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LOU DOBBS TONIGHT

U.S. Companies Slash Jobs; Democrats Call For Regime Change at Pentagon

Aired September 5, 2003 - 18:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JOHN KING, CNN ANCHOR: Jobless in America. U.S. companies slash jobs for the seventh consecutive month. Peter Viles will report on an economic recovery that destroys jobs. And our "Editors' Circle" will discuss the challenges facing the Bush White House.
And Secretary Donald Rumsfeld goes to Saddam Hussein's hometown. Back home, a leading Democrat calls for regime change at the Pentagon. Congressman David Obey will be my guest.

Hurricane Fabian races toward Bermuda. It may be the strongest storm in the area for nearly 80 years. Gary Tuchman will have a live report from Bermuda.

And technology overload: how millions of American are suffering from exhaustion, anxiety and even depression because of the gadgets that are supposed to make our lives easier.

ANNOUNCER: This is LOU DOBBS TONIGHT for Friday, September 5. Sitting in for the vacationing Lou Dobbs, John King.

KING: Good evening.

Late word from the White House tonight that President Bush will deliver a nationally televised address to the nation Sunday night about postwar Iraq. It comes after an extraordinary week. The administration changed course and appealed to the United Nations for help improving security in Iraq. And members of Congress returning from summer break reported growing unease back home from constituents worried about the war's rising costs, both in terms of American lives and tax dollars.

Tonight's news also comes in a week in which the White House launched a concerted effort to persuade Americans the economy is improving. That challenge was highlighted today in the government's latest employment report. U.S. companies cut nearly 100,000 jobs in August. It was the seventh consecutive month of declines.

White House correspondent Suzanne Malveaux is traveling with the president and joins us now live from Indianapolis, Indiana.

Suzanne, let's begin on the economy, a tough day for the president to make the case things are getting better.

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, absolutely, John.

But he remains optimistic about it. This is really the third time that he has been pushing forward his economic agenda this week, particularly in the Midwest, talking about the incentives for small businesses, as well as the efforts the administration is making in terms of creating new jobs.

The president is really pushing forward now to make those tax cuts, the three that he pushed through Congress since he's become president, to become permanent. That is something that he sees will really try to help and turn this economy around. Of course, it carries a very high price tag, $1 trillion over 10 years, but the president speaking to the American people, saying just give his plan some time, that he recognizes people are out of work, but that it will get better.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: There are a lot of Americans looking for work. And we need to do something about that in Washington, D.C.

We've taken steps to get our economy growing again. And there are some very hopeful signs that progress is being made. I'm optimistic about the future of this country. Yet, today's unemployment report shows we've got more to do.

(END VIDEO CLIP)

MALVEAUX: Well, Democrats certainly disagree with the president. They wasted no time last night in their first debate taking on the president and his economic agenda, many of them calling to either cut or repeal some of those tax cuts that have already been put into place, the president suggesting one solution. He announced creating a kind of job czar type of position at the Commerce Department.

But at least one major political donor does not think that this is the solution.

(BEGIN VIDEO CLIP)

JAMES HOFFA, TEAMSTERS PRESIDENT: That's like putting a Band-Aid on a terrible sore. I mean, this is a major problem that we've been talking about since he got in. We have a major problem in this country losing jobs. We have to do something about it. We have to turn it around. And we have to have a president that cares about America, that cares about people in this country, and cares about these issues that send our jobs out of the country.

(END VIDEO CLIP)

MALVEAUX: And one of the major things that he's also calling for is really to hold congressional spending. When Congress comes back into session, he is really pushing forward for them to keep their spending at a minimum. This is something that he feels they are equally responsible, if this economy is going to turn around -- John.

KING: And, Suzanne, late word that the president wants to address the American people, 8:30 Sunday night, from the White House on Iraq. Are they worried at the White House that perhaps they're losing the support of the American people?

MALVEAUX: Well, they certainly recognize that they need to do something about it, because there have been a lot of questions and, of course, a lot of setbacks inside of Iraq, with the bombing of the U.N. as well as the Jordanian Embassy, and U.S. soldiers being ambushed almost on a daily basis now.

It became very apparent over the last month or so, the president having discussions on his Crawford ranch with his national security team over videoconference, also visits from the secretary of defense, as well as State. And then it was just last week, we were told by Scott McClellan, the White House spokesman, that he took it very seriously that he needed to go before the American people and explain what is necessary in terms of why we are there, what type of progress needs to be made.

It is not only a speech for the American audience, but the international one as well -- John.

KING: Suzanne Malveaux with the president in Indianapolis -- and thank you, Suzanne.

And today's employment numbers surprised economists, who had expected a slight increase in the number of jobs. Those economists believed the labor market was improving after a series of better-than- expected government reports.

Peter Viles reports now on an economic recovery that continues to hemorrhage jobs.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): After a month of solid retail sales, a reality check: news that American employers cut jobs in August for the seventh month in a row; 93,000 jobs disappeared, 2.8 million jobs now lost since February 2001. Jobs are always a lagging indicator, but something's out of kilter here. The recession ended almost two years ago.

BOB GAY, COMMERZBANK SECURITIES: Once again, we're seeing, even as the economy's recovering, even as spending is spurting forward thanks to tax cuts, we're still not generating jobs.

VILES: Hardest-hit sectors: manufacturing, 2.4 million jobs lost; professional and business services, three-quarters of a million jobs; and information jobs, just under half-a-million lost.

Factors behind those losses include rising productivity, which means the same work can be done by fewer workers, and cheap foreign competition that is destroying American factory jobs.

