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Lou Dobbs Moneyline
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Aired October 31, 2001 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is LOU DOBBS MONEYLINE for Wednesday, October 31.
LOU DOBBS, CNN ANCHOR: Good evening.
A mysterious case of anthrax in New York City has resulted in death. And it leaves investigators with more questions than answers.
The attorney general announced new measures today to stop terrorists from entering the United States.
(BEGIN VIDEO CLIP)
JOHN ASHCROFT, ATTORNEY GENERAL: America will not allow terrorists to use our hospitality as a weapon against us.
(END VIDEO CLIP)
DOBBS: We'll have a live report for you from the White House in just a moment.
President Bush says America will win the war against terrorism at home and abroad. And also today, the president urged Congress to pass an economic stimulus package to help jump start the economy to recovery.
Meanwhile, technology stocks rallied on Wall Street today after the economy shrank less than had been expected by many economists. But the economy still managing to stage the worst performance in a decade.
And joining me tonight, America's most respected CEO, Jack Welch. He may have retired, but he has certainly not slowed down.
Turning to the anthrax attacks: The death of a 61-year-old New York woman has taken the anthrax investigation into new territory. The woman died of inhalation anthrax early today, but did not work at a mail facility nor did she work for the New York media. Instead, she was a stockroom clerk for Manhattan's Eye, Ear and Throat Hospital. Another employee -- complaining of having a lesion, but the cause is not yet known.
Similarly in New Jersey, investigators are trying to understand how a woman contracted skin anthrax. The woman lives near a mail center that handled three anthrax-tainted letters, but she has not been to that facility in six months.
Until now, law enforcement officials said they had traced most of the anthrax cases to postal facilities and mail rooms in Washington, D.C. and Hamilton Township, New Jersey. So far: 16 known anthrax infections; 10 of them are inhalation cases. Four of those have resulted in death. And there are six known cutaneous, or skin, anthrax cases.
The postal service says making the mail safe is its top priority. And as part of its war on bioterrorism, the postal service will begin using state-of-the-art defenses. But despite extra funding, dealing with anthrax in the mail system is certainly not easy.
Steve Young has the report.
(BEGIN VIDEOTAPE)
STEVE YOUNG, CNN CORRESPONDENT (voice-over): The nation will have to jump over a high hurdle to supply an anthrax buster for America's mail. Not a single company in the U.S. now makes exactly what's required to beat the terrorist threat.
Government and industry are racing to modify gear used to sterilize bottles, protect medicines and foods. The three leading technologies zap letters with high energy, but some of the gizmos don't penetrate far into boxes or take more time to deliver a lethal dose which slows down the mail.
The postal service has signed its first contract with the Titan Company -- $40 million for just eight E-beam machines for use in Washington, D.C.
DR. GENE RAY, CEO, TITAN CORP.: They come out as a beam of energy and will kill the bacteria inside no matter what that bacteria is, including anthrax in the mail.
YOUNG: Other companies with technologies that could kill anthrax include IBA, Steris, Energy Sciences and Electronic Processing Systems. But if the goal is to protect more than just Washington bureaucrats, the cost could be huge and delivery time could be up to 36 months.
SAM NABLO, CEO, ELECTRON PROCESSING SYSTEMS: If you are really talking about the sterilization of the mail that flows in this country to perhaps 20 major centers, you must be talking a billion dollars worth of equipment and hardware, and then, you know, the training of personnel and the maintenance of the equipment itself.
YOUNG: And that doesn't begin to take into account the Fortune 500 companies that have been calling the firms making the equipment, wondering how to protect their mail.
(on camera): Late today, MONEYLINE learned, as the result of some concern in Washington, at least one company is now working on adapting its technology to keep U.S. currency from being used by terrorists to spread anthrax. After all, paper money moves quickly from hand to hand -- Lou.
DOBBS: Steve, thank you very much -- Steve Young.
Well, the 61-year-old New York woman who died today checked into a hospital Sunday. She was complaining of flu-like symptoms.
For more now on this, we are joined by Dr. Sanjay Gupta.
Doctor Gupta, since the flu and anthrax apparently seemed to share some of the same early symptoms, how does one actually know what is happening?
DR. SANJAY GUPTA, CNN MEDICAL CORRESPONDENT: That's right, Lou, you're absolutely right.
It is very difficult to tell sometimes. The symptoms are very similar to start with. I actually had a chance to sit down and speak with the secretary of Health today about sort of the protocol and what they would do in that sort of situation.
Here's what he had to say.
OK, so let me just give you a little bit of a overview.
What we're talking about -- I think we have a few graphics sort of highlighting this point.
The symptoms do start off very similarly. They start off with fatigue, fever, muscle aches, malaise, which is general tiredness. Sometimes then it progresses, in the case of flu, to pneumonia. Most cases will recover. Some will die. Out of the millions and millions that will likely get flu this winter, you can expect about 20,000 deaths.
