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Lou Dobbs Tonight

Muncie Mayor Ends U.S. Flag Ban; Attack Politics Dominates Race for President

Aired August 24, 2004 - 18:00   ET

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

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


LOU DOBBS, CNN ANCHOR: Tonight, outrage in Muncie, Indiana. After the mayor of Muncie bans the flying of the American flag, the mayor of Muncie, Indiana, tonight is under fire.
(BEGIN VIDEO CLIP)

MAYOR DAN CANAN, MUNCIE, INDIANA: This was a decision I made and I made by myself.

(END VIDEO CLIP)

DOBBS: We'll be talking with the head of the state's American Legion, Steve Short.

The Middle Class Assault. Both presidential candidates say they will do more to help working men and women in this country, but just what are the candidates of the two major political parties really proposing that will help American workers? We'll have a special report.

Exporting America tonight. Corporations not only shifting American jobs to cheap foreign labor markets, but also their personal information. Some in Congress are fighting to keep financial, medical and other personal records from going overseas. Others say it's simply too late. We'll have a special report.

And Population Explosion. The U.S. population is growing at an alarming rate. Experts say we don't have the resources to support it. Robert Engelman of Population Action International, David Pimentel of Cornell University join us to talk about the potentially devastating consequences.

And just days before the Republican Convention opens in New York City, Senator John Kerry challenged President Bush to stop what Senator Kerry calls the tactics of fear and smear.

(BEGIN VIDEO CLIP)

SEN. JOHN F. KERRY (D-MA), PRESIDENTIAL NOMINEE: Words, slogans and personal attacks cannot disguise what they have done and left undone.

(END VIDEO CLIP)

DOBBS: And I'll be talking tonight with three of the nation's top political journalists, Karen Tumulty of "TIME" magazine, Ron Brownstein of the "Los Angeles Time," and "Washington Post" columnist E.J. Dionne.

CNN ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, August 24. Here now for an hour of news, debate and opinion is Lou Dobbs.

DOBBS: Good evening.

Tonight, Senator John Kerry accuses President Bush and his supporters of fear and smear tactics. The Democratic candidate launched his offensive in New York just days before Republicans arrive in the city for their convention.

President Bush has denounced all 527 political advertisements, including that of the Swift Boat Veterans for Truth. Now Senator Kerry is trying to turn his campaign from the attack politics that have dominated for weeks to debating programs and positions that best serve this country's embattled middle class.

Joe Johns reports.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT (voice-over): In New York, trying to get out ahead of the Republican message machine before the start of the GOP Convention, John Kerry spoke indirectly about the swift boat controversy, but his audience got the message.

KERRY: The Bush campaign and its allies have turned to the tactics of fear and smear because they can't talk about jobs, health care, energy independence and rebuilding our alliances. They can't or they refuse to talk about the real issues that matter to the American people.

JOHNS: A line about his war record, which he has used in speeches before drew a longstanding ovation.

KERRY: I defended this country as a young man, and I will defend it as president of the United States.

JOHNS: Behind the scenes, the Kerry campaign and its surrogates were trying to make the case that the swift boat controversy was backfiring on Bush based on news reports, editorials and responses from some veterans, and they continue to charge that Republicans were working in tandem with the Swift Boat Veterans group in making the ads, though Republicans deny it.

Kerry, who spent much of his speech focused on the campaign's central issues, tried once again to weave in a broader attack on the administration's credibility, a continuing Democratic theme.

KERRY: And mark my words. They're going to bend over backwards with last-minute proposals and last-minute promises to make up for all that they haven't done and to pretend that they're not who they really are. JOHNS: That line drew a sharp response from a Bush campaign spokesman who called it an incredible effort to rewrite history, highlighting Kerry's voting record and accusing Kerry of trying to smear the president.

(on camera): With just days to go before the start of the GOP Convention, the Kerry campaign is hoping to focus voters on what it calls the clear choice between Kerry and the president on the issues. Even so, the swift boat controversy is still churning up the water -- Lou.

(END VIDEOTAPE)

DOBBS: Joe Johns tonight with the Kerry campaign in New York. President Bush's campaign today also tried to move past weeks of attack politics.

The Bush-Cheney team released the president's campaign schedule from now until he arrives at the Republican Convention next week. President Bush will visit eight battleground states and share his vision for the next four years.

Jill Dougherty is near the president's ranch in Crawford, Texas, and has the report for us -- Jill.

JILL DOUGHERTY, CNN CORRESPONDENT (voice-over): Well, Lou, you know, we talked with Scott Stanzel, who is with the Bush-Cheney campaign, about what Senator Kerry said today, and he said the Kerry campaign seems to be working to try to cover up the fact that we want to debate the -- actually, the senator's Senate record. That is what the Republicans want the debate to be. What did John Kerry do in the Senate?

About that so-called failed record by Bush, no, he says, there is no failed record, it's a record of accomplishment, and he said they intend to run on it. Now what's in the record of accomplishment? Well, tax relief, prescription drug benefits, educational reform, creation of the Department of Homeland Security and the war on terror.

And, Lou, you know, the attack ads issue -- we did get into that a little bit today, but the Bush campaign is saying if you look at the groups that are funding those ads that actually liberal groups are outspending conservative groups 25-1.

DOBBS: Jill, thank you very much.

And we will be, of course, examining those 527s and PAC groups and their respective spending from the standpoint of both parties here later in the broadcast.

Vice President Dick Cheney today talked candidly on another highly sensitive issue in this campaign -- gay marriage. The vice president, whose daughter is a lesbian and works for the Bush-Cheney campaign, today spoke at a campaign event in Davenport, Iowa.

A reporter asked the vice president to state his own personal views on the issue of gay marriage.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: My general view is that freedom means freedom for everyone. People ought to be free to enter into any kind of relationship they want to.

At this point, say, my own preference is as I've stated, but the president makes basic policy for the administration, and he's made it clear that he does, in fact, support a constitutional amendment on this issue.

(END VIDEO CLIP)

DOBBS: President Bush has called for a constitutional amendment to ban gay marriage after a judicial ruling in Massachusetts made it legal in that state. The Senate rejected the proposed amendment on the 14th of July by a vote of 48-50.

Some Hollywood celebrities, directors and writers are part of the latest moveon.com campaign to unseat President Bush. There are 10 advertisements that moveon.org's political action committee is unveiling here in New York City tonight. This ad features Ione Sky, who was the lead actress in the 1989 movie "Say Anything."

Moveon.org's PAC has purchased broadcast time for the first ad, and, depending on how it's received, the other nine may air on television or may be available online.

Republicans are turning to some star power of their own for their next round of political advertising. The November Fund, a 527 group, with the backing of the U.S. Chamber of Commerce will unleash ads addressing what it calls legal system abuses.

The November Fund is co-chaired by Craig Fuller, the former chief of staff to President George Bush when he was the vice president, and Bill Brock, former senator and RNC chair. The Chamber of Commerce is also going to run a voter education program discussing legal reform and what it calls the dangers of having the trial bar too closely aligned with the White House.

So far, the Swift Boat Veterans for Truth have generated the most attention of any independent 527 political group in this election. Yet the group and other conservative 527s have spent millions of dollars less than their Democratic counterparts.

Bill Schneider reports.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): The Swift Boat Veterans have hijacked the presidential campaign. They spent only about half a million dollars to run their ad for eight days in a few battleground states, but the ad generated a bonanza of press coverage. EVAN TRACEY, CAMPAIGN MEDIA ANALYSIS GROUP: Every presidential election, it seems that there's one ad that has great timing and great message, and the press wants to sort of jump on that ad and run with it. Swift Boat Veterans were exactly that.

SCHNEIDER: The perception encouraged by the Kerry campaign is that the Bush campaign has allowed independent so-called 527 groups, like the Swift Boat Veterans, to do its dirty work.

KERRY: The president keeps telling people he would never question my service to our country. Instead, he watches as a Republican-funded attack ad does just that.

SCHNEIDER: In fact, most of the spending by independent groups by far has been to help Kerry, not Bush. Since March, pro-Kerry groups have spent more than $40 million on more than 56,000 ads in the top 100 markets. That's nearly 15 times as much as the $2.7 million spent by pro-Bush groups on 2,700 ads in those markets. The Bush campaign raised so much money, Bush supporters saw no reason to form independent spending groups.

TRACEY: Democrats knew whoever the nominee was in March was going to be flat broke, and they were going to need some sort of outside help.

SCHNEIDER: The disparity in spending explains why President Bush denounces 527 groups at every opportunity.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I don't think we ought to have 527s. I can't be more plain about it.

SCHNEIDER: That sounds hypocritical to many people. The president benefits from the Swift Boat Veterans' ads, while he denounces such spending. Kerry gets to play the victim.

KERRY: They have obviously decided that some people will believe anything, no matter how fictional or how farfetched, if they just repeat it often enough.

SCHNEIDER: The entire campaign has been put off message by one ad run by one independent spending group.

(END VIDEOTAPE)

SCHNEIDER: The campaign finance law was designed to limit negative campaigning by the political parties by cutting off special interest contributions. Well, instead, that money is going to independent groups, and, theoretically, the campaigns can't control the message anymore -- Lou.

DOBBS: Are we so sure they can't control that message? Are we so sure that there isn't an alignment between the Democratic Party and its 527s and the Republican Party and its 527s?

SCHNEIDER: There is a constant debate over that "alignment" you just talked about. The law says there can't be any collaboration between the campaigns and the independent groups or they could be prosecuted. So the question is: What defines collaboration?

