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ANDERSON COOPER 360 DEGREES

Record Rise as Stocks Soar; Politics of the Economy; Sarah Palin on the Trail

Aired October 13, 2008 - 23:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


ANDERSON COOPER, CNN ANCHOR: We begin tonight with "Breaking News."
New details on the economic crisis and how Britain, Europe and the U.S. plan to fix the mess; a new dollar figure; the announcement set for tomorrow, we've got early details tonight. New signs as well that investors like what they are seeing; Asian markets rallying as we speak.

That's the "Breaking News" after a record day on Wall Street.

The Dow industrials up 936 points, the sharpest point jump in market history. Investors are gaining $1.2 trillion on paper in a single trading day.

Now, on the campaign trail, both candidates speaking out on the economy and how they'd fix it.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R) PRESIDENTIAL NOMINEE: The catalyst of this crisis was the collapse of the housing in America. And I want homeowners to be able to negotiate a new mortgage at the new value of their home so they can stay in their homes.

SEN. BARACK OBAMA, (D) PRESIDENTIAL NOMINEE: I've already proposed a middle class tax cut for 95 percent of workers and their families. But today, I'm calling on Congress to pass a plan so that the IRS will mail out the first round of those tax cuts as soon as possible.

(END VIDEO CLIP)

COOPER: Senator Obama also proposing a new tax credit for small businesses that create jobs, a three month halt in home foreclosures and chance for people to take up to $10,000 from their 401(k) or IRA accounts without taxes or penalties.

Today, there were no new specifics yet from the McCain camp. But they are expected to unveil a new economic plan tomorrow. We'll have more on the politics shortly.

But first, the money and the "Breaking News" and Ali Velshi. Ali a lot of Americans no doubt, lawmakers must be relieved with this major come back on Wall Street.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes and look, it's a not a trend it's just a day. But let me tell you a little bit about how this day started out.

On Friday night, we had a loss of 198 points but a lot of people thought that was really almost a game. Part of the loss there was because of price of oil have gone down and EXXON and Chevron brought the market down.

So take a look at how today in went, it was up more than 500 points, for most of the day, then 600 points, and then in that last hour, something technical happened. It's called a short squeeze; it's people who are betting against the market realizing that those stocks weren't going to go down, you have to buy stocks to make up for it.

So that's what that happened. We've never numbers like this, 936 points higher by the end of the day. Until today, the biggest number that we'd ever seen wasn't even a 500 point gain.

Now there are a lot that happened. In Europe, the banks decided -- that the governments decided they were going to back up the banks.

The U.S. has sort of gave out hints that it was going to start spending the $700 billion soon and maybe emulate the British model of guaranteeing bank loans. So that was another big deal. A lot of these things led to this kind of market charge that we had today. But we're not even half way made up for what we lost over the last couple of weeks -- Anderson.

COOPER: Ali, we're learning more details about what the government is going to announce tomorrow. What are you hearing?

VELSHI: There are four basic things that we're hearing about. Let me show you what they are.

The first one is that the government seems to be targeting nine specific banks that they're going to make direct investments in. They're going to invest in those banks and they're going to get stocks back in return.

The second thing is the Treasury has been authorized to spend the first $250 billion of the $700 billion bailout. Well, the President is going to give them authority to spend another $100 billion so that they can accelerate the pace at which they're buying up these troubled assets and investing in the banks.

The third thing is we're going to get the rules on CEO compensation. As you know that bailout package had some provisions that if your company gets help from the government, from taxpayers, well, your CEOs aren't going to be able to walk away with golden parachutes or get too much money.

We're going to get details on that tomorrow morning.

And finally, the FDIC, the Federal Deposit Insurance Corporation which insures your bank accounts now up to $250,000 apiece is apparently going to start insuring non-interest bearing accounts, the kind out of which people's payrolls are paid. So that's a pretty important thing for all those people who are worried that this credit crisis could affect their payroll, Anderson, we're hearing news that could change too.

COOPER: All Ali Velshi thanks.

Again, the Dow up a record 936 points, that's up 11 percent just today. The question is what comes next? What happens tomorrow?

Some perspective now on where things may be headed and what it means to your bottom line; from "Fortune" magazine managing editor, Andy Serwer.

Tomorrow, you said it's going to be an interesting day. What do you mean?

ANDY SERWER, MANAGING EDITOR, FORTUNE: When the flight attendants say, keep your seatbelts securely fastened, I mean there's no question Anderson that tomorrow is going to be another one of those days. There's a couple of things that happens.

And first of all today was a bank holiday. So the credit markets were not open. So we'll get the full response of more developments from Washington. And we're also are going to be having the President and the Treasury Secretary as Ali suggests that they're going to be announcing more details about the plan, investing directly in banks also insuring more.

COOPER: You pointed out to me just before we went on the air, that the amount of money that the U.S. government is now going to be putting into banks which was basically what the Europeans have been doing or announced that they're going to be doing is minuscule compared to what the Europeans are putting into their own banks.

SERWER: Well, that's right.

COOPER: So in a way the plan is cheap?

