now we know that hamza alkhalee is dead. pictures of his body are disturbing. his family received his remains. it appeared the 13-year-old had been tortured. he was mutilated. many of the pictures we've received are too graphic to broadcast. cnn made repeated attempts to reach for comment without success. hamza's murder brought syrians into the streets. even children have joined the protests. we'll have more on dramatic developments in syria and the strongest words yet from washington in just a moment. but first, a look at the other stories we're covering tonight. what do robert e. lee and sarah palin have in common? they both went to gettysburg, one of them lost, the other may have just begun to fight. and housing prices keep falling, in some places they haven't been this low since the 1960s. edie hill asks, does the american dream get dragged down with them? then the sheriff of arizona, he deported 25,000 illegal immigrants, and now he wants to take his wild west show to washington. for more now on the murder and mutilation of 13-year-old hamza ali khateeb, none of our reporters can tell the story from inside syria, it's too dangerous. the government refuses to allow it. arwa is in beirut. arwa, what has been the response of the protesters in syria to the reports of this heinous torture of a 13-year-old boy? >> reporter: well, eliot, what we did hear from a prominent syrian activist who is in damascus, she said that, first of all, she firmly believes the report the video that we're seeing to be authentic. and she believes that the syrian regime deliberately released the boy's body back to his family to send a chilling message. the message being that the regime had absolutely no red lines when it came to how it was going to be handling these voices of dissent. no matter what the age, no matter if the individual in question was a child or an adult. however, the regime's intent to terrorize people off the streets, it appears to have caused the opposite effect. we saw numerous demonstrations across the country with people chanting their support for the 13-year-old child vowing that hamza's blood would not have been spilt in vain. we saw children taking the streets despite the fact the same fate could be facing them. >> there's also the pseudo amnesty assad has issued. is anyone taking that seriously? >> reporter: this is not exactly an amnesty or general pardon in the sense that many would understand it. we're not expecting to see any sort of a mass release of detainees from prison. although it is intended to apply to anyone who was detained up until today. basically up until tuesday. according the decree that was published on the syrian/arab news agency, this basically is more of a reduction in sentence. a death sentence reduced to life in prison, a life in prison sentence, depending on what the crime was being reduced to, for example, 20 years of hard labor. and so this move is really being greeted with much skepticism, especially amongst activists who are viewing it as another move by the regime to try to maintain their credibility. not amongst the opposition per se, but more amongst their own loyalists. >> all right, arwa. thanks so much for that report. >> thank you. the state department today, secretary hillary clinton had strong words about syria's president. senior state department producer elise labbott was there and joins me now. >> i asked secretary clinton about this young boy today. and she was visibly shaken when she talked about him. she used his full name. and here's what she had to say. let's take a listen. >> i too was very concerned by the reports about the young boy. in fact, i think what that symbolizes for many syrians is the total lapse of any effort by the syrian government to work with and listen to their own people. >> so, eliot, i asked secretary clinton if this action meant that the syrian regime had really lost all legitimacy. she said that every day that goes by, the government is becoming more untenable. and she said she hopes that this young boy will not die in vain. she hopes the government will end the brutality and move towards democracy. really the strongest comments i've heard from anybody in this administration about the future of this regime. >> you know, elise, there obviously is the frustration. i think it is impossible for anybody who has seen the video, seen the pictures of what is almost a medieval act of torture not to respond that way. but i guess the question for the state department is what will happen next with respect to u.s. policy? is there a tangible, definitive next step that the secretary indicated will follow because of this heinous behavior? >> well, the next step is to go to the u.n. security council and the u.n. is pushing for a strong condemnation of the regime. but the question is, what is that going to do? it's not calling for any sanctions. they're having a lot of problems with the russians. so it's really not clear what leverage, what influence the u.s. has in terms of cracking down on the regime and getting it to end the brutality of its people, eliot. >> all right. thank you, elise. we turn now to one of the wisest minds in the arab world. the director of middle eastern studies at johns hopkins university at florida. he was my professor 30 years ago, back my fenreshman year at princeton. your wisdom was evident even back then. >> thank you very much. >> this is mortifying, factually. the question i have for you, will this fundamentally change the internal dynamics within syria? >> i don't think so, eliot. i think this regime is a very strange beast. the it's a very strange regime. it rests on