awards. he helped make me a better journalist and i will always be grateful. we wish david only the best as he embarks on his next new challenge. good luck, david. we thank you, all of us here at cnn will miss you. and that's it for me. i'm wolf blitzer in "the situation room." for our international viewers, "world report" is next. in north america, "john king, usa" starts right now. >> thanks, wolf, and good evening, everyone. syria's regime broadcasts images of a devastated hama, a government brutally gunning down its own people has the gal to say it saved the city from thugs. but images the regime would never show you tell a different story. but up first tonight, breaking news that could impact your mortgage rate or what you pay for your credit card. i'm told by a senior obama administration official tonight that the ratings agency stand d

standard & poor's plans to downgrade the aaa credit rating. if that happens, it could not only affect the government borrowing costs but could have a domino effect, but the administration found what he called serious and amateur errors of the s&p analysis of the recent debt ceiling compromise. they say that the s&p models was off in his view by trillions of dollars. now the officials say s&p acknowledged some errors and agreed to rethink its analysis. t at this hour no final word and the official described it as, quote, a moving target. when asked if s&p would change its mind and keep its aaa rating in effect. we'll keep on top of that. a downgrade from aaa to aa will hurt the government and you as well, and that news in to us after a roller coaster day on wall street as a decent but hardly robust jobs report quiets but doesn't silence talk of a double-dip recession. >> what i want the american people and our partners around the world to know is this, we

are going to get through this. things will get better, and we're going to get there together. >> in a moment, the politics of the economy and what those numbers tell us about the president's job security. but, first, your reality and your anxiety about a stalled recovery and the jobs market. the jobs report showed the private sector added 154,000 jobs last month, but it had a net gain of 117,000 jobs, more than what most economists predicted, but it takes double that number in monthly jobs gains to make a serious dent in unemployment. the jobless rate, 9.1%, down a notch from 9.2% in june, but the sad reality is the biggest factor in the slight decline is the fact that many discouraged americans just stopped looking for work and the way the government calculates if you aren't actively applying for work you don't get counted among the unemployed.

it factored into a roller coaster friday on wall street. the initial reaction to the job numbers quite positive and then stocks fell because of european debt worries and the decision about the s&p. when it was all over the dow closed up 64 points, alison kosik rode out the day on wall street and is here now. alison, why the ups and downs? >> gosh, do you know what was happening today, john? we saw the wild swings because wall street was really riding on every headline that came out. you know, first we had that positive jobs report at the open and we saw the dow go up as much as 172 points. you know, everybody took a deep breath, thought the day was going to be great and before you knew it the dow was plunging 244 points down on unsubstantiated worries that standard & poor's would downgrade the u.s. credit rating after the closing bell. we called s&p, they had no comment on that. but then we got positive news out of europe and we saw the dow rise another 118 points after that.

after the ebp said it's ready to buy up italian and spanish debt. there had been worries that no one would buy its bonds, so what you saw was a market clearly still on edge. the fear is still there. we saw that in a wild swings that we saw today on wall street, john? >> as you wrap up the week, as you look around the world and we need to realize this is a global economy at the moment, stock values down in asia, down in europe. where are we heading here? >> yeah, i mean, you talk about the global view here, you know, 10, 15 years ago all you had to worry about was our own economies, but we're so interconnected. we had our own debt problems. that was spooking the markets overseas and now we're hearing more worries about greece coming up again and more particularly, you know, italy and spain and their debt issues. they've got big debt issues as well. you know, one trader said it this way, europe has a cold and we start sneezing over here. we're just so interconnected that we wind up spooking each other and that's why you're going to see sort of this market

continually on edge until these problems go away, john. >> a wild week and a wild day on wall street. alison kosik, thanks. >> yes. let's go behind the numbers with mark zandi, the chief economist at moody's analytics and chrystia freeland, the analyst from reuters. in a strong economy we'd look at the report and call it modest or tepid, but given what we've gone through the past week is there hope even though this is not huge job growth, is there hope here? >> it's really good news in the context of all the fear and angst out there. the economy isn't home free. it's still very weak, we're not creating enough jobs to bring down unemployment, but i think this strongly suggests we're going to skirt recession and clearly that a very positive thing and the best message we can take out of this data. >> is mark right, is the double-dip talk going to stop now? >> no, i don't think the double-dip talk will stop, because there's so many other signs of weakness. and i do think the shock to the stock market yesterday is really going to have people jittery.

