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CNN LOU DOBBS MONEYLINE
Bush Shifts Focus to Economy; USS Abraham Lincoln Docks in San Diego; Interview With Paul Berman
Aired May 2, 2003 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, HOST: Good evening, everyone.
President Bush today shifted his focus from war to the economy. A day after making a prime-time speech from the deck of the USS Abraham Lincoln, the president went to Silicon Valley in California to promote his tax cut plan. The president said the rise in the unemployment rate to 6 percent means tax cuts are needed and needed now. White House correspondent, Suzanne Malveaux reports.
(BEGIN VIDEOTAPE)
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): President Bush is steaming full force ahead from the USS Abraham Lincoln, where he had declared major combat operations in Iraq over to a military contractor that provided tanks and fighting vehicles for the war.
This visit to United Defense Industries in California's Silicon Valley, the heart of the economic bubble and its burst, was also designed to use Mr. Bush's wartime popularity to sell his $550 billion tax cut plan aimed at promoting economic growth.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The goal of this country is to have an economy vibrant enough, strong enough so that somebody who's looking for work can find a job.
MALVEAUX: But Mr. Bush was stunned by newly released unemployment numbers, a jump from 5.8 percent unemployment in March to 6 percent in April, 8.8 million Americans out of work, more than half a million jobs lost in the past three months, the worst stress since immediately following the September 11 terrorist attacks, a fact Democrats seized on to blast his big tax cut plan.
House Minority Leader Nancy Pelosi said, "We would hope that the president would use his political capital that he may have gained coming off the war to create jobs for the American people and not just create a tax break for the wealthiest people."
The president, too, tried to use the new unemployment figure to his advantage.
BUSH: The unemployment number is now at 6 percent, which should serve as a clear signal to the United States Congress, we need a bold, economic recovery package so people can find work. MALVEAUX: With the latest poll showing Mr. Bush's popularity hovering around 70 percent, the White House is hoping his wartime success will also help the administration push other items on the domestic agenda like Medicare reform, prescription drugs and energy.
But aides acknowledge it's far from certain, one reason the president will continue to travel across the country to promote his brand of job creation in important electoral states.
(END VIDEOTAPE)
MALVEAUX: And this weekend, while President Bush hosts Australia's Prime Minister John Howard at his Crawford ranch to thank him for his support for the war with Iraq, nine democratic presidential hopefuls will gather in South Carolina for their first debate, all angling to find holes in Mr. Bush's agenda -- Lou.
DOBBS: Suzanne, thank you very much. Suzanne Malveaux from the White House. We'll have the latest on the homecoming of the USS Abraham Lincoln and its air wing later in the broadcast.
And we'll be talking with author Paul Berman, who says he believes radical Islamists are comparable to the threats of the Nazis and communists.
And we'll talk about the president's ambitious economic agenda with Mark Morrison of "BusinessWeek," Dennis Kneale of "Forbes" and Justin Fox of "Fortune."
The Abraham Lincoln docked in San Diego, California, today. The aircraft carrier returning to port, almost 10 months at sea. It was the longest carrier deployment since the Vietnam War. The crew took part in military operations in Afghanistan and Iraq. The 5,000 sailors aboard were given a heroes' welcome by their family and friends. One hundred and fifty of the sailors saw their new babies for the first time. They were born while the ship was deployed overseas.
More fighter jets from the Lincoln returned from their home base today. The 10 F-14 Tomcats flew to Oceana Naval Air Station in Virginia, the most advanced naval base in this country. Kyra Phillips joins us now from Oceana -- Kyra.
KYRA PHILLIPS, CNN CORRESPONDENT: Hi, Lou. That's right, those F-14 pilots the first ones off the flight deck when Operation Iraqi Freedom was announced by the President of the United States and now, months later, they are finally here back home.
This is the hangar of their hangout, and they're here with friends and families. And one person that's specifically excited to be home, of course, is the skipper of this squadron, Commander Paul Haas and his family. We caught up with them just as they were getting out of the aircraft.
(BEGIN VIDEO CLIP) COMMANDER PAUL HAAS, F-16 TOMCAT PILOT: It's just too hard to describe, the range of emotions from just, you know, everything I could do to just keep my composure and keep from crying like a schoolgirl right now. So, it's awesome. It's just great. It's just great.
PHILLIPS: I had time to spend with you guys during the war, and you talked so much about Kelly Ann (ph) and the boys, and they all made pictures for you, and you had those hanging up everywhere. How do they look? Are they all grown up?
HAAS: They're huge, they're gigantic. I can't believe how much they have grown. It's awesome. Proud of these guys. They did great. They did great.
PHILLIPS: Kelly Ann (ph), you really held the fort together with all the other wives, as a skipper's wife. How are you feeling now? Are you totally relieved?
UNIDENTIFIED FEMALE: I'm so overwhelmed with emotion because the greatest thing for me was to bring them all back together in the same -- and I'm so proud of him for doing that. I'm just relieved. I'm proud, and I'm so very grateful that they all made it back and landed safely.
PHILLIPS: How does he look?
HAAS: Awesome! Can't wait to plant a real kiss on him.
PHILLIPS: Hey, you guys, what's the first thing you are going to do with dad?
UNIDENTIFIED MALE: Probably play some football and maybe go to the beach.
PHILLIPS: All right.
UNIDENTIFIED MALE: Right after this, we're going to the beach with our cousins and stuff.
PHILLIPS: What's the first thing you want to do with dad?
UNIDENTIFIED MALE: I don't know. Just like hang out in the house and catch up.
