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LOU DOBBS TONIGHT

U.S. Pledges $350 Million of Aid to South Asia; Look Back at 2004

Aired December 31, 2004 - 18:00   ET

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


(BEGIN VIDEOTAPE)
KITTY PILGRIM, GUEST HOST (voice-over): Tonight, a solemn welcome to the new year, celebrations around the world are tempered by the rising death toll from the South Asian tsunami. We'll have reports from around the Indian Ocean rim.

The United States responds to criticism that it isn't doing enough to help southern Asia. It's raising its pledge of aid to the region from $35 million to $350 million.

COLIN POWELL, SECRETARY OF STATE: So this tenfold increase is indicative of American generosity, but it also is indicative of the need.

PILGRIM: An extraordinary year comes to a close. We'll look back at the most memorable moments of 2004 from politics to war to Mother Nature. And John Dickerson of "TIME" magazine will tell us why President Bush is "TIME" magazine's "Person of the Year."

And the new year could bring new devastation for American textile workers.

UNIDENTIFIED MALE: I don't think catastrophic is too strong a word to use.

PILGRIM: International quotas are expiring, which could create an explosion of cheap Chinese imports. We'll have a special report.

ANNOUNCER: This is LOU DOBBS TONIGHT for Friday, December 31st. Here now for an hour of news, debate and opinion, sitting in for Lou Dobbs, who is on vacation, Kitty Pilgrim.

(END VIDEOTAPE)

PILGRIM: Good evening. Tonight, people around the world are welcoming the new year. Many with subdued celebration out of respect for the 135,000 people killed in the South Asian tsunami. Well, the new year has just arrived in Berlin and elsewhere in Europe. These are live pictures from the Brandenburg Gate. Revelers there are being urged to donate the money to tsunami relief.

American troops serving in Iraq and Afghanistan also welcomed in the new year. This is Kabul. Troops counted down to midnight by dropping a ball reminiscent of the one in New York Times Square. In Sri Lanka, the devastation from the tsunami did not stop people from welcoming the new year. Many lit candles in a vigil to the tens of thousands of people killed.

More than 4,000 people are still missing in Sri Lanka. And aid is finally arriving in some areas six days after the tsunami. Yet the struggle to survive is growing even more desperate for many. Hugh Riminton reports from southern Sri Lanka.

HUGH RIMINTON, CNN CORRESPONDENT (voice-over): Come with us for a short drive down the Sri Lankan coastline where some aid is starting to arrive. The Dutch-funded agency involved here says the desperation is getting greater rather than less. Livelihoods are gone in this village as well as lives.

RAMYA JAYARAJNE, VILLAGE ELDER: So many people along the road they have got washed up and still the bodies are not found. And sometimes in certain families two or three people.

RIMINTON: Here, not even the wild monkeys are safe. The trees, still standing, are dying. They've been poisoned by the saltwater surge.

JAYARAJNE: I think this whole place will become a desert.

RIMINTON: Down the road, we find a police inspector using vital drinking water to clean up his house. He admits there's no safe water in the area, but he doesn't seem too much concerned, even if people nearby are reduced to beseeching passing traffic for food and drink. The further we go, the worse it gets. The search for bodies continues under awful and unhygienic conditions.

(on camera): Even now, as you can see behind me, bodies lie unidentified and still unburied, although an earth-moving piece of equipment has just been brought in, there's no ceremony, a hole is being dug in the sand, and that is where these people will be interred.

(voice-over): The bodies are being pulled from the train that was wiped out with 1,000 dead. Richmond Wijesekera looks at everybody, but still finds no sign of his brother and his wife.

RICHMOND WIJESEKERA: We can't identify them because they are so damaged. So I saw about 1,000 bodies, they are buried.

RIMINTON: The bodies that are recovered will rest near the sea that claimed them. On Sri Lanka's national day of mourning, it is hard to imagine a bleaker end.

Hugh Riminton, CNN, southern Sri Lanka.

(END VIDEOTAPE)

PILGRIM: Thailand today more than doubled its death toll to 4,000 people. Thousands more are still missing. Well, tonight in Phuket, survivors held a vigil for those lost. ITN's Adrian Britton reports.

(BEGIN VIDEOTAPE)

ADRIAN BRITTON, ITV CORRESPONDENT (voice-over): Each with a candle in the tropical breeze and each with a single white rose of mourning. In Phuket tonight, they gather to remember. But how will they ever be able to forget the end of 2004? The year passed away in silent remembrance. Like the new year, Boxing Day began in tranquility until fate appeared on the horizon. This video just released from the British family shows how quickly curiosity turned to panic.

UNIDENTIFIED MALE: That wave is a good 15, 20 feet tall, easy. Get in! Get in! Get in!

BRITTON: This video from an Israeli family shows how rapidly the water rose inside their hotel, wading waist high past floating suitcases and furniture. Outside, a man grabs onto palm trees to resist the torrents, as another man much older, quite literally hangs on to the only chance of life.

And still they come to the tsunami crisis center in Phuket to identify from photographs relatives and friends they've lost. The British embassy is advising people not to attend mortuaries as bodies are no longer recognizable. And to end the year, the people of Thailand wanted to show their strength.

