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Lou Dobbs Tonight
Interview With Labor Secretary Elaine Chao; Deadly Week in Iraq
Aired November 07, 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.
ANNOUNCER: This is LOU DOBBS TONIGHT for Friday, November 7. Here now, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening.
Tonight: the best week for the economy in three years. Employment is rising. Productivity is soaring, and the economy growing rapidly. Labor Secretary Elaine Chao will be my guest tonight. And in our special report, "Wasted Minds: Our Failing Schools," we focus tonight on radical solutions for schools in crisis.
And "Exporting America" -- tonight, state governments outsourcing American jobs overseas. I'll talk with two Indiana state senators who are trying to keep those jobs in Indiana.
And a dramatic week in space, a total lunar eclipse this weekend. The biggest solar flare ever has hit Earth. And four spacecraft are closing in on Mars. Astrophysicist Charles Liu joins us.
Tonight, more Americans have been killed in Iraq, as the State Department is warning that terrorists may be about to attack U.S. targets in Saudi Arabia. Six U.S. soldiers were killed when their Black Hawk helicopter crashed near Tikrit. Local Iraqis said the helicopter was shot down. Two other American soldiers were killed in separate attacks in northern Iraq; 34 American troops have been killed in Iraq this week, the highest number in any week since the fall of Baghdad.
We have two reports tonight. Senior Pentagon correspondent Jamie McIntyre will report on the escalating war in Iraq. National security correspondent David Ensor will report on the terrorist threat to U.S. interests in Saudi Arabia.
We go to Jamie McIntyre -- Jamie.
JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Lou, as tragic as this helicopter incident has been in Iraq, with the loss of six American soldiers, it could have provided an even more powerful psychological boost to the enemies of the United States.
CNN has learned that an Army general was on the second helicopter traveling with that ill-fated Black Hawk. Now, U.S. military officials aren't saying for sure at this point if enemy rocket fire brought down the UH-60 Black Hawk helicopter, but it appears likely. Sources say that, on the first helicopter, the one that wasn't hit, was this man, Major General Thomas Romig, the judge advocate general of the Army. That's the Army's top lawyer.
He's not based in Iraq, but was visiting Iraq on an undisclosed mission. He, again, is safe, as we are told. But, as it turns out, the two helicopters were in range of rocket-propelled grenades. As they flew along the marshy banks of the Euphrates River near Tikrit, according to witnesses, a rocket hit the second of the two helicopters and sent it crashing to the ground at high speed.
The U.S. military, again, doesn't consider the loss of a high- ranking officer any more important than a loss of junior officers or enlisted personnel, but a successful attack on a two-star general could have given the anti-U.S. insurgents a very powerful morale boost. Just as when, by the way, when rockets hit the Al-Rashid Hotel when Deputy Defense Secretary Paul Wolfowitz was spending the night there, there's no way to know at this point if the insurgents knew a general was on one of those helicopters, although the heavy security around the helicopters could have been a tipoff.
The incident, though, does raise troubling questions about the level of intelligence that is in possession of the enemies of the U.S.-led coalition and whether or not the United States can take any real effective measures to guard against rocket-propelled grenade attacks -- Lou.
DOBBS: Jamie, the death of 34 American soldiers raises very important questions. Defense Secretary Donald Rumsfeld repeatedly has said, no more troops, U.S. troops, are needed in Iraq. According to the secretary, military commanders have not asked for any more troops. Are those commanders, Jamie, simply afraid of some sort of retribution or perhaps losing their jobs, like former Army Chief of Staff General Shinseki, when he talked about 300,000 troops being needed?
MCINTYRE: Well, of course, at the time Shinseki made those remarks, he was already out of favor with Defense Secretary Rumsfeld. He didn't technically lose his job, because he served until the end of his term and then retired, but warning about the size of the military overall.
As for the commanders in Iraq, if you talk to them, they say they take very seriously their responsibility, probably the highest responsibility they have, to request what they need to complete their mission and protect their troops. They insist that, if they believed that there was a need for more troops, they would ask for them.
And I think if you told them that they were cowed by political pressure, I think they would be very insulted by that.
DOBBS: And the situation as it stands now, Jamie, is that nearly every retired officer with whom I've spoken -- there have been exceptions -- general staff officer -- says that it is obvious that we need more boots on the ground.
But the men who make the decisions say no. Jamie McIntyre, our senior Pentagon correspondent, thank you very much.
The State Department, meanwhile, says radical Islamist terrorists have moved from the planning phase to the operational phase as they prepare for a possible attack against U.S. targets in Saudi Arabia.
National security correspondent David Ensor has the report.
David, what is the nature, as we understand it, of this threat?
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, Lou, the State Department declared closed for the next three days the U.S. Embassy and consulates in Saudi Arabia.
The decision to close them is based on credible information, officials say, suggesting al Qaeda may be planning to attempt another attack soon within the kingdom. The intelligence does not suggest any specific target or time. But officials say they assume that American diplomatic and military facilities in Saudi Arabia would be high on the terrorist groups' lists of desired targets.
Officials are saying that this intelligence they're talking about includes chatter on Web sites and comments on publicly released audiotapes released by al Qaeda leaders in the last few months, as well as some other intelligence that's also been gathered by the U.S.
Another reason, Lou, for the concern about the attacks, officials say, is, of course, that the Muslim holy period of Ramadan started last week -- Lou.
DOBBS: David, thank you -- David Ensor, our national security correspondent.
An Air Force translator from the Guantanamo Bay prison for suspected terrorists will face a court-martial on 20 charges, including espionage. The military says senior airman Ahmad al-Halabi gave classified information about the prison to people from Syria and Qatar. The Air Force says it will not seek the death penalty in the case. Two other people who worked at Guantanamo Bay are also in custody, a Muslim chaplain in the Army and a civilian translator.
Turning now to the economy and more signs today that faster economic growth is finally creating jobs -- the government today reported unemployment fell to 6 percent in October. That is the lowest level in six months. The number of jobs in the economy rose for a third straight month as well. President Bush said the numbers prove his tax cuts and business incentives are now working.
Senior White House correspondent John King is traveling with the president and reports tonight from Winston Salem, North Carolina.
(BEGIN VIDEOTAPE)
JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: White House officials are now voicing strong confidence that the new unemployment report is proof to them that the economy has finally turned the corner on key question of creating jobs.
The White House happy, of course, that the unemployment rate dipped a bit to 6 percent last month. But most encouraging, from the White House perspective, is the data showing the economy added 126,000 new jobs last month. That is the third consecutive month the economy has added jobs, some 300,000 jobs now over the past three months. The White House believes that will deflate the Democratic argument that the Bush recovery has been a -- quote -- "jobless recovery."
Mr. Bush in North Carolina today, on the one hand, to raise some campaign money, on the other hand, to tout his economic record. A bit of an "I told you so" from the president, as he said his big tax cuts, very much criticized by the Democrats, first brought the economy out of recession. Now Mr. Bush says they are finally helping create jobs as well.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The economy's growing. New jobs are being created. And we -- there's an opportunity. And I hope you seize it.
KING: But note the president's tone. He was careful not to crow too much. Democrats say some three million Americans have lost their jobs in the Bush presidency.
And here at a community college roundtable, the president came face-to-face, first, with one woman who said she lost her job in an electrical manufacturing plant because it went overseas. Then the president encountered a woman who said her job in a textile factory went overseas. The Democrats say those jobs are being lost overseas because of Bush administration trade policies. The president disagrees. He says free trade is a key engine of economic growth.
But it is clear that the president also is quite sensitive to the Democratic criticism.
BUSH: Trade is a two-way street, that, if we have trade with other neighbors and countries, we expect there to be fair trade coming the other way.
KING: One of the reasons the president choosing his words so carefully in this state, North Carolina has lost more than 150,000 manufacturing jobs over the past three years. The president also reminded, as he tried to focus on what he considers to be upbeat economic news, that the economy is hardly the only issue in the coming campaign.
Outside of one of his events, a modest group of protesters, most of them opponents of the war in Iraq, one sign saying, "Mr. President, where are the weapons of mass destruction?" Another sign saying, "Mr. Bush, bring our troops home," a fresh reminder for the president both the economy and the war in Iraq the key issues in the campaign to come.
John King, CNN, Winston Salem, North Carolina.
(END VIDEOTAPE)
DOBBS: And still ahead, our special report, "Wasted Minds: Our Failing Schools" in this country -- tonight, one city's radical approach in fixing a failing school system. Bill Tucker will report. And broken borders -- it is too easy to steal an American identity and a free pass into this country. Lisa Sylvester will have the report.
And an explosion in economic growth and job creation in the best week for the economy in three years. Labor Secretary Elaine Chao joins us.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: Tonight: Philadelphia schools have been so bad for so long that the state of Pennsylvania had to resort to drastic measures. Last year, the state of Pennsylvania took over Philadelphia's public school system, trying a variety of approaches to fix the problems.
Bill Tucker has the report.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): Philadelphia has embarked on a great experiment. And one year after being taken over by the state, test scores in reading math and science show improvement.
The teachers union, after opposing the state takeover, is now on board with the changes being made inside the schools, but they remain leery of changes being tried at the management level; 86 of the worst performing schools in the city became the object of immediate and dramatic change. Some underperforming schools were restructured, charter schools supported. And, at other schools, partnerships were formed with corporations and universities to share resources and management expertise. And 45 schools were turned over for private management.
PAUL VALLAS, CSO, SCHOOL DISTRICT OF PHILADELPHIA: Those schools that are performing, we're going to keep, support, expand. Those school models that aren't performing, we're going to jettison, we're going to close down.
TUCKER: And already Vallas has terminated one private manager's contract. Regardless of the management structure, all schools are now held accountable for instituting a standard curriculum, reducing class size or increasing teaching staff, offering teacher development programs, and getting the parents of children involved.
SAUNDRA HOPKINS, EDISON SCHOOL PRINCIPAL: We have had more parent participation than we've had in a long time. We invite our parents. We shower our parents to come in.
TUCKER: And the state has embraced the changes in one very important way. It injected 85 million additional dollars into the school's budget.
UNIDENTIFIED FEMALE: What should be the next number? TUCKER: But it isn't just the money that's made the difference, in the eyes of one financial analyst.
TRACE URDAN, THINKEQUITY PARTNERS: In some ways, it's almost just the permission to believe that you're starting fresh that matters more than anything else.
TUCKER: Test scores, while improving, remain well below state standards in most Philadelphia schools.