but i agree with mark in general. this was one piece in good news in an otherwise grim week. i think the thing that is interesting to me if you look sort of under the hood in these job numbers is they would look even better if the government wasn't laying so many people off. so, part of what's going on is the private sector is the little engine that could, it's trying to get up the hill, but we're actually hurting the economy because the government is throwing more people into unemployment. >> and there's no end to that in sight because states don't have much money. you mentioned dig a little deeper. let's go over and look at some of the numbers. i want to pop up the unemployment line graph. if we look through, i'm going back to july '09 here. the administration had hoped the stimulus program would keep the unemployment rate below 8%, we're at 9.1% now. mark zandi, if you look at 150,000 jobs last month what we've been through in recent weeks, 9.1%, what's the prognosis for the next year? we'll be somewhere in the 8s i assume at best? >> right, under the best and most optimistic scenario next

year we won't be below 8%, but i do think, though, there are some reasons for optimism and the most fundamental is that businesses, american companies are in very good financial shape, they're very profitable, their balance sheets are strong, they reduced their debt. it's not a question of can they hire, it's a question of willingness. >> i'll try to give our viewers historical context, chrystia, as i bring you in. here's what we've seen, january 2009, january through december, 2010, when the president took office, bleeding jocks, upspurt and down, and this is a little better this month and they readjusted the last two months but i want to show some historical numbers here. we go back in time. here back in 2004 to 2007, when the unemployment rate was in the 4%, 5% range, the economy was creating 250,000 jobs or more, sometimes above 300,000 a month. chryst chrystia, is that kind of job growth anywhere on the horizon? >> you pointed to the central economic and also frankly for the president political issue right now, that, you know, tepid

job growth is not going to be enough. we need real -- a really, really strongly growing economy to bring all of those unemployed people back to work. and another issue that you see when you look again a little more deeply in these job numbers is, there is sort of a hardcore unemployed group that is forming because of the length of this recession. >> and how does that work out, mark zandi, as we watch this, i want to pull this up. chrystia made a good point. the government says 14 million unemployed and if you add in the underemployed, people that would like to work full time but can only find a part-time job, so you've got 22.5 million people in the united states who are either unemployed or underemployed and a lot have been unemployed for a very long time. what's the prognosis for them? >> we've got a long haul and it will take a few years to get the unemployment back to what you were suggesting in the 2004, 2005, 4% or 5% unemployment.

even then i don't think we get back there because as chrystia pointed out, we have a lot -- a large number of long-term unemployed who will have a great deal of difficulty getting back in the job market, because they've been out of work for so long. >> let me ask each of you in closing and i want to bring up on the screen here the sector changes. the government bled 30,000 more jobs across the country state and local governments don't have money. they're laying people off. here's what grew, manufacturing, 24,000 jobs up, the mining industry, retail trade, that's good, consumers are spending more money, health care, tourism, the consumers are spending a little bit more money. as you look long term, though, as we went through obviously the debt crisis, mark, you mentioned how that caused issues in the markets but we've got a lot going overseas as well. chrystia, to you first, where is the calming or turning point or is there too many bouncing bawrls to see that? >> i appreciate your effort at positivity, but i'm going to focus in on one of those negative balls that i think we should be looking at the most and that is really europe.