a minority community, they're a mountain people, they've come down to the city thairvgs joined the army, they are the intelligence bearers of the regime. and they are committed to him. they will not be defections. there will not be a crack in the regime as there was in libya. this is a strange regime. it's a regime at war with the population. and 10% to 11% of the population have managed to capture state power, they will fight to keep this regime. >> had managed to fool the west, apparently, into we believe that somehow he was a voice of reform. does this rip that mask off and finally make it clear he is no such thing? >> absolutely. but, remember, this story has a trail. the trail is that in the year 2000 when he died and installed his son. imagine a country being handed over from father to son. he installed his second son because his first son died in a car accident. so he brought this ophthalmologist from london who loved the music of phil collins, who faked he was at one with the modern world. 11 years later we can see the myth of assad as a reformer. he's as cruel and could be even more cold-blooded than his late father. >> other than to the fact you were seeking some sort of consistency in u.s. policy. gadhafi to assad, they begin to look very similar these days. >> they look very similar, but let's remember one thing about assad, the syria regime, it's centrally located. it has no oil, nevertheless, it has convinced the rest of the world that syria is a major player. take a look at the arabs. the arabs broke with gadhafi. he calls himself as the king of the kings of africa. he turned his back on them, but the arabs are very committed to the syrian regime. this is a much more centrally placed regime in the game of nations than the gadhafi regime. >> we the united states, we were hesitant to move even with respect to gadhafi and libya until we had the perimeter of the arab nations themselves saying, yes, we want to unseat gadhafi. will there be that sort of unity? or any sort of unity of leaders turning on assad? you say no? >> there is no chance that the arab states will single out the syrian regime and say this is a brutal regime. they don't like bah bashar. they favored his father. but they will not break with him as they did with gadhafi. >> can the united states and should the united states act in unis unison? >> to be honest, i don't see american policy going in that direction. go back to may 19 when the famous speech president obama gave at the state department about the arab -- >> famous or infamous. but we'll come back to that. >> but when you go back to that speech, he basically said we had a mandate in libya, we don't have a mandate in syria. he drew a line about where american power can be used and can't be used. and let's remember that even on libya, president obama's half in, not fully in, let alone on syria. >> the libyan debacle, the quagmire stalemate is problematic in and of itself. but the question of looking for consistency when you read the speech he gave on may 19, when you read the speech he gave when he accepted the nobel peace prize considering the legitimacy of force. one would think that applying those standards to assad and syria, it is a perfect example of a legitimate use of force. >> well, the right to protect is one of the great issues in our world. but president obama is very, very timid, if you will. that's one word. but very, very careful about the use of american power. we haven't even recalled our ambassador from damascus. and we keep saying, even president obama says he has that choice. he can either lead the process of reform or get out of the way. and imagine in a bunker in the world where assad lives with his brother and brother-in-law and his gang and the intelligence around him. this is just idle talk. >> there have been so many false starts, so many -- the big speech that assad pretended to give a few weeks ago that he was going to lay out reform amounted to nothing. the amnesty, so called amnesty. is that meaningful at all? to whom is he appealing? >> the regime, the ruler can both grant life and he can also kill. so this is him showing the syrian people, i master of your universe. remember, there were only 6 million syrians when the father was president. now there are 22 million syrians. 16 million people have known no other president than them. so the message is we have the power to grant pardon and we have the power to kill children. >> and the capacity seems unabated, unlimited by moral dictate. the images of children marching in the street. and we have no idea how widespread that might be. does that crystallize -- does that happen in assad where fear is the dominant emotion? >> i think people are not afraid. and he's wondering, why aren't you afraid of me as your elders were afraid of my father? i think the barrier of fear has been broken. and you have a standoff between the regime that cannot be overthrown yet and a population that can't be sent back to their homes and back to the fear. >> so does this stalemate of brutality continue? and do the bodies pile up and the images of children being mutilated continue to pour fourth with no resolution? >> i wish there was another verdict. this man has rounded up tens -- there are at least -- you hear 10,000 people have been rounded up as prisoners, 1,000 or more have been killed. people are fleeing to jordan, fleeing to lebanon, and yet the regime does not blink and the regime does not crack. >> let's come back to the lesson to be taken from where the united states has intervened and where not. we see mubarak being pushed out, the punitive ally, we see gadhafi