jobs they have had. And some new research that I read about this week says that that's because we have shifted from a manufacturing economy to a service economy, and that takes longer to ramp back up.

TAPPER: So, here's the big question for all the people who are unemployed or underemployed or working five jobs and people who have been struggling and they're watching this and they hear about the Dow. How come that money isn't going down? How come it's not trickling down? How come it's not manifesting itself in job creation for all these people?

TANKERSLEY: Well, it's manifesting probably in some job creation.

TAPPER: Right, OK, but not in the size that you would think from -- based on the Dow.

TANKERSLEY: Well, sure, yes.

I mean, there's this big disconnect right now, and in part it's because the wealth effect, like Alison was talking about, is in itself a big disconnect. There's a lot of wealth going up to people at the very top, and there's not a lot of wealth going up to the people in the middle, people in the low end that would fuel the sort of consumption that would then fuel the sort of production or service expansion that you would expect to add a lot of jobs.

So, until we get probably a more robust middle- and low-end growth in that wealth effect, we're not going to see nearly as much job creation.

TAPPER: And some practical advice for the people watching at home. Is now a good time for them to take out a loan to buy a house, to start a business? Is now good?

TANKERSLEY: Well, I'm not a loan officer or financial planner.


TAPPER: ... Suze Orman, but...


TANKERSLEY: Right, but I would say this.


TANKERSLEY: Low -- rates are really low right now.


TANKERSLEY: So, if you can get a loan, it's a great time to start that sort of economic activity. And we're seeing it with the housing market right now absolutely.

Housing prices are going up because more people can get these great low loans. And if you can get that, it's a good time to buy in that market in particular.

TAPPER: All right, thank you so much, Jim Tankersley. Appreciate it.

TANKERSLEY: Thank you.

TAPPER: Now to the national lead. You had to know that security changes were coming after the Boston terror attacks. Now they're starting. As we were first to report, Azamat Tazhayakov reentered the U.S. earlier this year on a visa that should have been revoked, because he was no longer a student at UMass Dartmouth. But Customs and Border Protection never got the message. There's that information sharing problem we have been talking about for more than a decade.

But now, effective immediately, a U.S. government official confirms to CNN that the Department of Homeland Security is ordering border agents to confirm that every international student arriving here has a valid visa. DHS says the move is part of an effort to reform the student visa program.

Tazhayakov is one of the friends accused of taking evidence from Dzhokhar Tsarnaev's room and disposing of it. Also, a source tells CNN that investigators found explosive residue in the Cambridge apartment that Tamerlan Tsarnaev shared with his wife, Katherine Russell, and their young daughter. A law enforcement official has told CNN that the bombs were built there, in their view.

I went to that apartment building to talk to a neighbor earlier this week. The wife's attorney says that the reports about her husband came as a shock. That does seem odd, because these aren't exactly Trump Towers. They're not luxury, spacious apartments. If someone is building a bomb in one, one would think you would know about it.

But, meanwhile, the FBI and police are searching in and around the town of Dartmouth, Massachusetts, where Dzhokhar Tsarnaev went to school. A source says they're checking tips about loud explosions in the area in recent months. Protesters, meanwhile, stood outside a funeral home in North Attleborough that briefly took in Tamerlan Tsarnaev's body before his uncle picked it up.

The mayor of Worcester confirms that his city has the dubious distinction of being chosen as the site of Tamerlan Tsarnaev's funeral. With the release of the body, the medical examiner could announce the official cause of death as early as today.

I want to begin with CNN national security analyst Juliette Kayyem. She's also a "Boston Globe" columnist. And that's where we find her today.

Juliette, this new crackdown on verifying student visas, what extra steps would agents take that they're not already trying to do?

JULIETTE KAYYEM, CNN NATIONAL SECURITY ANALYST: Well, I think there would be sort of a check, when someone comes through, a check to ensure that their student visa is still valid through a system called SEVIS.

It's a system that they are checking the names. What appears to have been the case is either the check did not occur or the name was not put into the right system that would be apparent to the Customs and Border official, the person at the airport. So they're trying to put in real-time information from a school into that system -- we don't know exactly where the delay occurred -- to ensure that a person coming in on a student visa who are -- I have to say, Jake, they're so -- they're low priority right now.

