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Lou Dobbs Tonight

Americans Drowning in Debt; Bracing For Hurricane Isabel

Aired September 15, 2003 - 18:00   ET

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

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


LOU DOBBS, CNN ANCHOR: Bracing for Isabel. Max Mayfield, director of the National Hurricane Center, will tell us where the most powerful hurricane in a decade is likely to hit.
In Iraq, another American soldier killed. The number of U.S. deaths in Iraq approaches 300. Walter Rodgers reports from Baghdad.

Millions of Americans are drowning in debt, weighed down by massive credit card bills. Bill Tucker reports on the middle-class squeeze.

"Extraordinary Careers" -- we begin a new series of special reports on how to achieve both success and satisfaction in your life. Jim Citrin, co-author of "The Five Patterns of Extraordinary Careers," is our guest.

And tonight, we take a fair and balanced look at politics and the media with comedian, satirist and author Al Franken.

ANNOUNCER: This is LOU DOBBS TONIGHT for Monday, September 15. Here now, Lou Dobbs.

DOBBS: Good evening.

An astonishing day in what is already an extraordinary political campaign. A federal appellate court today ordered officials to stop preparations for California's gubernatorial recall election, that election scheduled to take place October 7. But today, the 9th Circuit Court of Appeals ruled that officials should have more time to replace antiquated voting machines in several California counties.

National correspondent Bob Franken has the story and joins us from Los Angeles -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: You'll remember Laurel and Hardy, who plied their trade out here and talked about a fine mess? Well, Lou, we have one now.

The three-judge panel of the federal appeals court has said that the election must be stopped. But they gave seven days for the inevitable appeals. There will be appeals. One of the parties in the case, an attorney for Ted Costa, who is the personal who began the recall, told CNN just moments ago that his team of attorneys has decided to appeal directly to the U.S. Supreme Court, asking the highest court in the land to stop this lower court ruling, to allow the election to go forward. The reasoning is that there is only three weeks before the election. There is no time to waste time with the normal procedures, meaning the circuit court of appeals, en banc hearing, which would be a larger panel of judges. Now, what these judges ruled in overturning a lower court decision is that the 14th Amendment of the Constitution, which guarantees equal protection, could not be met, because six counties in California, including the six most populous counties, with 44 percent of the state's population, largely disadvantaged the minority, would be using voting machines that had already been declared obsolete, were supposed to be replaced by the March election, which is the next regularly scheduled election.

Therefore, the judges said, the election should be delayed until March, until those voting machines can be replaced, so they have an equal chance of having votes counted in those six counties as the rest of the state. It is very rich constitutional law. The lower court judge, Lou, was appointed by President Ronald Reagan, with an emphasis that usually accompanies that on states' rights. His ruling was, California law trumped.

These are all Democratic appointees, two by former President Clinton, one by President Carton, their ruling, that the federal laws and the federal Constitution took precedence. The irony is that the man who appointed two of these judges, Lou, former President Bill Clinton, was in the state today campaigning for Gray Davis against the recall -- Lou.

DOBBS: And I'm sure, Bob, that all 130 candidates for governor appreciated the irony of Mr. Clinton's presence there in California.

Bob Franken, thank you very much.

B. FRANKEN: Those who knew what the word means, yes.

(LAUGHTER)

DOBBS: Bob, thank you very much. You got me.

The ruling today by the 9th Circuit Court of Appeals in California cited the Supreme Court decision that settled the 2000 presidential election. This particular court has earned a reputation, however, as one of the most liberal appellate courts in the country. In fact, more of its decisions have been reversed by the U.S. Supreme Court than any other circuit.

One of the Republican candidates hoping to replace Governor Davis, state senator Tom McClintock, today called the ruling -- quote -- "an outrageous decision by an outrageous court." This is the same court that found the words "under God" in the Pledge of Allegiance unconstitutional last year.

For more on today's decision and the 9th Circuit Court that made the decision, I'm joined by CNN legal analyst Jeffrey Toobin.

Jeffrey, this decision basically says that the voting machines and the voting process that was used just a year ago to put Gray Davis in the governor's chair is not adequate to remove him from the governor's chair.

JEFFREY TOOBIN, CNN LEGAL ANALYST: And the decision these Democratic judges cite over and over again in their opinion is Bush vs. Gore, the Republicans' favorite decision.

You can tell that they were sort of needling the Republicans by saying, well, you thought Bush vs. Gore was such a good decision. This is what you get. You get Gray Davis' victory in court here today.

DOBBS: Well, this is -- is it really that puerile level that our justices and judges have reached, that there would be tweaking one another, circuit court to U.S. Supreme Court?

TOOBIN: Well, they're only human.

And the political passions surrounding these cases are real. These judges argued -- and the decision has its persuasive aspects -- that the secretary of state of California has certified that punch- card voting is simply unreliable and can't be used anymore.

DOBBS: Wait a minute. Did you say the secretary of state has certified...

TOOBIN: Has said that.

DOBBS: The parallels are becoming overwhelming.

TOOBIN: Oh, it is unbelievable.

The secretary of state of California has said that these machines simply are not reliable, so we are not going to allow them to be used anymore. He, of course, didn't know that there would be an election before March of 2004. This court has said there is not going to be an election before 2004.

DOBBS: Californians have to be just scratching their heads at this particular moment, the 9th Circuit Court making this decision based on Gore/Bush in 2000 before the Supreme Court. Is there any likelihood that the high court will reverse the 9th Circuit Court, one of their very favorite courts?

TOOBIN: It seems unlikely. The Supreme Court term hasn't even started yet. Justice Sandra Day O'Connor, who is the justice responsible for that circuit, as I understand it, isn't even in the country at the moment. There isn't much time.

But this court -- this Supreme Court has not had trouble in the past reversing the 9th Circuit. And you can bet there will be several justices, at least, who will take a hard look at reversing this and putting the election back on for October.

DOBBS: And what is your judgment? Give us your best read of this entire mess. Now, as I understood the ruling in 2000, the Supreme Court said this was a one-time decision.

TOOBIN: Well, that's right.

But they had to operate by certain precedents. And they said recounting votes, using separate standards in the same state, was unconstitutional. That's the holding of Bush vs. Gore. What this court did was to say, the 9th Circuit said today, no, in addition, using different machines to vote within the same state is unconstitutional. It is an expansion of the opinion, but it's not contrary.

And it very hard to know. This is all a new area. The Supreme Court, before Bush vs. Gore, tended to stay away from election controversies.

DOBBS: And we're beginning to learn why.

TOOBIN: Well, that's exactly right. That's what some critics of the decision have said.

Now, will they stay away again? But I hazard -- I'm afraid to guess.

DOBBS: Californians, at this moment -- to put it in something of a Hollywood parlance, Californians are going to be wondering, how do they get out of this particular movie?

TOOBIN: And think about how long this movie is going to be. If this decision stands, we're talking about almost six more months of campaigning on this recall, basically freezing California politics, so nothing will get done. It is hard to think how that benefits anybody.

DOBBS: Can you recall a recall?

TOOBIN: You know, we may find out.

(LAUGHTER)

DOBBS: All right.

Jeffrey Toobin, thank you.

TOOBIN: Thanks.

DOBBS: Later here, we'll have another perspective on this political story and all of its attendant ironies. We'll be joined by Al Franken, political satirist, comedian, author of "Lies and the Lying Liars Who Tell Them: A Fair and Balanced Look at the Right." We will have a fair and balanced discussion with Mr. Franken.

Turning now to Iraq today, terrorists killed another soldier in Baghdad today. The American's deaths brings the number of U.S. soldiers killed in Iraq now to 295. Gunmen also murdered a police chief west of Baghdad. Those killings came on the day Secretary of State Colin Powell ended a two-day visit to Iraq.

Walter Rodgers joins us now from Baghdad -- Walt.

WALTER RODGERS, CNN CORRESPONDENT: Hello, Lou.

Secretary of State Colin Powell ended his two-day visit to Iraq with a reminder of the brutality of the regime of Saddam Hussein, and that, if the United States cannot now find weapons of mass destruction, that indeed Saddam's regime did use them before and against his own people. Powell toured the northern enclaves of Iraq, the Kurdish areas of Iraq, and recalled the Kurds were the minority who were the most brutally persecuted by Saddam Hussein over a long period of time.

It was more than fitting that the secretary of state went to the Kurdish town of Halabjah. Halabjah is where Saddam Hussein's forces gassed, used chemical weapons, killing 5,000 Kurds in 1988. The secretary tried to end his visit on an up beat, but he was dogged by reports of sporadic violence around Iraq, even during his two days here. And he was forced to address that sporadic violence.

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE: Talking to many of my commanders today, our commanders, up in the northern part of the country, they're confident they will be able to handle these remnants of the regime. The problem remains for the most part in the triangle around Baghdad. And we are going after them. We will find them and we will defeat these remnants of the former regime.

(END VIDEO CLIP)

RODGERS: But the remnants of the former regime still struck savagely, even while the secretary of state was here.

This afternoon, in the town of Khaldiya, the police chief of the town was gunned down by unknown assassins. Two of his officers were also killed. And about 24 hours, just about this time a day ago, yet another American soldier was killed, shot by a rocket-propelled grenade while he was on a night patrol. Security sources now say that, within the last 24 hours, there have been upwards of 22 booby trap and roadside bomb and improvised explosive device attacks on coalition forces in the Baghdad area alone -- Lou.

DOBBS: Walt, let me ask you -- go to the heart of this issue. You were there, of course, with the 7th Cav at the height of the combat, as those forces moved toward Baghdad. You are there now.

The issue is the degree of stability, the degree of law and order there. Give us your sense as to what is going on in Baghdad and the nearby environs, as to what the prospects are for stability in that particular area.

RODGERS: It is very difficult to say, Lou.

When you see U.S. soldiers going out in the Baghdad area around the airport, and they're out in their Humvees, a Humvee literally bristles with guns. Each soldier there inside the Humvee has rifles pointing out through open doors. The doors have been removed. There is a machine gun on top. These soldiers are under constant threat of attack and alert.

Is there stability here? Perhaps when U.S. forces are in a given sector or coalition forces are in a given sector, remove those forces from any given sector, particularly in the center of Iraq. That is in the so-called Sunni Muslim triangle, Fallujah, Baghdad, Tikrit. In those areas when there are no U.S. forces, you have incidents like today in Khaldiya, where the police chief was just simply gunned down by assassins.

