average plunged 520 points, 4.6% amid jitters about europe's debt crisis and growing resignation that the long-term prospects for growth here in the united states are bleak. alison kosik watched the massive selloff up close. >> john, we had yet another brutal session here on wall street today. you know, there's a lot of uncertainty about the economic outlook here in the u.s. and in europe as well. you know, there's worries about france being downgraded like the u.s.' debt was downgraded. they really accelerated the losses in the final minutes of the trading day, and then, of course, there's a fear factor that's around here, you know, investors feel like they're flying blind. no one has any idea of what's coming next or where the economy is headed, and it's that certainty that's feeding this downward spiral, but i also want you to keep in mind, what's also fueling this volatility are the computer models that many institutional investers use to trach stocks, as the market falls, the programs trigger tell i selling at different levels. yesterday investors felt energized by the federal reserve statement that it would likely keep interest rates exceptionally low for another two years, but today investors got a second look at the statement and there's a part that they didn't like, that the fed said to get ready for more slow growth, and traders tell me what you're seeing happening in the market is the market pricing in the rolling likelihood of another recession, john? >> let's go through the rubble with ali velshi and dave ramsey, the host of the dave ramshy show. i want to pick up where alison left off. the people are looking at the u.s. economy and the fed statement which is pretty bleak and look at what's happening in europe and thinking perhaps another recession around the corner, especially when you look at the europe debt issue bubbling up yet again. now it's france. how serious of a concern? >> well, it's kind of strange, because the rumor, it wasn't even fact, the rumor that france might be downgraded from a aaa to a aa plus like the united states cost their biggest bank 15% on the stock market and ended up with this. you got to be wondering here when you're sitting in the united states what does france getting downgraded by one notch have to do with the value of my 401(k), but the problem is it's one of those markets where anybody saying anything slightly negative makes people say i don't want to be holding the bag if this keeps going down, so what's happening is you're seeing money going into gold again. gold hitting $1,800. another noninflation adjusted all-time high and you saw more money going into u.s. treasuries, so the cost of borrowing money for the u.s. government has dropped yet again. this also says something called a flight to safety. people don't want to be involved in any risk whatsoever, and any hint of risk sends them into something that isn't risky and that is costing people in their portfol portfolios, as alison said, a lot of it is program trading and computers but that doesn't really give much comfort to people watching their 401(k)s diminish in size. >> dave, you have people saying worried and what is my path to safety, and a lot of people have been saying, hey, why not gold, the price is way up? is that a good buy? >> well, i'm not a speculator. i'm an investor. and an investor always thinks as we've talked about many times on your show already, we always think long term. a speculator might say, well, gold's probably going to hit $2,000 by christmas, i think probably will, but i'm not worried about christmas, i'm worried about christmas 15 years now for my 401(k). this is what's known as a bubble. and it's going to burst when the fear subsides. and so i don't want to be in gold and i don't want to be in gold at all. but if you want to play the daily run on gold, you can probably make some money. that's not what i do, though. >> i was having a conversation with fareed zakaria about what the markets are looking for, and he said especially after the fed statement yesterday there's a lot of concern that washington, not the economy at large, but washington in particularly won't do any steps to encourage growth and job creation. let's listen. >> the market is saying what we care more than anything else about is whether or not you're going to get economic growth and the market is right in this particular case. so, what is our policy? what is our national strategy to boost economic growth, to create jobs, to generate demand from american consumers? we have none. >> "a," is that true, ali, in your view, "b," we have none and is that what the markets are looking for? >> we had growth somewhere, we didn't have it in the united states but we had it in other parts of the world where we can manufacture things or sell services to them, that would be great. but when you see the soft economy all over the place, where does growth come from? it doesn't come out of nowhere, generally it comes from the fact that people are working, their wages are increasing, so they buy things, that creates demand and companies then hire more people, and expand their workforces. the problem with that is that it's not -- we've had unsustainable growth for a long time. why should we just be growing and growing and growing? so we don't have a plan to get people back to work, and without that back to work, you don't get more tax revenues in the government. your debts don't get smaller. there has to be some plan and that plan means making it easy for employers to hire people and providing incentives which might be tax cuts or credit to businesses that are most likely to hire people here in the united states. we'd have no such plan as you know better than anyone, john, we have no such plan or anything even resembling such a plan in the united states. >> and so in the absence of that, dave, i was reading that statement from the fed yesterday and i kept reading it over and over again. it's just one piece of paper and i kept reading it, reading it, trying to find something, aha, there's a nugget of good, but it says that the growth projections are now less than they were just two months ago, that the downsides, potential huge risks to the economy, more than they were two months ago. persistent, chronic unemployment as far as the eye can see. when you go through that and you interact with your listeners, people who call in with questions, with people who you are helping with investments, how do you deal with the fact that that is an incredibly pessimistic outlook? >> well, it is extremely pessimistic, you're right. and i think what's