Increasing Evidence Worst of Recession is Over; Obama Promises to Change Tone Between Democrats and Republicans; U.S. Navy Pilot's Remains Found 18 Years Later
DON LEMON, CNN ANCHOR: Hello, everyone. I'm Don Lemon. Call them green shoots, call them signs of optimism, call them whatever you want. But there are some increasing evidence -- some of it official, some anecdotal -- that the nation's economy has turned a corner and the worst of this recession may -- may be over. Some of it from Alan Greenspan, the former Federal Reserve Chairman; he says, he believes there is a good chance the worst is behind us.</s>ALLAN GREENSPAN, FORMER FEDERAL RESERVE CHAIRMAN: I'm pretty sure we've already seen the bottom. In fact, if you look at the weekly production figures, the various different industries, it's clear that we've turned perhaps in the middle of last month, the middle of July.</s>LEMON: All right, so let's talk about the economy and the evidence that things are getting better here, let's do that with Poppy Harlow of CNNMoney.com. Hello Poppy.</s>POPPY HARLOW, CNNMONEY.COM: Hi, Don.</s>LEMON: I mean, you've heard Mr. Greenspan there. He says that he thinks that we have hit bottom and I think he said somewhere in the middle of July. Do the numbers support what he's saying?</s>HARLOW: You know some do and some don't. And you have to see what is just sort of propped up by the government Don and what's real. I mean, the latest news we have is the GDP report that we got on Friday morning and it was better than expected and we can't say that for most economic reports we get. Our economy contracted one percent in the second quarter. This is the first of three readings so it's not the final call on economic activity but it was better than the one and a half percent contraction that was expected. And Don, let's compare it to the first quarter of this year when we saw our economy shrink by five and a half percent; so it's a lot better than that. But again, you've got stimulus spending that has really kicked in more in the second quarter...</s>LEMON: Yes.</s>HARLOW: ...and that's not going to be here forever, Don and we still need the economy to grow. It's great that it's slowing at a better pace than before but we need it to grow, so we can add -- add jobs, Don and as you know, that is the key, add the jobs or you won't fix anything.</s>LEMON: Yes and you mentioned the GDP report. The president spoke about it on Friday. Let's just listen to him, Poppy and then we'll talk.</s>HARLOW: Ok.</s>BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Today's GDP is an important sign that the economy is headed in the right direction and that business investment, which had been plummeting in the last several months, is showing signs of stabilizing.</s>LEMON: Ok, so let's talk about unemployment, as you said, because if you're still jobless, right, if you still don't have a job, then you probably don't feel like the economy is rebounding because you don't have any money coming in.</s>HARLOW: Yes and I mean, how can you, right? We have six and a half million jobs lost in this recession alone from December, 2007. Until now, many more underemployed people -- let's not forget of people not making enough money -- and what you see on your screen, the June jobs report. Our unemployment rate ticked up to nine and a half percent, a lot say it's going to top 10 percent or 11 percent in the not too distant future and you have about 500,000 people that lost their job in that one month alone. So let's wait for the July numbers, let's see what happens. But Don, what about those unemployment checks that people are living on right now and paying their mortgage with and what we're hearing from "New York times," today.</s>LEMON: It should be running out, right?</s>HARLOW: Exactly, come September, come the fall, one and a half million Americans...</s>LEMONG: Right.</s>HARLOW: ...according to the New York Times will see their unemployment checks stop and then what are they're going to do?</s>LEMON: Yes and let's talk about what was -- it used to be I think the biggest investment for most Americans and that was their homes...</s>HARLOW: Yes.</s>LEMON: Right? So what about sales any movement there?</s>HARLOW: Some great news this week.</s>LEMON: Ok.</s>HARLOW: Let's be positive for a second. Monday we got a new home sales report that showed an 11 percent spike when you look at the month of June, that's great. But you have an $8,000 first-time homebuyer credit from the Obama Administration that's helping things out. It's going to disappear on December. We did get at a very positive home price index report on Tuesday that showed -- that was a very unexpected home prices increase about a half a percent in 20 major cities on average when you look at the month of May. So two positive home reports but Don something you and I have talked about that producers hear lot -- what about commercial real estate? I saw a friend on Friday night who works in this industry and he said, let me tell you that the fallout from the housing sector is going to pale in comparison to the fallout from the commercial real estate industry. And we're going to see it too and that's what he is saying. So we're keeping an eye on it.</s>LEMON: You're absolutely right. I've heard the same thing. Poppy Harlow, CNNMoney.com, we appreciate it.</s>HARLOW: Sure.</s>LEMON: You know the economy was a hot topic today on the morning talk shows, no surprise there. And the top adviser though to President Obama is drawing some extra attention for refusing to rule out a middle class tax hike to pay for health care reform. Let's bring in now our senior political analyst Bill Schneider. Bill anytime you mention middle class tax hike, any time you mention taxes, a lot of people get really nervous especially when times are already as tough as they are now.