you know, mark pointed to the fact that the economy seemed to be recovering at the beginning of this year. i think the problem is the economy is so weak that any external shock just knocks it down, and the place where it looks like some of those shocks might be coming from, as they did this week, is europe, particularly italy and spain. so, watch those countries. >> more of a policy response. you know, in my view the problem here is confidence, a lack of confidence, just flat-out fear, nervousness, and it amplifies the impact of anything that goes wrong. so, in a normal economy you get hit by these things and you sort of shrug it off and in the economy today and given what we've been through, we can't get beyond it. we need policymakers here and particularly in europe to act very decisively and i think they will, i think they're getting the message. and, you know, it's steps they're not sure exactly what they should do and how they should do it, but i think they're getting to that point and i think we'll see more policy action. when we see that, i think that will be for me the signal that things have turned definitively. >> mark zandi, chrystia

freeland, appreciate your help. the syria regime that is brutally killing its own people, it uses state television to suggest it's fighting terrorists. but our images expose the crackdown and the brutal truth. s&p serves notice to the obama white house that it plans to downgrade the u.s. credit rating. the government is fighting back. more on that just ahead. [ groans ] you okay? i'm not looking forward to my flight. try this. bayer aspirin? i'm not having a heart attack. it's my back. no, this is new bayer advanced aspirin...

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back now to tonight's major breaking economic news. i'm told by a senior obama administration official that at about 1:30 this afternoon the white house received news from standard & poor's it plans to downgrade the united states aaa credit rating because the agency said it was not convinced that the deficit reduction plan agreed to just last week would do enough to get the u.s. economy back on track, to get the u.s. government back on a path toward fiscal sanity. the administration is fighting back tonight i'm told to challenge the economic assessment spr assessment from standard & poor's, and one official saying it was, quote, off trillions of dollars of how the debt deal would impact future debt and government spending. let's dig deeper on the prospect. i'm told by that official as of now it's a moving target, no

final decision made by standard & poor's which agreed to re-look ats its numbers but official sounded convince that some at standard & poor's wanted to continue to press ahead and go ahead with this downgrade. let's talk about the implications if that plays out. cnn senior correspondent allan chernoff on the phone and on the phone is poppy harlow, i want to go to the magic wall so people can visualize this at home. if standard & poor's were to take us, the united states government, down from extremely strong to, say, aa, very strong, all of these, of course, the lower ratings. we assume if they went down, it would be just a notch. what would the impact be on the government and what might the impact be on the consumer? >> absolutely, john. i have two words for it, unprecedented and uncharted. those are not my words, those are what a new york stock exchange trader told me after the market closed today. that's the fear heading into monday's session. if we have a downgrade from s&p, that is what traders not only in the united states and investors, the average americans and people all around the world are

concerned about. that is -- that is what sustaining this fear heading into monday's session. we'll get a first indication of if we do have a downgrade on sunday night. we'll see how the asian markets react when they open at 8:00 p.m. eastern on sunday. for the average person, this is huge. this has never happened before in the history of the united states. that is why it's so unprecedented. what it would mean for you at home watching right now is that your cost of borrowing would go up. the treasury yield would be affected and, therefore, your interest rates would go up. we're talking about your mortgage, if you have an adjustable rate mortgage. we're talking about your college loan, if you have a privately funded college loan, your car loan, so this spans the gamut. and i think, john, the timing of this is so critical because it comes at a time when clearly our economy is at peril and if you make the cost of borrowing for consumers and businesses more expensive, that does nothing to help pull us out of what feels realistically like a recession. still it does nothing to pull us

out, it just digs us deeper in the hole, john. >> and allan, it's extraordinary the way it plays out. standard & poor's serves notice middle this afternoon, and the administration says, no, your numbers are wrong, they start to fight back. they said, okay, we'll look at it. the discussions were private while the market was open. the market is closed and we have no word to standard & poor's, to poppy's point isn't there now a burden on the company to say yea or nay as soon as possible? >> there's been pressure throughout the week, because at the beginning of the week the country did avoid default. that was not enough for standard & poor's and back on july 14th when the company put the u.s. on a negative credit watch, the company said, standard & poor's said, that they wanted to see a credible program for reducing the u.s. government debt burden. that's their phrase. they clearly don't see that just yet. standard & poor's, though, didn't act right away when the program came out of washington. what they do is they assess the