(on camera): The candles have replaced the traditional new year fireworks. It has been a sorrowful end to 2004, but the government here says that 2005 must start afresh and the rebuilding of Thailand and its ravaged beaches must now begin.

Adrian Britton, ITV News, Phuket.

(END VIDEOTAPE)

PILGRIM: Tens of thousands of people are still unaccounted for around the Indian Ocean rim. Yet six days after the disaster there are some remarkable stories of survival and reunion.

Satinder Bindra reports from southern Sri Lanka.

(BEGIN VIDEOTAPE)

SATINDER BINDRA, CNN CORRESPONDENT (voice-over): 8-year-old Guyan Sandakalam (ph) screams in pain. "I want my dad," he wails. All his mother can do is watch helplessly and cry herself. Last Sunday Guyan was knocked unconscious by the tsunami. Hours later, he was found by strangers who brought him to this hospital. His mother was united with him just a few hours ago.

"I was crying in the village," she says, "when someone told me that my son was alive and is in this hospital. I rushed here and found him alive." Just a few feet away in another ward of the hospital, silence. But these faces tell a story of loss, of despair and complete helplessness. Ratamagomay Sunil (ph) fractured his leg when he says a 25-foot wave swept him off his perch on a tree.

"This is an unbelievable incident, " he says. "We can deal with property damage but what we cannot deal with is the loss of so many human lives."

Sunil's wife keeps a close watch over him. But it's clear she's consumed by loss. "I could only see my son's face as he was being swept away," she says. "I managed to catch him at first, but I just couldn't hold on."

Little comfort that their house is still intact, but they want to return home soon so they can be reunited with their other son who's just 2 1/2 years old.

(on camera): There are 400 casualties at this hospital. Most are suffering from fractures, lacerations, and emotional trauma. Some patients were admitted here just yesterday, after being injured while running away from what they thought was another tsunami.

(voice-over): That second tsunami never came. But this 11-year- old bears the scars of the wild panic that followed the alarm and led to dozens of road accidents. For now in the room next door, little Guyan has stopped crying. But given all he has experienced, sleepy eludes him. His mother is worried. She says she just can't muster the courage to tell him his elder sister and father are still missing and now presumed dead.

Satinder Bindra, Galle, southern Sri Lanka.

(END VIDEOTAPE)

PILGRIM: A 200-year-old legend is credited with saving the lives of thousands on one Indonesian island. The island is one of the closest land masses to the epicenter of the earthquake that created the tsunami. Yet most of its residents survived.

Atika Shubert reports.

(BEGIN VIDEOTAPE)

ATIKA SHUBERT, CNN CORRESPONDENT (voice-over): Just 40 kilometers or 25 miles from the epicenter of one of the biggest earthquakes in recent history, the island is Sumulu (ph) amazingly intact. According to the U.S. Geological Survey, the earthquake picked up and shifted the entire island.

Yet from our plane window, we can see idyllic seaside villages seemingly impervious to the devastation that has swept the region. This plane was the first to arrive since the earthquake, amid rumors the island was underwater.

(on camera): Before this plane arrived, the island of Sumulu had lost all communication with the world. And many had believed the island had been simply wiped off the map.

(voice-over): The local governor is overjoyed, without any other means of communication, this is his chance to get the word out that the island survived, but still needs help.

"Thanks be to God that we did not lose many lives," he said. "But we did lose our homes, schools, and mosques."

In fact, the island did not escape unscathed. Scores of homes on the northern coast were destroyed and need to be rebuilt. What saved lives was this scene, villagers running for the hills after the initial earthquake. Islanders received a tsunami warning handed down from generation to generation.

The island's harbor manager explained it like this. The story goes, in the 1800s, there was a quake so big it brought the sea onto land. So whenever there's an earthquake, we run for the hills.

A few days later, residents came down and returned to normal life thankful that they minded island folklore. In what is otherwise a sea of despair, this is an island of hope. Atika Schubert, CNN, Sumulu, Indonesia.

(END VIDEOTAPE)

PILGRIM: Well in a moment, I'll talk to a scientist who says thousands more lives could have been saved from the tsunami. Ellen Prager is the author of "Furious Earth." And she's my guest next.

And then the United States increases its aid to Southern Asia by tenfold. We'll have a special report on one of the launching points for relief coming from the United States.

And then, the year that was: Remembering 2004, and the many events that changed our world. That and a great deal more still ahead here tonight.

(COMMERCIAL BREAK)

PILGRIM: President Bush today announced a huge increase in aid for tsunami victims in Southern Asia. The United States will now contribute at least $350 million to relief efforts in the region. Initially, the United States pledged $35 million.

Now, Secretary of State Colin Powell today met with U.N. Secretary-General Kofi Annan ahead of Powell's trip to Asia. Secretary Powell today said the increase in U.S. aid is based on initial reports from American assessment teams in the region.