Of all the problems that we have with immigration, someone overstaying a student visa is generally a low priority. This new directive puts them in a higher priority, so that we double-check, so that the government double-checks to make sure that their visa is still valid.

TAPPER: Juliette, yesterday, I interviewed a former head of ICE, Immigration and Customs Enforcement, who told me that the computer models and programs for SEVIS -- that's the student visa and visitor system -- that's not the exact acronym, of course, but that's the system that keeps track of individuals in this country who are visiting students, et cetera, that all these computer programs are not hooked up. They're not working.

They're not efficient. This is obviously more than a decade after 9/11. When you joined the Department of Homeland Security a few years ago, were you surprised at the condition of the computer and information sharing apparatus? It just seems staggeringly behind where one would think it would be.

KAYYEM: Right. There's no -- just -- some of it is just the legacy of what is left over from all of these agencies being put together into the Department of Homeland Security.

So the truth is, there is no single master list, right, that someone at the Customs and Border Protection, someone at the Coast Guard and someone at CIA might be able to figure out. So what you end up having is a lot of bridges between information. Some of that seems pretty obvious that you would want that, because too much information makes it noisy.

But if information is delayed and you're not getting the right information to the customs official who needs to know that this person is coming in and their student visa is not valid, that's important. But, once again, student visa violations are not a high priority as compared to murderers and others who you don't want in the country.

And, as we know, just from the -- from at least so far, that when he came in, that his involvement with the bombing was really in the cover-up. So it's not even clear, you know, sort of what finding him would have done. But, obviously, this is low-hanging fruit to fix. And if it can be fixed, it should be fixed.

TAPPER: And, lastly, Juliette, according to a source, Dzhokhar Tsarnaev says or is telling investigators that the brothers originally planned a suicide attack on Boston's Fourth of July celebration. But the bombs were ready early, so they picked the marathon a day or two beforehand.

Obviously, everything that Dzhokhar Tsarnaev says has to be taken with a grain of salt. But assuming it's true, that does not suggest a huge amount of planning, does it?

KAYYEM: Not at all.

It's just the haphazardness of their exit strategy, right, the fact that they didn't seem to have any plan, now seems to be sort of mirrored in the haphazardness of their selection of a site. Sophisticated terrorists choose their sites for years and years, if you think about 9/11, if you think about the U.S. Africa Embassy bombing.

These are strategic decisions about where you are going to attack. This is like they woke up, they realized the bombs were ready and they realized, oh, April 15 is this Monday. It's the Boston Marathon. It is inconsistent with sophisticated planning and I think goes to the sort of haphazard nature of at least their operations. We still do not know whether they had assistance or the older brother got training in Russia. That investigation is ongoing.

But at least once it got here, it just is -- it's not fitting any the criteria of a sort of sophisticated, organized attack, including picking the site just because you're ready to do it.

TAPPER: All right, Juliette Kayyem, thank you so much.

The surviving terror suspect says he and his brother self-radicalized. They watched videos online. Is that even possible? We will talk to a psychiatrist that says absolutely, and it could be a growing problem.

And from their cold dead hands, acres of guns, gear and ammo on display at the annual NRA Convention. As the national debate gets nastier and more personal, I will speak to the outgoing president of the National Rifle Association.


TAPPER: Welcome back to THE LEAD. I'm Jake Tapper.

One of the most disturbing things about the Boston terrorist attacks is that the bombs were created with simple household items, like some kind of twisted Martha Stewart do-it-yourself project from hell.

But can self-radicalization really happen in vacuum like Dzhokhar Tsarnaev reportedly claims? Can they really self-radicalize? Are online videos and rantings on Web sites enough to turn someone into a terrorist?



TAPPER (voice-over): What could inspire anyone living in America to create and execute a plan that wreaked so much destruction? The question whether the bombers had collaborators is yet to be definitely answered, but the surviving brother, Dzhokhar Tsarnaev, has, according to law enforcement sources, told investigators they acted alone, allegedly inspired by what they saw as unjust wars in Iraq and Afghanistan, and the claim is they radicalized themselves by what they read and heard online.

