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Lou Dobbs Tonight
Dobbs Interviews Warren Buffett; Top al Qaeda Capture; Hunt for bin Laden; Massacre in Iraq
Aired May 04, 2005 - 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, an exclusive interview with the legendary Warren Buffett. We'll be talking about everything from corporate corruption to Social Security reform to the threat of nuclear and biochemical terrorism.
(BEGIN VIDEOTAPE)
ANNOUNCER: Also ahead on LOU DOBBS TONIGHT, al Qaeda's number three leader is captured. How close are we to Osama bin Laden?
Hidden power, how unelected activists in nongovernmental organizations are dominating global politics.
And stealing America. Intellectual property theft is costing this country a staggering $200 billion a year.
This is LOU DOBBS, for news, debate and opinion, tonight.
(END VIDEOTAPE)
DOBBS: Good evening.
Tonight, a major victory in the global war on terror and radical Islamists. Pakistani Special Forces have captured the third-highest ranking leader of al Qaeda. President Bush today declared the terrorist a top general for Osama bin Laden. Officials said the man coordinated al Qaeda operations in the United States and other countries.
Our national security correspondent David Ensor reports.
(BEGIN VIDEOTAPE)
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): U.S. counterterrorism officials say intelligence gathered by the U.S. from human sources was "critical" in finding the hideout of Abu Faraj al-Libbi in northwest Pakistan. The president gave the credit for a difficult, dangerous operation to Pakistan.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I applaud the Pakistani government and President Musharraf for acting on solid intelligence to bring this man to justice.
ENSOR: Al-Libbi was captured Monday after a gun battle, U.S. and Pakistani officials say. But word of it was kept quiet to allow time to round up other terrorists he might know about. MOHAMMAD SADIQ, EMBASSY OF PAKISTAN: The announcement of his arrest was delayed because an operation was going on. And I believe that there was some useful information obtained from him which helped us in more arrests.
ENSOR: Al-Libbi was the number three man in al Qaeda under Osama bin Laden and Ayman al-Zarqawi, in charge of operations since the capture of his predecessor, Khalid Sheikh Mohammed, in 2003. Khalid Sheikh Mohammed is now in CIA hands.
Administration officials are nothing less than thrilled at al- Libbi's capture.
STEPHEN HADLEY, NATIONAL SECURITY ADVISER: He was not only doing operations, he was a facilitator. He was into finance. He was into administration. This is a real accomplishment.
JOHN MCLAUGHLIN, CNN NATIONAL SECURITY ANALYST: This guy was my number one target. Bin Laden, of course, is much more important symbolically. But in terms of practical day-to-day operations, what al Qaeda is doing, how it threatens the United States, how it plans against targets in the United States, this is the guy you want.
ENSOR (on camera): Do you think he knows where Osama bin Laden is?
MCLAUGHLIN: If anyone knows where Osama bin Laden is, this is the man.
(END VIDEOTAPE)
ENSOR: And McLaughlin says that if al-Libbi did know where bin Laden was, that by now will have moved -- Lou.
DOBBS: Thank you very much. David Ensor.
The arrest of al Qaeda's number three is a major success in the war against radical Islamist terrorism. But three-and-a-half years after September 11, Osama bin Laden and many other al Qaeda leaders remain at large.
Kitty Pilgrim reports.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): The high-level arrests make headlines, but where do we stand in disabling al Qaeda? And is the organization still capable of commanding operations?
MARVIN WEINBAUM, MIDDLE EAST INSTITUTE: The general feeling is that al Qaeda at this point is a fairly loosely connected network, and that many of the operations which were taking place globally are initiated by locals who may be under certain instructions. But if they are, they are very broad instructions.
PILGRIM: Pakistan has proved to be fertile ground in recent months. One important arrest was al Qaeda figure Khalid Sheikh Mohammed, al-Libbi's predecessor and suspected September 11 mastermind.
And a few months ago, another kingpin. The high-level arrest of Ahmed Khalfan Ghailani, a Tanzanian wanted since 1998 for his part in the attacks on U.S. embassies in east Africa.
U.S. officials point to cooperation from Pakistani president Pervez Musharraf for the arrest. Each capture brings forth new data, cell phones, computer files, and paper to point to additional figures.
Meanwhile, the top two, Osama bin Laden, and his closest associate, Ayman al-Zawahiri, are still elusive. Is capturing them important to rooting out al Qaeda?
MATTHEW LEVITT, WASHINGTON INSTITUTE: We're now at the middle level of that structure. Clearly, Ayman al-Zawahiri, bin Laden's immediate deputy, is an extremely important person who we believe continues to play an operational role.
We're dealing with a lot of lower-level people right now in Europe and in the Middle East. And in some cases they are going to be new to us.
(END VIDEOTAPE)
PILGRIM: Well, the chain of command is no longer clear. Experts put it this way: the war on terror starts with al Qaeda, and there's been good progress in capturing many of the top leaders. The only problem is the ones who replace them are often unknown, and those terrorists often are very loosely affiliated with the al Qaeda organization.
DOBBS: Osama bin Laden himself, irrespective of any saving (ph) by an analyst, a strategist, a counterterrorism expert, this administration, is still the number one sought after terrorist.
PILGRIM: Absolutely. And it would be a deep morale blow to al Qaeda to have him caught.
DOBBS: And a great help for the civilized world. Kitty, thank you very much. Kitty Pilgrim.
Two deadly bomb attacks in Iraq today. Insurgents tonight killed nine Iraqi soldiers in southern Baghdad. Seventeen others were wounded.
Earlier, 60 police recruits were killed in northern Iraq. The attack took place in the city of Erbil, about 200 miles north of Baghdad.
Ryan Chilcote has the report.
(BEGIN VIDEOTAPE)
RYAN CHILCOTE, CNN CORRESPONDENT (voice-over): The suicide bomber targeted a crowd of 300 young Kurds who had come to sign up for Iraq's police force. The Iraqi militant group Army of Ansar al-Sunnah claimed responsibility. The attack, the group claimed on a Web site, was payback for the Kurds.
They fought alongside the Americans against our people in Falluja, Mosul, Baghdad and other Muslim lands. "We promise you that we are prepared more for you."
Some analysts say the claim is a sign the insurgents are stepping up their efforts to turn Iraqis against one another and to undercut cooperation between their representatives in the government.
COL. BOB MAGINNIS (RET.), U.S. ARMY: The success of the Iraqi government, especially under Jaafari, who is a Shiite, is really dependent upon the Kurds, Shia, Sunni, and the few Turkmen and Christians and others getting along. And if they can divide those populations, then they are going to be successful at not only dismantling the government, but also perhaps fueling a civil war.
CHILCOTE: The fault lines for further ethnic and religious division are already apparent. It has taken Iraq's prime minister months to form what he calls a government of national unity. And he has yet to fill several jobs.
Sunni Arabs, who feel alienated by the larger Shiite majority, are expected to get at least some of the jobs. So far, agreement between Iraq's many groups has eluded them.
Ryan Chilcote, CNN, Baghdad.
(END VIDEOTAPE)
DOBBS: Insurgents, of course, have made Iraqi police and military recruits a primary target of their terrorist campaign. One cannot help but wonder how so many of these recruits have been killed. At least 1,000 Iraqi recruits have been killed over the past two years by the terrorists. And today's attack, the worst since a bomb killed 125 recruits in Hillah in February.
The recruits are easy targets because they are forced to wait outside concrete barriers that surround government buildings. And police have refused to allow those recruits any closer because some of them may be, in the fears of those authorities, suicide bombers themselves.
The FBI today arrested a Pentagon analyst for allegedly passing top-secret information to a pro-Israel lobbying group. Investigators say employees of that Israeli lobbying group may have given the information directly to the government of Israel.
The Pentagon analyst, Lawrence Franklin, made his first court appearance today. Prosecutors say he passed on classified information about potential attacks on American troops in Iraq. Franklin's attorney declared that he intends to plead not guilty to the charges.
Still ahead here tonight, I'll be talking with the legendary Warren Buffett. We'll be talking about Social Security reform, the economy, corporate crime, the threat of nuclear annihilation, biochemical terrorism and much more.
Also ahead tonight, exporting illegal labor in this country, how the hotel industry is profiting through the hiring of illegal aliens, and why more isn't being done to stop it. Our special report is next.
(COMMERCIAL BREAK)
DOBBS: The Real ID Act is one step closer to becoming law. Today, the chairman of the House Judiciary Committee, Congressman James Sensenbrenner, the principal sponsor of the legislation, took a victory lap on Capitol Hill.
(BEGIN VIDEO CLIP)
REP. JAMES SENSENBRENNER (R), JUDICIARY COMMITTEE CHAIRMAN: The Real ID Act contains vital border security provisions aimed at preventing another 9/11-type attack by disrupting terrorist travel. Issuing driver's licenses to anyone without knowing whether they are here legally or who they really are is an open invitation for terrorists and criminals to hide in plain sight.
(END VIDEO CLIP)
DOBBS: That an invitation that's obviously being rescinded. Congressman Sensenbrenner chose to take with him on today's victory lap the chairman of the House Rules Committee, David Dreier, and the chairman of the House Armed Services Committee, Duncan Hunter, both of whom played important roles in moving this legislation through Congress.
The bill is assured to be passed by the House and Senate but is still fiercely opposed by many who advocate open borders, illegal immigration, and the interests of big business ahead of our national security. The lead editorial in today's "New York Times" criticized the Real ID Act, saying, Congress is going to "ram through a bill that turns state-issued driver's licenses into a kind of phony national identity card through the mislabeled Real ID provision."
And "The Wall Street Journal," its counterpart on the ideological spectrum, also weighed in saying, "The best way to decrease the number of illegal crossings while also satisfying our economic needs is to give immigrants more legal ways to come."
What a novel idea.
Real ID, for its part, is a critical piece of legislation, in my opinion, that will help secure our borders. And we applaud here Congressman Sensenbrenner, Congressman Hunter and Congressman Dreier for moving it forward with the support of the president.