ANTHONY CHAN, BANC ONE INVESTMENT: We are losing a lot of jobs overseas that are not coming back, simply because of those wage differentials. When you have people in China that are making 40 to 50 cents an hour, it's very difficult to compete with that sort of worker. VILES: No politician would say it, but one analyst suggested, 6 percent unemployment may be the new norm.

ART HOGAN, JEFFRIES & COMPANY: Structurally, there's a change. And maybe we need to look at what we consider to be full employment in this country now, which the bar was always at 5 percent. Maybe now, with the structural changes, full employment's going to be with a higher unemployment level.

VILES: Most economists continue to predict a rebound in jobs, but this consultant doesn't see evidence of a turnaround yet.

CHRIS ELMES, THOMSON DBM: We see a continued tough market at least for the next couple of quarters. And there are some people who believe that 2004 could be a tough year as well.

(END VIDEOTAPE)

VILES: Now, you hear over and over again that jobs are a lagging indicator, which is true. But they have never lagged for this long before. Typically, after recession, four or five months, then you see job growth. This time, we're at 21 months and counting -- John.

KING: Twenty-one months and counting, Pete, bad news for the manufacturing sector. Again, any bright spots here?

VILES: There are some in these numbers, one million new jobs created in education and health care, health care a really strong sector. Another sector that's growing -- you wouldn't necessarily know it from what you hear from the state capitals -- government jobs, half a million new government jobs in this period of time, most of them at the state and local level -- John.

KING: Peter Viles on the unemployment report, thank you very much.

And we will discuss today's jobs report, the economy, and the challenge facing the Bush White House in tonight's "Editors' Circle." Joining us will Rik Kirkland, managing editor of "Fortune," Robert Lenzner, national editor of "Forbes," and Steve Shepard, editor in chief of "BusinessWeek."

As the White House made plans for Sunday's major presidential address on Iraq, Defense Secretary Donald Rumsfeld visited Saddam Hussein's hometown and delivered a defiant message to Iraqis still loyal to the former regime. Rumsfeld said saboteurs, snipers and terrorists will not drive coalition forces out of Iraq.

Ben Wedeman reports from Baghdad.

(BEGIN VIDEOTAPE)

BEN WEDEMAN, CNN CORRESPONDENT (voice-over): This is what he said he wanted to do, get a firsthand look at how things are going.

Defense Secretary Donald Rumsfeld continued his tour of Iraq, dropping in on American troops based in the town of Tikrit, Saddam Hussein's ancestral hometown. Tikrit is one of the most troublesome spots for American forces, the scene of almost daily attacks by foes of the occupation. But Mr. Rumsfeld, traveling under intense security, with a top-secret itinerary, and staying well away from ordinary Iraqis, Tikrit could not have been more welcoming.

He even picked up a souvenir to take home from the 101st Airborne Brigade, known as the Screaming Eagles.

UNIDENTIFIED MALE: On behalf of all the 21,000 soldiers up here in AOR north right now, I'd like to give you our coin. It's got the Screaming Eagle patch on there. And ask you to add that to your coin collection and think of the Screaming Eagles.

WEDEMAN: This is Rumsfeld's third visit to Iraq, his second since Saddam's fall. In what may now seem like a parallel universe, his first visit took place in 1984, when he met with Saddam Hussein at the behest of the first President Bush.

To the south, the assassination of a senior Shiite cleric continues to reverberate. In the town of Kufah, mourners gathered to pay respects to the memory of the late Ayatollah Mohammed Baqir al- Hakim, killed in a car bombing a week ago in Najaf, along with more than 80 other people. The bombing has ignited fears of rising friction between Shiite and Sunni Arabs, fears that were intensified by an early morning attack on a Sunni mosque in northern Baghdad.

"The worshipers left the mosque after finishing prayers," recalls the imam of the mosque, Whalid Al-Azari. "Suddenly, we heard shooting toward the congregation. Three people were injured. The mosque was full. We thank God no one was hurt. The gunman escaped after the attack."

No blame was placed by the imam. But many in his congregation were ready to point the finger at what they see as foreign forces with an interest in seeing their country collapse into chaos.

Ben Wedeman, CNN, Baghdad.

(END VIDEOTAPE)

KING: The coalition's top police adviser in Iraq has finished his work and returned home. Former New York police Commissioner Bernard Kerik started his job back in May. At the time, he said he expected to be in Iraq for at least six months, or as he put it, until the job was done. The coalition said Kerik's departure had been planned for some time and a successor will be announced soon.

Spain today arrested a correspondent from the Al-Jazeera television network on suspicion of belonging to the al Qaeda terror network. The correspondent was arrested at his home in southern Spain. He had an interview with the al Qaeda leader, Osama bin Laden, in October 2001. Authorities believe the correspondent relayed messages to al Qaeda operatives in Europe.

A terror alert in this country tonight, less than a week before the second anniversary of the September 11 attacks. The FBI today announced a worldwide hunt for four men who may be planning attacks against the United States. The agency said the men should be considered armed and dangerous.

Justice correspondent Kelli Arena has that report.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): The FBI strongly suspects these four men are terrorists who could be planning to attack Americans or U.S. interests and is asking police agencies worldwide to help find them.

JOHN PISTOLE, FBI ASST. COUNTERTERRORISM DIRECTOR: The intelligence that we have indicates that they are likely operating independently of one another, which makes it more of a challenge force and also gives us reason to want to get this information out to the public and to our partners around the world.

ARENA: Information on the men came from a variety of sources, including al Qaeda detainees and overseas intelligence agencies. Their whereabouts are unknown. And there is no information suggesting any of the four is currently in the United States.