The preachings of radical American cleric Anwar al-Awlaki were likely to have been among the videos that the Tsarnaev brothers watched, according to a U.S. government official. And investigators are also looking into whether the jihadist online magazine "Inspire" was read by the brothers.

The brainchild of al-Awlaki, "Inspire" reads like a how-to manual for would-be terrorists.

REP. PETER KING (R), NEW YORK: For a number of years, I was, believe it or not, that one magazine seemed to be a main recruiter of young Muslims in this country as far as self radicalizing.

TAPPER: One of the pressure cooker bombs allegedly used by the Tsarnaev was similar to a design found in the magazine's article, "make a bomb in the kitchen of your mom." Tamerlan Tsarnaev also has an online footprint, after his trip to Dagestan and parts of Russia, including Chechnya last year, it appears Tamerlan created a YouTube channel which he posted and then removed a video of a jihadist leader, one who was later killed by Russian troops.


TAPPER: Joining me now, Daniel Lieberman, professor of psychiatry and behavioral sciences at George Washington University.

Dr. Lieberman, thanks for joining us.

First of all, talk to me how self-radicalization works on a psychological level -- the idea that these two men are looking for an outlet, they find it online and do this to themselves. Does that make sense?

PROF. DANIEL LIEBERMAN, GEORGE WASHINGTON UNIVERSITY: Well, you know, radical philosophies are appealing to certain kinds of people. It can give very easy answers to difficult questions. Such as for people who are misfits, what's wrong with me? Why do I feel like such an outsider?

And these are the kinds of answers that can be found on radical sites on the Internet.

TAPPER: The idea, though, that these videos could take somebody and turn them into something they were not already, that seems tough for a lot of us to swallow, that they wouldn't already be bad people. Although when you hear descriptions of Dzhokhar Tsarnaev, he is described as a typical 19-year-old dope smoker.

LIEBERMAN: Right. Typically, we think that there's going to be a person involved in this, actually doing the radicalization. Radicalization does require social involvement, but that's what social media is.

And social media is a relatively new phenomenon. We don't know exactly how it compares to direct social interaction. But it seems to have a lot of the same influence.

TAPPER: So, Lee Smith (ph), a writer for "The Weekly Standard", another publication, writing in "Tablet Magazine," says there's a problem with the way society understands self-radicalization. He says, quote, "These attacks are not accidents of individual psychology or humiliation. They are part of a larger plan shaped by some very smart sociopaths to use such people for horrific ends."

I'm not sure you guys are contradicting each other actually, but his idea -- he's saying that self-radicalization, there's no self in it, that there's an apparatus. Jihadists are creating this apparatus, and that's what the Anwar al-Awlaki videos are, and everything else, the "Inspire" magazine, and we can't just say, oh, it's these two Tsarnaev brothers, that there's this immense thing, this immense entity that is doing it.

LIEBERMAN: I think that's absolutely true. We imagine people all by themselves going on the Internet and say, well, this is self- radicalization. That's not true at all. They are being -- they are brain connected.

TAPPER: Brainwashed in a way?

LIEBERMAN: Brainwashed is not really a technical term.


LIEBERMAN: But they're being influenced. I mean, we know the intense kind of influence social media can have on people. We know of people falling in love on Facebook, leaving their families to pursue this virtual relationship. And so, it can be intense and it can lead people to behave in ways that ordinarily they wouldn't consider.

TAPPER: Is the ideology -- jihadi ideology more of a threat when it comes to radicalization than other ideologies that have resulted in violence? Obviously in the '60s and '70s, we saw a lot of -- there was no social media -- but we saw a lot of radicalization of people on the left and some of them became the Weather Underground and Black Panthers, et cetera. Is there something about jihadi ideology that's worse than others?

LIEBERMAN: Well, I think when you have the religious element, it becomes much more problematic, because then, when people think about acting in their own self interest, death takes on a very different meaning. If you look at it purely in secular terms, death is something to be avoided. But if you think you're going to be rewarded and go to paradise, it becomes very different.