</s>BILL SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, I should think so. Most people identify as taxpayers -- they are taxpayers. And President Obama got elected on a pledge not to raise taxes on middle income Americans and he said 95 percent of Americans will not see a tax increase. If taxes do go up they're going to be only at the highest levels. And that's what's been proposed by many of the plans that are now being considered for health care. That's why when the members of the administration start talking about tax increases not primarily falling on the middle class, a lot of people get nervous. What does that mean? "Not primarily falling on the middle class." Are middle class taxes actually going to go up to pay for health care and the deficit?</s>LEMON: Yes, you've got to pay close attention to the language as you we're saying "primarily" which doesn't mean the middle class taxpayers are exempt from anything.</s>SCHNEIDER: That's right. And there's a long history in Washington and in this country of raising taxes and disguising that. It's been by Republicans as well as Democrats calling them fees for services, calling them charges but not calling them a tax hike because "tax hike" is a poisonous word. The way Ronald Reagan built the Republican coalition was on the foundation of low taxes and that's still the cornerstone of the Republican faith. And you can bet that if there is any indication that taxes are going to go up for middle class Americans, the Republicans are going to jump right on it.</s>LEMON: That language is like the fine print...</s>SCHNEIDER: Exactly.</s>LEMON: ...you got to read it. Ok, Bill Schneider, our senior political analyst. Thank you, Bill.</s>SCHNEIDER: Sure.</s>LEMON: President Barack Obama came to Washington promising to change the tone between Democrats and Republicans but his rival in last November's election says things haven't worked out that way so far. Republican Senator John McCain told CNN why he thinks so.</s>JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Just before the inauguration, the president had a dinner in your honor. And he said you're an American hero and a guy who reached across the aisle. And that is the tone he wanted to set when he came to Washington. On this point has he failed the test he laid out at that dinner to be truly bipartisan?</s>SEN. JOHN MCCAIN, (R) ARIZONA: I'm afraid they have and look, they've got the votes. We understand that, they had the votes in the stimulus package and the budget and the omnibus and the S-Chip (ph) all this legislation. And they have picked off sometimes two or three Republicans but that's not changing the climate in Washington.</s>LEMON: That was made about the first hundred days. What about the second 100 days of the Obama administration? Let your voice be heard. Cast your vote at CNN.com/reportcard then get the results on "CNN's National Report Card" Thursday night 8:00 p.m. Eastern. Some answers tonight finally for the family of Navy Captain Michael Scott Speicher. He was the first American officer to be shot down in "Operation Desert Storm" back in 1991 when his jetfighter was hit on the first night of that war. But his remains were never found until last month. An Iraqi civilian told U.S. Marines in Anbar Province that Speicher's body was buried at the crash site. And excavation turned up bones that were positively identified as Speicher's. For friends and family, who had been trying to learn his fate for 18 years, their long search has come to an end.</s>MIRIAM NOVELLY, CAPT. SPEICHER'S FRIEND: It's a bittersweet ending. I mean it's great that we have finally accomplished an ending but it is bittersweet. You know, you always hope that he's going to found alive but yet, on that end if he was found alive, look what he's missed. I mean, his children are in college now. And what kind of life would he have led being a prisoner of war? And of course, there was always speculation that he was tortured and beaten and you know; so it's, like I said, it's bittersweet.</s>LEMON: And just a short time ago we received this written statement from the Speicher family who called the captain a brave and wonderful father, husband and naval officer who responded to the call of duty without hesitation. Their statement goes on to say, "We thank the active duty men and women whose diligence has made this happen and hope that this process has prevented another of our service men and women from being left behind. We will miss him, and we will never forget. Thank you for your thoughts and your prayers." And CNN's Pentagon correspondent, Chris Lawrence has been following the story and he joins us now live from Los Angeles. Chris, we're also just hearing from the White House as well on this from President Obama. I'll read that statement in just a minute. What are you hearing from the Pentagon?</s>CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, the big thing is we just talked to the family spokesman just a little while ago and they say that they do expect to get a classified briefing from the military either Monday or Tuesday. But it has answered the one big question they had and they now know for sure that Captain Speicher did not die in some Iraqi prison. This has been a mystery that has gone on for nearly 20 years and there were all kinds of questions, you know. Was he captured, was he tortured? All this time the answer was buried in those Iraqi sands and it really all was solved by one single tip. When that Iraqi citizen came forward and told the U.S. troops about that crash site, when the marines got there, they talked to another Iraqi citizen who said he not only remembered that American jet crashing, but that he was there when the Bedouins found Captain Speicher already dead and buried his body. It took several days but the Marines were able to collect enough evidence. They found those skeletal fragments and bones, they flew them back here and that's when that team of military pathologist were able to match the jawbone with Captain Speicher's dental records and confirmed that it was indeed him.