standing up to our force, letting the french take the lead. and we see no response of any magnitude in syria. what does the leadership in saudi arabia or bahrain take from this in terms of understanding the use of u.s. power? >> well, i'm afraid there may be a terrible lesson,which is that people who are vulnerable to our judgment, such as the ruler in tunisia and egypt are easier to overthrow to people who are not vulnerable to our judgment such as gadhafi or the ruler in syria. so i think there are things in the world that don't really lend themselves to american power. we have to admit that and we have to face that. and this syrian debacle, the syrian massacre, the standoff between the regime and the population is evident of that. >> if you were to receive a phone call from the president and he said, professor, tell me what we do with syria. is this a situation where we simply can't determine the outcome? or would you say, mr. president, full steam ahead, we must stand up for the lessons you are trying to teach in libya and intervene for the cause of reality. >> well, if that was president bush, he would call me, president obama is not going to call me -- >> what would you say? >> i think i really honestly don't know what the issue is. i think we have to separate ourselves from this regime. we have to shed the illusion that this regime is going to reform. and we have to take away from the regime one argument, which is the regime always frightens us by saying we're a secular dictatorship. we have to say we're willing to face the alternative. it takes that courageous first step. willing to face the alternative. >> we need to be willing to sacrifice some degree of uncertainty and risk and understand that is what the world will look like otherwise we have tyrants and villains as allies. >> that's about it. >> we'll have you back whenever you can. thank you, sir. coming up, jeffrey toobin is here to talk politics. what is going on there? >> sarah palin is here in new york having dinner tonight with donald trump. they're discussing their shared psychological condition. attention-getting deficit disorder. and later tonight, we may hear her gettysburg tweet. >> i'd never heard that psychological interpretation. attention -- >> attention-getting deficit disorder. >> can't wait for the conversation. and you'll be joined by rick lazio. but first a quick look at sarah palin out on the town here in new york tonight. >> what do you think of donald trump donating to democrats? >> i think i'll go change his mind right now and make sure that he's contributing to constitutional conservatives. we're adding new cell sites... increasing network capacity, and investing billions of dollars to improve your wireless network experience. from a single phone call to the most advanced data download, we're covering more people in more places than ever before in an effort to give you the best network possible. at&t. rethink possible. we could've gone a more traditional route... ... but it wouldn't have been nearly as memorable. ♪ bridgestone is using natural rubber, researching ways to enhance its quality and performance, and making their factories more environmentally friendly. producing products that save on fuel and emissions, and some that can be reused again. ♪ and promoting eco-friendly and safety driving campaigns. ♪ one team. one planet. bridgestone. at this very moment, there's a rare harmonic convergence happening right here in manhattan. sarah palin is about to share a pizza with none other than donald trump. trump who briefly flirted with the republican presidential run of his own is the latest stop on palin's one nation tour, adding him to a list of national monuments that includes the lincoln memorial, the gettysburg battlefield, and the liberty bell. donald trump and sarah palin, i would love to be a fly on that wall. and i don't know why we think they're eating pizza. sounds like not exactly their choice of food. joining me now is cnn senior analyst jeffrey toobin and rick lazio, a good friend of the show and a great personal friend. rick, let me start with you. >> yep. >> none other than perhaps the most powerful person in the republican party has been dumping all over sarah palin. you now have this remarkable event of palin and trump who suck up all the energy of the republican party going off to have dinner. meanwhile, you've got huntsman, you've got romney, you've got pawlenty serious candidates wandering aimlessly with no candidates following them. is this good? >> well, i guess it's a success for both of them. you've got two master showmen. you've got donald trump who fanned the flames, teased if media, and was in the headlines for weeks. and sarah palin that was out of the spotlight for a while but is back in. i think for the candidates who are like maybe pawlenty or like michele bauchmann who were in respectively iowa and new hampshire over the last couple of days, it does tend to suck the oxygen away from them. i think when romney makes his announcement in new hampshire, that will get its own -- >> i think that's an important distinction between candidates who already have some stature. you have palin and trump -- we had a conversation with him a few weeks ago, he refused to answer any serious questions, take any positions. neither palin nor trump has been willing to define himself or herself. what does that mean about being able to manipulate the politics at the moment? >> it means it's better to be famous than anything else. they're both really famous and got a lot of support. sarah palin is still about 10% in the polls. that doesn't sound like much except