TAPPER: Fascinating stuff. Dr. Daniel Lieberman, thank you very much.

TAPPER: Thanks for having me.

No Mounties per miles (ph). This Sunday night, Anthony Bourdain heads north to show Canada like you've never seen it before and enjoy a gourmet meal in a wood shack on an iced over lake. That's "PARTS UNKNOWN" this Sunday, at 9:00 Eastern, right here on CNN.

Next, big obnoxious hats still allowed but big bags not allowed. There's a whole new list of banned items at tomorrow's Kentucky Derby as organizers try to keep 160,000 people safe after Boston. We'll be live at Churchill Downs in "The Sports Lead".

Plus, cutting a clear path through homes, campers, backyards right to the ocean. Wildfires on an early and angry rampage across California.


TAPPER: Welcome back to THE LEAD.

In the "Sports Lead", it's been called the most exciting two minutes in sports. The people in charge of the Kentucky Derby are hoping it's also the most secure two minutes in sports.

More than 160,000 people are expected to show up for the first leg of the Triple Crown tomorrow.

So how do you keep a crowd that big safe after the Boston bombings?

Pam Brown joins us from Louisville.

Pam, did I say it right, Louisville? Louisville?

PAM BROWN, CNN CORRESPONDENT: Louisville. Don't worry, Jake, not many people get it right. Unless you're from Kentucky like me.

TAPPER: So, the big question is, Kentucky girl, first of all, I don't -- I don't know where your huge hat is. My understanding is you need to be wearing one of those to even get into the state this weekend.

BROWN: Yes, I look like an amateur, don't I? You think I would know better. I just didn't have time to go shopping, but I have to say, your Twitter tip was right on, big hats yes. Big bags, no for this weekend.


UNIDENTIFIED FEMALE: I was happy to hear that they had increased security. It means, you know, less makeup and goodies we can bring in, but it's -- you know, it's worth it to just be more comfortable and know that we're going to look after each other.

BROWN: Is what happened in Boston on your mind today?

UNIDENTIFIED FEMALE: Yes, it definitely is on my mind just because it's such a large crowd and you just never know how people's intentions are. It's definitely, but I'm not going to let that pull off (ph) my time and we're going to enjoy ourselves.


TAPPER: So, Pam, as somebody who is --

BROWN: Jake, today is --

TAPPER: Go ahead.

BROWN: Go ahead. No, you go ahead. TAPPER: As someone who has attended many of these, is security definitely tighter than in previous years?

BROWN: It does seem like it, Jake. I grew up going to the Kentucky derby. It seems like ever since 9/11, security has gotten a lot tighter. In fact, it used to be that you could walk around wherever you wanted to. In the fast few years, you've had to have a certain ticket to get on each level. It's definitely gotten tighter.

And then today, definitely you've seen a bigger presence of authorities. We're seeing local, state and federal authorities here. National Guard troops, just everywhere you look, around every corner, it seems like there's someone keeping a watchful eye on the crowds.

More than 100,000 people here today for the Oaks. This is sort of a test run for tomorrow, the Run for the Roses. So the new security measures are put into place today. They're banning cans, coolers, purses bigger than 12 inches, which is causing some consternation among some of the women I've spoken with today. And so, it's clear that they're taking security very seriously here, Jake.

TAPPER: All right. Pam Brown, enjoy your weekend back home. And I hope it's a safe one.

#Tag You're It: Golden Sense, Falling Sky, Lines of Battle. Those aren't James Bond titles. They're names of horses running tomorrow's Kentucky Derby. If you had a horse in the race, what would you name it?

Me, personally, I find fascinating. The phrase the White House is using about chemical weapons in Syria -- varying degrees of confidence. It doesn't mean anything. Varying degrees of confidence, that's my horse name. Tweet us up with your horse name @TheLeadCNN. Use the #derbynames.

Coming up, may the fourth be with you. It's like Christmas and New Year's combined in nerd land. They'll all be putting on their best pair of suspenders tomorrow in "The Pop Culture Lead".