Without U.S. forces, there is very little law here, there is very little stability. And only when U.S. forces are present and make themselves targets, do we have any semblance of normality -- Lou.

DOBBS: Walt, thank you very much -- Walter Rodgers from Baghdad.

U.S. and government forces in Afghanistan today said that they killed a senior Taliban commander near the border with Pakistan. The commander was among 15 Taliban members killed in overnight fighting. There has been an increase in Taliban attacks in southeastern Afghanistan over the past six weeks.

Training for the war on terror under way in the Coral Sea off Australia. The Navy this weekend began a series of drills to stop and board ships suspected of carrying weapons of mass destruction. The navies of Japan, Australia and France also took part in exercise Specific Protector. North Korea called it a provocation. More drills are expected off Europe later this year.

Still ahead here tonight: bracing for Isabel. Max Mayfield, director of the National Hurricane Center, joins us to tell us when and where Isabel will hit the eastern seaboard.

Exporting America: World trade talks in Mexico end in bitterness and recrimination. Kitty Pilgrim reports on the growing doubts about the relevance of the World Trade organization.

And drowning in debt: how millions of Americans are financing their middle-class lifestyles by running up huge debts.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Still ahead: "Lies and the Lying Liars Who Tell Them." Comedian/satirist Al Franken will join us to talk about his new best- selling book by the same name. We'll hear his take on the Bush administration, a dispassionate and objective review and analysis of his thoughts on patriotism and what he calls the myth of the liberal media.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight, the most powerful Atlantic storm in a decade is speeding toward the Eastern United States, winds now up to 125 miles an hour, sustained. Forecasters say Isabel will probably make landfall near the Outer Banks in North Carolina by Thursday.

Residents there are already boarding up their homes and officials are discussing evacuation plans for the Outer Banks Islands. The governor of Virginia is taking no chances. Tonight, the governor declared a state of emergency in Virginia. He said that hurricane could cause significant flooding, wind damage and even tornadoes, should it hit his state.

The Navy has placed its ships in Norfolk, Virginia, on stand by. The Navy wants those ship and their crews to be ready to deploy from locations away from this storm. The first ships could leave port early tomorrow to avoid Hurricane Isabel. Norfolk is the main base, of course, for the Atlantic Fleet.

Isabel has now been classified a Category 3 hurricane, but it has twice reached the Category 5 threshold. That means winds of 156 miles an hour, sustained winds. The last Category 5 hurricane to hit the United States was Hurricane Andrew. That was 11 years ago. Hurricane Andrew killed 58 people in Florida. It caused more than $26 billion of damage. It was the most destructive natural disaster in American history.

The second most costly hurricane was Hurricane Hugo, which struck North and South Carolina in 1989; 60 people died, $7 billion of damage.

Later in the show, we'll be talking with Max Mayfield of the National Hurricane Center in Miami. He'll have the very latest for us on Isabel, including the latest assessment by the National Hurricane Center as to where Hurricane Isabel will make landfall.

Well, turning to a political storm now, Texas Democrats and Republicans are locked in a battle over congressional redistricting. The GOP wants to redraw district lines. Democrats say that move is nothing more than a power grab. Democrats left the state twice trying to block the legislation. House members took refuge in Oklahoma. Senators took refuge in New Mexico. The senators were back on the floor of the statehouse today, a third special session on the issue. One Democratic senator said this fight is far from over. And there is no evidence to suggest that he is wrong.

South of the border, a weekend breakdown of the World Trade Organization. Talks in Cancun, Mexico, that were supposed to end with a grand agreement on trade among 146 countries instead collapsed. That's become a pattern for the World Trade Organization. It is only one of the reasons that critics say the WTO has outlived its usefulness.

Kitty Pilgrim has the story.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Another debacle for the World Trade Organization, not quite as disastrous as the meeting in Seattle, which dispersed in a cloud of tear gas four years ago. But the 146 countries in Mexico agreed on one thing: It was a no-go.

JOHN CAVANAGH, INSTITUTE FOR POLICY STUDIES: They said, we have to have a new round. We have to have agreement, or we die. We're irrelevant.

And they don't have an agreement, they don't have a new round. And I think it does reduce their relevancy.

PILGRIM: U.S. trade representative Robert Zoellick accused some countries of inflexibility and inflammatory rhetoric. Some say it is an uneven playing field, each country accorded the same vote, despite the fact the major industrialized countries generate most of the world's growth.

ALAN TONELSON, U.S. BUSINESS & INDUSTRY COUNCIL: I don't understand why the United States and the other industrialized countries have coddled them, these developing countries, to the extent that we have, to the extent of making the purpose of the entire round to promote Third World economic development. That's a worthy goal, but that's not free trade.

PILGRIM: There some that question whether the trade group helps any country, rich or poor. In a controversial study by Andrew Rose of Berkeley, the growth of countries is charted before joining the World Trade organization and after. The graph line runs pretty much the same five years before and five years after.

ANDREW ROSE, UNIVERSITY OF CALIFORNIA, BERKELEY: What you see is that, as countries that were outside joined, they don't really experience a big increase in trade. And countries that are inside the system really have the same trade patterns as countries that are outside the system.

(END VIDEOTAPE)

PILGRIM: Many say the climate has become too accusatory.

Now, for example, the United States made concessions so that poor countries could get cheaper versions of patented medicines. Yet that flexibility did very little to deflect criticism over agricultural issues -- Lou.

DOBBS: Of course, one could argue, I think, rather convincingly, that agriculture and medicine should have no relationship, even in a trade context.

PILGRIM: This is the problem. It is so broad, the talks are so broad, 146 countries, each with one vote, trying to hit consensus, it is almost impossible.

DOBBS: Sounds almost like the United Nations.

Kitty, thank you very much -- Kitty Pilgrim.

Coming up next, we begin our look at five Americans whose careers have been nothing short of extraordinary. Tonight: a man who turned his vision for a European style coffee shop into one of the most successful companies and the author of "Five Patterns of Extraordinary Careers." James Citrin joins us.

Al Franken, a comedian, a satirist, he's very serious about what he calls the lies of the right wing. He'll join us to talk about his new book, "Lies and the Lying Liars Who Tell Them: A Fair and Balanced Look at the Right." And we will look forward to that fair and balanced interview.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Hurricane Isabel is rapidly approaching the Eastern United States. The National Hurricane Center is now following its progress with the most sophisticated hurricane tracking technology in the world.

The hurricane center maintains a continuous watch on tropical cyclones in the Eastern Pacific, hurricanes in the Atlantic. Specially equipped aircraft from NOAA and the Air Force Reserve are helping scientists gather Data.

Max Mayfield is the director of the National Hurricane Center. And he joins us now from Miami, Florida.

Max, hanks for being with us. This storm, I know you're updating these reports almost, it seems like every five to 10 minutes. Give us your best guidance as to where Isabel is going to make land.

MAX MAYFIELD, DIRECTOR, NATIONAL HURRICANE CENTER: OK.

Well, Lou, in addition to those recon flights that we have from NOAA and the Air Force flying into the hurricane, since Saturday, we have also been flying the NOAA jet aircraft -- it's a Gulfstream 4 airplane -- and one of the Air Force C-130s, not through the hurricane, but in the environment around the hurricane, to sample the steering currents.

And then all that data gets fed into the computer models to help give us a forecast. So most of the models are very consistent in hitting the hurricane towards the North Carolina coast and then on northward through Pennsylvania and New York, eventually up into Canada. The really important thing here is that this is not only a powerful Category 3 hurricane, but it's a large hurricane.

The tropical storm force winds extend out about 200 miles away from that eye. So what that means is that, at least if we're close on our forecast back here, the storm force winds are likely be getting near the North Carolina coast as early as late Wednesday, probably Wednesday near midnight, and then the center itself near the coast sometime around noon on Thursday. So people really have Tuesday and Wednesday to make their preparations.

DOBBS: Max, how large is the eye of this hurricane? It looks, as you say, huge. MAYFIELD: Yes.

It is varied, but it is kind of averages between 30 and 40 miles in diameter. And that is a large eye. And what that means is, the strong winds are in that eye wall that doughnut around the eye. So that really covers a large area. The hurricane-force winds go out 100 miles in every direction from the eye. So it is going to have a big impact.

This hurricane, if it makes landfall, as a major hurricane, has the potential to cause extensive damage over large sections of the United States, from North Carolina northward.

DOBBS: And this has been twice now a Category 5 hurricane, sustained winds over 156 miles an hour. Is it your sense this hurricane is going to ebb further in strength or there any likelihood here that it will regather its strength?

MAYFIELD: We really don't think it will.

The most likely thing, it may even weaken a little bit more. But the wisest thing to do, everywhere from North Carolina through southern New England, is go ahead and prepare for a major hurricane, for a Category 3 hurricane.

DOBBS: And it is your judgment right now that this hurricane is headed to North Carolina. Is it squarely headed for the Outer Banks Islands?

MAYFIELD: Well, it is right now.

But because it is so large, it will have a real impact all the way up through the DelMarVa and even up to the New Jersey coast and even some impact up into Long Island. But, again, it doesn't take much difference. Just a little difference in that track there and it could easily come on to the DelMarVa Peninsula dead on or a little bit to the left of the track there. We make a five-day forecast every six hours.

We'll likely see some changes. But right now, we're very concerned from North Carolina northward.

DOBBS: Max, thank you very much. Max Mayfield, director of the National Hurricane Center, thanks for being with us.

(CROSSTALK)

DOBBS: Coming up next: Al Franken, author of the best-selling book "Lies and the Lying Liars." We'll tell you who he's talking about. He'll join me to talk about weapons of mass destruction. We'll be talking about tax cuts and partisan politics and a lot more.

And "Extraordinary Careers" -- tonight, we'll take a look at a man who created a company that his father would have wanted to work for. And James Citrin, the co-author of "Five Patterns of Extraordinary Careers," on achieving success and satisfaction in work and your life.

Bill Tucker will report on why millions of us are drowning in billions of dollars in debt, the middle-class squeeze.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: If you're like 90 percent of American families, you or someone in your household has a credit card. And chances are, you don't pay off your entire credit card bill every month. If it sounds familiar, it's because you're not alone. What is changing now is the amount of that credit card debt. It is exploding and it is becoming a national crisis.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

PATRICIA BARONOWSKI, WORKING MOTHER: You have pencils, you have pens. Do you have to get colored pencils?

UNIDENTIFIED MALE: Yes.