In the case of inhalational anthrax, you may initially have a few days of improvement, followed by shock, respiratory distress. As we've heard so much about, Lou, in the case of inhalational anthrax, 80 to 90 percent will go on to death. But it is going to be very difficult to distinguish the two -- at least initially.
DOBBS: So, Sanjay, in point of fact, we have very little to reassure our viewers tonight as to how they can distinguish between the symptoms for flu and anthrax?
GUPTA: Well, yes, it is a little bit confusing and it's a little bit alarming. But, here, let me tell you a couple of things.
One is that if you -- if there is some suspicion that, in fact, what you have is anthrax -- and statistically it's unlikely to be anthrax -- but if you have suspicion, then go ahead and alert the health officials.
What will likely take place at that time, Lou, is an environmental screen, meaning they will screen the area around your home or business or wherever you think you may have actually contracted the anthrax. They'll also screen you and you'll likely, at that time, be started on antibiotics.
You'll also be tested, meaning that your blood will be sent off to a place like the CDC, the Centers for Disease Control, to have anthrax confirmed. And if it's not confirmed...
DOBBS: And how long does that take?
GUPTA: That usually takes three to five days, Lou.
DOBBS: This woman, Doctor, checked into the hospital Sunday and died three days later.
GUPTA: That's right.
And she was pretty far along when she got it. Apparently, she had symptoms on Thursday. So you're right, it did progress pretty quickly.
DOBBS: Is there any effort right now, Doctor, to accelerate the testing?
I know this is an extraordinarily complicated and difficult medical process and we're all learning almost day by day about this. But is there any effort right now to try to speed up the screening process -- the testing process?
GUPTA: Yes.
We talked to the secretary of Health today about that as well. Right now, there are a few sort of central facilities around the country that are equipped to do this sort of testing. They'd like to see it that much -- many more of the local organizations actually can conduct the test as well.
So whether you live in the heartland or whether you live in New York City, you get your test results back much more quickly. But these are all very valid concerns, Lou. And there weren't great answers, although it sounds like they're going to err on the side of treatment with the antibiotics, if someone presents with symptoms in a suspicious situation.
DOBBS: Dr. Sanjay Gupta, thank you very much.
GUPTA: Thank you.
DOBBS: Well turning now to bring you up to date in the latest developments in the war against terrorism: Gigantic explosions seen along the battle lines between the Taliban and opposition forces today. Smoke plumes stretching for miles along a mountain ridge where Taliban troops are dug in.
The Pentagon saying it's been targeting command-and-control centers and armored vehicles throughout. The Pentagon also saying the Taliban now is experiencing difficulty communicating and receiving supplies.
U.S. cargo aircraft continuing to drop humanitarian rations. They have dropped about a million packets since the bombing began.
And CNN has learned that the United States and Britain are creating a joint coalition information center to try to counter Taliban propaganda by spreading pro-coalition news and information among Arab communities all around the world.
Attorney General John Ashcroft today announced new immigration policies. That policy aimed at keeping terrorists from entering the United States and tracking down those who do.
For more on that, we're joined by Kelly Wallace, White House correspondent -- Kelly.
KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, you heard President Bush yesterday create the Foreign Terrorist Tracking Task Force that is shared by Attorney General John Ashcroft. And Ashcroft today announcing a major goal of this task force will be trying to prevent any suspected terrorists from entering the United States.
Ashcroft says the task force has designated 46 terrorist groups. And so it will be up to this task force to try to prevent any of the groups' members and the groups' supporters from, again, trying to cross the border into the United States. Forty-six, again, terrorist groups, some linked to Osama bin Laden's al Qaeda network, others whose assets have already been frozen by the U.S. Treasury Department, others again believed to be suspected of terrorism activities.
A big focus, Lou, will be for U.S. officials to get what's called real time information to federal agencies because as you know, since the September 11 attacks, there have been lots of questions about whether all federal agencies are getting the information they need, information FBI and law enforcement officials might have, about who is suspected of terrorism and who should not be allowed into the country.
Ashcroft also making it clear any terrorists already in the United States will be prosecuted and could be deported, making it clear that the prosecutors are already implementing some of the new powers signed into law by President Bush last week -- Lou.
DOBBS: Kelly, at the same time, our borders are, if you will, undermanned by Border Patrol, Customs, Immigration and Naturalization Service agents. Is there a push for more money, more resources to bolster their efforts at the borders?
WALLACE: There definitely is a concern about that. You raise, of course, a very good point. Obviously, a lack of resources. Some believe needing to beef up the borders with Canada and Mexico. Likely to be included. Certainly, lawmakers pushing for this. The administration as well. Not clear that there is any package that this administration is looking for, currently utilizing what it has.
What we're hearing more now, Lou, is better coordination, that law enforcement officials haven't been able to share some information they might have with intelligence officials, that they have been prevented from that because of some restrictions on, in particular, sharing some secret grand jury information.
Again, some of those restrictions lifted by the bill President Bush signed into law last week.
So what we're seeing right now is trying to have better coordination between these federal agencies. But of course, likely to need more money and more resources at the borders, Lou.
DOBBS: And more time. Kelly, thank you very much. Kelly Wallace from the White House.