There are a lot of liberal and Democratic sympathizers and activists and supporters supporting those groups like moveon.org, but you have to prove that their activities are coordinated with the campaign, and that's very often hard to prove.

DOBBS: And the charges that the -- some of these 527 groups have leveled respectively against Senator Kerry and President Bush -- we mentioned -- you just reported that 15 times as much money has been spent. What about the veracity, the truthfulness of these ads? Which has the greater credibility? Have we examined that -- well, forget credibility. Which is the most accurate between these 527s? Do we have an answer for that one yet, Bill?

SCHNEIDER: I don't think we -- I don't have an answer because I haven't systematically looked at all those ads. Certainly, the Swift Boat Veterans' ads -- that first ad has been looked at with great care.

And what "The Washington post" concluded on Sunday was those allegations have remained unproved about Kerry's military record, that he lied about his record, that he didn't do what he said he did in order to win his medals. That has not been proved, but then his opponents have made a lot of charges that they haven't fully substantiated either.

My guess is there's going to be controversy over every single charge, including a lot of the charges made by the liberal groups as well. The answer is they're not really part of the campaign, so no one knows who's answerable for those ads.

DOBBS: Perhaps the president has it right that all 527s should be disbanded.

SCHNEIDER: That's exactly what he says. That's what John McCain says. That's what a lot of reformers say. But that's not what the Federal Election Commission says, and that's what they're angry about.

DOBBS: Bill Schneider, thank you.

SCHNEIDER: Sure.

DOBBS: Turning now to our report on the middle class and the assault on the middle class. Working men and women in this country are a key voting block, arguably the most important voting block, and a key focus, of course, of the presidential candidates. Yet there are many questions tonight about whether either candidate has a real plan to help this country's middle class.

Louise Schiavone reports.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): It's impossible to miss the issue of personal prosperity this election year. SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL NOMINEE: The truth is we still live in a country where there are two different Americas: one for all those people who have lived the American dream and don't have to worry, and another for most Americans, everybody else, who struggle to make ends meet.

SCHIAVONE: If there are, indeed, two Americas, both Democratic and Republican Party standard bearers are decidedly in the upper crust America. All of them are multimillionaires. In fact, fully a third of the U.S. Senate are millionaires, as is more than a quarter of the House of Representatives. Many argue it makes a difference.

ALEX KNOTT, CENTER FOR PUBLIC INTEGRITY: Because of their income and because of their assets, they're able to live in a better part of town. They're -- they don't have to make decisions that the average American has to make between what type of food to get or what type of health care to get.

SCHIAVONE: The truth is that by the time an American makes it to Congress, he or she is fairly successful.

BOB WALKER, FORMER U.S REPRESENTATIVE: A lot of them have been successful in life and so, therefore, are economical reasonably well off. But the fact that they grew up in middle-class backgrounds, they come from middle-class districts -- I think that for the most part, members of Congress are pretty reflective of the broad base of America.

SCHIAVONE: Among lawmakers today, there are 235 law degrees, 15 medical degrees, 18 doctorates and 142 masters degrees. Members of Congress earn $158,000, while the Census Bureau says the mean American salary is $42,000.

But this is not new. Historians note the founding fathers themselves were quite prosperous.

DON RITCHIE, SENATE HISTORIAN: The authors of the Constitution were men of property essentially. They were merchants. They were planters. They were professionals, lawyers and others.

SCHIAVONE: And no one goes to Congress without middle-class votes.

(END VIDEOTAPE)

SCHIAVONE: Lou, while there may be plenty of aspiring middle- class politicians, they are squeezed out of the national office by the sheer expense of campaigning as political parties recruit candidates who can pay for their own campaigns, creating an undeniable niche in Washington for the wealthy -- Lou.

DOBBS: Louise, thank you.

Louise Schiavone reporting from Washington.

Coming up here tonight, outrage after the mayor of Muncie, Indiana, issues an executive order banning the American flag flying in a city park. I'll be talking with Steve Short, the head of the Indiana American Legion next.

And then, both presidential candidates trying to redirect their campaigns from the attack politics that have dominated now for weeks. I'll be talking with three of the country's leading political journalists about whether the attacks are working, whether they're really over, and what we can all expect.

And then, the shipment of American jobs to cheap foreign labor markets has also sent the personal records of many millions of Americans overseas. Our special report, Exporting America, coming up.

(COMMERCIAL BREAK)

DOBBS: Outrage in Indiana after the mayor of Muncie banned the flying of the American flag in a public park. Mayor Dan Canan issued an executive order requiring all flags, including the American flag, be removed from the Prairie Creek Reservoir Campsite. Today, however, the mayor this afternoon rescinded the order under tremendous pressure from an outraged Indiana public.

(BEGIN VIDEO CLIP)

CANAN: This was a decision I made and I made by myself. This was the wrong decision to make, I can tell you now, and so I'm re -- I'm backing up on that, apologizing to those that I have offended, and encouraging them, as you see in the memo, to get their flags out and fly their flags at Prairie Creek Reservoir and support our troops.

(END VIDEO CLIP)

DOBBS: Joining me now from Indianapolis is Steve Short. He is the chief administrative officer of the Indiana American Legion.

Steve, thanks for being here.

The mayor rescinding his ban this afternoon. Your thoughts when you heard what he had done?

STEVE SHORT, INDIANA AMERICAN LEGION: Well, we were relieved. We were flabbergasted to begin with when we received calls yesterday that this had occurred, and we followed it closely through the evening and then again this morning, and we were relieved to hear that the mayor had stepped back, taken a look at it, adjusted fire and made the appropriate decision.

DOBBS: He adjusted fire, but it is -- it appears to be a case of the mayor and his colleagues and city government being too clever by half. The city had tried to ban the flying of the confederate flag in that park, had then been sued by the Indiana Civil Liberties Union...

SHORT: Yes, sir.

DOBBS: ... to allow the flying of the confederate flag and decided it would have a better defense in court if it simply eliminated all flags. Is that correct?

SHORT: That's my understanding, sir.

DOBBS: This is remarkable, if I understand it. I want to point out to our viewers here that we invited the mayor of Muncie, Indiana, we invited the head of the Indiana Civil Liberties Union to address these issues, and they declined, and I think we can say respectfully declined. But the idea that anyone at any time could deny the right of any American to fly the American flag properly, it's mind boggling. It simply is not within American law, is it, Steve?

SHORT: No, sir. The U.S. Flag Code is very clear. It's -- no one can force anyone to fly an American flag, but, certainly, I know of no instance in the past where anyone has denied -- a government agency has denied a group of citizens the right to fly the American flag.

DOBBS: Now, as I understand it, the police officers in Muncie were actually enforcing this order that the mayor had laid down. Is that correct?

SHORT: I'm not sure about that. I know that after yesterday's conversations with the newspaper in Muncie, The Muncie "StarPress," I was told that American flags were continuing to fly and that no tickets were written, nor was any attempt made to take those flags down.

DOBBS: The fact that any group can, well, insist, as the Indiana Civil Liberties Union here has, that a flag like the confederate flag be flown -- what is your reaction? Is there a proper resolution to that issue?

SHORT: I think that's an issue that reasonable Americans would disagree about, and I think they're -- it appears with this impending court case that they're about to disagree and argue that issue, and that's not a concern of ours at this point.

Our concern, obviously, was the decision made about the American flag, and, once we received calls from some outraged veterans in the Muncie area, we looked into it.

DOBBS: It's a remarkable -- when people on -- with good intentions on various sides of an issue -- and this one has various sides, not only two -- can come to just a ridiculous decision like this, one I suppose, Steve -- and I would assume you'd join me in this -- has to give the mayor of Muncie credit for being responsive, if you will, to public opinion and quickly fixing his mistake.

SHORT: Yes, sir, and we commend him for that action.

DOBBS: We join you in that.

And Steve Short, we commend you for being here with us. Thanks.

SHORT: It's my pleasure, sir. DOBBS: That brings us to the subject of our poll tonight. Do you believe Americans are free to properly fly the American flag anywhere they choose in this country? Cast your vote at cnn.com/lou. We'll have the results for you later in the broadcast.

Coming up next, attack ads dominating this race for the past few weeks, one of the most negative presidential campaigns in history. But the attack strategy could be costly for the candidates. It's just impossible at this point to ascertain for which candidate. Three of the nation's leading political journalists will join me to give us the answer to those questions.

And a rogue nation launching a vicious verbal attack against the president of the United States. We have that story coming up.

And a population explosion. We'll be a nation of nearly half a billion people within a half-century. David Pimentel, professor of ecology at Cornell University, Robert Engelman of Population Action International -- they're my guests, coming up next.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues with more news, debate, and opinion. Here now, Lou Dobbs.

DOBBS: Three of the nation's top political journalists joining me tonight: Karen Tumulty, national political correspondent, "TIME" magazine; E.J. Dionne, columnist, "Washington Post"; Rob Brownstein, national political correspondent for the "Los Angeles Times." Thank you for being here.

Ron, I take it, after the reporting of the "New York Times," "The Washington Post," the "L.A. Times," that we now have seen the candidates change their minds, 527s are over, no more attack politics -- or at least attack ads.

RON BROWNSTEIN, "L.A. TIMES": Yes. When? Until what? For the next four minutes?

Look, you know, as we talked about before, money is very difficult to stop in the presidential races. The Democrats and groups allied with them have been quicker to use this vehicle. In fact, I believe the Republicans largely discouraged the use of 527s, believing they were better off having the money flow into the Bush campaign and the Republican National Committee where they could control the message more directly.

