Ron Paul's Take on the Wall Street Crisis
JOHN ROBERTS, CNN ANCHOR: Crossing the top of the hour now, and here are this morning's top stories. North Korea says it's getting ready to restart a key nuclear reactor. We all watched as North Korea blew up a cooling tower on the site in a symbolic move back in June. A North Korean negotiator says further destruction is on hold now because the U.S. is not keeping up its end of the disarmament deal. No comment yet from the White House. A week after Hurricane Ike and Galveston residents are still waiting to go home. Texas Governor Rick Perry is asking for more patience this morning. Search teams say they swept every house there and the few homes remaining on the nearby Bolivar Peninsula where the damage is much, much worse. A 15-foot wall of water flattened that Texas town washing entire neighborhoods out to sea. Gilchrist, literally not there anymore. And tainted baby formula blamed for killing four babies has been traced back to three Chinese dairies. A chemical in powdered baby milk was likely used to fake higher protein content after the real milk was watered down. More than 6,000 other children have been sickened. At least 18 people have been arrested in connection with the case in China. The Food and Drug Administration says it has not found any of the tainted formula here in the United States.</s>CHETRY: And back to our top story now, and that's talk of the biggest bailout yet to stop a recession or something much worse. The Treasury Department and the Federal Reserve are working on a plan to buy up all the bad mortgage debt from the nation's banks. Congress and the leaders of our nation's financial system are all in on it. Here's Nancy Pelosi, the House Speaker, after a late briefing.</s>REP. NANCY PELOSI (D), HOUSE SPEAKER: We just had what I believe was a very productive meeting, where we heard from the administration and from the chairman of the Fed an initiative to help resolve the financial crisis in our country. Our purpose is to do that and in doing so to insulate Main Street from Wall Street and recognize our responsibility to the taxpayer, to the consumer, and to people all across our country.</s>CHETRY: Asian markets soaring overnight on the news. The Hang Seng almost 10 percent up. The Nikkei up almost four percent. And right now, we're getting details of this big plan right now. Ali Velshi is joining us right now with more on it. Hey, Ali.</s>ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Hey, Kiran. Yes. I want you to know I'm sort of staying here working on this at my desk because I'm trying to get sort of as much detail as we can on this plan. The best way to describe it and you saw that they've all come together -- Henry Paulson, Ben Bernanke, Chris Cox, the secretary of the -- the chairman of the Securities and Exchange Commission, Nancy Pelosi, Harry Reid, John Boehner -- all of these -- it's a big bipartisan effort to try and fine some solution to this mess. What they want to do is not have to deal on a daily or weekly basis with some new collapse of a financial institution or some other business. So the idea here is coming up with some massive rescue plan and when I say massive, at the low end we might be talking about hundreds of billions of dollars, and at the high end, over a trillion dollars. The idea here might be something like what happened after the saving and loans crisis. Something like the Resolution Trust Corporation which went up and bought up all these houses that were flooding the market, all those property that was flooding the market. In this case, they would probably be buying out some of this bad debt, holding that debt until maturity, until it's actually worth something and it's fully paid. And then sort of packaging it, repackaging it, and selling it, as if someone who bought stuff from your garage sale that was junked to you, repackaged it and sold in their fancy store for more money. These types of trusts and bail outs have actually worked in the past. But this would be very big but it would face some opposition from those who think there shouldn't be any sort of government bailout at all. For the moment, though, they are trying to deal with this before Congress goes into recess on September 26th. And there's certainly some sense that Congress or these congressional leaders and Secretary Paulson and Ben Bernanke will actually sit around probably through the weekend to make sure that there's a deal on this. We'll probably be hearing about it by the end of the weekend, maybe Monday -- Kiran.</s>CHETRY: All right. Working overtime for sure, Ali.</s>VELSHI: Yes.</s>CHETRY: Thanks so much.</s>ROBERTS: Regardless of what the results of this emergency plan are, it's going to be the next president's problem to kind of deal with all of this in terms of regulation and making sure something like this doesn't ever happens again. Right now, both candidates are scrambling to keep up with America's money crisis. John McCain added an economic speech this morning in Green Bay, Wisconsin. Barack Obama also added a meeting with his economic team. And meantime, the attacks on each other keep getting in the way of the issue. Our business correspondent Christine Romans is here now with more on all of this. Good morning.</s>CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Where is the clear defined language, the leadership about how each of these guys would handle this crisis? It is the deepest financial crisis to hit our economy since the Great Depression. By all accounts, weathering it will take almost unprecedented financial leadership.</s>ROMANS (voice-over): It's been six months since Bear Stearns collapsed, and the dominoes have fallen one by one. Until Lehman Brothers went bankrupt Sunday and Uncle Sam seized AIG on Wednesday. The men who want to be president have struggled with a coherent message. Oh, there are insults.</s>SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Senator McCain then bragged about how, as chairman of the Commerce Committee in the Senate, he had oversight of every part of the economy. Well, all I can say to Senator McCain is nice job.</s>ROMANS: And vague promises.</s>GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: And in this race, there is one man of action, one proven reformer who will clean up Wall Street and fix our economy and that man is John McCain.</s>ROMANS: Economists Peter Morici says both approaches lack substance.</s>PROF. PETER MORICI, UNIVERSITY OF MARYLAND: Neither candidate is showing real leadership. McCain is demonstrating is that neither he or his economic advisers understand the scope of the problem. And Barack Obama busily raising money on Wall Street has such a conflict of interest, it's ludicrous to expect that somehow he's going to go in there and protect the taxpayers' interest.</s>ROMANS: On Thursday in Iowa, John McCain was trying to take charge of his message. He called for a new agency to clean up after the mortgage mess and blasted the chairman of the</s>SEC. SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: If I were president today, I would fire him.</s>ROMANS: Both candidates searching for the right tone and the right response for the economy.</s>OBAMA: And that's why I'm calling on the Treasury and the Federal Reserve to use their emergency authorities to maintain the flow of credit, to support the availability of mortgages, and to ensure that our financial system is well capitalized.</s>ROMANS: Each in the rare position of running for president during a crisis unlike any since Franklin Roosevelt was running for office.</s>MORICI: What he promised in 1932 is, and I quote, "bold persistent experimentation," which isn't a very specific claim or appeal or plan of action at all. All he promised was he'd do something.</s>ROMANS: It works for FDR. But many are still looking for more leadership about this crisis from both candidates -- Kiran and John.</s>CHETRY: You also know that it's going to be very, very telling and vital as to who these candidates pick as their economic advisers.</s>ROMANS: That's absolutely right. I mean, they have to pick a team that can get in there immediately and follow-through on what Henry Paulson has already started. Now, Ben Bernanke, of course, the Federal Reserve chairman, would still, you know, go through. But whoever wins picks is going to be incredible. And there's already the wagering on Wall Street about what that team is going to look like and who would want that job. You know, it's going to be a really tough job. Paulson has really been the point man on this. So, you know, continuity with him will be critical as well.</s>ROBERTS: Transitions are always fascinating to watch.</s>ROMANS: Aren't they?</s>ROBERTS: This one even more so, though.</s>ROMANS: Right.</s>ROBERTS: Christine Romans, thanks so much. Here's what we're working on for you this morning. The first dude won't take the stand. Why Todd Palin is refusing to testify in the investigation into his wife.</s>CHETRY: Also, a big kink in the FEMA plan to help Hurricane Ike survivors. What displaced residents are facing now.