PHILLIPS: Also in that squadron, Lieutenant Lucas Gadar (ph). He was in that flyover as it was coming. You must have been so excited. We're going to look at video of it now. Tell me what it was like to see everybody for the first time as you were flying over this base.
UNIDENTIFIED MALE: Well, it was incredible. The best part is flying from off the Lincoln and then heading across country and just going through all the states and actually seeing the United States for the first time after being gone that long. That was incredible. And, you know, I can't put into words what that meant just to be actually back home and flying over friendly territory, you know? And as far as the flying back in Oceana here, incredible. The weather, you know, worked for us, and it was like the, you know, someone parted the clouds for us so that we could get in here and do a 10-plane flyby. That's what we really wanted to do and bring everyone home at the same time.
And for me, I didn't have much of a chance to look down on the ground to much and see everyone because I was trying to stay in position there with all the other aircraft.
PHILLIPS: And you do an awesome job.
UNIDENTIFIED MALE: Well, thank you very much.
PHILLIPS: Lucas Gadar (ph), thank you so much.
Lou, these are the guys that not only participated in Operation Iraqi Freedom but Operation Enduring Freedom, Operation Southern Watch. It's been a long 10 months. The best part, they were telling me, about coming home is they didn't worry about AAA fire or surface- to-air missiles this time around. All they had to worry about was landing and getting into the arms of those that they love.
DOBBS: A decided improvement over what they've been through and, obviously, everyone delighted to have them home, and Kyra Phillips, as I said, our CNN ace, outstanding job yourself, and we're glad to have you home.
PHILLIPS: Thank you, Lou.
DOBBS: A former senior diplomat has been tapped to lead the reconstruction of Iraq. Paul Bremer served as ambassador at large for counterterrorism during the Reagan administration. Bremer will report to either Defense Secretary Donald Rumsfeld or the head of Central Command, General Tommy Franks. That hasn't been decided yet.
General Jay Garner will continue to be involved in reconstruction reporting to Bremer.
Coalition forces have captured two more Iraqis who were top officials in Saddam Hussein's regime. The first is number 16 on the list of the most wanted Iraqis, the 10 of hearts, if you're keeping track in the deck of cards issued by CENTCOM to identify them. He was director of the Office of Military Industrialization, which the coalition says was connected to Iraq's weapons of mass destruction.
Also captured was number 42 on the list, the nine of diamonds. He was the vice president and member of the Revolutionary Command Council. Coalition forces have captured 17 of the 55 most wanted Iraqis, the highest ranking, the air force defense commander in Saddam Hussein's regime. He was number 10 on the list of most wanted Iraqis, the queen of diamonds in the deck.
Besides Saddam Hussein and his sons, Qusay and Uday, a number of top Iraqis remain at large. They include the ace of diamonds, the former presidential secretary, who's an authority on weapons of mass destruction; the king of clubs, the former vice chairman of Iraq's Revolutionary Command Council; and the king of hearts, the former director of the Special Security Organization.
The Homeland Security Department today warned that al Qaeda is in the late stages of planning an aerial suicide attack against the U.S. consulate in Karachi, Pakistan. The Pakistani authorities this week arrested the suspected mastermind of the attack on the USS Cole in Yemen. He is in U.S. custody now.
Counterterrorism officials say the threat of Al Qaeda has diminished but remains serious. Justice correspondent Kelli Arena has the report.
(BEGIN VIDEOTAPE)
KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice over): Recent intelligence is prompting warnings al Qaeda is targeting U.S. interests in both Pakistan and Saudi Arabia. Twenty months into the war on terror, and al Qaeda still poses a serious threat.
BUSH: And we're still on the hunt. We will flush them out of the caves. We'll get them on the run. And we'll bring them to justice.
ARENA: Half of al Qaeda senior operatives are now dead or in U.S. custody. But public enemy number one, Osama bin Laden, his second in command, Ayman Al-Zawahiri, and al Qaeda's security chief, Saif Al-Adel (ph), have all eluded U.S. forces.
And the terror network is actively moving to replenish the ranks. For the first time, Director Robert Mueller acknowledged the FBI is actively tracking down recruiters right here in the United States.
ROBERT MUELLER, FBI DIRECTOR: On those individuals, we have open investigations, and we are pursuing them hard.
ARENA: With U.S. forces still in Afghanistan, intelligence suggests al Qaeda is building up its ranks in southeast Asia and East Africa. In recent months, both have seen al Qaeda-related attacks against so-called soft targets like hotels and nightclubs.
KEN KATZMAN, TERRORISM EXPERT: The government capabilities, perhaps, to find them is less. So they're under less pressure. They can continue to be active there.
(END VIDEOTAPE)
ARENA: While there's widespread agreement that al Qaeda remains dangerous, exactly how dangerous is still a matter of some debate. Some factions within the government believe that it's not capable of full-scale attacks like we saw on September the 11th with some of its funding cut off and several leaders in custody. They say the terror network's ability to strike has been diminished, but the FBI disagrees, and it says that al Qaeda is just as dangerous now as it was then -- Lou.
DOBBS: Kelli, any further word, any speculation about the whereabouts of Osama bin Laden?
ARENA: No. Absolutely not. It has been weeks since any one of our sources, anyone we've spoken to in the intelligence community has even brought up his name.
One wonders if that is on purpose, as the focus is seeming to shift to praising the victories of getting other al Qaeda operatives in custody, which is very important, especially the capture of Khalid Sheikh Mohammed, as you know, who has some experience here in the United States and knows vulnerabilities. But Osama bin Laden has not come up, Lou.