That brings us to the subject of our poll tonight. Do you believe the Real ID Act is a valuable tool to combat the illegal alien crisis in this country, yes or no? Please cast your vote at loudobbs.com. We'll have the results later here in the broadcast. Turning now to the many industries that benefit from the millions of illegal aliens in this country while U.S. taxpayers and workers are paying the tab. Tonight, an estimated 620,000 illegal aliens are working for hotels in this country. They are among the lowest paid workers in all of our economy. And they are helping the hotel industry earn soaring profits while taxpayers pick up the bill.
Lisa Sylvester reports.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): If you stayed in a hotel recently, good chance an illegal alien cleaned the room. At least 200,000 illegal workers have jobs in the U.S. hotel industry. Employers are required to check for documentation, but illegal aliens get around that with phony identification. It's been a problem for years, as this hotel worker acknowledges.
UNIDENTIFIED FEMALE: All the people have them. All the people. I would say the majority have false papers.
SYLVESTER: The presence of illegal aliens have pushed down wages for American workers. Hotel and motel employees are among the lowest paid in the United States. Their average wage is 25 percent lower than other American workers. Illegal aliens often don't complain about working conditions or the low pay for fear of drawing attention, a benefit to the large corporate hotel chains interested in maximizing profits.
JOHN WILHELM, UNITE HERE: The industry as a whole has pursued a very short-sighted quarter-to-quarter profit policy. It has not made the decision to invest in its workforce.
SYLVESTER: Congressman Sylvestre Reyes says the federal government is not doing enough to make sure employers comply with the law.
REP. SYLVESTRE REYES (D), TEXAS: We don't need new laws. We just need to enforce the laws that are on the books today and to give homeland security specific resources to enforce that law in the work site.
SYLVESTER: That would take away the incentive for illegal immigration.
JOHN CHALLENGER, CEO, CHALLENGER, GRAY & CHRISTMAS: There are nearly six million illegal workers in the country today in jobs. The government could certainly go to employers and enact stiff penalties and cut that spigot off.
SYLVESTER: But, so far, the political will has not been there. So the underground service economy continues to flourish.
(END VIDEOTAPE)
SYLVESTER: The American Hotel and Lodging Association did not make anyone available for this report. But the group is pushing for President Bush's guest worker program, increasing their potential source for cheap labor and higher profits -- Lou.
DOBBS: Thank you very much, Lisa. And unfortunately, obviously the hotel industry certainly not alone in its exploitation of illegal labor and its expectation that taxpayers and hardworking American citizens should be picking up the tab. Thank you.
Now to update you on a story we reported here last night. Billboards posted by a Spanish language television network in Los Angeles declaring Los Angeles to be really part of Mexico will be changed after all.
The KRCA TV billboards sparked outrage across southern California. And California Governor Arnold Schwarzenegger said the billboards and the station were simply promoting illegal immigration.
Leonard Lieberman, the vice president of Lieberman Broadcasting, which owns KCRA, told us, "If we wanted to promote illegal immigration, we would have advertised in Mexico. The billboards are promoting a newscast in Los Angeles for Hispanics living in Los Angeles."
We should point out, that is Los Angeles, California, Mr. Lieberman. The billboards will be changed later this week, we're told, and will eliminate the phrase "Los Angeles, Mexico." And KFI Radio in Los Angeles is to be complimented for taking on the issue so directly and quickly.
Mexico's attorney general has dropped a controversial land dispute case against the embattled mayor of Mexico City, clearing the way for the mayor, Mayor Andre Manuel Lopez Obrador, to run for president of Mexico in next year's election. The mayor, who is the frontrunner in the presidential race, had accused President Vicente Fox and other political rivals of exaggerating the charges in order to keep him out of the race. In fact, most -- most journalists in Mexico City agreed.
The so-called crime, by the way, that Lope Obrador had committed, he built an access road to a hospital for poor people. A hospital that had been built in such a way as to be inaccessible to those people.
Coming up next, an emerging and largely selective and secretive power in global politics. How the U.S. government may be undermined by something called nongovernmental organizations. The NGOs are using their billions of dollars in funding to influence politics and governments all around the world. It's a special report you don't want to miss.
And then, a rare and exclusive interview with the renowned Warren Buffett. We'll be talking about a wide range of topics, bringing his insight to the issues of global terrorism, Social Security reform and, of course, this economy.
Stay with us. (COMMERCIAL BREAK)
DOBBS: Tonight, an emerging force is emerging and dominating global politics. There are now thousands of what are called nongovernmental organizations, or NGOs. They employ, in fact, millions of people. They have budgets larger than the economies of many countries.
As the influence of these NGOs rise, so do questions about their funding, their direction and just exactly what they're trying to accomplish and who they are trying to influence.
Christine Romans reports.
(BEGIN VIDEOTAPE)
CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Disaster relief, famine and war. On their face, NGOs are grassroots movements with good intentions. But their power and influence on the world's political stage have exploded.
There are now 3,000 NGOs registered with the United Nations. By definition, they exist to further the political goals of their members.
A report by the group Sustainability shows NGOs have 19 million employees and annual budgets topping a trillion dollars. That makes them the world's eighth largest economy. With that power comes criticism.
JOHN FONTE, HUDSON INSTITUTE: They claim to speak for the peoples of the world. Of course they don't speak for the peoples of the world. They speak for themselves. They claim to be a global civil society, but there really is no -- no such thing.
ROMANS: They are unelected activists, funded by private donations from wealthy individuals and foundations. Sometimes by governments and U.N. contracts.
JOHN ENTINE, MIAMI UNIVERSITY OF OHIO: Right now, they get away literally with whatever they want to do. And I think even NGOs themselves are recognizing that -- that they can't exist that way, that it's not in their best interest, because the credibility factor is so great that the public is now becoming cynical when they see how much money is being wasted and how ideologically narrow and disruptive many of the agendas of advocacy groups like Greenpeace and others actually are.
ROMANS: Transparency and accountability are the two biggest criticisms of NGOs. Greenpeace, of course, is the well known environmental organization. And it agrees that more power requires more responsibility.
JOHN PASSACANTANDO, GREENPEACE U.S.: We have to be as transparent as possible. We have to abide by the laws of the countries that we operate in and emanate from. And we have to ultimately go beyond the letter of the law and maintain this trust, this confidence, with our -- with the people who support us.
ROMANS: Here in the U.S. NGOs are required to open their books to the IRS. But the thousands who operate outside those boundaries often do not.
(END VIDEOTAPE)
ROMANS: But Greenpeace, Amnesty International and many others have been criticized for poor corporate governance overall, how they make their decisions, how they measure success. Investors, the public, largely in the dark about this, Lou.
Also, Greenpeace says it is working on that. But it makes a point. It says that it has such incredible powers, NGOs overall, because governments are hamstrung by corporate interests, allowing the special pressure groups to move right in on the world stage.
DOBBS: Which is precisely why we're taking a look at this critical issue. Because the influence of not only corporate America, but multinationals around the world, are dominating politics not in this country alone, but around the world. And that influence is not always positive or in the best interest of either this country or often the world itself.
ROMANS: And they are unelected, making some very big moves on the world's stage. These are unelected groups.
DOBBS: We are going to continue our look -- thank you, Christine -- at NGOs. Also, the not-for-profits and nonprofit organizations which are also hand in hand with NGOs becoming a powerful force for a political agenda that has not been decided by the people.
Coming up next, I'll be talking with the legendary Warren Buffett.
And we'll also be talking about how China is blatantly stealing critical American intellectual property and why the U.S. government is doing nothing to stop it. I'll be talking with economist, Pat Choate, the author of an explosive new book.
All of that and a great deal more still ahead. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: Warren Buffett, the chairman and the CEO of Berkshire Hathaway, is among, a host of other things, the second wealthiest man in the world. He just this weekend added the world's richest man, Bill Gates, to his board at Berkshire Hathaway, the company he runs.
Warren Buffett's insight reaches well beyond the world of business and economics, to politics, society itself. Warren Buffett is kind enough to join us here tonight to talk about his views of the issues and the challenges facing us.
Warren, it's great to have you here. WARREN BUFFETT, CHAIRMAN & CEO, BERKSHIRE HATHAWAY: Thanks, Lou.
DOBBS: As you have pointed out to your -- your shareholders, and indeed to all who pay attention to your musings, this is a complicated and challenging time. And I would like to begin first with something that may surprise a lot of people about you, and that is your interest in biochemical nuclear terrorism and thwarting what you consider to be the gravest threat to the country, and to the world, in point of fact.
How did you first decide to focus your energy on that?
BUFFETT: Well, back in 1945, I delivered a paper that told about Hiroshima. And I didn't know much about physics, but I learned. And there's no question in my mind that the number one problem with mankind is the spread of nuclear knowledge.
And, you know, thousands of years ago we had psychotics and we had religious fanatics and we had megalomaniacs. But they -- about the most they could do was throw a stone at somebody if they wished evil on them.
DOBBS: Right.
BUFFETT: Today, since 1945, the ability to inflict evil on -- or harm on other people in huge numbers has grown exponentially. And right now there's the knowledge around to use nuclear material. And we've got to hope that the wrong people don't get their hands on it.
DOBBS: And to hope is one thing. But we have a government, and there are other governments around the world whose responsibility it is to protect all of us. Is the United States government doing enough, in your judgment, to thwart that threat?
BUFFETT: Well, it's doing more. But there are -- as you know, there are lots of loose nukes around the world.
DOBBS: Right.
BUFFETT: We've got multiple governments that have the capability. We have lots of chemical and biological agents that are ill-guarded around the world. And it should be at the top of the list for our government.
DOBBS: Warren Buffett, the chairman and the CEO of Bircher Hathaway is, among a host of other things, the second-wealthiest man in the world. He just this weekend added the world's richest man, Bill Gates, to his board at Bircher Hathaway, the company he runs. Warren Buffett's insight reaches well beyond the world of business and economics to politics, society itself.
Warren Buffett is kind enough to join us here tonight to talk about his views of the issues and the challenges facing us. Warren, it's great to have you here.