when you consider the leading candidate who is romney by and large is only about 17% in the polls. so she remains very popular -- somewhat popular among the slice of the republican electorate that votes in primaries. and so until she decides whether she's running or not, she's going to suck up a lot of the oxygen. >> you may be right. we are perhaps playing her game. here we are talking about her. shame on us would be one response. but, rick, is this going to succeed in rebranding her? is it going to work? >> well, she's got an important movie coming out that, i think, in part is an effort to reposition -- well, to her. in terms of her repositioning. attempts to tell a much more sympathetic story about sarah palin. and frankly, she has got an interesting story. she's an interesting person, that's why people like her. she's looking for ways to directly connect with the people as opposed to going through the media, which is a real challenge. but she does understand, which jeff was saying, the nature of contemporary politics,which is a celebrity political culture. >> but this rebranding business, is there one person who thinks poorly of sarah palin now that she's gone to gettysburg, she's riding around in a bus is going to think differently of her? i can't imagine this changing one person's opinion. >> rick, try to defend maybe the thinking of the republican leadership in not having tried to push her back at this point. her negatives are 60%, very high for somebody who wants to be president. >> right. >> even among independents, they're -- >> she can read the polls. >> so explain the logic of how -- you've been a successful politician. how does she begin to appeal -- how does she begin to appeal to those middle independent swing voters without whom she can't win? >> you're absolutely right. the swing voters are the key. part of the electorate right now. she's having real difficulty of reaching out to suburban voters, democrats, and independents. her appeal, an intense appeal is to that part of the republican base that is really attracted to her populism. her appeal is strong. she's got an intensity to her appeal that will be very helpful. so republican leadership to the extent they can control these things. they don't want to turn her off, they want to rechannel her so she's seen as contributing to what they think is a majority. >> who do you have in mind? who could possibly tell you? but roger, he's -- if she was a serious candidate and was a possibly running for president, he would take her off the air. she's a fox news analyst. he took off rick santorum, took off newt gingrich when they became clearly candidates. he hasn't taken her off because she's just making a spectacle of herself. she's not running for president. >> i'm about to quote some words that were attributed to him in an article. and this is somebody who is quoting roger ales. he thinks she's stupid. he helped boost her up, people like sarah palin haven't elevated the conservative movement. so if these quotations were true and they were in "new york" magazine -- >> no, it was "rolling stone." >> to whom will the republican leadership turn and when to say now silly season is over, we do need somebody of a stature to stand up to president obama who can say in the past month osama bin laden gone. we have a foreign policy. we stand for something. >> right. i think the establishment to the extent they can control anything can put pressure on the candidates to be substantive. to talk about their policies, what they stand for. not just make a media appearances and play cat and mouse and do all the cute things that actually attract attention in the short run. but who's going to have the credibility to be a serious challenger to president obama next year. they don't have the ability to pull a sarah palin or anybody else out of the race. what they do, i think, have the ability to focus people's attention on what they should be looking for in mounting a credible challenge. >> and also i think it's important if you want to run for president, run for president. mitt romney's running for president, the tim pawlenty is running for president, newt gingrich. that's it so far for all the talk. and i think we have to give them credit for actually making the effort and taking -- and taking on the challenge of saying i am going to be the person not an endless discussion of are they running, are they not running? and i think ultimately that will benefit them. and i think either romney or pawlenty is going to be the nominee. >> and you see what happens when people are brushed out of this. so when trump was finally smoked out to sort of take some policy positions, that was the beginning of the turn for him. and he never came back from that. >> and romney and pawlenty. whatever else you think -- they've been governors, they know the issues, they'll be able to talk about libya and health care. they've got problems on both. but the fact is, they are -- they are serious people running as serious candidates. >> jeff, i'm with you. not to disagree with rick, but absolutely. i would add john huntsman to that list. there are serious candidates who stand for serious propositions about public policy who have governed, who are willing, in fact, cherish the opportunity to answer the questions and i think sarah palin is sucking the oxygen, which is why the republican leadership must be frustrated. >> i think they'll let it play out. she can make the case and she can appeal to a broader part of the population, prove she can attract the swing voters, talk about serious policy, then, you know -- >> don't hold your breath. >> all right. . jeff thanks always, great fun to talk to you guys. when we come back, is washington ready for arizona's anti-immigration sheriff, joe arpiao. stay with us. 