DOBBS: Well, we'll keep bringing it up, Kelli. Thank you. Kelli Arena from Washington.
Turning now to the markets on Wall Street today, stock prices moved higher. Stocks rallied on new optimism about the direction of the economy. The market scored, in fact, its third straight winning week. The Dow Jones Industrials surging 128 points gaining 1.5 percent. The Dow up 3 percent on the week. The Nasdaq today up 30 points, gaining almost 2 percent, just a little better than 2 percent, in point of fact, and 5 percent higher for the week. The S&P 500 up 13 points, a gain of 3.5 percent on the week.
Still ahead here, the entire crew of a Chinese submarine was killed today. We'll have that story coming right up.
Then, the author of "Terror and Liberalism." Paul Berman will join me to talk about what he sees as the new totalitarian threat.
And racing toward history at Churchill Downs, second place, she has no interest in it whatsoever. Rosemary Homeister, she will be the fifth woman to race at the Kentucky Derby, and she is our special guest tonight. Stay with us.
(COMMERCIAL BREAK)
DOBBS: The entire 70-member crew of a Chinese submarine has died at sea. Chinese news agency says the incident happened recently in the waters between China and North Korea during training. The deaths were said to be the result of a mechanical malfunction.
That submarine, which is of the same class as this picture you're looking at now, is diesel powered. It normally carries a crew of 55. China's nuclear attack subs can hold as many as 75 people.
Well, my guest tonight says the rise of radical Islamic terrorism is not a new phenomenon. Instead, Paul Berman argues that radical Islamist terrorism is just the newest form of totalitarianism, and he makes the case in his book, "Terror and Liberalism." Berman sits on the board of "Dissent" magazine. His articles have appeared in publications such as "The New Republic," "The New York Times Magazine," and he joins us now. Paul, good to have you here. PAUL BERMAN, AUTHOR: Glad to be here.
DOBBS: Radical Islamist terrorism and the other-isms, communism, Nazism. You think they're absolute relationship?
BERMAN: I do. I think that all of these movements represent modern ideas. They're modern ideas that rose in Europe in the years after the first World War. They flourished in the 1920s and 1930s, and that's, in fact, when radical Islamism got its start.
DOBBS: Radical Islamism and its expressions of terror around the world, does it really matter to us whether it is an ism or whether we simply just root it out and kill it?
BERMAN: Well, it makes all the difference in the world. There's no way to root it out and kill it. This is a movement with millions and millions of followers and huge institutions. The only way finally to defeat it is to persuade its advocates, the members of this movement, to change their ideas.
DOBBS: And where do we find them?
BERMAN: Well, we find them all over the Muslim world, but we also find them in the West. The two terrorists in Israel just now were from Britain, and so, the centers of the movement intellectually, in London, Paris, sometimes New York.
DOBBS: Most people are not aware of the degree to which the United States has engaged in a military campaign, as well as an intelligence campaign, literally all over the world, but military operations, active military operations, in 28 countries right now. What is, in your judgment, the course of the war against terror as the Bush administration has styled it?
BERMAN: Well, I think that from a military point of view, the Bush administration appears to be extremely talented, brilliant, and that's great. But diplomatically, they seem to be a disaster, and the crucial thing for me is to see are we conducting a war of ideas? Are we fighting the doctrine? Are we arguing against it?
From this point of view, I think the Bush administration has let us down badly.
DOBBS: The Bush administration has let us down badly in your view. Specifically, how in this war of ideas?
BERMAN: I don't think that the Bush administration has been able to define the issues very clearly, that we should be standing for doctrine of liberal society, a free society. President Bush does talk about this sometimes, but not consistently.
DOBBS: Well, he just put 300,000 troops into Iraq and deposed a dictator who was both a supporter and sponsor of radical Islamic terrorism and other forms of terrorism. That's a strong expression of, I would think, democratic values. BERMAN: Well , from the military point of view, it was good, but he was not able to persuade the world of the value of what he was doing, which was too bad. It had a value. It has a value. He should have been able to persuade the world. He wasn't able to do it. That was a serious problem, and...
DOBBS: In almost, it seems to me, ideological terms, Paul, almost as if there is a vacuum here in which I would personally put France and Germany, Belgium, the United Nations. Do they have any responsibility as either institutions or state governments in this?
BERMAN: Well, I'll tell you. The way you get into a predicament as terrible as the one we've been in in the last few years is -- the only way is to have everybody fall down on the job, and that's what's happened. All of the western countries fallen down on the job. The journalists, the intellectuals, the government agencies. It's been a pretty widespread failure.
DOBBS: And to redeem at least redeem ourselves journalistically, isn't it about time that we all started looking at the fact that liberalism, a liberal society, cannot simply be in homeostasis? That values are not simply rising spontaneously and miraculously around the world? They have to be advocated strongly, as you would suggest. They have to be enforced. In the case of the Middle East, outright exportation.
BERMAN: Well, absolutely. That's true. The Saudis have sponsored, it is said, 1,400 mosques around the world in the last few years, and what's the United States 'government done that's, in any way, equivalent to that? That's been a really serious problem.
DOBBS: The duplicity of the Saudi government is documented. The Saudi society is anything but liberal. Why do you argue -- let me put it this way -- are you hopeful that we'll see a change in U.S. policy towards Saudi Arabia for, for example?
BERMAN: Well, I'm worried about this. I think that America...
DOBBS: By the way, we should point out that this policy has endured through democratic administrations, republican administrations for 50 years.