u.s. economy, the liquidity of the country, monetary policy, fiscal policy, they look at all that. they have a committee. there's an odd number of people that actually sit on that committee. once they receive a report from the analysts, they then decide. so, they go through a whole long process. that's why it's taken all the way until friday, right now, and you better believe during this entire week, there has been tremendous pressure coming from the administration on s&p not to move. the other credit agencies said we're not going to change the rating. s&p is under serious heat. >> and, poppy, to that point, moody's said we'll leave it the same, we'll keep an eye on you, fitch the same. for standard & poor's to break with them, how significant would that be and would the agency itself be going out on a limb to do that? >> john, i couldn't hear the last part of your question there, but i did want to say one point. i heard you talking about fitch and moody's and them saying they're not going to downgrade.

i want to point out one very important thing. if indeed standard & poor's makes the decision independently on their own despite your reporting that the obama administration is pushing back fiercely against the downgrade saying their math is off, if we see a downgrade from standard & poor's, that is important, but it is less important if we don't see also a downgrade from moody's and/or fitch. meaning the more agencies that you have downgrading the credit rating of the united states, the more substantial the blow is. so, we have confidence that moody's and fitch will not downgrade. we'll see if s&p does. but independently, it is still important but it means less than if we saw, say, standard & poor's and moody's, downgrade the rating, john, and i think that is a very, very important point. at the same time i think it's important when you look at where americans have been putting their money, when they pulled out so aggressively of the market yesterday and we saw the biggest decline for stocks that we've seen since the financial crisis, where did people put their money? they put their money, interestingly, in u.s. treasuries, in government bonds,

so much so that one-month t-bills were getting a negative return. people were paying the u.s. government to hold their money. if we see a downgrade, you will see a dramatic shift and people will be going away from what they thought was a flight to safety in treasuries and they will be looking for another safe haven for their money. they don't feel like that safe haven is in the stock market, if they don't feel like that with the u.s. treasuries. the question is where do they feel like their money is safe, john. >> and allan, it's remarkable, you could see if you or i would be trying to get a loan, we'd be arguing with the bank back and forth. the highest level in the obama administration and the people in the rating agencies, and having an economic argument with the ratings agency and it's remarkable to think about that and the stakes of the lobbying argument. >> s&p would be going out on a limb. we need to keep it in perspective, s&p and the other major credit rating agencies, pretty much missed the financial

crisis, they were all over on the mortgage-backed securities and they turned out not to be worth the paper they were printed on. now s&p wants to be extremely vigilant, do they get supertough with the united states of america? it appears perhaps they will. and that really is highly controversial, books will probably be written about it. will it destroy the u..s. economy? 12, i know poppy gave some strong language, but perhaps not. i mean, there have been other major countries who have seen their debt downgraded and they've survived just fine. and, of course, this can always be changed if the u.s. does put in place a credible plan, then s&p could bring it back up to aaa. >> we'll stay on top of the story, appreciate your insights on the breaking news. we'll stay on top of it. anti-government protesters march across the country while the assad government continues

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syria tonight remarkable bravery by anti-government demonstrators and galling propaganda from the brutal regime that is killing its own citizens. hama is the biggest battleground, the videos loadeded there, the videos loaded up on youtube. listen in. you can hear the gunfire there, again, the syrian regime cracking down on citizens that it says are terrorists. look at some of the other demonstrations all across country today, braving and risking their lives to be out on the streets. peaceful demonstrations chanting in support of hama and calling for the end of the regime here. and look at these pictures as well here. chants in the street, supporting the demonstrators elsewhere. and here as well. violence here. this mosque, people gathering for friday prayers and you can