The hunt for terrorist money is continuing tonight, a hunt that so far has produced mixed results: 152 nations now say they are cooperating in that effort; 81 countries, including key allies in the Middle East, have issued orders to block accounts. But MONEYLINE has learned only 90 accounts worldwide so far have actually been frozen. And one of the biggest questions tonight is how much is the government of Saudi Arabia doing to help.
Allan Dodds Frank reports.
(BEGIN VIDEOTAPE)
ALLAN DODDS FRANK, CNN CORRESPONDENT (voice-over): Saudi Arabia has lots fewer than one-dozen banks, so tracking cash flows there should not be difficult. But so far, only a few accounts involving small amounts of money have been frozen there, even though Osama bin Laden and 15 of the 19 terrorists involved in the September 11th attacks had been Saudi citizens.
Saudi officials insist their government is cooperating fully.
ADEL AL-JUBEIR, ADVISER TO SAUDI CROWN PRINCE: We have a population of 6 million foreigners living in Saudi Arabia that transfers over $16 billion a year. The average transfer is about $200 to $300 a month. So we're looking at almost 70 million transactions a year that go to in excess of 100 countries. And so, that's -- we're trying to get a handle on that.
FRANK: The U.S. Treasury Department says it is pleased with Saudi Arabia's cooperation so far. One visible success: freezing the assets of this wealthy Saudi businessman, Yassin Kadi (ph), accused of funding a charity that secretly backed bin Laden's organization. Kadi says he is innocent and plans to fight.
KENNETH DAMM, DEPUTY TREASURY SECRETARY: If he feels that he has been improperly accused, he has a remedy. He can come to us. He can come and let the Treasury lawyers interview him. He can even send us a letter, but he's not done any of that. He says he's going to, but he hasn't done it.
FRANK: Since September 11th, no U.S. Treasury team has been invited to Saudi Arabia to help track suspicious accounts. The government there says it has investigated thoroughly.
AL-JUBEIR: We have not found any direct evidence of support by Saudis for terrorist organizations.
FRANK: Direct evidence may be hard to find, but investigators want to know if any charitable donations went astray.
WYCHE FOWLER, FORMER U.S. AMBASSADOR TO SAUDI ARABIA: I don't think there's any question, having studied this and worked with Saudis over my last years as ambassador, that there is what we would call in this country "leakage."
(END VIDEOTAPE)
FRANK: The Saudis concede some money may have slipped out of the country to terrorists unwittingly, but they insist no Saudi has knowingly funded Osama bin Laden's organization -- Lou.
DOBBS: Allan, thank you very much. Allan Dodds Frank.
Well, the economy is one significant step closer to recession. The economy contracted by 4/10 of a percent in the third quarter, but the performance better than some economists had expected. This is also the first time that the economy has contracted in eight years. The decline, because of another sharp fall in business investment, down nearly 12 percent during the quarter, and of course, weaker consumer spending.
Coming up next, we'll bring you more on the latest developments in the war against the Taliban and al Qaeda in Afghanistan, where U.S. bombing strikes continue tonight. We'll be talking with Jack Welch. He's retired as chairman of GE. He is busy as ever, even has a new book. We'll be talking about that as well.
And the House debates the airline security bill on Capitol Hill. We'll be joined by the former head of intelligence for the Israeli air force to discuss air travel security in this country.
(COMMERCIAL BREAK)
DOBBS: Just one day before the House votes on airline security legislation, both Democrats and Republicans are pushing their respective bills. Bottom line, Democrats want to federalize the security system, while the White House and House Republicans want federal supervisors for a private work force.
Kate Snow joins us now from Capitol Hill -- Kate.
KATE SNOW, CNN CORRESPONDENT: Lou, all afternoon the House has been talking about spending bills, but just off the floor, in the back of the room, there have been a lot of discussions going on. Almost every discussion, we're told, about airline security. Republican leaders trying to convince some of their own members to come along with them and the president on their version of airline security.
Now, their version of the bill would provide for federal oversight of security screening, but it would allow some discretion to the administration. They could choose to have the people that do the security screening either be federal employees or they could be privately contracted employees.
Republican whip Tom DeLay, speaking about this, says that's a better option than making a new bureaucracy of 28,000 new federal employees.
(BEGIN VIDEO CLIP)
REP. TOM DELAY (R-TX), MAJORITY WHIP: We asked the FAA five years ago to improve security rules for the airports in this country, and they've taken five years to do nothing. Can you imagine what it's going to be to hire and train 28,000 federal employees when it takes three months to hire one employee? This transition could take forever. And in the meantime, the flying public and their security is at risk.
(END VIDEO CLIP)
SNOW: It is going to be a close vote, though. Democrats supporting what already passed the Senate by a vote of 100 to nothing. That bill provides for federal employees to do the security screening at the nation's largest airports. At smaller airports, it could be done by local or state law enforcement. But no private companies involved in their version. Democrats say that's the right thing to do and it would boost the economy.