(BEGIN VIDEO CLIP)

POWELL: This tenfold increase is indicative of American generosity, but it also is indicative of the need. The need is great. And not just for immediate relief, but for long-term reconstruction, rehabilitation, family support, economic support that's going to be needed for these countries to get back up on their feet. (END VIDEO CLIP)

PILGRIM: Meanwhile, the first U.S. cargo plane loaded with supplies arrived in Sri Lanka's capital city of Colombo today. The plane flew in from Utapao U.S. Naval Air Base in Thailand, carrying water and other supplies. The water will be distributed by the Sri Lankan military to outlying areas of the country.

Donations of aid for the victims of the tsunami are pouring into relief agencies all over the world. But moving food and supplies from warehouses to the people in need poses an enormous challenge. Miguel Marquez reports from operation USA in Los Angeles.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: You've heard anything from my uncle?

MIGUEL MARQUEZ, CNN CORRESPONDENT (voice-over): Nimmi Gowrinathan, a Sri Lankan, born and raised in Beverly Hills is focused.

UNIDENTIFIED FEMALE: It's very overwhelming. There's so many things going on sometimes.

MARQUEZ: Gowrinathan has spent the last several summers helping orphans along Sri Lanka's Northeastern coast. Now she's volunteering at the L.A. offices of Operation USA.

NIMMI GOWRINATHAN, VOLUNTEER: I've heard one of the orphanages was 6 to 10 feet underwater. One with 65 children was totally destroyed. Those children, none of them survived.

MARQUEZ: Sri Lanka is home to a huge number of orphans, because of decades of civil war.

GOWRINATHAN: The tsunami happened in a political climate, which was very, very tense.

MARQUEZ: Though a peace accord was signed two years ago, the terms of it were never implemented. Gowrinathan who is getting her ph.d. from UCLA in political science hopes the tsunami cleared a path for peace.

GOWRINATHAN: I think the destruction of the infrastructure in the area is going to make it very difficult to return to war.

RICHARD WALDEN, PRESIDENT OPERATION USA: Sri Lanka actually can use all of the stuff that's coming in, but they don't have the means to absorb it.

MARQUEZ: Richard Walden, president of Operation USA says working with ethnic groups in Sri Lanka has given them a leg up in getting aid to those who need it most.

WALDEN: We're sort of more accustomed to navigating the minefield of the government approval process. GOWRINATHAN: These are the boys that we worked with.

MARQUEZ: Gowrinathan holds on to a handful of pictures and cards, memories of children whose fate is unknown.

GOWRINATHAN: To know that, you know, maybe tens or hundreds of them have died, I don't know how you're supposed to deal with that.

MARQUEZ: For now, she has found relief work a relief of it's own. Miguel Marquez, CNN, Los Angeles.

(END VIDEOTAPE)

PILGRIM: Well, my guest tonight says thousands of lives could have been saved in this tragedy with a minimum amount of preparedness. Ellen Prager is the author of "Furious Earth: The Science and Nature of Earthquakes, Volcanoes and Tsunamis." I spoke with her earlier and asked why more alarms were not sounded after such a major earthquake.

(BEGIN VIDEOTAPE)

ELLEN PRAGER, AUTHOR, "FURIOUS EARTH": Well, at first they didn't realize it was 9.0. Because it was in a remote region and for seismologists, the scientists who study earthquakes and locate them and estimate the magnitude, it's pretty easy to get the location, but it takes some time to actually get the magnitude, they have to get a lot of data from a lot of stations, so I think in this case people thought it was 7, an 8. And then when people started to realize it was a 9, I think people were surprised.

PILGRIM: Now, many scientists are saying that there should be systems in place to predict tsunamis. Is that technology good at this point? We know it exists, but is it good technology and do you believe it should be employed all over?

PRAGER: Well, we certainly have a tsunami warning system in many areas of the world, particularly in the Pacific Ocean and we know that it works to some extent. What it does is it measures or determines when there is a potential triggering event like a massive earthquake under the seafloor. Then a message is sent to a warning center where scientists can determine if there is a potential for a tsunami and then they can put out the signal and warning to the emergency response managers, people in local communities. So we know it works and unfortunately it's not all around the entire globe. And that's the big issue. Not whether they work, but where are they.

PILGRIM: Is it...

PRAGER: So yes, I think it should be.

PILGRIM: Is it an expense issue at this point?

PRAGER: Well, it's a combination of things. Not simply expense. You know, one of the problems where this happened is that even if there had been a warning sent out, and there are some friends (ph) who tried to put out a warning, there is no infrastructure to receive that warning and then disseminate it to the local communities. So it's not a simple matter of just putting the instruments out. You also have to put the experts in place. You also have to set up the infrastructure to get the message out and here we are talking some really remote communities so it's a difficult problem, it's a complex problem, so it's going to cost money and it is really going to take the international community to get together with the scientific community and the emergency response management to put something in place.

PILGRIM: One of the things we are doing right now is talking as if it is all over. Is it all over or are other communities at risk?

PRAGER: Well, we're still seeing aftershocks. I think there are upwards of 70 aftershocks, though not near the magnitude of what we saw in the main shock. So people are at risk in the aftershocks, but because the aftershocks decrease over time and get smaller over time, we don't expect there to be another tsunami, certainly of this magnitude. It's pretty unlikely.

PILGRIM: If one happened in the next few months do you think we'd be better prepared?