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on that mechanism for approaching this? >> yes, but we have state laws, we're the only agency in force on the employer sanction laws. we raided 46 businesses, locked up over 500 people. the majority have false identification. so we are doing our part in that aspect. and i'm glad that the supreme court ruled in favor of our state. i think that's an important ruling. >> well, look, the supreme court just so everybody understands ruled that an arizona law that requires employers to use the e-verification system is, in fact, constitutional. so, i guess, congratulations. the law you certainly were pushing for has been deemed constitutional. let me ask you about your enforcement. because as i understand it, you obviously, and i just said rounded up many of the workers. have you brought charges against any of the employers who are employing the illegal immigrants? >> well, eliot, the state laws, it's a civil law. it's very weak. we need a stronger state law, and i hope the legislature will pass or increase the sanctions, at least make it a criminal offense. but in the meantime, i'm not stopping, we still go into the workplace. we still arrest illegal aliens, and we've also brought to justice three or four employers. but it's very difficult with the current law we have here in arizona. >> no, but i guess the point i'm trying to zero in on just a bit is some people see a fundamental inequity. they think it's easy and to a certain extent i think they're right. i've been in law enforcement, as well. it's easy to go after the folks at the bottom of the totem pole finding them or rounding them up is easy. and the obama administration, i think has deported something like 400,000 people. way up over president bush. it's much more difficult to go after the employers who are taking advantage of them. so why don't you focus more of your energy on the employers? because if the employers don't hire them, then the influx will stop. >> well, the last i heard stealing people's i.d. is very serious. so we are arresting those workers that are here illegally. as far as the employers, we need stronger laws, state laws, to enforce. so i hope that the president says he's going after employers. let's see how many have been brought to justice. instead of talking about it, i want to see the facts. >> well, look, sheriff, i'm with you. where people talk, let's check to see what the records are. i think the numbers in terms of deportations for the obama administration are pretty strict and remarkable. here's the thing, if an employer has hired an illegal worker, immigrant, they're falsifying immigration forms, the i-9s are not going to be accurate. they're going to be submitting information they know is false to irs, not paying taxes. have you done the audits of the employers to make those cases? >> once again, we don't have subpoena powers under this civil law, which is you lose your license the second time around. we need tougher laws. but in the meantime, i'm still raiding businesses and still locking up those here illegally, working in the businesses with false identification. that's still a serious violation. i understand what you're talking about. we need stronger state laws. >> well, look, i think most folks probably understand you and i have differing views about how the best -- what the best mechanism is to resolve the immigration issue. maybe fundamentally different views on many issues. but i'm looking for some sense of balance. when you go in and arrest the workers, do you also arrest the employer for falsifying his payroll, his tax returns? do you audit those tax returns? do you seize that stuff? you have a search warrant, you can go and seize the workers, you can seize with a search warrant those wage records. why don't you seize those and then go after that employer who's the one benefitting financially and taking advantage of these workers? >> well, that's somewhat in the federal jurisdiction. we deal with the i.c.e. when we come up with that information, we turn it over to i.c.e. once again, we need stronger state laws to enforce what you're talking about. but in the meantime, i'm going to say it again, we're doing our job and getting rid of those who are here working illegally because we have a 10% unemployment. at least i'm making vacancies for those u.s. citizens, those who are here legally. i'm doing something for the economy. if nothing else. >> look, i think, you know, i disagree with some of your tactics, but i'm mystified that when you go in and arrest the workers you have search warrants, you could get those employment records, you have all sorts of false filings against the business leaders of your city and your town. they may be powerful, but sheriff, i'd say to you, if you really believe what you're doing, you should be taking those documents, doing that audit, arresting those employers. they may be rich, powerful, and politically important, but they're the ones committing a crime at least as bad by not paying their taxes and knowingly employing people who are here illegally. my challenge to you is why don't you do that? >> that's an irs problem. >> but you've been saying you have the enforcement power at a state level. i know what the powers are. >> no. >> you have the capacity to do it. i challenge you to do that. the easy thing -- and i don't say this to disparage you. the easy thing is to arrest the workers, the harder thing is to take it to