happened is, is that somewhere along the line we got sold a bill of goods and the bill of goods was that the government had the ability to be the economy's puppet master, and it kind of comes out of the roots of keysian economics there, it started there. and somehow the idea that the president and the congress are responsible for throwing the levers and getting the economy moving. truthfully the economy moves from the bottom up. and to stimulate just like ali said, to simulate the small business out there, will move the needle, because 64% of americans work for a company 500 people or less. >> right. >> and so, you know, you and i are the economy, and so the great recovery will happen from the bottom up, and what washington can do there is they can leave the emotilead the emo of that charge and put people back in charge of their own lives. >> in some cases it's anxious and angry and it's safe to say a lot is frustrated. i want you to weigh in. a single mother from missouri, lucy nob, she's a single mother, times are tough, resources are scarce and she spends a few hundred bucks to do this, play for an airplane to fly around lower manhattan, thanks for the downgrade, you should all lose your jobs. she also wanted to send it my way down here to washington but we have a no-fly zone around the nation's capital for security reasons. ali, people are look for somebody to blame. there is a culprit? >> there isn't a culprit. there isn't, john. i mean, economic downturns are part of history. they happen. we had thought over the years that we had had the ability to make them shorter and shallower and the recession of 2008 showed us that that wasn't actually true. the economy is not science. for people out there wondering, saying you don't understand the economy, dave put it correctly. it's you. if you are going to spend more, if you go out to dinner, if you see your 401(k) going down and you make a decision you're not going on a trim or spep or spen something, it's the economy. the thing that makes people spend is the value of your home or savings or investments increasing or the value of your wage increasing, that's it. or you marry a rock star or rob a bank, that's the only way you get richer in society. we need those options in front of us, as for the woman that did that banner, it's american timi economy, right, dave? >> she did, right. >> absolutely she did. >> people looking for a victim, how does it affect their behavior, dave, when they're down like that? >> it does. instead of looking to themselves, and this sense of self-reliance that made this country great. they're saying congress, fix my life. oops, you didn't do it. mr. president, fix my life. oops, you didn't do it. so, i don't feel hopeful. i don't feel prosperous, and then based on that feeling, that's consumer confidence is one way we measure that, they don't go into the marketplace. i'm not purporting that people go into the marketplace to spend willy-nilly to drive the economy, i'm not one that believes that. they are not saving correctly and panicking and pulling their money out of the market right now, all of this has to do with the broken hope, this lack of hope. and so -- and that is a leadership breakdown in washington, so in that sense we can point at both parties and that's what this lukewarm compromise that really made no one happy did to the markets. the markets lost their hope with that. >> dave ramsey, ali velshi, rocky day, but appreciates your insights. we'll keep in touch. thanks so much. the audacity of sarah, yes, that sarah. the republicans running for president have a big debate and a big straw poll in iowa. we know 9 of the 12 supercommittee charged with finding more deficit cuts. are they ready to bargain in faith over tax increases or medicare cuts or is a group picked to protect the status quo? 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[ female announcer ] phillips' colon health. at exxon and mobil, we engineer smart gasoline that works at the molecular level to help your engine run more smoothly by helping remove deposits and cleaning up intake valves. so when you fill up at an exxon or mobil station, you can rest assured we help your engine run more smoothly while leaving behind cleaner emissions. it's how we make gasoline work harder for you. exxon and mobil. worries about europe drove much of the stock market's drop today, but worries about washington also were a huge part of the volatility and uncertainty and tonight we have important new pieces of a critical puzzle. congressional leaders have named 9 of the 12 members of the so-called supercommittee charged with finding at least $1.5 trillion in additional deficit reduction. the white house, again, made clear today it wants more tax revenues as part of any committee deal, and the house republican leadership just as quick made it clear it views tax increases as a nonstarter, so is this enterprise destined to fail already, or are there ingredients for a grand compromise, david gergen is here and dave herbert, a former "new york times" columnist. and i want to go into the particulars of the members in a minute, but, bob, to you first, a quick headline, when you look at the nine members so far, do you see status quo, gridlock, beholden to the leadership or do you see maybe a recipe for surprise? >> i don't see a recipe for surprise. i see status quo, but i also thought that when they came up with the decision to create this supercommittee that it was going to be status quo. i don't see where the give is going to come from, and i don't see, you know, we had the debt ceiling and the potential for default hanging over the government and they couldn't come up with an agreement then. i don't see how they're going to do it in a few shorts months by thanksgiving. >> david, the same not optimistic, i won't call it pessimistic, but do you see maybe in the members potential? >> i think bob herbert is fundamentally right. when you look at this group, three of the members were on -- one democratic senator and two republican congressmen were on the simpson/bowles commission that tried to come up with the grand bargain, propose a grand bargain. all three were against it. and the simpson/bowles commission. another republican senator walked out of the conversations with joe biden about trying to come up with some big compromise, show, john, i think it will be very tough with what they've got. the issue is going to be if six members of one party hang together, can they pick off a seventh from the other side? and people will be looking at who is the potential break point, who is the potential