PRAGER: Well, we're pretty well-prepared in certain parts of the world where, historically, some of this happened before. In Hawaii, Alaska, the Pacific Northwest, in Chile. It if happens in one of those areas we will certainly be prepared. I think this is going to be the impetus to be more prepared in other areas.

PILGRIM: Thank you very much for your insight in this. Dr. Ellen Prager. Thank you.

PRAGER: Thank you.

(END VIDEOTAPE)

PILGRIM: Wildlife experts say the tsunami in Asia and East Africa are bolstering arguments that animals have a so-called sixth sense. Sri Lankan wildlife officials say not one animal was found dead in that disaster that killed tens of thousands of people in that country. And they say there has been some evidence of this phenomenon in the past with dogs barking or birds migrating before volcanic eruptions or earthquakes. But the theory has not been proven because a specific study would be practically impossible to carry out.

Well, coming up, a big year in politics. John Dickerson co-wrote "TIME" magazine's "Person of the Year" feature article. He'll join us with the look at last year and the year to come.

And a soldier's new year. One soldier in Iraq will celebrate the new year on patrol in one of the country's most dangerous regions.

(COMMERCIAL BREAK)

PILGRIM: The beginning of a new year has a different meaning for American troops station the in Iraq with the violence escalating ahead of next month's election. But one officer is looking forward to the new year in the hopes that it will find him going home. And that's where he'll meet his newborn son for the first time. Chris Lawrence is embedded with the soldier's unit in Ramadi and has the story.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN CORRESPONDENT (voice-over): The new year is sure to find Lieutenant Michael Penney right where the old one leaves off, on his feet, in the street, trying to find insurgents in Ramadi.

1ST LT. MICHAEL PENNEY, 1ST BATTALION 503rd INFANTRY: Yes, he's got a store out here on the road. How could he not see?

LAWRENCE: Lieutenant Penny has one wish for 2005, to meet his newborn son for the first time.

PENNEY: I'm excited to be able to get home one day and be able to hold him and be a dad, for sure.

LAWRENCE: The lieutenant tries to tell himself, think about what's in front of you, not your wife and son.

PENNEY: You can't help it. You know, one day, you know, most of us are going to be going back home.

LAWRENCE: Most, but not all, and that's the reality of making plans while you're fighting in Iraq.

PENNEY: I know our battalion's had quite a few casualties.

LAWRENCE (on camera): Even a simple patrol like this one is dangerous here in Ramadi because the insurgents are watching and learning from every move the soldiers make.

(voice-over): And the American troops know the insurgents' tactics will keep changing. They've already learned to lay traps as soldiers exit an area and save their fire for vehicles with lighter armor.

UNIDENTIFIED MALE: And they have their own little method where they'll shoot an RPG at you and then open up with the AKs.

LAWRENCE: Lieutenant Penney gave up a civilian career as a retail buyer and joined the Army after the attacks on September 11. Now he's hoping his deployment won't make him a stranger to his own son.

PENNEY: I have a fear that he -- you know, is he going to know -- he won't know who I am. It's going to be like, who's this guy?

LAWRENCE: The lieutenant hopes to answer that question in person, sometime in the new year.

With the 503rd Infantry, Chris Lawrence, CNN, Ramadi.

(END VIDEOTAPE)

PILGRIM: Still to come, an unforgettable year in politics. John Dickerson is White House correspondent for "TIME" magazine and co- author for the "Person of the Year" article on President Bush. He will join us.

And the year in film, the best, the worst, the most controversial movies of 2004, and a preview of the latest releases at the box office. Gitesh Pandya of Boxofficeguru.com will join us.

(COMMERCIAL BREAK)

PILGRIM: In a moment, we'll talk about the most intriguing stories of 2004 with John Dickerson, who is White House correspondent for "TIME" magazine. But first, a look at some of the top stories tonight.

Nearly 200 people were killed and more than 600 injured after a fire swept through a popular nightclub in Argentina's capital, Buenos Aires. Officials say many of the thousands of people in the club were trapped by locked exit doors. The fire was apparently sparked by a flare used during a rock concert in the club.

The Justice Department today issued a memo outlining new guidelines and legal standards for interrogating detainees. The document replaces a controversial 2002 memo which some say led to the prisoner abuse scandal at Abu Ghraib. The new document makes clear that torture violates U.S. and international law.

And Ukrainian Prime Minister Viktor Yanukovych has resigned. He made the announcement today in a televised address, saying he refuses to concede the presidential election and will challenge the results. Last Sunday, in a runoff election ordered by the supreme court, opposition candidate Viktor Yushchenko was chosen as the country's new president.

The Ukrainian election crisis was just one of several remarkable stories of 2004. The events of this year have set the tone for a less giddy new year's celebration and perhaps one more for reflection.

(BEGIN VIDEOTAPE)

PILGRIM (voice-over): A year of war and politics, earth- shattering events and sweet victories. Tears and tenderness often at the same time. It was a year of incredible cruelty and destruction where children were not spared, by the hand of man in Beslan, Russia; by a force of nature in South Asia.

The war on terror continued. The 9/11 Commission report became a best-seller. But security comes at a high cost. Limits on freedoms, necessary indignities. On the streets of America, there were no major terrorist attacks. And the Olympic celebrations in Athens were without incident.

