a lot of people asking how a candidate that was at the bottom tier a week ago jumped to the very top in a key election state. welcome to "america live" i'm megyn kelly. mr. cain delivering a shocking blow to the frontrunners rick perry and mitt romney. he won 37% of the gop vote in the florida straw poll, more than perry and romney combined. how did a former ceo without a big campaign machine manage to pull this off? some are blaming a bad debate performance by governor per raoefplt others say, just listen to mr. cain speak. >> the american dream is under attack. the american dream is under attack because we have become a nation of crises. we have an economic crisis, we have an entitlement spending crisis, we have an energy crisis, we have an immigration

crisis, we have a foggy foreign policy crisis, we have a national security crisis, and the biggest -- we have a moral crisis in this country, and the biggest crisis of all is a severe deficiency of leadership in washington d.c., and in the white house. [cheering] >> leadership, deficiency. but the good news is we can solve these crises. they are not impossible to solve, it's just going to take the right leadership and some common-sense. but even when america is not at the top of the hill it's still the best nation in the world with everybody else looking up to the united states. we're still the best nation in

the world. megyn: byron, put into perspective what a huge victory that was for cain, given his efforts prior to that straw poll. >> really big. i was in the room for that speech, by the way. he got at least seven standing ovations. the audience went while. a lot of his victory has been interpreted in the context of rick perry support collapsing. look at very positive things there are about herman cain. he's been a tea party favorite for a longtime, a good speaker. he's had a talk radio show which he's very good at and he paid a lot of attention to base voters. he met with a lot of people, he gave a lot of speeches. he made sure that they understood that he was coming from solid, conservative principles. this is not a national poll, and he's pulling i think 6th in the republican race behind most of the other candidates. but with that group that was in florida he was really

connected. megyn: what did it? it's not like perry didn't try in florida, he did try and actually had some statements you pointed out in your piece saying just hours before the poll, that quote, i've got all my hopes on florida, so he tried. herman cain didn't have anywhere near the organization or money behind him that rick perry had, so what did it? >> reporter: perry had a poor debate, did not do well with you and chris and b r-rbs et at the debate. he had a breakfast the next day which only attracted about half of the room, he spent a lot of time pressing the flesh but only gave a seven-minute speech that really didn't turn anybody on. his last chance to impress the delegates was at that moment where herman cain spoke before. they were invited to speak to the delegates before the voting. perry skipped that because he was off to michigan campaigning. so he just didn't take advantage of his opportunities there. megyn: this florida stu poll has been won by every gop presidential nominee since

1979. that doesn't necessarily mean that herman cain is going to be the republican presidential nominee but it certainly is a nice omen for hip. how can he parlay this? does this give him some wind behind his back and if so how, in what say? >> this is a second life for him. he first rose to prominent after the first fox debate in greenville, south carolina back in may. a lot of people in frank luntz' group thought he won that debate. he got bogged down with statements about muslims in his cabinet, all sorts of things. he has another chance now to get some more money. his spokeswoman told mow over the weekend that he had had the best 48 hour period of fundraising that he ever had. get more money, do some commercials do more traveling and try to follow-up this time on his victory and this good performance in this debate this orlando. megyn: those assuming that

herrmann cain could not win they may be receasing that notion today. he's the man of the hour, herman cain, and he will join me live today at 2:15pm eastern time to talk about the big win, the gop field and what is next for his white house campaign. well, new jersey governor chris christie hitting the campaign trail as talk is happening as to whether he will join this race. seven big republican donors are pushing the government for him to reconsider his decision and enter the primary. sources close to christie say the bid is off the page. he is headlining the gop's largest fund-raiser tonight and he will give a keynote speech at the reagan national like prayer row tomorrow night. the donald is back in the spotlight, one week after meeting with rick perry he is

getting together with mitt romney. the two meeting about an hour from now. strat skwr*eus say that trump has become a king maker of sorts when it comes to presidential politics after he considered his own presidential run earlier this year. donald trump will join our own neil cavuto at 4:00pm eastern this afternoon. that will be his first interview after the meeting with mitt romney. what went on behind chosed doors? who better to find out from than neil. in washington house republicans are taking steps to ramp up into investigation in the white house role in a bang superintendent see that cost taxpayers half a billion dollars. the obama administration grant aide $535 million stimulus loan to solar maker solyndra despite warnings that the company faced serious charges. doug mcelway picks up the story there live in washington. >> reporter: no solyndra hearings scheduled for this week with the house being in recess. there is a new development

today. the washington times reports in its bankruptcy filing solyndra listed as one of its creditors, the california democratic party. why solyndra may be indebted to the department krat particular party for california, no one seems to know. they say the organization was not owed funds in any form. he said it was unclear why the party would be listed as a creditor. we know that in 2009 california's democratically led legislation passed the strictest legislation in the country requiring that one-third come from renewables, including solar by 2020. investigators want to know a lot more about that. >> we continue to get the facts. chairman upton and subcommittee chairman stearns says there will be no witnesses interviewed at the staff level, both at the department of energy and office of management and budget. the bush administration credit review committee had recommended against this particular loan in january of 2009, and the obama

credit review committee which came in recommended in early -- either late february or early march of that same year for it. not only recommended for it, but it put it on the fast track, we're going to focus on that. >> reporter: the house energy and commerce committee has obtained tens of thousands of documents that it needs to sift through. committee chairman fred upt orbg n said during friday's hearing at which so linda executive pleaded the fifth. we are not done, no, we are not done. martha megyn: a country's teachers held hostage by drug cartels. facing a led line to start handing over half their paychecks by october 1st. the teachers are speaking out, but what happens if they don't pay up? trace gallagher live from los angeles. these headlines are just so extraordinary. you read like that, okay, like

this is what is happening now. this is actually hang. >> reporter: aside from selling drugs in mexico extortion is real he one of the best business. the cartels don't call it extortion, they call it protection money. you pay us, we protect you. now they are targeting the teachers, saying give us half of your salaries or risk your lives. and now you've got hundreds of schools in acapulco that are shutting down because the teachers are too afraid to show up for work. the reason this is getting so much publicity is because the teachers have a very powerful union down in mexico and they are trying to get the word out, trying to organize protests here. they want the government to assure their safety by giving teachers panic buttons in class, surveillance cameras, putting telephones in all the classrooms. i want to show you video taken in a mexican classroom last school year. this is kids doing cartel drills. you know how we do earthquake drills and fire drills in this country. they do cartel drills to protect

themselves in case the cartels actually attack their school. of course this whole extortion explosion thing came to a head last month when the zeta cartel went into a casino in monterey rey and they torched the casino because they would not pay the fees. 52 people were killed, most of them housewives, middle age women among the dead. doctors, lawyers, everybody in mexico 80% paying these keys but 80% also go unreported because people are afraid to tell the authorities what is happening and now the teachers are being targeted, megyn. megyn: halloween is four weeks away. if you want a good scare check out some of the economic headlines today. we are seeing stories about a global recession around the corner. the worst losses on wall street in 20 years. people repeating mistakes of the 1930s, and that's just today.