BERMAN: Oh, I agree. And, it's only after 50 years of foolish policy that you find yourself, in fact, getting massacre staged in your own country. And I think that our policy has been, in fact, disastrous. We haven't managed to be able stand up and uphold liberal values in the Middle East. We haven't done this diplomatically...
DOBBS: Why do you put emphasis on the Bush administration, out of curiosity in that regard?
BERMAN: Well, just because they happen to be the ones in power right now.
DOBBS: OK. So, you would not exculpate, for example, the Clinton administration or the previous Bush administration? BERMAN: No. No.
DOBBS: Or the Reagan administration?
BERMAN: No, No. It's been a bipartisan act.
DOBBS: OK. Well, let's hope we can enjoy bipartisan success in the effort. Thank you very much, Paul Berman.
BERMAN: Thank you.
DOBBS: Fascinating book.
Coming up next, our quote of the day offers young athletes reason to strive for greatness.
And this deal will make history when they step into the ring at Churchill Downs tomorrow. That won't be enough, however, for this young rider who has lofty aspirations. We'll be talking with Rosemary Homeister on her run for the roses.
And tonight, our weekly round table with the editors of the country's top business magazines.
Apparently, it takes a village to build a team atmosphere at the Postal Service. This is truly a bizarre story and one that we can't wait to share. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Well, it's a lot more than a horse race. It's the Derby, the Kentucky Derby, the 129th Run for the Roses underway in a little under 24 hours from now at Churchill Downs in Louisville. There's a lot riding on this race as always, but this time especially for jockey Rosemary Homeister, Jr. Rosemary will be just the fifth woman ever to ride in the Derby. If she makes it into the top ten, hers will be the best finish for some time.
Joining me now from Churchill Downs is Rosemary Homeister, Jr. Rosemary, good to have you with us.
ROSEMARY HOMEISTER, JR., JOCKEY: Great to be with you, Lou.
DOBBS: Are you all set and ready to run?
HOMEISTER: I'm ready to run. I've been here at the races all day watching the Oaks, all the races during the day, just to see a little bit how the track was playing out for my races tomorrow, and I was a little nervous earlier because a lot speed was holding, but when they showed the Kentucky Oaks, finally a long shot and closer came in, so I have a chance still.
DOBBS: Well, speaking of long shots, Supah Blitz, a strong horse but, if you will, something of a breeding of a late bloomer. How strong do you think he can perform? How do you feel about the odds? HOMEISTER: The odds doesn't affect me at all because horses can't read the tote (ph) board. I just know that I'm on a very good horse. I know that I'm on a very good horse. Supah Blitz has proven that.
You know, he does have only one win and a lot of seconds, but he has competed against the toughest horses almost in the country. I mean, he's run against some of the horses that are already in the Kentucky Derby and finished second and third to them and also beaten some of them. So he really has a good chance. He's got a great trainer in Manny Tortora, and he's an excellent horse, and I know he's going to do a great job.
DOBBS: And a heck of a jockey. You're also starting from the number one position. You've got the post. How important is that to you, Rosemary?
HOMEISTER: Well, it's very important. Post position. And the number one is the shortest way home.
DOBBS: And give us your thoughts. A lot of people are saying if you finish in the top ten, that would be great. How do you feel?
HOMEISTER: I think if I finish first, it would be even better. I would love to be here to win it. I would love to make history, and you know, I'm making a little history just being the fifth woman, but I want to make history by winning and bringing home the roses with Supah Blitz.
DOBBS: Rosemary, we want you to, too. We wish you all the best of luck. Have a great, great ride.
HOMEISTER: Thank you very much. It was a pleasure speaking with you.
DOBBS: Rosemary Homeister, Jr. Ready to run.
And let's turn to today's quote. It just happens to be authored by none other than Rosemary Homeister, Jr., who, earlier this week, offered some advice to young women who aspire to being a jockey, and any woman with aspirations for that matter. And saying simply, "Aim for the top because if you keep your goals set high, anything can happen."
You know, I think that looks like an almost gender-free statement to me. Outstanding, and we do wish Rosemary all the very best of luck.
A solid rally on Wall Street today despite a rise in unemployment. The Nasdaq closed above 1,500, in fact, for the first time since June of last year. A strong session for the Dow, as well, up 128 points in the day. The Dow, Nasdaq, S&P, all up more than three percent on the week. Christine Romans is here with what has turned out to be just a very impressive performance.
CHRISTINE ROMANS, CNNfn CORRESPONDENT: Indeed, and three weeks of gains, as a matter of fact, for the Dow and the S&P. Investors betting the economy will recover later this year.
The Dow up 3.3 percent this week. The Nasdaq up almost 5 percent, the highest close since last summer, and bond prices fell this week. Break the market into 200 industry groups and only five were lower. Some of the top performers, airlines, software, insurance, and computer chips.
In fact, the charts show quite a run, Lou, from the five-year lows hit last October. Since then, the Dow up more than 19 percent. The Nasdaq has rallied 35 percent. The S&P 500 up 21 percent, and so far, Lou, investors are ignoring that old Wall Street adage, "Sell in May, go away." The buyers are reining supreme these days.
DOBBS: Well, we have only two days so far in May.
ROMANS: This is true.
DOBBS: We won't establish this yet, at least as a trend.
ROMANS: So far, so good.
DOBBS: But it is really remarkable. People talking about a bear market rally. When they get into the levels of 20 and 35 percent, you begin to suspect it's a different kind of rally.
ROMANS: Well, and if it's a bear market rally, still, that's a return a lot of people will take, right?