hear glass breaking. there was gunfire there on that mosque there. and here in duma, just watch the tear gas here, violence, the syrian regime cracking down, again, again, on its own citizens. cnn's arwa damon is tracking this brutal crackdown for us. she's in beirut tonight. arwa, you've been able to speak to some residents, some sources inside hama, what do they describe today? >> reporter: they describe an ongoing military crackdown. one that appears to be getting even more intense and more brutal. this morning we got through to one resident who was speaking to us on a satellite phone, as all communications have been cut off since wednesday morning, and during that conversation you could clearly hear the sound of gunfire. we were able to get in touch with him a few hours later, and he said that the gunfire had intensified to such a degree that he was forced to make a run for it. he said his vehicle was shot at and he was especially worried that if he was caught, he would possibly be executed, killed on the spot, because he was in

possession of a satellite phone. but, john, it really goes to show you the lengths and the risks that these activists will take. and they say that this is something that they absolutely have to do. not just the resident whom we were talking to, but all of the individuals that we see filming the youtube videos that have provided such a critical window in to not just what is happening in hama, but throughout the entire country, and they say it's part of their duty to do this, because, they tell us, the world has to be aware of this massacre that's being carried out by the syrian regime. >> and, arwa, the regime took the brazen step of broadcasting images of hama on state tv, but not, shall we say, in proper context. what was that all about? >> reporter: yeah, syrian state television appears to have a crew in hama, we believe it's the first time they broadcast their own images in the city since the uprising began and in this report the military offensive was being described as

an attack on armed terrorist groups. the reporter was saying that the military had gone through, was removing barricades that were set up by these terrorist elements, that it was per suing them throughout the city. and they were saying that it was foreign elements that were fueling all of this. >> and, arwa, we also have images and reports of other demonstrations, protests, across the country today. are demonstrators also where being met with the same force that we see in hama? >> reporter: not necessarily the same level of military force, but most certainly there have been a number of reports where demonstrations throughout the country came under attack by syrian security forces. there's some pretty dramatic images that show people who appear to be holed up in a mosque coming under attack. and this, again, john just goes to show you the bravery and the defiance of these demonstrators. there's one clip in particular where you see the cameraman, the person filming it, appears to be

on the roof of the mosque, and you see a plume of smoke rising. you hear gunfire, but you also hear the chants of the people want the downfall of the regime. so, it seems that despite everything that the government is trying to do, despite the fact that it appears to be literally trying to bomb and shoot these demonstrators into submission, at this point it's not working. >> arwa damon for us tonight from beirut, arwa, thank you. let's continue the coverings with syrian human rights activist, and a university and maryland professor and senior fellow from the brookings institute. let me start with you, you belief 2,000-plus have been killed in the crackdown, i don't doubt your numbers. but since we can't get in there, we've had reporters in there briefly, they won't let the reporters in. how you come about these numbers? >> basically we're in touch with a huge number of people via skype and people are reporting the number of deaths, and there's more than 2,000 get killed. we have names and locations and

date killed, and we expect the number is higher, but that's the number we managed to document. and basically more people are afraid. they broke the fear and they're not afraid to report about the death and the arrest and the torture incident. >> as it plays out, sibley, we've heard ratcheting up of the pressure, and i want you to listen to the u.s. ambassador to the u.n., susan rice, and she insists the regime is starting to feel some pressure. is there any evidence, any evidence at all, that president assad feels enough heat to even think about stepping aside? >> well, he's certainly feeling more and more heat, john, with every day. the heat is coming in various forms. the economy is crumbling. the people of syria are rising up in city after city, day after day, night after night, making claims that they are determined to forge a future of freedom and democracy.