BARANOWSKI: And I bought you a three ring binder, no?

UNIDENTIFIED MALE: Yes.

BILL TUCKER, CNNfn CORRESPONDENT (voice-over): This is Patricia Baranowski, single mom, two kids, three-and-a-half jobs, and drowning in debt.

BARANOWSKI: I did what I could raising them by myself. And I kept everything afloat. If it was robbing Peter to pay Paul, paying back the credit cards with income tax, whatever, I had it in tact. And now it's just -- it's out of control.

TUCKER: Patricia's not alone, nor unique when it comes to debt. Millions of Americans increasingly finance their middle class life on credit cards.

UNIDENTIFIED MALE: How do I do it? I'm in debt up to my eyeballs. I can barely pay my finance charges. Somebody help me.

TUCKER: From 1990 through 2001, credit card debt exploded 75 percent to just over $4,100 per family. But there's a problem with that survey by the Keiser Family Foundation. It relied on what people reported they owed. A study by cardweb.com, which tracks credit card data, says the actual amount owed is closer to $8,400, or double what was admitted to in Keiser's report. And that's not cheap debt.

TAMARA DRAUT, ECONOMIC OPPORTUNITY PROGRAM DEMOS: The interest rates on credit cards just really haven't come down in the way that you think they would, like other rates have for auto loans, mortgages. The credit card companies aren't passing these savings on to their customers. TUCKER: While the prime rate has fallen to 4 percent, a level it hasn't seen since 1958, and home mortgage rates for 30-year fixed mortgages fell to just under 5 percent in June, the average credit card interest rate is just over 13 percent, according bankrate.com. And that's before late fees and penalty interest rates, which can push the rate above 20 percent.

DON BLANDIN, AMERICAN SAVINGS EDUCATION COUNCIL: We're headed toward a future where we will have -- we will be carrying so much personal debt that it will destroy all other dreams we might have for others' life stages, like retirement.

TUCKER: Patricia is in debt counseling and working to pay down her debt.

(END VIDEOTAPE)

TUCKER: Banks say rates on credit cards remain high because much of the money they lend is risky and lend they do. Total credit card debt is now $660 billion, according to cardweb.com. Ninety percent of the families in the income range of $50,000 to $99,000 have a credit card. And Lou, 44 percent of them do pay off that entire bill every month.

DOBBS: Bill, thank you very much.

Tonight's poll question, on the decision today by the Ninth Circuit Court of Appeals to postpone the California gubernatorial recall election. The question, "What do you think of that decision to delay the recall? A disruption of the democratic process? Or perhaps a protection of voters' rights?" Cast your vote at cnn.com/lou. We'll have the results later in the show.

Tonight's quote is from the California Congressman who accused the Ninth Circuit Court of hijacking the electoral process. And by the way, the one who started it all off. "A panel of three liberal judges, all appointed by Democrats, are asking us to believe that the voting systems that were used last November to elect Gray Davis aren't good enough for an election to remove him from office." That from Congressman Darrell Issa, Republican of California.

Still ahead here, Starbucks, one of the most valuable consumer brands in the world. Tonight we look at the success of its founder. We'll talk about the qualities of extraordinary leadership with author James Citrin.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: All this week we'll be introducing you to a number of exceptional people, men and women who have found the secret to special careers and special lives.

Tonight, Howard Schultz.

(BEGIN VIDEOTAPE)

HOWARD SCHULTZ, CHAIRMAN, STARBUCKS: Hi, how are you?

DOBBS (voice-over): Howard Schultz is so excited about Starbucks, sometimes he simply can't contain himself.

SCHULTZ: Oh, come on! Now have you had Starbucks coffee before?

UNIDENTIFIED FEMALE: Yes, all the time.

SCHULTZ: You know you're in the original store.

UNIDENTIFIED FEMALE: No.

SCHULTZ: You don't know that?

UNIDENTIFIED FEMALE: No.

SCHULTZ: You didn't know that?

UNIDENTIFIED FEMALE: No.

SCHULTZ: You're in the original Starbucks.

DOBBS: This is the store in Seattle's Pike Place Market that Schultz visited as a European housewares salesman in 1981, a visit that changed his life.

SCHULTZ: I really believe when I saw Starbucks in its original form that this was me, that it had all the makings of something that I could both contribute to and hopefully expand.

DOBBS: At the time, Starbucks was in the whole bean coffee business. A trip to Italy introduced Schultz to the Italian mainstay, the coffee bar.

SCHULTZ: The epiphany for me was that although we were in the coffee business, we had missed the unique relationship of -- and the sense of community in the personalization of coffee by the cup.

DOBBS: Schultz raced back to Seattle to convince his bosses that Starbucks needed to change.

SCHULTZ: Unfortunately it wasn't a very successful meeting.

DOBBS: So Schultz left, opening Il Giornale, a coffee bar based on the Italian tradition. Seventeen months later, he bought Starbucks from his old employers. The oldest son of a struggling working class family from Brooklyn, Schultz wanted to build a different kind of company.

SCHULTZ: My dad was a classic blue collar worker in the '50s and '60s. And he had a series of terrible blue collar jobs. And as a young boy, I saw not only the poor pay associated with that, but it began to fracture his self-esteem. And witnessing that, and all the things that came with it, I wanted to try and build the kind of company that my father never a chance got work for.

DOBBS: To start, employees are called partners. And all who work 20 hours week or more receive full benefits. Part of the benefits package, stock options in the company's bean stock program.

SCHULTZ: What that did is that transformed the company. It really created a level of trust and confidence between the management of the business and everybody else, put everyone on the same page.

UNIDENTIFIED FEMALE: So, in the beginning of the class...

DOBBS: Starbucks also spends more money on training than advertising.

UNIDENTIFIED MALE: The difference between the Starbucks roast and all others...

DOBBS: Classes like this one for employees from around the world imprint the Starbucks mantra.

SCHULTZ: Flavor, body and a perfect cup of coffee is not linked to profitability.

DOBBS: Profitability is not a problem at Starbucks -- more than 7,000 stores in 30 countries. Three to four new stores open every day and 200 new hires report for work every 24 hours, adding to a worldwide staff of 70,000 people.

Ranked as one of the best places to work, and a spot on the Fortune 500, Schultz has a lot to be proud of.

SCHULTZ: There's been a lot of milestones and -- but, again, I must say these are early days. We -- you haven't seen anything yet. Trust me.

(END VIDEOTAPE)

DOBBS: Joining me now, Jim Citrin of Spencer Stewart. He's the co-author of "Five Patterns of Extraordinary Careers."

Jim, good to have you with us.

JAMES CITRIN, DIRECTOR, SPENCER STUART: Great to be here.

DOBBS: The book focuses on five elements that you've identified that are important to finding both success and satisfaction in life.

With Howard Schultz, you focus on finding the right fit.

CITRIN: Yes.

DOBBS: He -- how much luck is involved in that?

CITRIN: Well, Howard's is a great example of finding the right fit, which is one of the five patterns of extraordinary careers. He migrated from a career as a Xerox and housewares salesman to the magic of coffee. In the process, he transformed his own career and society through the creation of Starbucks brand.

But the key for Howard was working in a role that he loves and is placed with natural strengths, with people who he likes and respects, and really doing something that he believes in.

DOBBS: And you have to admit that Howard Schultz also has a unique situation, which is extraordinary profitability and margins that enabled him to create the company that his father, or at least Howard would have liked his father to have worked at.

Do you think enough leaders, business leaders in particular, people with extraordinary careers, do enough for the people who really make the company?

CITRIN: Well, we did three -- we did three years of research into what makes great careers and one of the most important findings was something called benevolent leadership, which is focus on the success of those around you as your own success.

And Howard is the living embodiment of the benevolent leader. He built the company with soul and with morale and all the benefits and the stock options programs has helped actually pay for itself through reduced turnover and greater retention.

DOBBS: And you also talked about personal value. How does one discover that in a -- and particularly in an age that we're living in, where college graduates, the younger side, middle aged workers, either losing jobs or not being able to find them, not being able to achieve the opportunity to get the experience they need?

CITRIN: Well, the key, Lou is to over time be self-aware, find the things you are really great at and then migrate over time into those roles. Howard, for example -- he's in a current role that he is the chief evangelist for Starbucks. He's the international ambassador. But...

DOBBS: Global strategist.

CITRIN: Global strategist is his title. But his -- he actually partners with CEO Orrin Smith, who is a total star CEO. And together, they've built this incredible company.

DOBBS: And the other qualities that you think are most important?

CITRIN: Well, certainly focusing on the success of those around you is a guaranteed success strategy, both at the individual level and the corporate level. And playing to the strengths and the passions.

See -- Howard has a -- he lives coffee. It's a passion. In fact, if you look at where Starbucks is going, as he said in the segment, they're at the early days. The manifestations of the brand and the relationships with their customers are really at the early stages.

DOBBS: As I read your book, I kept thinking of the Chinese aphorism, "If you love your work, you'll never have a job."

CITRIN: It is -- it is truly one of the distinguishing patterns of extraordinarily successful individuals and they really -- they love it. In fact, only one out of 10 working Americans are truly satisfied in their careers, our research showed. But those that do, that is one of the keys to success.

DOBBS: By the end of this week, everyone watching this broadcast will move that up, at least, four or five notches.

CITRIN: That's our goal.

DOBBS: Absolutely.

Jim, thank you very much for being with us, and we'll see you tomorrow night. Jim Citrin.

Tomorrow, our discussion of those five patterns of extraordinary careers continues. We'll take a look at how Shelly Lazarus rose to the top of one of the world's largest adverting agencies. That's tomorrow night. Please join us.

And tonight's thought is on achieving a extraordinary career: "Every calling is great when greatly pursued." Oliver Wendell Holmes.

Coming up next, Al Franken. He's tweaked the nose of the Fox News Channel. He's won. Franken talks about his book "Lies and the Lying Liars Who Tell Them." And we're going to have a dispassionate, objective, frank talk with Mr. Franken next.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Al Franken's new book is No. 1 on "The New York Times" best-seller list. Very impressive. In the book, "Lies and the Lying Liars Who Tell Them," Franken takes on the Bush administration, media bias, Fox News Channel and its -- and Bill O'Reilly.

Al Franken joins us now.

Congratulations on the book. That's terrific.

AL FRANKEN, AUTHOR, "LIES AND THE LYING LIARS WHO TELL THEM": Thank you, lou.