DOBBS: Thirty-five percent at a time is not a bad way to get back.
ROMANS: Indeed.
DOBBS: We have a ways to go, however. Christine, thanks very much.
ROMANS: You're welcome.
DOBBS: Turning now to our poll question of the evening, which of the following should be the President's main priority? The war on terror, tax cuts, job creation or health care reform? Please cast your vote at cnn.com/moneyline. We'll have the preliminary results later in the broadcast.
Now, the final results of yesterday's poll question, how long do you think it will be necessary for U.S. troops to be in Iraq? Twelve percent of you said a year. Sixteen percent said two years. Seventy- two percent said three years or more.
When we continue, our thought of the day on what really counts in life.
And our weekly editor's circle. Mark Morrison of "BusinessWeek", Dennis Kneale of "Forbes", Justin Fox of "Fortune" will be my guests.
Also this week, co-CEOs of the week who have built their business empire on solid performance and ethics.
And would you believe, speaking of ethics, Enron may be asking for a huge tax refund from the Internal Revenue Service, and they're not the only ones looking for hundreds of millions of dollars. It just gets better and better, doesn't it? Stay with us.
(COMMERCIAL BREAK)
(NEWSBREAK)
DOBBS: Charles, thank you.
And this just in to CNN. Some news that senior U.S. officials have just said that Iraq will be divided into three sectors commanded by officers from the United States, Britain, and Poland. Troops from at least 10 countries will be assigned to those sectors. France, Germany, and Russia have not been invited to take part in the stabilization operation.
And some good news for companies that fraudulently inflated their profits in this country, lied to shareholders, and drove themselves into bankruptcy. It turns out all those bogus profits put the companies in a position to claim a tax refund.
WorldCom, now known as MCI, today confirmed it's received nearly $300 million in tax refunds because it overpaid taxes when it was misreporting those higher earnings. Enron is in talks with the IRS about the extra taxes that it may have paid.
It's now been 515 days since Enron went bankrupt. The Justice Department handed out dozens of additional indictments yesterday. Fifteen executives of Enron have now been charged. Another 50 from the rest of corporate America have been charged. No one has gone to jail.
We normally have the score board of those -- a tally board, if you will, of those numbers. I don't know what happened to it. We apologize.
Corporate America could benefit from the message behind today's thought of the day. It comes from a man who knew what was really important in life. He said that everything that can be counted counts -- not everything that counts can be counted." That comes from, of all people, Albert Einstein.
A federal court today threw out several parts of the new campaign-finance law. The three-judge panel ruled that the law's ban on soft money contributions to political parties is unconstitutional and, in fact, violates free speech protection. The court also ruled the new restrictions on political advertisements by special interest groups are outright unconstitutional.
The ruling, a victory for Mitch McConnell, who led a lawsuit filed by dozens of plaintiffs against the law. Senator McConnell he would do this before it was even put into law. He is the winner to this point. Now we'll find out who the ultimate winner. The case goes to the Supreme Court.
Joining me now, three winners. We'll be talking about that ruling, other topics of the week. The editors. From "BusinessWeek," Mark Morrison, the managing editor. Dennis Kneale, managing editor, "Forbes." Justin Fox, the editor at large of "Fortune."
And it is good to have you with us.
MARK MORRISON, "BUSINESSWEEK": Nice to be here with you.
DOBBS: Well, for some reason, Poland, the United Kingdom, and the United States will be in charge of those three sectors.
JUSTIN FOX, "FORTUNE": It sounds like the start of a very bad joke.
DOBBS: Well, it doesn't rise to the level of the joke about Belgium, Luxembourg, Germany, and France creating their own defense pact, does it?
FOX: No, it doesn't.
MORRISON: It sounds pretty awesome.
DOBBS: What do we think will happen here? Is this -- are we going to see significant benefits to U.S. companies, to the U.K., and now Poland as a result of the reconstruction effort?
MORRISON: Well, very definitely. Those -- those are the companies that are going to get the big contracts going forward, and I think that some of the -- as it goes along, there will be a lot of subcontracting going on, and other countries will benefit as well.
DOBBS: Today, we learned that Paul Bremer, formerly in charge of counterterrorism in the Reagan administration, will be leading the reconstruction effort. Any surprise there in the selection of Bremer?
FOX: He was a State Department guy, and so there was some thought that somehow State won a little internal battle here with the Pentagon. But, other than that, I don't think he's considered a bleeding heart State Department guy.
DENNIS KNEALE, "FORBES": I've got to tell you, as a business editor, it is my duty to point out that it doesn't matter what civilian or bureaucrat they put there to -- you know, it's going to be U.S. companies that rebuild Iraq. We bombed it. We get to rebuild it. The one I want is no French and German contractors or subcontractors.
DOBBS: Well, apparently, that's the way it's going right now rather steadfastly so.
Let's turn to the markets themselves. We have seen three weeks of strong performance. These numbers are -- this doesn't look like a bear market rally, at least to me. We're right at 20 percent or more in each of the indexes. What do you make of it, Mark? MORRISON: Well, the war coming to a close is part of that, but I think the earnings have been gaining momentum for the last several quarters, and the market has just begun to be a little more positive about how the economy's going to go later in the year.
FOX: It's party just that companies have learned to deal with a bad economy, and they're squeezing out profits, even though their revenues aren't going up. But, eventually, companies being profitable -- they'll eventually someday start hiring people again.
DOBBS: Well, in this most -- the S&P companies that have reported at this point are showing an increase in revenue, which, I think, has surprised...