But terror still struck around the world. In Madrid and Saudi Arabia and other places. Yet some terrorists were apprehended and insurgencies around the world were also hard pressed.

This year, social issues were brought to the pitch of debate in a campaign year. Gay marriage, steroid use in sports, stem cell research, religion emerged as a societal force, film makers led the discussion on religion and politics. Cultural diversity was defended and in some countries diminished.

In the united states, icons tumbled. Courts were turned into spectacles. Some cases held gruesome fascination.

Nature reasserted its power on an epic scale. Hurricanes tore at the shores. Waters rose up. Volcanoes spoke and the tides turned deadly.

And time took with it great men and world figures, buried with great emotion and ceremony. And countless others were buried nameless without.

It was a year when the world community felt connected by democracy upheld. Elections in faraway places succeeded with effort. In Afghanistan after a year of war. In Ukraine after peaceful protests. And the battle to secure Iraq for next year's voting continues.

Kids from Kansas are still in Iraq. Nearly 850 service men and women died this year. It was a year when the Statue of Liberty was reopened for the first time since September 11th and that symbol of liberty may be the legacy of this year for future generations.

(END VIDEOTAPE)

PILGRIM: 2004 was a memorable year in the world of politics and John Dickerson is the White House correspondent for "Time" magazine. He co-wrote the magazine's Person of the Year article on President Bush. And I spoke with John Dickerson earlier and asked him about the magazine's choice for Person of the Year.

(BEGIN VIDEOTAPE)

JOHN DICKERSON, "TIME" MAGAZINE: In the end, the editors decided that the president was the one who won this victory for himself. And it was not only that he won, but the way he won. He broke a lot of the old rules of politics and did it his way, which not only helped him win re-election, but will give him what he thinks is a mandate for his style of leadership for the next four years.

PILGRIM: You know, some of those rules really were rules that were set in stone. And its don't go after these fractional groups, don't go after the extremely rural group. He just actually went over some turf that normally a president wouldn't bother with. It was because the race was so tight, wasn't it?

DICKERSON: Well, that's part of it, yes. What they did was they set a strategy and then they stuck to it. And this is something the president prides himself on. And this they did over two years. And so tactically, you're right, they went to rural areas, these ex urban areas, and they found new voters there.

But also what the president did that was new was he often told people what they didn't want to hear. We're not used to that from politicians, especially as it gets closer to election time. They often tell us just what we want to hear. And in a number of instances the president refused to admit mistakes, he refused to drop Secretary of Defense Donald Rumsfeld during the Abu Ghraib prison scandal, didn't want to get rid of his Vice President Dick Cheney. This is the kind of thing that he's been criticized for but he said, this is the way I'm going to play it and voters will support me in the end. And it turns out he was right.

PILGRIM: Let's spin it forward. Hillary Clinton in 2008? What's your view?

DICKERSON: Well, she's certainly the superstar of the Democratic party. And so everybody will be watching her every single move from now until 2007 or 2006 when she starts having to make real commitments. And so she has to be considered the sort of in first position. I'm sure John Kerry has a lot to say about that and it will be very interesting to watch the two of them as they behave in the Senate.

PILGRIM: What's the status of John Kerry now, in your opinion?

DICKERSON: Well, it's interesting. In talking to a lot of Democrats for the piece about Bush and what kind of lessons they might have taken away from his re-election victory, there are a lot of Democrats who feel generally pretty good about John Kerry. They have plenty of criticisms to be sure about his lack of message and his inability to stay on a single message.

But they do point out that he sort of came back from the dead twice in his race. He won the three debates. He finished strong and raised a lot of money and turned out more Democrats than ever before. So there are a lot of Democrats out there who feel all right about John Kerry, which will help him if he wants to run again in '08.

PILGRIM: Do you think there's another strong role for John Edwards going forward?

DICKERSON: Well, Edwards has lost his platform. He's no longer in the Senate and that's difficult for a candidate who had a light governing resume as it stood. So Edwards has a lot of work to do if he wants to be considered seriously in the next race.

PILGRIM: There's much soul searching in the Democratic party. Do you assess them as in crisis, as some people would have you believe, or do you think that they need to find a new group to tap into for their support?

DICKERSON: Well, political parties, when they're in crisis, it's almost right before they turn around. In 1964, the Republicans were supposed to be off the map after Barry Goldwater lost. Then we had two terms of Nixon. McGovern's loss in '72 was supposed to be a big problem for Democrats and then Jimmy Carter and Bill Clinton came along.

So the Democratic party is certainly searching its soul. But they can't be counted out. And there are plenty of smart people there who will be fighting back starting right away with the president as he tries to enact his agenda. Democrats in the Senate are going to try and redefine what their party means in opposition to the president.

PILGRIM: You know, right now the way it's being told, the Republican party tapped into the soul of America. Do you think that's true? And do you think that they will continue to really hit the exact right note to get this kind of support?

