another recession. and adds new urgency to the political debate here in washington over new jobs initiatives. the dow jones industrial average was down just short of 420 points or 3.7%. the nasdaq down 5.2%. the s & p 500 down 4.5%. it is what drove the markets down that is again stoking recession fears. overseas more jitters as europe struggles to contain its debt crisis. here at home, data some see as evidence of a new downturn. weekly unemployment claims rose much more than expected. sales of existing homes dropped by 3.5% in july. analysts had been expecting a modest increase. the key manufacturing index was way down. and inflation on consumer goods was up. add in collapsening consumer confident and you get sober advice like this. >> 2012 could be a very difficult year. i'm on the camp that we have more chance of being in recession than avoiding it. so they should be conservative right now. their confidence should be down. because there's every reason out there that they shouldn't feel confident. >> getting us started tonight, our chief business correspondent aali velshay. >> i wanted to pull back and take a look at the dow which is what a lot of people's 401 ks look like. wanted to take a look at it from the beginning of the year. we started just above 11,500 on the dow. went up to 12,500. the middle of july everything was fine. then in august look at that big drop. down well below 11,000. then it popped back up to 11,500. looked like things were okay for awhile and then back down. what triggered this? you mentioned some of the things. we got into today as a trading day with a lot of trouble over in asia and europe. in fact those european markets took a major, major beating on news that germany's economy has almost stalled and france's is completely even. we got a report out from morgan stanley this morning. it said things that we had all sort of thought. but now it was on paper. number one it said we are dangerously close to a recession. dangerously close. it doesn't say it's entirely likely. it doesn't even say it's their base assumption. but dangerously close. is also says that europe and the u.s. have made policy errors, that's the central bank's and the political system. in fact, it referred specifically to the drama of the debt ceiling debate in the united states. that has sucked the confidence out of investors worldwide. and number three, it says both the fed and the european central bank may need to intervene again. boy, you've been talking about this decision by -- this comment by rick perry that any intervention, further intervention by the fed between now and the election would be considered treasonous. so on one hand investors say we may need more money from the central banks and politicians here in the united states saying it's treasonous. let's take a look at the u.s. situation. there are a few things that happened today in and of themselves wouldn't have caused the selloff that we saw. but they exacerbated it. you mentioned some of this a little bit earlier. number one, every week on thursday we get jobless claims from the previous week. we got those numbers today. they were higher than the previous week. not by much, but any bad news rattles the market like this. number two, existing home sales were down in july. and that means prices were down as well. that's very unusual. prices are so low you'd think people would be snapping up houses, particularly since you can get a 30-year mortgage for under 4.5% if you have good credit and a down payment. number three, consumer prices are up. prices for the goods that you pay are up. the money you earn is not up. the value of your house is not up and your investments are not going up but the costs of living are going up. that's a problem. number three, by the way, that means less money to put into the economy because you're spending it on the things that you're already buying. number four, manufacturing. that's actually been an area of some strength in the last year. and a new report as you said showed it weakening. you put that all together and you've got investors saying i don't want to be in stocks. i want to be in things that are safe. they were buying gold. gold hit another record. and putting their money into treasury bills which by the way these days offer virtually no interest because they're safe. that's the story of what happened today. joh john? >> what can be done. let's get perspective from cnn's fareed zakaria. fareed you write and i want to read in the "washington post" today "everything we do as a country should be geared toward the central task of boosting employment. some of this will involve government spending. an infrastructure bank that uses current low interest rates, includes the private sector and chooses projects based on merritt rather than patronage is one of the best ideas to come out of washington in years". best idea to you, speaker boehner the other house republican leadership says that's more stimulus spending. not happening. >> this is part of the problem. we've gotten into an absurd political debate where everything the government does is called stimulus spending. it's important to understand what we're talking about. we're talking about rebuilding america's infrastructure, bridges, highways, but also, for example, a power grid, also broadband. all this would be done using an infrastructure bank that would largely use private sector money. that is it would borrow from the private sector and using and taking advantage of current low interest rates. you know, the odd thing here is america actually builds its infrastructure under the current setup in a quarter anxiety socialist way. the government does everything. what i'm suggesting, and this is president obama's suggestion, kay bailey hutchison's suggestion, what i'm suggesting is we use a method used in lots of other countries that basically gets the private sector involved in all these projects. >> how do we crack that code, if you will, and break the pair paralysis. yesterday the president was in illinois. after