But I think that's over, Lou. The swift boat attacks, whatever the veracity -- and a lot of questions have been raised about this first ad in particular -- they now are in a position where they are likely to continue raising large amounts of money and will be able to influence this campaign for as long as they want to, and I think they are going to be a factor for quite a while from here on out.

DOBBS: E.J., do you agree that -- is it important for the national media to be focusing on these attack ads, or are they simply a distraction from the national agenda and the people's interest?

E.J. DIONNE, "THE WASHINGTON POST": Well, I think the real problem is -- that you've seen is the extent to which one ad can set the media agenda for two weeks, one ad with about a half a million dollars put behind it, where one side can get money to that organization without really being accountable for the fact that may be helping them out.

So I think that is a big problem, but it is now a big deal, and I think it really shifted the course of the campaign in the last couple of weeks. I think Kerry was on a kind of slow roll after his convention. His numbers were improving, even though the lead over Bush wasn't big, and I think this totally threw the Kerry campaign off its stride, and I think it's starting to shift the numbers a little bit.

DOBBS: And, Karen, do you agree with E.J. and, Ron, do you believe in point of fact that these attack ads have been so effective that we're bound to see them now?

KAREN TUMULTY, "TIME": Oh, absolutely. I think probably not since Harry and Louise were introduced to us in 1994 have we seen such a small investment in paid air time pay such huge dividends. So I think that the lesson here for all of these groups is keep 'em coming.

DIONNE: But, Lou, you know, there's one thing that might turn this a little bit. I think the real test for the next week is whether John Kerry can turn this from a negative to him into a negative for Bush, and that's what he tried today with his speech when he talked about fear and smear.

Going negative on the negative, as the political consultants like to put it, is an old trick in American politics. It's a useful trick because it can push back the negativity. We'll see if Kerry can succeed in that.

DOBBS: That kind of adroitness has not been particularly visible on the part of either campaign in this election, at least in terms of the issues. We have a host of national issues that each of you writes about, everything from education, national security, border security, immigration, the war on terror, the war in Iraq. The voters have been denied a lot of discourse by the candidates on this. Are we going to see them return with a vengeance and talk in specifics, Ron?

BROWNSTEIN: Well, Lou, that's why I think this is a little different than what it's often compared to, 1988 when arguments created by the campaigns themselves over Willie Horton or the flag or Boston Harbor, dominated the election. In that year, there really wasn't that much on the mind of the voters.

I think this is a very different environment in which people are genuinely concerned, pro or con, about the war in Iraq, the state of economically, health care and our overall response to terror, and, for that reason, I think it is going to be tougher over a sustained period of time to keep the focus solely on this dispute about something -- about a war that did end almost 30 years ago. I do think that -- inexorably that given that there are real issues on the table that people are really concerned about, some of the focus is going to have to shift back in that direction. The president himself wants to turn the page, I think, as he moves into his convention, to try to sell more of the ideas that he wants to pursue in the second time.

DOBBS: That convention, E.J., what must President Bush do in your judgment there to come out successfully?

DIONNE: Well, I think he's at a tricky spot in the economy because on the one hand, he'd like to improve people's perceptions of the nation generally. He'd like to improve their perceptions of the war on terror and the war in Iraq and of the economy. Yet, if he goes too far in that direction, he's telling people, you're doing great, when they don't feel that way. So I think that's -- how he walks that line is a challenge.

There's a lot of talk about how he's going to lay out a second term agenda. I'm not sure that is the most important goal. I'm not sure how much -- how many specifics he's going to offer anyway. I think his task is to look more in control than he has in the last six months. I think he's been really hurt, not by political ads, but by the flow of the news since his campaign started.

TUMULTY: And in fact, there's a question, the timing here, in that the Friday that he is coming out of his convention is the first Friday of the month. And we have learned that that is the day every month that we get the new jobs numbers. And so, as the president comes out of his acceptance speech, he may, in fact, be looking at another dose of reality that does not look so great.

BROWNSTEIN: Just to reinforce that, Lou, as we've talked about before, Thursday, two days from now, is the annual census reports and the number of people without health insurance, the number of Americans in poverty and the median income for families. The most important report card on how the economy is producing for average families. That will be another kind of marker or book end going into the convention for the president.

DOBBS: And Karen, to what degree is Senator Kerry disadvantaged, if you will, the campaign going dark over the course of next week as the Republicans move front and center with their national convention?

TUMULTY: It is a disadvantage. In fact, they have assumed all along that this was going to be the case. In fact, they were assuming they wouldn't be spending anything at all on the air this month. So they know that they're going to be thrown off balance and he was certainly, Senator Kerry we saw today, trying to get the debate back to the issues, he said. And it's something that he needs. It's something that President Bush also needs. Because I think that this controversy has reached the point of diminishing returns even for the Bush campaign.

BROWNSTEIN: Can I add one quick point to that, Lou?

DOBBS: Quickly, please.

BROWNSTEIN: For the Kerry campaign, the real threat here is that swing voters, the persuadable voters that are left tend to be culturally conservative. You look at polls. They're not real happy with the direction of the country or Bush's overall job performance but they do feel culturally closer to him. The question is whether the Swift Boat Veterans have happened on the issue that can make those voters feel distant or separate from Kerry, that he's not really one of them, doesn't share their values. I think that's the underlying threat here the Kerry campaign has to deal with.

DOBBS: E.J., we're going to give you the last word.

DIONNE: First of all, we've got to underscore the fact that the first ad in this series has been shot full of holes. So you've had a group that's taken innuendo and turned it into a big national story. That's a real problem. But I do agree with Ron, that the Kerry campaign has to be more aggressive. And I think they've also got to deal with Kerry's testimony before Congress when he was 25 years old. I think they ought to be more aggressive in talking about that and not hide from it.

DOBBS: The Bush/Cheney campaign has made it well known, specifically today, that that is going to be the focus of the senator's record in the Senate. E.J. Dionne, Ron Brownstein, Karen Tumulty, thank you all three.

Tonight's thought on presidential campaigns. The legions of reporters who cover politics don't want to quit the clash and thunder of electoral combat for the dry duty of analyzing the federal budget. As a consequence we have created the perpetual presidential campaign." Political author and columnist Hugh Sidey.

North Korea today launched another vicious personal attack against President Bush. The Korean communist government's news agency called the president, quote, "a political idiot and human trash." Yesterday, a Korean government spokesman there compared President Bush to Adolf Hitler. Now North Korea is threatening to pull out of talks to end its nuclear program. This before the talks have even begun. The State Department said this latest outburst is in the words of the State Department, "not appropriate to diplomatic discourse." End quote. The White House called it just more bluster.

Taking a look at some of your thoughts. Many of you wrote in about the new overtime rules that went into effect yesterday.

David Williams in Portland, Oregon. "The new overtime rules will cost me approximately 20 percent of my current, now previous income. These new overtime rules are just another giveaway to large corporations."

Marc in Olathe, Kansas. "Lou, how can we believe any of the projections coming from the Labor Department? They haven't been able to come close on any of their estimates in the past two years."

John at Fort Wayne, Indiana praised the changes. "Lou, I certainly can not say how many people will be effected positively or negatively but I will now be able to receive overtime for the work I do, I am a customer service representative and have been exempted for the past eight years."

Send us your thoughts at loudobbs@CNN.com.

Coming up here, your personal information, your private information, phone numbers, financial records, even medical records handed over to foreign countries without your knowledge. Our special report.

And then, the worst drought to hit this country in as many as 500 years in the western states threatens millions of people across the western U.S.

And the population in this country at the same time exploding at what some call a dangerous even alarming rate. David Pimentel, professor of ecology at Cornell University, Robert Engelman of Population Action International are my guests. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight in "Exporting America" we focus on a disturbing trend within that phenomenon. Your most personal data, your medical records, your financial records, your Social Security number, all at risk because companies inside this country are now sharing your information with companies outside the U.S., where there are little or no privacy guarantees. Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): Nothing stands between a person's personal data and a database in a foreign country. Your name, address, phone number, date of birth, mailing address, medical records, financial information, all can be shared by domestic companies with companies offshore with no guarantee that it will be kept private.

REP. EDWARD MARKEY (D), MASSACHUSETTS: They can just send your private information offshore. They can send it to another country and it's over there and you don't have any right as an American to say that you don't want your medical, financial, personal records to be sent to another country.

TUCKER: Congressman Ed Markey introduced a bill in the House in May which would regulate the flow of personal data. The bill would require companies to notify citizens before exporting their personal data, allow them the opportunity to approve or not approve before transferring the data, protect customers from being charged more if they refuse to approve, and penalize companies that violate the rules while also allowing individuals to sue for damages. New York Senator Hillary Clinton has introduced similar legislation in the Senate, known as the Safe I.D. Act. The bills don't solve all the problems though.

LESLIE REIS, CTR. FOR INFO. TECH. & PRIVACY LAW: One of the other problems we have especially with passing information outside of our borders is enforcement, jurisdiction. How do you find the violators? How do you catch the violators? Then what do you do? How do you prosecute them? Under what laws? Under what courts can you seek some remedies?

TUCKER: To address that, the bills would make the companies liable to regulators and citizens if they fail to protect an individual's personal data.

(END VIDEOTAPE)

TUCKER: But the reality is, if your information's already been shared with an overseas database, it's out of the country and, Lou, frankly, out of your control.

DOBBS: And I am sort of amused by the idea that one would file suit internationally. It takes four to five years at best to solve a civil suit in this country. Add the international dimension, and you better be prepared to wait a long time. A disturbing trend. And again, part of the outsourcing of America. Thank you very much, Bill Tucker.