SERWER: Right, well, the way the plan looks to me, is that's $250 billion, and perhaps plus an additional $100 billion. The details are still fuzzy. But remember, the Europeans are throwing the long ball here; they're throwing $2.3 trillion at their problem. The economy of Europe is say roughly the same size of the U.S. economy. And we're only going to be doing $250 billion.

So they're spending ten times as much as we are. Some people are suggesting that our plan could be overwhelming in that sense. Underwhelming, I should say, excuse me.

COOPER: Well, isn't that something -- that this whole idea of injecting money directly into banks, isn't that something that Paulson wrote off a couple weeks ago?

SERWER: Yes in late September and I think it was September 23rd, in fact, there were suggestions that that was not necessary to do it all. And now, we've seen the Europeans do it and here we are doing the European model. For those who suggests that early in the year we should have headed this thing off the pass, that maybe a bit of a red herring because no one foresaw exactly how bad this is going to be. This is un-chartered territory right now.

So maybe it is prudent to keep shifting in terms of what you see as the focus.

COOPER: There are those who have said, and I think its CNN's Fareed Zakaria was among them who said look, you know that as painful as this is, and gosh knows, it's going to be incredibly painful for some folks, more than others, but there are going to be a lot of people hurting, out of the work, seeing their savings disappear, but it's a dose of reality in an economy that very badly needed reality.

Our economy has been bloated and drunk for a long time on greed and other things, and this is a wakeup call.

SERWER: Yes, I think we have too much debt as a nation. Individuals, our government, we're overleveraged. We borrowed too much and we're paying the piper right now.

I mean, you don't want to say that we need pain, that people all around America need to be thrown out of work, I mean that's ridiculous that's crazy, that's horrible, particularly people who did nothing wrong. I mean you look at a guy who works in a factory, who never borrowed more than his mortgages and perfectly safe and perfectly on target and he loses a job because of this thing.

It is true that we should not be borrowing as much as we have. People shouldn't be floating things in their cars. We're sending so much money overseas to pay for oil and our trade deficit.

So it is a wakeup call. But the pain really hurts people. Job losses, that's the worst.

COOPER: Even people looking at the stock market now they're wondering should I get in on the stock market now it's gone up a thousand points.

SERWER: Well, the reasons for being on the stock market are the same today as they were on Friday is they were last year, which is when the market was 14,000 and now it's 9,000. You buy great companies with great profit prospects, hold them. Microsoft, Proctor and Gamble, Exxon and these companies are going to be around for a long time.

It's true, they are cheaper now than they were a year ago and it's true, that they were cheaper on Friday and today.

But this is a great lesson in market timing, right Anderson. I mean if you had sold on Friday, you would have looked like a sucker, right?

COOPER: And trying to time the market, as we got so many people Suze Orman and others telling us, is virtually impossible to do.

SERWER: A tough game.

COOPER: Andy Serwer we appreciate it.

"On the Campaign Trail," it is a heated issue to drill or not to drill? Tonight, a look at the battle over Arctic oil, our "Planet in Peril" investigation when "360" continues.

(COMMERCIAL BREAK)

COOPER: On the campaign trail there's a battle brewing over the vast oil resources that may lies under the Arctic ice sheet, it's a fight with big implications for the American economy as well as the potential for a serious impact on our "Planet in Peril.

Lisa Ling headed north, way north to investigate.

(BEGIN VIDEOTAPE)

LISA LING, CNN CORRESPONDENT: I'm Lisa Ling in the Alaskan Arctic freezing my fanny off; this is considered to be the top of the world. In some cases, and certainly it's the top of the continental U.S.

And this is ground zero in the conflict over offshore drilling. What lays beneath the surface of the ocean here could potentially be a tremendous, tremendous supply of oil. And when you hear the phrase, "drill, baby drill," this is what they're talking about.

Shell Oil has already made a huge investment and is banking on the fact that what lies beneath the surface of the ocean here could potentially alleviate our reliance on foreign oil.

The indigenous community up here has been relying on this ocean for centuries. They essentially live off of the bowhead whale population and they are afraid that if Shell is able to start drilling up here, it could alter the migration pattern of the bowhead whales and destroy the communities that survive off of the ocean.

So there's a huge, huge battle brewing here and you can see more of it on "Planet in Peril" in December.

(END VIDEOTAPE)

COOPER: As Lisa mentioned this year's worldwide investigations it's called "Planet in Peril: Battle Lines," it airs in December 11. You can right now, though, go to CNN.com/planetinperil for our latest dispatches from the field and more.

Coming up, a new plan from Barack Obama.

(BEGIN VIDEO CLIP)

OBAMA: It's a plan that begins with one word that's on everybody's minds. And it's easy to spell, j-o-b-s, jobs.

(END VIDEO CLIP)

COOPER: Specifics in a moment and John McCain strikes an optimistic tone.

(BEGIN VIDEO CLIP)

MCCAIN: We're six points down. The national media has written us off. But they forgot to let you decide. We've got them just where we want them.

(END VIDEO CLIP)

COOPER: Can he battle back?