(BEGIN VIDEO CLIP)
REP. RICHARD GEPHARDT (D-MO), MINORITY LEADER: The biggest thing that is interrupting our economy is people's fear, especially fear of getting on airplanes, because the air system lies at the heart of our economy. If business people can't travel, if conventions don't go on, if people aren't able to go to other parts of the country to sell their products, the economy is in trouble.
(END VIDEO CLIP)
SNOW: Republicans don't disagree that the economy needs some strengthening, that they need to know, people need to know that the airline security is better than it is right now. Both bills, Lou, agree on certain points. Both bills providing for air marshals, providing for strengthened cockpit doors, and also for screening of checked baggage. So those are the key agreements. It's just that there's this one major disagreement -- Lou.
DOBBS: A major disagreement, indeed.
Is it really a matter of ideological lines here, because in either case significant hiring will have to be done and somebody's got to pay the bill?
SNOW: It is to some extent, although both sides will tell you that the other side is the one playing politics. But it definitely is. I mean, you look at it, it's sort of a classic. Many of the Republicans feel they don't want a bigger government, they don't want a new federal bureaucracy. Many democrats feeling that these are potentially union jobs. These are people that'll be employed by the federal government, and the federal government can do the best job at providing that service.
But it does really come down to some of the classic arguments, although there's crossover on both sides.
DOBBS: Kate, thank you very much. Kate Snow from Capitol Hill.
Well, I'm joined now by the former chief executive officer of Israeli airline, El Al, Joel Feldschuh. Joel is also the former head of intelligence for the Israeli air force.
Joel, good to have you with us.
JOEL FELDSCHUH, FORMER CEO, EL AL: Good evening.
DOBBS: The debate, as you just heard Kate Snow report from Capitol Hill, will be resolved by vote tomorrow in the House at least. What is your judgment? Federal, governmental security, or private?
FELDSCHUH: To a certain point the government has to be involved in this aviation security. There's no doubt that when it comes to intelligence, when it comes to standards, to other things, the government should be involved.
On the other hand, there's another model, which was adopted in Israel, where there was a partnership between the government and the airline. The airline carried about 30 percent of the expenses. Therefore, the motivation of a CEO was to make it more efficient.
DOBBS: And the airline actually employing the security force.
FELDSCHUH: Yes. The airline employs the security force. But there were -- there was the measures, and if it was not good, they can cancel the flight.
DOBBS: And the security force in Israel is Israeli militarily trained.
FELDSCHUH: Not necessarily. We have also non-Israeli citizens abroad, because the system works abroad as well as in Israel.
DOBBS: But I'm talking about specifically in Israel.
FELDSCHUH: In Israel...
DOBBS: Because here the issue is domestic travel.
FELDSCHUH: No, but flights to Israel.
DOBBS: I understand, but I'm talking about domestically in Israel.
FELDSCHUH: (UNINTELLIGIBLE)... DOBBS: And in terms of the idea, a number of the ideas that have been conjured up of trying to deal with this issue, amongst them giving pilots handguns with which to protect themselves and the passengers.
FELDSCHUH: I think it's not a very good idea. I think a pilot is a pilot. (UNINTELLIGIBLE) to fly an aircraft is a complicated task itself, so pilots should concentrate on the flying only, especially when there is a threat.
DOBBS: Of course, it would always be in the case of a last resort, with a threat to the cockpit. Even then you would not recommend it.
FELDSCHUH: They should not enter the cockpit, because there should be certain layers, and the last layer should be the secure doors.
On El Al, we had two doors even.
DOBBS: And the idea of a private security force in this country, we have had extraordinary problems with companies not even screening their employees, let alone properly, not screening them, doing background checks. It is -- there's a huge confidence obstacle to overcome here, and the idea of private security doing the job of law enforcement effectively, as Senator John McCain has said, is a difficult hurdle.
FELDSCHUH: I don't think -- if the system doesn't work, it doesn't mean necessarily the system is wrong. If, for instance, airlines will perceive security as a customer service, because customers deserve not just to take off but to land safely, then it will work.
DOBBS: Absolutely. We're in total agreement on that. Joel, good to have you with us.
FELDSCHUH: Thank you.
DOBBS: Thank you.
Well, the airline industry tonight is on the brink of collapse, despite that $15 billion federal bailout package.
Kitty Pilgrim now takes a look at the struggling airline industry.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): All that federal money helped, but for how long? Continental Airlines posted a third- quarter profit, thanks to $243 million in federal grants. But the company reported an operating loss of $97 million and it's losing 4 to 5 million dollars a day. Analysts say most airlines are still hemorrhaging money. JULIUS MALDUTIS, AVIATION CONSULTANT: If there is nothing to indicate a positive turnaround, I think you will see a number of bankruptcies in the first quarter. More importantly, I think if one of the carriers files, in order to maintain parity in the industry, I think the others will follow suit.
PILGRIM: US Air reported a $760 million loss. Delta, one of best-positioned airlines, is expected to report tomorrow, along with United, which some analysts estimate is losing $20 million a day.