Alerts have been issued before on two of the four, Abderraouf Jdey and Adnan El Shukrijumah. Shukrijumah's family, who lives in South Florida, insists, he's got no terror connection. But the FBI describes him as a first among equals, saying he's got a lot in common with the ringleader of the September 11 attacks.

PISTOLE: He is of significant concern to us because of his similarities to Mohamed Atta in terms of his ability to, we believe, pilot an aircraft, his fluency in English, his familiarity with the United States, and his ability to use false documents perhaps to get into the United States undetected.

ARENA: Shukrijumah's ability to pilot airplanes is especially worrisome in light of the latest alert from homeland security, warning that al Qaeda maintains an interest in attacking commercial aircraft.

PISTOLE: He may be the best-suited al Qaeda operative in the world to commit such an act that we believe al Qaeda is still interested in planning.

ARENA: That's not to say law enforcement thinks Shukrijumah is the only serious player. Officials say they have information linking Karim El Mejjati to the May attacks in Casablanca.

(END VIDEOTAPE)

ARENA: Officials stress, there is no information suggesting an attack is imminent or that any plan has reached an operational phase. Still, officials warn that intelligence on the four comes on top of a mountain of information suggesting that al Qaeda is planning multiple attacks against the United States -- John.

KING: Justice correspondent Kelli Arena -- thank you, Kelli.

ARENA: You're welcome.

KING: And coming up: target: Bermuda. Hurricane Fabian is battering the tiny island at this hour. Gary Tuchman will have a live report from South Hampton, Bermuda.

Then: A prominent Democrat calls for two key Bush administration officials to -- quote -- "return to the private sector." Congressman David Obey of Wisconsin will be our guest.

And is too much technology bad for your mental health? Lisa Sylvester will have some answers that may surprise you.

(COMMERCIAL BREAK)

KING: Coming up: It's a direct hit for Bermuda tonight. Hurricane Fabian slams the island with winds churning at more than 120 miles an hour. Gary Tuchman is in Bermuda and he will have a live report up next.

(COMMERCIAL BREAK)

KING: The strongest storm to hit Bermuda in decades is pounding the island tonight. Hurricane Fabian is battering Bermuda right now with torrential rains, waves that are 10 feet above normal, and winds of 120 miles an hour.

Gary Tuchman is on the southwest part of Bermuda tonight, right in the middle of this tremendous storm. And he joins us now on the line.

Gary, what's the situation right now?

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT: Well, John, the paradise of Bermuda is now the antithesis of a paradise. It's meteorological misery.

For more than three hours now, we've been standing out here experiencing hurricane-force winds. It's still believed we have a couple of hours left. The National Hurricane Center says the winds have been up to 125 miles per hour, sustained at 115 miles per hour, which makes this the most powerful hurricane to directly hit the islands of Bermuda since 1926, 77 years.

We're standing right now on the southwest portion of this British territory. The ocean you can't see anymore, even though we're standing right next to it, the visibility is so poor. But we've seen palm trees. We've seen furniture. We've seen a restaurant just crash into the ocean and get swallowed up by the roiling, angry waters.

It is impossible right now to ascertain if there have been any casualties of any kind in Bermuda. There is really no way to get around, because the main roads are all covered with trees, with power lines, branches. We tried to drive. We couldn't get five minutes past the point we're at right now at the beach. And we had to turn back. And on the way back, a huge branch from one of the trees fell right on top of our car.

So it gives you an idea of what people here are contending with. Unlike many hurricanes, where you're in Florida or Texas or North Carolina, we advise the viewers to go inland to get away from trouble. But for the people here who live here, the 63,000, and the tourists who've decided not to leave, there is nowhere to go. The airports are closed.

They are basically trapped. And they can't even leave where they are right now, which they shouldn't anyway, because there's just no way to get around in a vehicle. And to walk is just impossible with these hurricane-force winds -- John.

KING: Well, Gary, you mentioned nowhere to go. You have some experience in these matters. Give us a sense of the preparations there, in terms of, we've seen some pictures of businesses boarding up and the like. Do they seem well prepared for this?

TUCHMAN: John, do me a favor. Repeat the last part of the question. The winds kind of drowned out your voice.

KING: Sorry about that.

Just your sense of the level of preparation. Does it appear that local businesses and the government have their act together?

TUCHMAN: Yes, they certainly did have their act together.

And one of the reasons they had their act together has nothing to do with the preparations of the last couple of days and everything to do with Bermuda's strict building codes. Very high per capita income in Bermuda. $71,000, means they can enforce these codes, which require 8-inch-thick walls when you build a home. That's very thick. And your home is supposed to be able to withstand gusts of up to 150 miles per hour.

Therefore, they should have no problems. And so far, in the limited traveling we've done around the island, we've seen parts of roofs come off. We've seen parts of buildings. But we haven't seen any entire collapses yet. And that, so far, is certainly a good sign.

KING: Gary Tuchman, stay safe for us and stay in touch.

And for more on Hurricane Fabian now, let's go to Rob Marciano at CNN's Weather Center.

Rob, just how devastating is this likely to be?

ROB MARCIANO, CNN METEOROLOGIST: John, at the risk of sounding overly dramatic, this is about as bad as it could get.

It's a Category 3 hurricane, a major hurricane, and not only that, but the track of this thing. Bermuda is so small. I mean, look at this thing and then look at the size of the storm itself, and then consider the thousands of square miles of the Atlantic Ocean. Bermuda itself may be about 10 miles wide. Now, the track of this thing went just to the west of it. The eye wall, the right center of the eye wall went just to the west of it.