(on camera): Educational experts and analysts say it will ultimately be a few years before they can determine the success or failure of these schools. And that brings into question the only thing in shorter supply than money: parents' patience.
Bill Tucker, CNN, Philadelphia.
(END VIDEOTAPE)
DOBBS: Another issue about which we have reported extensively on this broadcast is the growing number of illegal aliens entering this country, some 10 million illegal aliens in the country, as many as 700,000 crossing our borders each year.
Immigration officials say they're becoming, those illegal aliens, far more difficult to catch, in part because they're using fake green cards.
Lisa Sylvester is here tonight with the report -- Lisa.
LISA SYLVESTER, CNN CORRESPONDENT: Lou, for $80 to $100, someone can buy a new identity. That will get you a fake green card and, as a bonus, your very own fake Social Security card.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Coming up on exit two.
SYLVESTER (voice-over): This tape shows a recent roundup of illegal aliens in Boston and Los Angeles. When the suspects are arrested, more often than not, they're carrying fake alien registration cards. The fraudulent green cards are sold in the open on the streets of major cities from vendors called micas.
KEVIN DELLI-COLLI, U.S. IMMIGRATION AND CUSTOMS ENFORCEMENT: A slip of paper would be passed off to the mica, along with the cash. And then that vendor then would pass that information to another individual known as a runner.
SYLVESTER: Peddling fake immigration documents is a growing trade. The product is always in demand, and it's less risky than selling drugs.
Immigration agents broke up illegal document rings this year in New York, Los Angeles, San Francisco, Atlanta, Chicago, Las Vegas, Denver and Washington, D.C. As part of Operation Card Shark, authorities in the District of Columbia seized more than 1,000 phony green cards, blank Social Security cards and driver's licenses.
Surprisingly, somebody can make a passable document with an old typewrite, cutting board, and laminator. But it's innocent people whose identities are stolen who are getting hurt the most.
ROSCOE C. HOWARD JR., UNITED STATES ATTORNEY: Of course, those people's lives are overturned. Their credit is ruined. They spend an awful lot of their lives just trying to get their good name back.
SYLVESTER: Technology is making the job of immigration officials even harder.
JOSEPH GREENE, U.S. IMMIGRATION AND CUSTOMS ENFORCEMENT: As the new features advance for photocopying and computer graphics and so forth, we have to keep pace in order to frustrate and thwart the document vendors from coming up with look-alikes that are fairly difficult to detect, even by an expert.
(END VIDEOTAPE)
SYLVESTER: U.S. officials have another incentive to crack down on the illegal document trade. And that is to prevent terrorism. The 9/11 hijackers had phony driver's licenses -- Lou.
DOBBS: That's unsettling, at the very least, to think that those fake I.D.s, green cards, Social Security cards, driver's licenses, are that readily available.
SYLVESTER: In fact, that's the thing that is most startling about this, is, these cards are being sold out in the open out on the street. All you have to do is know where the neighborhood, know where to go; $80 to $100, you're walking away with a fake green card or a fake driver's license, very frightening.
DOBBS: And with what appears to be a free pass across our borders.
Lisa Sylvester, thank you very much.
Coming up next: back to work; 126,000 Americans found jobs over the past month. Millions more, however, are still looking. We'll be talking about employment and other labor issues with the secretary of the Department of Labor, Elaine Chao.
And an American hero's story of survival and resilience in the face of pain and incredible odds. Casey Wian will report from Camp Pendleton, California.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: The White House today said the decline in the unemployment rate to 6 percent is evidence that President Bush's tax cuts are working.
Joining me now for more on labor is the secretary of the Department of Labor, Elaine Chao.
Good to have you with us, Secretary.
ELAINE CHAO, SECRETARY OF LABOR: Nice to be here. Thank you.
DOBBS: Secretary Chao, these numbers surprised most economists, 6 percent. Do you believe this means that the economy has turned, that now we're going to see substantial job creation?
CHAO: I think the labor market rebound has begun in earnest.
And the numbers are actually more positive than you paint. In the last three months, there have been 287,000 new jobs; 126,000 new jobs was created in the last month, far surpassing expectations of 65,000 new jobs. And then, last month, I had announced that 57,000 new jobs were created. And the Bureau of Labor Statistics, which produces these numbers, went back and revised the data based on actual results. And we found that, in fact, over the past three months, job creation has been more robust than had been expected.
DOBBS: Secretary Chao, you better get that whip out and fix those people over at BLS, so they get those numbers right the first time.
(LAUGHTER)
CHAO: They do a wonderful job. They do a wonderful job. But it's just the nature. These revisions occur all the time. And, as you well know, we have revisions twice a year as well, on top of the monthly revisions.
DOBBS: Absolutely.
And while everyone is pleased to see this unemployment rate come down, and we all hope that it will come down more, there's still nine million Americans out of work in this country, two million of them long-term unemployed. These numbers and the 126,000 jobs created last week, most of them were the retail sector. They were not high-paying jobs. These are lower-paying jobs, for the most part. But the good news is...
CHAO: But that's not really true.
DOBBS: I beg your pardon?
(CROSSTALK)
CHAO: That's not really true.
Of the long-term unemployed, that number has dropped as well in the past month. So we are beginning to see a drop in the long-term unemployed. We saw a drop in the number of jobless claims filed. That is a leading indicator. The unemployment rate is a lagging indicator. And even that has shown that there's been a drop from 6.1 percent to 6 percent. And then, as a leading indicator, the jobless claims have fallen again to well over 380,000. So with GDP growth of the last quarter hitting well over 7.2 percent, and having productivity increases over 8.1 percent, which are phenomenal numbers, clearly, the economy is in full gear and the labor market...
DOBBS: Full gear?
CHAO: I think it's very strong.
DOBBS: Full gear?
CHAO: It's very strong.
DOBBS: Secretary Chao, if I may argue with you, then.
CHAO: Yes.
DOBBS: We have to create 150,000 jobs just to keep pace with population growth. We have 6 percent unemployment. We're far from being in full gear, Secretary Chao.
CHAO: Well, full gear means that the economy is fully engaged.
DOBBS: I understand what it means.
(CROSSTALK)
CHAO: Thank you.
What it also means is that, again, with GDP growth of 7.2 percent and a productivity growth of 8.1 percent, the productivity growth cannot continue at this level without creating permanent jobs. We're also seeing increases in temporary help supply. That's, again, a precursor to permanent hiring.
DOBBS: Right.
CHAO: And we're also seeing the average number of hours worked increase.
DOBBS: Secretary Chao, if I may...
(CROSSTALK)
DOBBS: We're losing hundreds of thousands jobs to outsourcing as well. We have 10 million illegal aliens in the country. The Labor Department is doing absolutely nothing on the issue of
(CROSSTALK)
CHAO: Oh, that's not true at all. Lou, you know better than that. The Labor Department does a lot of things.
DOBBS: Let me give you a couple of examples, if I may, Secretary Chao. For example, we went through a number, with the Department of Labor, to get some sort of sense of who is tracking this. We are told that the Department of Labor will fully support illegal aliens in their labor -- legal issues.
CHAO: I'm not so sure who you were talking to, Lou.
But, clearly, this is a larger issue, the whole issue of illegal immigrants, than just Labor Department.
(CROSSTALK)
CHAO: We serve the work force. And for people who are out of work, we have $12 billion publicly funded work force training program.
We also spend about $58 billion in unemployment insurance. For the illegal immigrant that you're talking about, H-1B visas, for example, which I think some of your people may have alluded to, that has a cap of 66,000 annually. So it's a very small part of the whole work force.
(CROSSTALK)
DOBBS: Secretary Chao, I personally wanted this to be just a wonderful, congratulatory discussion.
CHAO: Well, thank you.
DOBBS: But since you -- if you want to be confrontational, let me bring
(CROSSTALK)
CHAO: No, not at all.
DOBBS: Give me the Labor Department's best report, if you will, on the number of H-1B and L-1 visa holders in this country right now and for whom they're working.
CHAO: H-1B visas has an annual cap now of 66,000. And that has been actually underutilized because of the high-tech situation.
DOBBS: Secretary Chao, I asked how many are in the country now working and where? Does the Labor Department have any idea?
CHAO: No. We have a work force of 146,000. So I can't tell you that.
DOBBS: One hundred forty-six.
CHAO: We do not track that. But, annually, it's a 66,000 ceiling.
DOBBS: Right. Secretary Chao, I congratulate you on what I hope and we all hope is a wonderful turn in the employment situation in this country. CHAO: Thank you.
Well, we want to help every worker that's out of work, as the president has said. We are optimistic, but not complacent. Every person -- we want to make sure that every person who wants a job will indeed get one.
DOBBS: We're with you all the way.
CHAO: Thank you.
DOBBS: Thank you very much, Elaine Chao, secretary of the Department of Labor.
Coming up next, we're going to focus on "Exporting America" -- tonight, a story you will not believe, state governments hiring foreign workers to help unemployed Americans find work. That's right. Two state senators from Indiana have had a bellyful. They join us next.
And out of this world, a week of truly phenomenal events in outer space, from the largest-ever explosion on the surface of our sun to a total lunar eclipse this weekend. We'll be joined by astrophysicist Charles Liu.
Please stay with us.
(COMMERCIAL BREAK)
DOBBS: Now following up a story that we first reported last month.
The state of Indiana's Department of Workforce Development hired a company to do technology work. The state's project in this case is called Energize Indiana, its aim, to help unemployed Hoosiers find work. So what did the state's Department of Workforce Development do? Well, it hired an Indian firm, Tata. We were outraged by the deal, quite frankly.
And so is state Senator Jeff Drozda. He's drafting a bill to put the needs of Indiana workers first. He's working with state senator David Ford, who chairs the Economic Development and Technology Committee. Both of them are kind enough to join us tonight from Indianapolis.
Good to have you with us.
DAVID FORD (R), INDIANA STATE SENATOR: Good to be here.
JEFF DROZDA (R), INDIANA STATE SENATOR: Good evening.
DOBBS: Let me turn, if I may, first, to you, Senator Drozda.
The idea that the state of Indiana, its work force development agency, would go outside -- I mean, did they explain anything to you about this? DROZDA: Well, I was contacted by a constituent before this contract was awarded, and this individual, an expert in the I.T. industry, warned me that this was coming bound the pike. And so I contacted the Department of Workforce Development and they said, Well, we know it might be coming down the pike, we might award this contract. But we'll be able to answer any questions that any policymakers might have.
Well, they awarded the contract to the tune of $15.2 million. But thus far, has not -- they have not been able to answer any of the questions that I've asked them.