person who could form a compromise, otherwise you come out 6-6 in the committee and it's a nonstarter and you don't have something to vote on. >> you start on the senate side, who might be the compromise, you have senator kerry, he was a presidential nominee. patty morey, the knocks at the same time she chairs the democratic senatorial campaign committee, she's raising money for the democratic candidates and saying the republicans are killing medicare while she's serving on the committee that medicare cuts might be on the table. and liberals don't like max baucus, and here's an interesting part, you mentioned who are the potentials. jon kyl didn't like the negotiations with the vice president. some conservatives worry he's retiring after this term, they think he might be looking for a big achievement. rob portportman, he's widely vi as a potential vice presidential candidate, the new senator from ohio, worked in the bush budget office, yes, he's a conservative, but they don't view him as an ideologue. might he be a deal maker? >> there's a possibility that one side could pick off one member from the other side, but the problem then is it's got to go to the congress. i just think that this whole thing is fraught with politics. and ideology. people have rigid ideological positions, and i just don't see how a grand compromise could work. if the president and john boehner who supposedly had come close to some kind of an agreement and that couldn't work, i don't see how it's more likely to work when you throw it open to members of congress. >> and, david gergen, does it make any difference in the game of washington chess all three of these republicans relatively good relationship with their leadership, these three democrats good relationship with their leadership, you come over to the house side, speaker boehner picked three republicans with whom he has very good relationships, nancy pelosi has the final picks, the democratic leader. does she have any special leverage now that she knows all the other members? >> yeah, well, it makes it -- it makes her picks obviously more interesting, but nancy pelosi, as you well know, john, has said going into the 2012 elections, there are three issues on the table, medicare, medicare, medicare. she's going to send people in there who are going to refuse to have any big cuts on entitlements, what i'm less certain about we don't know when john boehner was agreeing to the $800 billion in new tax revenues what that involved. was there a formula there that if you were -- if you reform taxes, that revenue would come out of growth as opposed to higher taxes. i don't know the answer to that, but there may be some give in there. there's some aspects of this -- i wouldn't write this off, but i do agree with bob herbert that the outlook is not optimistic. >> john, one more point i could make? >> sure. >> quickly. even if they can come up with an agreement, what we're talking about is a move toward austerity here, which it seems to me in this economic environment is exactly the wrong way to go, so an agreement, if anything, in the short term will likely harm the economy, and make unemployment even worse. so, we're in a really terrible fix here. >> which brings me to this point, you mentioned an age of austerity perhaps coming here. we went back and counted, the president in recent days pivoted and wants to focus on jobs for the american people. we found six examples going back to 2009, when he said it's time to stop talking about what we're talking about and focus on jobs. you knew i was going to be seeing you, 18 of the 20, 18 asked a variation of -- >> jobs. >> -- where are the jobs, when are they coming back? >> look, this is something that i ask every single one of my economic advisers every single day, because i know that ultimately the measure of an economy is, is it producing jobs that help people support families and send their kids to college. that's the single most important thing we can do. >> david, that's two years ago. you see it from the left, you see it from progressives more toward the center, lots of disappointment in this president and you see every other breath of the republican presidential candidate saying, he promised you jobs, he has failed. will we see a sustained focus from the president on jobs? >> don't know. we've just heard from the federal reserve, too, that they think the next two years we're not going to have much growth and many new jobs. john, i think that the most important thing he can do right now is to take time away from campaigning, turn seriously, bring the leaders of the congress back and cut a deal on jobs and do something that gives people a reassurance that we're going to actually do something real in their lives. this will help to staunch the flow of blood in the stock market and will give people more confidence. maybe if he can get the jobs issue moving with a bipartisan kind of deal, i think the makings of it are there, maybe he can change the environment in this debt commission is going to work. but i do think bob herbert is right, i agree with him on a lot of these issues, we disagree on others, that you've got to get this jobs issue right. he's got to get moving on this. this country right now feels as if there's no one in charge. >> bob, it's both a leadership and a credibility question, is it not the? >> oh, it is. david is absolutely right about the need for the president to essentially come off the campaign trail, really focus on jobs, in an environment when you don't have a lot of tools for job creation begin to bring people together and try to forge some kind of bipartisan agreement on jobs. now, i know this is difficult, but i think that's what the president is obliged to do. that's where -- that's -- leadership is called for and he's the one that's obliged to provide that leadership. >> bob herbert, david gergen, appreciate your insights on these two important topics tonight. still to come here, sarah palin isn't in the big iowa republican debate tomorrow night or on the iowa straw poll ballot on saturday. so, why, oh, why, is she rolling into iowa this week? is that smart? maybe selfish? also anderson cooper joins us live from somalia where bono among those trying to help the starving. my doctor told me calcium is best absorbed in small continuous amounts. only one calcium supplement does that in one daily dose. new citracal slow release... continuously releases calcium plus d for the efficient absorption my body needs. citracal. as much as i can about a company before i invest in it. that's why i like fidelity. they give me tools and