DOBBS: And -- and how much of your success do you owe to Roger Ailes and the Fox News Channel for all these sales?

A. FRANKEN: You know the book "The Tipping Point"?

(LAUGHTER)

DOBBS: I was reading that -- I brought that to Italy to figure out a marketing strategy for my book. And I was reading in bed, I fell asleep thinking must think of tipping point for book. Next conscious moment, someone in the house came in and said, "Al, you're being sued by Fox." And I said, "Good. "

DOBBS: That's amazing.

Roger Ailes, who is a very bright media...

A. FRANKEN: That's what I used to think.

(LAUGHTER)

DOBBS: This seems to be a significant departure for him.

A. FRANKEN: Yes.

DOBBS: And I think probably the last thing he'd want to do is benefit you.

But you take on the right wing, as you call it, and President Bush, the Republican Party.

A. FRANKEN: Right, well the media and..

DOBBS: ...and the media...

A. FRANKEN: and the right wing.

DOBBS: And -- and (UNINTELLIGIBLE) absolutely justified. A couple things I don't. That's the way it works here in America, I think.

But you particularly, you said -- talking about the 2000 election -- you said you think there was a conspiracy to knock down Al Gore. You talk about the...

A. FRANKEN: No, I didn't say that, actually.

DOBBS: You didn't say that?

A. FRANKEN: I don't -- I don't use the word conspiracy at all.

DOBBS: You didn't say vast conspiracy?

A. FRANKEN: No, nor did I put -- I've used the word vast a lot in the book because...

DOBBS: Did you have conspiracy anywhere?

A. FRANKEN: No.

(LAUGHTER)

A. FRANKEN: Because Bush said, by far, a vast majority of my tax cut goes to those at the bottom, which I point out was a huge lie.

DOBBS: Yes.

A. FRANKEN: So I use the word vast a lot, but I don't say there was a conspiracy. I say actually that there are biases in the media, in the mainstream media, including pack mentality and there was a pack mentality to say that Al Gore got a lot more negative coverage because of this pack mentality that he is an exaggerator and stuff.

DOBBS: You don't think he was an exaggerator?

A. FRANKEN: No, I don't think anymore more than anyone else. And I think he got hit for things that -- I think, for example, the right wing, the mainstream media, kept doing this mythology of "I invented the Internet." He never said that. The thing about Love Canal was a perfectly...

DOBBS: Students standing in Florida classrooms because it was overcrowded...

A. FRANKEN: That day they were.

DOBBS: On that day they were. They were remodeling the classroom. That was hardly the spirit of the metaphor.

A. FRANKEN: OK.

DOBBS: You and I are in the debate. I'm hear to listen to -- humor me.

A. FRANKEN: Listen to me. In that same debate, in that first debate, he was hit on that and he was hit on the James Lee Witt thing.

DOBBS: Right.

A. FRANKEN: (UNINTELLIGIBLE). In that same debate, Bush said by far a vast majority of the help -- and he was referring to his tax cut -- goes to those at the bottom. Gore was hit for saying that I went down to Texas with James Lee Witt to a disaster down there. He didn't go that disaster with James Lee Witt...

(CROSSTALK)

DOBBS: ...Bush also said that Gore was outspending him. Bush was outspending Gore. I mean, the desymboling (ph), if you will, or mistakes, go on both sides.

A. FRANKEN: But the idea of -- by far -- but what I'm saying is Gore got hit.

DOBBS: Right.

A. FRANKEN: Bush didn't. So if you're talking -- if you're saying there's a liberal bias in the media, why did Gore get hit for the James Lee Witt thing...

DOBBS: I'm not saying there's a liberal bias to the media. You were saying there is a right wing biased in the media.

A. FRANKEN: OK. I'm saying the mainstream media there is not -- asking whether there is a liberal or conservative bias in the mainstream media is asking whether the al Qaeda uses too much oil and they're homeless. It's the wrong question, there are other biases. I say there is a right wing media which is Fox, which is the "Wall Street Journal" editorial page, which is Rush Limbaugh and the entire talk radio circuit, the books by (UNINTELLIGIBLE) -- and all that stuff. And they are biased and they have an agenda and they cheat and lie.

DOBBS: I thought it was interesting, you said that you didn't think that the "New York Times" was particularly liberal in its views. What about their editorial page?

A. FRANKEN: It is liberal editorial page but it is not on the same...

DOBBS: Is the "Wall Street Journal" news page, is it liberal?

A. FRANKEN: No, I don't think the "Wall Street Journal" -- I think the Wall Street Journal is a very good news organization but I think their editorial page is different in tone and I think it's different in agenda. It is much more conservative than "New York Times" is liberal. And I think that -- and Michael Tomasky did a study of this of the Shorenstein Center. And showed that, for example, on Zoe Baird -- I'll do a different subject, on the task force, on Hillary Clinton's task force, the "New York Times" went after her for being secret and so did the "Wall Street Journal." On Cheney's energy task force, "New York Times" is consistent they went after him, the "Wall Street Journal" didn't. And the study that Tomasky did, shows time after time much more doctoring in the "Wall Street Journal" in the editorial page. And the tone is incredibly different. They were publishing things -- they were publishing the way to get a hold of the Clinton chronicles on the editorial page which was a tape put up by Jerry Falwell to show that -- that said that Clinton was a murderer and a cocaine addict. And That was on the editorial page of the "Wall Street Journal." Now to compare that to the editorial page in the "New York Times," I'm sorry, there is a huge difference.

DOBBS: There is a huge difference. I would say you're right, one is liberal, one is conservative.

A. FRANKEN: No, no. That's not the difference.

DOBBS: It's not the difference you're referring to, but it's the one I am. And that distinction, I think is interesting. Because we have become a nation where there is -- and this is great fun and it is satire and political...

A. FRANKEN: Yes, we're having tremendous fun here. I said we are having tremendous fun here. No, no I like this.

DOBBS: But the fact of the matter is we've become a country where -- I really believe this, we have become so polarized and people are making every effort it seems to further fracture the country, rather than look at the reality. The reality is we have idiots on the left, we have idiots on the right. Neither party has all of the answers. Yet we continue to behave almost as though each side was granted some sort of original charter to the correct view and perspective.

A. FRANKEN: You and I are in total agreement on that. The difference between my book and those book on the right is that mine is based on the truth. And that's what I'm trying to do. I'm trying to debunk the people like O'Reilly, like Sean Hannity, like Ann Coulter, like pretty much the whole landscape at Fox, who. And so I don't -- I don't think I'm polarizing people.

I think I'm bringing people together and I'm getting e-mails from conservatives who enjoy my book and who are saying it changes their perspective, it changes the way they look at the news. I believe that the truth is the most important thing. And that's what I'm doing. That's why I call "Lies and The Lying Liars Who Tell Them: A Fair and Balanced Look at the Right." And I'm doing a fair and balanced look. I really am.

DOBBS: And we appreciate you being fair and balanced.

A. FRANKEN: Thank you.

DOBBS: Although I think the balanced thing can be overdone.

A. FRANKEN: I think it is important to be fair...

DOBBS: You're supposed to be making the jokes. Not me. We are going to have you back. Will you come back?

A. FRANKEN: We're both doing a bad job then.

DOBBS: Come back and we'll both have a better...

A. FRANKEN: I'll do -- I want do that.

DOBBS: Al, thanks a lot. Al Franken, good to have you here.

Coming up next, outrage at the New York Stock Exchange it is no joke about Chairman Richard Grasso's multi million dollar pay package.

Christine Romans will have the latest on that controversy and the market, of course.

That and a great deal more still ahead. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of our poll question, what do you think of the decision to delay the California Recall? Sixteen percent of you said it's disruption of the democratic process, 84 percent of protection of voter's right.

Of Wall Street stocks today, finished the day lower for the first time in three sessions. Christine Romans is here to tell us about a Dow that fell nearly 23 points, a Nasdaq that was off 9. Quite a day.

CHRISTINE ROMANS, CNNfn CORRESPONDENT: Quite a day. And the focus on mutual funds again today, Lou, investors wondering what to do for first time. Morning Star issued a blanket avoid warning for four families of funds. Bank of America fund, Janus, Strong and Bank One's mutual fund. And Morningstar made a few exceptions, Marsico funds (UNINTELLIGIBLE) that are owned by Bank of America but managed separately from B of A, and Janus Small and Mid Cape Value funds are managed separately from Janus' Denver operation .

Christine Benz says the relationship between a mutual fund and investor is built on trust. She's waiting, Lou, to see if these companies are trustworthy as we know Elliott Spitzer is investigating them for preferential treatment to their hedge fund.

DOBBS: And Dick Grasso.

ROMANS: Tense. Another tense day at the New York Stock Exchange. In fact, one source very close to the 6th floor telling me today, Christine it doesn't look like this over yet by any stretch of the imagination. A former chairmen of the NYSE today, James Needham calling for the resignation of the entire board. He said he likes Dick Grasso but he likes public interest and public trust more. And that 1,200 pages of documents the NYSE sent to the SEC, they really didn't tell quite a tale. I was looking at those again today, in 1991, then chairmen, Bill Donaldson, got a special chairmen bonus of $200,000 for helping exchange earn $11.8 million that year. Ten years later, with Dick Grasso at the helm, a special chairman bonus was $5 million, $5 million. And the earnings were just about three times what they were banking in the 1991.

DOBBS: My calculation that would be an overpayment on a straight-line extrapolation of about $4.4 million.

ROMANS: That doesn't count all the other bonuses wrapped in there, too.

DOBBS: Christine, thanks.

Let's take a look at some of "Your Thoughts." Many of you wrote in about my interview with George Andrews a former Marine who is in danger of losing his home because he flies an American flag in his front yard.

Wilson Hulley, of Chevy Chase, Maryland said, "The flagpole incident is the example of the depth of stupidity that our legal process has done. Flying our American flag is the right of every American wherever and whenever this American wants to fly it."

Clayton Taylor, of Fort Worth, Texas disagreed, "This man," he says, "bought a home in a community with deed restrictions that I'm sure he was aware of when he moved in. This has nothing to do with patriotism. This person is allowed to display an American flag, he just can't do it on a 20 foot flagpole."

Charlie Roberts, of Eagle, Idaho says, "My neighbors complained that my flag was lighted. My homeowners association backed me and the flag proudly waves high with a U.S. Marine Corps Globe and anchor flying right below Old Glory."

We love hearing from send us "Your Thoughts" at loudobbs@cnn.com.