WARREN BUFFETT, BIRCHER HATHAWAY CEO: Thanks, Lou.
DOBBS: As you have pointed out to your shareholders -- and indeed to all who pay attention to your musings -- this is a complicated and challenging time. And I would like to begin, first, with something that may surprise a lot of people about you, and that is your interest in biochemical, nuclear terrorism and thwarting what you consider to be the gravest threat to the country -- and to the world, in point of fact. How did you first decide to focus your energy on that?
BUFFETT: Well, back in 1945 I delivered a paper that told about Hiroshima, and I didn't know much about physics, but I learned. And there's no question in my mind that the number one problem of mankind is the spread of nuclear knowledge. You know, thousands of years ago we had psychotics and we had religious fanatics and we had megalomaniacs, but about the most they could do was throw a stone at somebody, if they wished evil on them. Today, since 1945, the ability to inflict evil on -- or, harm on other people in huge numbers has grown exponentially and right now there's the knowledge around to use nuclear material. And we've got to hope that the wrong people don't get their hands on it.
DOBBS: And to hope is one thing, but we have a government -- and there are the other governments around the world -- whose responsibility it is to protect all of us. Is the United States government doing enough, in your judgment, to thwart that threat?
BUFFETT: Well, it's doing more, but there are lots of loose nukes around the world. We've got multiple governments that have the capability. We have lots of chemical and biological agents that are ill guarded around the world and it should be at the top of the list for our government.
DOBBS: And, by saying it should be it, is obvious you think it is not. You have also seen fit to join the Nuclear Threat Initiative and to get into the movie-making business, effectively, with this new movie that's going to come out, "The Last Best Chance." Why did you decide to fund this?
BUFFETT: Well, Sam Nunn heads the Nuclear Threat Initiative. You couldn't have a better person in the world to be sounding the alarm to governments around the world of just what this threat is. And I have supported Sam in heading NTI, bringing out this movie, trying to make people be aware. If they go to LastBestChance.org, they can get a film about it. It's the number one problem of our time. There are people out there that would like to do a lot more than the World Trade Center or the Spanish trains or that sort of thing.
DOBBS: You say people. They are, specifically, radical Islamists. We talk about a war on terror, and I, frankly, have gotten crossways with the Bush administration in various capacities because I have criticized the idea we call it a war on terror. It is really far more than that. It is a war against a specific group, and a widening group, of radical Islamists. Is it your sense that this country, in addition to the nuclear biochemical threat, is doing enough -- period -- in terms of homeland security?
BUFFETT: Well, I don't think you could do enough. It's important to guard what comes into this country, to try to infiltrate at the source, people that may have evil intent toward the country -- and it's important that no more countries get nuclear weapons. There are a lot of problems to attack on this.
DOBBS: Absolutely, and one of the things that we hear from people in business, in particular, others, is that while, it's important to secure our borders, it's important to secure our ports, we certainly don't want to interfere with commerce. I have to tell you there is a, perhaps a peevish, part of me that says maybe we should interfere we have a trade deficit that is now approaching six percent of our gross domestic product. Twenty-nine consecutive years of trade deficits. Is this country consigned to be a debtor nation in perpetuity? Is there some reason that we simply cannot emerge from this huge debt, and these deficits, and say we're going to have balanced trade?
BUFFETT: Everyone says that what is going on can't go on forever. We had, you know, $618 billion trade deficit last year, and it's already grown a little bit this year. The standard line is, it can't go on forever, but no one seems to give an answer of what is going to be done about it. We exported 1.1 trillion last year, and we imported over 1.7 trillion, and we are running up obligations to the rest of the word and they are buying our assets at the rate of almost $2 billion a day, and that will have consequences.
DOBBS: Consequences and not happy consequences, I think it's fair to say. You are, as a businessman, an investor, in point of fact, looking to a declining dollar as an opportunity for the company that you run. How long a window do you see to invest in what are dim prospects for the American dollar?
BUFFETT: Well, I don't know timing. I mean, this is a terrificly strong country. We have a lot of assets to trade, and people will take our IOU's. Right now our net position versus the rest of the world is they own three trillion more of us than we own of them, and that number grows every day, and at some point economists talk about a soft landing. Maybe there will be a soft landing, but I -- you know, who knows. And right now Berkshire Hathaway has a portion of its assets in foreign exchange contracts.
DOBBS: You also have a portion in cash.
BUFFETT: That's true.
DOBBS: $40 billion, because you feel right now that not only is -- are prices overvalued in the equities market, even some of your own assets you consider overpriced -- $40 billion, an immense amount of money. How concerned are you about this market, this economy? I couldn't have you here, Warren, without talking about the market. BUFFETT: No, I'm -- I just don't find things that are undervalued. We like to get a lot for our money if we're buying marketable securities. So, I'm hoping to put that money out. We are going to announce an acquisition, costs a little less than a billion, but I'd rather have it cost five or 10 billion, and then we'll get an opportunity to put the money either into marketable securities. We bought junk bonds three years ago. We spent seven billion in a short period of time. We'd like to buy businesses. So, I'm not happy with 40 billion, but, one way or another I think we'll manage to invest it.
DOBBS: The rest of us -- when Warren Buffett holds cash and says he doesn't see opportunity, it sets off alarm bells for everyone, as you well know. You well know that. The fact is you bought a small percentage of a Chinese oil company, for example.
BUFFETT: Right.
DOBBS: You're investing -- I think that's the correct way to put it -- in currencies, not the dollar. The fact of the matter is, you have described what is happening in this context -- tremendous deficits, rising debts as a result of budget deficits, trade deficit, those mounting debts that this country is taking on. You are talking about something you refer to as the sharecropper society and economy. What does that mean to you, because the rest of us -- those are strong and powerful words for all of us but especially for those of us who are concerned about the middle class in this country, and who want this country to be all it is aspired to be.
BUFFETT: Well, if we keep doing what we're doing and we have shown no signs of slowing, down the world will own a substantially greater percentage of this country or have our IOUs in the form of government bonds, 10 years from now than now, and the cost of servicing the debt or the cost of paying dividends on the ownership, will mean that we will send abroad a few percent of our GDP every year just to service debts that arose from the over-consumption that has taken place currently. So, our sons will pay for the sins of their fathers, to a degree. Now, we'll always have a rich country. I don't want to -- this is the best country in the world.
DOBBS: Absolutely.
BUFFETT: But if the rest of the world has 10 trillion of our assets instead of there trillion, we will be shipping some of our product abroad every year merely to service the debt that we've run up.
DOBBS: And do you see this as an irremedial situation, a direction that cannot be avoided now?
BUFFETT: It can be addressed. I -- we'll be taxable (ph).
DOBBS: Warren, I've got to hear the answers. We're going to be back with Warren Buffett in just a moment. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: We're back with Warren Buffett.
Warren, we're talking about fixes for the fix we're in. So much of what we discuss in our broadcast and report on, we hear from the -- if you will -- the elites, the political elites, that there is just simply nothing that can be done. There's a lack of determinism, it seems to me, abroad in this country. What would you do to fix, first, the trade deficits that are, as you say, mortgaging the future of our children?
BUFFETT: Well, I wrote an article 18 months ago in "Fortune" about import certificates, and -- just a change in the value of the dollar is probably not going to do much as we've seen in the last three years. I mean, the euro's gone from 85 cents to $1.29, and the dollar's fallen against many currencies, and the trade deficit keeps ballooning, so I think that we have to address it in some way that brings exports up and imports down and this import certificate idea would address that.
DOBBS: It's certainly one of the ideas. Fred Bergson one of the most well-known free trade economists has actually started calling for tariffs on China. I'm concerned about free trade. And I think it's a hollow mantra for failed policies, but I'm not ready to call for broad tariffs, are you?
BUFFETT: I wouldn't call for them on any specific country. The import certificate approach does not go after any industry, it does not go after any country, but it lets the market adjust in a way that brings our trade closer to balance. And I think at a higher level of exports than currently exist.
DOBBS: Are you surprised when you focus on the two deficits we just talked about, the trade deficit, and the budget deficit? The budget deficit is 3.6 percent of our GDP. The trade deficit is reaching just almost 6 percent of GDP. And the president is talking about reforming Social Security. Does that surprise you?
BUFFETT: Well, it's an interesting idea that a deficit of $100 billion a year, something, 20 years out, seems to terrify the administration. But the $400 plus billion dollars deficit currently does nothing but draw yawns. I mean the idea that this terrible specter room looms over us 20 years out which is a small fraction of the deficit we happily run now seems kind of interesting to me.
DOBBS: In point of fact, the Congressional Budget Office which is considered to be the bipartisan objective standard of such things. And its research suggests that that deficit in Social Security would be only .4 percent of our GDP over 75 years as compared to the other large deficits percentages that associated with trade in the budget deficit. Do you have -- we're talking about fixing the fixes we're in, a quick answer for Social Security?
BUFFETT: I think -- I personally would increase the taxable base above the present 90,000. I pay very little in the way of Social Security taxes because I make a lot more than 90,000. And the people in my office pay the full tax. I would -- we're already edging up the retirement age a bit. And I would means test -- I get a check for $1700 or $1900 or something every month. I'm 74. And I cash it. But I'll eat without it.
DOBBS: You will eat without it. So will literally more than a million other Americans, as well. Means testing, the idea of raising taxes, the payroll tax. In 1983, Alan Greenspan, the fed chairman, he had a very simple idea. Raise taxes, that's what you're saying here.
BUFFETT: Sure. But I wouldn't raise the 12 point and a fraction, I would raise the base. From above $90,000.
DOBBS: That's a progressive idea. In other words, the rich people would pay more?
BUFFETT: Yeah. The rich people are doing so well in this country. I mean, we never had it so good.
DOBBS: What a radical idea.
BUFFETT: It's class warfare, my class is winning, but they shouldn't be.
DOBBS: Exactly. Your class as you put it, in point of fact is winning on estate taxes, which I know you are opposed to. I don't know how your son Howard feels about that. I know you are opposed to it.