charles pane in three minutes on what to expect next. protestors accusing police of abuse for scenes like this. we've got a video exclusive just ahead. and republican student at uc berkeley want to hold a bake sale pricing the cupcakes differently based on race or gender to make a point on affirmative action. while there is a push to refund and punish the group. both sides join me live. >> cupcakes for sale. if you're asian a buck 50. if you're white a buck. if you're latino or black, 50-cents. >> that is not right. >> is the cupcake poison?

megyn: fox news alert we are getting possible new leads into a massive explosion that rocked a seattle suburb a couple of

hours ago. at least two people are injured. their house apparently destroyed by the blast and the fire that soon followed. witnesses say the explosion was so loud it shattered their windows. more than 20 homes have now been evacuated in the area. firefighters say it is still unclear whether a reported gas leak in the area may be to blame. not since the fall of 2008 have we felt this kind of concern, the whole world watching european economic struggles and the united states unable to dent the unemployment average. financial markets struggling with headlines like, gruesome week, recession fears, and profits wrecked by a golden decade. here now to put it in perspective for us fox news contributor charles paine. the author of be smart, act fast, get rich. charles, i look at this and it actually is a little scary, when you look in particular what is happening with europe. we are talking about 44 million people unemployed in countries

right now. 44million taking it outside of the united states where we're talking about 15 million or under employed. and what is happening in europe directly related to what is happening here. where are we headed? are the fears of another recession real? >> absolutely. there is no doubt that they are valid. the irony is probably the worst economic news of last week was contraction in manufacturing in china. it's been growing and the straw that stirred the entire global economic drink. megyn: it's the secret bail out, like when your credit cards are overrun and they keep mounting, and the interest mounts and you can't pay it, in the back of your mind maybe you know some mom or dad or some family member with dough, and it's the secret bail out person. china is th the secret bail out person. >> before we were saying shall the economic data is fake. now we're saying please don't

let it be real. the greatest question is the west 44 million unemployed, that is not counting people who are under employed. in american we have 25 million people who want a better job or a job. this is -- the west has gone off the rails. what we wanted to do really particularly in european the countries like greece and spain and portugal they went to socialism in the 07s, and 80s, and they wanted to show fairness and put on a facade that the system works and they had to borrow and use their former greatness and glory to keep it going. we are at the end of that road on all of that. we know it ends ugly. but how ugly is the question mark. megyn: how does europe get out of this jam? that is directly related to us. >> what they are saying in europe is the countries that have been responsible, for the most part germany, northern european counsel trees to a smaller degree france. they are telling their taxpayers, hey we want you to

pay for the bail out for your greek neighbors. while you work until you are 68 they retire at 50. while you pay gigantic taxes they are getting tax breaks. it's just absolutely amazing. so -- megyn: isn't that similar to what is happening here in the united states? >> it is. megyn: we have talks, for example, about bailing out certain states that have fiscally irresponsible. the way the president puts it it makes it sound good. it will prevent teachers, police officers, firefighters from being laid out. people don't want to hear that. you hear from states that are fiscally prudent that balance their budgets and they say why do we want our tax dollars to bail out people who were not fiscally praou den. >> we love our firemen and policemen and love our great teachers, and he knows he can use that as a smokes screen for really what is just amazing, wasteful -- everyone watching this show knows particularly local governments how much money

is wasted. state governments, how much money is wasted. should that come out of the taxpayers and cities that are flying to do the right thing? it's a slippery slope. megyn: let me ask you about wall street. it had a terrible, terrible week. today the market is not so bad. i neared neil cavuto describe the market in one word, civil. that's not a big comfort to us. we can't predict anything. what are we supposed to be taking out of that. >> sybil had 18 personalities. today we're seeing the good one. wall street use he to be the reflection of the wealth of this country and the potentialment today it's the reflection of the latest rumor in greece, the latest bail out rumor, the latest data in china. we have to get the market back to reflecting our own poe tension ago. it's still there, it has to be happened and we have to believe in it. i wouldn't say much about this rally. i'm hamee it's happening. overall the world's global market lost $3.5 trillion in

value alone. i'd be happy we could limp along this week and get good news next week. next friday we get the jobs report. we had a goose egg last month. megyn: it's sad when you are just looking forward to limping along. >> we reward and celebrate mead deobjecting kra tee. that's the best we can ask for. megyn: president obama's plan to tax the rich isn't going over well. >> they pay a ton of taxes. megyn: is the president apartments job push getting lost in the argument over this tax debate? did the white house set this up in a manner to be selfdefeating because they told us certain facts that bun dates on both sides of the aisle say are just not true. we'll have a fai fair & balanced debate coming up. protests on wall street get

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dominic? >> here is what happened about 9:00pm local time last night. an afghan employee who works in the cia-used annex in the embassy compound opened fire on his colleagues. they run for cover. two of the colleagues ran into direct fire. he was firing one them. one was killed instantly. another was injured. they've been moved to a military installation, they are believed to have nonlife threatening woupb. you've got to remember this is the second high profile attack on the u.s. embassy in cab he will in two weeks. woo taoebgs ago there was an incredible account of multiple militants trying to siege the compound there. we don't know much about this afghan employee. we do know that he was shot on the scene. he was killed out right. no details of how he got his weapon inside or whether he was the signed of employee that will be allowed to carry a weapon. the embassy being very tightlipped on the details. they are very sensitive with regards to anything to do with cia movements, obviously given

the counterinsurgency and terrorism operations they have at the moment. another par get specifically at u.s. targets here in afghanistan, meg. megyn: dominique d-natali, thank you. new drama at the amanda knox trial in italy. an italian prosecutor resorting to name calling now, launching school-yard insurance sults at the american college student as she gets ready to give testimony that could win or freedom or not. huge controversy on a california campus. republican students at uc berkeley plan to hold an affirmative action bake sale where the price of baked goods is based on gender and race. the backlash coming up. >> if you're going to hold a bake sale obviously you can't charge certain people certain prices for their race. >> it's supposed to be satisfactory teuto be

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we're having mexican tonight, so another pill then? unless we eat later, then pill later? if i get a snack now, pill now? skip the snack, pill later... late dinner, pl w? aghh i've got heartburn in my head. [ male announcer ] stop the madness of treating frequent heartburn. it's simple with prilosec otc. one ll a day. twenty-four hos. zero heartburn. no heartburn in the first place. great. >> megyn: new drama in the amappeda knox murder trial, the prosecution resorted to personal attacks, calling the american student fighting for her freedom, she's already been convicted of murder, quote, a she devil and satanic, the 26-year-old is appealing her murder conviction in connection with the death of her roomate. greg burke, streaming live to us from rome. greg. >> reporter: megyn, that's right. criminal cases here, it's sort of a contact sport, to make that complicated case more complicated, there are

civil lawyers involved with civil suits and today we heard from lawyers for the victim, meredith, kircher and patrick lamumba, who knox accused of crime even though he had an air tight alibi. it would be a tough day for amanda knox, and it was, not only did she have to hear the names called, and saying she had a split personality and she devil, she had to hear about the wounds on the body of kircher as the lawyers tried to show there were three people involved in the murder, the defense of course it was only one man. there's about a week left in this appeal, in this trial. the appeal has dragged on for months but this is really crunch time for amanda knox, the prosecution is congress for life in prison for amanda, so that would be even more than she received in the initial trial. she got 26 years in the initial trial, but all indications are that will be reduced if she's not freed entirely. finally, megyn, to give you