That's our show for tonight. Thanks for being with us. For all 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







Aired September 15, 2003 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: Bracing for Isabel. Max Mayfield, director of the National Hurricane Center, will tell us where the most powerful hurricane in a decade is likely to hit.
In Iraq, another American soldier killed. The number of U.S. deaths in Iraq approaches 300. Walter Rodgers reports from Baghdad.

Millions of Americans are drowning in debt, weighed down by massive credit card bills. Bill Tucker reports on the middle-class squeeze.

"Extraordinary Careers" -- we begin a new series of special reports on how to achieve both success and satisfaction in your life. Jim Citrin, co-author of "The Five Patterns of Extraordinary Careers," is our guest.

And tonight, we take a fair and balanced look at politics and the media with comedian, satirist and author Al Franken.

ANNOUNCER: This is LOU DOBBS TONIGHT for Monday, September 15. Here now, Lou Dobbs.

DOBBS: Good evening.

An astonishing day in what is already an extraordinary political campaign. A federal appellate court today ordered officials to stop preparations for California's gubernatorial recall election, that election scheduled to take place October 7. But today, the 9th Circuit Court of Appeals ruled that officials should have more time to replace antiquated voting machines in several California counties.

National correspondent Bob Franken has the story and joins us from Los Angeles -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: You'll remember Laurel and Hardy, who plied their trade out here and talked about a fine mess? Well, Lou, we have one now.

The three-judge panel of the federal appeals court has said that the election must be stopped. But they gave seven days for the inevitable appeals. There will be appeals. One of the parties in the case, an attorney for Ted Costa, who is the personal who began the recall, told CNN just moments ago that his team of attorneys has decided to appeal directly to the U.S. Supreme Court, asking the highest court in the land to stop this lower court ruling, to allow the election to go forward. The reasoning is that there is only three weeks before the election. There is no time to waste time with the normal procedures, meaning the circuit court of appeals, en banc hearing, which would be a larger panel of judges. Now, what these judges ruled in overturning a lower court decision is that the 14th Amendment of the Constitution, which guarantees equal protection, could not be met, because six counties in California, including the six most populous counties, with 44 percent of the state's population, largely disadvantaged the minority, would be using voting machines that had already been declared obsolete, were supposed to be replaced by the March election, which is the next regularly scheduled election.

Therefore, the judges said, the election should be delayed until March, until those voting machines can be replaced, so they have an equal chance of having votes counted in those six counties as the rest of the state. It is very rich constitutional law. The lower court judge, Lou, was appointed by President Ronald Reagan, with an emphasis that usually accompanies that on states' rights. His ruling was, California law trumped.

These are all Democratic appointees, two by former President Clinton, one by President Carton, their ruling, that the federal laws and the federal Constitution took precedence. The irony is that the man who appointed two of these judges, Lou, former President Bill Clinton, was in the state today campaigning for Gray Davis against the recall -- Lou.

DOBBS: And I'm sure, Bob, that all 130 candidates for governor appreciated the irony of Mr. Clinton's presence there in California.

Bob Franken, thank you very much.

B. FRANKEN: Those who knew what the word means, yes.

(LAUGHTER)

DOBBS: Bob, thank you very much. You got me.

The ruling today by the 9th Circuit Court of Appeals in California cited the Supreme Court decision that settled the 2000 presidential election. This particular court has earned a reputation, however, as one of the most liberal appellate courts in the country. In fact, more of its decisions have been reversed by the U.S. Supreme Court than any other circuit.

One of the Republican candidates hoping to replace Governor Davis, state senator Tom McClintock, today called the ruling -- quote -- "an outrageous decision by an outrageous court." This is the same court that found the words "under God" in the Pledge of Allegiance unconstitutional last year.

For more on today's decision and the 9th Circuit Court that made the decision, I'm joined by CNN legal analyst Jeffrey Toobin.

Jeffrey, this decision basically says that the voting machines and the voting process that was used just a year ago to put Gray Davis in the governor's chair is not adequate to remove him from the governor's chair.

JEFFREY TOOBIN, CNN LEGAL ANALYST: And the decision these Democratic judges cite over and over again in their opinion is Bush vs. Gore, the Republicans' favorite decision.

You can tell that they were sort of needling the Republicans by saying, well, you thought Bush vs. Gore was such a good decision. This is what you get. You get Gray Davis' victory in court here today.

DOBBS: Well, this is -- is it really that puerile level that our justices and judges have reached, that there would be tweaking one another, circuit court to U.S. Supreme Court?

TOOBIN: Well, they're only human.

And the political passions surrounding these cases are real. These judges argued -- and the decision has its persuasive aspects -- that the secretary of state of California has certified that punch- card voting is simply unreliable and can't be used anymore.

DOBBS: Wait a minute. Did you say the secretary of state has certified...

TOOBIN: Has said that.

DOBBS: The parallels are becoming overwhelming.

TOOBIN: Oh, it is unbelievable.

The secretary of state of California has said that these machines simply are not reliable, so we are not going to allow them to be used anymore. He, of course, didn't know that there would be an election before March of 2004. This court has said there is not going to be an election before 2004.

DOBBS: Californians have to be just scratching their heads at this particular moment, the 9th Circuit Court making this decision based on Gore/Bush in 2000 before the Supreme Court. Is there any likelihood that the high court will reverse the 9th Circuit Court, one of their very favorite courts?

TOOBIN: It seems unlikely. The Supreme Court term hasn't even started yet. Justice Sandra Day O'Connor, who is the justice responsible for that circuit, as I understand it, isn't even in the country at the moment. There isn't much time.

But this court -- this Supreme Court has not had trouble in the past reversing the 9th Circuit. And you can bet there will be several justices, at least, who will take a hard look at reversing this and putting the election back on for October.

DOBBS: And what is your judgment? Give us your best read of this entire mess. Now, as I understood the ruling in 2000, the Supreme Court said this was a one-time decision.

TOOBIN: Well, that's right.

But they had to operate by certain precedents. And they said recounting votes, using separate standards in the same state, was unconstitutional. That's the holding of Bush vs. Gore. What this court did was to say, the 9th Circuit said today, no, in addition, using different machines to vote within the same state is unconstitutional. It is an expansion of the opinion, but it's not contrary.

And it very hard to know. This is all a new area. The Supreme Court, before Bush vs. Gore, tended to stay away from election controversies.

DOBBS: And we're beginning to learn why.

TOOBIN: Well, that's exactly right. That's what some critics of the decision have said.

Now, will they stay away again? But I hazard -- I'm afraid to guess.

DOBBS: Californians, at this moment -- to put it in something of a Hollywood parlance, Californians are going to be wondering, how do they get out of this particular movie?

TOOBIN: And think about how long this movie is going to be. If this decision stands, we're talking about almost six more months of campaigning on this recall, basically freezing California politics, so nothing will get done. It is hard to think how that benefits anybody.

DOBBS: Can you recall a recall?

TOOBIN: You know, we may find out.

(LAUGHTER)

DOBBS: All right.

Jeffrey Toobin, thank you.

TOOBIN: Thanks.

DOBBS: Later here, we'll have another perspective on this political story and all of its attendant ironies. We'll be joined by Al Franken, political satirist, comedian, author of "Lies and the Lying Liars Who Tell Them: A Fair and Balanced Look at the Right." We will have a fair and balanced discussion with Mr. Franken.

Turning now to Iraq today, terrorists killed another soldier in Baghdad today. The American's deaths brings the number of U.S. soldiers killed in Iraq now to 295. Gunmen also murdered a police chief west of Baghdad. Those killings came on the day Secretary of State Colin Powell ended a two-day visit to Iraq.

Walter Rodgers joins us now from Baghdad -- Walt.

WALTER RODGERS, CNN CORRESPONDENT: Hello, Lou.

Secretary of State Colin Powell ended his two-day visit to Iraq with a reminder of the brutality of the regime of Saddam Hussein, and that, if the United States cannot now find weapons of mass destruction, that indeed Saddam's regime did use them before and against his own people. Powell toured the northern enclaves of Iraq, the Kurdish areas of Iraq, and recalled the Kurds were the minority who were the most brutally persecuted by Saddam Hussein over a long period of time.

It was more than fitting that the secretary of state went to the Kurdish town of Halabjah. Halabjah is where Saddam Hussein's forces gassed, used chemical weapons, killing 5,000 Kurds in 1988. The secretary tried to end his visit on an up beat, but he was dogged by reports of sporadic violence around Iraq, even during his two days here. And he was forced to address that sporadic violence.

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE: Talking to many of my commanders today, our commanders, up in the northern part of the country, they're confident they will be able to handle these remnants of the regime. The problem remains for the most part in the triangle around Baghdad. And we are going after them. We will find them and we will defeat these remnants of the former regime.

(END VIDEO CLIP)

RODGERS: But the remnants of the former regime still struck savagely, even while the secretary of state was here.

This afternoon, in the town of Khaldiya, the police chief of the town was gunned down by unknown assassins. Two of his officers were also killed. And about 24 hours, just about this time a day ago, yet another American soldier was killed, shot by a rocket-propelled grenade while he was on a night patrol. Security sources now say that, within the last 24 hours, there have been upwards of 22 booby trap and roadside bomb and improvised explosive device attacks on coalition forces in the Baghdad area alone -- Lou.

DOBBS: Walt, let me ask you -- go to the heart of this issue. You were there, of course, with the 7th Cav at the height of the combat, as those forces moved toward Baghdad. You are there now.

The issue is the degree of stability, the degree of law and order there. Give us your sense as to what is going on in Baghdad and the nearby environs, as to what the prospects are for stability in that particular area.

RODGERS: It is very difficult to say, Lou.

When you see U.S. soldiers going out in the Baghdad area around the airport, and they're out in their Humvees, a Humvee literally bristles with guns. Each soldier there inside the Humvee has rifles pointing out through open doors. The doors have been removed. There is a machine gun on top. These soldiers are under constant threat of attack and alert.

Is there stability here? Perhaps when U.S. forces are in a given sector or coalition forces are in a given sector, remove those forces from any given sector, particularly in the center of Iraq. That is in the so-called Sunni Muslim triangle, Fallujah, Baghdad, Tikrit. In those areas when there are no U.S. forces, you have incidents like today in Khaldiya, where the police chief was just simply gunned down by assassins.

Without U.S. forces, there is very little law here, there is very little stability. And only when U.S. forces are present and make themselves targets, do we have any semblance of normality -- Lou.