At the same week the House passed the estate tax, Congress passed the bankruptcy legislation which they had the temerity to call bankruptcy reform -- Democrats and Republicans passing this legislation. Which is onerous to the middle class. Half of the bankruptcies in this country take place, because people fall ill, serious illnesses result in bankruptcy. Nearly half of the people involved. How do you -- you have watched a lot of politics. What is going on in this country?
BUFFETT: The rich are winning. Just take the estate tax, less than 2 percent of all estates pay any tax. A couple million people die every year, 40,000 or so estates get taxed.
We raise, what, $30 billion from the estate tax. And, you know, I would like to hear the Congressman say who they are going to get the $30 billion from if they don't get it from the estate tax. It's nice to say, you know, wipe out this tax, but we're running a huge deficit, so who does the $30 billion come from?
DOBBS: And it is, it's $300 billion in lost tax revenue over the course of the next decade if the estate tax goes through.
You say the rich are winning. The rich are winning in some cases, because they are cheating. The corporate corruption scandals, which burst full upon the country at the end of 2001. Sarbanes-Oxley, new regulations, new efforts to achieve transparency. What is your -- has enough been done? Or does more need to be done?
BUFFETT: I think the climate has been changed on that for the better, Lou. I think during the '90s May West said I was Snow White but I drifted. Well, I think corporate America drifted some. But I literally think what has happened has changed the culture somewhat, and for the better. I think that's probably more important than the laws.
DOBBS: Yet we hear the Business Roundtable, the U.S. Chamber of Commerce, whining that it's so onerous, so difficult to obey the law and to meet these regulations. What's your reaction?
BUFFETT: Well, right now corporate profits as a percentage of GDP in this country are right at the high. Corporate taxes as a percentage of total taxes raised are very close to the low.
DOBBS: Historically we're talking about.
BUFFETT: Historically.
So, you know, corporate America is not suffering, I'll put it this way.
DOBBS: Corporate America is not suffering. In point of fact, those same organizations that I just mentioned, the U.S. Chamber of Commerce and the Business Roundtable representing some of the largest companies are saying you tax us, you are taxing our consumers, our customers. Do you think corporations in this country should be paying more? Taking some of that burden?
BUFFETT: I think that the -- and just eventually you have seen companies be able to repatriate earnings with a very small tax that were taxed at very low rates abroad. Corporations are doing better in the total tax picture than the people I'm going to walk by on the street when I leave here.
DOBBS: And some of the people you are going to meet are going to say, perhaps this evening and otherwise in business circles, are going to say, Warren, what are you talking about, raise our taxes.
BUFFETT: They are still friends of mine, Lou.
DOBBS: You are going to get along. I know you are going to get along.
BUFFETT: Is there anyone I have forgotten to offend?
DOBBS: Let's give you another opportunity. And I'm going to bring up General Ray and the fact that today the FBI announced that it is entering the investigation into the insurance industry. General Ray obviously under investigation. A broad number of investigations -- AIG.
BUFFETT: A couple dozen all told.
DOBBS: Right. Formally run by Hank Greenberg, until a few weeks ago one of the most respected businessmen in the country. Do you think this widening investigation is appropriate? Do you think it's necessary? And do you -- are you concerned about what it will reveal? BUFFETT: I think it's fine to be done. I mean, we'll find out what has taken place. And some things that were actually legal a few years ago will probably be found to be distasteful. There will be things that are found that were probably illegal.
But there's nothing wrong with looking in the insurance industry just like the investment banking industry or some of the other things that have been looked at.
DOBBS: As you look over this society you know, I'm struck by the fact that your board averages right at 70 years.
BUFFETT: I bring up the average, too.
DOBBS: You do. But have you some colleagues who boost it more than you.
BUFFETT: Right.
DOBBS: Including Charlie Munger.
BUFFETT: Right.
DOBBS: But I was struck by the fact of the age of that board. And I know a lot of people would want to talk to you about succession and everything else. That's not my interest. My interest is we have 77 million Americans who are retiring. Do you think there's a crisis per se in retirement in this country? Or do you think that this is a healthy and perhaps important change where people are both living longer and contributing longer? And that we should look at this as positive rather than a negative?
BUFFETT: Well, it is a positive. But people age in different ways. I mean, we have three or four managers in the 80s, but we had a few other managers that we had to let go much earlier than that.
So, it's hard to generalize. The people we have on our board -- we don't have anyone on the board that doesn't have at least 4 million of stock. They bought it in the open market, they weren't given it by restricted stock or options. And they are owner oriented. They are business savvy. They are all-star crew.
DOBBS: I want to close with your thoughts about the future here. You said this is still the richest economy. Give us -- let me ask you straightforward. Are you optimistic about the prospects for a country that's been built on a middle class and those who have aspired to it? Do you see the same opportunity going forward? Are you heartened or concerned?
BUFFETT: I think it's a terrific country, Lou. You never want to go short on America. The nuclear, chemical and biological threat is real. And it's one we should attack. But this country -- our children our grandchildren are going to live better than we do in this country. No question about it in my mind.
DOBBS: And that's a pretty good mind from which to hear that forecast. Warren Buffett, thanks for being here. Appreciate it.
BUFFETT: Thank you, Lou.
DOBBS: Coming up at the top of the hour here on CNN, "ANDERSON COOPER 360." Anderson joins us now with a preview -- Anderson.
ANDERSON COOPER, CNN ANCHOR: Lou, thanks very much. Fascinating interview.
Next on 360, a fugitive on the run. How do police track them down? Tonight, inside a manhunt. The view from the hunters and the hunted.
Also tonight, danger at the gas pumps. A forgetful driver causes a fire at a gas station. It's all caught on tape. Tonight, we're going to look at who causes more accidents at the pump, men or women. You might be surprised.
Also tonight cheer leading and indecency. One man's crusade to clean up the halftime shows at schools. Is it a waste of taxpayer money? I'll ask him the tough questions. That and more at the top of the hour, Lou.
And Lou.
DOBBS: Well, thank you very much, Anderson. Warren and I were just...
COOPER: Interesting guy, I know.
DOBBS: I apologize. We look forward to it, Anderson, I'm sure.
COOPER: Yes, yes, I bet.
DOBBS: My next guest says the United States isn't -- isn't fighting those who steal our intellectual property. He'll tell us why. I'll be talking with Pat Choate, next here. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: My guest tonight says simply the Chinese are stealing, stealing our intellectual property. And he says, the biggest problem is, you may have heard this before somewhere, this country isn't enforcing our laws. Instead, Pat Choate says we're sacrificing our intellectual property to further are foreign policy with China.
Joining me now, economist, author, Pat Choate. Good to have you here, Pat.
PAT CHOATE, AUTHOR, "HOT PROPERTY": Lou, good being back.
DOBBS: Why in your judgment, it's pretty clear why the Chinese would steal it, and the examples you point out in your book are -- loom large, why in the world are we not enforcing our laws? CHOATE: I think there's two basic reasons. I think, one, the Bush administration realizes they need the Chinese Central Bank to put up about 200 billion a year to finance the federal budget deficit, and they are relying upon the Chinese to help them with North Korea. And so what we're doing is we're giving away our technology, our innovations and I believe we're giving away our future.
DOBBS: Giving away our future. That's a strong statement.
CHOATE: It is.
DOBBS: And the degree to which we're giving away that intellectual property -- would you characterize that intellectual property as sort of marginal, or would that intellectual property be the designs and the creativity at the higher level of our productive society?
CHOATE: Well, one measure of this is that this last year we ran a $36 billion deficit with the Chinese in advance technology products. The Chinese are not just interested in the simple industries of the old industries, they want the very best industries. The FBI reports that they maintain about 3,000 frat (ph) groups inside the United States to gather information. And of course, when our companies move their factories there, they -- the Chinese in effect have direct access to a very best technologies.
DOBBS: What I love, Pat, is when I hear stories from manufacturers in particular who have chosen to offshore and outsource and particularly to China, and they start talking about knock offs. They've just turned over their design, every capacity, every characteristic of whatever it is and are surprised that it doesn't have their logo and their label on it?
CHOATE: They're also giving them the no how to put it together, which is often you can only get that by having American show someone how to do it. They're giving -- they're giving away the store.
DOBBS: Giving away the store, and sometimes our stores are helping us give away the store. For example Wal-Mart, putting up -- basically saying to a U.S. manufacturer, let's see if this can be done cheaper in China. Let's see whether or not we can have a challenge on this design. And guess what, the U.S. Supreme Court says, go ahead.
CHOATE: Go ahead, and do it. Well, and we also have our manufacturers that are moving to China. They're saying to the American manufacturers, their suppliers, you must move to China and find a local partner and supply us from there. You have got to supply us from there not here.
DOBBS: It's -- what can we do?
CHOATE: There are three things that I'm saying we can do right now. The first thing we need to do is crackdown on government such as China that are sanctuaries for pirates. We should take a case to the World Trade Organization and ask for damages. China made a treaty commitment to us that they would buy these laws. We need to do that. There's something called the 18-month rule we need to change in Congress. The Congress is mandated that the patent office reveal the full contents of all patent applications at 18 months whether a patent is issued or not. It takes 27 month. The third thing we should put up enough money for the patent office to guarantee that we can get those patents through in six months. If the innovations are important, let's get it now instead of three years from now.
DOBBS: The book is "Hot Property," the author Pat Choate. Great to be with you.
CHOATE: Good, and thank you.
DOBBS: Thank you.
Still ahead here, the results of "Tonight's Poll," a preview of what is ahead tomorrow. Stay with us.
(COMMERCIAL BREAK)
DOBBS: The results of our poll tonight -- 61 percent of you say the Real I.D. Act is a valuable tool to combat the illegal alien crisis in this country, 39 percent disagree.
Thanks for being with here tonight. Please join us tomorrow. Why the president of 9/11 Families For a Secure America is now under investigation by the Mexican government.
Secretary of the Interior Gale Norton will be our guest. She joins us to talk about the escalating illegal alien crisis in our national parks.
And a police chief who's found a novel way to enforce our immigration laws even if the federal government won't. Please join us for all of that and more tomorrow.