DICKERSON: Well, they tapped into enough of the soul of America to - or the president did anyway, to get the majority of votes. I think there are certainly a lot of Democrats who believe that the party, in terms of this notion of the American cultural wars that have been discussed, that the Democratic Party, there are a number of Democrats who believe the Democratic party is seen as slightly out of touch with the way most normal people live their lives. And so there's a lot of discussion in the Democratic party about whether they have to kind of reach out to voters who would be considered more conservative.

PILGRIM: OK. Let's go into some of the Republican contenders you think might be coming up. Your predictions?

DICKERSON: Well, there are many of them. We have Majority Leader Bill Frist in the Senate. Senator John McCain is certainly thinking about running. Former New York Mayor Rudy Giuliani is thinking about running. Governor Pataki of New York is thinking about running.

Of course, there are lots of people thinking about it but we also see some meetings and some of the first inklings of building a presidential force. What, again, will be interesting is what lessons these potential candidates take from President Bush's victory. Was this something only President Bush could do in these unique times? Or is it something that other candidates can copy? And that's what they're all figuring out right now.

PILGRIM: Iraq really dominated the year. Do you think it will going forward? And are the events in Iraq really the determinant of the domestic, political picture going forward?

DICKERSON: Well, it certainly will determine what sort of the main conversation of the day is. And we have the elections coming up and those will be crucial. The White House certainly hopes that they come off and come off reasonably well to try and sort of break that topic from being the first one on the news most evenings.

PILGRIM: All right. Thanks very much. John Dickerson, White House Correspondent, "Time" magazine.

DICKERSON: Thank you.

PILGRIM: Thanks, John.

DICKERSON: Thank you.

(END VIDEOTAPE)

PILGRIM: Across the country, most people will be busy ringing in the new year tonight and into tomorrow. But some new, slightly bizarre state laws are officially added to the books. And we'll give you some of those.

For example, beginning tomorrow, it will be illegal to have a wild animal as a pet in New York. And that was sparked by a man who kept a tiger and an alligator in his apartment.

If you're 16 and living in Illinois, you'll have to wait another year to drop out of high school. You must now be 17 to drop out of school in that state.

And, finally, it's now up to you to watch your diet in Illinois and Missouri. And that's where it is now illegal to sue a restaurant or a fast food chain for serving fattening foods.

Let's turn to the subject of tonight's poll. What do you believe was the biggest news event of the year? The U.S. presidential election? The war in Iraq? The tsunami disaster? Or none of the above? Cast your vote at LouDobbs.com and we will bring you the results later in the show.

And just ahead, we'll go live to Times Square. Hundreds of thousands of people are gathering for tonight's celebration.

And then, the year in film. Gitesh Pandya, the editor of BoxOfficeGuru.com, is my guest.

(COMMERCIAL BREAK)

PILGRIM: And just over five hours from now, the world famous ball drops in Times Square. And tonight marks the 100th anniversary of the celebration there. So let's go to Times Square.

And Jason Carroll is with us with a look for what's ahead tonight.

Jason.

JASON CARROLL, CNN CORRESPONDENT: And what about a little Barry White to celebrate the 100th anniversary? That's what's playing right now to get the crowd going. If you take a look, you can see that there are already thousands of people who are packed into here, into Times Square. Take a look at all those people down there waiting for the events to get started.

Again, they're expecting about 750,000 people to pack in here. From the sounds of it, it sounds like a lot of them are already in here. Law enforcement officials have put in a security plan to make sure that everything comes off safely. That plan is details on the grounds and on the air. And in terms of what will be happening on the ground, thousands of police officers. We've seen a number of them out here already. Manhole covers in the area have been sealed. So have all the mailboxes as a precaution.

Also something new. The city's gone high tech in some ways. What they've done is they've installed chemical sensors in the area. That way they can test the air quality on an hourly basis, if necessary. I know you're looking at the ground right now but also want to take a look at what they're going to be doing in the air. A fleet of seven helicopters will be patrolling the skies. One of the chopper will be equipped with radio active sensors. That chopper is also going to be equipped with a camera ID on board that can detect people on the ground, some 1,000 feet below. Earlier, Mayor Michael Bloomberg encouraged everyone to come out, just like you see these people are doing right now, to have a good time.

(BEGIN VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG, NEW YORK CITY: To make sure that everybody is going to have a good time, be safe and respectful of the people standing next to you. We are here together and we want to make sure that everybody enjoys Times Square.

(END VIDEO CLIP)

CARROLL: Again, it sounds like the people out here are already enjoying Times Square. Also want to show you what we saw just a short while ago when the crystal ball was raised into position. We had an unprecedented view of that as it was being raised. That happened just a short while ago. The crowd went wild as the ball was lit, as you can see there, and went into place.

And what's going to happen is, at 11:59, it will start its descent. Mayor Bloomberg, along with Secretary of State Colin Powell will do the honors on that one to release the ball. There will be fireworks. There will be confetti. There will be lots of music, as you can hear right now. But at one point tonight, at 8:14, there will also be a moment of silence and that will be for, of course, the victims of the tsunami.

So as you can see right here, right now, happiness is in the air. A lot of people out here screaming, having a good time, just waiting for 2005 to make its appearance.

Back to you.

PILGRIM: All right. Thanks a lot, Jason, and have a great time.