Also tonight, we're naming another name, adding it to our ten most wanted lists. Who is tonight's culprit of the collapse? Here is a hint, and he says the recession is all in your head.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: We'll create another 2 million jobs by fixing our crumbling roads and schools and bridges, our infrastructure. And if people ask you how are we going to pay for that? You just tell them, if we can afford to spend $10 billion a month rebuilding Iraq, we can spend some time rebuilding Ohio.

(END VIDEO CLIP)

COOPER: Barack Obama today in Toledo where the local unemployment rate is 8.7 percent. More than 60,000 Ohioans have gotten pink slip is in the last six months alone; the state always close and now heavily in play.

As we mentioned at the top of the hour, Senator Obama laid out a new economic plan today, aimed at insulating homeowners from the financial meltdown and not incidentally at winning support in places like Toledo.

Candy Crowley has the "Raw Politics."

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Ohio by the numbers; 20 electoral votes, 48 percent, Obama, 46 percent, McCain, 7 percent unemployment.

OMABA: It's easy to spell, j-o-b-s, jobs. We've got to work on jobs.

CROWLEY: Adding new ideas to his economic proposal, Barack Obama told a crowd in Toledo, he wants a two-year tax break for small businesses that create new jobs, penalty free withdrawals of up to $10,000 from retirement accounts and a moratorium on some home foreclosures on loans held by banks getting money from the rescue plan.

OBAMA: You will not be able to foreclose on their homes for three months; we need to give people the breathing room to get back on their feet.

CROWLEY: Still, even as he called for help for hard-pressed-voters, Obama also noted some of those same voters aided and abetted the economic freefall.

OBAMA: If we're honest with ourselves, everyone was living beyond their means from Wall Street to Washington to even some on Main Street. Lenders tricked people into buying homes they couldn't afford and some folks knew they couldn't afford them and they bought them anyway.

CROWLEY: Sailing in the polls and most of the battleground states it is the beauty of being Barack that unlike John McCain, whose campaign is still struggling, Obama can stay the course.

(END VIDEOTAPE)

COOPER: Candy, it's interesting here, both candidates have made this very much a populist issue. And then, to hear Obama there, basically essentially saying to voters, you know what you guys have some of the blame as well.

CROWLEY: Absolutely and it's interesting, because right after he said that, I called Ali and I said, hey, what percentage of homeowners are in foreclosure. And he said about two percent, which means 98 percent of homeowners are not in foreclosure.

And while there is certainly sentiment out there to help people who have been duped, who have been cheated, who were told lies, there is also a sentiment that, listen, I got a mortgage I could afford, and I did the right thing.

So am I going to bail out people that simply wanted a bigger house and they were betting that it would just go up? Do I want to bail out people that were -- in the business of flipping houses and got stuck at the wrong end of the market?

So I just think it's interesting, as you say, that he -- it's all been populist, populist, bad banks, bad financial institutions, bad Fannie Mae. And now, it's like, you guys, we all kind of did it.

COOPER: So he may alienate some but he also may get more supporters because they share the same sentiment.

CROWLEY: No I just think it was something -- I'm not sure it comes down the fine line of we've got to get these supporters so much as it's just an interesting point to make to say we've all sort of done this, yes.

COOPER: Candy Crowley, I appreciate it thank you.

On the trail tonight, new polling and a new shift for John McCain's campaign. He's now being challenged in states that used to be fire- engine red and we'll tell you why and despite that, he announces, he's got them right where he wants to be.

And later, the McCain-Palin crowds, they've been rough at times but are they as angry as some of the stuff you heard. You wanted the facts so we sent Gary Tuchman to a Palin event to cover the supporters and not the candidate. We'll show you what he found.

And Levi Johnson, Palin's future son-in-law, speaking out for the first time, what does he think of Barack Obama? Find out ahead. (COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MCCAIN: I'm proud of my supporters. I'm proud of the people that come and proud of those veterans that served their country and come to my rallies and fire me up, I love them. And for anybody to intimate that overwhelming 99.99 percent is anything but patriotic and good Americans is frankly unacceptable. And I won't stand for it.

(END VIDEO CLIP)

COOPER: Senator McCain interviewed today by our Dana Bash. McCain campaign today, in two unlikely battleground states, North Carolina and Virginia.

Now the latest CNN poll of polls gives Obama a four percent lead over McCain in Virginia and the most recent CNN Time Opinion Poll shows they're both tied in North Carolina.

And nationwide here's where the race stands tonight, take a look, among likely voters, Obama is up eight points over McCain, 50-42, with eight percent undecided.

McCain behind in the numbers and a leading conservative, Bill Kristol calling on him to basically fire his campaign staff. The candidate is under immense pressure to try to turn the race around in these final days. He launched a new attempt today to do just that.

CNN's Ed Henry has the "Raw Politics".

(BEGIN VIDEOTAPE)

ED HENRY, CNN CORRESPONDENT: Call it John McCain's 4.0, another shift in message. The maverick morphing back into the fighter he talked about at the convention.

MCCAIN: Fight for what's right for America.

HENRY: His new effort to close the deal with independent voters; so less attacks on Barack Obama as risky and in-experienced and more about McCain as happy warrior.

MCCAIN: We never give up and we never quit. And let's go win this election and get this country moving again.