DOBBS: They're just plain ignoring you?
DROZDA: Well, in a letter that I wrote to them and was dated October 21, I said, Number one, I'd like you to pull the contract in favor of rebidding it. And let's look at some firms from the state of Indiana. And number two, I want you to give me your policy on L-1s and H1-B visas and thus far I have yet to hear back.
DOBBS: Well, don't feel too badly, Senator. I just asked the secretary of the Department of Labor to tell us how many H1-B and L-1 visas were working in the country and you, I think, probably heard her response which is simply they do not know.
DROZDA: That's no different from the state of Indiana because they don't know either.
DOBBS: Senator Ford, you are the chairman of this committee. You -- this agency has a critical role, I would think, to play in training up your people, your citizens there in Indiana, to be able to work in technology and high-value jobs. What was your reaction when you found out that very agency was outsourcing to an Indian company?
FORD: In the last year, we've tried to create several new entities to bring jobs back into Indiana and increase our workforce to stop the brain drain. Indiana ranks 50th in the nation in the number of young people who are educated here and leave.
You have to remember, Indiana has some of the finest universities in the country -- Indiana University, Purdue, Ball State, Notre Dame -- 40 some others. And the fact that they were not able to find...
DOBBS: Don't forget Indiana State or you're going to be in real trouble, Senator Ford.
FORD: Indiana State, certainly. I don't intend to leave anybody out, I just don't have time to name them all on the show.
But the idea that they couldn't look and find programmers in Indiana who can translate these programs from Cobalt so Java make them available on the Web, which is what we're talking about doing here for $15 million I found very strange.
DOBBS: Very strange. Are you going to be able, gentlemen, to do anything about that legislatively? Will you be able in any way to correct it?
FORD: I think we can. At least send them a message that this is not acceptable.
The response that I got was that they were within the law, that they bid the projects correctly and they awarded it to the higher bidder. That's simply not enough. They just didn't try hard enough.
When we write the law, we try to be general and leave it to the administration to do the right thing. In this particular case they just simply dropped the ball, and what we're going to try do is write legislation to make sure that doesn't happen again.
Senator Drozda, Senator Ford, we invited your governor, Joseph Kiernan, to join us. We asked to talk with him immediately after we learned of this debacle, in point of fact. He declined our invitation to be with us this evening.
Why isn't your governor taking on this issue, and why isn't there an outrage from the governor's office?
DROZDA: Well, when I contacted the department under the auspices of the governor, I copied the governor on the letter. The governor's very well aware of this. It's unfortunate that the governor, Joe Kiernan administration, decided to proceed with the contract. And not only that, but they said, We will ignore the general assembly.
We won't respond to the letter and we'll proceed with the contract. So what I -- I have had no other choice but I did draft legislation, Senate Bill 4 here in Indiana. And it's going to have -- contain some provisions that hopefully will protect Hoosier -- individuals from -- in the state of Indiana who definitely want employment.
DOBBS: Senator Drozda, Senator Ford, we thank you both. We also wish you all of the best. Thank you.
(CROSSTALK)
DOBBS: That brings us our poll question for the evening. The question -- "Should state governments outsource work if it saves taxpayers money? Yes or no?" Cast your vote at cnn.com/lou. We'll have results for you later in the show.
Now, "Heroes." Tonight, the story of Marine Sergeant Jason Wittling. He saw fighting in Baghdad and made it through uninjured until a week after major combat was declared ended. But it was dealing with munitions left behind by the army of Saddam Hussein that changed his life.
Casey Wian has his story of strength and determination from Camp Pendleton, California.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNNfn CORRESPONDENT (voice-over): after a nine-year military career without combat, Marine Sergeant Jason Wittling saw Iraq as an opportunity.
SGT. JASON WITTLING, U.S. MARINES: I was chomping at the bit. I wanted to go so bad.
WIAN: The combat engineer was in the first assault on Baghdad, then moved to Karbala, where he demolished piles of Iraqi mortars and RPGs. In May, after lighting fuses to detonate more than a ton of ordnance, Wittling was wounded while speeding away.
J. WITTLING: We were coming into corner and the Humvee started going sideways. And I seen one little hump of dirt, not but three or four feet tall and we're headed right for it, and that's what rolled up. I woke up, like, 30 seconds later, flat on my back in the desert.
WIAN: Unable to move and only halfway to safety, the driver, Staff Sergeant Tommy Pierce, came to Wittling's aid.
J. WITTLING: He just laid across me -- like, across my face and chest, and it blew.
WIAN: They survived, but Wittling's neck was broken, and he was paralyzed.
MAUREEN WITTLING, WIFE: My kids had gone to a family fun day out in town for all the Marines. And we had come back, and there -- the doorbell rang and I walked around the corner and saw the men stand there in their dress blues uniforms and I thought only one thing could have happened. I didn't know that they came out to tell you about accidents. I thought they were only there for death. And I wouldn't let them until they said he was alive.
WIAN: Wittling had surgery to fuse bones in his spinal cord. Now, after three months in the V.A.hospital, he's now home. Physical therapy has restored some arm strength. Wittling says he has no regrets.
J. WITTLING: People talk about how we shouldn't have been over there. If they would have seen them kids' faces when we rolled up into Baghdad, into Karbala, or into those other cities, I guarantee you they would have changed their mind. Because they -- the look on their face, like, We have been waiting on you for 12 years to come in.
WIAN: Doctors gave Wittling a three-to-four percent chance of walking again.
J. WITTLING: I kept telling them, Obviously, you don't know me very well. Because if you did, my chances of walking will a whole lot higher.
I'm going to walk. I'm going to walk. It's -- there's no doubt in my mind.
WIAN: Casey Wian, CNN, Camp Pendleton, California.
(END VIDEOTAPE)
DOBBS: Marine Sergeant Jason Wittling, our best for a speedy recovery.
We'll continue here in just a few moments.
(COMMERCIAL BREAK)
DOBBS: As we reported earlier, the economy added more than 125,000 jobs last month. Many of those new jobs, however, in the lowest pay brackets. Millions of more Americans are still looking for work.
Joining us now, this week's "Newsmakers": Justin Fox, editor-at- large of "Fortune" magazine; Bob Lenzner, the national editor of "Forbes"; and Mark Morrison, managing editor of "BusinessWeek."
Gentlemen, good to have you here.
Happy days are here again. We got a 6 percent unemployment rate, 7.2 percent GDP. Things are rolling, right, Bob?
BOB LENZNER, "FORBES:" 250, 000 jobs, whatever you may say about them, in two months -- if you figure out how long it takes to get 3 million jobs, that means only a year. We were discussing that before the show.
It's good for George Bush, whatever the jobs are, if he can keep the thing rolling. I think the question is -- I don't think 7.2 percent growth's going to continue for very long.
DOBBS: You just lost me. A hundred -- how many jobs every...
LENZNER: They -- they created 125,000 jobs this month and 125,000 jobs in September. So that's 250,000 jobs. Oh, you're right, 250,000.
(LAUGHTER)
LENZNER: My God. I got to go back to school.
(CROSSTALK)
DOBBS: It's all right. The fact of the matter is I can't add three plus two some days.
MARK MORRISON, MANAGING EDITOR, BUSINESSWEEK: It's a rock 'n' roll economy and the administration's obviously going to get credit. We would have blamed them if it had gone the other way.
DOBBS: Oh, there is no question about it.
MORRISON: But we also deserve -- you know, we also have to praise Mr. Greenspan and I would say Mr. Spitzer, all of which have come together to make this thing happen.
JUSTIN FOX, EDITOR AT LARGE, FORTUNE MAGAZINE: Because the whole giving presidents blame or credit for where the economy's going is nuts on a really short-term basis like this. Elaine Chao claiming credit for it, other people blaming Bush.
LENZNER: I don't think they even thought this was going to happen.
FOX: No, I'm sure they didn't.
(CROSSTALK)
DOBBS: Justin, one of the things that amazes me is you heard Elaine Chao say this economy's at full bore, 7.2 percent GDP growth for the third quarter. This doesn't feel like full bore to me.
FOX: No, it was catching up because it didn't do anything for the first half of the year.
DOBBS: We have got to have about 150,000 jobs a month just to maintain pace with population.
FOX: But it was the best news on the economic front ...
DOBBS: Oh, I'm not in any way denigrating the news. I'm delighted as anybody short of the president. I mean, it's great.
MORRISON: The recovery certainly is full bore, and whether the Bush tax cuts, the latest ones, had a lot to do with it, it's probably difficult to argue. But I think it's going to help as we go forward to keep the momentum going. You have this very favorable investment climate, and the stock market's performance has certainly -- it's reacting to earnings, but it's also reacting to this new very favorable climate for taxes on stock investments.
DOBBS: Yet, within that employment number, long-term unemployment, this is a significant problem, those are many of them higher paying jobs, and we saw the formation here primarily the lower paying jobs. How do we get around that, and how soon?
MORRISON: It's not a perfect...
DOBBS: No.
MORRISON: It's not a perfect recovery, certainly. But you know, I think over a period of time, you know, this is an innovative, very innovative economy we have.
FOX: And everybody had the same concern in the early '90s.
(CROSSTALK)
MORRISON: ... that the high-quality jobs are going to come along with the others, is my view.
DOBBS: You mentioned Alan Greenspan. I'd like to show you the headlines. I'm sure you saw this. If we can put those up, wherever we have them. "Financial Times" and -- there it is, "The Financial Times." "Greenspan Hints Rates May Stay Low." And if we can see how "The New York Times" characterized it. "The New York Times." "Greenspan Hints at End to Low Rates."
LENZNER: I think "Financial Times" beat "The New York Times" on that one, if you read what he actually said because the quote that I read today said he was predicting for a considerable period of time the rates might stay low, right?
FOX: Yeah. And I read the speech. And also you're supposed to read John Barey (ph) in "The Washington Post" on Greenspan, don't believe anybody else, so.
MORRISON: But there is no question the chairman's doing a little tap dance here and backing away, moving away from his position that, you know, we had deflation, we had to keep these extraordinarily low rates. Really, rates should be going up now, they should be moving higher to do...
FOX: He promised they wouldn't for a while, so they won't.
(CROSSTALK)
MORRISON: Yes, but he's starting to make the move and he's got to catch up with the bond market. The bond market is telling us that the rates should be somewhat higher.
LENZNER: Even if they go somewhat higher it's not going to be so much as to hurt economic growth. We have another 7.2 percent quarter, rates are going to go up.
DOBBS: We get another 7.2, I think we're all going to be cheering wildly.