the employers -- >> it's not easy to arrest the workers. we don't knock a door down, we do a lot of research. takes six months. we do deal with the economic security, social security, we don't just go in there. believe me, eliot. i would love to lock up all the employers, believe me. >> have you checked to see the way and methods they use to determine whether or not their employees, in fact, are citizens, whether they have the documentatio documentations, the i-9s, the necessary withholding forms. and when they don't go after them for false filings, tax fraud, the whole raft of crimes that necessarily accompany hiring and employing those illegal workers? have you done that? >> i'm going to tell you again. i'm going to tell you again. we work closely with the federal government. i.c.e. and irs, and we turn over the records because we don't have the subpoena powers right now under the state law. >> but sheriff, when you go in with a search warrant, you can make those cases. i'll do you a favor. you and i are going to talk after the show. i'll give you free legal advice. and my challenge to you, sir, if you want to be serious about this, don't just go after the low-hanging fruit. >> we don't do that. we did grab -- we did -- i agree with you. we did go after employers. i'm talking about the civil violation. the other violations you're talking about we do enlist the help of the federal government. what else do you want me to do? >> make the cases yourself. >> i'm doing my part. >> sheriff arpaio, we'll talk more. >> thank you, sir. edie hill is here tonight. you're looking at the falling reality and the impossibility, perhaps, of the american dream. what's this about? >> yes, as the sheriff was talking about, 10% unemployment in arizona. and a lot of folks that can't make their mortgage payments now. they don't have jobs. instead they're being foreclosed on and in some cases walking away from houses. it's gotten worse than that. today we've gotten new information that shows that just as we might have been hoping things were starting to turn around a little bit, it's gotten a whole lot worse. we have a man with amazing wisdom about this. and he's going to join us right after this. >> e.d., thanks so much. with new extra-strength bayer advanced aspirin. it has microparticles so it enters the bloodstream faster and rushes relief right to the site of your tough pain. ♪ in fact, it's clinically proven to relieve pain twice as fast. new bayer advanced aspirin. extra strength pain relief, twice as fast. with heart-related chest pain or a heart attack known as acs, you may not want to face the fact that you're at greater risk of a heart attack or stroke. plavix helps protect people with acs against heart attack or stroke: people like you. it's one of the most researched prescription medicines. goes beyond what they do alone by helping to keep blood platelets from sticking and forming dangerous clots. plavix. protection against heart attack or stroke in people with acs. [ female announcer ] plavix is not for everyone. certain genetic factors and some medicines such as prilosec reduce the effect of plavix leaving you at greater risk for heart attack and stroke. your doctor may use genetic tests to determine treatment. don't stop taking plavix without talking to your doctor as your risk of heart attack or stroke may increase. people with stomach ulcers or conditions that cause bleeding should not use plavix. taking plavix alone or with some other medicines, including aspirin, may increase bleeding risk, which can potentially be life threatening, so tell your doctor when planning surgery. tell your doctor all medicines you take, including aspirin, especially if you've had a stroke. if fever, unexplained weakness or confusion develops, tell your doctor promptly. these may be signs of ttp, a rare but potentially life-threatening condition, reported sometimes less than two weeks after starting plavix. it's june 1st tomorrow, and for many americans, that means the monthly mortgage payment is due. now, home ownership has traditionally been a sense of pride and a way to build wealth, but just when it looked like the housing market was pulling out of the nose dive comes news it's getting worse. what's driving this cycle of few jobs, hard to get mortgages? perhaps the best person to explain all of this joins me now, former labor secretary and the author of this book "aftershock" robert reich. thank you very much for being with us. >> good evening, e.d. >> i have been looking at the latest numbers that came out today. and everybody was waiting for the second shoe to drop, and it did. we got the case shiller number. it tracks the real estate value. and as folks take a look at this graphic we have for them, it shows you exactly what has happened since 2006. values down almost 33%. we have hit a double-dip. how did it get this bad? >> e.d., it's partly a cascading effect. because you see as people can't pay their mortgages and banks foreclose and these mortgages go into default, that means that more and more properties are available on the market. there are more and more empty homes, more and more people that have to sell. and that pushes down the value of everybody else's property. and as other people's property becomes less and less valuable, more and more of them find themselves under water with homes that are worth less than they paid for them and actually that they owe more on their homes than their homes are worth. so they default or they walk away from their homes. and you see how it just has a multiplier effect. that's exactly what's happening. 