an idea of how complicated this case is, everybody who's been convicted, amanda, her former boyfriend, they're both being tried now, there was a separate trial for rudy gabad, he got 16 years, every one of them at one point or another has changed their story, they've lied. it's going to be really tough for the jury to make a decision. megyn. megyn: wow. greg, thank you. president obama, teaming up with the social networking site linked in to help sell his jobs plan, supporters on the west -- to supporters on the west coast today, his comments set to get underway live in about 30 minutes. we're watching the picture live, i should say, but the president's jobs plan has been overshadowed in recent days by the argument her his proposed tax hike. it all targeted last week when the associated press called out the president for using questionable tax data and continued this weekend when white house senior adviser

david plouffe appeared on fox news sunday with our own chris wallace: >> the american people are screaming out, saying it's unfair that the wealthiest, the largest corporations who can afford the best attorneys, the best accountants, take advantage of these special tax streams as a lobbyist, have along with lawmakers, have cooked the books here, so the question is how are we going to move forward as a country, are we going to, yes, do spending cuts that don't gut things like education and innovation, and are we going to ask the wealthiest to pay a little more. all we're talking about is -- >> the 28 percent isn't enough? >> they make a ton of money. >> and pay a ton of taxes. should they pay more than a ton? >> the question is, from a percentage standpoint, they're paying less than warren buffet -- >> it is not true. there may be a certain number, and you talked about

people manipulating the numbers. the fact is paopl is the the highest end pay the highest percentage of taxes, they are paying a higher percentage than middle class people are. is it -- it is an effective tax rate. >> joining me, brad blakeman, former assistant to president george w. bush and dick harpootlan, democratic party chair. this was a fiery exchange and i thought it was a very interesting one. one of the terms that jumped out at me, brad, was plouffe saying again to justify the tax hike on the rich, over and over, he said they make a ton of money, they make a ton of money. and it struck me that this is going to be something that conservative pundits are going to pick up on as a continuation of president obama's, you know, you got to spread the wealth around, a redistribution of wealth. at what point is a ton of money too much money and people begrudge it of the rich? >> this is an absolute class warfare, it's pinning one against the other, it's also a deflection against the people who got us into this mess.

was it the rich who accumulated this massive debt, both in what we're spending a.mally and our decifits, were they to blame for that, no, but they're called in to pay their share and more for thead decisions that politicians like barack obama made in giving us health care that nobody can afford, they don't have jobs, for amassing, quadrupling the debt under his watch. this is absolutely the wrong way to go, it's pinning one american group against the other, it doesn't solve the problem and it again deflects. in 2008, it was bush who caused all our problems and in this election year, it's somehow the rich are to blame for not paying enough. enough is enough. and the american people are going to reject it in 2012. megyn: dick, chris wallace played a sound bite from barack obama in 2009 where the president said then, quote, the last thing you want to do is raise taxes ph the -- in the middle of a recession because that would sick up -- suck up and take more demand out of the economy and put businesses in a further hole. he was asking plouffe about that because here we are on the brink of another recession and the president

is indeed proposing several billion, actually chris wallace put it, $2 trillion worth of tax hikes, it's at least 1.5 trillion. dick, that's for you. what do you make of it? >> is there a question here? i didn't hear a question. megyn: what do you make of the counter -- contradiction? president obama in '09 saying you can't do that, and last thing you want to do is raise tax necessary a recession, and now proposing $2 trillion in tax hikes. >> it's a contradiction for people on -- >> i think -- >> megyn: americans don't consume? >> look, they consume, but they don't consume of somebody at the rate that has to buy one car, groceries, those sorts of things, the disposable income of the average american is being consumed, if they get a tax break, and under president obama's plan, they get several thousand dollars each in tax breaks, they'll actually spend that money. but here's the important point. you know, when we -- this

country is in serious trouble and has been, we're at war, we have huge debt, we're facing challenges everywhere. if this were a war, we'd be drafting people. should the rich only have to serve six months and the middle class serve 18 months? right now a hedge fund manager that makes $10 billion a year works until about january 2nd for the government, pays his taxes, the average teacher or firefighter or policeman works until the last of march to do that. their wife, that policeman's wife, his day is as valuable as the hedge fund's manager. further, if you go to the biblical -- i know that rick perry would do this -- to go to the biblical sources, people tithe. it's not that the rich have to pay 1 percent or the middle class or poor have to pay 9 percent. everybody pays 10 percent. what president obama is trying to do is get to the idea of equalizing tax, not spreading the wealth. >> megyn: let me get to brad. how is it equal that -- brad --

>> the teacher has to work nine month as year orioo. >> megyn: it's a 2-man segment. >> equal. megyn: brad, how is it equal that 1 percent of the population pays 30 percent of the tax, the fop ten pays 70 percent of taxes and 46 percent of households pays no federal income tax whatsoever, how is that equal? >> it is not equal. the top 7 percent of all people who pay taxes pay for everybody else. it is fundamentally unfair, and what dick says is that somehow we got to soak the rich. the secret is if we stoke the rich, 100 percent of their wealth, we still wouldn't get out of the bind here in. what we need to do is unleash the creativity and ingenuity of individuals who create jobs. it's not the government spending money, it's the individuals spending their money own -- money and that's what democrats fundamentally can't get, they won't get, their problem becomes somebody else's problem and the problem for all americans is we cannot sustain ourselves by spending money we don't have and by encouraging

others to do bad things, which is exactly what dick and the democrats will do. they will come -- they won't come to grips with the fact that we are out of control with our current and obligations in the future, in medicare, social security, and medicaid. he refuses to face that which everybody knows needs to be faced. the day of reckoning will come. >> i know you're going cut me off but this president has proposed cutting $4 trillion out of budget. >> over ten years. it's ridiculous. >> the tea party people -- brad, you know this is true -- will not go along with any revenue enhaepbtss. >> the tea party people are not the ones who make the rules. the general election -- >> no tax -- >> the key person to create jobs, how do you have this contradiction, dick, how have you -- one reason, you demonize the guy who's chairman of one of america's largest corporation and on the second side of your mouth, you're saying he's going to our job creator.

you guys have no clue what to do. >> we're demonizing anything. we're saying the tax structure is wrong. if my taxes were cut to zero, i'd lying to think i'd participate some way but i'm going to pay what the government tells me to pay. ge is not evil for that, ge is doing what they're allowed to do under congress, it's created under george bush. >> it was a democratic congress, by the way and a democratic president who bushed the bush tax cuts. again, you guys want it both ways. you can't have it both ways. the american people reject it first and foremost on november of 2012. megyn: a fair -- >> there you go -- you've been phoebging it, brad. megyn: as always, my friends, thank you. we'll leave it at that, dick and brad, all the best. herman cain scored more votes in the florida straw poll than governor perry and governor romney combined. can he parlay into something more? he joins me at 2:15 today.

new fall out after a group of republican students at u.c. berkeley want to hold a bake sale, pricing the cupcakes differently about gender. trying to make a point about affirmative action. we'll tell you what happened live when john stossel did the same thing. >> cupcakes for sale. >> that makes me feel bad because i'm latino and black. >> should i not do this because it hurts peoples' feeling? >> you shouldn't do it out of respect. >> it's very hurtful, very demeanorring.