Good night from New York. ANDERSON COOPER 360 starts right now. And Anderson, I'm going to watching every minute.
END
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 May 4, 2005 - 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, an exclusive interview with the legendary Warren Buffett. We'll be talking about everything from corporate corruption to Social Security reform to the threat of nuclear and biochemical terrorism.
(BEGIN VIDEOTAPE)
ANNOUNCER: Also ahead on LOU DOBBS TONIGHT, al Qaeda's number three leader is captured. How close are we to Osama bin Laden?
Hidden power, how unelected activists in nongovernmental organizations are dominating global politics.
And stealing America. Intellectual property theft is costing this country a staggering $200 billion a year.
This is LOU DOBBS, for news, debate and opinion, tonight.
(END VIDEOTAPE)
DOBBS: Good evening.
Tonight, a major victory in the global war on terror and radical Islamists. Pakistani Special Forces have captured the third-highest ranking leader of al Qaeda. President Bush today declared the terrorist a top general for Osama bin Laden. Officials said the man coordinated al Qaeda operations in the United States and other countries.
Our national security correspondent David Ensor reports.
(BEGIN VIDEOTAPE)
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): U.S. counterterrorism officials say intelligence gathered by the U.S. from human sources was "critical" in finding the hideout of Abu Faraj al-Libbi in northwest Pakistan. The president gave the credit for a difficult, dangerous operation to Pakistan.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I applaud the Pakistani government and President Musharraf for acting on solid intelligence to bring this man to justice.
ENSOR: Al-Libbi was captured Monday after a gun battle, U.S. and Pakistani officials say. But word of it was kept quiet to allow time to round up other terrorists he might know about. MOHAMMAD SADIQ, EMBASSY OF PAKISTAN: The announcement of his arrest was delayed because an operation was going on. And I believe that there was some useful information obtained from him which helped us in more arrests.
ENSOR: Al-Libbi was the number three man in al Qaeda under Osama bin Laden and Ayman al-Zarqawi, in charge of operations since the capture of his predecessor, Khalid Sheikh Mohammed, in 2003. Khalid Sheikh Mohammed is now in CIA hands.
Administration officials are nothing less than thrilled at al- Libbi's capture.
STEPHEN HADLEY, NATIONAL SECURITY ADVISER: He was not only doing operations, he was a facilitator. He was into finance. He was into administration. This is a real accomplishment.
JOHN MCLAUGHLIN, CNN NATIONAL SECURITY ANALYST: This guy was my number one target. Bin Laden, of course, is much more important symbolically. But in terms of practical day-to-day operations, what al Qaeda is doing, how it threatens the United States, how it plans against targets in the United States, this is the guy you want.
ENSOR (on camera): Do you think he knows where Osama bin Laden is?
MCLAUGHLIN: If anyone knows where Osama bin Laden is, this is the man.
(END VIDEOTAPE)
ENSOR: And McLaughlin says that if al-Libbi did know where bin Laden was, that by now will have moved -- Lou.
DOBBS: Thank you very much. David Ensor.
The arrest of al Qaeda's number three is a major success in the war against radical Islamist terrorism. But three-and-a-half years after September 11, Osama bin Laden and many other al Qaeda leaders remain at large.
Kitty Pilgrim reports.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): The high-level arrests make headlines, but where do we stand in disabling al Qaeda? And is the organization still capable of commanding operations?
MARVIN WEINBAUM, MIDDLE EAST INSTITUTE: The general feeling is that al Qaeda at this point is a fairly loosely connected network, and that many of the operations which were taking place globally are initiated by locals who may be under certain instructions. But if they are, they are very broad instructions.
PILGRIM: Pakistan has proved to be fertile ground in recent months. One important arrest was al Qaeda figure Khalid Sheikh Mohammed, al-Libbi's predecessor and suspected September 11 mastermind.
And a few months ago, another kingpin. The high-level arrest of Ahmed Khalfan Ghailani, a Tanzanian wanted since 1998 for his part in the attacks on U.S. embassies in east Africa.
U.S. officials point to cooperation from Pakistani president Pervez Musharraf for the arrest. Each capture brings forth new data, cell phones, computer files, and paper to point to additional figures.
Meanwhile, the top two, Osama bin Laden, and his closest associate, Ayman al-Zawahiri, are still elusive. Is capturing them important to rooting out al Qaeda?
MATTHEW LEVITT, WASHINGTON INSTITUTE: We're now at the middle level of that structure. Clearly, Ayman al-Zawahiri, bin Laden's immediate deputy, is an extremely important person who we believe continues to play an operational role.
We're dealing with a lot of lower-level people right now in Europe and in the Middle East. And in some cases they are going to be new to us.
(END VIDEOTAPE)
PILGRIM: Well, the chain of command is no longer clear. Experts put it this way: the war on terror starts with al Qaeda, and there's been good progress in capturing many of the top leaders. The only problem is the ones who replace them are often unknown, and those terrorists often are very loosely affiliated with the al Qaeda organization.
DOBBS: Osama bin Laden himself, irrespective of any saving (ph) by an analyst, a strategist, a counterterrorism expert, this administration, is still the number one sought after terrorist.
PILGRIM: Absolutely. And it would be a deep morale blow to al Qaeda to have him caught.
DOBBS: And a great help for the civilized world. Kitty, thank you very much. Kitty Pilgrim.
Two deadly bomb attacks in Iraq today. Insurgents tonight killed nine Iraqi soldiers in southern Baghdad. Seventeen others were wounded.
Earlier, 60 police recruits were killed in northern Iraq. The attack took place in the city of Erbil, about 200 miles north of Baghdad.
Ryan Chilcote has the report.
(BEGIN VIDEOTAPE)
RYAN CHILCOTE, CNN CORRESPONDENT (voice-over): The suicide bomber targeted a crowd of 300 young Kurds who had come to sign up for Iraq's police force. The Iraqi militant group Army of Ansar al-Sunnah claimed responsibility. The attack, the group claimed on a Web site, was payback for the Kurds.
They fought alongside the Americans against our people in Falluja, Mosul, Baghdad and other Muslim lands. "We promise you that we are prepared more for you."
Some analysts say the claim is a sign the insurgents are stepping up their efforts to turn Iraqis against one another and to undercut cooperation between their representatives in the government.
COL. BOB MAGINNIS (RET.), U.S. ARMY: The success of the Iraqi government, especially under Jaafari, who is a Shiite, is really dependent upon the Kurds, Shia, Sunni, and the few Turkmen and Christians and others getting along. And if they can divide those populations, then they are going to be successful at not only dismantling the government, but also perhaps fueling a civil war.
CHILCOTE: The fault lines for further ethnic and religious division are already apparent. It has taken Iraq's prime minister months to form what he calls a government of national unity. And he has yet to fill several jobs.
Sunni Arabs, who feel alienated by the larger Shiite majority, are expected to get at least some of the jobs. So far, agreement between Iraq's many groups has eluded them.
Ryan Chilcote, CNN, Baghdad.
(END VIDEOTAPE)
DOBBS: Insurgents, of course, have made Iraqi police and military recruits a primary target of their terrorist campaign. One cannot help but wonder how so many of these recruits have been killed. At least 1,000 Iraqi recruits have been killed over the past two years by the terrorists. And today's attack, the worst since a bomb killed 125 recruits in Hillah in February.
The recruits are easy targets because they are forced to wait outside concrete barriers that surround government buildings. And police have refused to allow those recruits any closer because some of them may be, in the fears of those authorities, suicide bombers themselves.
The FBI today arrested a Pentagon analyst for allegedly passing top-secret information to a pro-Israel lobbying group. Investigators say employees of that Israeli lobbying group may have given the information directly to the government of Israel.
The Pentagon analyst, Lawrence Franklin, made his first court appearance today. Prosecutors say he passed on classified information about potential attacks on American troops in Iraq. Franklin's attorney declared that he intends to plead not guilty to the charges.
Still ahead here tonight, I'll be talking with the legendary Warren Buffett. We'll be talking about Social Security reform, the economy, corporate crime, the threat of nuclear annihilation, biochemical terrorism and much more.
Also ahead tonight, exporting illegal labor in this country, how the hotel industry is profiting through the hiring of illegal aliens, and why more isn't being done to stop it. Our special report is next.
(COMMERCIAL BREAK)
DOBBS: The Real ID Act is one step closer to becoming law. Today, the chairman of the House Judiciary Committee, Congressman James Sensenbrenner, the principal sponsor of the legislation, took a victory lap on Capitol Hill.
(BEGIN VIDEO CLIP)
REP. JAMES SENSENBRENNER (R), JUDICIARY COMMITTEE CHAIRMAN: The Real ID Act contains vital border security provisions aimed at preventing another 9/11-type attack by disrupting terrorist travel. Issuing driver's licenses to anyone without knowing whether they are here legally or who they really are is an open invitation for terrorists and criminals to hide in plain sight.
(END VIDEO CLIP)
DOBBS: That an invitation that's obviously being rescinded. Congressman Sensenbrenner chose to take with him on today's victory lap the chairman of the House Rules Committee, David Dreier, and the chairman of the House Armed Services Committee, Duncan Hunter, both of whom played important roles in moving this legislation through Congress.
The bill is assured to be passed by the House and Senate but is still fiercely opposed by many who advocate open borders, illegal immigration, and the interests of big business ahead of our national security. The lead editorial in today's "New York Times" criticized the Real ID Act, saying, Congress is going to "ram through a bill that turns state-issued driver's licenses into a kind of phony national identity card through the mislabeled Real ID provision."
And "The Wall Street Journal," its counterpart on the ideological spectrum, also weighed in saying, "The best way to decrease the number of illegal crossings while also satisfying our economic needs is to give immigrants more legal ways to come."
What a novel idea.
Real ID, for its part, is a critical piece of legislation, in my opinion, that will help secure our borders. And we applaud here Congressman Sensenbrenner, Congressman Hunter and Congressman Dreier for moving it forward with the support of the president.