Revenues for the industry are down 45 percent. Airlines have cut the number of flights they offered some 20 to 30 percent, and still the planes are not full. About a third of the seats are still empty.
RAY NEIDI, ABN AMRO: Anything could happen. You could have every airline in chapter 11 by January if people don't start coming back. I don't think that's going to happen. It's going to be a very tough quarter. It's going to be a huge money-losing quarter.
PILGRIM: Airline stocks are all grounded by lack of consumer confidence, all down 50 percent or more
(END VIDEOTAPE)
PILGRIM: Now, the biggest test is yet to come for the industry. The day before Thanksgiving is the biggest travel day of the industry. Now, bookings are only half of what they should be, and airlines will know by the end of the month if the public is going to get back on the plane or stay home -- Lou.
DOBBS: Very sobering.
PILGRIM: Very immediate too.
DOBBS: Kitty, thank you very much. Kitty Pilgrim.
Well, coming up in just a few moments, we'll have the latest developments for you on America's war against terrorism, the U.S. hitting Taliban communication facilities today and front-line Taliban troops.
Stocks taking a weak economic news report in stride, and we'll be joined by Harvey Eisen. He'll tell us where he thinks these markets will be going from here and what investors should be doing.
And we'll be talking with the recently retired chairman of General Electric. He is busier than ever. He'll be here to tell us what's in store for Jack Welch. Stay with us.
(COMMERCIAL BREAK)
DOBBS: He is America's most admired and most influential chief executive officer, and at least he was, until he retired as chairman and CEO of General Electric last month. In his career at GE, Jack Welch made 993 acquisitions, created $339 billion of market value, and he hasn't slowed down much in retirement. His book, "Jack: Straight From the Gut," leads the best-sellers list, and he has just agreed to be a senior adviser with J.P. Morgan.
Joining us now, Jack Welch. Jack, good to have you here.
JACK WELCH, FORMER CEO, GENERAL ELECTRIC: Lou, thanks for having me.
DOBBS: I want to talk about your book here in a minute, but I thought with all that is going on, to have an opportunity to sit down and talk with one of the smartest guys in the country and a born leader, that we should talk about the current situation and get sort of your sense of it.
We've just reported the economy has contracted. You and I have talked over the past year a number of times. I know you've been concerned about the economy. It appears we're there. Is this recession?
WELCH: Oh, there's no question. If you define recession as two quarters, we'll have a negative fourth quarter. And by -- by technically we'll be there. But we've been in a manufacturing recession before this.
DOBBS: And in terms of the stimulus package that's being brought on, nine interest rate cuts, is that going to be sufficient to, as many people say, to create a V-shaped recovery, an immediate recovery?
WELCH: I think we would have had that with the $10 trillion, a hundred-billion-plus surplus, still interest rate movement possible without this cloud of uncertainty created by 9-11. Now predicting the shape of the curve is beyond my scope and my capabilities. But it's -- we're in a tough time, but we've got all the economic tools. We've got the right stuff. And if we can get our arms around this terrorist activity, we'll be -- we'll have recovery.
DOBBS: Well, as the man who ran for two decades the largest industrial company in the world, as you watch the Post Office struggling with this, the federal government struggling with this issue -- and I'm talking about the anthrax attacks right now -- what is your sense of how they're doing as both leaders and managers?
WELCH: Well, I think they're doing well, groping with a total unknown. I think this -- I've made comments before about the fact that it's much tougher in a political environment to pull together everybody than it is in the corporate world, where you can appoint somebody and say that's it. So these folks are dealing with a more complicated set of constituents.
But in general, you've got to give them high marks for dealing in a very vast unknown air.
DOBBS: Let's turn to the book, Jack. I will say this at the outset, I don't work for you so I can say this without appearing to be sucking up, I hope. It's a great read. Anybody who loves business is going to love this book. My congratulations to you on a tale well told.
WELCH: That's as good as it gets for somebody who was sitting in a room writing a book. You've done that.
DOBBS: And I have to say with all of the demands on your time, I am amazed you had time to do it.
WELCH: Well, I almost killed myself trying it. I wouldn't advise it. I understand now why authors drink and do other things. It is a brutal job, but going out and selling the book is fun, meeting people.
DOBBS: The book -- this book -- you released it on September 11 and you were supposed to be here as a matter of fact, that very night. In a markets sense, you are on the best-seller list. You are doing great. But as a businessman, what do you think of the marketing here? It is a very difficult time to sell books.
WELCH: Look, I've got one advantage here, I am giving all the money to charity, so I can be out hawking it, I can be out talking to people. I don't feel anything bad about that. I've been at every university. I have been at Northwestern, University of Chicago. I will be at Columbia tonight. I love talking to these kids. I love seeing how -- you wouldn't believe every campus is so united. It's like the 50s -- literally like the '50s.
DOBBS: And to see American flags draped off the windows of some of those colleges that I graduated from in the 60s is stunning and also heart warming.
WELCH: It is so heartwarming. If there is a silver lining to this terrible tragedy, it's the attitude. It's the attitude of people. I was at the Smithsonian Monday night with 1,500 people and all they were was united, excited, turned on. It's remarkable.