And that's the worst part of the storm, because if you've got the storm moving at, say, 20 miles an hour to the north, which it's doing, and then you have winds of 120 miles an hour, you combine those two and you get wind gusts of 140 miles an hour. We've already had a wind gust of 132 miles an hour. So this is definitely a devastating storm. And we are going to have substantial damage when they clean this thing up tomorrow.

Hurricane Fabian, these are the statistics at last check. Category 3, mentioned that. Moving north at 20 miles an hour. Winds at 120 miles an hour. We don't expect it to strengthen any longer. You notice that the eye was actually past Bermuda now. So things will be improving as we go on through the next couple of hours, John.

Effects on the U.S. will be big waves, dangerous rip currents up and down Northeast beaches as we go on through this weekend.

KING: And Rob, Fabian's not the only thing you're tracking tonight, is it?

MARCIANO: No, you're right. I want to touch briefly on what's going on down across the Florida Peninsula, where we have Tropical Storm Henri, nowhere near the strength of Fabian.

But certainly it's going to cause some headaches as fall as rainfall goes. We've got winds of 50 miles an hour. That's not going to be the issue. It's a very slow mover. These are the tropical storm warnings. It's going to be heading across the Florida Peninsula, where they've had tremendous amounts of rain, John, already, 13 inches above normal in Tampa alone. This is going to bring up to a foot as we go on through the next day or two.

So, between Fabian and Henri, we've got our hands full, no doubt -- back to you.

KING: A busy, very busy Rob Marciano in our Weather Center, thank you very much, Rob.

And coming up: A congressional Democrat says repeated calculations in Iraq are reason enough for two key Bush administration officials to go. Congressman David Obey of Wisconsin will join us.

Then the "State of the States." Tonight: Minnesota relies on high taxes and deep spending cuts to stay out of financial trouble. Minnesota Governor Tim Pawlenty will join us.

And our weekly "Editors' Circle" on the trouble in the job market, the war in Iraq, and a great deal more.

(COMMERCIAL BREAK)

KING: My next guest today sent a letter to President Bush calling for the resignations of Secretary of Defense Donald Rumsfeld and his deputy, Paul Wolfowitz. Congressman David Obey of Wisconsin told the president that Rumsfeld and Wolfowitz -- quote -- "have made repeated and serious miscalculations, miscalculations that have been extremely costly to the American people in terms of lives lost, degradation of our military and intelligence capability to defend against terrorists in countries outside of Iraq, isolation from our traditional allies and unexpected demands on our budget that are crowding out other priorities."

Congressman Obey is the ranking Democrat on the House Appropriations Committee. He joins us now live from Capitol Hill.

Congressman, you're calling for the resignation of two of the president's most trusted advisers. The president, of course, is a Republican. You are a Democrat. As you write this letter today, you know the answer is no. Why send it?

REP. DAVID OBEY (D), WISCONSIN: Well, the president -- under our system of government, the president runs the government.

And about the only thing that Congress can do after the fact in foreign policy issues is to simply give advice. Sometimes, that advice is sought. Sometimes, it's not. But I felt, given what I know and what I've been told by people in the military, by people in the government itself, and certainly based on the extreme polarization that I saw of the American people when I was in my district for the last month, I felt I had an obligation to tell the president what I thought needed to happen in order for us to get a new start with new faces, so that we can succeed in a very difficult situation.

KING: You talk about what you call the polarization back in your district. We learned just before the show tonight that the president will give an address to the American people Sunday night from the White House, nationally televised. From your sense, the people back home, the two questions they want answered by this president.

OBEY: Well, I think they want to know what the plan is and how we are going to internationalize this issue, so that Uncle Sam doesn't become "Uncle Sucker" in paying for everything in sight and in loss of lives for the next five years.

And, secondly, I think they'd like to know that we have a plan other than sending the bill to our grandkids. I think the president needs to talk to the American people. And no doubt, he sees the same disquiet that members of Congress see on this issue. But it's going to take more than a speech to renew America's confidence. America has to believe that the people who are running the show actually know what they're doing.

And certainly, while the military operation was conducted very well, the aftereffects and the after-the-war situation in Iraq is a disaster.

KING: Congressman, you're the ranking Democrat on the Appropriations Committee, which means you get a voice in coming up with the money. The administration is going to come back and ask for $60 billion, perhaps even more, in the coming weeks. It appears the president will get his money. The Republicans are in the majority. The Democrats don't want to let the troops down, even if you might disagree with the policies.

OBEY: Right.

KING: But what are you going to be asking? Where are the pressure points in this debate over the money?

OBEY: Well, as I say, I think we need to know, first of all, how the last money has been used.

We appropriated almost $70 billion. We need to know how that's been used. We need to know what the plans are in Iraq over the next year, two years, five years. I, for one, want to know how we're going to rotate the troops back to this country on the second rotation in April, for instance, when the Army is stretched so thinly right now, that we really don't have the troops necessary to provide for those rotations.

And God help us if we should have any problems anywhere else in the world, such as Korea, because the Army is stretched so thin that we don't have anything left by way of reserves, without totally discombobulating our whole military manpower situation.

KING: Congressman David Obey of Wisconsin, ranking Democrat on the House Appropriations Committee, thank you for your thoughts tonight, sir.

OBEY: Thank you.

KING: Thank you.

And coming up: the "State of the States." Tonight: Minnesota is banking on technology and education. And so far, it appears to be paying off. Governor Tim Pawlenty of Minnesota will be our guest.