LENZNER: I can cap that one.
DOBBS: You can cap it...
(CROSSTALK)
DOBBS: The New York Stock Exchange sends the proxy out, John Reed, the interim chairman, to the members of the New York Exchange; reform is at hand. Is it adequate, Bob?
LENZNER: I think it's a first step. I think he's trying to get the approval of them before he goes forward. And there's going to be pressure on him to take the self-regulation outside and put it someplace else, and getting rid of the specialists, which I think is bound to happen. I don't think he wanted to force that down their gullets right at this point.
FOX: But it's got to come. It's a totally archaic system. And maybe they still have some small role to play, but the sort of monopoly power they have over trading NYSE stocks is crazy.
DOBBS: Is it proper for the SEC to take over the regulation of the New York Exchange at this point, do you think, Mark?
MORRISON: I think it's going to happen, but you know, that's not the...
(CROSSTALK)
MORRISON: They're supposed to be regulating the mutual fund industry last I saw.
DOBBS: You think they ought to start that, too?
MORRISON: They might want to start that too. I mean, they've had that responsibility for a while, had they not?
DOBBS: Eliot Spitzer in this. I recall at the outset of this investigation into Wall Street, people saying he's politically ambitious, it's just, you know, so forth, so on.
FOX: What's wrong with being politically ambitious?
DOBBS: We need more politically ambitious regulators and prosecutors.
LENZNER: Rudy Giuliani (UNINTELLIGIBLE).
FOX: And the thing that's great about Spitzer is he's just dealing with these things, shaking things up and not creating some crazy massive laws to deal with it all. Because I don't know that there is any way you can keep this from ever happening again, but he is punishing people and making them not want to do it for the next 20 years, I think.
LENZNER: He's going to put some of these guys in jail just like what happened to the inside information guys in the '80s. I think what's amazing is that what we're learning as it unravels how many of these mutual fund companies were actually doing this stuff, how many brokers were cooperating with the mutual funds to do it. That's what's happening.
DOBBS: The thing that amazes me is two years of corporate corruption scandals, we -- the mutual fund industry, Wall Street, the New York Stock Exchange and its total lack of transparency and conflicts of interest, I mean, when in the world are business leaders going to wake up in this country?
LENZNER: Well, we were discussing that before we came on, and we were saying that because...
(CROSSTALK)
LENZNER: So much -- so much money -- where there was so much money around that everybody decided to take -- Mr. Strong, who had his own mutual funds, who was on the "Forbes" list of 400 richest people in the country trades in his own shares to make extra money. This is what was going on.
MORRISON: They don't have any choice. They have to clean up. You know, try getting a rating now if you've got a bunch of hocus- pocus in your books. We were with a -- one of the big four accounting firms this week. They have shredded more than 500 accounts of their accounts, bringing in revenue of $52 million to the accounting firm, because they didn't feel comfortable, they got rid of these accounts.
(CROSSTALK)
MORRISON: They unloaded these accounts that were revenue- producing accounts because they were uncomfortable with the relationships and with the integrity of the numbers of the books.
DOBBS: Bob, Justin, Mark, thank you. And we appreciate it. Look forward to seeing you next week.
Up next, a historic journey. Eight billion miles into space is just one of several truly remarkable events in space. This week, astrophysicist Charles Liu of the American Museum of Natural History is my guest, next. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: We've seen two weeks of unprecedented solar activity creating the largest solar flare, in fact, on record. Now we're awaiting tomorrow's total lunar eclipse when the Earth's shadow falls on the moon. Joining me now our expert on all things celestial here, Charles Liu, astrophysicist, American Museum of Natural History. Charles, it is great to see you, as always.
CHARLES LIU, AMERICAN MUSEUM OF NATURAL HISTORY: Thanks.
DOBBS: Remarkable. Solar flares, this thing is the strongest on record?
LIU: Absolutely. The one that happened on Tuesday is 28 more -- 28 times more powerful than the typical powerful solar flare. This past two weeks, my solar astronomy colleagues tell me they can't remember a time when they had this much violence. This is going to keep them busy for years.
DOBBS: Now, in 1859, that was the strongest on record ever. How does...
LIU: Well, the problem is we didn't have the technology back then to measure the X-ray flux from that flare.
DOBBS: Right.
LIU: All we know is that that flare came through and damaged telegraph wires and stations and so forth. So probably it was stronger than these. But even so, these were really powerful.
DOBBS: And there was no damage from this that we're aware of, significant damage?
LIU: What had happened is that because we got the early warning, people who ran communication satellites or power grids actually adjusted their schedules and their power levels so that we didn't have any problems. DOBBS: We're being bombarded by these coronal ejections right now. We are supposed to be moving toward the nadir of solar storm activity.
LIU: Yes.
DOBBS: And it seems that just the opposite is happening, and profoundly the opposite.
LIU: Well, two weeks does not a trend make. So anytime you have a burst like this, it catches people's attention. But unless it happens for weeks or months further, that's when we have some sort of a strange, anomalous activity. So I'm not too worried yet.
DOBBS: You want to be a solar storm forecaster here? Will it continue?
LIU: They probably will not. That's my guess. But then again, I'm actually not a solar storm forecaster.
DOBBS: There are very few of them around.
LIU: Yeah. Well, it does highlight the fact that we should learn more about these storms as much as possible.
DOBBS: But you're a lunar forecaster and have a remarkable degree of accuracy. What are you forecasting for tomorrow?
LIU: At about 8:06 p.m. Eastern time, the moon will move into Earth's shadow, in fact, the darkest part of it, so that the sun, the Earth and the moon will be lined up. And during the two hours before 8:06, the half hour after 8:06 and the two hours after that half hour, we're going to see a total lunar eclipse passing through our eyes in a very gentle, happy way.
DOBBS: Now, to show you that I am really an astrophysicist in the making and have high mathematical aptitude myself, what you're saying is that that's going to begin about 6:00 p.m. Eastern, the beginning of it? Is that right?
LIU: Exactly.
DOBBS: Are you impressed that I can (UNINTELLIGIBLE) two plus two?
LIU: Great.
DOBBS: It will be visible, you think throughout...
LIU: As long as the weather is good, it's visible through much of the globe, including most of the United States.
DOBBS: And unlike other phenomena, this, we will -- this phenomena we can just sit there and watch it, we don't even need a telescope, do we? LIU: Exactly. Go on the backyard, on the porch, have a good time with your friends and just watch this thing that's amazed people for thousands of years.
DOBBS: Voyager is now on the outer limits of our solar system, what you astrophysicists call the heliosphere. We have Opportunity and Spirit headed toward Mar to land in a couple of months. This is going to be -- the Leonids later this month. It's going to be a busy time.
LIU: Yes. It's a marvelous thing. We also have spacecraft going to Saturn. We have new spacecraft that have been launched recently that are going to give us new information about the infrared universe. Wonderful things to look forward to.
DOBBS: Come back and share some of that with us in the next week, if you will.
LIU: It will be my pleasure. Thank you so much.
DOBBS: Charles Liu, thank you very much.
LIU: Thanks, Lou.
DOBBS: Coming up next, your thoughts on illegal aliens entering the country and demanding rights, that and a great deal more. All of that is straight ahead. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: The stock market scored another winning week, although the major averages did drop a bit. Here's Christine Romans with the market.
CHRISTINE ROMANS, CNN FINANCIAL NEWS CORRESPONDENT: Lou, the Dow down about 47 points, most of the losses came late in the day. The S&P also lower.
But you know, for the week it wasn't so bad, Lou. It was technology that really led things here today and for the week. The Nasdaq up more than 2 percent. The S&P and the Dow up for five of the past six weeks. So the trend still pretty solid there.
Among the large cap winners on Wall Street this week, Cisco rallied. Signs that tech spending may be picking up, at least that's what investors thought they read in its earnings report. That helped information technology. It was the best sector for the week, far and away the best sector. It also helped computer makers, software stocks.
Tyco and Disney are another couple of notable, widely held gainers on the week.
Among the laggards, General Electric fell 2 percent, as did Merck. ExxonMobil and AIG both down about 4 percent.
It was telecom and energy that were the poorest performing sectors in the S&P for the week, Lou.
DOBBS: Christine, thank you very much. Quite a week. Christine Romans.
Taking a look now at some of your thoughts.
From Huntington Beach, California -- "Your reports on trade policy or lack of it are amazingly insightful and refreshing in their analysis of the negative effects of the road we are set upon. Also, your cautionary comments regarding claims of increased productivity begin the process of discovery of a nation, which is rapidly losing its heart and soul." That from Duane Youngbar.
From Fort Collins, Colorado: "Not only are we rapidly losing manufacturing jobs to cheaper labor in other countries, the jobs we still have are rapidly going down hill. Case in point, my skilled labor job used to pay $16 an hour four years ago. It pays less than $12 an hour today, while productivity in this plant has increased more than 20 percent." That from Henk Ahrens.
From Parkesburg, Pennsylvania: "How can anyone argue that someone who is working here illegally should have protection under the same system of laws that they are breaking? It's their breaking of our laws that gives them protection under our laws. How bizarre can something be?" That from Randy Schirmer.
Unfortunately, I think it's one of those instances in which we have to say, stay tuned.
From Eaton Rapids, Michigan: "Mr. Dobbs, I thank you for bringing attention to the problems facing education in America today. As an educator of 28 years, it's like digging a ditch with a spoon. Old textbooks and low pay. Who will be our educators of tomorrow?" Gerald Adams.
From Beaver Dam, Wisconsin: "Your story on immigrants and illegals taking jobs was shameful racist scapegoating and dividing, not to mention inaccurate." That from Jeremy Kamps.
Well, Jeremy, the focus on our reporting is on illegal aliens, not immigrants, legal immigrants. And our reporting is absolutely accurate. As to shameful racist scapegoating, as you call it, what other kind of racial scapegoating would there be? And screaming "racist" will not deter us in any way. I have absolutely no objection of any kind to immigration. But we believe there must be a national immigration policy before illegal immigration overwhelms this country. This country, Jeremy, is, as you may have noticed, the most racially diverse nation on the face of the planet and its immigration laws are among the most generous. We will continue to report reality and the facts. You might try it.
And from Salt Lake City, Utah -- "I am shocked, absolutely shocked to find a news program that did not entertain us with Kobe, Scott Peterson or Rosie, but instead devoted the hour to critically important issues for all Americans. Keep up the good work!" Rick Dwore. We love hearing from you. E-mail us at loudobbs@cnn.com.