A reminder now to vote in our poll. The question tonight -- Do you believe Americans are free to properly fly the American flag anywhere they choose in this country? Cast your vote at cnn.com/lou. We'll have the results for you later in the broadcast.

Still ahead here, water wars. A severe drought, a record severe drought in the western United States is devastating the region. We'll have a full report.

And the world's population and that of the United States rising dramatically. In the world, 80 new -- 80 million new people each year. When we continue, I'll be talking with two experts about the population explosion and its potentially devastating impact on our environment and our flag. Stay with us.

(COMMERCIAL BREAK)

DOBBS: An update now on a story we first reported to you in May, the devastating drought in the western part of this country. Some experts are now saying that this will be the worst drought in more than 500 years. Others are saying it is part of a natural cycle.

Either way, the impact is growing, and it's worsening. Casey Wian reports from Los Angeles.

We apologize for those audio problems with the report. We will bring that to you just as soon as those problems are identified and corrected.

Last week we reported to you about a new study showing global population exploding. One of the highlights of that study, world population will increase by an astonishing 45 percent by 2050. That according to the Population Reference Bureau. The study also projected this country will experience a staggering 43 percent increase in our population by the same year.

Joining me now to discuss the impact of a population increase of that magnitude, its impact on our natural resources and our society, Robert Engelman, vice president of research of Population Action International, joining me tonight from Washington. And from Ithaca, New York, professor of ecology at Cornell University, David Pimentel. Good to have you both with us.

DAVID PIMENTEL, PROFESSOR, CORNELL UNIVERSITY: My pleasure.

DOBBS: First, let me begin first with you, Bob.

ROBERT ENGELMAN, POPULATION ACTION COUNCIL: Sure.

DOBBS: Were you surprised by this rate of growth for the entire world population, to see the world would be in excess of nine billion people in short order?

ENGELMAN: Well, I'm not sure about that final figure, because we really can't say for sure about the future. There's a lot of speculation about the trends between now and then. Certainly if you just look at the snapshots of growth on an annual basis, it's not terrifically surprising. It's pretty much on track with what population has been doing in recent years, which actually is a somewhat downward trend in terms of the overall growth rates, which is part of the success story of population.

DOBBS: And, professor Pimentel, is this a sustainable rate of growth? Demographers, I understand, scientists may not be shocked by it, but in fact the population of the world is doubling here over our lifetimes. It's rather shocking, is it not?

PIMENTEL: It is shocking. And one of the major dimensions of this growth is the fact that we've got a young age distribution worldwide. And it will take about 70 years before these young are old enough and the world population stabilizes.

DOBBS: Putting it in the context of the United States, to suggest that this country's population would be approaching almost a half billion people over the course of the next 40, 45 years, is this country, given everything that we are experiencing now, drought, the competition worldwide for natural resources, for building materials. Bob, is that something that our policy makers should be focusing on right now?

ENGELMAN: Well, it's certainly accurate to say that they're not focusing on it very much at the moment. I think it would be good to have a national discussion about this issue. I think all countries are well advised to take a look at where population trends are going, begin to prepare for them.

I'm amazed at the ignorance of population projections among government policy makers and people who are planning for infrastructure in this country and policy around how to deal with population, how to address it, how to perhaps influence it in positive ways. We aren't talking about it much. DOBBS: Professor, your thoughts?

PIMENTEL: Yes. I think population growth is a major threat to our environment, in particular land and water. And looking at it worldwide, the World Health Organization reported that we've got more than three billion people who are malnourished. And this, of course, then relates to the problem of increasing diseases, of malaria, AIDS, TB and so forth. And so we have a major problem currently, and certainly intensifying in the future.

DOBBS: Bob, why don't our policy makers, why don't our thinkers in academia, why aren't they focusing on this critically important issue?

ENGELMAN: Well, economics tends to drive a lot of discussion in this country, as well as really any country. And if there's been any concern about demographics in the United States at all, it's tended to focus on, will Social Security survive? Are there enough young people?

There tends to be a lot of attention around the idea of, will we be able to sustain Social Security programs? So this tends to make people a little bit less aware of environmental issues, aspects of congestion, housing prices, the rising price of petroleum, that do relate to demographic change and demographic growth in this country.

DOBBS: Well, you just described also economic issues and very important economic issues. The scarcity of resource is fundamental to economics. Environment and quality of life is the reason that economics even exists as a study, that is to help us assure that. Professor Pimentel, the idea that policy makers are not focusing on population growth, at what point -- what level of population, in your judgment is sustainable in this country?

PIMENTEL: Well, of course, we have published a report of about 200 million, which is nearly half of what we currently have. But that's based in the future when we run out of fossil energy, and so forth. And it's also, with the judgment that we would like to have a high standard of living. As the population grows, it's affecting our natural resources, and of course in our future our standard of living. And these should be examined related to what we would like to have in the future.

DOBBS: Are there, Bob, let me turn to you. We've got very little time. As succinctly as you can, one or two of the most important policy initiatives that our lawmakers, our political leaders could take in the next few years that would be well advised given this population explosion?

ENGELMAN: Well, focus on the needs of women. The reality is, we're going through a tremendously hopeful transition worldwide, it's affecting the United States, it's affecting countries that send people to the United States. Women want to have fewer children today than their mothers did. Some cases, their older sisters did. A lot of them don't have access to the health care facilities, the clinics, the family planning services that allow them to have the family size they actually want to have.

If we could focus on women's status and women's access to health, we'd make a lot of progress on population.

DOBBS: Bob, thank you. David, very quickly, if you will, just a matter of seconds here.

PIMENTEL: Yes, well, I think we've got to understand that we have limited resources of water and energy and land in which the provide us with our necessities. And these should be examined and what standard of living we would like to have for the future.

DOBBS: David Pimentel, Bob Engelman, thank you both for being with us here tonight. Please come back soon, as we continue to examine this important subject.

Still ahead here, one U.S. company says outsourcing simply isn't worth the cost. Instead of ship jobs to cheap overseas labor markets, this software company creating jobs right here at home. That story and more still ahead. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: On Wall Street today stocks mixed. The Dow up 25 and half points, the Nasdaq down nearly 2, the S&P 500 barely budged.

Outsourcing doesn't always work for American companies nor their employees.

And Christine Romans is here to tell us all about it -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: A company that is homeshoring, as it calls it, not offshoring.

DOBBS: Homeshoring. Now we're getting the idea.

ROMANS: A new word in the lexicon of offshoring. This company is Alera, and I.T. researched India, China and Armenia researching how it could do I.T. work more cheaply overseas. They thought, Lou, they'd find rich cost savings, instead they found software sweat shops and hidden cost. So, Alera, doing the work in the U.S., hiring 250 software and I.T. workers in Savannah and Fitzgerald, Georgia.

Now, "The Economic Times of India" is reporting that Bear Stearns may shift some high end analyst work to Mumbai in the next few months. The paper reports the proposal has number crunching research work going to India, freeing up the analysts in the U.S. for client relationships.

Bear Stearns has denied that report. But Wall Street analysts say several firms have research teams already in place in cheap overseas labor markets -- Lou.

DOBBS: Well, oil got a little cheaper today. ROMANS: Three days lower in a row, below $46. It's now down 4 percent from its high. But it's still up 44 percent from where it was trading last year at this time. So some perspective on the decline in oil prices.

DOBBS: And Bear Stearns denied that report?

ROMANS: Bear Stearns, said that report was false.

DOBBS: Then we should compliment Bear Stearns right now for having the good sense, judge of principle to keep those jobs in the United States for American workers. Congratulations, Bear Stearns.

ROMANS: Absolutely.

DOBBS: Christine, thank you.

Taking a look now at some of "Your Thoughts" on "Exporting America."

Olisaeloka Okeke, of Philadelphia, "By exporting jobs, companies aren't only cutting cuts, they are overseeing the attrition of America's power. The prosperity of this country doesn't lie in the prosperity of it's companies, but in that of its people." Well said.

Gail Rubio, of Brea, California. "Since the middle class does most of the working, living, fighting for this country and dying for it, you would think both parties would be more caring of this group. But we are treated as a great stupid beast whose only purpose is to provide the money to run this ship."

Darlene in Raleigh, North Carolina, "Enough about swift boats! I want someone to tell me what they are going to do to turn the economy around so our 401k's are worth something. I want to hear what is going to be done to protect our borders. I want to hear how we can afford the high cost of heating this winter."

Those issues are certainly of importance to us here as well. Keep sending us "Your Thoughts" on those issues and all that you're thinking about. We'd love to hear from you. E-mail us at loudobbs@cnn.com.

Still ahead the results of "Tonight's Poll," a preview of what's ahead tomorrow. A reminder to check our Web site for the complete list of companies we've confirmed to be "Exporting America." Cnn.com/lou.

(COMMERCIAL BREAK)

DOBBS: The results now of "Tonight's Poll." 79 percent of you responded, saying Americans are free to properly fly the American flag anywhere they choose in this country, 21 percent of you say they are not.

Thanks for being with us here tonight. Please join us tomorrow. And our "Face-Off" tomorrow, which presidential candidate would do more for the middle class in this country. That will be the subject of the debate between, Kevin Hassett, economic adviser to the Bush campaign, and Gene Sperling, senior economic adviser to the Kerry campaign in our "Face-Off" tomorrow.

Please be with us.

And we will report to you tomorrow on the 500 year drought, 6 years of drought in the Western United States, Casey Wian will have the report for you tomorrow evening here. Please be with us.