megyn: new backlash over a bake sale? college republicans at u.c. berkeley trying to make a point about affirmative action, leaving critics with a sour taste by charging different prices for cupcakes depending upon race orgenner, asking white students to pay $2 a cupcake, asians, 1.50, african-americans, 75 cents, native americans asked to pay 25 cents. and women, they get a 25 percent discount across the board.

sean lewis is president of the berkeley college republicans, michelle ulamb is with associated students of u.c. berkeley and you two do not see eye to eye on this at all but we appreciate you both coming on to give your view. sean, you are the folks puting this bake sale on, in california right now, there is the law, as was passed under proposition 209, years ago, says no affirmative action at colleges. but now, there's a law waiting to be signed by the governor that would change all that, including at u.c. berkeley and hence, you got this idea, and what is your message? >> hi megyn, big fan of the show. our message is very clear, very simple, we feel that treating people differently based on the color of their skin is inherently unfair and any affirmative action type of legislation that treats people differently based on race is itself racism and it's discriminatory so the purpose of the bake sale is to upset people about charging people differently on the -- based on the color

of their skin because we feel that is wrong and unfair. megyn: michelle, what's wrong with them exercising their rights to call attention to a controversial issue in a residentual -- in a controversial way? >> so i fully support the idea of members of bcr coming out and expressing their opinions and views on sc185 or any legislation for that matter, but i think the tactic that they're using is not constructive and it's a little bit offensive, quite frankly. megyn: but they're looking for attention and this does it. as you know f. they just sort of went out to the street corner with a sign saying we're against this bill, no one would pay attention. they did what they did and now they're on national news. don't you think it's effective? >> at what cost. it's a campus climate issue, you're making students who attend u.c. berkeley unwelcome on their campus and i think that's not appropriate. if your motive is to truly educate students on your opinion, there are many other ways to do that that are more constructive. megyn: sean, she is not the only ones who feel that way,

the campus democrats say you have humorrized and mocked the struggle of people on campus and call it very disgusting, how do you respond. >> so the intention of the bake sale and the message has never been toward any individual or to humorrize any individual's identity or the race they belong to, and the fact that this bake sale, it's been done before, and the people are receiving it, i think people understand the message, and i previously have said, i stated before that i personally am comfortable apologizing directly to anybody who personally feels attacked by our event and i'd like to clarify that our event is certainly not meant to offend anybody personally but it is meant to think people think more critically about a polly that judges people based on color. megyn: our own john stossel is equally as guilty, he did this same thing to pose this sort of fake bake sale and boy did he get some sort of reaction of the here's a clip for viewers who haven't seen it. >> cupcakes for sale, if you're asian, 1.50, if

you're white, a buck, latino or black, 50 cents. >> that's not right. >> you've got to pay -- >> man! >> asian cupcakes, poison? >> megyn: so people didn't like it in that context. you know, sort of that is affirmative action boiled down to -- you could argue whether that's an appropriate synopsis of what affirmative action does. they didn't like it in that context. but does it make a point, michelle? >> i just don't think that it's comparable. differential pricing doesn't see comparable to what sc185 stands for. it's not differential tuition at sc -- that sc185 is asking for so i don't see how differential pricing on race is comparable. megyn: it's dividing us by race. >> right. and to actually rank the races to say as an asian american i'd pay 1.50, as an african-american, you'd pay 1-d, it doesn't seem -- it's offensive and it's not right. megyn: last question, sean. there are reports 245 you -- that you guys, they may be

looking at punitive measures against you, that they're, quote, della possibility, that possibility you could lose your funding from this asuc organization. you're going to take those consequences? >> right. we talked a little bit about that last night at an ascc special senate meeting and the pole of losing our funding or facing punitive action, i would be really -- i'm interested to see if -- there may be charges brought against us but if the ascc tries to revoke our funding as a right to free speech, i would be interested to see that and it would be unconstitutional. on the state level, national level and we would respond with legal action. megyn: we may take that case up in kelly's court. listen, i appreciate you both coming on, you both seem like well informed, well intentioned students, you must be to be at u.c. berkeley. all the best to you, take care. >> thank you. megyn: we'll follow it. it sounds like they're going to go it. -- going to do it. maybe we'll watch it and go

to stossel for a comment! what do you think? the white house says there's no way to predict that the green jobs bankruptcy that cost taxpayers half a billion dollars would happen. but next hour, we will talk to a guy who was predicting the collapse of this company more than two months before the president said it had a promising future. and a video exclusive on "america live", up next what we found on the tapes of violent clashes between protestors and police on wall street. look, every day we're using more and more energy.

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on wall street has agreed to let us air their video of violent clashes between the protestors and police. it is still unclear what happened moments before this video was shot that led to

this brawl with the police. the violence even escalating into one woman being pepper sprayed in the face. look at this! at least 80 people were taken away in handcuffs, the nypd, currently investigating the use of pepper spray in these tapes. we asked trace gallagher to join us live from the breaking news desk. >> reporter: these protests are being fueled by websites like facebook and twitter, the group, occupy wall street, their hope is to try and draw attention to what they call a dysfunctional financial system that benefits the rich and hurts the poor. as you see here, the protests turn out very much peaceful. this is video from wnyp, our new york fox affiliate, but what you're missing here and you'll see it quickly, this thing gets ugly and ugly fast. as many as 80 of these protesters were actually arrested. but what you don't see is the context in all of this. in each individual case,

what led up to these people being arrested. police say there was no permit for this protest, that they were taunting police, they were blocking traffic, and when they were told to move, they simply refused to move, which is why people were arrested. now, the protestors say this was all excessive force, police did not have to use this much force. i want to show that video you showed a little in the beginning, megyn. this is the most controversial of it, three women, and they're behind an orange netting, kind of a banner, and they appear to be talking to police and yelling at police and taking pictures. you can see police are guarding it, and not even facing them. but one turns, pepper sprays all three women, they drop to the floor and begin screaming, that supervisor then walked away. you can see the police looking at like what just happened, what just happened, nypd says they are investigating as to why that supervisor came over and

sprayed those women with pepper spray. that was the most controversial. but again, we don't have the context of what those women were doing prior to them taking pictures and being kind of cordoned off in that orange netting. megyn: trace, thank you. folks, we just showed you the video. did police crack down too hard? we'll have a fair and balanced debate just ahead. fresh off a big win in florida, herman cain joins us live to talk about the gop field and what's next for his campaign. >> and how did the white house miss the warnings about seoul rained, when they were written down in fine print? and how will anyone find out the truth with top executives of the failed company now refusing to talk? >> what is your plan to pay back the taxpayers $535 million you owe?