HENRY: McCain unveiling the new message in Virginia reflects his shakiness in a state Democrats have not carried in 44 years.

Influential conservative William Kristol declared, McCain has been totally overmatched by Obama. Writing in "The New York Times" the McCain campaign once merely problematic is now close to being out-and- out dysfunctional." Kristol's speaks let McCain be McCain.

MCCAIN: I've been fighting for this country since I was 17 years old and I have the scars to prove it. You elect me President I will fight to take America in a new direction from my first day in office until my last.

HENRY: After leaving Virginia, John McCain headed to North Carolina. And on Friday, Sarah Palin is going to Indiana, two states Republicans should have locked down a long time ago but haven't.

Ed Henry, CNN, Richmond.

(END VIDEOTAPE)

COOPER: Well, John McCain is defending these states with a sharply smaller advertising budget than his opponent. The "Raw Data" is kind of surprising.

Senator Obama is outspending him on advertising of about 4-1 in Virginia. In North Carolina, it's 3-1, same goes for Indiana, reliably red Indiana, where Obama is spending 3 ad dollars for every dollar a McCain spends and where results are benefiting from Gary Indiana's proximity to the Chicago media market, where he gets a lot of free coverage on the local news.

That's the "Raw Data."

McCain says he is just where he wants to be. We'll tell you this new strategy and what we are hearing about his economic announcement tomorrow.

David Gergen, Ed Rollins and Roland Martin join me for that.

Also a rare interview with Levi Johnson, the soon to be husband to Bristol Palin and father to their child; his thoughts on his future mother-in-law, Barack Obama and even a big hint on whether the child is a boy or a girl.

And Hillary Clinton out on the stump for Obama today with some tough talk about the Bushes. A "Strategy Session" ahead on "360."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON, (D) NEW YORK: What we'll create across America is a Democratic President and bigger Democratic majority in the House and the Senate, comes down to this, jobs, baby, jobs.

(END VIDEO CLIP)

COOPER: From drill baby, drill to jobs, baby, jobs; Senator Hillary Clinton in Pennsylvania today with a play on words from Governor Palin's mantra on oil.

The election, the economy that clashed again today, it was the historic surge on Wall Street and at the same time, the candidates launching new promises. Obama announcing a sweeping economic proposal while McCain creating a new campaign plan. They'll meet for their third and final presidential debate on Wednesday and the stakes are high for the man in the lead and the underdog. Joining us for our "Strategy Session" tonight, CNN's senior political analyst and former presidential advisor to Republicans and Democrats, David Gergen and CNN's senior political contributor and Republican strategist and McCain supporter, Ed Rollins and CNN's political analyst and radio talk show host and Obama supporter, Roland Martin.

David, McCain came out telling supporters he is a fighter and shouldn't be counted out but today he had no new economic ideas where as Obama did. Though tomorrow the McCain campaign says they will have some new ideas. Was that a missed opportunity today?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: I think it was but if -- and it raises the stakes for tomorrow. And this was a good theme today, about fighting for you, fighting for America. It fits with who he is and is consistent with sort of his whole narrative of his life.

But Anderson, as you know, it's been sort of a theme a week. This campaign started with the argument that terrorism is a transcendent challenge of our time, then that it became a campaign about reform and change in Washington, overhauling Washington. And then it was about, can you trust Obama; all the attacks on Obama.

And now this week, he's turning to, I'm going to fight for you. And now, we'll let see what the economic proposals bring. But as you know over the weekend, there seemed to be a lot of confusion in the McCain camp about whether they would even have economic proposals.

I think he's wise to do that, smart. Senator Obama seems to be on cruise control, came out with some -- not blockbuster but solid proposals today and McCain needs to match him and beat him tomorrow.

COOPER: Ed, you wrote on the blog, that it's critical of the McCain campaign understands the stakes. And you said that James Carville famous slogan to Bill Clinton, about it's the economy, stupid, should now be replaced with, "You morons, what have you done with my money, my life, and my kids?"

Hey, that's certainly true. But do you think McCain gets them? I mean do you see?

ED ROLLINS, CNN SENIOR POLITICAL CONTRIBUTOR: Well, if he doesn't get it -- I think Bill Ayers and all that stuff is legitimate six or eight weeks ago, it's not legitimate today, no one cares about it. It's like trying to get a drink out of a fire hydrant.

People want to know what you're going to do for me. Do you understand my problems? Do you have some kind of a plan? If we vote for you in 21 days, are you going to be able to put a team together and get this economy moving again? We don't have much confidence in the Bush group, and tomorrow is going to very important.

If he doesn't come up with an economic plan and if he doesn't basically win this debate, he can't tie this debate he has to win this debate to get people to take a second look or this race is over.

COOPER: It's interesting though Roland, Ayers has not gone away. CNN's Dana Bash interviewed McCain earlier today, asked him about the whole Bill Ayers thing. Let's play that.

(BEGIN VIDEO CLIP)

DANA BASH, CNN CORRESPONDENT: Many Republicans, I'm sure you've heard this, have said to me and to others and why is William Ayers fair game and Jeremiah Wright who has a much more clear established relationship with Barack Obama in your view, is off the table?