"ANDERSON COOPER 360" is next. Good night from New York.

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


Aired August 24, 2004 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: Tonight, outrage in Muncie, Indiana. After the mayor of Muncie bans the flying of the American flag, the mayor of Muncie, Indiana, tonight is under fire.
(BEGIN VIDEO CLIP)

MAYOR DAN CANAN, MUNCIE, INDIANA: This was a decision I made and I made by myself.

(END VIDEO CLIP)

DOBBS: We'll be talking with the head of the state's American Legion, Steve Short.

The Middle Class Assault. Both presidential candidates say they will do more to help working men and women in this country, but just what are the candidates of the two major political parties really proposing that will help American workers? We'll have a special report.

Exporting America tonight. Corporations not only shifting American jobs to cheap foreign labor markets, but also their personal information. Some in Congress are fighting to keep financial, medical and other personal records from going overseas. Others say it's simply too late. We'll have a special report.

And Population Explosion. The U.S. population is growing at an alarming rate. Experts say we don't have the resources to support it. Robert Engelman of Population Action International, David Pimentel of Cornell University join us to talk about the potentially devastating consequences.

And just days before the Republican Convention opens in New York City, Senator John Kerry challenged President Bush to stop what Senator Kerry calls the tactics of fear and smear.

(BEGIN VIDEO CLIP)

SEN. JOHN F. KERRY (D-MA), PRESIDENTIAL NOMINEE: Words, slogans and personal attacks cannot disguise what they have done and left undone.

(END VIDEO CLIP)

DOBBS: And I'll be talking tonight with three of the nation's top political journalists, Karen Tumulty of "TIME" magazine, Ron Brownstein of the "Los Angeles Time," and "Washington Post" columnist E.J. Dionne.

CNN ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, August 24. Here now for an hour of news, debate and opinion is Lou Dobbs.

DOBBS: Good evening.

Tonight, Senator John Kerry accuses President Bush and his supporters of fear and smear tactics. The Democratic candidate launched his offensive in New York just days before Republicans arrive in the city for their convention.

President Bush has denounced all 527 political advertisements, including that of the Swift Boat Veterans for Truth. Now Senator Kerry is trying to turn his campaign from the attack politics that have dominated for weeks to debating programs and positions that best serve this country's embattled middle class.

Joe Johns reports.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT (voice-over): In New York, trying to get out ahead of the Republican message machine before the start of the GOP Convention, John Kerry spoke indirectly about the swift boat controversy, but his audience got the message.

KERRY: The Bush campaign and its allies have turned to the tactics of fear and smear because they can't talk about jobs, health care, energy independence and rebuilding our alliances. They can't or they refuse to talk about the real issues that matter to the American people.

JOHNS: A line about his war record, which he has used in speeches before drew a longstanding ovation.

KERRY: I defended this country as a young man, and I will defend it as president of the United States.

JOHNS: Behind the scenes, the Kerry campaign and its surrogates were trying to make the case that the swift boat controversy was backfiring on Bush based on news reports, editorials and responses from some veterans, and they continue to charge that Republicans were working in tandem with the Swift Boat Veterans group in making the ads, though Republicans deny it.

Kerry, who spent much of his speech focused on the campaign's central issues, tried once again to weave in a broader attack on the administration's credibility, a continuing Democratic theme.

KERRY: And mark my words. They're going to bend over backwards with last-minute proposals and last-minute promises to make up for all that they haven't done and to pretend that they're not who they really are. JOHNS: That line drew a sharp response from a Bush campaign spokesman who called it an incredible effort to rewrite history, highlighting Kerry's voting record and accusing Kerry of trying to smear the president.

(on camera): With just days to go before the start of the GOP Convention, the Kerry campaign is hoping to focus voters on what it calls the clear choice between Kerry and the president on the issues. Even so, the swift boat controversy is still churning up the water -- Lou.

(END VIDEOTAPE)

DOBBS: Joe Johns tonight with the Kerry campaign in New York. President Bush's campaign today also tried to move past weeks of attack politics.

The Bush-Cheney team released the president's campaign schedule from now until he arrives at the Republican Convention next week. President Bush will visit eight battleground states and share his vision for the next four years.

Jill Dougherty is near the president's ranch in Crawford, Texas, and has the report for us -- Jill.

JILL DOUGHERTY, CNN CORRESPONDENT (voice-over): Well, Lou, you know, we talked with Scott Stanzel, who is with the Bush-Cheney campaign, about what Senator Kerry said today, and he said the Kerry campaign seems to be working to try to cover up the fact that we want to debate the -- actually, the senator's Senate record. That is what the Republicans want the debate to be. What did John Kerry do in the Senate?

About that so-called failed record by Bush, no, he says, there is no failed record, it's a record of accomplishment, and he said they intend to run on it. Now what's in the record of accomplishment? Well, tax relief, prescription drug benefits, educational reform, creation of the Department of Homeland Security and the war on terror.

And, Lou, you know, the attack ads issue -- we did get into that a little bit today, but the Bush campaign is saying if you look at the groups that are funding those ads that actually liberal groups are outspending conservative groups 25-1.

DOBBS: Jill, thank you very much.

And we will be, of course, examining those 527s and PAC groups and their respective spending from the standpoint of both parties here later in the broadcast.

Vice President Dick Cheney today talked candidly on another highly sensitive issue in this campaign -- gay marriage. The vice president, whose daughter is a lesbian and works for the Bush-Cheney campaign, today spoke at a campaign event in Davenport, Iowa.

A reporter asked the vice president to state his own personal views on the issue of gay marriage.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: My general view is that freedom means freedom for everyone. People ought to be free to enter into any kind of relationship they want to.

At this point, say, my own preference is as I've stated, but the president makes basic policy for the administration, and he's made it clear that he does, in fact, support a constitutional amendment on this issue.

(END VIDEO CLIP)

DOBBS: President Bush has called for a constitutional amendment to ban gay marriage after a judicial ruling in Massachusetts made it legal in that state. The Senate rejected the proposed amendment on the 14th of July by a vote of 48-50.

Some Hollywood celebrities, directors and writers are part of the latest moveon.com campaign to unseat President Bush. There are 10 advertisements that moveon.org's political action committee is unveiling here in New York City tonight. This ad features Ione Sky, who was the lead actress in the 1989 movie "Say Anything."

Moveon.org's PAC has purchased broadcast time for the first ad, and, depending on how it's received, the other nine may air on television or may be available online.

Republicans are turning to some star power of their own for their next round of political advertising. The November Fund, a 527 group, with the backing of the U.S. Chamber of Commerce will unleash ads addressing what it calls legal system abuses.

The November Fund is co-chaired by Craig Fuller, the former chief of staff to President George Bush when he was the vice president, and Bill Brock, former senator and RNC chair. The Chamber of Commerce is also going to run a voter education program discussing legal reform and what it calls the dangers of having the trial bar too closely aligned with the White House.

So far, the Swift Boat Veterans for Truth have generated the most attention of any independent 527 political group in this election. Yet the group and other conservative 527s have spent millions of dollars less than their Democratic counterparts.

Bill Schneider reports.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): The Swift Boat Veterans have hijacked the presidential campaign. They spent only about half a million dollars to run their ad for eight days in a few battleground states, but the ad generated a bonanza of press coverage. EVAN TRACEY, CAMPAIGN MEDIA ANALYSIS GROUP: Every presidential election, it seems that there's one ad that has great timing and great message, and the press wants to sort of jump on that ad and run with it. Swift Boat Veterans were exactly that.

SCHNEIDER: The perception encouraged by the Kerry campaign is that the Bush campaign has allowed independent so-called 527 groups, like the Swift Boat Veterans, to do its dirty work.

KERRY: The president keeps telling people he would never question my service to our country. Instead, he watches as a Republican-funded attack ad does just that.

SCHNEIDER: In fact, most of the spending by independent groups by far has been to help Kerry, not Bush. Since March, pro-Kerry groups have spent more than $40 million on more than 56,000 ads in the top 100 markets. That's nearly 15 times as much as the $2.7 million spent by pro-Bush groups on 2,700 ads in those markets. The Bush campaign raised so much money, Bush supporters saw no reason to form independent spending groups.

TRACEY: Democrats knew whoever the nominee was in March was going to be flat broke, and they were going to need some sort of outside help.

SCHNEIDER: The disparity in spending explains why President Bush denounces 527 groups at every opportunity.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I don't think we ought to have 527s. I can't be more plain about it.

SCHNEIDER: That sounds hypocritical to many people. The president benefits from the Swift Boat Veterans' ads, while he denounces such spending. Kerry gets to play the victim.

KERRY: They have obviously decided that some people will believe anything, no matter how fictional or how farfetched, if they just repeat it often enough.

SCHNEIDER: The entire campaign has been put off message by one ad run by one independent spending group.

(END VIDEOTAPE)

SCHNEIDER: The campaign finance law was designed to limit negative campaigning by the political parties by cutting off special interest contributions. Well, instead, that money is going to independent groups, and, theoretically, the campaigns can't control the message anymore -- Lou.

DOBBS: Are we so sure they can't control that message? Are we so sure that there isn't an alignment between the Democratic Party and its 527s and the Republican Party and its 527s?

SCHNEIDER: There is a constant debate over that "alignment" you just talked about. The law says there can't be any collaboration between the campaigns and the independent groups or they could be prosecuted. So the question is: What defines collaboration?

There are a lot of liberal and Democratic sympathizers and activists and supporters supporting those groups like moveon.org, but you have to prove that their activities are coordinated with the campaign, and that's very often hard to prove.