and that does not include bashar assad. >> really, though? he's killing his own people. we saw more images today. it seems that his reaction is to intensify the crackdown, not think about leaving. >> there's no question, look, if you look at it from his point of view. first all, he'd rather be where gadhafi is, and not where mubarak is, not in a cage. you can assume there won't be any military intervention and there won't be from the outside. and an resolution from the u.n. is unlikely to materialize if it is strong because of russian likely veto. he has not seen huge demonstrations in the two largest sees, some in damascus, more today, but on the scale of elsewhere, he's had some defections of the military but not on the large scale, so he really believes he can withstand that. i don't think he can, actually. i think now he's at a point of no return for a number of reasons, because the battle

will. even if he doesn't feel the heat directly, all of this is involving the people. it's a battle of wills. the public is out there. the barrier of fear has been broken. it's expanding to many different cities. it's very hard to turn it around. >> and you met with the canadian foreign minister, today, i think, if i have that right. what are you looking for in terms of the human rights if russia and china won't sign on to a tough u.n. security council resolutions, that means sanctions from the united nations security council, what can everyone else do? >> they can push more for sanctions. and that's the word for -- there a crack in the wall with the russians and we need to make the crack bigger and bigger. and i met with secretary clinton today as well and that's what we asked secretary clinton that we need president obama to say publicly he has to step down. >> and what's her question, why won't she? >> she talked about the minority joining or not joining the protests and the political vacuum of the president absence, and we answered those issues with her.

and i think her statement, the strong statement, in the last 24 hours, was based on the view, on the explanation we provided. and we especially canada because you asked has no oil and gas companies working in syria, we're working with europeans and canadians to impose oil and gas sanctions because i think the economy factor is a key factor when the government cannot finance this method of operation, i think we're going to win this battle. >> you make an important point i think when you make the point that he would rather be like gadhafi than mubarak. i want to follow-up. but first the arab league was key to the operations in libya. the arab league said he lost his legitimacy. they have been silent when it comes to bashar al assad, why? >> it's complicated. it's not just the arab league. in the gadhafi case it was always unique case, in part there were so many different factors including score settling with gadhafi like saudi arabia, essentially, you know, sketeling scores. the interesting thing is you

have arab public opinion supporting international interrens. you do not have it in the case of syria. even people who are angry with syria, you don't find the public opinion pushing for a military intervention by the international community. they want pressure, but they don't want international intervention. in the gulf states obviously they're also worried that they are not yet comfortable that they will not come back to haunt them and this has been the interesting situation particularly with the case of syria. >> take us inside, as we listen arwa damon has been great reporting and you have your activists and you see the demonstrations in the streets, you see the siege in hama and the military moving other places, in terms of the humanitarian needs and medical needs, how many people are afraid of going out of their house because a sniper might shoot them? >> that's the problem in hama, and it will be the problem elsewhere where you see the tanks and the government did not pay the salaries for people, and

no electricity and no water and no communications. it's the same case with hama now for more than four days and the people cannot even get out of their home to bring food or something. and furthermore, they attack hospital and they shut down the electricity for hospitals and that caused loss of deaths and deaths of everybody in the hospitals. we're through talking about humanitarian crisis and this was, again, one of the demon from the international community to push more to allow the irc to intercede and do humanitarian missions. >> thank you for your time. it's a horrible story, we'll see if the international pressure changes at all. we appreciate your insights. joplin, missouri, getting ready to go back to school, a challenge under scored by the horrific new images of the power of the deadly may tornado. next, they say the numbers don't lie. if that's the case, the new unemployment numbers are a tough truth for a president hoping to win four more years. [ man ] natural gas vehicles are used somewhere... but not in my neighborhood.

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on the one hand, word the economy added 117,000 jobs last month is progress. given more anemic hiring last month and all the other downbeat economic news of recent days. but unemployment is still high, 9.1%. and it takes monthly job gains in the ballpark of 250,000 to get the jobless rate heading down at a steadily clip, so it's no surprise president obama said his singular focus right now will be, in a word, jobs.