Then "Heroes," our feature series on American troops returning from war to face a new set of challenges here at home. Casey Wian will have one soldier's remarkable story.

And tunneling in to an American military base. Two men did just that and carted off some very precious cargo -- that story and much more still ahead.

(COMMERCIAL BREAK)

KING: This Sunday in Columbus, Ohio, Farm Aid will hold its 18th annual concert to help America's family farmers and other projects in rural America.

Willie Nelson co-founded Farm Aid In 1985 and is currently Farm Aid's president. He joined me earlier today to talk about why he's still fighting for America's small farmers.

(BEGIN VIDEO CLIP)

WILLIE NELSON, CO-FOUNDER & PRES., FARM AID: I haven't seen a lot being done about it on either side of the board, or either side of the table in Washington, and this has to happen. Until a young couple, again, can take 200 acres of land and make a living and get enough for what they do and their work to pay their bills over here -- until that happens we're not going to have a good economy again in this country.

(END VIDEO CLIP)

KING: In all, Farm Aid has raised some $24 million, a little bit more, over the past 18 years to help family farmers and other programs in rural America.

And tonight we conclude our series of special reports on those states doing whatever it takes to stay out of budget trouble.

Minnesota is one of them. The North Star State is fighting a projected $4 billion deficit with spending cuts and taxes.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNNfn CORRESPONDENT (voice-over): Mary made it in Minnesota.

GARRISON KEILLOR, RADIO PERSONALITY: Well, it's been a quiet week in Lake Woebegone.

TUCKER: It's home to Garrison Keillor and his radio show, "A Prairie Home Companion." It's a state with beautiful cities and thousands of acres of forests and lakes -- 12,000 lakes, in fact. It has a thriving technology industry, but more notably, Minnesota has actively applied technology to its governing process.

DANIEL SALOMONE, MINNESOTA DEPT. OF REVENUE: Minnesota has invested a lot in technology and training to have our employees be empowered to do things efficiently and creatively. We've invested a lot in the technology of matching computer tapes from the IRS and from other tapes that we can get within the state to identify taxpayers who have an obligation to pay and who have not paid.

TUCKER: In other words, don't try and skip out on your taxes in Minnesota.

And those taxes are high. Only in three other states do individuals pay more on a per capita basis. The state's top tax bracket is 8-and-a-half percent.

But in few states can its residents feel as assured about how those taxes are managed. Congressional Quarterly gives Minnesota four out of four stars in terms of management.

Much of that tax money makes its way into education.

UNIDENTIFIED MALE: I dedicate this book to J.R.R. Tolkien, who made me want to start writing. TUCKER; Education accounts for 42 percent of Minnesota's overall budget. The state's education system is interesting because it funds not only public schools but charter schools as well through its support of vouchers.

In addition, the state prides itself on its commitment to using technology to expand course offerings like foreign languages for rural schools.

CHERI PERISON YECKE, MINNESTOA DEPT. OF EDU: It's more than just foreign languages. A.P. courses, advanced placement courses can also be offered so that if you're in a high school that has maybe 30 children in the entire high school, you could still take A.P. history but you could take it online through a computer course as opposed to, you know, not being able to take it at all. So there are really wonderful opportunities becoming available to children in rural areas.

TUCKER: The schools are funded through a statewide property tax on corporations.

What's not taxed is the natural beauty of the state, which gives it a high quality of life. And Minnesotans seem adjusted to the taxes, calling their state high tax, high service.

(END VIDEOTAPE)

KING: That was Bill Tucker reporting.

And joining me now is Minnesota's governor, Tim Pawlenty.

Governor, I was looking at the national unemployment report today. This economy is bleeding jobs in information technology sector. Your state is adding them.

What's your secret, sir?

GOV. TIM PAWLENTY (R), MINNESOTA: Well, I think, John, our state is basing its premise not that we're going to be the lowest-cost place to do business but that we've got some other value added assets, and it certainly includes our people. We pride ourselves on high education, high skill job readiness, and I think a lot of employers, particularly in a knowledge economy, find that to be a very attractive feature, and so they like to expand and grow here.

KING: The president was nearby today, close to your neighborhood. You were in Minnesota. He was in Indiana. He's trying to convince the heartland this economy is coming back, turning a corner, that jobs are about to come.

Give us your sense. More the national government has to do?

PAWLENTY: Well, we are seeing some economic growth not on the across the country but certainly here in Minnesota. It's not as fast or significant as we would like, but like a lot of folks we're hoping for a big third and fourth quarter. The real question, though, is once the stimulus works its way through the national economy will it be sustained in the next year? And we sure hope so. We've got our fingers crossed, and our plans are built on some of those assumptions. But I do sense just from Minnesota's perspective that we are slowly coming out of this downturn and recovering.

KING: I want to ask you another question, another issue, sir, if you don't mind. The president will address the American people Sunday night, talking about his policy in post-war Iraq. The administration back to the United Nations this week. The death toll has been rising. There's a sense that perhaps the American people are getting a little uneasy about all this.

I want your sense as you travel your state and talk to your citizens, what questions do you think they need to hear the president answer?

PAWLENTY: Well, they're certainly concerned, but I think we give the president, our leader, our commander-in-chief, the benefit of the doubt. And the president said from day one we're going to get into this thing and it's not going to be a 60 or 90-day thing, it's going to be months if not years if not decades.