Well, tonight, let's look at the year's biggest blockbusters. And some sparked a bit of controversy in some peaked the interest, our sci-fi interests. Some just made us laugh. They really did.

Now the leading top five grossing films of 2004, "Shrek 2," brought in a whopping $437 million. That was followed by "Spider-Man 2." "The Passion of the Christ," "Harry Potter 3," and "The Incredibles."

Well, joining me now is Gitesh Pandya, the editor of BoxOfficeGuru.com. And he says the biggest surprise of the year is in the top five.

And let's just talk about the top five. They made a lot of money, didn't they? GITESH PANDYA, EDITOR, BOXOFFICEGURU.COM: Right. The bigger hits got even bigger this year in 2004. "Shrek 2," of course, led the way with well over $430 million. And, worldwide, close to $900 million. But one of the biggest surprises came from "The Passion of the Christ." Here's a low-budget film, didn't want to be released by any studio in Hollywood, yet they went on to gross $370 million, held partially by the large Christian population who wanted to see the film, plus the controversy which made it the biggest media spectacle this spring.

PILGRIM: Yes, and I remember following that, day after day, watching those numbers grow and being surprised and the controversy was extreme just before that.

Another film that did extraordinarily well, the sort of new- market technique of controversy, "Fahrenheit 9/11," and there was quite a rumpus over distribution.

PANDYA: Right.

PILGRIM: There was a lot of talk about that just before it was released and I think that probably helped it, too.

PANDYA: Oh, definitely. I mean it really proved that, for marketing purposes, controversy was the biggest tool of the year. And for "Fahrenheit 9/11," here's a documentary. Documentaries don't make that much money at the box office but the controversy that Michael Moore attracted brought in both his supporters and those who were against him. So whether or not you were for or against him, the controversy made you want to see this film. And they rode that to $119 million gross.

PILGRIM: That's unbelievable. Let's talk about a big blockbuster that really didn't turn out to be a big blockbuster, "Alexander." Your view?

PANDYA: Right. "Alexander" was $150 million budgeted film from Oliver Stone. It came out at Thanksgiving time. However, the interest just was not there. The reviews were mediocre at best. It's on its way to about a $35 million gross and really just a big flop for 2004.

PILGRIM: A new release, "Aviator," which I saw last weekend. This may be an Oscar contender?

PANDYA: Oh, definitely. This is a terrific movie. It's being released by Miramax Films. And it is one of the odds on favor to win the Oscar. The biography of Howard Hughes, the eccentric billionaire. Leonardo DiCaprio is the star here. And it's gotten six Golden Globes nominations. It's on the front-runner status to get the Oscar nominations. And it could be a movie that hangs around in theaters for months to come.

PILGRIM: Let's talk about another one that's out now, in case someone wants to go to the movies this weekend, and that's "Sideways." PANDYA: Right. "Sideways" is currently playing in limited release as well. This one got seven Golden Globe nominations. That's even more than "The Aviator." It's a buddy picture about two guys on a wine-tasting trip in California. This film has swept all the critics awards in New York, Los Angeles, Boston, so on and so forth. It is a major contender for the Golden Globes and the Oscars. A much smaller film but, look out, this could be a big contender.

PILGRIM: All right. Let's talk about best actor nominations. And two films seem to be talked about a lot. One is "Ray." Tell us what you think.

PANDYA: Right. Well, Jamie Foxx does an incredible performance doing Ray Charles in the movie "Ray" from Universal Pictures. This is a film where he carries it by himself. A terrific performance. This is what the Oscar voters like. Here's a person who is a real-life character, who is put on the screen for the first time. Jamie Foxx's performance definitely makes him the front-runner to win the Oscar for best actor.

PILGRIM: So two historical figures. You will have "The Aviator" and "Ray" also in ...

PANDYA: Right. DiCaprio hopefully will get his Oscar nomination. He didn't get it for "Titanic." And he'll go face to face against Jamie Foxx.

PILGRIM: All right. One other thing, "Eternal Sunshine," which is saw Jim Carrey, is he up for maybe an Oscar, do you think?

PANDYA: Well, he hasn't got a nomination yet. He might get a nomination this time around. And he's had all the blockbuster success. So he doesn't really need a Oscar nomination. He's done it all in his career.

PILGRIM: Let's talk about a laugh track and that's "Meet the Fockers." Everyone saying that it's very funny. And maybe this year we just needed a laugh, didn't we?

PANDYA: Right. Comedy did very well in 2004. And now what a way to end off the year but with "Meet the Fockers." It's the hit sequel to "Meet the Parents" with Robert DeNiro and Ben Stiller. It just crossed the $100 million on Wednesday after only eight days. It will be number one again this weekend for new year's and it's on its way to $200 million. And this is exactly what people want to see. Whether you're in the red states or blue states, you love this film. Everybody came out for "Meet the Fockers."

PILGRIM: It's a big teem movie, isn't it, which is a big demographic.

PANDYA: Right. Well, there's not a lot of teen movies out there. It's a PG-13 comedy, so it really has the broadest appeal of any film out there. And marketing wise, that is what gets you the dollars.

PILGRIM: All right. Thanks so much. Love talking movies with you. Gitesh Pandya, thank you.