MCCAIN: Because William Ayers was an unrepentant terrorist. I mean he's a person who on 9/11 said that he wanted to set off more bombs. I mean, this is a very big question, I think that people have to ask. Clearly, Senator Obama said he was quote "a guy in the neighborhood."

BASH: Why not Wright? Why not Wright?

MCCAIN: Because Mr. Ayers is an unrepentant terrorist. That's a unique individual in American history.

(END VIDEO CLIP)

COOPER: Roland, why do you think it is that McCain is staying away from Wright? He said he would a while ago and is sticking to it.

ROLAND MARTIN, CNN POLITICAL ANALYST: Because he has to.

If he tries to go to it, they could use his own words against him by saying, wait a minute, how did you attack the North Carolina Republican Party for using it; now all of a sudden, you use it?

But, also, he looks even more desperate. Look, what you saw today was amazing. I have been extolling Ed all day that he was a prophet.

In his column, he said that John McCain has been playing like Hillary Clinton. Today's speech was exactly what Hillary Clinton did: I'm going to fight for you. I think what he's hoping is that the tail end of the Democratic primary is going to turn out the same way in this general, in terms of how she was able to go after Obama by saying I am going to fight for you.

But it sounds like he's simply playing the entire Hillary Clinton campaign over and over again. And you know what? She didn't get the nomination. So, it might not work for him.

COOPER: Is -- David, Bill Kristol basically said the campaign staff should -- should all be fired or resign. Is it that bad? I mean, is there really such a disconnect?

GERGEN: Well, there are many, many Republican strategists and camp followers who are extremely discouraged right now, Anderson. And I think Bill Kristol is giving voice to that.

But, you know, he has already done that once. He fired his campaign earlier when he was in trouble. And he did rise from the ashes, and admirably so.

But I have to tell you, whatever you think of the campaign staff -- and I have disagreed seriously with a lot of what they have done -- ultimately, it is the candidate who is responsible for his campaign staff, not the other way around. It's not the campaign staff who is responsible for the candidate. The candidate is responsible for the quality of his campaign, the message of his campaign, the money- raising, and the mobilization of voters.

And, on these issues, John McCain and his -- and what Bill Kristol was saying today, on every single one of those indicators, Barack Obama is running a superior campaign.

COOPER: We're going to have more with our political panel ahead.

Has the GOP ticket crossed the line? That's what their critics are saying. A longtime veteran of the civil rights movement, John Lewis, said Palin and McCain are -- quote -- "sowing the seeds of hatred and division." We will go on the trail with Sarah Palin.

And our 10 most wanted culprits of the collapse -- tonight, a new name added to the list. Find out who it is -- when 360 continues.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOE BIDEN (D), VICE-PRESIDENTIAL NOMINEE: These attacks don't hurt Barack Obama, these attacks don't hurt me. Every single false charge, every single baseless accusation that comes forward is an attempt to get you to focus on something other than what's going on in your family, other than something that's going -- what's in your neighborhood, in your state.

Beyond the attacks, and I mean this literally, beyond the attacks, what is John McCain really offering?

(END VIDEO CLIP)

COOPER: Senator Joe Biden in New Hampshire today. There's been a lot of discussion about the language and mood at the McCain-Palin rallies. There's also been a number of edited videos on YouTube of interviews with people at these rallies. But are they fair?

We decided to see for ourselves and turn our cameras on the crowd at a Palin rally. We'll do the same thing at a Biden rally, we should point out, in the days ahead.

Tonight, here's what Gary Tuchman found on the trail with Palin in Virginia.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN CORRESPONDENT (voice-over): If getting the NASCAR vote is an important priority for Sarah Palin, this was an ideal place to do it, in a parking lot outside the Richmond International Raceway in Virginia.

GOV. SARAH PALIN (R), VICE-PRESIDENTIAL NOMINEE: Here to sing our most beautiful national anthem, please welcome to the stage, Mr. Hank Williams, Jr.

TUCHMAN: Introducing a country music legend to the crowd, one of Sarah Palin's largest, is a nice touch, too.

HANK WILLIAMS, COUNTRY MUSIC SINGER: The left-wing liberal media have always been a really close-knit family.

PALIN: Hank Williams Jr. customized his song, "Family Tradition," to turn it into the McCain-Palin tradition.

WILLIAMS: From any way you see.

TUCHMAN: The original song includes the lyric, "If I get stoned and sing all night long, it's a family tradition." But few seemed to care or to know the original words as they partied politically with Palin.

PALIN: Just once I would love to hear Barack Obama say he wants America to win.

TUCHMAN: Palin's message, toned down. No mention of a recent claim Barack Obama pals around with terrorists.

Have you heard Sarah Palin talks about him palling around with terrorists? Do you believe that?

UNIDENTIFIED FEMALE: I have a real problem with that.

TUCHMAN: Yes?

UNIDENTIFIED FEMALE: I tell -- I tell my children not to pal around with some certain children. I sure don't want my president palling around with terrorists.