>> when congress gets back in september, i want to move quickly on things that will help the economy create jobs right now. extending the payroll tax credit to put $1,000 in the pocket of the average worker, extending unemployment insurance to help people get back on their feet, putting construction workers back to work rebuilding america. those are all steps that we can take right now that will make a difference. >> november 2012 might seem a long way off, but election is 459 days away. and most economists predict at best the unemployment rate by then will be in the ballpark maybe 8.5%. now, history suggests a rate that high would spell trouble for the president's re-election prospects. let's take a closer look. let's just look right here at the unemployment rate. we're at 9.1% today. if you look back to fdr, no incumbent president has won re-election above 7.2%. ronald reagan was that president back in 1984. one other number to look at here, job growth.

job growth in the economy you see when the president started we were still in recession, then we came up and had a flat line. this is recent months it's in the positive but it's not robust. history suggests, again, an inbi incumbent needs the 200,000, 300,000 range to be assured re-election. let's explore it with our political analysts. let's start with the democrats, and when you look at history and the anemic economy if you're the president of the united states and you are planning re-election, you are running on hope and change, what can you say this time? >> there are a few things. first the progress that's been made since 2008 and when i talk to voters, they feel that things have improved since 2008. there was a poll recently that showed more people blame congress and president bush and wall street, former president bush, than they blame president obama. another thing to look at, think about with those numbers and think about what it means for the dialogue, is they would have been a little bit higher, but we

lost some jobs in the government sector. and private sector gains have been much less volatile and actually increased more, and, in fact, the biggest drop-off was in minnesota where there was the huge fight caused by republicans. republicans have really kind of made this a more difficult climate on top of what people are already feeling. >> i think you probably wouldn't be that upset if president obama ran around the country saying we need more government jobs? >> well, here's the issue. we can look at consumer confidence, and today consumer confidence has dropped to a lower level than we saw since 2009, and no incumbent president of this country has ever won re-election with consumer confidence as low as it is today. so, what it says at best he's facing a too-close-to-call campaign, we've got one more year to go to get better. the economy is growing way too slowly. and pretty soon history says you're the guy that has been there and you take the hit. >> i know the consumer

confidence is a number you focus on in your studies. let's bring it is up and look at the university michigan survey down here in may and june and now in july in the danger zone. incumbent presidents have been above 95. if you are above 95 you get re-elected. if you're down here, it's a lot more dicey. this reminds me in some way in 1992 where the economy was getting better. when george h.w. bush, a republican president, was getting better, but at a slow rate. it was hard to break the psychology. voters had decided it's bad, and even though the data was there, the president couldn't convince him. will president obama have the same problem? >> the debate is who is paying more attention to voter struggles and who is really trying to focus on fixing the economy. it's clear that the president wins that debate over republicans in congress or over any of the republican candidates for office. they are fighting over who is going to be farther extreme, who is going to be signing the most extreme pledge. who is going to be holding up the most bills. they haven't introduced a single jobs bill. if this really comes down to who

is more interested in fixing the economy or who is like mitt romney hoping that nobody asks him tough questions, then it will be really clear who wins out in that debate. >> a way to shorthand is it a referendum or a choice, if it's a referendum on president obama, the statistics are stuff, they are tough statistics if you come into office if you're a "d" or an "r," if it's a choice, the president has a better chance, right? >> here's the reality. we've used this index since 1952, so what we know, as i said, no incumbent party has ever won with the consumer confidence below 74 and here's the other thing. this consumer confidence hill normally changes a point or two. it dropped eight points. we do tracking for cnbc every quarter in economic confidence. people say now, right now my wages are -- i don't think my wages will go up. my housing values are the worst they've been. i don't think the market will go up. these are all lower than they've been at any point during this

three-year recession. no incumbent president wants to face that electorate and say give me another chance. sooner or later, people say, i know that didn't work. what's the next guy? that helped him in 2008. it could also2012. >> let's set politics aside, to the degree that we can, but when you talk to voters and do focus groups, what is it? why are they so down? why is the consumer confidence dropping so much? >> a few reasons. one, the economy is not -- we have a ways to go. and i think they look at washington and they look at the debate in washington and what happened with the debt ceiling fight and say here are some folks who are not paying attention at all to what we're talking about. they are grandstanding. the tea party has highest unfavorables than they've ever had. even the republicans say the tea party had too much influence over the debt ceiling debate so they're looking at the fighting in washington, where even though