DOBBS: In terms of your book, what's the reaction? What are the young people -- and by young people, I am talking about those college age and business school-age students -- how are they responding, what are they finding most riveting?
WELCH: Right now, they're all concerned about jobs, so it is a different campus than it was 12 months ago when everybody was "dot com-ing" it and getting a BMW to sign up. So they are concerned about jobs, they are concerned about the future, they are concerned about globalization -- is it real? Will it last? They're concerned about that.
On the other hand they are asking all about leadership. How do I get a real job doing real things, manage people, build an enterprise? They're forward looking. They are so into leadership discussions. What makes a leader? What is it? What are the characteristics? Jack, tell me more.
DOBBS: One of the things I found -- amongst the many things I found fascinating inn your book, Jack -- you started out with your degree, going into business. It wasn't even your first thought. Your first thought was not becoming CEO, but somewhere between that plastics division and another point, Jack Welch decided he was the right fellow to run the whole shebang. What happened? What made you look at it and say, I am the guy?
WELCH: I got a taste of, first, the plastics business, starting from scratch, first employee. And then I was lucky enough to add other business to it, and building teams. And we kept winning. And before I knew it I was hiring people smarter than I was, putting them together. They were all terrific. And we were knocking it out of the park, business after business.
So, I said, gee, if I can do it in this group -- I was aggressive, I liked to win -- so I said I'd like the run the whole thing.
DOBBS: You have mentioned a number of mentors that were important to you along the way. In selecting Jeffrey Immelt to be CEO, your relationship with him, would you describe it as a mentor relationship? Because I didn't sense that at all.
DOBBS: No, I wouldn't. I'd say that if I was a mentor it was indirectly. He worked for me for a number of years. They all did, we had a family business. We all shared everything together. I never directly mentored him. I guess I coached him a bit. He taught me a lot too.
Our whole principle was we all learn from each other. We all, we throw an idea out and then we get smarter.
DOBBS: One of things also as I read the book, one of the things I wanted to learn was what Jack Welch -- and this will be the only light criticism -- I really wanted to know how you selected your board, your views on governance. And there wasn't as much of that as I would have liked.
Is there a reason, or is that just something you didn't consider important or interesting to a broader public?
WELCH: I guess I didn't think it was that interesting. I picked people that I thought were capable, that were diverse. We had a very diverse board. They were smart and they were willing to speak up and we were open as could be with that board. We were all together in this game. And when I had a problem, they had a problem. When I had a success, they had a success.
DOBBS: I loved what you said about Walt Wriston, who is one of my very favorite people as well. He has -- (UNINTELLIGIBLE) I want to take any pride or note of this,but he's mentored me over the years. And I love the fact -- the accolade you gave him.
WELCH: He's a thoughtful, fabulous guy who, very early in my career, the first weeks, he was walking around town tooting my horn. And it was an enormous break. An early CEO needs that support from the board, desperately needs it. And when a CEO does not have a board support, the whole place smells it and senses it, and before you know it you can't carry out what you have to do. DOBBS: A number of CEO are learning that lesson the hard way.
Is there, in your judgment, a lasting change that we're witnessing here. Is there a tectonic shift because of September 11, because of what's happening, that you can see. Your one of the best seers that I know.
WELCH: No, Lou, I don't think so. I think that we're going to go through a very unconcern period here. There is no question about it. but we are more united than ever before. Globalization is clearly here forever. The have-nots get more out of this than anything going.
We will have trauma here. But we have opportunities. I saw a fella the other day on a show -- let me just give this quick anecdote -- who was so pleased that he had bought 15 resort properties. And he bought it at half the price that he thought he'd pay in August.
Now obviously that was a trade that somebody on the other side -- he believed there was going to be travel, and they were going to go to resorts again. The guy who sold those resort properties thinks people aren't going to do that again. So, that's what's happening all over this country today -- all over the world. There are more opportunities than you have ever seen in your life. Because everyone is looking at it through two lenses, and it depends on how you come at it. Is it going to be what you said, or is it going to be applause and onward?
DOBBS: That is what makes a market, and that's one of the things that makes the country great, a free market democracy.
WELCH: Absolutely.
DOBBS: Jack Welch. Thank you for being here. I hope you come back soon. I can't wait to watch you in your next move.
WELCH: Lou, thanks for being so good to me for so long.
DOBBS: Thank you, and the same back to you. Jack Welch.
We want to turn now to the latest develops in the war on terrorism. A 61-year-old New York City woman has died of inhalation anthrax just three days after checking into a New York City hospital. The woman worked as a stockroom clerk for Manhattan's Eye, Ear and Throat Hospital.
In New Jersey tonight, investigators trying to understand how a woman contracted skin anthrax. The woman lives near a mail center that handled three of those anthrax-tainted letters but she says she has not been to that facility in six months.