TUCHMAN: Well, what does that mean, though? Are you saying that he's terrorist or that he'd be friendly with terrorists? What do you think that means?

UNIDENTIFIED FEMALE: I think he's...

UNIDENTIFIED FEMALE: I think it says it's the wrong people to be with.

UNIDENTIFIED FEMALE: You're known by the company you keep.

TUCHMAN: And she didn't mention the investigation in Alaska that led to the conclusion she abused her gubernatorial powers.

But her political antenna may be a bit frayed. When her enthusiastic supporters started shouting the word "louder" so they could hear her better, she thought they were yelling at her, not for her.

PALIN: I would hope at least that those protesters have the courage and the honor of thanking our veterans for giving them the right to protest.

TUCHMAN: Sarah Palin's high approval numbers may have slipped nationally, but you couldn't tell it from this crowd. And if there were protesters here among the thousands, they were quiet. It was her supporters making the noise.

Palin may be low-keying her attacks against Obama and Biden, but not all the supporters are.

Do you believe Barack Obama is a Christian like he says?

UNIDENTIFIED MALE: No.

TUCHMAN: And do you believe he's an American like he says?

UNIDENTIFIED MALE: No.

TUCHMAN: And why do you have the word "Hussein" there? It sounds like you're just on a hate campaign to be honest with you.

UNIDENTIFIED MALE: No hate campaign. Everybody here that's looked at it, you're the first one that says it's hate. Who are you for?

TUCHMAN: Well, I'm for...

UNIDENTIFIED MALE: Who are you for?

TUCHMAN: I'm for honest journalism.

UNIDENTIFIED MALE: Well, then you don't want to talk about him.

TUCHMAN: Why is that?

UNIDENTIFIED MALE: Because he's not honest.

PALIN: Only one man with the courage to keep on fighting for you and that man is John McCain. Thank you for supporting him.

God bless you, God bless America.

TUCHMAN: Governor Palin then sped out of the track parking lot as the race enters its final laps.

Gary Tuchman, CNN, Richmond, Virginia.

(END VIDEOTAPE)

COOPER: We'll have more politics in a moment.

Just want to update you on our breaking news; Asian markets picking up where the Dow today in the United States left off.

In Japan, the Nikkei index up 13 percent. Singapore and Australian markets right now are up 5 percent. Hong Kong is up 4. We'll have more of the money ahead.

Back with our panel and politics next.

Plus, Southern California burning; the latest on two massive wildfires that have already killed at least two people. One firefighter described the blaze he's battling as "a blowtorch we cannot get in front of."

And Sarah Palin's soon-to-be son-in-law goes on the record as the rumors swirl around him. Is he being forced to marry 17-year-old Bristol Palin who's expecting their baby in December? He's speaking out, Levi Johnson, coming up.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PALIN: Hello, across America. I know -- we can feel it -- that there's a lot of anger right now. There's anger about the insider dealing of lobbyists, and there's anger at the greed of Wall Street. And there's anger about the arrogance of the Washington elite. And there is anger about voter fraud.

(END VIDEO CLIP)

COOPER: Governor Sarah Palin in Virginia today on the trail. She didn't mention the other kind of anger that's erupted on the trail. This weekend, a respected veteran of the civil rights movement entered the fray.

Democratic Congressman John Lewis said McCain and Palin were, quote, "sowing the seeds of hatred and division. He also talked about the climate of hate that Governor George Wallace fostered in Alabama back in the 1960s.

Later, he said he hadn't intended to directly compare McCain and Palin to Wallace.

But today, in an exclusive interview with CNN's Dana Bash, McCain made his anger clear. Take a look.

(BEGIN VIDEO CLIP)

MCCAIN: The accusation that Congressman Lewis made is so far out of bounds and so disturbing to me. Of course it stopped me in my tracks.

I never believed that John Lewis, who's an American hero who I admire, would ever make a comment of that nature. He even referred to the bombing of the church in Birmingham. That's unacceptable. It's totally unacceptable. And of course, I'm not going to accept it, and I'm going to reject it.

(END VIDEO CLIP)

COOPER: Well, that's the latest. Let's dig deeper. Joining us again, our panel of CNN analysts and contributors: David Gergen, Ed Rollins, and Roland Martin.

Do you think -- Ed Rollins, do you think Congressman Lewis was way out of bounds by the comments he made? I mean, pretty strong stuff, comparing George McGovern essentially to John McCain, which is essentially what he...

MARTIN: George Wallace.

COOPER: Excuse me, George Wallace.

MARTIN: One of the issues that he was looking at was the whole notion of hate.

What was interesting, though, I mean, I can't tell you the number of e-mails I began to receive when you saw the rhetoric turned up in these rallies and the reaction from the audience. People saying, what is going on with the chants, with the various statements? You cannot assign every single comment that was made to the entire campaign, obviously, but people were, indeed, bothered by what they were hearing.

Here's a guy, John Lewis, who was living in that moment, who has got a steel plate in his head because he remembers that. Was he calling them a bigot? No. What he was saying: "Look, I'm hearing a hate on the campaign trail, and I've got a problem with it."

COOPER: Ed, do you think it was completely out of line?

