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CNN Larry King Live

Interview with Lou Dobbs

Aired October 10, 2006 - 21:00   ET

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

(BEGIN VIDEO CLIP)
LARRY KING, CNN HOST (voice-over): Tonight, he's outspoken...

LOU DOBBS, CNN ANCHOR: And that was a sham and a joke.

KING: ...outrageous.

DOBBS: There's not a single thing in this that -- that even remotely has legitimacy.

KING: Some say he's out of control.

DOBBS: Partner, I don't even listen to that kind of language. I don't even listen to that. No, you pollute the air. You pollute the air.

KING: Lou Dobbs, CNN's most opinionated anchor, this time he answers the question on the war on the middle class and takes on his toughest critics in heated debates. It's all next on LARRY KING LIVE.

(END VIDEO CLIP)

KING: Good evening.

He's in our beautiful new studios in New York. I'm in Los Angeles. He's Lou Dobbs, anchor and managing editor of CNN's "Lou Dobbs Tonight." He's author of the new book, "War on the Middle Class, how the Government, big Business and Special Interest Groups are Waging war on the American Dream and how to Fight Back." There you see its cover.

Lou, you used to do financial news only. That was primarily the Lou Dobbs' report.

DOBBS: Right.

KING: What changed?

DOBBS: What changed was September 11th, Larry, and what changed were a series of the worst horrific corruption scandals in this country's history and the very clear evidence that the middle class of this country, about 250 million Americans, the backbone of this country, the foundation of this country, were put into direct competition for their jobs from the cheapest labor around the world by corporate America, U.S. multinationals. Their public education system neglected and in some cases simply attacked by forces that wanted to suggest that a free market has something to do with public education. We've wasted a generation of Americans in our schools.

KING: Did you sit down with management and say, "I'm going to change the concept of the show, I'm going to give opinions," because I think you're the only CNN anchor that does.

DOBBS: Right. The fact is, Larry, that we did sit down with CNN management and specifically Jim Walton, better than three years ago and we had already -- obviously the show had already migrated to a news hour. My opinions were becoming more frequent.

And we reached a point where Jim Walton, the CNN group president, whom you know very well, made what I think is a very courageous decision and said, "Lou, we want you to stay with your analysis and to drive the program ahead with news, debate, and opinion."

KING: Is it deliberate, Lou? In other words, do you go on every night saying, "I'm going to stir up a hornet's nest?"

DOBBS: No, not at all. In fact, what we do is we go on the air each night trying to bring to our audience a very sophisticated and a very demanding audience a non-partisan independent reality, one that because so many people practice in national media, whether print or electronic, he-says, she-says journalism; that is, if you put forward two views in one report, a Republican view and a Democratic view, then you as a journalist have done your job.

That isn't the way we approach our role. Our role is to show our viewers what is happening to their lives and what the forces are driving those changes in their lives and whether they're beneficial or detrimental. And, unfortunately most of the forces at work right now in American society and in the American economy and in the American body politic, Larry, are detrimental.

KING: We're going to move to the book in a couple minutes. Michael Kinsley, writing in "The Washington Post" last March said, "CNN's Lou Dobbs, formerly a mild-mannered news anchor, noted for his palsy-walsy interviews with corporate CEOs has turned into a raving popular xenophobe."

DOBBS: You know, Michael Kinsley is a man I respect tremendously but something got into Michael on that one because Michael, as you recall, Larry, was one of the co-hosts of a very popular debate program we had on this network called "Crossfire" in which he gave into his partisan views nightly, Monday through Friday without particular care. He is a man who has since made his living giving opinion.

What I hear Michael saying in that is he believes in a free marketplace of ideas just not those ideas that are in opposition to his own. In that, he shares a great deal in common with the Bush administration, the Republican Party and the Democratic Party.

KING: He also says writing about opinion journalism, "Are you open" meaning you, Lou Dobbs...

DOBBS: Right.

KING: "Are you open to new evidence or an argument that might change your mind? Do you retain at least a healthy sliver of a doubt about the argument you choose to make?"

DOBBS: Oh, absolutely without question and I can say that I test and my colleagues on the broadcast test every one of the positions that I take on every issue. But it's important, Larry, for everyone to understand I don't hold forth on an issue unless we have given it careful examination, we have reported on it extensively and I've come to a conclusion based on both my knowledge and my understanding and my experience.

When I talk about the issues of illegal immigration, border security, when I talk about our public education system, these are not opinions formed from the either (ph). They are the extension of rigorous, strenuous reporting, considerable analysis, and thoughtful, thoughtful conclusions.

KING: Some nights I tune in and I hear you raking George Bush to the coals. Then I hear you taking on Democrats. What are you?

DOBBS: I'm, as I say in the book, Larry, I am an unaffiliated, independent. I was -- I've been a lifelong Republican but I have come to the conclusion after -- with mounting evidence seemingly every year for the past six to eight years in particular that there is no difference in these political parties.

Now, there are Democrats and Republicans out there saying, "What in the world are you talking about?" The fact is that both parties are owned lock, stock, and barrel by corporate America and U.S. multinationals.

And, if you examine their funding or where they stand with their platforms, where in the United States Congress do you find representation for the middle class today? There is $2.4 billion being spent by corporate America and special interests and social special interests in this country to persuade your lawmakers and mine to vote in whatever way is most amenable to them but not you and me.

KING: Are you saying therefore, Lou, that November 7th makes no difference?

DOBBS: I think November 7th makes a great deal of difference. It's one of the reasons I think that the American people have a great opportunity to send a message this November 7th.