DOBBS: Walt, thank you very much -- Walter Rodgers from Baghdad.

U.S. and government forces in Afghanistan today said that they killed a senior Taliban commander near the border with Pakistan. The commander was among 15 Taliban members killed in overnight fighting. There has been an increase in Taliban attacks in southeastern Afghanistan over the past six weeks.

Training for the war on terror under way in the Coral Sea off Australia. The Navy this weekend began a series of drills to stop and board ships suspected of carrying weapons of mass destruction. The navies of Japan, Australia and France also took part in exercise Specific Protector. North Korea called it a provocation. More drills are expected off Europe later this year.

Still ahead here tonight: bracing for Isabel. Max Mayfield, director of the National Hurricane Center, joins us to tell us when and where Isabel will hit the eastern seaboard.

Exporting America: World trade talks in Mexico end in bitterness and recrimination. Kitty Pilgrim reports on the growing doubts about the relevance of the World Trade organization.

And drowning in debt: how millions of Americans are financing their middle-class lifestyles by running up huge debts.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Still ahead: "Lies and the Lying Liars Who Tell Them." Comedian/satirist Al Franken will join us to talk about his new best- selling book by the same name. We'll hear his take on the Bush administration, a dispassionate and objective review and analysis of his thoughts on patriotism and what he calls the myth of the liberal media.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight, the most powerful Atlantic storm in a decade is speeding toward the Eastern United States, winds now up to 125 miles an hour, sustained. Forecasters say Isabel will probably make landfall near the Outer Banks in North Carolina by Thursday.

Residents there are already boarding up their homes and officials are discussing evacuation plans for the Outer Banks Islands. The governor of Virginia is taking no chances. Tonight, the governor declared a state of emergency in Virginia. He said that hurricane could cause significant flooding, wind damage and even tornadoes, should it hit his state.

The Navy has placed its ships in Norfolk, Virginia, on stand by. The Navy wants those ship and their crews to be ready to deploy from locations away from this storm. The first ships could leave port early tomorrow to avoid Hurricane Isabel. Norfolk is the main base, of course, for the Atlantic Fleet.

Isabel has now been classified a Category 3 hurricane, but it has twice reached the Category 5 threshold. That means winds of 156 miles an hour, sustained winds. The last Category 5 hurricane to hit the United States was Hurricane Andrew. That was 11 years ago. Hurricane Andrew killed 58 people in Florida. It caused more than $26 billion of damage. It was the most destructive natural disaster in American history.

The second most costly hurricane was Hurricane Hugo, which struck North and South Carolina in 1989; 60 people died, $7 billion of damage.

Later in the show, we'll be talking with Max Mayfield of the National Hurricane Center in Miami. He'll have the very latest for us on Isabel, including the latest assessment by the National Hurricane Center as to where Hurricane Isabel will make landfall.

Well, turning to a political storm now, Texas Democrats and Republicans are locked in a battle over congressional redistricting. The GOP wants to redraw district lines. Democrats say that move is nothing more than a power grab. Democrats left the state twice trying to block the legislation. House members took refuge in Oklahoma. Senators took refuge in New Mexico. The senators were back on the floor of the statehouse today, a third special session on the issue. One Democratic senator said this fight is far from over. And there is no evidence to suggest that he is wrong.

South of the border, a weekend breakdown of the World Trade Organization. Talks in Cancun, Mexico, that were supposed to end with a grand agreement on trade among 146 countries instead collapsed. That's become a pattern for the World Trade Organization. It is only one of the reasons that critics say the WTO has outlived its usefulness.

Kitty Pilgrim has the story.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Another debacle for the World Trade Organization, not quite as disastrous as the meeting in Seattle, which dispersed in a cloud of tear gas four years ago. But the 146 countries in Mexico agreed on one thing: It was a no-go.

JOHN CAVANAGH, INSTITUTE FOR POLICY STUDIES: They said, we have to have a new round. We have to have agreement, or we die. We're irrelevant.

And they don't have an agreement, they don't have a new round. And I think it does reduce their relevancy.

PILGRIM: U.S. trade representative Robert Zoellick accused some countries of inflexibility and inflammatory rhetoric. Some say it is an uneven playing field, each country accorded the same vote, despite the fact the major industrialized countries generate most of the world's growth.

ALAN TONELSON, U.S. BUSINESS & INDUSTRY COUNCIL: I don't understand why the United States and the other industrialized countries have coddled them, these developing countries, to the extent that we have, to the extent of making the purpose of the entire round to promote Third World economic development. That's a worthy goal, but that's not free trade.

PILGRIM: There some that question whether the trade group helps any country, rich or poor. In a controversial study by Andrew Rose of Berkeley, the growth of countries is charted before joining the World Trade organization and after. The graph line runs pretty much the same five years before and five years after.

ANDREW ROSE, UNIVERSITY OF CALIFORNIA, BERKELEY: What you see is that, as countries that were outside joined, they don't really experience a big increase in trade. And countries that are inside the system really have the same trade patterns as countries that are outside the system.

(END VIDEOTAPE)

PILGRIM: Many say the climate has become too accusatory.

Now, for example, the United States made concessions so that poor countries could get cheaper versions of patented medicines. Yet that flexibility did very little to deflect criticism over agricultural issues -- Lou.

DOBBS: Of course, one could argue, I think, rather convincingly, that agriculture and medicine should have no relationship, even in a trade context.

PILGRIM: This is the problem. It is so broad, the talks are so broad, 146 countries, each with one vote, trying to hit consensus, it is almost impossible.

DOBBS: Sounds almost like the United Nations.

Kitty, thank you very much -- Kitty Pilgrim.

Coming up next, we begin our look at five Americans whose careers have been nothing short of extraordinary. Tonight: a man who turned his vision for a European style coffee shop into one of the most successful companies and the author of "Five Patterns of Extraordinary Careers." James Citrin joins us.

Al Franken, a comedian, a satirist, he's very serious about what he calls the lies of the right wing. He'll join us to talk about his new book, "Lies and the Lying Liars Who Tell Them: A Fair and Balanced Look at the Right." And we will look forward to that fair and balanced interview.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Hurricane Isabel is rapidly approaching the Eastern United States. The National Hurricane Center is now following its progress with the most sophisticated hurricane tracking technology in the world.

The hurricane center maintains a continuous watch on tropical cyclones in the Eastern Pacific, hurricanes in the Atlantic. Specially equipped aircraft from NOAA and the Air Force Reserve are helping scientists gather Data.

Max Mayfield is the director of the National Hurricane Center. And he joins us now from Miami, Florida.

Max, hanks for being with us. This storm, I know you're updating these reports almost, it seems like every five to 10 minutes. Give us your best guidance as to where Isabel is going to make land.

MAX MAYFIELD, DIRECTOR, NATIONAL HURRICANE CENTER: OK.

Well, Lou, in addition to those recon flights that we have from NOAA and the Air Force flying into the hurricane, since Saturday, we have also been flying the NOAA jet aircraft -- it's a Gulfstream 4 airplane -- and one of the Air Force C-130s, not through the hurricane, but in the environment around the hurricane, to sample the steering currents.

And then all that data gets fed into the computer models to help give us a forecast. So most of the models are very consistent in hitting the hurricane towards the North Carolina coast and then on northward through Pennsylvania and New York, eventually up into Canada. The really important thing here is that this is not only a powerful Category 3 hurricane, but it's a large hurricane.

The tropical storm force winds extend out about 200 miles away from that eye. So what that means is that, at least if we're close on our forecast back here, the storm force winds are likely be getting near the North Carolina coast as early as late Wednesday, probably Wednesday near midnight, and then the center itself near the coast sometime around noon on Thursday. So people really have Tuesday and Wednesday to make their preparations.

DOBBS: Max, how large is the eye of this hurricane? It looks, as you say, huge. MAYFIELD: Yes.

It is varied, but it is kind of averages between 30 and 40 miles in diameter. And that is a large eye. And what that means is, the strong winds are in that eye wall that doughnut around the eye. So that really covers a large area. The hurricane-force winds go out 100 miles in every direction from the eye. So it is going to have a big impact.

This hurricane, if it makes landfall, as a major hurricane, has the potential to cause extensive damage over large sections of the United States, from North Carolina northward.

DOBBS: And this has been twice now a Category 5 hurricane, sustained winds over 156 miles an hour. Is it your sense this hurricane is going to ebb further in strength or there any likelihood here that it will regather its strength?

MAYFIELD: We really don't think it will.

The most likely thing, it may even weaken a little bit more. But the wisest thing to do, everywhere from North Carolina through southern New England, is go ahead and prepare for a major hurricane, for a Category 3 hurricane.

DOBBS: And it is your judgment right now that this hurricane is headed to North Carolina. Is it squarely headed for the Outer Banks Islands?

MAYFIELD: Well, it is right now.

But because it is so large, it will have a real impact all the way up through the DelMarVa and even up to the New Jersey coast and even some impact up into Long Island. But, again, it doesn't take much difference. Just a little difference in that track there and it could easily come on to the DelMarVa Peninsula dead on or a little bit to the left of the track there. We make a five-day forecast every six hours.

We'll likely see some changes. But right now, we're very concerned from North Carolina northward.

DOBBS: Max, thank you very much. Max Mayfield, director of the National Hurricane Center, thanks for being with us.

(CROSSTALK)

DOBBS: Coming up next: Al Franken, author of the best-selling book "Lies and the Lying Liars." We'll tell you who he's talking about. He'll join me to talk about weapons of mass destruction. We'll be talking about tax cuts and partisan politics and a lot more.

And "Extraordinary Careers" -- tonight, we'll take a look at a man who created a company that his father would have wanted to work for. And James Citrin, the co-author of "Five Patterns of Extraordinary Careers," on achieving success and satisfaction in work and your life.

Bill Tucker will report on why millions of us are drowning in billions of dollars in debt, the middle-class squeeze.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: If you're like 90 percent of American families, you or someone in your household has a credit card. And chances are, you don't pay off your entire credit card bill every month. If it sounds familiar, it's because you're not alone. What is changing now is the amount of that credit card debt. It is exploding and it is becoming a national crisis.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

PATRICIA BARONOWSKI, WORKING MOTHER: You have pencils, you have pens. Do you have to get colored pencils?

UNIDENTIFIED MALE: Yes.

BARANOWSKI: And I bought you a three ring binder, no?

UNIDENTIFIED MALE: Yes.