We're in a global war against terrorism, we've got to have persistence, we've got to have courage. There's going to be sacrifices and there's going to be responsibility for continuing the effort. It's not going to be easy. But I think what they to want to hear is there is a plan. They I think give him the benefit of the doubt both with respect to the money being spent and his leadership. But they also want to make sure that we're making progress. And I think the vast majority of the country is still very strongly behind President Bush on this front.

KING: And in a sentence or two, sir, what's it like to succeed Jesse Ventura?

PAWLENTY: Well, those were big shoes to fill, John, literally and figuratively. Everybody's got their own style. I'm not a big former wrestler. He was flamboyant and dynamic, and I have a lot of respect for a lot of what he did. But it's a new day with new leadership. I'm just trying to do the best I can as Tim Pawlenty.

KING; And we wish you well, sir. Governor Tim Pawlenty, thank you very much for your time.

PAWLENTY: Appreciate it.

KING: And we want to hear from you. How do you view the economy? In tonight's poll question we ask, "How do you judge the strength of the economy? By the unemployment rate? The level of the Dow? Or the level of your 401(k)? " Cast your vote at cnn.com/lou. We'll bring you the results a bit later in the show.

And coming up, Christine Romans will have the market. And it's called NEDS. And if you have a cell phone, a beeper, or even an old-fashioned phone, you could be part of this story. Lisa Sylvester will have that report up next.

(COMMERCIAL BREAK)

KING: Today's news that the economy lost 93,000 jobs last month ended Wall Street's recent winning streak. The Dow Industrials fell almost 85 points. The Nasdaq lost nearly 11. The S&P fell more than 6.

Christine Romans has the market -- Christine.

CHRISTINE ROMANS, CNNfn CORRESPONDENT: Yes, John, it's pretty hard for stocks to rally when just about 100,000 jobs disappear. Stocks sold off on above average volume. All but four of the Dow stocks were lower. Really, only airlines and computer chip stocks escaped the selling today.And money moved into the safety of the bond market. OK. So that's the day.

But the weekly performance was still pretty impressive. The Dow was up for the fifth week in a row. Its longest weekly winning streak this year. The S&P 500 and the Nasdaq are each up four weeks in a row now. Ninety percent of the stocks in the S&P 500 closed higher for the week, led by big gains for airlines, telecom, and Internet stocks. But the worst weekly performers this week were the heavy industry stocks that have done so well lately.

John, a tough day. Another good week for stocks. The key to next week is whether the market can continue to sort of brush off the week's job news. One of the economists today told me that essentially, Main Street very concerned about the jobs picture but Wall Street is betting that jobs are going to start growing by the end of the year.

KING: Lou will be back on Monday. The market will feel a lot better about that.

(LAUGHTER)

Thank you, Christine Romans.

The technology bubble burst in the stock market three years ago, creating headaches for millions of investors. But now millions of Americans are finding that very technology itself, the computers, cell phones, beepers, personal digital assistants, and the constant barrage of information they dispense are hurting users.

Lisa Sylvester has that report.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNNfn CORRESPONDENT (voice-over): Karen Sorber is a government analyst who works from home. She's constantly being bombarded by her home phone, cell phone, and BlackBerry. The technology avalanche often leaves her feeling overwhelmed, anxious, and exhausted.

KAREN SORBER, GOVERNMENT ANALYST: I certainly have had sleepless nights. I wake up in the middle of the night at 2:00 sometimes, and my mind will start rolling. It will go for an hour and a half. And I can't get back to sleep.

SYLVESTER: Karen is a prime candidate for NEDS, a term coined by Internet executive and author Tim Sanders.

TIM SANDERS, YAHOO! CHIEF SOLUTIONS OFFICER: NEDS stands for New Economy Depression Syndrome. It's the combination of information overload, frequent interruption, resulting in erosion of personal relationships.

SYLVESTER: In a new study on NEDS, the research firm HeartMath surveyed 1500 people. Of those who reported being interrupted by cell phones and pagers more than 10 times per day, 41 percent feel exhausted; 43 percent of the people suffering from information overload also have difficulty remembering things, and of those who reported more than 30 hours in weekly Internet use, 17 percent feel less connected with friends and family than they did a year ago.

BRUCE CRYER, CEO, HEARTMATH: This is not an anti-technology survey, but rather, what we've learned is that as people increase the amount of hours spent online, symptoms of depression do tend to rise.

SYLVESTER: Therapists say create tech-free moments in the day, tech-free areas in the workplace and make a point of face-to-face contact.

TERRENCE REAL, PSYCHOTHERAPIST: Go low-tech. Don't send the guy down the hall an e-mail. Walk over and talk to him, in the same way that we make an effort to walk up a flight of stairs rather than take an elevator.

(END VIDEOTAPE)

SYLVESTER: HeartMath estimates as many as 8 million people in America may have New Economy Depression Syndrome, particularly in high-tech fields where there can be little or no human interaction -- John.

KING: Very interesting. Lisa Sylvester in Washington, thank you very much.

And coming up, the editors of the nation's leading business magazines join us to share their outlook on the job market, the economy, and much more.

And beer, wine, and an underground tunnel add up to trouble for two South Koreans and one American military base. That story next.

Stay with us.

(COMMERCIAL BREAK) KING: As we reported earlier, U.S. companies slashed nearly 100,000 jobs in the month of August. It's the seventh straight month of declines for the job market.

Joining us to discuss this and more, our "Editors' Circle," Steve Shephard, editor-in-chief of "BusinessWeek," Robert Lenzner, national editor of "Forbes," and Rik Kirkland, managing editor of "Fortune."

Rik, let's start it with you. The president has a problem, doesn't he? When it comes to this economy?