MORRISON: And this is the quarter where so many things were going against them. It just shows you what control companies have on their costs now. The problem is more and more unemployment, as you match up an overcapacity situation with a slow-growing economy.
KNEALE: The market looks great if you start in March and you go to now. The market, if you take it back -- back a full 12 months, has gone absolutely nowhere. So we've still got fundamental growth to take care of. We've still got a long way to go with that.
FOX: But going nowhere is better than it was looking, you know, a while ago.
KNEALE: Sure.
DOBBS: You know, your boss on this broadcast right here in River City said that we could be looking at a 30-percent, 40-percent, or 50- percent gain, Dennis.
KNEALE: This year? You know hat? I'm sure he's entirely right, unless, of course, it turns out that he's wrong.
DOBBS: Well, Hillary Clinton -- I don't know if we got this quote -- Hillary Clinton this week blasted the president on this issue and some others. If we've got it, could we -- do we have a Hillary Clinton -- great. Let's listen to it.
(BEGIN VIDEO CLIP)
SEN. HILLARY RODHAM CLINTON (D), NEW YORK: They have the most wrong-headed economic policies that we've seen since Herbert Hoover, and we're beginning to pay a price as a nation for these policies, and I am sick and tired of people who say that, if you debate and you disagree with this administration, somehow you're not patriotic, and we should stand up and say we are Americans and we have a right to debate and disagree with any administration!
(END VIDEO CLIP)
DOBBS: Justin?
FOX: Well, I -- that's what you do in politics. You take advantage of the fact that the economy's not doing well and you harp on it. It's not Bush's fault, but, if it had been a Democratic president and the economy...
DOBBS: This is the worst policy since Herbert Hoover, said Senator Clinton.
FOX: But it is the -- right. But Dennis has something on that.
KNEALE: Two words. Wait. I'll boil this down to two words, "flight suit." Senator Clinton, are you suicidal? You should not be speaking like this, this harshly against this president at this moment. She's trying to run for president, but, boy, you're just doing this way too early at the wrong time.
MORRISON: It sounds...
FOX: But it's just so tempting to say Herbert Hoover. I just think that Democrats can't...
MORRISON: Yes, I agree. It sounds very desperate on her part, and I think the Democrats are rather desperate to get an issue going. The economy is perhaps the chance for them, but they don't have any great positive ideas to get growth going again. It's more of a defensive thing. They don't like what Bush is proposing.
DOBBS: Do you like what Bush is proposing?
MORRISON: I like it well enough. I think that there's a lot of stimulus in the system, thanks to Alan Greenspan, and I think that the tax cuts are going to help. The dividend cut, which it sounds like he's going to get most of. I think it's not...
DOBBS: Even if incrementally.
MORRISON: Yes, the tax cut. I don't think that that's going to break the budget, and I think it's good long-term policy. It's not much of a stimulus immediately, but long term...
KNEALE: Actually...
MORRISON: ... term is good.
KNEALE: Being with "Forbes" magazine, of course, we're in favor of any tax cut of any kind. I wish it were tilted more to stimulate business spending instead of individuals. A lot of that disappears. You pay down credit-card debt. I'd like to see special tax breaks for business to buy tech and build plants and start employing people again.
DOBBS: Do you really want to give business any special breaks here? These CEOs have been acting like a bunch of milquetoast ninnies. They haven't got the guts -- they were supposed to be big, inspiring leaders...
KNEALE: You know, each company...
DOBBS: ... but everything was...
KNEALE: Each company employs one CEO, and they employ thousands of regular of workers, and so, yes, I do want them to get help.
DOBBS: Yes, I remember the ratio.
FOX: Yes, and the CEO gets paid about as much as...
DOBBS: And point being, these CEOs -- why not have a business roundtable, a business council all -- U.S. Chamber of Commerce stand up and say, you know, we're going to be leaders here. They see the trends that you and I see and everyone out there sees. Why lay back? They don't need -- come on.
MORRISON: There's been a lot of denial in this past week, seeing the Wall Street CEOs after the settlement come out with some of the comments that they have is just -- the idea of ever rebuilding trust for these institutions is getting pretty farfetched because they don't seem to get it as far as the trust...
KNEALE: If could I just disagree with my more liberal members of the business press, I've got I got to tell you the settlement announced today, Sarbanes-Oxley, this big, crackdown law. This is going to be terrible for business. You know, Wall Street..
DOBBS: The $1.4 billion?
KNEALE: Yes, that and all of these new regulations that -- because of the sins of a dozen companies, we are making life difficult for 8,000 publicly held companies. If you'll read the latest issue of "Forbes" on criminalizing capitalism, you'll see that, on Wall Street, these people are dreading this. This is going to raise everybody's costs. In the end, investors will have fewer choices of stocks.
FOX: Wall Street is a cartel.
KNEALE: This is not...
FOX: It's been running this IPO scam for...
DOBBS: Well -- it's a cartel?
FOX: It's a cartel, and it's got to change how it especially does investment banking for IPOs. That's not anti-capitalism, and I don't -- I agree that I don't think the settlement and Sarbanes-Oxley fixes that, but I just think..
KNEALE: I mean the investors aren't going to get a dollar of that settlement. It's going all into the state treasuries.
DOBBS: Was it a slap on the wrist or -- now wait a minute. Which way is this going?
KNEALE: Well -- but, you know, if you're trying to do this ostensibly to help investors, then let investors have some money, those who got hurt. Otherwise, I think you're just trying to grandstand and look good for the cameras, and that's what this settlement does.