BILL TUCKER, CNNfn CORRESPONDENT (voice-over): This is Patricia Baranowski, single mom, two kids, three-and-a-half jobs, and drowning in debt.

BARANOWSKI: I did what I could raising them by myself. And I kept everything afloat. If it was robbing Peter to pay Paul, paying back the credit cards with income tax, whatever, I had it in tact. And now it's just -- it's out of control.

TUCKER: Patricia's not alone, nor unique when it comes to debt. Millions of Americans increasingly finance their middle class life on credit cards.

UNIDENTIFIED MALE: How do I do it? I'm in debt up to my eyeballs. I can barely pay my finance charges. Somebody help me.

TUCKER: From 1990 through 2001, credit card debt exploded 75 percent to just over $4,100 per family. But there's a problem with that survey by the Keiser Family Foundation. It relied on what people reported they owed. A study by cardweb.com, which tracks credit card data, says the actual amount owed is closer to $8,400, or double what was admitted to in Keiser's report. And that's not cheap debt.

TAMARA DRAUT, ECONOMIC OPPORTUNITY PROGRAM DEMOS: The interest rates on credit cards just really haven't come down in the way that you think they would, like other rates have for auto loans, mortgages. The credit card companies aren't passing these savings on to their customers. TUCKER: While the prime rate has fallen to 4 percent, a level it hasn't seen since 1958, and home mortgage rates for 30-year fixed mortgages fell to just under 5 percent in June, the average credit card interest rate is just over 13 percent, according bankrate.com. And that's before late fees and penalty interest rates, which can push the rate above 20 percent.

DON BLANDIN, AMERICAN SAVINGS EDUCATION COUNCIL: We're headed toward a future where we will have -- we will be carrying so much personal debt that it will destroy all other dreams we might have for others' life stages, like retirement.

TUCKER: Patricia is in debt counseling and working to pay down her debt.

(END VIDEOTAPE)

TUCKER: Banks say rates on credit cards remain high because much of the money they lend is risky and lend they do. Total credit card debt is now $660 billion, according to cardweb.com. Ninety percent of the families in the income range of $50,000 to $99,000 have a credit card. And Lou, 44 percent of them do pay off that entire bill every month.

DOBBS: Bill, thank you very much.

Tonight's poll question, on the decision today by the Ninth Circuit Court of Appeals to postpone the California gubernatorial recall election. The question, "What do you think of that decision to delay the recall? A disruption of the democratic process? Or perhaps a protection of voters' rights?" Cast your vote at cnn.com/lou. We'll have the results later in the show.

Tonight's quote is from the California Congressman who accused the Ninth Circuit Court of hijacking the electoral process. And by the way, the one who started it all off. "A panel of three liberal judges, all appointed by Democrats, are asking us to believe that the voting systems that were used last November to elect Gray Davis aren't good enough for an election to remove him from office." That from Congressman Darrell Issa, Republican of California.

Still ahead here, Starbucks, one of the most valuable consumer brands in the world. Tonight we look at the success of its founder. We'll talk about the qualities of extraordinary leadership with author James Citrin.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: All this week we'll be introducing you to a number of exceptional people, men and women who have found the secret to special careers and special lives.

Tonight, Howard Schultz.

(BEGIN VIDEOTAPE)

HOWARD SCHULTZ, CHAIRMAN, STARBUCKS: Hi, how are you?

DOBBS (voice-over): Howard Schultz is so excited about Starbucks, sometimes he simply can't contain himself.

SCHULTZ: Oh, come on! Now have you had Starbucks coffee before?

UNIDENTIFIED FEMALE: Yes, all the time.

SCHULTZ: You know you're in the original store.

UNIDENTIFIED FEMALE: No.

SCHULTZ: You don't know that?

UNIDENTIFIED FEMALE: No.

SCHULTZ: You didn't know that?

UNIDENTIFIED FEMALE: No.

SCHULTZ: You're in the original Starbucks.

DOBBS: This is the store in Seattle's Pike Place Market that Schultz visited as a European housewares salesman in 1981, a visit that changed his life.

SCHULTZ: I really believe when I saw Starbucks in its original form that this was me, that it had all the makings of something that I could both contribute to and hopefully expand.

DOBBS: At the time, Starbucks was in the whole bean coffee business. A trip to Italy introduced Schultz to the Italian mainstay, the coffee bar.

SCHULTZ: The epiphany for me was that although we were in the coffee business, we had missed the unique relationship of -- and the sense of community in the personalization of coffee by the cup.

DOBBS: Schultz raced back to Seattle to convince his bosses that Starbucks needed to change.

SCHULTZ: Unfortunately it wasn't a very successful meeting.

DOBBS: So Schultz left, opening Il Giornale, a coffee bar based on the Italian tradition. Seventeen months later, he bought Starbucks from his old employers. The oldest son of a struggling working class family from Brooklyn, Schultz wanted to build a different kind of company.

SCHULTZ: My dad was a classic blue collar worker in the '50s and '60s. And he had a series of terrible blue collar jobs. And as a young boy, I saw not only the poor pay associated with that, but it began to fracture his self-esteem. And witnessing that, and all the things that came with it, I wanted to try and build the kind of company that my father never a chance got work for.

DOBBS: To start, employees are called partners. And all who work 20 hours week or more receive full benefits. Part of the benefits package, stock options in the company's bean stock program.

SCHULTZ: What that did is that transformed the company. It really created a level of trust and confidence between the management of the business and everybody else, put everyone on the same page.

UNIDENTIFIED FEMALE: So, in the beginning of the class...

DOBBS: Starbucks also spends more money on training than advertising.

UNIDENTIFIED MALE: The difference between the Starbucks roast and all others...

DOBBS: Classes like this one for employees from around the world imprint the Starbucks mantra.

SCHULTZ: Flavor, body and a perfect cup of coffee is not linked to profitability.

DOBBS: Profitability is not a problem at Starbucks -- more than 7,000 stores in 30 countries. Three to four new stores open every day and 200 new hires report for work every 24 hours, adding to a worldwide staff of 70,000 people.

Ranked as one of the best places to work, and a spot on the Fortune 500, Schultz has a lot to be proud of.

SCHULTZ: There's been a lot of milestones and -- but, again, I must say these are early days. We -- you haven't seen anything yet. Trust me.

(END VIDEOTAPE)

DOBBS: Joining me now, Jim Citrin of Spencer Stewart. He's the co-author of "Five Patterns of Extraordinary Careers."

Jim, good to have you with us.

JAMES CITRIN, DIRECTOR, SPENCER STUART: Great to be here.

DOBBS: The book focuses on five elements that you've identified that are important to finding both success and satisfaction in life.

With Howard Schultz, you focus on finding the right fit.

CITRIN: Yes.

DOBBS: He -- how much luck is involved in that?

CITRIN: Well, Howard's is a great example of finding the right fit, which is one of the five patterns of extraordinary careers. He migrated from a career as a Xerox and housewares salesman to the magic of coffee. In the process, he transformed his own career and society through the creation of Starbucks brand.

But the key for Howard was working in a role that he loves and is placed with natural strengths, with people who he likes and respects, and really doing something that he believes in.

DOBBS: And you have to admit that Howard Schultz also has a unique situation, which is extraordinary profitability and margins that enabled him to create the company that his father, or at least Howard would have liked his father to have worked at.

Do you think enough leaders, business leaders in particular, people with extraordinary careers, do enough for the people who really make the company?

CITRIN: Well, we did three -- we did three years of research into what makes great careers and one of the most important findings was something called benevolent leadership, which is focus on the success of those around you as your own success.

And Howard is the living embodiment of the benevolent leader. He built the company with soul and with morale and all the benefits and the stock options programs has helped actually pay for itself through reduced turnover and greater retention.

DOBBS: And you also talked about personal value. How does one discover that in a -- and particularly in an age that we're living in, where college graduates, the younger side, middle aged workers, either losing jobs or not being able to find them, not being able to achieve the opportunity to get the experience they need?

CITRIN: Well, the key, Lou is to over time be self-aware, find the things you are really great at and then migrate over time into those roles. Howard, for example -- he's in a current role that he is the chief evangelist for Starbucks. He's the international ambassador. But...

DOBBS: Global strategist.

CITRIN: Global strategist is his title. But his -- he actually partners with CEO Orrin Smith, who is a total star CEO. And together, they've built this incredible company.

DOBBS: And the other qualities that you think are most important?

CITRIN: Well, certainly focusing on the success of those around you is a guaranteed success strategy, both at the individual level and the corporate level. And playing to the strengths and the passions.

See -- Howard has a -- he lives coffee. It's a passion. In fact, if you look at where Starbucks is going, as he said in the segment, they're at the early days. The manifestations of the brand and the relationships with their customers are really at the early stages.

DOBBS: As I read your book, I kept thinking of the Chinese aphorism, "If you love your work, you'll never have a job."

CITRIN: It is -- it is truly one of the distinguishing patterns of extraordinarily successful individuals and they really -- they love it. In fact, only one out of 10 working Americans are truly satisfied in their careers, our research showed. But those that do, that is one of the keys to success.

DOBBS: By the end of this week, everyone watching this broadcast will move that up, at least, four or five notches.

CITRIN: That's our goal.

DOBBS: Absolutely.

Jim, thank you very much for being with us, and we'll see you tomorrow night. Jim Citrin.

Tomorrow, our discussion of those five patterns of extraordinary careers continues. We'll take a look at how Shelly Lazarus rose to the top of one of the world's largest adverting agencies. That's tomorrow night. Please join us.

And tonight's thought is on achieving a extraordinary career: "Every calling is great when greatly pursued." Oliver Wendell Holmes.

Coming up next, Al Franken. He's tweaked the nose of the Fox News Channel. He's won. Franken talks about his book "Lies and the Lying Liars Who Tell Them." And we're going to have a dispassionate, objective, frank talk with Mr. Franken next.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Al Franken's new book is No. 1 on "The New York Times" best-seller list. Very impressive. In the book, "Lies and the Lying Liars Who Tell Them," Franken takes on the Bush administration, media bias, Fox News Channel and its -- and Bill O'Reilly.

Al Franken joins us now.

Congratulations on the book. That's terrific.

AL FRANKEN, AUTHOR, "LIES AND THE LYING LIARS WHO TELL THEM": Thank you, lou.

DOBBS: And -- and how much of your success do you owe to Roger Ailes and the Fox News Channel for all these sales?