U.S. jet aircraft dropping bombs causing massive explosions today along Taliban mountain positions near territory held by the Northern Alliances. And the Pentagon says it's been successful targeting Taliban command and control centers. Rear Admiral John Stufflebeem saying that that is causing communication problems for the Taliban. In New York city, armored cars hauling away gold from the site of the World Trade Center; $200 million of gold belonging to the Bank of Nova Scotia was buried in the rubble. Mayor Rudolph Giuliani says he thinks salvage workers have recovered most of it.
Coming up next here, we will take a look at your comments including some feedback on our special Coast Guard report that we brought you last evening. Also, we will be taking a look at the markets, the economy and the demise of the 30-year treasury bond. We'll be talking with a top strategist next here.
ANNOUNCER: After the break, Lou speaks with Harvey Eisen, chairman of Bedford Oak Advisers.
(COMMERCIAL BREAK)
DOBBS: In a surprise move today, the Treasury Department scraped what's long been considered the safest investment in the world -- the 30-year Treasury Bond. The Treasury Department says it is getting rid of the long bond because it is no longer needed to cover the government's financial needs.
That news sent the price of the 30-year bond soaring -- as you might expect -- pushing the yield to the lowest level in nearly 3 years. The 10-year note now becomes the benchmark security.
Today, a mixed session on Wall Street. The Dow Jones Industrials falling nearly 50 points on the session, while the Nasdaq rallied well over 1 percent. Three weeks ago, Harvey Eisen said he believed the markets had hit a bottom, and he said it is time to buy into the market at that time. And since then, the Nasdaq has gained about 4 percent. The Dow off just about 1 percent. And he joins us now.
Harvey, good to have you here.
HARVEY EISEN, BEDFORD OAK ADVISORS: Thanks, nice to be here.
DOBBS: Has the market performed about as you thought it would over the course of these several weeks?
EISEN: For a change it's actually done what I thought it should do. DOBBS: It's listening.
EISEN: It is listening, what a relief.
DOBBS: Or as (UNINTELLIGIBLE) Mr. Market.
EISEN: Mr. Market, right.
DOBBS: We have seen some weakness here. Friday, the previous two days this week and now we have this stabilizing. Do you think we are going to test those lows again?
EISEN: Well, history tells you that you are going to test the lows. The question -- you always go sideways after you have had one of these crashes. If you go back, as I have, and you looked at all these periods, the bottom line is, this rally has been right on target as roughly an average rally after a crash. So, now you go sideways. You test because you have to test.
DOBBS: In talking with Jack Welch just now, he focused on the confidence issue and the impact of the terrorist attacks and the anthrax attacks on the confidence -- and he didn't say precisely this way -- the confidence of the American consumer and investor. How large a role do you believe that plays in the direction of the market from here on?
EISEN: First of all, Jack Welch is a living legend and the greatest mind in business that I've known. I, of course, agree with what he said. Clearly the uncertainty is unprecedented and that's the real problem.
DOBBS: And with this continued uncertainty, you still believe we can move this market forward, ahead, up?
EISEN: Of course. The question is when. The problem is, is that you've got this uncertainty that's is really impacting the economy. All you have to do is walk around the streets of New York City and you see it and you talk to people. It's a major negative for business.
DOBBS: A major negative, we are down, contracting for the first time in 8 years and this economy with the GDP report today, and it is only the initial report. It could be worse or it could be better.
But the fact is that it has contracted. What do you see in terms of economic growth over this quarter and the next?
EISEN: Well, as Jack Welch pointed out, the manufacturing sector has been in a recession for a long time. And the technology sector has been in a depression for at least a year. What I see is federal stimulus through the Federal Reserve cutting rates, increasing money supply, the government cutting taxes, putting 200 billion dollars into the system. The price of oil is down. Home refinancing keeps going so consumer have money.
You saw consumer spending was up in this recession, so the bottom line is if you take away the uncertainty, which unfortunately you can't do, I would have a very high degree of confidence about the turn. The problem is, is because of the uncertainty you can't time it.
DOBBS: We know that markets adjust to almost everything, and is it reasonable to except this market to adjust, discount uncertainty?
EISEN: You do this every night. You tell me that there's not going to be another attack and I will tell you the market can adjust. Nobody knows. The market adjusts because the market has a way, historically of figuring out what is going on.
DOBBS: I wasn't talking about adjusting to another attack, but addressing the issue of uncertainty itself -- not knowing. EISEN: The market can deal with anything it can understand. We don't know what going to happen tomorrow. We don't know what is going to happen next week and that is the single most negative thing today.
DOBBS: Best counsel to investors tonight?
EISEN: You have to stay the course. You have to know what you own. You have to realize that we are going to come out of this. But you also have to realize that you are in times that are incredibly uncertain. So, no one, not Jack Welch, not anybody can tell you when that is going to be resolved. That is the problem.
DOBBS: Thank you. Harvey Eisen.
Coming up next, news of a strengthening economy led the president to demand action from Congress today. We will have that report for you. And we'll take a look at your thoughts on our story of a vital national service stretched to the point of breaking. Stay with us.