DOBBS: Mark, do you have any thoughts on that?
MORRISON: Well, I think -- I think Wall Street is not gaining trust back with investors, and -- and that's going to hurt us in the long term. It's going to hurt them.
DOBBS: Was this a good settlement?
KNEALE: It's good to get it out of the way.
FOX: Yes, and I think Wall Street just needs -- is going to need a lot more shoving before it figures out how to get that trust back and organize its investment banking and the IPO market in a way that doesn't..
MORRISON: But about the best you're going to do -- you're going to get back to the days when we had research that was just -- that was not corrupt necessarily but was just bad and research that the Wall Street firms put out just so you would buy stock. They wanted to turn -- they wanted to do transactions.
DOBBS: Research equalled another word for sales. Let's be honest about it.
MORRISON: That's right.
FOX: That's right.
(CROSSTALK)
FOX: ... fears.
DOBBS: Let's take a look at what Phil Purcell of Morgan Stanley had to say. They invited a response from the SEC -- the chairman of the SEC. "I don't see anything in this settlement that will concern the retail investor about Morgan Stanley," said Phil Purcell. And Bill Donaldson...
KNEALE: You know...
DOBBS: ... said, "Your statements reflect a disturbing and misguided perspective on Morgan Stanley's alleged misconduct. Your reported comments evidence a troubling lack of contrition."
A lack of contrition on Wall Street, gentlemen?
KNEALE: Yes. See, that's what Washington really wants most of all, is we want Wall Street to be ashamed, we want you to, you know, to hang your heads.
DOBBS: But, my God, don't you think they should be?
KNEALE: But -- yes, they should be in some isolated cases, but I think over the vast..
FOX: It's not isolated.
KNEALE: ... spectrum of business...
DOBBS: But, you know, this idea...
KNEALE: I mean investors had no problem with all of this when the stock market was going up. The only reason they're angry now is because stocks are down.
MORRISON: Isn't it terrific, though -- isn't it terrific, though, that Donaldson jumped in on this thing overnight and came out with this very hard-hitting statement, hit Purcell right in the nose, and I think this says something about Donaldson and his plans, the type of program he wants to run there, and its appointment...
FOX: It does.
MORRISON: ... of McDonough several weeks ago was also a good move. I think the SEC is getting more serious.
KNEALE: That's...
(CROSSTALK)
KNEALE: Again, it's a great political instinct. You know, it's a great year for a good sound bite.
DOBBS: Well, it also says that Phil Purcell won't be quite as loose with his words.
KNEALE: I mean he must have had direction that said open mouth, insert both feet or something. I can't believe he did that.
DOBBS: It's hard to believe a Wall Street firm would make a mistake, especially under courageous leadership, such as evidenced by Phil Purcell in this instance.
We're going to wrap it up for the -- give us your best shop. What do you think? Are we in -- are we in recovery? Are we going to see things pick up here?
FOX: Yes, we're in recovery. Things are going to picking up. It's just what keeps happening -- everything -- bad things keep happening to a good economy, and...
(LAUGHTER)
FOX: ... it could happen again.
DOBBS: Dennis.
KNEALE: Yes, I would like to think there's a lot of hope, but there's so much overhanging uncertainty right now that I think is going to -- it's not like I'd be throwing all of my fixed-income stuff right in the stock market right now. MORRISON: We'll have gradual growth improving toward the end of the year. We've still got a lot of negatives, though, around the world, with Europe going nowhere and China with SARS. It's hard to find a growth engine that's really going to get things moving.
DOBBS: I think personally it makes it all the more impressive to see the positives that we're seeing at this point.
MORRISON: That's right.
DOBBS: Gentlemen, thank you very much.
KNEALE: Thank you.
DOBBS: Appreciate it. See you all next time.
MORRISON: Thanks, Lou.
DOBBS: Two Democratic senators want the Postal Service inspector general fired. Senators Byron Dorgan and Ron Wyden accuse Karla Corcoran of wasting money on some bizarre staff retreats. The senators say Corcoran made the staff dress up as cats and sing songs by the Village People. Oh! It doesn't get much worse than that. The senators also say she spent $117 million to identify $56 million of waste.
(LAUGHTER)
DOBBS: Corcoran was appointed by President Clinton and tells CNN tonight she saved the Postal Service more than $2 billion over the past six years. She also says she will not resign. Stay tuned.
A reminder now to vote in our poll tonight. Which of the following should be the president's main priority -- the war on terror, tax cuts, job creation, or health-care reform? Cast your vote at cnn.com/moneyline. We will have the preliminary results coming right up.
Next, a pair of CEOs who are partners in their lives and in business.
Also tonight, some celebrities are finding that being bad can be very good. Bill Tucker will have that story for us.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: This week, we have a bonus CEO of the week. Two CEOs of the week, in fact. They share the same last name, the same title at the second largest savings institution in the country. The company has $70 billion of assets. Its stock recently hit an annual high of $76.91. Herb and Marion Sandler of Golden West Financial, our CEOs of the week.
(BEGIN VIDEOTAPE) DOBBS (voice-over): Herb and Marion Sandler are partners in life as well as in business. The husband and wife team are co-CEOs at Golden West, a banking business they bought 40 years ago in Oakland, California. Today, annual revenue almost $4 billion. Herb Sandler admits the savings and loan business is in a bit of a sweet spot right now, but he points out they've held the course during bitter spots as well.
HERB SANDLER, CEO, GOLDEN WEST FINANCIAL: I mean this is a company, again, that has compounded earnings over 35 years at 20 percent, and, over the last five year, at 25 percent. So this is not an isolated performance.