megyn: fox news alert, seconds away -- seconds away from the list esales pitch from president obama on creating jobs, brand new hour of "america live", welcome, everyone, i'll

megyn kelly. we are awaiting the start of an online town hall discuss, the president once again drying to -- trying to drum up support for his job proposal, this time in silicon valley. megyn, interesting, good to see you, because the president, as you say, is continuing to make this sales pitch now here on the west coast, mixing in fundraising, along with pushing that $447 billion jobs plan. the bottom line is that in recent weeks, we've seen the president sort of focus his rhetoric on trying to bring back independent voters, stress how he's working with republicans in washington, trying to get compromise,t cetera. we're seeing a shift over the last couple of days, particularly on this trip. you saw it saturday night when the president was in washington, spoke to the congressional black caucus and basically pushed back, said stop complaining, stop whining, he basically said take off the bedroom slipper, put on the marching shoes and get behind me, clearingly trying to ray -- rally more of his liberal

base. he did the same yesterday in seattle, not just by saying at one point shake off the doldrums, stick with the democrats, basically, he also took some shots at those republican candidates on the other side. take a listen: >> we can either go back to the same ideas that the other side is peddling, old worn out ideas that were tried throughout the last decade, where corporations get to write their own rules and those of us who have been most fortunate get to keep all our tax breaks. >> now, you see the president has already walked out, he's about to begin speaking. even before, this was a prebuttal from the committee, saying no matter what the address is, last week, it was that bridge in cincinnati, they're saying no matter where the backdrop is he's having a hard time selling the jobs plan in part because of how he wants to pay for it, which is raising taxes. megyn: henry, thank you.

if you want to hear the president's remarks, go to foxnews.com, where they are streaming live. during last week's republican debate, one of the most popular plans for the economy me was the 999 plan, that of course ambulance to candidate herman cain. he went on to win the florida straw poll on saturday and he joins me live in five minutes with his plan for fixing the economy and what's next for husband white house run. again, he is live here, ten minutes away. fox news alert, in new -- some new grim news on the housing market, sales of new homes falling to 56 month low. the commerce department reports sales dropped 2.3%, the fourth straight monthly decline. new homes sales represent only a fraction of the market but every home built creates an average of three jobs and about # on thousand dollars in tax payments. the clock is ticking for the new joint congressional supercommittee, their task,

slash $1.2 trillion from the nation's decifit in the next two months. or trigger massive cuts to entitlements and the defense budget. on the defense side, we're talking about as much as $600 billion over the next decade. that is on top of the $350 billion over the same period, hammered out as part of last month's debt deal. so what would all of this moon for our military? we're already hearing pushback on it. national security correspondent jennifer griffin live at the pentagon. >> secretary of defense leon panetta put it best last week when he was asked by senator lindsey graham what would happen if the supercommittee fails and these defense cuts go into effect: >> if we pull that trigger, would we be shooting ourselves in the shoot? >> -- in the foot? >> it would be shaouting -- shooting ourselves in the head. >> the chairman of the house service was committee warns the pentagon may have to reintroduce the draft, a memo prepared by republicans on that committee shows how the country's overall

unemployment rate would rise if the severe defense cuts are triggered. take, for example, nearly 200,000 soldiers and marines would be cut, expect at least 25 percent of the civilian work force to be furloughed at the pentagon, that's at least 200,000 jobs, the national unemployment rate is already 9 percent, unemployment rate for iraq and afghanistan is 22 percent, for wounded vets, it's as high as 41 percent. if the supercommittee fails, the number of army batallions will go from 100 to about 60 batallions, the number of navy ships, from 288 to 238, a reduction of two aircraft carrier battle groups. the air force would lose more than 400 fighter jets, about 34 strategic bombers. the fear at the pentagon and on capitol hill is that if the supercommittee fails, they're going to try and balance the budget on the backs of the armed forces, megyn. megyn: jennifer griffin, thank you. there is a state of emergency in one nevada city today over worries of a war

from rival motorcycle gangs. it started with the leader of the hell's angels biker gang, guns -- gunned down inside a casino on friday. soon after, a possible retaliatory driveby shooting where another biker was killed. now police are searching for the man who started it all. trace gallagher has more from the west coast. >> reporter: that state of emergency was started in sparks, nevada, but they went an high alert. they had security measures in place. those who don't know the hell's angel social security one of the biggest biker organization in the world, they call themselves motorcycle enthusiasts, the fbi says they are highly involved in org need crime. the fight began in the casino as a fistfight, sph-rb pulled a gun and the shooting started and the leader of the san jose chapter was shot and killed. hours later a retaliatory driveby and they are expecting more paybacks in the days to come. the mayor of sparks, he

tried to shut down this big event called street vibrations, one of the biggest motorcycle gatherings in the country, tens of thousands show up, it didn't work, they kept on partying, the businesses stayed open, but the state of emergency did stay in effect. listen to the mayor: >> i hope that people out there won't judge a motorcycle community by the incident that happened. i don't think it's a true picture. whenever you have people that enter our city with bad intentions, bad things are going to happen and that's what happened here. >> reporter: the hell's angels believes the boggles gang is behind the killing of their chapter leader and experts say they will not give up until they believe the score is even. megyn. megyn: wow. trace, thank you. a piece of space junk the size of a city bus, crashing back to earth at supersonic speed. we have new leads today on where it finally landed. plus, protests on wall street turned violent when the men in blue tried to scatter the crowd, but does

the tape tell the whole story? wait until you see the exhibit a in kelly's court. and he just took a giant step on the road to the oval office, herman cain joins me live on his victory in the florida straw poll, next. >> let me tell you what the cain doctrine is going to be. america is going to be its own best customer. drill here, dig here, explore here, first! we have the resources.

megyn: well, we already know the fate of nasa's doomed satellite, the 6 1/2 ton piece of space junk came crashing back to earth on the weekend, its demise captured on video, but nasa still is not sure where it crashed and it says it may never know. best guess is somewhere in the pacific ocean.

dozens of pieces of the upper atmosphere research satellite may have survived reentry but so far, no one has found any wreckage. a stunning victory in a critical contest this weekend, herman cain, a former ceo, struggling near the bottom of the gop field a week ago, won the florida straw poll on saturday, scoring as many votes as governor perry and romney combined. here is some of the speech that won the hearts and minds of those in florida: >> one of the reasons we're still the best nation in the world despite our challenge challenges, despite these challenges, is the fact that the founding fathers, they did get it right, they got the vision right. we have to live up to that vision over the years. they got it right when they said we hold these true, to

be self-evident that all men and women are created equal, that they are endowed by their creator, their creator, not a man, not a commission by their creator, unfailing inalienable rights that among these, life, liberty, the pursuit of happiness. that's a great part of the declaration, but the next section is even greater. because it says if you keep reading, when any form of government becomes destructive of those ideals, it is the right of the people to altar or abolish it. we've got some altering and abolishing to do! our job, alter and abolish. >> her man cain taking the top spot in the florida straw poll, look at this,

blowing away his closest competitor, rick perry, with 37 percent of the vote, perry weighing in at 15.4, and mitt romney, third, at 14 percent, although he did not participate down there. mr. cain, saying this speaks volumes about his performance. he joins me now, live, heman cain, former ceo of godfather's pizza. mr. cain, congratulations to you! you must be feeling pretty good today. >> thanks meggish, i'm feeling pretty good but let me tell you why i'm feeling pretty good in addition to the win, it says the voice of the people is still more powerful than the voice of the media, with all due respect. and secondly, it says that message is more important than money. the other two competitors, they spent a considerable amount of money to try and influence the outcome of this florida straw poll. i rented a bus and went all over the state this week, as well as previously, taking my message of common sense solutions, taking my message

of 999, and it resonated, and i think that that's what the poll, the straw poll reflects more than anything else. megyn: of course, some people are saying that it reflects a protest vote, that they were disappointed in how governor perry in particular performed at the debate and it was a vote against him, not so much a vote for you. how do you respond to that, sir? >> well, some people are still in denial, megyn. but as you know, some people get in denial about stuff. people who have been a part of the, quote, political establishment, they are still in denial. that this long shot has a shot. the american people are showing, little by little by little, that they are not going to be influenced by the flavor of the week, they're not going to be influenced by all of the hype. so people can call it a protest vote all they want to, i don't see it as a protest vote. if it had been a protest vo, wouldn't you think that the margin of victory would have been a little smaller than it was?