(COMMERCIAL BREAK)
DOBBS: The longest economic expansion in our country's history ending in the third quarter, even though the economy took a step closer to recession, a significant step: The figures were somewhat better than many economists had expected. Shortly after that report was released, the president called upon Congress to get to work and stop the slowdown and pass an economic stimulus package before the Thanksgiving recess.
Tim O'Brien reports from Washington.
(BEGIN VIDEOTAPE)
TIM O'BRIEN, CNN CORRESPONDENT (voice-over): The Bush administration wants Congress to put aside political differences and act swiftly on an economic stimulus package.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: And so my call to Congress is get to work and get something done. The American people expect us to do just that.
(APPLAUSE)
O'BRIEN: And, as the president spoke, Treasury Secretary Paul O'Neill was telling reporters swift action could still avert a recession.
PAUL O'NEILL, TREASURY SECRETARY: If we can get this stimulus bill in place quickly, there is still a plausible argument that the fourth quarter could be mildly positive. But we need to act.
O'BRIEN: But Democrats and Republicans in both the House and Senate are light-years apart on what should be in any stimulus bill -- exhibit A: Democrats' reaction to the latest proposal from Senate Republicans. SEN. KENT CONRAD (D), NORTH DAKOTA: People's payroll taxes are being taken to give income tax cuts to the wealthiest 1 percent. That's not a stimulus package; that's a rip-off.
O'BRIEN: Senate Democrats may have better luck dealing with the Republican in the White House than with Republicans in their own house. The president acknowledged that government dollars need to be directed to those with low income, who are most likely to spend them and most vulnerable to an economic downturn, as Democrats have long argued.
But the president also reiterated the need to cut, if not eliminate, the alternative minimum tax for business, which has fierce opposition from Democrats, who control the Senate. Mr. Bush has forged close alliances with the leadership of both parties in both the House and the Senate. Although often vague, he also seems to accept many of the stimulus principles advanced by both Democrats and Republicans.
(END VIDEOTAPE)
O'BRIEN: In short, the president may have set himself up as the one person and possibly the only person genuinely well positioned to hammer out a compromise. Around here, that can be risky. If you succeed, sure, you get some credit. But if you don't, you get all the blame -- Lou.
DOBBS: But that also sounds, Tim, like it puts the course, the destiny of this legislation firmly in his hands. And I don't think he could ask for more than that, could he?
O'BRIEN: No. They really do want to work out a deal.
But tonight, Democrats and Republicans seem like two immovable objects waiting for some external force. It could be the White House. It could be Wall Street or the American people. But as that Thanksgiving recess approaches, you can expect the heat to work out a deal to be very intense.
DOBBS: Well, if they were not moved today by a GDP report for the third quarter showing contraction for the first time in eight years, we have plenty of other economic reports on the way before then.
Thanks a lot, Tim O'Brien, from Washington.
Well, "WOLF BLITZER REPORTS," it begins in just a few minutes. Let's go to Wolf now in Washington to tell us what's ahead -- Wolf.
WOLF BLITZER, CNN ANCHOR: Thank you, Lou.
We're here in the CNN "War Room." Tonight, we'll focus on Saudi Arabia. Are the Saudis doing everything they can to help the United States win the war on terrorism?
I'll speak with Adel Al-Jubeir. He's the former policy adviser to Crown Prince Abdullah. We'll get a different perspective as well from investigative journalist Seymour Hersh -- that and all the day's developments, including the start of U.S. carpet-bombing in Afghanistan next -- Lou.
DOBBS: Wolf, thank you.
Coming up next here, we'll take a look at your thoughts and tell you what to expect tomorrow, at least part of what to expect.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: Tomorrow, several reports on the economy, including the National Association of Purchasing Managers Index for the month of October. We'll also have auto sales, construction spending and personal income and spending. Delta Air Lines, United Air Lines and Priceline.com are all expected to report their quarterly earnings tomorrow.
It's time now to take a look at some of your thoughts. Many of you were responding to my conversation last night with General David Grange. We talked about the reports of rising impatience among the American people and whether the military is concerned about those reports.
Kenny Snowball of Salt Lake City wrote in to say: "I think you're making too big a story about this tiny minority. It's going to be a long war. And the news is going to be the same for quite some time: slow and disappointing."
Richard Daley of Pass, Mississippi wrote in to say: "Americans are patient. In this age of fast living, some of them may have forgotten that. Perhaps the murder of 5,000 of our countrymen and women on September 11 will jolt their memories."
And a note tonight from a viewer who was jolted into action by the terrorist attacks. He wrote to thank us for our report last night on the financial troubles of the Coast Guard, as its responsibilities are expanded. He writes: "Because of the September 11 attacks, I recently joined my local auxiliary and have come to better appreciate this branch of the military. I'm glad to see it getting some much- needed coverage."
As always, we appreciate your thoughts. Send us your comments at moneyline@CNN.com.
That's MONEYLINE for this Wednesday evening. Thanks for being with us. I'm Lou Dobbs. Good night from New York.
"WOLF BLITZER REPORTS" begins right now.
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