DOBBS: The company's success is attributed to team work, no egos, and their system of meritocracy.
MARION SANDLER, CEO, GOLDEN WEST FINANCIAL: The way you get ahead here is performance, and it's not whether I like you or Herb likes you. It is merit. We have very high standards.
HERB SANDLER: Both of us worked in organizations before we came to Golden West in which you got ahead by who you knew and how you played the game.
DOBBS: And Herb and Marion don't consider business ethics a game.
HERB SANDLER, The Enrons, the WorldComs, the Global Crossings -- they're a disgrace, and they must have had a level of greed that to -- Marion and I just can't fathom where they were coming from and what was in their heads.
MARION SANDLER: There are some very -- people with very high ethical standards, and there are people who will cut corners, but that has nothing to do with corporations. It has to do with what people are. I think the difference is the stakes were very high in terms of the rewards for acting improperly, and something has to be done about that. Something has to be done about corporate compensation, I would say.
DOBBS: The Sandlers don't follow the herd in their business decisions. In fact, their corporate board is predominantly women.
(END VIDEOTAPE)
Our congratulations to the Sandlers and Golden West.
Coming up next he re, we'll share some of your thoughts, including one clever viewer who has a bit of a French lesson for all of us.
And sometimes being bad can be very good, especially if you're a celebrity. Bill Tucker will take a look at how some stars have spun scandal into gold.
We'll be right back. (COMMERCIAL BREAK)
DOBBS: The Dixie Chicks, Winona Ryder, O.J. Simpson, ODB -- they all have something in common. There's no such thing as bad publicity, as Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CEO CORRESPONDENT (voice-over): Steal a dress? Go to court? Go to jail? Get out of here. You sign a contract as a model for the very designer whose clothes you were shoplifting.
DONNY DEUTSCH, CHAIRMAN & CEO, DEUTSCH, INC.: You know, there's that kind of old saying, you know, no publicity is bad publicity.
TUCKER: Michael Moore was roundly booed for being a boor at the Oscars, but Moore is not a totally stupid white man. His book, on its way down the bestseller list, shot up to number one the week after the Oscars. Scandal sells.
Consider the case of Monica Lewinsky, now host of Fox's latest reality show, "Mr. Personality." There's an irony that hasn't gone unnoticed in this cartoon appearing in "Newsweek."
Or how about Madonna? Her album critically trashed, her video controversial for tossing a grenade into the president's lap. She debuts at number one on the charts.
MARK HUGHES, CEO, BUFFMARKETING: Case in point with Madonna. You know, her consumers have come to expect that. So, you know, she's almost kind of pushed the line every step of her career, and they're willing to accept it.
TUCKER: And then there's O.J. He went from being chased in a white Bronco to the subject of the latest reality show series buzz. O.J. says no to the series but says he would like to serve as a TV commentator at the murder trial of this man, actor Robert Blake.
Rappers may hold the record for multiple scandals: 50 cent has a huge hit, "Get Rich or Die Trying." He's been shot nine times, leaving one to wonder what's next.
And rapper Old Dirty Bastard got out of jail for cocaine possession, signed a new record contract, and he announced his new TV series in the fall, "On Parole With ODB" all in the same day.
(END VIDEOTAPE)
TUCKER: Will Rogers is right. You don't have to make this stuff up. You have to just read the papers or watch TV -- Lou.
DOBBS: The very best in television.
TUCKER: Absolutely.
DOBBS: Bill, thank you very much. Bill Tucker.
When we come back, the results of tonight's poll and a look at some of your thoughts.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: Well, the preliminary results of our poll question, which of the following should be the president's priority, 18 percent of you said the war on terror. Seven percent said tax cuts. Forty-four percent said job creation. Thirty-two percent said health-care reform.
Now let's take a look at your thoughts.
Joan Ross asked us where in the world is Vice President Dick Cheney. She wrote, "Do we still have a vice president? Haven't heard anything from him for the past couple of months."
Well, Joan, the vice president is in the nation's capital. Mr. Cheney yesterday watched the president land aboard the USS Abraham Lincoln from his West Wing officer, and, last week, he cast the tie- breaking vote in the Senate on the tax-cut package.
Walter White from Lodi, California, wrote about corporate crooks. "Lou, I watch your scoreboard daily and long for the satisfaction to see even one CEO go to jail, and, if they did, it would likely be in a minimum-security country club where they would get a good rest and then be released to enjoy their millions."
Well, Walter, I'm not quite right -- quite ready yet to make that conclusion. Let's wait and see. Let's hope you're wrong.
Robert Hohlman from Grayslake, Illinois, was outraged by CNN's choice of words. "I saw a description on CNN last night about planes taking off from the USS Abraham Lincoln. The description said that 16,500 sorties have been made from the ship. Well, bite your tongue and live in shame. 'Sorties' is a French word. I guess we just learn something new every day."
Robert, you're exactly correct. "Sortie" comes from the French word "sorter" meaning to go out.
We love hearing from you. Please send us your thoughts at loudobbs@cnn.com. We will be working diligently over the weekend to come up with a new word for "sortie."
I'm Lou Dobbs. Thanks for being with us.
Monday, Senator Chuck Grassley, chairman of the Senate Finance Committee, joins us to talk tax cuts. Fareed Zakaria, author of "The Future of Freedom," will also be here.
And for all of us, good night from New York City. We wish you a very pleasant weekend.
"LIVE FROM THE HEADLINES" with Paula Zahn begins right now.
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