DOBBS: And the charges that the -- some of these 527 groups have leveled respectively against Senator Kerry and President Bush -- we mentioned -- you just reported that 15 times as much money has been spent. What about the veracity, the truthfulness of these ads? Which has the greater credibility? Have we examined that -- well, forget credibility. Which is the most accurate between these 527s? Do we have an answer for that one yet, Bill?

SCHNEIDER: I don't think we -- I don't have an answer because I haven't systematically looked at all those ads. Certainly, the Swift Boat Veterans' ads -- that first ad has been looked at with great care.

And what "The Washington post" concluded on Sunday was those allegations have remained unproved about Kerry's military record, that he lied about his record, that he didn't do what he said he did in order to win his medals. That has not been proved, but then his opponents have made a lot of charges that they haven't fully substantiated either.

My guess is there's going to be controversy over every single charge, including a lot of the charges made by the liberal groups as well. The answer is they're not really part of the campaign, so no one knows who's answerable for those ads.

DOBBS: Perhaps the president has it right that all 527s should be disbanded.

SCHNEIDER: That's exactly what he says. That's what John McCain says. That's what a lot of reformers say. But that's not what the Federal Election Commission says, and that's what they're angry about.

DOBBS: Bill Schneider, thank you.

SCHNEIDER: Sure.

DOBBS: Turning now to our report on the middle class and the assault on the middle class. Working men and women in this country are a key voting block, arguably the most important voting block, and a key focus, of course, of the presidential candidates. Yet there are many questions tonight about whether either candidate has a real plan to help this country's middle class.

Louise Schiavone reports.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): It's impossible to miss the issue of personal prosperity this election year. SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL NOMINEE: The truth is we still live in a country where there are two different Americas: one for all those people who have lived the American dream and don't have to worry, and another for most Americans, everybody else, who struggle to make ends meet.

SCHIAVONE: If there are, indeed, two Americas, both Democratic and Republican Party standard bearers are decidedly in the upper crust America. All of them are multimillionaires. In fact, fully a third of the U.S. Senate are millionaires, as is more than a quarter of the House of Representatives. Many argue it makes a difference.

ALEX KNOTT, CENTER FOR PUBLIC INTEGRITY: Because of their income and because of their assets, they're able to live in a better part of town. They're -- they don't have to make decisions that the average American has to make between what type of food to get or what type of health care to get.

SCHIAVONE: The truth is that by the time an American makes it to Congress, he or she is fairly successful.

BOB WALKER, FORMER U.S REPRESENTATIVE: A lot of them have been successful in life and so, therefore, are economical reasonably well off. But the fact that they grew up in middle-class backgrounds, they come from middle-class districts -- I think that for the most part, members of Congress are pretty reflective of the broad base of America.

SCHIAVONE: Among lawmakers today, there are 235 law degrees, 15 medical degrees, 18 doctorates and 142 masters degrees. Members of Congress earn $158,000, while the Census Bureau says the mean American salary is $42,000.

But this is not new. Historians note the founding fathers themselves were quite prosperous.

DON RITCHIE, SENATE HISTORIAN: The authors of the Constitution were men of property essentially. They were merchants. They were planters. They were professionals, lawyers and others.

SCHIAVONE: And no one goes to Congress without middle-class votes.

(END VIDEOTAPE)

SCHIAVONE: Lou, while there may be plenty of aspiring middle- class politicians, they are squeezed out of the national office by the sheer expense of campaigning as political parties recruit candidates who can pay for their own campaigns, creating an undeniable niche in Washington for the wealthy -- Lou.

DOBBS: Louise, thank you.

Louise Schiavone reporting from Washington.

Coming up here tonight, outrage after the mayor of Muncie, Indiana, issues an executive order banning the American flag flying in a city park. I'll be talking with Steve Short, the head of the Indiana American Legion next.

And then, both presidential candidates trying to redirect their campaigns from the attack politics that have dominated now for weeks. I'll be talking with three of the country's leading political journalists about whether the attacks are working, whether they're really over, and what we can all expect.

And then, the shipment of American jobs to cheap foreign labor markets has also sent the personal records of many millions of Americans overseas. Our special report, Exporting America, coming up.

(COMMERCIAL BREAK)

DOBBS: Outrage in Indiana after the mayor of Muncie banned the flying of the American flag in a public park. Mayor Dan Canan issued an executive order requiring all flags, including the American flag, be removed from the Prairie Creek Reservoir Campsite. Today, however, the mayor this afternoon rescinded the order under tremendous pressure from an outraged Indiana public.

(BEGIN VIDEO CLIP)

CANAN: This was a decision I made and I made by myself. This was the wrong decision to make, I can tell you now, and so I'm re -- I'm backing up on that, apologizing to those that I have offended, and encouraging them, as you see in the memo, to get their flags out and fly their flags at Prairie Creek Reservoir and support our troops.

(END VIDEO CLIP)

DOBBS: Joining me now from Indianapolis is Steve Short. He is the chief administrative officer of the Indiana American Legion.

Steve, thanks for being here.

The mayor rescinding his ban this afternoon. Your thoughts when you heard what he had done?

STEVE SHORT, INDIANA AMERICAN LEGION: Well, we were relieved. We were flabbergasted to begin with when we received calls yesterday that this had occurred, and we followed it closely through the evening and then again this morning, and we were relieved to hear that the mayor had stepped back, taken a look at it, adjusted fire and made the appropriate decision.

DOBBS: He adjusted fire, but it is -- it appears to be a case of the mayor and his colleagues and city government being too clever by half. The city had tried to ban the flying of the confederate flag in that park, had then been sued by the Indiana Civil Liberties Union...

SHORT: Yes, sir.

DOBBS: ... to allow the flying of the confederate flag and decided it would have a better defense in court if it simply eliminated all flags. Is that correct?

SHORT: That's my understanding, sir.

DOBBS: This is remarkable, if I understand it. I want to point out to our viewers here that we invited the mayor of Muncie, Indiana, we invited the head of the Indiana Civil Liberties Union to address these issues, and they declined, and I think we can say respectfully declined. But the idea that anyone at any time could deny the right of any American to fly the American flag properly, it's mind boggling. It simply is not within American law, is it, Steve?

SHORT: No, sir. The U.S. Flag Code is very clear. It's -- no one can force anyone to fly an American flag, but, certainly, I know of no instance in the past where anyone has denied -- a government agency has denied a group of citizens the right to fly the American flag.

DOBBS: Now, as I understand it, the police officers in Muncie were actually enforcing this order that the mayor had laid down. Is that correct?

SHORT: I'm not sure about that. I know that after yesterday's conversations with the newspaper in Muncie, The Muncie "StarPress," I was told that American flags were continuing to fly and that no tickets were written, nor was any attempt made to take those flags down.

DOBBS: The fact that any group can, well, insist, as the Indiana Civil Liberties Union here has, that a flag like the confederate flag be flown -- what is your reaction? Is there a proper resolution to that issue?

SHORT: I think that's an issue that reasonable Americans would disagree about, and I think they're -- it appears with this impending court case that they're about to disagree and argue that issue, and that's not a concern of ours at this point.

Our concern, obviously, was the decision made about the American flag, and, once we received calls from some outraged veterans in the Muncie area, we looked into it.

DOBBS: It's a remarkable -- when people on -- with good intentions on various sides of an issue -- and this one has various sides, not only two -- can come to just a ridiculous decision like this, one I suppose, Steve -- and I would assume you'd join me in this -- has to give the mayor of Muncie credit for being responsive, if you will, to public opinion and quickly fixing his mistake.

SHORT: Yes, sir, and we commend him for that action.

DOBBS: We join you in that.

And Steve Short, we commend you for being here with us. Thanks.

SHORT: It's my pleasure, sir. DOBBS: That brings us to the subject of our poll tonight. Do you believe Americans are free to properly fly the American flag anywhere they choose in this country? Cast your vote at cnn.com/lou. We'll have the results for you later in the broadcast.

Coming up next, attack ads dominating this race for the past few weeks, one of the most negative presidential campaigns in history. But the attack strategy could be costly for the candidates. It's just impossible at this point to ascertain for which candidate. Three of the nation's leading political journalists will join me to give us the answer to those questions.

And a rogue nation launching a vicious verbal attack against the president of the United States. We have that story coming up.

And a population explosion. We'll be a nation of nearly half a billion people within a half-century. David Pimentel, professor of ecology at Cornell University, Robert Engelman of Population Action International -- they're my guests, coming up next.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues with more news, debate, and opinion. Here now, Lou Dobbs.

DOBBS: Three of the nation's top political journalists joining me tonight: Karen Tumulty, national political correspondent, "TIME" magazine; E.J. Dionne, columnist, "Washington Post"; Rob Brownstein, national political correspondent for the "Los Angeles Times." Thank you for being here.

Ron, I take it, after the reporting of the "New York Times," "The Washington Post," the "L.A. Times," that we now have seen the candidates change their minds, 527s are over, no more attack politics -- or at least attack ads.

RON BROWNSTEIN, "L.A. TIMES": Yes. When? Until what? For the next four minutes?

Look, you know, as we talked about before, money is very difficult to stop in the presidential races. The Democrats and groups allied with them have been quicker to use this vehicle. In fact, I believe the Republicans largely discouraged the use of 527s, believing they were better off having the money flow into the Bush campaign and the Republican National Committee where they could control the message more directly.