ROLLINS: I think it was out of line. I think John McCain has been very careful not to bring Reverend Wright into this. He's made every effort not to get racism moving forward. And I think, to a certain extent, I don't think John Lewis intended the reaction he was going to have, at least, I hope he didn't. I have great respect for him.

But it's one hero calling another hero names, and I think to a certain extent, John McCain had a right to react the way he did.

COOPER: David, I want to -- just trying to pull it up on my computer -- I want to read you this thing that this Republican GOP chairman said. He encouraged campaign volunteers to make a connection between Obama and Osama bin Laden by saying they, quote, both have friends that bombed the Pentagon, obviously in a reference to Bill Ayers.

What do you make of that? I mean, this guy is not, you know, part of McCain's campaign. He's not, you know, in McCain's campaign. But is this -- where is this going? Where is this going?

GERGEN: All sorts of people are going over the line in this campaign in recent weeks.

John McCain was absolutely right to reject any comparison between himself and George Wallace. He had every right to stand up and say what he said. I think he was right to do that.

But when is John McCain, when is Sarah Palin going to reject the kind of comments that have been made at their rallies? You know, when they have called Obama a terrorist, when they have said "off with his head," when they have said, "kill him," when they have said "get him"? When are we going to hear words of repudiation about what's been happening, the hatred that's been expressed at some of these rallies? COOPER: David, you've heard -- I mean, John McCain himself says, "Look, this is -- you know, 99.99 percent of the people that come to my rallies are, you know, good upstanding patriotic Americans." Do you buy that?

GERGEN: Absolutely. I think they are. And they're fine Americans. But there are people who are showing up at these rallies who are sowing -- John Lewis was right about the sowing of hatred here.

And you know, I think the George Wallace comparison goes too far but it would be welcome -- John McCain did a good thing the other day by talking to that woman, saying, "He's not an Arab. He's a decent man," and so forth and so on.

But when are they going to repudiate, in the same way that he just showed so much anger toward the George Wallace -- George Wallace comparison, when are they going to repudiate some of the people who are saying these hateful things in the rallies?

COOPER: Well, I want to play something that a pastor delivering an invocation at a McCain-Palin rally said this weekend. Let's play that.

(BEGIN VIDEO CLIP)

UNIDENTIFIED PASTOR: There are millions of people around this world praying to their God, whether it's Hindu, Buddha, Allah, that his opponent wins for a variety of reasons. And, Lord, I pray that you would guard your own reputation because they will think that their God is bigger than you if that happens.

(END VIDEO CLIP)

COOPER: Kind of weird. I mean, he's basically saying that folks who are praying for Obama are Hindus or Buddhists or Muslim.

MARTIN: What angers me about that -- and this has nothing to do with the McCain and -- McCain or Palin campaign, is that a Christian would have the audacity to question the salvation of another Christian. That is what's so offensive.

When a person professes with their mouth that Jesus Christ is their Lord and Savior, you don't question that. And he knows Obama is a Christian. He knows what his background is. And here is a pastor who stands there and makes that kind of comment. And I've seen that before -- we've seen it in this campaign over and over and over again.

And so when people say, "Well, we can't control what people who are saying when we introduce them," no, you can pull people aside and say, "This is how we're going to conduct ourselves at this rally and what you can say and what you cannot say."

That is offensive from a faith perspective, and faith leaders, regardless of their partisan views, should call him out for it. That's an embarrassment as a preacher, somebody who preaches the gospel. COOPER: Ed, are these just isolated incidents? Or is this, you know, sort of...

ROLLINS: Unfortunately, we're in an ugly period of American politics, even before this campaign. And we're polarized. We're polarized in the Congress. We're polarized in the country.

And in every rally, Democrat-Republican rally, there's intense people, and there are people who aren't out there arguing about positions. They argue hatred. They think that really this is the direction of the country. And there are people who hate Barack Obama, just as there are people who hate George Bush and John McCain.

And somehow we've got to get back to being Americans again, and whoever wins this election, I assume it's going to be Barack Obama. We've got to come together and help them and pray for them.

MARTIN: Anti-American stuff is amazing, as well. Anderson, when you start hearing people chant the whole "USA, USA," and I understand what that means, but when your back is turned, typically watching a game, you're typically hearing -- you're cheering for the USA against somebody who doesn't like the United States. They're saying, "Obama, you're anti-U.S. McCain is U.S."

COOPER: I should point out they did chant "USA," also, at the Obama acceptance speech at the Democratic convention.

MARTIN: Which makes no sense whatsoever.

COOPER: Roland Martin. We're going to leave it there. David Gergen. Ed Rollins, thanks.

We're going to update our breaking news on the surge in world stock markets and the latest from Southern California.

We're looking at live pictures where firefighters are battling two blazes being described as blowtorches -- it's kind of dark there. Saw it from the left there in the distance, fueled by strong Santa Ana winds.

Plus Sarah Palin's future son-in-law is speaking out about the baby he's expecting with Palin's 17-year-old daughter and rumors that he's being forced to do the right thing. We'll talk about that ahead.

And we're naming names again tonight. Coming up, we'll reveal another "Culprit of the Collapse," part of our "Ten Most Wanted List." We'll be right back.