</s>LEMON: Hey, Chris, you know this has been going for almost 20 years -- 18 years now. And back in January when this happened -- January of 1991, then Joint Chiefs Chair and also the Secretary of Defense made the announcement. And I want you to take a look at this, because it is two very familiar faces even today.</s>UNIDENTIFIED FEMALE: Would you please describe the plane that went down on the American side, the type of plane, number of casualties?</s>DICK CHENEY, DEFENSE SECRETARY: It involves a single casualty. I don't know that we want to identify the aircraft, do we?</s>UNIDENTIFIED MALE: What other information do you have about casualties?</s>CHENEY: All I can give you at this time is that the total U.S. losses are one aircraft and one individual.</s>LEMON: Dick Cheney and Colin Powell -- total U.S. loss as they said one aircraft, one individual. This was on the first day, the first casualty.</s>LAWRENCE: That's right. There have been some criticism over the years that the military did make some mistakes along the way, starting just hours after Captain Speicher's plane was shot down, in which the Pentagon there with Defense Secretary Dick Cheney basically declaring him dead. The military later changed that to missing in action, or I should say killed in action but body not recovered. Years later that would be changed back to missing in action, so the family has been through some ups and downs. And there's been ongoing debate over the years because a lot of people in the military thought that he may have been ejected safely, that he may still be alive. There was a lot of push from a lot of people in the military to keep looking for him, but again, some, also some pushback from others who thought that certain missions couldn't be risked. You couldn't risk the lives of certain soldiers to look for what they thought were just remains at that time. So this has been an ongoing thing and of course you saw the family there thanking a lot of the military members who just kept up the push over the years to try to find him.</s>LEMON: All right Chris. Now we know what happened. Thank you very much for your reporting, our Pentagon correspondent Chris Lawrence. We just got this statement from President Barack Obama just minutes ago. It says, "I am grateful to the Marines who pursued the information that led to Captain Speicher's recovery so that he can now come home. My thoughts and prayers are with this family and I hope that the recovery of his remain also bring them a needed sense of closure." That's from the president of the United States. Coming up in just a few minutes we'll speak with one of Speicher's old Navy buddies who can talk to us about the kind of man that he was. It's coming up in just a few minutes here on CNN. Let's go to Iran and another story that is developing, the Swiss ambassador is trying to get more information on three Americans arrested Friday by Iranian troops. The Swiss embassy represents U.S. interests in Iran because the U.S. and Iran have no diplomatic relations. The three Americans apparently strayed into Iranian territory while hiking in the Kyrgyzstan region of Iraq. One of the three has been Joshua Fattal from Elkins Park, Pennsylvania. Last night, his mother spoke with CNN Radio.</s>LAURA FATTAL, MOTHER OF DETAINED AMERICAN: My husband and I are eager for the best welfare and conditions for our son, Josh, and for the other two companions he's with. And that is our only concern, his welfare, and the best conditions for him.</s>LEMON: And a fourth American hiker from the group, Sean McFessel (ph) is at the U.S. Embassy in Baghdad. He didn't go hiking with the others because he felt sick It has been a deadly weekend of fighting in Afghanistan. Three American troops were killed today in the eastern part of the country. At least six other NATO troops were killed yesterday including several Americans. In July, 75 NATO troops were killed in Afghanistan, the deadliest month for international troops since the U.S.-led invasion began back in 2001. In Tel Aviv, Israel, mourning and shock after two teenagers were shot dead at a center for gay youth last night. Hundreds of people showed up for their funerals and meantime police are looking for the shooter who witnesses say was wearing a mask. Protesters are condemning the attack as an assault on their freedom.</s>NITZAN HOROWITZ, ISRAELI KNESSET MEMBER: We're all under shock. We didn't expect such murderous attack. This is the first time something like that is happening in Israel, and we are not going to sit quietly and let this pass away. We're going to fight for our freedom.</s>LEMON: Police are treating the shooting as a hate crime against the gay community. Prime Minister Benjamin Netanyahu has called for respect and tolerance, and he is promising justice. The man who allegedly sparked a bomb scare at New York's LaGuardia Airport yesterday has been ordered to undergo a psychiatric examination. Police say 32-year-old Scott McGann was arrested with a backpack containing wires, batteries and a trigger attached to it. The bag sparked suspicion and led to a large-scale evacuation of the New York airport. LaGuardia was shut down and thousands of passengers had their travel plans disrupted. McGann is charged with placing a false bomb in a mass transportation facility and making a terrorist threat. If convicted he faces up to seven years in prison. More than 250 people killed so far this year, that's life on the street in Chicago. Why? You're going to hear from a gang member who says there's no way to stop this violence. And how do you fix a $24 billion deficit? The state of California may turn to marijuana. And new fuel to keep the cash for clunkers program alive, but for how long? And here's how you get on the air here, Twitter, Facebook, MySpace or iReport.com. We appreciate your comments.