That's our show for tonight. Thanks for being with us. Have a very pleasant weekend. Good night from New York.
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Iraq>
Aired November 7, 2003 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is LOU DOBBS TONIGHT for Friday, November 7. Here now, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening.
Tonight: the best week for the economy in three years. Employment is rising. Productivity is soaring, and the economy growing rapidly. Labor Secretary Elaine Chao will be my guest tonight. And in our special report, "Wasted Minds: Our Failing Schools," we focus tonight on radical solutions for schools in crisis.
And "Exporting America" -- tonight, state governments outsourcing American jobs overseas. I'll talk with two Indiana state senators who are trying to keep those jobs in Indiana.
And a dramatic week in space, a total lunar eclipse this weekend. The biggest solar flare ever has hit Earth. And four spacecraft are closing in on Mars. Astrophysicist Charles Liu joins us.
Tonight, more Americans have been killed in Iraq, as the State Department is warning that terrorists may be about to attack U.S. targets in Saudi Arabia. Six U.S. soldiers were killed when their Black Hawk helicopter crashed near Tikrit. Local Iraqis said the helicopter was shot down. Two other American soldiers were killed in separate attacks in northern Iraq; 34 American troops have been killed in Iraq this week, the highest number in any week since the fall of Baghdad.
We have two reports tonight. Senior Pentagon correspondent Jamie McIntyre will report on the escalating war in Iraq. National security correspondent David Ensor will report on the terrorist threat to U.S. interests in Saudi Arabia.
We go to Jamie McIntyre -- Jamie.
JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Lou, as tragic as this helicopter incident has been in Iraq, with the loss of six American soldiers, it could have provided an even more powerful psychological boost to the enemies of the United States.
CNN has learned that an Army general was on the second helicopter traveling with that ill-fated Black Hawk. Now, U.S. military officials aren't saying for sure at this point if enemy rocket fire brought down the UH-60 Black Hawk helicopter, but it appears likely. Sources say that, on the first helicopter, the one that wasn't hit, was this man, Major General Thomas Romig, the judge advocate general of the Army. That's the Army's top lawyer.
He's not based in Iraq, but was visiting Iraq on an undisclosed mission. He, again, is safe, as we are told. But, as it turns out, the two helicopters were in range of rocket-propelled grenades. As they flew along the marshy banks of the Euphrates River near Tikrit, according to witnesses, a rocket hit the second of the two helicopters and sent it crashing to the ground at high speed.
The U.S. military, again, doesn't consider the loss of a high- ranking officer any more important than a loss of junior officers or enlisted personnel, but a successful attack on a two-star general could have given the anti-U.S. insurgents a very powerful morale boost. Just as when, by the way, when rockets hit the Al-Rashid Hotel when Deputy Defense Secretary Paul Wolfowitz was spending the night there, there's no way to know at this point if the insurgents knew a general was on one of those helicopters, although the heavy security around the helicopters could have been a tipoff.
The incident, though, does raise troubling questions about the level of intelligence that is in possession of the enemies of the U.S.-led coalition and whether or not the United States can take any real effective measures to guard against rocket-propelled grenade attacks -- Lou.
DOBBS: Jamie, the death of 34 American soldiers raises very important questions. Defense Secretary Donald Rumsfeld repeatedly has said, no more troops, U.S. troops, are needed in Iraq. According to the secretary, military commanders have not asked for any more troops. Are those commanders, Jamie, simply afraid of some sort of retribution or perhaps losing their jobs, like former Army Chief of Staff General Shinseki, when he talked about 300,000 troops being needed?
MCINTYRE: Well, of course, at the time Shinseki made those remarks, he was already out of favor with Defense Secretary Rumsfeld. He didn't technically lose his job, because he served until the end of his term and then retired, but warning about the size of the military overall.
As for the commanders in Iraq, if you talk to them, they say they take very seriously their responsibility, probably the highest responsibility they have, to request what they need to complete their mission and protect their troops. They insist that, if they believed that there was a need for more troops, they would ask for them.
And I think if you told them that they were cowed by political pressure, I think they would be very insulted by that.
DOBBS: And the situation as it stands now, Jamie, is that nearly every retired officer with whom I've spoken -- there have been exceptions -- general staff officer -- says that it is obvious that we need more boots on the ground.
But the men who make the decisions say no. Jamie McIntyre, our senior Pentagon correspondent, thank you very much.
The State Department, meanwhile, says radical Islamist terrorists have moved from the planning phase to the operational phase as they prepare for a possible attack against U.S. targets in Saudi Arabia.
National security correspondent David Ensor has the report.
David, what is the nature, as we understand it, of this threat?
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, Lou, the State Department declared closed for the next three days the U.S. Embassy and consulates in Saudi Arabia.
The decision to close them is based on credible information, officials say, suggesting al Qaeda may be planning to attempt another attack soon within the kingdom. The intelligence does not suggest any specific target or time. But officials say they assume that American diplomatic and military facilities in Saudi Arabia would be high on the terrorist groups' lists of desired targets.
Officials are saying that this intelligence they're talking about includes chatter on Web sites and comments on publicly released audiotapes released by al Qaeda leaders in the last few months, as well as some other intelligence that's also been gathered by the U.S.
Another reason, Lou, for the concern about the attacks, officials say, is, of course, that the Muslim holy period of Ramadan started last week -- Lou.
DOBBS: David, thank you -- David Ensor, our national security correspondent.
An Air Force translator from the Guantanamo Bay prison for suspected terrorists will face a court-martial on 20 charges, including espionage. The military says senior airman Ahmad al-Halabi gave classified information about the prison to people from Syria and Qatar. The Air Force says it will not seek the death penalty in the case. Two other people who worked at Guantanamo Bay are also in custody, a Muslim chaplain in the Army and a civilian translator.
Turning now to the economy and more signs today that faster economic growth is finally creating jobs -- the government today reported unemployment fell to 6 percent in October. That is the lowest level in six months. The number of jobs in the economy rose for a third straight month as well. President Bush said the numbers prove his tax cuts and business incentives are now working.
Senior White House correspondent John King is traveling with the president and reports tonight from Winston Salem, North Carolina.
(BEGIN VIDEOTAPE)
JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: White House officials are now voicing strong confidence that the new unemployment report is proof to them that the economy has finally turned the corner on key question of creating jobs.
The White House happy, of course, that the unemployment rate dipped a bit to 6 percent last month. But most encouraging, from the White House perspective, is the data showing the economy added 126,000 new jobs last month. That is the third consecutive month the economy has added jobs, some 300,000 jobs now over the past three months. The White House believes that will deflate the Democratic argument that the Bush recovery has been a -- quote -- "jobless recovery."
Mr. Bush in North Carolina today, on the one hand, to raise some campaign money, on the other hand, to tout his economic record. A bit of an "I told you so" from the president, as he said his big tax cuts, very much criticized by the Democrats, first brought the economy out of recession. Now Mr. Bush says they are finally helping create jobs as well.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The economy's growing. New jobs are being created. And we -- there's an opportunity. And I hope you seize it.
KING: But note the president's tone. He was careful not to crow too much. Democrats say some three million Americans have lost their jobs in the Bush presidency.
And here at a community college roundtable, the president came face-to-face, first, with one woman who said she lost her job in an electrical manufacturing plant because it went overseas. Then the president encountered a woman who said her job in a textile factory went overseas. The Democrats say those jobs are being lost overseas because of Bush administration trade policies. The president disagrees. He says free trade is a key engine of economic growth.
But it is clear that the president also is quite sensitive to the Democratic criticism.
BUSH: Trade is a two-way street, that, if we have trade with other neighbors and countries, we expect there to be fair trade coming the other way.
KING: One of the reasons the president choosing his words so carefully in this state, North Carolina has lost more than 150,000 manufacturing jobs over the past three years. The president also reminded, as he tried to focus on what he considers to be upbeat economic news, that the economy is hardly the only issue in the coming campaign.
Outside of one of his events, a modest group of protesters, most of them opponents of the war in Iraq, one sign saying, "Mr. President, where are the weapons of mass destruction?" Another sign saying, "Mr. Bush, bring our troops home," a fresh reminder for the president both the economy and the war in Iraq the key issues in the campaign to come.
John King, CNN, Winston Salem, North Carolina.
(END VIDEOTAPE)
DOBBS: And still ahead, our special report, "Wasted Minds: Our Failing Schools" in this country -- tonight, one city's radical approach in fixing a failing school system. Bill Tucker will report. And broken borders -- it is too easy to steal an American identity and a free pass into this country. Lisa Sylvester will have the report.
And an explosion in economic growth and job creation in the best week for the economy in three years. Labor Secretary Elaine Chao joins us.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: Tonight: Philadelphia schools have been so bad for so long that the state of Pennsylvania had to resort to drastic measures. Last year, the state of Pennsylvania took over Philadelphia's public school system, trying a variety of approaches to fix the problems.
Bill Tucker has the report.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): Philadelphia has embarked on a great experiment. And one year after being taken over by the state, test scores in reading math and science show improvement.
The teachers union, after opposing the state takeover, is now on board with the changes being made inside the schools, but they remain leery of changes being tried at the management level; 86 of the worst performing schools in the city became the object of immediate and dramatic change. Some underperforming schools were restructured, charter schools supported. And, at other schools, partnerships were formed with corporations and universities to share resources and management expertise. And 45 schools were turned over for private management.
PAUL VALLAS, CSO, SCHOOL DISTRICT OF PHILADELPHIA: Those schools that are performing, we're going to keep, support, expand. Those school models that aren't performing, we're going to jettison, we're going to close down.
TUCKER: And already Vallas has terminated one private manager's contract. Regardless of the management structure, all schools are now held accountable for instituting a standard curriculum, reducing class size or increasing teaching staff, offering teacher development programs, and getting the parents of children involved.
SAUNDRA HOPKINS, EDISON SCHOOL PRINCIPAL: We have had more parent participation than we've had in a long time. We invite our parents. We shower our parents to come in.
TUCKER: And the state has embraced the changes in one very important way. It injected 85 million additional dollars into the school's budget.
UNIDENTIFIED FEMALE: What should be the next number? TUCKER: But it isn't just the money that's made the difference, in the eyes of one financial analyst.
TRACE URDAN, THINKEQUITY PARTNERS: In some ways, it's almost just the permission to believe that you're starting fresh that matters more than anything else.
TUCKER: Test scores, while improving, remain well below state standards in most Philadelphia schools.
(on camera): Educational experts and analysts say it will ultimately be a few years before they can determine the success or failure of these schools. And that brings into question the only thing in shorter supply than money: parents' patience.