PANDYA: Always a pleasure.

PILGRIM: Happy new year.

PANDYA: Happy new year.

PILGRIM: Still to come tonight, why tens of thousands of American textile workers could be out of a job in the new year. We'll have a special report on that.

And "Made in America." One company that's fighting to keep its workers in this country against the odds.

(COMMERCIAL BREAK)

PILGRIM: Hundreds of thousands of American textile jobs will be at risk as of midnight tonight. Quotas that have protected U.S. manufacturers for decades will expire and that will clear the way for China to rule the textile industry worldwide.

Lisa Sylvester reports from Washington.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT, (voice over): Springs Industry is closing two of its South Carolina plants and slashing more than 500 jobs. The textile company says it has no choice as quotas on foreign imports are lifted. For the workers, it means an uncertain start to the new year.

UNIDENTIFIED MALE: People support their families off this company.

SYLVESTER: The textile quotas were put in place to protect the domestic industries of developed countries. But under World Trade Organization rules, the quotas expire on January 1st. In the absence of quotas, China, the manufacturing giant, is expected to dominate the world market. U.S. manufacturers say up to 700,000 U.S. jobs are in jeopardy.

JIM SCHOLLAERT, AMTAC: I don't think catastrophic is too strong a word to use for the effect on the U.S. textile and apparel industry. 680,000 employees is nothing to sneeze at, especially when we have lost so many jobs already across the board.

SYLVESTER: Since China joined the WTO in 2001, the United States has lost more than 350,000 jobs. After the quota's sunset, China's share of the market is expected to jump from 16 percent to as high as 85 percent. But not everyone thinks China should be held back. Consumers will likely see a reduction in clothing prices.

JULIA HUGHES, U.S. IMPORTERS OF TEXTILES & APPAREL: There will be winners and losers probably in every country, our own included. But, overall, I think we're going to see, as this shakes out, really improvements for the world economy and certainly for consumers. SCHOLLAERT: These are livelihoods of people we're talking about. And we are trimming (ph) those livelihoods away as though there was no tomorrow.

SYLVESTER: It's not known how soon China will ramp up production. But there's little doubt that China will move from being a big player in the textile market to a colossal giant.

U.S. manufacturers asked the Bush administration to put safeguards in place to limit Chinese imports. But a federal district judge ruled against the textile industry. The judge said the manufacturers have to show actual harm after the quotas expire and not just the threat of harm.

Lisa Sylvester, CNN, Washington.

(END VIDEOTAPE)

PILGRIM: In "Made in America" tonight, a furniture company that is resisting the powerful draw to move production overseas. They're teak furniture is entirely made in America.

(BEGIN VIDEOTAPE)

PILGRIM, (voice over): On a cold December day in upstate New York, the employees of Wood Classics are preparing for warmer days of garden parties and backyard barbecues. The company was started by former Wall Street Trader Eric Goodman 21 years ago. A student of economics, Goodman thinks keeping all his operations in the United States just makes good business sense.

ERIC GOODMAN, CEO, WOOD CLASSICS: I have never, up until this date, been able to understand why it would be economically worthwhile for us to do it other than the way we are now.

PILGRIM: It may not be sentimental, but the business model works. By building on-site, the company doesn't have to stock as much inventory or incur costly shipping charges. The sales team can also respond quickly to new orders and changes in demand.

GOODMAN: It's a very seasonal business. And if you run out of something in April and you're not going to get it till June, you've lost the sale.

PILGRIM: Goodman pays his employees 10 times more than their Asian counterparts, but he drives efficiency with tough quality controls and top of the line equipment.

GOODMAN: Go to, you know, one of these mass-production factories. Jobs that we do with one person and a machine here, they'll have five people. When labor is cheap, it's wasted.

PILGRIM: Goodman makes sure none of his employees are wasted. Each are held accountable for the final product.

UNIDENTIFIED MALE: We see the customer surveys when they come back. If it says hooray for you, we say, OK, good. If it says poo on you, we say, oh, OK, we're going to try a little harder.

PILGRIM: Goodman says he's refused several offers to outsource his manufacturing to foreign companies because there's more at stake than maintaining a business model.

GOODMAN: We have people who have worked here 10, 15 years and we're very close to the people who work here. It would be a huge disruption to just say we're going to bring it from Thailand.

(END VIDEOTAPE)

PILGRIM: It is a special place. And it is getting more and more difficult to find woodworking like this in the United States.

Well, still ahead, the results of tonight's poll and a preview of what's ahead on Monday.

(COMMERCIAL BREAK)

PILGRIM: Now the results of tonight's poll. Twelve percent of you said the presidential election was the biggest news event of the year, 32 percent said the war in Iraq, 52 percent said the tsunami disaster, and 5 percent said none of the above.

Well, thanks for being with us tonight and please join us on Monday when Lou Dobbs returns. Our guests will include Congressman Henry Hyde. He plans to introduce new legislation to help the victims of the devastating tsunami.

Plus, we'll begin our series of special reports, "Jackpot Justice."

For all of us here, good night from New York. Happy new year.

A special edition of ANDERSON COOPER 366 is next.

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


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