no. that not -- not that many people would have done a protest vote. i think that's their way of trying to spin it because they didn't win it. so it really doesn't bother us, we're going to build on that from this point going forward. megyn: what did you think of governor perry's performance the other night? >> with all due respect, it was not up to prime time. his performance, quite frankly, wasn't even on par with anybody on that stage. not in terms of the issues, per se, but in just debate delivery. first of all, i happen to think that that form national worked well, i believe that fox news did a good job, and i'm not just saying this because you were one of the moderators, but you did a good job of trying to give everybody an equal opportunity to be able to express some of their views but quite frankly, his answers were not cisp, not succinct and i think one of the biggest disappointments was when bret baier asked him what is your economic growth plan. he didn't have one. you would have thought

getting all this free publicity for the last couple of weeks you would have started to work on the outline of what you're going to do about the biggest crisis we face other than national security, which is this economy. and i think that that disappoint dollars a lot of people, and when i talk to many of the straw poll delegates, many of them told me quite up front, the day before, leading up to it, i'm undecided. so i'm not going to make up my mind until after saturday, and i was able to deliver my message on saturday, and i think that changed a lot of votes. megyn: let me ask you this question, because i think you -- in particular, i'll return the compliment, i think you did a good job of actually answering the questions asked, and you know, frankly, not all the candidates did that, and i think that's a disservice to the viewers, that you listened, and then you were brave enough to actually answer the questions that were asked of you. it's so novel. but not necessarily this one. so i wanted to follow up on this one, sir, and it was chris wallace's question of

you about your 99 plan, for people that don't know it, that would be we get rid of the current tax code and replace it with 9 percent corporate tax, 9 percent income tax, 9 percent sales tax, makes april 15th, whatever date it's going to be, nice and easy on you. he asked you, that sounds good but what happens if some future president after mr. cain comes along and decides to hike those taxes because most people who support doing something like this also sport getting rid of the income tax, repealing the income tax. you're not saying repeal it. you're saying leave it in place. what's to prevent another president after you coming look and hiking three tax on us? >> okay. first, we can pass 999 and congress has the power to have it supercede the current 16th amendment provision of the -- they can -- in other words, you still need the 16th amendment in order to impose the first nine and the second nine. megyn: talking about income tax.

>> exactly. we're talking about income taxes. now, you are right, there's nothing to prevent a future president from coming in and saying i'm going to take the 999 plan and turn it into, you know, 20, 20, 20. they couldn't do that. but the thing is, the american people would be aware of it and they wouldn't be able to get away with it like they can in the current tax code with a bunch of sneaker taxes. here's an example. if you look at president obama's speech that he calls a jobs plan, i counted 84 sneak a-- sneaker taxes. so with the current code, he buryies tse loophole necessary there for people and organizations and segments of the economy that he wants, 84 sneaker taxes, and they are going to hit everybody. but most people won't know that they've been bitten until after they've been bitten. that's the disadvantage of the current tax code. you're going to tell me i'm going to worry about a code where you got three rates and you don't have any loopholes for anybody? so if they start trying to

put in loopholes, the american people will be able to speak up. they start trying to change the 999, the american people will be able to speak up. why? >> it's called visibility. so they have no absolute that somebody may not come back and try and raise the rates. the american people can hold congress -- congress' feet to the fire not to raise taxes arbitrarily or in a discretionary manner. megyn: i want to ask you, you did an interesting interview, sir, talking about president obama and his most recent tax -- well, his jobs plan, which includes $1.5 trillion worth of tax hikes, in particular, on the so-called rich, and in response to an interviewer, you actually referred to a sound bite of mr. obama's, saying he's a liar, that was your word. in three minute, i'm going to ask you about that, play the sound bite and ask you about it and ask you what's next for your campaign and where you go from here. thank you very much, we're back with mr. cain, three minutes away. stay with us. >> thanks.

megyn: back now with presidential candidate herman cain, former ceo of godfather's pizza. mr. cain, you gave this interview to a man named chris moody, conducted prior to the straw poll results, and he asked you about this sound bite from president obama. let's have viewers listen: >> either we gut education and medical research, or we have got to reform the tax code so that most profitable corporations have to give up tax loophole that is other companies don't get. we can't afford to do both. this is not class warfare. it's math. megyn: and you responded by saying can i be blunt? that's a lie. do you really believe that the president of the united states is intentionally misleading us on that? >> with all due respect, political correctness is not

one of my strong points, it is a lie. and it is class warfare. that's what it is, pure and simple. the president has a view -- has abused his position and made statements like that from time to time. this is pure class warfare. to say millionaires need to pay their fair share. 50 percent of the american taxpayers pay 97 percent of the taxes. that's not fair enough? when will it be fair? when 50 percent pay 100 percent? no. he has made statements like that before. and i told this gentleman, i said look, i'm going to be blunt, it is class warfare. megyn, the mainstream media, not tpo*rbgs and i'm not just saying this because i'm on fox, they give this president a -- give this president a pass on those kinds of statements. let me give you another example, when the president is going around talking about pass my bill, pass my bill, it's a sorry bill!

it doesn't solve the problem he wants people to pass another $450 billion so he can waste it like the trillion dollars that he passed. i'm not going to give this president a pass just because he's the president of the united states of america. the american people need to know the truth. this is what i'm talking about. all the organizations are trying to bring this to life. it is class warfare, pure and simple, and the facts bear that out. megyn: a couple more issues for you. president obama was speaking to a group, the congressional black caucus and said to them over the weekend that they need to quit their crying and stop complaining. already he's taking heat from that, including from congressional black caucus member maxine waters who said that was unfair of him to do. here's the president speaking to a group now again, the blacks have nearly doubled the national average of unemployment at 16.7%. here's the president: >> put on your marching

shoes, shake it off! stop complaining! stop grumbling. stop crying! we are going to press on. we've got work to do! >> mig has the president done enough to fight in particular black unemployment numbers? >> you know, megyn, no, he has not. so goes the national economy, so goes the state economy, so goes the local economy, so goes the household economy, so goes the economy for black america, white america, all america. you know, the speech he should have been giving to the congressional black caucus? he should have been saying my polices have failed, my polices have failed the nation and, therefore, they have failed black people, white people, hispanic and all people. that's the message he should have been giving. instead, he wanted to chastise them for saying mr. president, things have not gotten better, instead, he went in on the defense, saying put on your marching