Bill Tucker, CNN, Philadelphia.
(END VIDEOTAPE)
DOBBS: Another issue about which we have reported extensively on this broadcast is the growing number of illegal aliens entering this country, some 10 million illegal aliens in the country, as many as 700,000 crossing our borders each year.
Immigration officials say they're becoming, those illegal aliens, far more difficult to catch, in part because they're using fake green cards.
Lisa Sylvester is here tonight with the report -- Lisa.
LISA SYLVESTER, CNN CORRESPONDENT: Lou, for $80 to $100, someone can buy a new identity. That will get you a fake green card and, as a bonus, your very own fake Social Security card.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Coming up on exit two.
SYLVESTER (voice-over): This tape shows a recent roundup of illegal aliens in Boston and Los Angeles. When the suspects are arrested, more often than not, they're carrying fake alien registration cards. The fraudulent green cards are sold in the open on the streets of major cities from vendors called micas.
KEVIN DELLI-COLLI, U.S. IMMIGRATION AND CUSTOMS ENFORCEMENT: A slip of paper would be passed off to the mica, along with the cash. And then that vendor then would pass that information to another individual known as a runner.
SYLVESTER: Peddling fake immigration documents is a growing trade. The product is always in demand, and it's less risky than selling drugs.
Immigration agents broke up illegal document rings this year in New York, Los Angeles, San Francisco, Atlanta, Chicago, Las Vegas, Denver and Washington, D.C. As part of Operation Card Shark, authorities in the District of Columbia seized more than 1,000 phony green cards, blank Social Security cards and driver's licenses.
Surprisingly, somebody can make a passable document with an old typewrite, cutting board, and laminator. But it's innocent people whose identities are stolen who are getting hurt the most.
ROSCOE C. HOWARD JR., UNITED STATES ATTORNEY: Of course, those people's lives are overturned. Their credit is ruined. They spend an awful lot of their lives just trying to get their good name back.
SYLVESTER: Technology is making the job of immigration officials even harder.
JOSEPH GREENE, U.S. IMMIGRATION AND CUSTOMS ENFORCEMENT: As the new features advance for photocopying and computer graphics and so forth, we have to keep pace in order to frustrate and thwart the document vendors from coming up with look-alikes that are fairly difficult to detect, even by an expert.
(END VIDEOTAPE)
SYLVESTER: U.S. officials have another incentive to crack down on the illegal document trade. And that is to prevent terrorism. The 9/11 hijackers had phony driver's licenses -- Lou.
DOBBS: That's unsettling, at the very least, to think that those fake I.D.s, green cards, Social Security cards, driver's licenses, are that readily available.
SYLVESTER: In fact, that's the thing that is most startling about this, is, these cards are being sold out in the open out on the street. All you have to do is know where the neighborhood, know where to go; $80 to $100, you're walking away with a fake green card or a fake driver's license, very frightening.
DOBBS: And with what appears to be a free pass across our borders.
Lisa Sylvester, thank you very much.
Coming up next: back to work; 126,000 Americans found jobs over the past month. Millions more, however, are still looking. We'll be talking about employment and other labor issues with the secretary of the Department of Labor, Elaine Chao.
And an American hero's story of survival and resilience in the face of pain and incredible odds. Casey Wian will report from Camp Pendleton, California.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: The White House today said the decline in the unemployment rate to 6 percent is evidence that President Bush's tax cuts are working.
Joining me now for more on labor is the secretary of the Department of Labor, Elaine Chao.
Good to have you with us, Secretary.
ELAINE CHAO, SECRETARY OF LABOR: Nice to be here. Thank you.
DOBBS: Secretary Chao, these numbers surprised most economists, 6 percent. Do you believe this means that the economy has turned, that now we're going to see substantial job creation?
CHAO: I think the labor market rebound has begun in earnest.
And the numbers are actually more positive than you paint. In the last three months, there have been 287,000 new jobs; 126,000 new jobs was created in the last month, far surpassing expectations of 65,000 new jobs. And then, last month, I had announced that 57,000 new jobs were created. And the Bureau of Labor Statistics, which produces these numbers, went back and revised the data based on actual results. And we found that, in fact, over the past three months, job creation has been more robust than had been expected.
DOBBS: Secretary Chao, you better get that whip out and fix those people over at BLS, so they get those numbers right the first time.
(LAUGHTER)
CHAO: They do a wonderful job. They do a wonderful job. But it's just the nature. These revisions occur all the time. And, as you well know, we have revisions twice a year as well, on top of the monthly revisions.
DOBBS: Absolutely.
And while everyone is pleased to see this unemployment rate come down, and we all hope that it will come down more, there's still nine million Americans out of work in this country, two million of them long-term unemployed. These numbers and the 126,000 jobs created last week, most of them were the retail sector. They were not high-paying jobs. These are lower-paying jobs, for the most part. But the good news is...
CHAO: But that's not really true.
DOBBS: I beg your pardon?
(CROSSTALK)
CHAO: That's not really true.
Of the long-term unemployed, that number has dropped as well in the past month. So we are beginning to see a drop in the long-term unemployed. We saw a drop in the number of jobless claims filed. That is a leading indicator. The unemployment rate is a lagging indicator. And even that has shown that there's been a drop from 6.1 percent to 6 percent. And then, as a leading indicator, the jobless claims have fallen again to well over 380,000. So with GDP growth of the last quarter hitting well over 7.2 percent, and having productivity increases over 8.1 percent, which are phenomenal numbers, clearly, the economy is in full gear and the labor market...
DOBBS: Full gear?
CHAO: I think it's very strong.
DOBBS: Full gear?
CHAO: It's very strong.
DOBBS: Secretary Chao, if I may argue with you, then.
CHAO: Yes.
DOBBS: We have to create 150,000 jobs just to keep pace with population growth. We have 6 percent unemployment. We're far from being in full gear, Secretary Chao.
CHAO: Well, full gear means that the economy is fully engaged.
DOBBS: I understand what it means.
(CROSSTALK)
CHAO: Thank you.
What it also means is that, again, with GDP growth of 7.2 percent and a productivity growth of 8.1 percent, the productivity growth cannot continue at this level without creating permanent jobs. We're also seeing increases in temporary help supply. That's, again, a precursor to permanent hiring.
DOBBS: Right.
CHAO: And we're also seeing the average number of hours worked increase.
DOBBS: Secretary Chao, if I may...
(CROSSTALK)
DOBBS: We're losing hundreds of thousands jobs to outsourcing as well. We have 10 million illegal aliens in the country. The Labor Department is doing absolutely nothing on the issue of
(CROSSTALK)
CHAO: Oh, that's not true at all. Lou, you know better than that. The Labor Department does a lot of things.
DOBBS: Let me give you a couple of examples, if I may, Secretary Chao. For example, we went through a number, with the Department of Labor, to get some sort of sense of who is tracking this. We are told that the Department of Labor will fully support illegal aliens in their labor -- legal issues.
CHAO: I'm not so sure who you were talking to, Lou.
But, clearly, this is a larger issue, the whole issue of illegal immigrants, than just Labor Department.
(CROSSTALK)
CHAO: We serve the work force. And for people who are out of work, we have $12 billion publicly funded work force training program.
We also spend about $58 billion in unemployment insurance. For the illegal immigrant that you're talking about, H-1B visas, for example, which I think some of your people may have alluded to, that has a cap of 66,000 annually. So it's a very small part of the whole work force.
(CROSSTALK)
DOBBS: Secretary Chao, I personally wanted this to be just a wonderful, congratulatory discussion.
CHAO: Well, thank you.
DOBBS: But since you -- if you want to be confrontational, let me bring
(CROSSTALK)
CHAO: No, not at all.
DOBBS: Give me the Labor Department's best report, if you will, on the number of H-1B and L-1 visa holders in this country right now and for whom they're working.
CHAO: H-1B visas has an annual cap now of 66,000. And that has been actually underutilized because of the high-tech situation.
DOBBS: Secretary Chao, I asked how many are in the country now working and where? Does the Labor Department have any idea?
CHAO: No. We have a work force of 146,000. So I can't tell you that.
DOBBS: One hundred forty-six.
CHAO: We do not track that. But, annually, it's a 66,000 ceiling.
DOBBS: Right. Secretary Chao, I congratulate you on what I hope and we all hope is a wonderful turn in the employment situation in this country. CHAO: Thank you.
Well, we want to help every worker that's out of work, as the president has said. We are optimistic, but not complacent. Every person -- we want to make sure that every person who wants a job will indeed get one.
DOBBS: We're with you all the way.
CHAO: Thank you.
DOBBS: Thank you very much, Elaine Chao, secretary of the Department of Labor.
Coming up next, we're going to focus on "Exporting America" -- tonight, a story you will not believe, state governments hiring foreign workers to help unemployed Americans find work. That's right. Two state senators from Indiana have had a bellyful. They join us next.
And out of this world, a week of truly phenomenal events in outer space, from the largest-ever explosion on the surface of our sun to a total lunar eclipse this weekend. We'll be joined by astrophysicist Charles Liu.
Please stay with us.
(COMMERCIAL BREAK)
DOBBS: Now following up a story that we first reported last month.
The state of Indiana's Department of Workforce Development hired a company to do technology work. The state's project in this case is called Energize Indiana, its aim, to help unemployed Hoosiers find work. So what did the state's Department of Workforce Development do? Well, it hired an Indian firm, Tata. We were outraged by the deal, quite frankly.
And so is state Senator Jeff Drozda. He's drafting a bill to put the needs of Indiana workers first. He's working with state senator David Ford, who chairs the Economic Development and Technology Committee. Both of them are kind enough to join us tonight from Indianapolis.
Good to have you with us.
DAVID FORD (R), INDIANA STATE SENATOR: Good to be here.
JEFF DROZDA (R), INDIANA STATE SENATOR: Good evening.
DOBBS: Let me turn, if I may, first, to you, Senator Drozda.
The idea that the state of Indiana, its work force development agency, would go outside -- I mean, did they explain anything to you about this? DROZDA: Well, I was contacted by a constituent before this contract was awarded, and this individual, an expert in the I.T. industry, warned me that this was coming bound the pike. And so I contacted the Department of Workforce Development and they said, Well, we know it might be coming down the pike, we might award this contract. But we'll be able to answer any questions that any policymakers might have.
Well, they awarded the contract to the tune of $15.2 million. But thus far, has not -- they have not been able to answer any of the questions that I've asked them.
DOBBS: They're just plain ignoring you?