That brings us to the subject of our poll tonight. Do you believe the Real ID Act is a valuable tool to combat the illegal alien crisis in this country, yes or no? Please cast your vote at loudobbs.com. We'll have the results later here in the broadcast. Turning now to the many industries that benefit from the millions of illegal aliens in this country while U.S. taxpayers and workers are paying the tab. Tonight, an estimated 620,000 illegal aliens are working for hotels in this country. They are among the lowest paid workers in all of our economy. And they are helping the hotel industry earn soaring profits while taxpayers pick up the bill.
Lisa Sylvester reports.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): If you stayed in a hotel recently, good chance an illegal alien cleaned the room. At least 200,000 illegal workers have jobs in the U.S. hotel industry. Employers are required to check for documentation, but illegal aliens get around that with phony identification. It's been a problem for years, as this hotel worker acknowledges.
UNIDENTIFIED FEMALE: All the people have them. All the people. I would say the majority have false papers.
SYLVESTER: The presence of illegal aliens have pushed down wages for American workers. Hotel and motel employees are among the lowest paid in the United States. Their average wage is 25 percent lower than other American workers. Illegal aliens often don't complain about working conditions or the low pay for fear of drawing attention, a benefit to the large corporate hotel chains interested in maximizing profits.
JOHN WILHELM, UNITE HERE: The industry as a whole has pursued a very short-sighted quarter-to-quarter profit policy. It has not made the decision to invest in its workforce.
SYLVESTER: Congressman Sylvestre Reyes says the federal government is not doing enough to make sure employers comply with the law.
REP. SYLVESTRE REYES (D), TEXAS: We don't need new laws. We just need to enforce the laws that are on the books today and to give homeland security specific resources to enforce that law in the work site.
SYLVESTER: That would take away the incentive for illegal immigration.
JOHN CHALLENGER, CEO, CHALLENGER, GRAY & CHRISTMAS: There are nearly six million illegal workers in the country today in jobs. The government could certainly go to employers and enact stiff penalties and cut that spigot off.
SYLVESTER: But, so far, the political will has not been there. So the underground service economy continues to flourish.
(END VIDEOTAPE)
SYLVESTER: The American Hotel and Lodging Association did not make anyone available for this report. But the group is pushing for President Bush's guest worker program, increasing their potential source for cheap labor and higher profits -- Lou.
DOBBS: Thank you very much, Lisa. And unfortunately, obviously the hotel industry certainly not alone in its exploitation of illegal labor and its expectation that taxpayers and hardworking American citizens should be picking up the tab. Thank you.
Now to update you on a story we reported here last night. Billboards posted by a Spanish language television network in Los Angeles declaring Los Angeles to be really part of Mexico will be changed after all.
The KRCA TV billboards sparked outrage across southern California. And California Governor Arnold Schwarzenegger said the billboards and the station were simply promoting illegal immigration.
Leonard Lieberman, the vice president of Lieberman Broadcasting, which owns KCRA, told us, "If we wanted to promote illegal immigration, we would have advertised in Mexico. The billboards are promoting a newscast in Los Angeles for Hispanics living in Los Angeles."
We should point out, that is Los Angeles, California, Mr. Lieberman. The billboards will be changed later this week, we're told, and will eliminate the phrase "Los Angeles, Mexico." And KFI Radio in Los Angeles is to be complimented for taking on the issue so directly and quickly.
Mexico's attorney general has dropped a controversial land dispute case against the embattled mayor of Mexico City, clearing the way for the mayor, Mayor Andre Manuel Lopez Obrador, to run for president of Mexico in next year's election. The mayor, who is the frontrunner in the presidential race, had accused President Vicente Fox and other political rivals of exaggerating the charges in order to keep him out of the race. In fact, most -- most journalists in Mexico City agreed.
The so-called crime, by the way, that Lope Obrador had committed, he built an access road to a hospital for poor people. A hospital that had been built in such a way as to be inaccessible to those people.
Coming up next, an emerging and largely selective and secretive power in global politics. How the U.S. government may be undermined by something called nongovernmental organizations. The NGOs are using their billions of dollars in funding to influence politics and governments all around the world. It's a special report you don't want to miss.
And then, a rare and exclusive interview with the renowned Warren Buffett. We'll be talking about a wide range of topics, bringing his insight to the issues of global terrorism, Social Security reform and, of course, this economy.
Stay with us. (COMMERCIAL BREAK)
DOBBS: Tonight, an emerging force is emerging and dominating global politics. There are now thousands of what are called nongovernmental organizations, or NGOs. They employ, in fact, millions of people. They have budgets larger than the economies of many countries.
As the influence of these NGOs rise, so do questions about their funding, their direction and just exactly what they're trying to accomplish and who they are trying to influence.
Christine Romans reports.
(BEGIN VIDEOTAPE)
CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Disaster relief, famine and war. On their face, NGOs are grassroots movements with good intentions. But their power and influence on the world's political stage have exploded.
There are now 3,000 NGOs registered with the United Nations. By definition, they exist to further the political goals of their members.
A report by the group Sustainability shows NGOs have 19 million employees and annual budgets topping a trillion dollars. That makes them the world's eighth largest economy. With that power comes criticism.
JOHN FONTE, HUDSON INSTITUTE: They claim to speak for the peoples of the world. Of course they don't speak for the peoples of the world. They speak for themselves. They claim to be a global civil society, but there really is no -- no such thing.
ROMANS: They are unelected activists, funded by private donations from wealthy individuals and foundations. Sometimes by governments and U.N. contracts.
JOHN ENTINE, MIAMI UNIVERSITY OF OHIO: Right now, they get away literally with whatever they want to do. And I think even NGOs themselves are recognizing that -- that they can't exist that way, that it's not in their best interest, because the credibility factor is so great that the public is now becoming cynical when they see how much money is being wasted and how ideologically narrow and disruptive many of the agendas of advocacy groups like Greenpeace and others actually are.
ROMANS: Transparency and accountability are the two biggest criticisms of NGOs. Greenpeace, of course, is the well known environmental organization. And it agrees that more power requires more responsibility.
JOHN PASSACANTANDO, GREENPEACE U.S.: We have to be as transparent as possible. We have to abide by the laws of the countries that we operate in and emanate from. And we have to ultimately go beyond the letter of the law and maintain this trust, this confidence, with our -- with the people who support us.
ROMANS: Here in the U.S. NGOs are required to open their books to the IRS. But the thousands who operate outside those boundaries often do not.
(END VIDEOTAPE)
ROMANS: But Greenpeace, Amnesty International and many others have been criticized for poor corporate governance overall, how they make their decisions, how they measure success. Investors, the public, largely in the dark about this, Lou.
Also, Greenpeace says it is working on that. But it makes a point. It says that it has such incredible powers, NGOs overall, because governments are hamstrung by corporate interests, allowing the special pressure groups to move right in on the world stage.
DOBBS: Which is precisely why we're taking a look at this critical issue. Because the influence of not only corporate America, but multinationals around the world, are dominating politics not in this country alone, but around the world. And that influence is not always positive or in the best interest of either this country or often the world itself.
ROMANS: And they are unelected, making some very big moves on the world's stage. These are unelected groups.
DOBBS: We are going to continue our look -- thank you, Christine -- at NGOs. Also, the not-for-profits and nonprofit organizations which are also hand in hand with NGOs becoming a powerful force for a political agenda that has not been decided by the people.
Coming up next, I'll be talking with the legendary Warren Buffett.
And we'll also be talking about how China is blatantly stealing critical American intellectual property and why the U.S. government is doing nothing to stop it. I'll be talking with economist, Pat Choate, the author of an explosive new book.
All of that and a great deal more still ahead. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: Warren Buffett, the chairman and the CEO of Berkshire Hathaway, is among, a host of other things, the second wealthiest man in the world. He just this weekend added the world's richest man, Bill Gates, to his board at Berkshire Hathaway, the company he runs.
Warren Buffett's insight reaches well beyond the world of business and economics, to politics, society itself. Warren Buffett is kind enough to join us here tonight to talk about his views of the issues and the challenges facing us.
Warren, it's great to have you here. WARREN BUFFETT, CHAIRMAN & CEO, BERKSHIRE HATHAWAY: Thanks, Lou.
DOBBS: As you have pointed out to your -- your shareholders, and indeed to all who pay attention to your musings, this is a complicated and challenging time. And I would like to begin first with something that may surprise a lot of people about you, and that is your interest in biochemical nuclear terrorism and thwarting what you consider to be the gravest threat to the country, and to the world, in point of fact.
How did you first decide to focus your energy on that?
BUFFETT: Well, back in 1945, I delivered a paper that told about Hiroshima. And I didn't know much about physics, but I learned. And there's no question in my mind that the number one problem with mankind is the spread of nuclear knowledge.
And, you know, thousands of years ago we had psychotics and we had religious fanatics and we had megalomaniacs. But they -- about the most they could do was throw a stone at somebody if they wished evil on them.
DOBBS: Right.
BUFFETT: Today, since 1945, the ability to inflict evil on -- or harm on other people in huge numbers has grown exponentially. And right now there's the knowledge around to use nuclear material. And we've got to hope that the wrong people don't get their hands on it.
DOBBS: And to hope is one thing. But we have a government, and there are other governments around the world whose responsibility it is to protect all of us. Is the United States government doing enough, in your judgment, to thwart that threat?
BUFFETT: Well, it's doing more. But there are -- as you know, there are lots of loose nukes around the world.
DOBBS: Right.
BUFFETT: We've got multiple governments that have the capability. We have lots of chemical and biological agents that are ill-guarded around the world. And it should be at the top of the list for our government.
DOBBS: Warren Buffett, the chairman and the CEO of Bircher Hathaway is, among a host of other things, the second-wealthiest man in the world. He just this weekend added the world's richest man, Bill Gates, to his board at Bircher Hathaway, the company he runs. Warren Buffett's insight reaches well beyond the world of business and economics to politics, society itself.
Warren Buffett is kind enough to join us here tonight to talk about his views of the issues and the challenges facing us. Warren, it's great to have you here.
WARREN BUFFETT, BIRCHER HATHAWAY CEO: Thanks, Lou.