his town hall meeting i talked to bobbie schilling. i asked him about infrastructure. he said well that's not democratic or republican. that's a red, white and blue issue. we can probably agree on that. and then it was almost as if a switch flipped in his head and he quickly turned and said this. >> what we need to look for is private sector, permanent jobs, not taxpayer-funded temporary jobs because we've already seen a failed stimulus that's cost our kids and our grandkids over trading bucks. we're willing to work with -- i shook his hand today and said mr. president we're here to work with you but we're going to need a little bit of help from your side also. >> how do we break this code if you will? >> well, if you talk to the ceos, if you listen to jeff imelt, andrew libris of dow, any of the major ceos in america, they all point out we have terrible infrastructure, we're falling behind, and the ironic thing here is, what is being proposed is actually a much more private sector-friendly, much more market-friendly approach than we have. what does the congressman mean by permanent jobs? there aren't no such thing as permanent jobs anymore. companies, small companies start up and go out of business all the time. they hire people when they need them. they let them go. the same would be true of construction projects. and by the way, it's very important to point out when you think about infrastructure, this is not government workers. the government would be in part paying for private sector funds, for private sector construction funds. we have a 20 to 25% unemployment rate in the construction industry. >> another point you make in your column that i think is an incremental step but i want you to tell me how important you think it should be "we should make it easier for tourist toss get visas and work hard to make them feel welcome. they are in the words of starwood hotels ceo fritz van paasschen a walking stimulus program". >> in our country, the united states these days ever since 9/11 we've basically been trying to stop people from coming into this country. that has been to the extent we have a policy toward visitors, it's basically to say how can we stop you from coming in because one out of every 10 million of you might possibly be a terrorist. it's crazy. what we should be trying to do, we should be the leading tourist destination in the world. right now france is. we're five times the size of france. we have got everything from the grand canyon to disney world to broadway to the metropolitan museum. we should be the world leader in. this and if we were to do it, it would create tens of thousands, maybe hundreds of thousands of jobs in the hotel business and the hospitality business, in travel, and it doesn't require much congressional action. this is actually an area where the administration would need courage. because of course you're going to have people claiming that we're being soft on terrorism and all this kind of nonsense. but it is something that we could mercyfully do while something is in recess. >> in the course of this conversation we've mentioned several scos ceos. what is their sense if we were having a conversation three or four months ago most people thought the economy was going to grow slowly but not stumble back into recession. in recent days when you see consumer confidence down, soft housing reports, soft manufacturing reports, the volatility on wall street, the european debt crisis, more and more smart people are saying 2012 might be another recession. >> what they would say to answer your question is it's actually not as bad as it looks, meaning that data is softer than what they're seeing on the ground. and they read the data as being a temporary blip downward. nobody thinks there's going to be rebust growth. but none of the ones i talked to seemed to think that we were going into a second recession. >> well, let's certainly hope they're correct. fareed zakaria as always thank you. >> pleasure. still ahead, you see it right there. flash mob crime is proving much more than a summer fad. philadelphia's mayor is here to describe his tough love approach to stopping it next maybe it took too long but tonight proebds has a simple message to syria's brutal dictator, step down. the sons of former slaves and the sons of former slave owners will be able to sit down together at the table of brotherhood. i have a dream today! 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" for the sake of the syrian people, the time has come for assad to step aside". the first echo came from america's top diplomat who it is worth noting not too long ago praised the syrian strong man as a reformer. but today, the blood of those killed finally meant more than some romantic theory that bashar al assad might someday see the light. >> and we will stand up for their universal rights and dignity by pressuring the regime and assad personally to get out of the way of this transition. >> next, the joint statement calling on assad to step down from the leaders of the united kingdom, france and germany, a united front secretary clinton says sends an important message. >> the assad government has now been condemned by countries in all parts of the world and can look only to iran for support for its brutal and unjust crackdown. >> let's check in with cnn's arwa damon who's monitoring the syrian political cries is from beirut. arwa, the big question is, will the president of the united states saying assad must go, will the european leaders, the u.k., france, germany saying assad must go, will it have any impact on his behavior? >> reporter: i think what we're going to have to wait for is to see how turkey is going to react, how countries like saudi arabia, other arab nations, if they do then follow suit. that could possibly lead to greater pressure on the syrian government. but since the onset of this, this has been a government that whenever the u.s. talked about the president's loss of legitimacy has merely skofd, it has been a government that has quite simply said