DROZDA: Well, in a letter that I wrote to them and was dated October 21, I said, Number one, I'd like you to pull the contract in favor of rebidding it. And let's look at some firms from the state of Indiana. And number two, I want you to give me your policy on L-1s and H1-B visas and thus far I have yet to hear back.
DOBBS: Well, don't feel too badly, Senator. I just asked the secretary of the Department of Labor to tell us how many H1-B and L-1 visas were working in the country and you, I think, probably heard her response which is simply they do not know.
DROZDA: That's no different from the state of Indiana because they don't know either.
DOBBS: Senator Ford, you are the chairman of this committee. You -- this agency has a critical role, I would think, to play in training up your people, your citizens there in Indiana, to be able to work in technology and high-value jobs. What was your reaction when you found out that very agency was outsourcing to an Indian company?
FORD: In the last year, we've tried to create several new entities to bring jobs back into Indiana and increase our workforce to stop the brain drain. Indiana ranks 50th in the nation in the number of young people who are educated here and leave.
You have to remember, Indiana has some of the finest universities in the country -- Indiana University, Purdue, Ball State, Notre Dame -- 40 some others. And the fact that they were not able to find...
DOBBS: Don't forget Indiana State or you're going to be in real trouble, Senator Ford.
FORD: Indiana State, certainly. I don't intend to leave anybody out, I just don't have time to name them all on the show.
But the idea that they couldn't look and find programmers in Indiana who can translate these programs from Cobalt so Java make them available on the Web, which is what we're talking about doing here for $15 million I found very strange.
DOBBS: Very strange. Are you going to be able, gentlemen, to do anything about that legislatively? Will you be able in any way to correct it?
FORD: I think we can. At least send them a message that this is not acceptable.
The response that I got was that they were within the law, that they bid the projects correctly and they awarded it to the higher bidder. That's simply not enough. They just didn't try hard enough.
When we write the law, we try to be general and leave it to the administration to do the right thing. In this particular case they just simply dropped the ball, and what we're going to try do is write legislation to make sure that doesn't happen again.
Senator Drozda, Senator Ford, we invited your governor, Joseph Kiernan, to join us. We asked to talk with him immediately after we learned of this debacle, in point of fact. He declined our invitation to be with us this evening.
Why isn't your governor taking on this issue, and why isn't there an outrage from the governor's office?
DROZDA: Well, when I contacted the department under the auspices of the governor, I copied the governor on the letter. The governor's very well aware of this. It's unfortunate that the governor, Joe Kiernan administration, decided to proceed with the contract. And not only that, but they said, We will ignore the general assembly.
We won't respond to the letter and we'll proceed with the contract. So what I -- I have had no other choice but I did draft legislation, Senate Bill 4 here in Indiana. And it's going to have -- contain some provisions that hopefully will protect Hoosier -- individuals from -- in the state of Indiana who definitely want employment.
DOBBS: Senator Drozda, Senator Ford, we thank you both. We also wish you all of the best. Thank you.
(CROSSTALK)
DOBBS: That brings us our poll question for the evening. The question -- "Should state governments outsource work if it saves taxpayers money? Yes or no?" Cast your vote at cnn.com/lou. We'll have results for you later in the show.
Now, "Heroes." Tonight, the story of Marine Sergeant Jason Wittling. He saw fighting in Baghdad and made it through uninjured until a week after major combat was declared ended. But it was dealing with munitions left behind by the army of Saddam Hussein that changed his life.
Casey Wian has his story of strength and determination from Camp Pendleton, California.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNNfn CORRESPONDENT (voice-over): after a nine-year military career without combat, Marine Sergeant Jason Wittling saw Iraq as an opportunity.
SGT. JASON WITTLING, U.S. MARINES: I was chomping at the bit. I wanted to go so bad.
WIAN: The combat engineer was in the first assault on Baghdad, then moved to Karbala, where he demolished piles of Iraqi mortars and RPGs. In May, after lighting fuses to detonate more than a ton of ordnance, Wittling was wounded while speeding away.
J. WITTLING: We were coming into corner and the Humvee started going sideways. And I seen one little hump of dirt, not but three or four feet tall and we're headed right for it, and that's what rolled up. I woke up, like, 30 seconds later, flat on my back in the desert.
WIAN: Unable to move and only halfway to safety, the driver, Staff Sergeant Tommy Pierce, came to Wittling's aid.
J. WITTLING: He just laid across me -- like, across my face and chest, and it blew.
WIAN: They survived, but Wittling's neck was broken, and he was paralyzed.
MAUREEN WITTLING, WIFE: My kids had gone to a family fun day out in town for all the Marines. And we had come back, and there -- the doorbell rang and I walked around the corner and saw the men stand there in their dress blues uniforms and I thought only one thing could have happened. I didn't know that they came out to tell you about accidents. I thought they were only there for death. And I wouldn't let them until they said he was alive.
WIAN: Wittling had surgery to fuse bones in his spinal cord. Now, after three months in the V.A.hospital, he's now home. Physical therapy has restored some arm strength. Wittling says he has no regrets.
J. WITTLING: People talk about how we shouldn't have been over there. If they would have seen them kids' faces when we rolled up into Baghdad, into Karbala, or into those other cities, I guarantee you they would have changed their mind. Because they -- the look on their face, like, We have been waiting on you for 12 years to come in.
WIAN: Doctors gave Wittling a three-to-four percent chance of walking again.
J. WITTLING: I kept telling them, Obviously, you don't know me very well. Because if you did, my chances of walking will a whole lot higher.
I'm going to walk. I'm going to walk. It's -- there's no doubt in my mind.
WIAN: Casey Wian, CNN, Camp Pendleton, California.
(END VIDEOTAPE)
DOBBS: Marine Sergeant Jason Wittling, our best for a speedy recovery.
We'll continue here in just a few moments.
(COMMERCIAL BREAK)
DOBBS: As we reported earlier, the economy added more than 125,000 jobs last month. Many of those new jobs, however, in the lowest pay brackets. Millions of more Americans are still looking for work.
Joining us now, this week's "Newsmakers": Justin Fox, editor-at- large of "Fortune" magazine; Bob Lenzner, the national editor of "Forbes"; and Mark Morrison, managing editor of "BusinessWeek."
Gentlemen, good to have you here.
Happy days are here again. We got a 6 percent unemployment rate, 7.2 percent GDP. Things are rolling, right, Bob?
BOB LENZNER, "FORBES:" 250, 000 jobs, whatever you may say about them, in two months -- if you figure out how long it takes to get 3 million jobs, that means only a year. We were discussing that before the show.
It's good for George Bush, whatever the jobs are, if he can keep the thing rolling. I think the question is -- I don't think 7.2 percent growth's going to continue for very long.
DOBBS: You just lost me. A hundred -- how many jobs every...
LENZNER: They -- they created 125,000 jobs this month and 125,000 jobs in September. So that's 250,000 jobs. Oh, you're right, 250,000.
(LAUGHTER)
LENZNER: My God. I got to go back to school.
(CROSSTALK)
DOBBS: It's all right. The fact of the matter is I can't add three plus two some days.
MARK MORRISON, MANAGING EDITOR, BUSINESSWEEK: It's a rock 'n' roll economy and the administration's obviously going to get credit. We would have blamed them if it had gone the other way.
DOBBS: Oh, there is no question about it.
MORRISON: But we also deserve -- you know, we also have to praise Mr. Greenspan and I would say Mr. Spitzer, all of which have come together to make this thing happen.
JUSTIN FOX, EDITOR AT LARGE, FORTUNE MAGAZINE: Because the whole giving presidents blame or credit for where the economy's going is nuts on a really short-term basis like this. Elaine Chao claiming credit for it, other people blaming Bush.
LENZNER: I don't think they even thought this was going to happen.
FOX: No, I'm sure they didn't.
(CROSSTALK)
DOBBS: Justin, one of the things that amazes me is you heard Elaine Chao say this economy's at full bore, 7.2 percent GDP growth for the third quarter. This doesn't feel like full bore to me.
FOX: No, it was catching up because it didn't do anything for the first half of the year.
DOBBS: We have got to have about 150,000 jobs a month just to maintain pace with population.
FOX: But it was the best news on the economic front ...
DOBBS: Oh, I'm not in any way denigrating the news. I'm delighted as anybody short of the president. I mean, it's great.
MORRISON: The recovery certainly is full bore, and whether the Bush tax cuts, the latest ones, had a lot to do with it, it's probably difficult to argue. But I think it's going to help as we go forward to keep the momentum going. You have this very favorable investment climate, and the stock market's performance has certainly -- it's reacting to earnings, but it's also reacting to this new very favorable climate for taxes on stock investments.
DOBBS: Yet, within that employment number, long-term unemployment, this is a significant problem, those are many of them higher paying jobs, and we saw the formation here primarily the lower paying jobs. How do we get around that, and how soon?
MORRISON: It's not a perfect...
DOBBS: No.
MORRISON: It's not a perfect recovery, certainly. But you know, I think over a period of time, you know, this is an innovative, very innovative economy we have.
FOX: And everybody had the same concern in the early '90s.
(CROSSTALK)
MORRISON: ... that the high-quality jobs are going to come along with the others, is my view.
DOBBS: You mentioned Alan Greenspan. I'd like to show you the headlines. I'm sure you saw this. If we can put those up, wherever we have them. "Financial Times" and -- there it is, "The Financial Times." "Greenspan Hints Rates May Stay Low." And if we can see how "The New York Times" characterized it. "The New York Times." "Greenspan Hints at End to Low Rates."
LENZNER: I think "Financial Times" beat "The New York Times" on that one, if you read what he actually said because the quote that I read today said he was predicting for a considerable period of time the rates might stay low, right?
FOX: Yeah. And I read the speech. And also you're supposed to read John Barey (ph) in "The Washington Post" on Greenspan, don't believe anybody else, so.
MORRISON: But there is no question the chairman's doing a little tap dance here and backing away, moving away from his position that, you know, we had deflation, we had to keep these extraordinarily low rates. Really, rates should be going up now, they should be moving higher to do...
FOX: He promised they wouldn't for a while, so they won't.
(CROSSTALK)
MORRISON: Yes, but he's starting to make the move and he's got to catch up with the bond market. The bond market is telling us that the rates should be somewhat higher.
LENZNER: Even if they go somewhat higher it's not going to be so much as to hurt economic growth. We have another 7.2 percent quarter, rates are going to go up.
DOBBS: We get another 7.2, I think we're all going to be cheering wildly.
LENZNER: I can cap that one.