But I think that's over, Lou. The swift boat attacks, whatever the veracity -- and a lot of questions have been raised about this first ad in particular -- they now are in a position where they are likely to continue raising large amounts of money and will be able to influence this campaign for as long as they want to, and I think they are going to be a factor for quite a while from here on out.

DOBBS: E.J., do you agree that -- is it important for the national media to be focusing on these attack ads, or are they simply a distraction from the national agenda and the people's interest?

E.J. DIONNE, "THE WASHINGTON POST": Well, I think the real problem is -- that you've seen is the extent to which one ad can set the media agenda for two weeks, one ad with about a half a million dollars put behind it, where one side can get money to that organization without really being accountable for the fact that may be helping them out.

So I think that is a big problem, but it is now a big deal, and I think it really shifted the course of the campaign in the last couple of weeks. I think Kerry was on a kind of slow roll after his convention. His numbers were improving, even though the lead over Bush wasn't big, and I think this totally threw the Kerry campaign off its stride, and I think it's starting to shift the numbers a little bit.

DOBBS: And, Karen, do you agree with E.J. and, Ron, do you believe in point of fact that these attack ads have been so effective that we're bound to see them now?

KAREN TUMULTY, "TIME": Oh, absolutely. I think probably not since Harry and Louise were introduced to us in 1994 have we seen such a small investment in paid air time pay such huge dividends. So I think that the lesson here for all of these groups is keep 'em coming.

DIONNE: But, Lou, you know, there's one thing that might turn this a little bit. I think the real test for the next week is whether John Kerry can turn this from a negative to him into a negative for Bush, and that's what he tried today with his speech when he talked about fear and smear.

Going negative on the negative, as the political consultants like to put it, is an old trick in American politics. It's a useful trick because it can push back the negativity. We'll see if Kerry can succeed in that.

DOBBS: That kind of adroitness has not been particularly visible on the part of either campaign in this election, at least in terms of the issues. We have a host of national issues that each of you writes about, everything from education, national security, border security, immigration, the war on terror, the war in Iraq. The voters have been denied a lot of discourse by the candidates on this. Are we going to see them return with a vengeance and talk in specifics, Ron?

BROWNSTEIN: Well, Lou, that's why I think this is a little different than what it's often compared to, 1988 when arguments created by the campaigns themselves over Willie Horton or the flag or Boston Harbor, dominated the election. In that year, there really wasn't that much on the mind of the voters.

I think this is a very different environment in which people are genuinely concerned, pro or con, about the war in Iraq, the state of economically, health care and our overall response to terror, and, for that reason, I think it is going to be tougher over a sustained period of time to keep the focus solely on this dispute about something -- about a war that did end almost 30 years ago. I do think that -- inexorably that given that there are real issues on the table that people are really concerned about, some of the focus is going to have to shift back in that direction. The president himself wants to turn the page, I think, as he moves into his convention, to try to sell more of the ideas that he wants to pursue in the second time.

DOBBS: That convention, E.J., what must President Bush do in your judgment there to come out successfully?

DIONNE: Well, I think he's at a tricky spot in the economy because on the one hand, he'd like to improve people's perceptions of the nation generally. He'd like to improve their perceptions of the war on terror and the war in Iraq and of the economy. Yet, if he goes too far in that direction, he's telling people, you're doing great, when they don't feel that way. So I think that's -- how he walks that line is a challenge.

There's a lot of talk about how he's going to lay out a second term agenda. I'm not sure that is the most important goal. I'm not sure how much -- how many specifics he's going to offer anyway. I think his task is to look more in control than he has in the last six months. I think he's been really hurt, not by political ads, but by the flow of the news since his campaign started.

TUMULTY: And in fact, there's a question, the timing here, in that the Friday that he is coming out of his convention is the first Friday of the month. And we have learned that that is the day every month that we get the new jobs numbers. And so, as the president comes out of his acceptance speech, he may, in fact, be looking at another dose of reality that does not look so great.

BROWNSTEIN: Just to reinforce that, Lou, as we've talked about before, Thursday, two days from now, is the annual census reports and the number of people without health insurance, the number of Americans in poverty and the median income for families. The most important report card on how the economy is producing for average families. That will be another kind of marker or book end going into the convention for the president.

DOBBS: And Karen, to what degree is Senator Kerry disadvantaged, if you will, the campaign going dark over the course of next week as the Republicans move front and center with their national convention?

TUMULTY: It is a disadvantage. In fact, they have assumed all along that this was going to be the case. In fact, they were assuming they wouldn't be spending anything at all on the air this month. So they know that they're going to be thrown off balance and he was certainly, Senator Kerry we saw today, trying to get the debate back to the issues, he said. And it's something that he needs. It's something that President Bush also needs. Because I think that this controversy has reached the point of diminishing returns even for the Bush campaign.

BROWNSTEIN: Can I add one quick point to that, Lou?

DOBBS: Quickly, please.

BROWNSTEIN: For the Kerry campaign, the real threat here is that swing voters, the persuadable voters that are left tend to be culturally conservative. You look at polls. They're not real happy with the direction of the country or Bush's overall job performance but they do feel culturally closer to him. The question is whether the Swift Boat Veterans have happened on the issue that can make those voters feel distant or separate from Kerry, that he's not really one of them, doesn't share their values. I think that's the underlying threat here the Kerry campaign has to deal with.

DOBBS: E.J., we're going to give you the last word.

DIONNE: First of all, we've got to underscore the fact that the first ad in this series has been shot full of holes. So you've had a group that's taken innuendo and turned it into a big national story. That's a real problem. But I do agree with Ron, that the Kerry campaign has to be more aggressive. And I think they've also got to deal with Kerry's testimony before Congress when he was 25 years old. I think they ought to be more aggressive in talking about that and not hide from it.

DOBBS: The Bush/Cheney campaign has made it well known, specifically today, that that is going to be the focus of the senator's record in the Senate. E.J. Dionne, Ron Brownstein, Karen Tumulty, thank you all three.

Tonight's thought on presidential campaigns. The legions of reporters who cover politics don't want to quit the clash and thunder of electoral combat for the dry duty of analyzing the federal budget. As a consequence we have created the perpetual presidential campaign." Political author and columnist Hugh Sidey.

North Korea today launched another vicious personal attack against President Bush. The Korean communist government's news agency called the president, quote, "a political idiot and human trash." Yesterday, a Korean government spokesman there compared President Bush to Adolf Hitler. Now North Korea is threatening to pull out of talks to end its nuclear program. This before the talks have even begun. The State Department said this latest outburst is in the words of the State Department, "not appropriate to diplomatic discourse." End quote. The White House called it just more bluster.

Taking a look at some of your thoughts. Many of you wrote in about the new overtime rules that went into effect yesterday.

David Williams in Portland, Oregon. "The new overtime rules will cost me approximately 20 percent of my current, now previous income. These new overtime rules are just another giveaway to large corporations."

Marc in Olathe, Kansas. "Lou, how can we believe any of the projections coming from the Labor Department? They haven't been able to come close on any of their estimates in the past two years."

John at Fort Wayne, Indiana praised the changes. "Lou, I certainly can not say how many people will be effected positively or negatively but I will now be able to receive overtime for the work I do, I am a customer service representative and have been exempted for the past eight years."

Send us your thoughts at loudobbs@CNN.com.

Coming up here, your personal information, your private information, phone numbers, financial records, even medical records handed over to foreign countries without your knowledge. Our special report.

And then, the worst drought to hit this country in as many as 500 years in the western states threatens millions of people across the western U.S.

And the population in this country at the same time exploding at what some call a dangerous even alarming rate. David Pimentel, professor of ecology at Cornell University, Robert Engelman of Population Action International are my guests. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight in "Exporting America" we focus on a disturbing trend within that phenomenon. Your most personal data, your medical records, your financial records, your Social Security number, all at risk because companies inside this country are now sharing your information with companies outside the U.S., where there are little or no privacy guarantees. Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): Nothing stands between a person's personal data and a database in a foreign country. Your name, address, phone number, date of birth, mailing address, medical records, financial information, all can be shared by domestic companies with companies offshore with no guarantee that it will be kept private.

REP. EDWARD MARKEY (D), MASSACHUSETTS: They can just send your private information offshore. They can send it to another country and it's over there and you don't have any right as an American to say that you don't want your medical, financial, personal records to be sent to another country.

TUCKER: Congressman Ed Markey introduced a bill in the House in May which would regulate the flow of personal data. The bill would require companies to notify citizens before exporting their personal data, allow them the opportunity to approve or not approve before transferring the data, protect customers from being charged more if they refuse to approve, and penalize companies that violate the rules while also allowing individuals to sue for damages. New York Senator Hillary Clinton has introduced similar legislation in the Senate, known as the Safe I.D. Act. The bills don't solve all the problems though.

LESLIE REIS, CTR. FOR INFO. TECH. & PRIVACY LAW: One of the other problems we have especially with passing information outside of our borders is enforcement, jurisdiction. How do you find the violators? How do you catch the violators? Then what do you do? How do you prosecute them? Under what laws? Under what courts can you seek some remedies?

TUCKER: To address that, the bills would make the companies liable to regulators and citizens if they fail to protect an individual's personal data.

(END VIDEOTAPE)

TUCKER: But the reality is, if your information's already been shared with an overseas database, it's out of the country and, Lou, frankly, out of your control.

DOBBS: And I am sort of amused by the idea that one would file suit internationally. It takes four to five years at best to solve a civil suit in this country. Add the international dimension, and you better be prepared to wait a long time. A disturbing trend. And again, part of the outsourcing of America. Thank you very much, Bill Tucker.