33% drop from 2006. that's worse and a bigger drop than we had during the great depression. then houses fell about 31%. this is really a record drop in housing values. and it's all because of this cascade that i've described. >> to your point about the banks coming in and foreclosing. if you take a look at this number of the homes for sale, 28% had been in foreclosure. so 2011, 28% of the homes out there for sale right now are foreclosure. and i understand that the banks have a whole lot more. so in essence, the banks continue driving down the value of the assets they have, and the assets that they have lent money on. >> that's essentially what's happening, e.d. and remember, many of these banks are the same big banks the taxpayers bailed out. they're doing very well in other parts of their business right now. they are sitting very pretty. the big banks on wall street are doing marvelously well. the bonus season was one of the best bonus seasons ever. but meanwhile, look at what's happening to american homeowners. what we should've done and it's easy to say monday morning quarterback, but i'll tell you, i said it at the time. what we should've done when we gave the big banks the bailout. we should've said you've got to reorganize and renegotiate loans that are going sour. >> you are absolutely right. and why wasn't there anybody in washington to put that string and attach it to the money that was given to these banks? i cannot figure that out. because the fat cats got fatter, and the rest of america seemed to be put in an even deeper hole. that's where we are right now. a decreasing number of americans own their own homes. and what i find interesting is that even people who can afford to buy now are opting to rent. and that seems to be changing the fundamental make-up of america. >> well, basically because the american dream, which used to include owning your home has turned for so many people into a nightmare. and that has scared off many, many other homeowners. some people are waiting on the margins because they see home prices are going down. they want to buy when the market hits bottom and the market has not hit bottom yet. they're holding off buying homes and that is putting further downward pressure on home ownership. i'll tell you, e.d., the easiest way out of this, the simplest way is to allow people to declare personal bankruptcy on and including their primary residence. now, if you did that, right now they can't do that, if you did that, that would give homeowners who are in default or danger of default much more bargaining leverage with their banks. and their original lenders in terms of renegotiating, because those lenders know that if that house is under bankruptcy, they are going to get only a small percentage back of what they otherwise could get back, they'd do much better to renegotiate that loan. >> but you know what we've got to do is fundamentally find a way to stop this cycle. we don't have employment. people can't get the loans, they can't buy the houses. people who can't sell the houses find that the values keep dropping. they can't walk away now because they'd owe money on it. and it's just this vicious cycle. well, i looked at the money that was sort of thrown at the american problem. we had the tax credits, we had tax credits for first-time home buyers. we had all sorts of stimulus bills. and it seems like you can hire all the census workers, irs workers, and people out there to pave roadways, but at the end of the day, they head home and they haven't created sustainable jobs. how do we do that? >> well, e.d., instead of worrying about the budget deficit five or ten years from now, instead of worrying about all these projected out year deficits, and they are big, we ought to worry about them. but right now, washington needs to do something about jobs and wages and home ownership. this is the big crisis facing people. and you start with, for example, my idea on allowing people to declare personal bankruptcy on their homes, but you can extend beyond that. i mean, exempt the first $20,000 of income from payroll taxes for a year. that would give people cash right in their pockets and also create an incentive for people to hire, for employers to hire. >> exactly. >> how about a new wpa, get them back to work, get them paying taxes. there are things that could be done but washington right now is paralyzed doing absolutely nothing -- >> you've just laid out a couple of very good ideas. you've got to get money to companies so they have an incentive to hire, you've got to get money to people so they've got the incentive and the ability to spend. and something has to stop here. fundamentally it's just got to stop. and we have to figure out a new way forward. robert reich, thank you very much for sharing your experience and your wisdom. i appreciate it. >> thanks, e.d. his book is called "aftershock." coming up, japan's nuclear disaster may be out of the headlines, but it is definitely not over. eliot has the latest on this catastrophe. it refuses to go away. 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[ clears throat ] [ deep voice ] yeah, babe. in a second. takin' care of some business. it's surprising just how affordable an rv vacation can be. gorving.com and get a free video. or visit an rv dealer. go affordably. go rving. it's the nuclear crisis that won't go away. crippled after the march 11th earthquake and tsunami, japan's fukushima power plant continues to struggle with the meltdown. a short time ago i spoke with the professor, author of the book "physics of the future" and he had scary news about fukushima. >> last week, there was this enormous bombshell dropped by the government. they finally admitted there was 100% core melt in unit one, possibly in units two and three. all these reassuring, soothing words mean nothing. 