it's been frustrating and folks have expressed frustration this week of how this all played out, the republicans have suffered the most in the polls. they may feel they won but that's not what the voters feel. the voters feel they lost and that republicans into nearly as much for voters or democrats in congress or the president. >> when you look ahead, i think you would concede the point that the president is a gifted politician. do you see and i think you're firm is doing polling for the romney campaign so i'll be careful. of all the candidates, do you see a new and interesting captivating economic message? or do you see a message that if you're working for the other side, the president could say -- that's the same old stuff. george w. bush did that and what did we get? >> the president is running on almost a trillion-dollar stimulus. we add a trillion-dollar health bill and try to make sure we improve the economy and increase government spending. >> so the republicans have to run on a negative economic

message. is there anything new and positive? >> we try what the president said would work and it failed. whenever that's happened, people are willing to look to who is the other guy? i think our party is a long way to go. our party nominee say long way to go to reiterate what is a different idea. but by the way, i believe that what we know for sure and let me talk about president obama in 2008. people would try to argue he's untested and didn't have this experience and i said, here's what i know. what i know about americans is if you try something and it doesn't work what they say is here's what i know for sure. that didn't work let's try something new. and the problem for the president on year four of his presidency is his idea of how to make this economy grow didn't work and he didn't meet his own standard. he said if we pass my stimulus unemployment won't go up above 8% and instead, it's been higher than the great depression and sooner or later, all that comes crashing down. i agree with margie. i think it dropped so much

because of the debt ceiling but the president suffered where his job approval and his independents. >> we'll come back and debate it again another day. when we come back, new images of a deadly tornado that devastated joplin, missouri. you'll wonder how students are going back to school? just a few days. [ male announcer ] even in the most uncertain times, there are some things we know for sure. there will still be weddings, still be babies, and still be bright futures. that's why new york life has been helping families plan

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we're a little over a week away from the opening of schools in joplin, missouri where the

spring semester was cut short by last may's deadly tornado. incredible pictures continue to surface from the day the storm hit. this is video surveillance cameras. the death toll now stands at 160. officials have had fewer than three months to find some place to teach about 4,000 students. with us now, joplin high school principal, kerry siketta. when you look at these new images does it stir it back up all over again? does it put it behind you? what goes through your mind? >> you live the tornado, the devastation again when you see them and you remember where you're at and when you heard about it and what you saw directly after it. so i've seen some of the footage and, yeah, it's a really a reminder of what we've been through. >> and when you see the pictures, the cafeteria and hallways, you must think, thank god it happened on the weekend and nobody was in school. >> we're so lucky it didn't

happen when students were in school. with 4,000 plus students that were all scattered throughout the district in different buildings, and with the path of the tornado, the tornado took about as bad a path at you could have taken to hit our schools and it's obvious that there would have been a lot of people hurt. >> and when you look at these new images obviously the students were not there. they were not in the halls of the school, music room or cafeteria and the like. their homes had been damaged, around when i was in joplin people talked about the counseling and conversations necessary to help the psyche of people through this. had you close are you to turning a chapter and not having people looking back about this painful event? >> we feel good about where we are but reare prepared for students and adults to still be upset or concerned. when we get the students back together we've had several activities during the summer to

get students back together, see their teachers and so on and we'll do it again next week to try to get over some of that anxiety and bringing up the memories of what they lived through. several of our students lost their home, school, their church. they lost the places that they go to. >> i'm looking forward to coming back sometime soon. take us around the town through your eyes. and how far along is joplin in getting rid of the debris in beginning to turn the page? >> you saw the devastation right afterwards so you know how bad it was. when you get to town again, you won't believe what you'll see. it's virtually cleaned up, except for a few locations. obviously, our schools have not been cleaned up yet because they're one of the last group and st. john's hospital is still in a situation writ hadn't been torn down. but you're not going to believe what you'll see in joplin. the people of joplin, the volunteerism statewide