RIK KIRKLAND, "FORTUNE": Well, he has a political problem particularly in those key states in the mid-Atlantic and the Midwest where he won the election last time because these job losses are all coming in manufacturing, and that's why I think you're seeing Secretary Snow going over and jaw boning the Chinese and why we've got this exciting news about a new undersecretary of commerce for manufacturing. I mean, the president is aware of this problem, and he's trying to show he cares about it.

ROBERT LENZNER, "FORBES": I think he's in worse trouble over Iraq, and I think that the economy, if it keeps growing and the stock market keeps going up, is going to bail him out.

KING: Worse trouble on Iraq. He will speak to the American people Sunday night. What does he have to tell them?

STEVE SHEPARD, "BUSINESSWEEK": Well, he has to tell them that this is going to be long and arduous but we have to stay the course and we have a plan. And he has to explain how he's going to get other people to come in and help share the cost and help share the burden of rebuilding Iraq, which has been much, much more difficult than he ever indicated or than anybody was led to believe.

KING: Let's stay on Iraq for one second. Let me interrupt for one second. I just want a little bit of sound from Secretary Powell today. The administration goes back to the United Nations. It now says bless a multinational force, call on member states to send in troops so you can bring some Americans home in time. The administration says this is not a change. Secretary Powell puts it this way.

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE: It's important for us to come together as an international community. And this is a further step in that direction. It's an evolutionary step because it's a resolution I've been talking about for weeks. We just finally found it was time.

(END VIDEO CLIP)

KING: Gentlemen, evolution or about-face?

SHEPARD: It's an evolution for him, but it's an about-face for the rest of the administration, I think. KIRKLAND: Yes, the French and the Germans clearly see it as an about-face, or they want to see more of an about-face. I mean, one of my questions, I was going to say, about what the president says on Sunday is I don't know if he has the answers yet to how he's -- what his plan's going to be because it seems to me he's going to have to give something in terms of our power over the military, over the civilian administration, in order to get these allies of ours to cooperate, and I haven't quite figured out how they're doing that yet.

LENZNER: One way or another I think we need more people in there, whether they're American troops, whether they're other national troops under the flag of the U.N. It's clear we don't have enough people in there to protect all the soft places and everyone who's in there, and also to get -- make it safe for the infrastructure to be rebuilt.

KING: Let's go back to the economy for a minute. A lot of talk here in New York this week -- I'm a visitor for the week -- about Dick Grasso, this $140 million salary, the bonus plan he gets. This a New York story, or is this something that out in the country maybe caused a little outrage and you think we're going to have...

LENZNER: Well, he's got it on the cover. So...

SHEPARD: Oh, it's a national story. There's no question about it, even in Washington.

Look, this is an outrageous amount of money, and he's got a lot of answering to do. The New York Stock Exchange is not just another Wall Street company. It's got a public regulatory job to do. And you know, those kinds of salaries are just not...

LENZNER: It's not a profitmaking institution. There's going to be a big force to roll back that $140 million. Grasso's in trouble, I'd say.

KIRKLAND: It's a modest profitmaking institution. But there's the shocking thing -- last year Grasso's salary and bonus was 43 percent of the NYSE's profits. You know, we got upset about the airline guys looking a little greedy. That just doesn't -- that's not going to fly. He's either going to give it back or somebody's going to make him give some of it out, I think.

SHEPARD: They presented themselves as the gold standard for governance and set rules for listing on the New York Stock Exchange, and then it turns out that they have a lot of the sins of private corporations: excessive compensations, conflicts of interests and all the rest of it, so, you know, he's got big problems here.

LENZNER: (UNINTELLIGIBLE) to the whole nation, not just to New York and Wall Street.

KIRKLAND: And by the way, your man in Washington, Mr. Donaldson, seems to have a strong feeling something needs to change, and he's got a position to make that happen.

KING: Sure does, doesn't he?

One of the things a guy from Washington learns when he spends a week in New York is this city speaks its own language. And there's diplomatic language in Washington. New York's very blunt. I'm walking back to the hotel the other night -- I want to show you something if you watch this screen. I'm walking back to the hotel, and you say, "What's the state of the economy?" Well, this guy's having a sale, and that's how he puts it. I won't say the words myself. We stopped in to ask him just what he meant, and let's listen just a second.

(BEGIN VIDEO CLIP)

TONY ASHMAWI, GENERATIONS MENSWEAR: He said you should put "The Economy Sucks Sale" because it's just not your business, it's the whole economy overall. And I said, Yes, that's true. And he talked about it, he said, you know, I live in California. You know, everything sucks, and he goes your sign is a sign of the times.

(END VIDEO CLIP)

KING: A sign of the times or a guy just looking to draw a few people in. Is it that bad?

SHEPARD: No, it's not that bad, and it's getting better. And the irony for Bush will be that he may suffer more from Iraq than he does from the economy because the economy's getting better real fast, and those jobs -- jobless numbers which are so horrific are going to get better by the end of the year, certainly by the early part of next year.

We're going to grow in the last half of this year by 4 1/2 even 5 percent. Those kind of growth rates are going to create jobs.

Not a lot of jobs, though. Not necessarily...

Over time.

You've got to separate the politics from the economics...

KING: You saying, enough to get him reelected?

LENZNER: I'm not sure about that.

The irony of it is since the jobs have been lost the profits of the companies are going up because of productivity, very high productivity. So that's good for the stock market, which is making the people who own the stocks feel richer except that we haven't created the jobs yet.