100% core melt. what stopped the reactor accident in time was the sudden influx of sea water. if they didn't put that sea water in at the right moment, we would've lost northern japan. that's how close by came to a national worldwide tragedy. >> okay. i just want to make sure people understand. 100% core melt means what? >> it means that the core uranium, which is 100 tons measuring about 12 feet tall is now basically a bowl of granola with cream on it. >> explain this to me. it melted down into this -- >> it melted down and crumbled into this mess. there's nothing recognizable in the core. if you were to take a tv camera down there and photograph it, it's like a pile of splittered granola with cream. >> some people were saying we have a meltdown and the government was saying no, no, no meltdown. it was a melt down. >> it was a meltdown, 100% core melt. and what prevented the reactor from going out of control and exploding was the fact they dumped sea water into the cores, stopping the accident, and this is not in any textbook. no textbook says as a last ditch measure dump sea water to stop three simultaneous meltdowns. >> so it stopped the meltdown because the water simply absorbed the heat and dissipated it, but the downside risk was the sea water went back into the ocean. >> you have all this salt, all this radioactive water and the chinese and koreans have protested because of the fact they were dumping radioactive sea water into the ocean, radioactive levels began to soar, people were concerned about plant life, seafood, it created a huge mess. realizing that school children right now are being exposed to 20 times the level that an atomic worker is going to be exposed. this is so bad that one of the advisers of the prime minister quit in protest saying i'm not going to let my children be exposed to 20 times the radiation of what an atomic worker would be. >> what would've happened if the sea water had not gone in? >> then you would have had a breach of containment. all this melted uranium would've plunged on to the floor, caused a steam explosion, hydrogen gas explosion, blew the lid off the whole thing and then you would have had chernobyl. three simultaneous chernobyls, raging cores with maybe 25% of the core vaporized and turning into dust particles and basically wiping out northern japan as an area that can be habited. >> so we came close? >> we came very close. right. >> did they know this at this time? >> they didn't even know how close it was. there was an argument between the utility and the government. the government said, you know, put in sea water and the utility said, no, we can salvage it. and even as there was a 100% core melt, they were saying it's salvageable, don't put sea water in. >> some people are saying what helped preserve this was the containment vessel itself was not breached. >> we realize there's partial breachment of one, maybe two containment vessels. it's coming from a breach of containment. it's leaking through cracks in the containment and melted holes. we now know there was a breach of containment. it did not create a steam explosion, thank god, because they put sea water in time. but radiation, the uranium leaked out. >> the next concern is typhoon season. what are the hazards, the risks we're facing now? >> yes, we're entering typhoon season. and we have three very damaged reactors still in freefall. the earliest estimate is early next year they'll finally stabilize the three reactors -- >> in terms of temperatures, you mean. >> in terms of temperatures. they can't go into cold shutdown now. that means there's a tipping point. a typhoon could tip it over and the accident can start up all over again. it's a ticking time bomb. it looks stable only because it's ticking away. however, a typhoon, a small earthquake, a pipe break, and their accident starts up all over again because of the damage which is now known to be much more severe than we previously thought. >> so not to revisit, but at the time when many of us were covering fukushima and there were people either saying, oh, you're making more of it than you deserve to, but the fact of the matter is it was even worse than we thought it was. >> it was worse than the worst imagination of the media. media was speculating maybe 5%, 10% core melt, no one already suspected we had three simultaneous core meltdowns, 100% core damage and sea water of all things stopped a tragedy from taking place. the media now if anything we realize down played the real impact of the accident. >> professor, thank you for all of that good news. all right. thanks for coming by. we know it's intimidating. instant torque. top speed of 100 miles an hour. that's one serious machine. but you can do this. any socket can. the volt only needs about a buck fifty worth of charge a day, and for longer trips, it can use gas. so get psyched. this is a big step up from the leafblower. chevrolet volt. the 2011 north american car of the year. t adththod it's dif - alcium crhea so every year my family throws this great reunion in austin. but this year, i can only afford one trip and i've always wanted to learn how to surf. austin's great -- just not for surfing. so i checked out hotwire. and by booking with them, i saved enough to swing both trips. see, hotwire checks the competition's rates every day so they can guarantee their low prices. that's how i got a 4-star hotel on the beach in san diego for half price. ♪ h-o-t-w-i-r-e ♪ hotwire.com