DOBBS: As you have pointed out to your shareholders -- and indeed to all who pay attention to your musings -- this is a complicated and challenging time. And I would like to begin, first, with something that may surprise a lot of people about you, and that is your interest in biochemical, nuclear terrorism and thwarting what you consider to be the gravest threat to the country -- and to the world, in point of fact. How did you first decide to focus your energy on that?
BUFFETT: Well, back in 1945 I delivered a paper that told about Hiroshima, and I didn't know much about physics, but I learned. And there's no question in my mind that the number one problem of mankind is the spread of nuclear knowledge. You know, thousands of years ago we had psychotics and we had religious fanatics and we had megalomaniacs, but about the most they could do was throw a stone at somebody, if they wished evil on them. Today, since 1945, the ability to inflict evil on -- or, harm on other people in huge numbers has grown exponentially and right now there's the knowledge around to use nuclear material. And we've got to hope that the wrong people don't get their hands on it.
DOBBS: And to hope is one thing, but we have a government -- and there are the other governments around the world -- whose responsibility it is to protect all of us. Is the United States government doing enough, in your judgment, to thwart that threat?
BUFFETT: Well, it's doing more, but there are lots of loose nukes around the world. We've got multiple governments that have the capability. We have lots of chemical and biological agents that are ill guarded around the world and it should be at the top of the list for our government.
DOBBS: And, by saying it should be it, is obvious you think it is not. You have also seen fit to join the Nuclear Threat Initiative and to get into the movie-making business, effectively, with this new movie that's going to come out, "The Last Best Chance." Why did you decide to fund this?
BUFFETT: Well, Sam Nunn heads the Nuclear Threat Initiative. You couldn't have a better person in the world to be sounding the alarm to governments around the world of just what this threat is. And I have supported Sam in heading NTI, bringing out this movie, trying to make people be aware. If they go to LastBestChance.org, they can get a film about it. It's the number one problem of our time. There are people out there that would like to do a lot more than the World Trade Center or the Spanish trains or that sort of thing.
DOBBS: You say people. They are, specifically, radical Islamists. We talk about a war on terror, and I, frankly, have gotten crossways with the Bush administration in various capacities because I have criticized the idea we call it a war on terror. It is really far more than that. It is a war against a specific group, and a widening group, of radical Islamists. Is it your sense that this country, in addition to the nuclear biochemical threat, is doing enough -- period -- in terms of homeland security?
BUFFETT: Well, I don't think you could do enough. It's important to guard what comes into this country, to try to infiltrate at the source, people that may have evil intent toward the country -- and it's important that no more countries get nuclear weapons. There are a lot of problems to attack on this.
DOBBS: Absolutely, and one of the things that we hear from people in business, in particular, others, is that while, it's important to secure our borders, it's important to secure our ports, we certainly don't want to interfere with commerce. I have to tell you there is a, perhaps a peevish, part of me that says maybe we should interfere we have a trade deficit that is now approaching six percent of our gross domestic product. Twenty-nine consecutive years of trade deficits. Is this country consigned to be a debtor nation in perpetuity? Is there some reason that we simply cannot emerge from this huge debt, and these deficits, and say we're going to have balanced trade?
BUFFETT: Everyone says that what is going on can't go on forever. We had, you know, $618 billion trade deficit last year, and it's already grown a little bit this year. The standard line is, it can't go on forever, but no one seems to give an answer of what is going to be done about it. We exported 1.1 trillion last year, and we imported over 1.7 trillion, and we are running up obligations to the rest of the word and they are buying our assets at the rate of almost $2 billion a day, and that will have consequences.
DOBBS: Consequences and not happy consequences, I think it's fair to say. You are, as a businessman, an investor, in point of fact, looking to a declining dollar as an opportunity for the company that you run. How long a window do you see to invest in what are dim prospects for the American dollar?
BUFFETT: Well, I don't know timing. I mean, this is a terrificly strong country. We have a lot of assets to trade, and people will take our IOU's. Right now our net position versus the rest of the world is they own three trillion more of us than we own of them, and that number grows every day, and at some point economists talk about a soft landing. Maybe there will be a soft landing, but I -- you know, who knows. And right now Berkshire Hathaway has a portion of its assets in foreign exchange contracts.
DOBBS: You also have a portion in cash.
BUFFETT: That's true.
DOBBS: $40 billion, because you feel right now that not only is -- are prices overvalued in the equities market, even some of your own assets you consider overpriced -- $40 billion, an immense amount of money. How concerned are you about this market, this economy? I couldn't have you here, Warren, without talking about the market. BUFFETT: No, I'm -- I just don't find things that are undervalued. We like to get a lot for our money if we're buying marketable securities. So, I'm hoping to put that money out. We are going to announce an acquisition, costs a little less than a billion, but I'd rather have it cost five or 10 billion, and then we'll get an opportunity to put the money either into marketable securities. We bought junk bonds three years ago. We spent seven billion in a short period of time. We'd like to buy businesses. So, I'm not happy with 40 billion, but, one way or another I think we'll manage to invest it.
DOBBS: The rest of us -- when Warren Buffett holds cash and says he doesn't see opportunity, it sets off alarm bells for everyone, as you well know. You well know that. The fact is you bought a small percentage of a Chinese oil company, for example.
BUFFETT: Right.
DOBBS: You're investing -- I think that's the correct way to put it -- in currencies, not the dollar. The fact of the matter is, you have described what is happening in this context -- tremendous deficits, rising debts as a result of budget deficits, trade deficit, those mounting debts that this country is taking on. You are talking about something you refer to as the sharecropper society and economy. What does that mean to you, because the rest of us -- those are strong and powerful words for all of us but especially for those of us who are concerned about the middle class in this country, and who want this country to be all it is aspired to be.
BUFFETT: Well, if we keep doing what we're doing and we have shown no signs of slowing, down the world will own a substantially greater percentage of this country or have our IOUs in the form of government bonds, 10 years from now than now, and the cost of servicing the debt or the cost of paying dividends on the ownership, will mean that we will send abroad a few percent of our GDP every year just to service debts that arose from the over-consumption that has taken place currently. So, our sons will pay for the sins of their fathers, to a degree. Now, we'll always have a rich country. I don't want to -- this is the best country in the world.
DOBBS: Absolutely.
BUFFETT: But if the rest of the world has 10 trillion of our assets instead of there trillion, we will be shipping some of our product abroad every year merely to service the debt that we've run up.
DOBBS: And do you see this as an irremedial situation, a direction that cannot be avoided now?
BUFFETT: It can be addressed. I -- we'll be taxable (ph).
DOBBS: Warren, I've got to hear the answers. We're going to be back with Warren Buffett in just a moment. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: We're back with Warren Buffett.
Warren, we're talking about fixes for the fix we're in. So much of what we discuss in our broadcast and report on, we hear from the -- if you will -- the elites, the political elites, that there is just simply nothing that can be done. There's a lack of determinism, it seems to me, abroad in this country. What would you do to fix, first, the trade deficits that are, as you say, mortgaging the future of our children?
BUFFETT: Well, I wrote an article 18 months ago in "Fortune" about import certificates, and -- just a change in the value of the dollar is probably not going to do much as we've seen in the last three years. I mean, the euro's gone from 85 cents to $1.29, and the dollar's fallen against many currencies, and the trade deficit keeps ballooning, so I think that we have to address it in some way that brings exports up and imports down and this import certificate idea would address that.
DOBBS: It's certainly one of the ideas. Fred Bergson one of the most well-known free trade economists has actually started calling for tariffs on China. I'm concerned about free trade. And I think it's a hollow mantra for failed policies, but I'm not ready to call for broad tariffs, are you?
BUFFETT: I wouldn't call for them on any specific country. The import certificate approach does not go after any industry, it does not go after any country, but it lets the market adjust in a way that brings our trade closer to balance. And I think at a higher level of exports than currently exist.
DOBBS: Are you surprised when you focus on the two deficits we just talked about, the trade deficit, and the budget deficit? The budget deficit is 3.6 percent of our GDP. The trade deficit is reaching just almost 6 percent of GDP. And the president is talking about reforming Social Security. Does that surprise you?
BUFFETT: Well, it's an interesting idea that a deficit of $100 billion a year, something, 20 years out, seems to terrify the administration. But the $400 plus billion dollars deficit currently does nothing but draw yawns. I mean the idea that this terrible specter room looms over us 20 years out which is a small fraction of the deficit we happily run now seems kind of interesting to me.
DOBBS: In point of fact, the Congressional Budget Office which is considered to be the bipartisan objective standard of such things. And its research suggests that that deficit in Social Security would be only .4 percent of our GDP over 75 years as compared to the other large deficits percentages that associated with trade in the budget deficit. Do you have -- we're talking about fixing the fixes we're in, a quick answer for Social Security?
BUFFETT: I think -- I personally would increase the taxable base above the present 90,000. I pay very little in the way of Social Security taxes because I make a lot more than 90,000. And the people in my office pay the full tax. I would -- we're already edging up the retirement age a bit. And I would means test -- I get a check for $1700 or $1900 or something every month. I'm 74. And I cash it. But I'll eat without it.
DOBBS: You will eat without it. So will literally more than a million other Americans, as well. Means testing, the idea of raising taxes, the payroll tax. In 1983, Alan Greenspan, the fed chairman, he had a very simple idea. Raise taxes, that's what you're saying here.
BUFFETT: Sure. But I wouldn't raise the 12 point and a fraction, I would raise the base. From above $90,000.
DOBBS: That's a progressive idea. In other words, the rich people would pay more?
BUFFETT: Yeah. The rich people are doing so well in this country. I mean, we never had it so good.
DOBBS: What a radical idea.
BUFFETT: It's class warfare, my class is winning, but they shouldn't be.
DOBBS: Exactly. Your class as you put it, in point of fact is winning on estate taxes, which I know you are opposed to. I don't know how your son Howard feels about that. I know you are opposed to it.