DOBBS: You can cap it...
(CROSSTALK)
DOBBS: The New York Stock Exchange sends the proxy out, John Reed, the interim chairman, to the members of the New York Exchange; reform is at hand. Is it adequate, Bob?
LENZNER: I think it's a first step. I think he's trying to get the approval of them before he goes forward. And there's going to be pressure on him to take the self-regulation outside and put it someplace else, and getting rid of the specialists, which I think is bound to happen. I don't think he wanted to force that down their gullets right at this point.
FOX: But it's got to come. It's a totally archaic system. And maybe they still have some small role to play, but the sort of monopoly power they have over trading NYSE stocks is crazy.
DOBBS: Is it proper for the SEC to take over the regulation of the New York Exchange at this point, do you think, Mark?
MORRISON: I think it's going to happen, but you know, that's not the...
(CROSSTALK)
MORRISON: They're supposed to be regulating the mutual fund industry last I saw.
DOBBS: You think they ought to start that, too?
MORRISON: They might want to start that too. I mean, they've had that responsibility for a while, had they not?
DOBBS: Eliot Spitzer in this. I recall at the outset of this investigation into Wall Street, people saying he's politically ambitious, it's just, you know, so forth, so on.
FOX: What's wrong with being politically ambitious?
DOBBS: We need more politically ambitious regulators and prosecutors.
LENZNER: Rudy Giuliani (UNINTELLIGIBLE).
FOX: And the thing that's great about Spitzer is he's just dealing with these things, shaking things up and not creating some crazy massive laws to deal with it all. Because I don't know that there is any way you can keep this from ever happening again, but he is punishing people and making them not want to do it for the next 20 years, I think.
LENZNER: He's going to put some of these guys in jail just like what happened to the inside information guys in the '80s. I think what's amazing is that what we're learning as it unravels how many of these mutual fund companies were actually doing this stuff, how many brokers were cooperating with the mutual funds to do it. That's what's happening.
DOBBS: The thing that amazes me is two years of corporate corruption scandals, we -- the mutual fund industry, Wall Street, the New York Stock Exchange and its total lack of transparency and conflicts of interest, I mean, when in the world are business leaders going to wake up in this country?
LENZNER: Well, we were discussing that before we came on, and we were saying that because...
(CROSSTALK)
LENZNER: So much -- so much money -- where there was so much money around that everybody decided to take -- Mr. Strong, who had his own mutual funds, who was on the "Forbes" list of 400 richest people in the country trades in his own shares to make extra money. This is what was going on.
MORRISON: They don't have any choice. They have to clean up. You know, try getting a rating now if you've got a bunch of hocus- pocus in your books. We were with a -- one of the big four accounting firms this week. They have shredded more than 500 accounts of their accounts, bringing in revenue of $52 million to the accounting firm, because they didn't feel comfortable, they got rid of these accounts.
(CROSSTALK)
MORRISON: They unloaded these accounts that were revenue- producing accounts because they were uncomfortable with the relationships and with the integrity of the numbers of the books.
DOBBS: Bob, Justin, Mark, thank you. And we appreciate it. Look forward to seeing you next week.
Up next, a historic journey. Eight billion miles into space is just one of several truly remarkable events in space. This week, astrophysicist Charles Liu of the American Museum of Natural History is my guest, next. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: We've seen two weeks of unprecedented solar activity creating the largest solar flare, in fact, on record. Now we're awaiting tomorrow's total lunar eclipse when the Earth's shadow falls on the moon. Joining me now our expert on all things celestial here, Charles Liu, astrophysicist, American Museum of Natural History. Charles, it is great to see you, as always.
CHARLES LIU, AMERICAN MUSEUM OF NATURAL HISTORY: Thanks.
DOBBS: Remarkable. Solar flares, this thing is the strongest on record?
LIU: Absolutely. The one that happened on Tuesday is 28 more -- 28 times more powerful than the typical powerful solar flare. This past two weeks, my solar astronomy colleagues tell me they can't remember a time when they had this much violence. This is going to keep them busy for years.
DOBBS: Now, in 1859, that was the strongest on record ever. How does...
LIU: Well, the problem is we didn't have the technology back then to measure the X-ray flux from that flare.
DOBBS: Right.
LIU: All we know is that that flare came through and damaged telegraph wires and stations and so forth. So probably it was stronger than these. But even so, these were really powerful.
DOBBS: And there was no damage from this that we're aware of, significant damage?
LIU: What had happened is that because we got the early warning, people who ran communication satellites or power grids actually adjusted their schedules and their power levels so that we didn't have any problems. DOBBS: We're being bombarded by these coronal ejections right now. We are supposed to be moving toward the nadir of solar storm activity.
LIU: Yes.
DOBBS: And it seems that just the opposite is happening, and profoundly the opposite.
LIU: Well, two weeks does not a trend make. So anytime you have a burst like this, it catches people's attention. But unless it happens for weeks or months further, that's when we have some sort of a strange, anomalous activity. So I'm not too worried yet.
DOBBS: You want to be a solar storm forecaster here? Will it continue?
LIU: They probably will not. That's my guess. But then again, I'm actually not a solar storm forecaster.
DOBBS: There are very few of them around.
LIU: Yeah. Well, it does highlight the fact that we should learn more about these storms as much as possible.
DOBBS: But you're a lunar forecaster and have a remarkable degree of accuracy. What are you forecasting for tomorrow?
LIU: At about 8:06 p.m. Eastern time, the moon will move into Earth's shadow, in fact, the darkest part of it, so that the sun, the Earth and the moon will be lined up. And during the two hours before 8:06, the half hour after 8:06 and the two hours after that half hour, we're going to see a total lunar eclipse passing through our eyes in a very gentle, happy way.
DOBBS: Now, to show you that I am really an astrophysicist in the making and have high mathematical aptitude myself, what you're saying is that that's going to begin about 6:00 p.m. Eastern, the beginning of it? Is that right?
LIU: Exactly.
DOBBS: Are you impressed that I can (UNINTELLIGIBLE) two plus two?
LIU: Great.
DOBBS: It will be visible, you think throughout...
LIU: As long as the weather is good, it's visible through much of the globe, including most of the United States.
DOBBS: And unlike other phenomena, this, we will -- this phenomena we can just sit there and watch it, we don't even need a telescope, do we? LIU: Exactly. Go on the backyard, on the porch, have a good time with your friends and just watch this thing that's amazed people for thousands of years.
DOBBS: Voyager is now on the outer limits of our solar system, what you astrophysicists call the heliosphere. We have Opportunity and Spirit headed toward Mar to land in a couple of months. This is going to be -- the Leonids later this month. It's going to be a busy time.
LIU: Yes. It's a marvelous thing. We also have spacecraft going to Saturn. We have new spacecraft that have been launched recently that are going to give us new information about the infrared universe. Wonderful things to look forward to.
DOBBS: Come back and share some of that with us in the next week, if you will.
LIU: It will be my pleasure. Thank you so much.
DOBBS: Charles Liu, thank you very much.
LIU: Thanks, Lou.
DOBBS: Coming up next, your thoughts on illegal aliens entering the country and demanding rights, that and a great deal more. All of that is straight ahead. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: The stock market scored another winning week, although the major averages did drop a bit. Here's Christine Romans with the market.
CHRISTINE ROMANS, CNN FINANCIAL NEWS CORRESPONDENT: Lou, the Dow down about 47 points, most of the losses came late in the day. The S&P also lower.
But you know, for the week it wasn't so bad, Lou. It was technology that really led things here today and for the week. The Nasdaq up more than 2 percent. The S&P and the Dow up for five of the past six weeks. So the trend still pretty solid there.
Among the large cap winners on Wall Street this week, Cisco rallied. Signs that tech spending may be picking up, at least that's what investors thought they read in its earnings report. That helped information technology. It was the best sector for the week, far and away the best sector. It also helped computer makers, software stocks.
Tyco and Disney are another couple of notable, widely held gainers on the week.
Among the laggards, General Electric fell 2 percent, as did Merck. ExxonMobil and AIG both down about 4 percent.
It was telecom and energy that were the poorest performing sectors in the S&P for the week, Lou.
DOBBS: Christine, thank you very much. Quite a week. Christine Romans.
Taking a look now at some of your thoughts.
From Huntington Beach, California -- "Your reports on trade policy or lack of it are amazingly insightful and refreshing in their analysis of the negative effects of the road we are set upon. Also, your cautionary comments regarding claims of increased productivity begin the process of discovery of a nation, which is rapidly losing its heart and soul." That from Duane Youngbar.
From Fort Collins, Colorado: "Not only are we rapidly losing manufacturing jobs to cheaper labor in other countries, the jobs we still have are rapidly going down hill. Case in point, my skilled labor job used to pay $16 an hour four years ago. It pays less than $12 an hour today, while productivity in this plant has increased more than 20 percent." That from Henk Ahrens.
From Parkesburg, Pennsylvania: "How can anyone argue that someone who is working here illegally should have protection under the same system of laws that they are breaking? It's their breaking of our laws that gives them protection under our laws. How bizarre can something be?" That from Randy Schirmer.
Unfortunately, I think it's one of those instances in which we have to say, stay tuned.
From Eaton Rapids, Michigan: "Mr. Dobbs, I thank you for bringing attention to the problems facing education in America today. As an educator of 28 years, it's like digging a ditch with a spoon. Old textbooks and low pay. Who will be our educators of tomorrow?" Gerald Adams.
From Beaver Dam, Wisconsin: "Your story on immigrants and illegals taking jobs was shameful racist scapegoating and dividing, not to mention inaccurate." That from Jeremy Kamps.
Well, Jeremy, the focus on our reporting is on illegal aliens, not immigrants, legal immigrants. And our reporting is absolutely accurate. As to shameful racist scapegoating, as you call it, what other kind of racial scapegoating would there be? And screaming "racist" will not deter us in any way. I have absolutely no objection of any kind to immigration. But we believe there must be a national immigration policy before illegal immigration overwhelms this country. This country, Jeremy, is, as you may have noticed, the most racially diverse nation on the face of the planet and its immigration laws are among the most generous. We will continue to report reality and the facts. You might try it.
And from Salt Lake City, Utah -- "I am shocked, absolutely shocked to find a news program that did not entertain us with Kobe, Scott Peterson or Rosie, but instead devoted the hour to critically important issues for all Americans. Keep up the good work!" Rick Dwore. We love hearing from you. E-mail us at loudobbs@cnn.com.
That's our show for tonight. Thanks for being with us. Have a very pleasant weekend. Good night from New York.
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