A reminder now to vote in our poll. The question tonight -- Do you believe Americans are free to properly fly the American flag anywhere they choose in this country? Cast your vote at cnn.com/lou. We'll have the results for you later in the broadcast.

Still ahead here, water wars. A severe drought, a record severe drought in the western United States is devastating the region. We'll have a full report.

And the world's population and that of the United States rising dramatically. In the world, 80 new -- 80 million new people each year. When we continue, I'll be talking with two experts about the population explosion and its potentially devastating impact on our environment and our flag. Stay with us.

(COMMERCIAL BREAK)

DOBBS: An update now on a story we first reported to you in May, the devastating drought in the western part of this country. Some experts are now saying that this will be the worst drought in more than 500 years. Others are saying it is part of a natural cycle.

Either way, the impact is growing, and it's worsening. Casey Wian reports from Los Angeles.

We apologize for those audio problems with the report. We will bring that to you just as soon as those problems are identified and corrected.

Last week we reported to you about a new study showing global population exploding. One of the highlights of that study, world population will increase by an astonishing 45 percent by 2050. That according to the Population Reference Bureau. The study also projected this country will experience a staggering 43 percent increase in our population by the same year.

Joining me now to discuss the impact of a population increase of that magnitude, its impact on our natural resources and our society, Robert Engelman, vice president of research of Population Action International, joining me tonight from Washington. And from Ithaca, New York, professor of ecology at Cornell University, David Pimentel. Good to have you both with us.

DAVID PIMENTEL, PROFESSOR, CORNELL UNIVERSITY: My pleasure.

DOBBS: First, let me begin first with you, Bob.

ROBERT ENGELMAN, POPULATION ACTION COUNCIL: Sure.

DOBBS: Were you surprised by this rate of growth for the entire world population, to see the world would be in excess of nine billion people in short order?

ENGELMAN: Well, I'm not sure about that final figure, because we really can't say for sure about the future. There's a lot of speculation about the trends between now and then. Certainly if you just look at the snapshots of growth on an annual basis, it's not terrifically surprising. It's pretty much on track with what population has been doing in recent years, which actually is a somewhat downward trend in terms of the overall growth rates, which is part of the success story of population.

DOBBS: And, professor Pimentel, is this a sustainable rate of growth? Demographers, I understand, scientists may not be shocked by it, but in fact the population of the world is doubling here over our lifetimes. It's rather shocking, is it not?

PIMENTEL: It is shocking. And one of the major dimensions of this growth is the fact that we've got a young age distribution worldwide. And it will take about 70 years before these young are old enough and the world population stabilizes.

DOBBS: Putting it in the context of the United States, to suggest that this country's population would be approaching almost a half billion people over the course of the next 40, 45 years, is this country, given everything that we are experiencing now, drought, the competition worldwide for natural resources, for building materials. Bob, is that something that our policy makers should be focusing on right now?

ENGELMAN: Well, it's certainly accurate to say that they're not focusing on it very much at the moment. I think it would be good to have a national discussion about this issue. I think all countries are well advised to take a look at where population trends are going, begin to prepare for them.

I'm amazed at the ignorance of population projections among government policy makers and people who are planning for infrastructure in this country and policy around how to deal with population, how to address it, how to perhaps influence it in positive ways. We aren't talking about it much. DOBBS: Professor, your thoughts?

PIMENTEL: Yes. I think population growth is a major threat to our environment, in particular land and water. And looking at it worldwide, the World Health Organization reported that we've got more than three billion people who are malnourished. And this, of course, then relates to the problem of increasing diseases, of malaria, AIDS, TB and so forth. And so we have a major problem currently, and certainly intensifying in the future.

DOBBS: Bob, why don't our policy makers, why don't our thinkers in academia, why aren't they focusing on this critically important issue?

ENGELMAN: Well, economics tends to drive a lot of discussion in this country, as well as really any country. And if there's been any concern about demographics in the United States at all, it's tended to focus on, will Social Security survive? Are there enough young people?

There tends to be a lot of attention around the idea of, will we be able to sustain Social Security programs? So this tends to make people a little bit less aware of environmental issues, aspects of congestion, housing prices, the rising price of petroleum, that do relate to demographic change and demographic growth in this country.

DOBBS: Well, you just described also economic issues and very important economic issues. The scarcity of resource is fundamental to economics. Environment and quality of life is the reason that economics even exists as a study, that is to help us assure that. Professor Pimentel, the idea that policy makers are not focusing on population growth, at what point -- what level of population, in your judgment is sustainable in this country?

PIMENTEL: Well, of course, we have published a report of about 200 million, which is nearly half of what we currently have. But that's based in the future when we run out of fossil energy, and so forth. And it's also, with the judgment that we would like to have a high standard of living. As the population grows, it's affecting our natural resources, and of course in our future our standard of living. And these should be examined related to what we would like to have in the future.

DOBBS: Are there, Bob, let me turn to you. We've got very little time. As succinctly as you can, one or two of the most important policy initiatives that our lawmakers, our political leaders could take in the next few years that would be well advised given this population explosion?

ENGELMAN: Well, focus on the needs of women. The reality is, we're going through a tremendously hopeful transition worldwide, it's affecting the United States, it's affecting countries that send people to the United States. Women want to have fewer children today than their mothers did. Some cases, their older sisters did. A lot of them don't have access to the health care facilities, the clinics, the family planning services that allow them to have the family size they actually want to have.

If we could focus on women's status and women's access to health, we'd make a lot of progress on population.

DOBBS: Bob, thank you. David, very quickly, if you will, just a matter of seconds here.

PIMENTEL: Yes, well, I think we've got to understand that we have limited resources of water and energy and land in which the provide us with our necessities. And these should be examined and what standard of living we would like to have for the future.

DOBBS: David Pimentel, Bob Engelman, thank you both for being with us here tonight. Please come back soon, as we continue to examine this important subject.

Still ahead here, one U.S. company says outsourcing simply isn't worth the cost. Instead of ship jobs to cheap overseas labor markets, this software company creating jobs right here at home. That story and more still ahead. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: On Wall Street today stocks mixed. The Dow up 25 and half points, the Nasdaq down nearly 2, the S&P 500 barely budged.

Outsourcing doesn't always work for American companies nor their employees.

And Christine Romans is here to tell us all about it -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: A company that is homeshoring, as it calls it, not offshoring.

DOBBS: Homeshoring. Now we're getting the idea.

ROMANS: A new word in the lexicon of offshoring. This company is Alera, and I.T. researched India, China and Armenia researching how it could do I.T. work more cheaply overseas. They thought, Lou, they'd find rich cost savings, instead they found software sweat shops and hidden cost. So, Alera, doing the work in the U.S., hiring 250 software and I.T. workers in Savannah and Fitzgerald, Georgia.

Now, "The Economic Times of India" is reporting that Bear Stearns may shift some high end analyst work to Mumbai in the next few months. The paper reports the proposal has number crunching research work going to India, freeing up the analysts in the U.S. for client relationships.

Bear Stearns has denied that report. But Wall Street analysts say several firms have research teams already in place in cheap overseas labor markets -- Lou.

DOBBS: Well, oil got a little cheaper today. ROMANS: Three days lower in a row, below $46. It's now down 4 percent from its high. But it's still up 44 percent from where it was trading last year at this time. So some perspective on the decline in oil prices.

DOBBS: And Bear Stearns denied that report?

ROMANS: Bear Stearns, said that report was false.

DOBBS: Then we should compliment Bear Stearns right now for having the good sense, judge of principle to keep those jobs in the United States for American workers. Congratulations, Bear Stearns.

ROMANS: Absolutely.

DOBBS: Christine, thank you.

Taking a look now at some of "Your Thoughts" on "Exporting America."

Olisaeloka Okeke, of Philadelphia, "By exporting jobs, companies aren't only cutting cuts, they are overseeing the attrition of America's power. The prosperity of this country doesn't lie in the prosperity of it's companies, but in that of its people." Well said.

Gail Rubio, of Brea, California. "Since the middle class does most of the working, living, fighting for this country and dying for it, you would think both parties would be more caring of this group. But we are treated as a great stupid beast whose only purpose is to provide the money to run this ship."

Darlene in Raleigh, North Carolina, "Enough about swift boats! I want someone to tell me what they are going to do to turn the economy around so our 401k's are worth something. I want to hear what is going to be done to protect our borders. I want to hear how we can afford the high cost of heating this winter."

Those issues are certainly of importance to us here as well. Keep sending us "Your Thoughts" on those issues and all that you're thinking about. We'd love to hear from you. E-mail us at loudobbs@cnn.com.

Still ahead the results of "Tonight's Poll," a preview of what's ahead tomorrow. A reminder to check our Web site for the complete list of companies we've confirmed to be "Exporting America." Cnn.com/lou.

(COMMERCIAL BREAK)

DOBBS: The results now of "Tonight's Poll." 79 percent of you responded, saying Americans are free to properly fly the American flag anywhere they choose in this country, 21 percent of you say they are not.

Thanks for being with us here tonight. Please join us tomorrow. And our "Face-Off" tomorrow, which presidential candidate would do more for the middle class in this country. That will be the subject of the debate between, Kevin Hassett, economic adviser to the Bush campaign, and Gene Sperling, senior economic adviser to the Kerry campaign in our "Face-Off" tomorrow.

Please be with us.

And we will report to you tomorrow on the 500 year drought, 6 years of drought in the Western United States, Casey Wian will have the report for you tomorrow evening here. Please be with us.

"ANDERSON COOPER 360" is next. Good night from New York.

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