(COMMERCIAL BREAK)

COOPER: Quick update on today's market surge. Our breaking news, it is going global in Japan, massive gains, the Nikkei index now up 13 percent, outpacing even the Dow industrials today, which rose 11 percent.

Stocks are also up in a big way in Hong Kong, Taiwan, Singapore and Australia. Of course, we'll see what happens tomorrow on Wall Street, especially after the president speaks again with more details on the administration's financial rescue plan.

Both candidates have said that now is not the time to talk about blame. Frankly, that's what politicians always say. The truth is now is exactly the right time to talk about blame. People deserve to know how we got into this mess and who should be held accountable.

Tonight, we're naming names again, telling you who's responsible on our "Ten Most Wanted List," the "Ten Most Wanted Culprits of the Collapse." We named three culprits so far. Tonight, a fourth, a name familiar to many. Senator Phil Gramm, who by the way, got a lot of help along the way to get on this list.

Here's 360's Tom Foreman.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT: The start of the holidays, 1999, and the financial industry gets a gift: a new law allowing banks to merge with investment and insurance companies.

The big backer, Texas Senator Phil Gramm, who says it promotes competition. Never mind that it also overturns a Depression-era law forbidding such economic giants, because their failure could crash the economy.

The new laws, many supporters figure, times have changed.

Marcus Mabry of the "New York Times."

MARCUS MABRY, "THE NEW YORK TIMES": Bill Clinton supported that legislation, and so did a vast majority of the Senate. It passed something like 95-0 and a huge majority in the House of Representatives. So it was a bipartisan legislation.

FOREMAN: One Christmas later, and Gramm is at it again. This time, he succeeds in reducing government regulation on those big financial firms. And with those two measures, some economic analysts say he built the pillars of the current financial collapse.

MABRY: What Senator Gramm's worst critics would say was that he allowed an atmosphere -- a permissive atmosphere of risk taking, with no penalties, to take hold. So Wall Street could get as greedy as it wanted, and there was no government agency to regulate it.

FOREMAN: Still, in 24 years as a lawmaker and as a trained economist, too, Gramm was a staunch opponent of regulation. Could his success with just two laws really be that critical?

Yes, according to progressive economist James Galbraith.

JAMES GALBRAITH, ECONOMIST, UNIVERSITY OF TEXAS: I've been quoted as saying he was the sorcerer's apprentice of financial instability and disaster. And I think his authority as an economist, as someone who has an advanced degree in our subject, also lent weight to -- in particular, to his positions.

MCCAIN: My dear friend and colleague, Senator Phil Gramm.

FOREMAN: Fast forward to this past summer. Gramm is an advisor to the John McCain, dismissing complaints about the economy.

PHIL GRAMM (R), FORMER U.S. SENATOR: You just hear this constant whining, complaining about our loss of our competitiveness.

FOREMAN: McCain severed ties with him over that.

Gramm, however, still defends his legislation telling the "Texas Observer," "I've never seen any evidence that opening up competition among banks and insurance companies in any way contributed to this. You've got a lot of people trying to rewrite history."

Maybe, but in Washington now, that is the minority opinion, as more people in both parties say efforts to cut regulation just went too far.

We tried to reach the former Senator through his employer these days, a big Swiss financial firm, but we received no call back from Phil Gramm, one of our "Ten Most Wanted Culprits of the Collapse" -- Anderson.

(END VIDEOTAPE)

COOPER: Tom, well, he had a lot of Democrats and Republicans in Congress and the White House who helped them. But Phil Gramm now joins our "Ten Most Wanted Culprits of the Collapse." We began last week; Joe Cassano from AIG, followed by Richard Fuld from Lehman Brothers and Chris Cox from the SEC. And now there he is, Phil Gramm.

More on the financial crisis ahead.

But first, Erica Hill joins us with a "360 News and Business Bulletin" -- Erica.

ERICA HILL, CNN ANCHOR: Anderson, we begin in Southern California. Two huge wildfires there, fueled by the Santa Ana winds, have already claimed at least two lives and destroyed dozens of homes.

You're looking at live pictures now of the blazes from our affiliate KCAL out of Los Angeles. And you can just see the enormity of that fire. At one point today those flames actually jumped an eight-lane freeway in northern Los Angeles. Keeping a close eye on that.

General Motors will close an SUV plant in Wisconsin in December; that is earlier than planned. They'll also shut down a metal stamping plant in Michigan by the end of next year. In all, more than 2,700 workers will lose their jobs.

Big Brown's racing days are over. The three-year-old colt injured his right front foot today during a workout and won't recover in time for one last race. Instead, the Kentucky Derby and Preakness winner will begin his second career as a stud a few months early. Sarah Palin's future son-in-law told the Associated Press he is not being forced to marry 17-year-old Bristol Palin, who is carrying their child. Eighteen-year-old Levi Johnson said they love each other and had planned all along to get married. He also said he was not forced to attend the Republican convention, Anderson.

COOPER: That does it for this edition of 360. Thanks for watching.

Larry King starts right now.

I'll see you tomorrow night.