in the past if you'll remember that europe would just cease to exist for syria and it would continue to look to its friends towards the east. other critical players are also going to be china and india, russia as well, because russia is still at this point continuing to sell weapons to the assad regime. so it's going to take a bigger union of many more countries before assad really feels that diplomatic pressure. but analysts will tell you this is at least a first step towards that. >> and so if the regime would feel a little heat initially or moderate heat initially, what about the conduct of the human rights activists? you talk to many in the community who for months have said the united states has a moral obligation to stand with us. will it have an impact on the brave souls who have been risking their lives across syria? >> reporter: you know, john, since the onset of this people have always been asking us, wondering what it is going to take for global leaders like the u.s. that always promotes democracy, they say, and others to begin to stand with the activists. some of them will say that they were under no illusion that the assad regime was going to ever change its course so why did it take america this long. that being said, i was speaking with one man an activist from ha ma who we had been in touch with federal regularly. he's now gone into hiding. his family has been threatened. but he said that after hearing this announcement at the very least at this point in time he felt as if he, the syrian opposition, was no longer standing alone. >> no longer standing alone. we will see how it plays out out from here. arwa damon in beirut tonight, thank you. let's continue this important conversation with nick burns, the normaler undersecretary of state, currently a professor at harvard and syrian human rights activist mohammed al abdullah. nick, you have said many times this should have happened sooner. it has happened. the question is now can the administration somehow create some momentum in addition to the europeans, the saddyes to not say it's a killing machine but assad must go. what has to happen next? >> john, it's a significant step by the obama administration because it isolates assad, it depreeshs his credibility in the region and internationally, and it hopefully will empower the opposition. syria matters. what happens next hopefully in other countries, turkey, egypt, saudi arabia will follow suit. if russia and china would cooperate more in the u.n. security council for a hard-core resolution to repudiate the syrian regime, that would be consequential. but this country is a very important country. it's a neighbor to israel, a neighbor to iraq, an ally of iran, and hamas and hezbollah. so obviously the administration now is trying to focus international pressure. it's almost always better when the united states acts multilaterally with other countries rather than alone. that's why i think, john, you saw the obama administration wait several weeks longer than many of us thought they should to take the step today. >> and so mohammed you heard from arwa damon. she was talking to some of these brave folks she keeps in touch with who say at least morally they don't feel alone. what is your sense from talking to friends inside syria and the community? what difference might it make in terms of the resolve from the demonstrators. >> for a long time i've heard from friends and activists inside syria resisting president assad just condemning the human sites violations, it was very significant and important to hear it clearly and loudly that president assad needs to step away or step aside, step down, because people cannot believe that the u.s. administration is not supporting him. there is a conspiracy theory in the head of those people in the middle east. it was great to hear that. and people now encouraged more to go to the street. we are not alone. the international community is with us and supporting us and everybody watching, the u.n. security council is gathering to do something to protect us. it's very important step. >> you say very important. nick, mohammed says as a conspiracy theory that maybe the united states secretly supports assad through. this i think there's a reason some people have these doubts. this is because the secretary of state of the united states back in march. >> there's a different leader in syria now. many of the members of congress of both parties who have gone to syria in recent months have said they believe he's a reformer. >> we have seen this play out, nick, over the last five months. more than 2,000 people killed. we have vivid video proof assad is no reformer. why has there been this romantic view that somehow this guy would be different than his father? somehow he would open up and be a democrat? >> well, john, this was the son bashar al assad who was never supposed to lead syria. he only came back from his opthalmologist training in london because his brother died, the brother who was supposed to become president. there's been a feeling for really the better part of the last decade among many people that perhaps he was different, he was better educated. but this is also the guy who aligned himself with iran, who opposed the united states and supported extremists in iraq when we were fighting there. and so i've never believed he was a reformer. and i think we've seen his true colors, especially over the last several months, especially since the arm of ramadan. >> how could so many smart people be so wrong about him? >> well, you know, i think in that region one is looking for partners and one is looking for friends. and there is the feeling that he came from a different place, he had significant international experience unlike most of the other leaders in syria. and obviously that assumption about him was plain wrong. because we've clearly seen what he's like over the last couple of months. >> mohammed, what should we look for in the next several days to see if this added international outrage, this specific explicit call