At the same week the House passed the estate tax, Congress passed the bankruptcy legislation which they had the temerity to call bankruptcy reform -- Democrats and Republicans passing this legislation. Which is onerous to the middle class. Half of the bankruptcies in this country take place, because people fall ill, serious illnesses result in bankruptcy. Nearly half of the people involved. How do you -- you have watched a lot of politics. What is going on in this country?
BUFFETT: The rich are winning. Just take the estate tax, less than 2 percent of all estates pay any tax. A couple million people die every year, 40,000 or so estates get taxed.
We raise, what, $30 billion from the estate tax. And, you know, I would like to hear the Congressman say who they are going to get the $30 billion from if they don't get it from the estate tax. It's nice to say, you know, wipe out this tax, but we're running a huge deficit, so who does the $30 billion come from?
DOBBS: And it is, it's $300 billion in lost tax revenue over the course of the next decade if the estate tax goes through.
You say the rich are winning. The rich are winning in some cases, because they are cheating. The corporate corruption scandals, which burst full upon the country at the end of 2001. Sarbanes-Oxley, new regulations, new efforts to achieve transparency. What is your -- has enough been done? Or does more need to be done?
BUFFETT: I think the climate has been changed on that for the better, Lou. I think during the '90s May West said I was Snow White but I drifted. Well, I think corporate America drifted some. But I literally think what has happened has changed the culture somewhat, and for the better. I think that's probably more important than the laws.
DOBBS: Yet we hear the Business Roundtable, the U.S. Chamber of Commerce, whining that it's so onerous, so difficult to obey the law and to meet these regulations. What's your reaction?
BUFFETT: Well, right now corporate profits as a percentage of GDP in this country are right at the high. Corporate taxes as a percentage of total taxes raised are very close to the low.
DOBBS: Historically we're talking about.
BUFFETT: Historically.
So, you know, corporate America is not suffering, I'll put it this way.
DOBBS: Corporate America is not suffering. In point of fact, those same organizations that I just mentioned, the U.S. Chamber of Commerce and the Business Roundtable representing some of the largest companies are saying you tax us, you are taxing our consumers, our customers. Do you think corporations in this country should be paying more? Taking some of that burden?
BUFFETT: I think that the -- and just eventually you have seen companies be able to repatriate earnings with a very small tax that were taxed at very low rates abroad. Corporations are doing better in the total tax picture than the people I'm going to walk by on the street when I leave here.
DOBBS: And some of the people you are going to meet are going to say, perhaps this evening and otherwise in business circles, are going to say, Warren, what are you talking about, raise our taxes.
BUFFETT: They are still friends of mine, Lou.
DOBBS: You are going to get along. I know you are going to get along.
BUFFETT: Is there anyone I have forgotten to offend?
DOBBS: Let's give you another opportunity. And I'm going to bring up General Ray and the fact that today the FBI announced that it is entering the investigation into the insurance industry. General Ray obviously under investigation. A broad number of investigations -- AIG.
BUFFETT: A couple dozen all told.
DOBBS: Right. Formally run by Hank Greenberg, until a few weeks ago one of the most respected businessmen in the country. Do you think this widening investigation is appropriate? Do you think it's necessary? And do you -- are you concerned about what it will reveal? BUFFETT: I think it's fine to be done. I mean, we'll find out what has taken place. And some things that were actually legal a few years ago will probably be found to be distasteful. There will be things that are found that were probably illegal.
But there's nothing wrong with looking in the insurance industry just like the investment banking industry or some of the other things that have been looked at.
DOBBS: As you look over this society you know, I'm struck by the fact that your board averages right at 70 years.
BUFFETT: I bring up the average, too.
DOBBS: You do. But have you some colleagues who boost it more than you.
BUFFETT: Right.
DOBBS: Including Charlie Munger.
BUFFETT: Right.
DOBBS: But I was struck by the fact of the age of that board. And I know a lot of people would want to talk to you about succession and everything else. That's not my interest. My interest is we have 77 million Americans who are retiring. Do you think there's a crisis per se in retirement in this country? Or do you think that this is a healthy and perhaps important change where people are both living longer and contributing longer? And that we should look at this as positive rather than a negative?
BUFFETT: Well, it is a positive. But people age in different ways. I mean, we have three or four managers in the 80s, but we had a few other managers that we had to let go much earlier than that.
So, it's hard to generalize. The people we have on our board -- we don't have anyone on the board that doesn't have at least 4 million of stock. They bought it in the open market, they weren't given it by restricted stock or options. And they are owner oriented. They are business savvy. They are all-star crew.
DOBBS: I want to close with your thoughts about the future here. You said this is still the richest economy. Give us -- let me ask you straightforward. Are you optimistic about the prospects for a country that's been built on a middle class and those who have aspired to it? Do you see the same opportunity going forward? Are you heartened or concerned?
BUFFETT: I think it's a terrific country, Lou. You never want to go short on America. The nuclear, chemical and biological threat is real. And it's one we should attack. But this country -- our children our grandchildren are going to live better than we do in this country. No question about it in my mind.
DOBBS: And that's a pretty good mind from which to hear that forecast. Warren Buffett, thanks for being here. Appreciate it.
BUFFETT: Thank you, Lou.
DOBBS: Coming up at the top of the hour here on CNN, "ANDERSON COOPER 360." Anderson joins us now with a preview -- Anderson.
ANDERSON COOPER, CNN ANCHOR: Lou, thanks very much. Fascinating interview.
Next on 360, a fugitive on the run. How do police track them down? Tonight, inside a manhunt. The view from the hunters and the hunted.
Also tonight, danger at the gas pumps. A forgetful driver causes a fire at a gas station. It's all caught on tape. Tonight, we're going to look at who causes more accidents at the pump, men or women. You might be surprised.
Also tonight cheer leading and indecency. One man's crusade to clean up the halftime shows at schools. Is it a waste of taxpayer money? I'll ask him the tough questions. That and more at the top of the hour, Lou.
And Lou.
DOBBS: Well, thank you very much, Anderson. Warren and I were just...
COOPER: Interesting guy, I know.
DOBBS: I apologize. We look forward to it, Anderson, I'm sure.
COOPER: Yes, yes, I bet.
DOBBS: My next guest says the United States isn't -- isn't fighting those who steal our intellectual property. He'll tell us why. I'll be talking with Pat Choate, next here. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: My guest tonight says simply the Chinese are stealing, stealing our intellectual property. And he says, the biggest problem is, you may have heard this before somewhere, this country isn't enforcing our laws. Instead, Pat Choate says we're sacrificing our intellectual property to further are foreign policy with China.
Joining me now, economist, author, Pat Choate. Good to have you here, Pat.
PAT CHOATE, AUTHOR, "HOT PROPERTY": Lou, good being back.
DOBBS: Why in your judgment, it's pretty clear why the Chinese would steal it, and the examples you point out in your book are -- loom large, why in the world are we not enforcing our laws? CHOATE: I think there's two basic reasons. I think, one, the Bush administration realizes they need the Chinese Central Bank to put up about 200 billion a year to finance the federal budget deficit, and they are relying upon the Chinese to help them with North Korea. And so what we're doing is we're giving away our technology, our innovations and I believe we're giving away our future.
DOBBS: Giving away our future. That's a strong statement.
CHOATE: It is.
DOBBS: And the degree to which we're giving away that intellectual property -- would you characterize that intellectual property as sort of marginal, or would that intellectual property be the designs and the creativity at the higher level of our productive society?
CHOATE: Well, one measure of this is that this last year we ran a $36 billion deficit with the Chinese in advance technology products. The Chinese are not just interested in the simple industries of the old industries, they want the very best industries. The FBI reports that they maintain about 3,000 frat (ph) groups inside the United States to gather information. And of course, when our companies move their factories there, they -- the Chinese in effect have direct access to a very best technologies.
DOBBS: What I love, Pat, is when I hear stories from manufacturers in particular who have chosen to offshore and outsource and particularly to China, and they start talking about knock offs. They've just turned over their design, every capacity, every characteristic of whatever it is and are surprised that it doesn't have their logo and their label on it?
CHOATE: They're also giving them the no how to put it together, which is often you can only get that by having American show someone how to do it. They're giving -- they're giving away the store.
DOBBS: Giving away the store, and sometimes our stores are helping us give away the store. For example Wal-Mart, putting up -- basically saying to a U.S. manufacturer, let's see if this can be done cheaper in China. Let's see whether or not we can have a challenge on this design. And guess what, the U.S. Supreme Court says, go ahead.
CHOATE: Go ahead, and do it. Well, and we also have our manufacturers that are moving to China. They're saying to the American manufacturers, their suppliers, you must move to China and find a local partner and supply us from there. You have got to supply us from there not here.
DOBBS: It's -- what can we do?
CHOATE: There are three things that I'm saying we can do right now. The first thing we need to do is crackdown on government such as China that are sanctuaries for pirates. We should take a case to the World Trade Organization and ask for damages. China made a treaty commitment to us that they would buy these laws. We need to do that. There's something called the 18-month rule we need to change in Congress. The Congress is mandated that the patent office reveal the full contents of all patent applications at 18 months whether a patent is issued or not. It takes 27 month. The third thing we should put up enough money for the patent office to guarantee that we can get those patents through in six months. If the innovations are important, let's get it now instead of three years from now.
DOBBS: The book is "Hot Property," the author Pat Choate. Great to be with you.
CHOATE: Good, and thank you.
DOBBS: Thank you.
Still ahead here, the results of "Tonight's Poll," a preview of what is ahead tomorrow. Stay with us.
(COMMERCIAL BREAK)
DOBBS: The results of our poll tonight -- 61 percent of you say the Real I.D. Act is a valuable tool to combat the illegal alien crisis in this country, 39 percent disagree.
Thanks for being with here tonight. Please join us tomorrow. Why the president of 9/11 Families For a Secure America is now under investigation by the Mexican government.
Secretary of the Interior Gale Norton will be our guest. She joins us to talk about the escalating illegal alien crisis in our national parks.
And a police chief who's found a novel way to enforce our immigration laws even if the federal government won't. Please join us for all of that and more tomorrow.
Good night from New York. ANDERSON COOPER 360 starts right now. And Anderson, I'm going to watching every minute.
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