shoes, we got more work to do. more work to do what? completely destroy this economy? no. completely destroy this economy? that's the work that they've got to do. and that's what he's talking about and even the congressional black caucus and black americans are pushing back, saying wait a minute. we can't just go along simply because you say we ought to follow you. we want to see some results. and he went in there totally defensive and at least they are saying it was unfair. i would have gone further and would have said that it's not only unfair, that it is also insulting. megyn: mr. cain, our apologies because when you were speaking, we got your audio, but the cameraman has had a few cocktails because we were going left and right and left and right! it's been rectified, but my apology, it made for a little weirdness on camera! before you go, i got to ask you, the real politics shows you seven out of nine on the

gop nominees, even though, even though, this florida straw poll has been won by every gop eventual nominee every year since 1979, so the people who win this poll tend to win the nomination. >> right. megyn: still you're seven out of nine now. how do you parlay this victory into something more? >> first of all, let's put that real clear politics poll in perspective, it represents the average of a whole lot of polls and many of them are national polls. remember, my name i.d., prior to saturday, was 50 percent. i don't know what it's going to be now but it's going to be significantly higher. so since they average a bunch of polls, you're going to see me move up gradually in that real clear politics poll and i'm okay with that because i didn't have a very high name i.d., but after saturday, i'm going to have a much higher name, d. -- i.d. and the way we're going to parlay that is continue what we've been doing, taking my message to the people and taking my message

directly to the people in all of the various venues where i get an opportunity, is how i'm making a difference and how more and more people are beginning to know who i am. my website, the traffic went up by a factor of ten. after saturday, megyn. as well as the contributions. now i don't want people tong i don't need more money, yes we do, herman cain.com, but the fact of the matter is more and more people are saying who is herman cain and you know what, megyn, i'm going to ask that with my new book coming out in october, coincidentally, entitled, drum roll, "this is herman cain", and so this is how we're going to continue to build on what happened in florida. megyn: "this is herman cain" exclamation point! thank you so much, sir. >> megyn, it's always a pleasure, thank you. megyn: all the best. >> how about that? we're taking your thoughts on t. kelly, foxnews.com. well, the white house says there was no way to predict the green jobs

bankruptcy that cost taxpayers half a billion dollars a couple of weeks ago. but when we return, we will talk to the stock analyst who was warning about the collapse of this company, more than two months before the president said it had a promising future, and long before we heard this from company execs last week. >> you're going to provide to this committee communications between yourselves or your senior executives with members of the west wing of the white house. >> on the advice of my counsel, i invoke the privilege afforded to me by the fifth amendment of the united states constitution. >> on the advice of my -- advice of my counsel i invoke the privilege afforded by the fifth amendment to the u.s. constitution. get back on your feet. three out of four doctors recommend the ensure brand for extra nutrition. ensure clinical strength has revigor and thirteen grams of protein to protect, preserve, and promote muscle health. and immune balance to help support your immune system.

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crest pro-health clinical gum protection. because healthy smiles are built on healthy gums. life opens up when you do. megyn: we showed you last hour how house republicans are now stepping up their investigation into the s solyndra scandal. vowing to get explanations why the obama administration backed the firm. they received $535 million in loan guarantees from the energy department. on a hearing on capitol hill last friday, solyndra executives, the ones who spent your money that doesn't look like you're going to get back were tightlipped. >> mr. chairman i have tremendous respect for the subcommittee and the important oversight role that it plays. as much as i wish to be able to answer the members questions i have been advised by my counsel that it is the better course for me to assert my constitutional right to decline to answer questions under the fifth

amendment. >> mr. chairman on the advice of my counsel i must invoke the privilege afforded by the fifth amendment to the u.s. constitution, and i respectfully decline to answer any questions put to me by this committee and subcommittee. megyn: well now we are hearing from a business writer and a stock analyst who was reporting last march and earlier how this company was in serious trouble. months before president obama touted it as the future. bill g u.n. derson is a finance expert and ceo of g u.n. ders finance management. thank you for being here. what did you first notice that this company had serious trouble? >> well, in early 2010 they were planning on doing an ipo and going public. in march of 2010 their auditors, pricewaterhousecoopers issued a growing concern letter. two months before president obama ever showed up at so

linda. a growing concern letter is a kiss of death meaning the company would be out of business in 12 months. it is mind boggling for me to see him there two months after the letter was issued. megyn: most people weren't paying any attention to solyndra. this is only now that the money is gone and 1100 people were laid off and we saw the president and vice president touting this thing, you were paying attention long before that and are scratching your head that others didn't see the red flags that you saw. >> it didn't take much. i talked to people in the solar industry. it was very easy to find out that they had a losing business plan right from the start. it never would have been profitable, and obviously their auditors saw the same thing in issuing that kiss of death letter. and again, i mean two months later president obama shows up on the stair steps of solyndra

telling us that this is what a brighter, s u.n. nier economic future looks like for america and this is where our money is being spent as taxpayers. megyn: the evidence seems to show -- we don't know what president obama two or didn't know. we do know that members of his administration saw the same red flags you saw. there is a january of 2009 -- january 20th 2009 writing where an energy official rights after major outstanding issue, namely that solyndra's numbers showed it would run out of cash in september of 2011 which it did. march of 2009 president obama is officially in office and a white house budget analyst writes in an email this deal is not ready for prime-time. and on and on it goes until we actually get approval of the loan, the taxpayers get in on the deal, president obama goes out there and says, companies like this are leading the way towards a brighter and more prosperous future and then the deal goes sour. what the white house says is for lack of a better term, win some

lose some, you can't make good on every investment. you've got to roll the d, ce sometimes. >> as a taxpayer i don't want them rolling the dice with my money. that is $535 million that went up in spoke in less than two years. had i done that in my industry, and put my investors into an investment like that, and looked past all of the warning signs, had my investors lost that kind of money i would more than likely end up in prison for not doing by due diligence. megyn: the f.b.i. is now looking into whether solyndra knowingly misled our government about its financial state. you know, as i just read, those emails suggest that our government did know something about a troubled economic state because they've got emails documenting that the deal wasn't ready for prime-time and they didn't know this company was going to be out of money in september of 2011. why if our government knew that this company was in such

trouble, why would they be so hell bent on going forward with giving it the money? why would they so go far to have our president go out there and put his own face on the company, if you will? >> well, i mean it's either incompetence on their part. everybody in the solar industry, in the financial industry, hedge funds, were passing up the investment. a guy like me who is a financial analyst knew was a bump deal. how could they not know, number one? number two we knew that there were some hedge funds involved, one headed by george kaiser who was a very large investor to the obama campaign. one has to wonder if there weren't some favors done there. megyn: bill, are you and anti-obama guy? >> let's put it this way, i'm hope we have somebody new in the white house come november. that is the only chance that the stock market has. megyn: bill gu g u.n. derson,

thank you so much, we appreciate it. some say he is a daredevil, others say he's nuts. the guy who tried to base jump off the empire state building, taking it to the next level. plus protests on wall street turn violent when the men in blue try to scatter the crowd, but does the tape tell the whole story. we'll look at exhibit a in "kelly's court" next. [ woman ] my grocery bill isn't wasteful spending. [ woman ] my heart medication isn't some political game. [ man ] our retirement isn't a simple budget line item. [ man ] i worked hard. i paid into my medicare. [ man ] and i earned my social security. [ woman ] now, instead of cutting waste and loopholes, washington wants to cut our benefits? that wasn't the agreement. [ male announcer ] join the members of aarp and tell washington to stop cuts to our medicare and social security benefits.