KIRKLAND: And I go back to my point. It does matter where those jobs are lost. Elections are won, as we learned in 2000, state by state, and the president needs some of those swing states where they're hurting the most, even if the overall number's down to 5.9 percent or 5.8 percent or something, if the k jobs are still -- he may have a political problem. SHEPARD: We do have to separate the politics from the economics. The economy is doing better even though....

KING: Something Washington's incapable of.

KIRKLAND: Everything's politics.

KING: Let's go -- the creative merchant there with the colorful sign outside mentioned one of his customers from California. Let's spend a minute on that. The recall race. Many people who watch it from afar say it's a circus, but this is a big state.

California, 55 electoral votes, a giant economy. What's your sense of the race out there and just thoughts, whether you want to talk about the politics of it, the economy of it, Arnold.

SHEPARD: Well, I don't know -- I don't have a really good feel of whether the recall's going to get Gray Davis out of there or not. But if he does, Arnold's obviously got a very good chance. How this affects Bush is very hard to read.

LENZNER: Well, I say that whoever wins the economic problems of California aren't going to be solved right away and it's going to take a good long time. But if Schwarzenegger wins, it's going to help Bush, I would think, in the campaign swing California to the Republicans.

KIRKLAND: California is a part of where it is because it got addicted to stock option money from the technology boom, and they spent money they didn't have, and it worries me to see us potentially repeating that error nationally. But that's a longer-term story.

KING: A longer-term story. We shall see how that goes. Thank you. Steve Shepherd, Robert Lenzner, Rik Kirkland. Thank you very much. Lou will be back in this comfortable chair for you next weak.

This story we love tonight. Two men in South Korea are under arrest for allegedly digging a tunnel into a U.S. army base in Seoul. Authorities say they weren't after weaponry or national secrets but beer.

The men opened a coffee shop next to the base and allegedly dug a tunnel linking it to a storage area at the base more than 60 feet away. Authorities say the suspects made off with thousands of cases of beer and wine before they were caught.

Those men allegedly sold all that on the black market, earning more than $1 1/2 million. Authorities say there's no evidence any soldiers were involved in the plot.

And a reminder now to vote in tonight's poll. How do you judge the strength of the economy? By the unemployment rate? The level of the Dow? Or the level of your 401(k)? We want to hear from you. Cast your vote at CNN.com/lou. We'll bring you the results a little later in the show. And when we return, the results of that poll, and heroes, our feature series on American troops returning from the front lines and adjusting to life on the home front. Tonight, Casey Wian shares one soldier's story.

(COMMERCIAL BREAK)

KING: And now the results of tonight's poll question. How do you judge the strength of the economy? Eight-eight percent of you said the unemployment rate; 6 percent said the level of the Dow; and 7 percent said the level of your 401(k).

And finally tonight, our weekly feature, "Heroes." U.S. soldiers returning home from service in Iraq. Our hero this week, Master Sergeant Catherine Taylor of the 3rd Infantry Division, based in Fort Stewart, Georgia. The 18-year army veteran left a sick husband to go to war in Iraq. She returned to face an even bigger enemy. Casey Wian reports.

(BEGIN VIDEOTAPE)

CHRIS TAYLOR, HUSBAND: Another beautiful day in paradise, huh?

CASEY WIAN, CNN CORRESPONDENT (voice-over): Sergeant Catherine Taylor enjoys breakfast with her husband, Chris, the their home near Fort Stewart, Georgia, a world away from the battlefield and Iraq, but still fighting a war on the home front.

MASTER SGT. CATHERINE TAYLOR, 3RD INFANTRY DIVISION: Well, I knew when I had deployed in January that Chris was stabilized and needed the liver transplant.

During the period of time I was gone he had a liver biopsy performed. I understood from him that everything was fine from that biopsy. Unbeknownst to me, it was not. And the doctors actually found a spot of cancer in his liver. Well, Chris and my leaders decided that they were going to keep that from me so that I could continue to focus on my job over there.

We had moved to a place that we named Dogwood. It was a steel factory just south of Baghdad. And we had set up our operation in there about almost a week before I had found out.

One evening, it was pretty late at night, I managed to get an e- mail message in my e-mail up and saw that Chris had gone through that biopsy and that the results were that they had found some cancer.

I was hysterical. Truly. I mean, I lost it. It was the first time I had broke down during the operation. And it just hit me, I was not prepared for it. I didn't have this, you know, emotional wall up at the moment. My guard was dropped. And it hit me like a ton of bricks.

WIAN: In the army, Sergeant Taylor analyzes troop strength, making sure each unit has the manpower it needs to get its job done. She made an emergency exit from Baghdad in April, and since then she's been watching her husband's strength, making sure he gets the treatment he needs.

CATHERINE TAYLOR: Well, at first I was telling Chris don't breathe, don't move, and I still do that every once in a while. You know, I'm trying to protect him.

WIAN: Chris Taylor is glad his wife's back home but won't let his health get in the way of her military career. Sergeant Taylor is still on the job each day and will be eligible to retire in two years. She plans to stay in the army at least that long, continuing a day-to- day battle on two very different fronts.

CHRIS TAYLOR: You know, when you're a military family, you've got to support your spouse because I'm not wearing boots now, she is. And she's just -- she's everything to me.

WIAN: Casey Wian, CNN, reporting.

(END VIDEOTAPE)

KING: That's a great story.

And that's our show tonight. Thanks for joining us. My thanks to Lou for letting me fill in this week. And my thanks to Lou for letting me fill in this week. And my thanks to the remarkable team that bring you this program every night. Have a great weekend. Lou will be back on Monday.

From all of us here, good night, from New York.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com



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