A. FRANKEN: You know the book "The Tipping Point"?

(LAUGHTER)

DOBBS: I was reading that -- I brought that to Italy to figure out a marketing strategy for my book. And I was reading in bed, I fell asleep thinking must think of tipping point for book. Next conscious moment, someone in the house came in and said, "Al, you're being sued by Fox." And I said, "Good. "

DOBBS: That's amazing.

Roger Ailes, who is a very bright media...

A. FRANKEN: That's what I used to think.

(LAUGHTER)

DOBBS: This seems to be a significant departure for him.

A. FRANKEN: Yes.

DOBBS: And I think probably the last thing he'd want to do is benefit you.

But you take on the right wing, as you call it, and President Bush, the Republican Party.

A. FRANKEN: Right, well the media and..

DOBBS: ...and the media...

A. FRANKEN: and the right wing.

DOBBS: And -- and (UNINTELLIGIBLE) absolutely justified. A couple things I don't. That's the way it works here in America, I think.

But you particularly, you said -- talking about the 2000 election -- you said you think there was a conspiracy to knock down Al Gore. You talk about the...

A. FRANKEN: No, I didn't say that, actually.

DOBBS: You didn't say that?

A. FRANKEN: I don't -- I don't use the word conspiracy at all.

DOBBS: You didn't say vast conspiracy?

A. FRANKEN: No, nor did I put -- I've used the word vast a lot in the book because...

DOBBS: Did you have conspiracy anywhere?

A. FRANKEN: No.

(LAUGHTER)

A. FRANKEN: Because Bush said, by far, a vast majority of my tax cut goes to those at the bottom, which I point out was a huge lie.

DOBBS: Yes.

A. FRANKEN: So I use the word vast a lot, but I don't say there was a conspiracy. I say actually that there are biases in the media, in the mainstream media, including pack mentality and there was a pack mentality to say that Al Gore got a lot more negative coverage because of this pack mentality that he is an exaggerator and stuff.

DOBBS: You don't think he was an exaggerator?

A. FRANKEN: No, I don't think anymore more than anyone else. And I think he got hit for things that -- I think, for example, the right wing, the mainstream media, kept doing this mythology of "I invented the Internet." He never said that. The thing about Love Canal was a perfectly...

DOBBS: Students standing in Florida classrooms because it was overcrowded...

A. FRANKEN: That day they were.

DOBBS: On that day they were. They were remodeling the classroom. That was hardly the spirit of the metaphor.

A. FRANKEN: OK.

DOBBS: You and I are in the debate. I'm hear to listen to -- humor me.

A. FRANKEN: Listen to me. In that same debate, in that first debate, he was hit on that and he was hit on the James Lee Witt thing.

DOBBS: Right.

A. FRANKEN: (UNINTELLIGIBLE). In that same debate, Bush said by far a vast majority of the help -- and he was referring to his tax cut -- goes to those at the bottom. Gore was hit for saying that I went down to Texas with James Lee Witt to a disaster down there. He didn't go that disaster with James Lee Witt...

(CROSSTALK)

DOBBS: ...Bush also said that Gore was outspending him. Bush was outspending Gore. I mean, the desymboling (ph), if you will, or mistakes, go on both sides.

A. FRANKEN: But the idea of -- by far -- but what I'm saying is Gore got hit.

DOBBS: Right.

A. FRANKEN: Bush didn't. So if you're talking -- if you're saying there's a liberal bias in the media, why did Gore get hit for the James Lee Witt thing...

DOBBS: I'm not saying there's a liberal bias to the media. You were saying there is a right wing biased in the media.

A. FRANKEN: OK. I'm saying the mainstream media there is not -- asking whether there is a liberal or conservative bias in the mainstream media is asking whether the al Qaeda uses too much oil and they're homeless. It's the wrong question, there are other biases. I say there is a right wing media which is Fox, which is the "Wall Street Journal" editorial page, which is Rush Limbaugh and the entire talk radio circuit, the books by (UNINTELLIGIBLE) -- and all that stuff. And they are biased and they have an agenda and they cheat and lie.

DOBBS: I thought it was interesting, you said that you didn't think that the "New York Times" was particularly liberal in its views. What about their editorial page?

A. FRANKEN: It is liberal editorial page but it is not on the same...

DOBBS: Is the "Wall Street Journal" news page, is it liberal?

A. FRANKEN: No, I don't think the "Wall Street Journal" -- I think the Wall Street Journal is a very good news organization but I think their editorial page is different in tone and I think it's different in agenda. It is much more conservative than "New York Times" is liberal. And I think that -- and Michael Tomasky did a study of this of the Shorenstein Center. And showed that, for example, on Zoe Baird -- I'll do a different subject, on the task force, on Hillary Clinton's task force, the "New York Times" went after her for being secret and so did the "Wall Street Journal." On Cheney's energy task force, "New York Times" is consistent they went after him, the "Wall Street Journal" didn't. And the study that Tomasky did, shows time after time much more doctoring in the "Wall Street Journal" in the editorial page. And the tone is incredibly different. They were publishing things -- they were publishing the way to get a hold of the Clinton chronicles on the editorial page which was a tape put up by Jerry Falwell to show that -- that said that Clinton was a murderer and a cocaine addict. And That was on the editorial page of the "Wall Street Journal." Now to compare that to the editorial page in the "New York Times," I'm sorry, there is a huge difference.

DOBBS: There is a huge difference. I would say you're right, one is liberal, one is conservative.

A. FRANKEN: No, no. That's not the difference.

DOBBS: It's not the difference you're referring to, but it's the one I am. And that distinction, I think is interesting. Because we have become a nation where there is -- and this is great fun and it is satire and political...

A. FRANKEN: Yes, we're having tremendous fun here. I said we are having tremendous fun here. No, no I like this.

DOBBS: But the fact of the matter is we've become a country where -- I really believe this, we have become so polarized and people are making every effort it seems to further fracture the country, rather than look at the reality. The reality is we have idiots on the left, we have idiots on the right. Neither party has all of the answers. Yet we continue to behave almost as though each side was granted some sort of original charter to the correct view and perspective.

A. FRANKEN: You and I are in total agreement on that. The difference between my book and those book on the right is that mine is based on the truth. And that's what I'm trying to do. I'm trying to debunk the people like O'Reilly, like Sean Hannity, like Ann Coulter, like pretty much the whole landscape at Fox, who. And so I don't -- I don't think I'm polarizing people.

I think I'm bringing people together and I'm getting e-mails from conservatives who enjoy my book and who are saying it changes their perspective, it changes the way they look at the news. I believe that the truth is the most important thing. And that's what I'm doing. That's why I call "Lies and The Lying Liars Who Tell Them: A Fair and Balanced Look at the Right." And I'm doing a fair and balanced look. I really am.

DOBBS: And we appreciate you being fair and balanced.

A. FRANKEN: Thank you.

DOBBS: Although I think the balanced thing can be overdone.

A. FRANKEN: I think it is important to be fair...

DOBBS: You're supposed to be making the jokes. Not me. We are going to have you back. Will you come back?

A. FRANKEN: We're both doing a bad job then.

DOBBS: Come back and we'll both have a better...

A. FRANKEN: I'll do -- I want do that.

DOBBS: Al, thanks a lot. Al Franken, good to have you here.

Coming up next, outrage at the New York Stock Exchange it is no joke about Chairman Richard Grasso's multi million dollar pay package.

Christine Romans will have the latest on that controversy and the market, of course.

That and a great deal more still ahead. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of our poll question, what do you think of the decision to delay the California Recall? Sixteen percent of you said it's disruption of the democratic process, 84 percent of protection of voter's right.

Of Wall Street stocks today, finished the day lower for the first time in three sessions. Christine Romans is here to tell us about a Dow that fell nearly 23 points, a Nasdaq that was off 9. Quite a day.

CHRISTINE ROMANS, CNNfn CORRESPONDENT: Quite a day. And the focus on mutual funds again today, Lou, investors wondering what to do for first time. Morning Star issued a blanket avoid warning for four families of funds. Bank of America fund, Janus, Strong and Bank One's mutual fund. And Morningstar made a few exceptions, Marsico funds (UNINTELLIGIBLE) that are owned by Bank of America but managed separately from B of A, and Janus Small and Mid Cape Value funds are managed separately from Janus' Denver operation .

Christine Benz says the relationship between a mutual fund and investor is built on trust. She's waiting, Lou, to see if these companies are trustworthy as we know Elliott Spitzer is investigating them for preferential treatment to their hedge fund.

DOBBS: And Dick Grasso.

ROMANS: Tense. Another tense day at the New York Stock Exchange. In fact, one source very close to the 6th floor telling me today, Christine it doesn't look like this over yet by any stretch of the imagination. A former chairmen of the NYSE today, James Needham calling for the resignation of the entire board. He said he likes Dick Grasso but he likes public interest and public trust more. And that 1,200 pages of documents the NYSE sent to the SEC, they really didn't tell quite a tale. I was looking at those again today, in 1991, then chairmen, Bill Donaldson, got a special chairmen bonus of $200,000 for helping exchange earn $11.8 million that year. Ten years later, with Dick Grasso at the helm, a special chairman bonus was $5 million, $5 million. And the earnings were just about three times what they were banking in the 1991.

DOBBS: My calculation that would be an overpayment on a straight-line extrapolation of about $4.4 million.

ROMANS: That doesn't count all the other bonuses wrapped in there, too.

DOBBS: Christine, thanks.

Let's take a look at some of "Your Thoughts." Many of you wrote in about my interview with George Andrews a former Marine who is in danger of losing his home because he flies an American flag in his front yard.

Wilson Hulley, of Chevy Chase, Maryland said, "The flagpole incident is the example of the depth of stupidity that our legal process has done. Flying our American flag is the right of every American wherever and whenever this American wants to fly it."

Clayton Taylor, of Fort Worth, Texas disagreed, "This man," he says, "bought a home in a community with deed restrictions that I'm sure he was aware of when he moved in. This has nothing to do with patriotism. This person is allowed to display an American flag, he just can't do it on a 20 foot flagpole."

Charlie Roberts, of Eagle, Idaho says, "My neighbors complained that my flag was lighted. My homeowners association backed me and the flag proudly waves high with a U.S. Marine Corps Globe and anchor flying right below Old Glory."

We love hearing from send us "Your Thoughts" at loudobbs@cnn.com.

That's our show for tonight. Thanks for being with us. For all us here good night from New York.

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