prego?! but i've been buying ragu for years. [ thinking ] i wonder what other questionable choices i've made? [ '80s dance music plays ] [ sighs ] [ male announcer ] choose taste. choose prego.

megyn: "kelly's court" is back in session. on the docket today chaos when cops show up to scatter a protest. that was the scene on saturday in lower manhattan. hundreds of demonstrators rallying against wall street, claiming the world financial nerve center is responsible for

economic inequality in america. signs and slogans turned to screams and struggles when the nydd unleashed pepper spray on the public. the folks who caught the spray say police used excessive force. but does the tape tell the whole story. we have arthur aidala, and defense attorney mark iglairsh. the group said they had no business using the pepper spray on him. we got this tape from the people who claim they were mistreated by the police. we didn't do the editing, they did the editing. take it into consideration as you watch. it's not to say it's not truthful, it's just a good caveat. let's mark it, mark, and you tell me whether you see evidence of the police behaving inappropriately here with respect to these three women. [screaming]

megyn: go ahead, mark. >> there is no way to tell. i'm not going to indict the police based upon this. there is no way. and i'm sure that we're going to hear testimony as to what led up to that. megyn: let me tell you this. we've got 85 people arrested. one of these women, i don't know whether these are among the arrested, there are 85. they come to you and say, not only was i not behaving in a a disorderly way as police are accusing me of and charging me with but the police were exceedingly violent. how do you make that case? what does a defense attorney do with that video? how do you make the argument. >> first thing i do is i say wrist the other video. all day i've been looking at

other video more compelling than this. one woman literally dragged from the sidewalk like a sack of potatoes for about 15 feet. i'm not saying that all cops made a mistake here, nor am i saying this this whole group is somehow subject to excessive violence or force. but there are instances clearly where individual cops stepped over the line. maybe not necessarily in this video. this doesn't necessarily represent at all. i would like at all the video and there is plenty available online. megyn: we have the video of the woman being dragged. arthur, let's take a look at that. because this too -- this too will come into any defense that these people offer. you've got scores of people, here she is getting dragged away, and you know what they are going to do, they are going to go after the nypd to try to get the charges dealt with. >> what we don't know is what happened two seconds before that video started? did that woman reach for a police officer's gun? i would argue that if somebody

thought that she reached for a police officer's gun then their actions were absolutely appropriate. did she spit in that lieutenant's face or that captain's face? then i would argue that their actions were totally appropriate. there are thousands, and thousands, and thousands of people down there. there have been 80 arrests. 80 arrests out of thousands and thousands. >> if she spat into a law enforcement officer's face that would be a battery on a law enforcement officer. nowhere in the manual does it then say when placing under arrest, regardless of what it's for let's change the facts and drag her 15 feet. it's not to say she doesn't deserve it if that's what she did. you don't have different methods of arrest based on what the crime was. >> we don't have the real audio and a real clean copy here. if he says, ma'am could you please turn around and place your hands behind your back. i'm now going to place you under arrest for spitting in my facement does it seem that

that would be the kind of person that would comply with his orders? megyn: what about the first video we showed with the orange netting. they are trying to corral the people. the police day, look they were blocking pedestrian traffic and they were blocking vehicle traffic, and we were trying to corral them so that traffic could go through and trying to maintain a sense of order. now you see -- then i guess it's the pep spray happens right there and the women go down. arthur, i don't know, i hear these women screaming. it's like they were shot in the face. there will be an argument that they are overly dramatic, playing it up for the cameras? >> it's so hard to tell by the videos. the police shot a lot of their own video. you see nypd officers who are officially videotaping what is going onto prove that they are no using excessive force. mayor bloomberg said they do not have the proper permits and they have a right to protest but they

cannot prevent art you are aidala from getting to the courthouse because they are blocking the streets to the courthouse. megyn: what circumstances would justify spraying those women? >> well i can't speak of every situation. megyn: just generally. >> it depends on the circumstances. certainly not when someone is on a sidewalk exercising their free speech. megyn: what if the women -- let's say these women were pushing against the orange netting. clearly they will say that wasn't the case. but did the police have some sort of potential defense in saying, they've laid hands on me, i'm not under an obligation to let them lay hands on me. i didn't want to push back i thought the pepper spray would be more effective. >> absolutely, sounds like a reasonable use of it. great alternative to using a billy club or more serious weapon on them, sure, it just depends factually on what they did. i don't know, we don't have the tape, but some of the people who were on the sidewalk yelling, even outrageous and offensive things should not have ever been touched.

>> also, what people should know about the nypd. you see the person in the white shirt, that is the rank of a lieutenant, or captain or in spector. these are the most experienced, the guys with the most longevity on the force are in the middle of this. ray kelly sent his a-team out there to prevent any kind of melee and i think they did the bear minimum that they had to do to maintain control of the situation for all the rest of the citizens out there who are affected by this. megyn: they've been there all week, and they were looking for publicity they got it in the end. arthur, mark, peaceful protests lawfully are at the core of our rights as americans. disorder tere lee conduct and assaulting a police officer do not qualify as peaceful if that's what happened here. we'll wait and see it play out.

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megyn: following a major controversy at vanderbilt university. one professor a cushion the school of suppressing religion claiming a new policy would destroy every religious organization on campus. senior national correspondent john roberts live in atlanta with more, john. >> reporter: this is a story attracting a lot of comments on foxnews.com. vanderbilt university has told four christian groups, christian student groups that they are know noncompliance with the school's none discrimination policies that require leaders to share their beliefs. one of their organizations is the christian legal society, around for a number of years, probably hasn't changed too much in terms of its constitution. here eugs the offending language. each officer is expected to lead bible studies, prayer and worship at chapter meetings. that drew fire from the university. a reverend who is the interim leader at the office of religious life at vanderbilt says policies do not allow this

expectation, qualification for officers. now some people have said that this is political correctness gone mad. professor carol swain who is a professor of law at vanderbilt university wrote an op ed about it. she says she sees a larger problem here, the growing secular ization at universities. >> they really are trampling on the first amendment rights not only of students but also of faculty. it's time for us to stand up for our constitutional rights and values. >> reporter: some of these groups have been negotiating with the university to try to come into compliance with the nondiscrimination policy but the christian legal society says it's gone about as far as it can go. we reached out to vanderbilt official force comment. they won't give us an on camera interview. they said, quote, we are committed to making our campus a welcoming environment for all of our students. in terms of the offending groups, the university said, we continue to work with them to

achieve compliance. we should mention the catholic group at vandy. vandy catholic came into compliance by watering down the constitution so leaders only need to be undergraduate students at vanderbilt. the christian legal society which had had problems with nonbelievers in the past said they can't do that. megyn: john roberts. thank you. coming up next the candidate you didn't get to hear from during last week's debate.

>>megyn: you may have thought the fewest questions went to gary johnson. not so, remember this candidate? remember her? that is little yardley evans, no questions to her but i have it on good authority she was a big fan of the mickey mouse questions and wanted some. thanks now watch be everyone. here is trace for shepard. >>trace: she is beautiful. i am trace gallagher here for shepard smith. in box one, co