KING: But you said both parties are the same.

DOBBS: Oh, I said both parties are absolutely the same.

KING: So?

DOBBS: That does not mean that every candidate is the same, Larry. What I hope and what I really, really am working very hard to bring to the attention of my audience, the American people, is the fact that every congressional district those candidates should be examined for what they will do for your interests.

What will they do in public education? What will they do to stand the mounting debt from our federal government's operation, from our trade policies that resulted in 30 consecutive years of trade deficits? What is that candidate going to do?

I don't care whether -- it's literal, do not care what any American does in terms of his or her vote, voting Republican or Democrat though I think it would be a powerful message and I suggest this many ways in which I think to get Washington's attention is don't be taken for granted.

Tell your party. Give a very loud message back to Washington or the RNC, the Republican National Committee, the Democratic National Committee. Do what I did. I went out and I decided I was going to register as an Independent and I did so because I don't want my vote taken for granted by either political party and I want them representing the interests of the middle class of this country, the least represented group, the largest group in the country.

KING: Let me get a break.

When we come back, we'll try to draw Lou out. How difficult it is to talk to him. Lou Dobbs is our guest. And, the book is "How the Government" -- "War on the Middle Class, how the Government, big Business and Special Interest groups are Waging war on the American Dream and how to Fight Back."

We'll be including e-mails, phone calls, and some opponents of Lou Dobbs. Don't go away.

(BEGIN VIDEO CLIP)

DOBBS: You have the temerity, the temerity to talk about propagandists? This government is a hideous joke in every respect. To me it's just inexplicable why it's being tolerated, nothing more than an absurd fig leaf and a political veil. The thing we got to get back to is...

UNIDENTIFIED MALE: It transcends everything.

DOBBS: ...everybody between these borders is American.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: We're back with Lou Dobbs. The book is "War on the Middle Class."

In your book, you blast a culture of corruption on Capitol Hill, Lou. On page 37, you say, "Lobbyists for corporate America and special interest groups are the arms dealers in the war on the middle class," and I'll hook that with the Foley thing. Is Congress just not to be trusted?

DOBBS: I don't believe that Congress is to be trusted at all. The leadership of Congress, in this case the Republican leadership of Congress, has a lot to answer for.

The oversight role that they are to play in foreign policy, in the war, on global terror and the war in Iraq, the war in Afghanistan, the fact that we still have issues about the quality of intelligence, well those are responsibilities of the Bush administration certainly since they have been in office for the past six years, five and a half years.

This also falls squarely on Congress and the fact that we do not have that oversight and we do not have new ideas emanating from Congress about the many issues that this country faces and challenges I think falls squarely on Congress.

The fact that $2.4 billion is spent in this country every year lobbying our lawmakers is a disgrace. Corporate America and special interests own, as I said, absolutely without equivocation the legislative process and the electoral process and we've got to come to terms with that reality because the men and women who are the bull work of this great nation, and it is first a nation, not a consumer economy, not a market, it is a nation and our people are citizens first and consumers secondly.

But, corporate America and nearly everyone in Washington, D.C. in an elected office looks at them as either first taxpayers or voters secondarily but we're citizens and we've got to -- we've got re- instill that regard on the part of our elected officials, that respect for the men and women who are the majority of this nation, who have to have representation, who are facing the greatest economic challenges and, who still provide the greatest share of our taxes, who make up about 70 percent of our economy but they're participating less and less in the rewards of this economy and taking on greater and greater burdens.

KING: We have some serious finger pointing today, Lou, regarding North Korea.

DOBBS: Right.

KING: Take a look at this and then we'll have a question. Watch.

DOBBS: Sure.

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D), NEW YORK: Some of the reasons we are facing this danger is because of the failed policies of the Bush administration and I regret deeply their failure to deal with the threat posed by North Korea.

SEN. JOHN MCCAIN (R), ARIZONA: I would remind Senator Clinton and other Democrats critical of the Bush administration policies that the framework agreement her husband's administration negotiated was a failure. We had a carrots-and-no-sticks policy that only encouraged bad behavior.

(END VIDEO CLIP)

KING: He-said, she-said, who's right, Lou?

DOBBS: Well, in this case, this is one of those rare exceptions, Larry there is great merit to both statements. And, the fact of the matter is that both the Clinton administration from 1994 forward on North Korea, and this administration from the time it's taken office to this very day with North Korea being a nuclear power for the past two days with world recognition, is squarely the result of failed policies of both President Clinton and President Bush.

And, the fact that this administration has chosen to say we -- sending out a secretary of state, its ambassador to the United Nations, its assistant secretary of state and the president of the United States saying, "We will not tolerate a nuclear North Korea, we will not tolerate a test," is the worst kind of hollow rhetoric and it is rhetoric certainly unworthy a super power which needs to learn humility and constraint.

This president ran in 2000, Larry, saying that this country needed a foreign policy of humility and, indeed we do because there are limitations to the influence and the power of even a super power.

And, the fact that Clinton administration from 1994 forward was willing to trade, to make deals to avoid further development of nuclear weapons on the part of North Korea is frankly shameful, shameful performance in foreign policy.

This is a nation that is the most innovative, brightest, I mean my God, Larry, we just swept all of the Nobel Prize awards in Stockholm. We have the greatest minds, the greatest history and tradition and we are dishonoring that tradition because we are not thinking. We are not acting in the national interest and concerning ourselves with the common good.

We're allowing ourselves to devolve to partisan ranker polemics, Hobson's choices that are utterly false, pushing people to polar extremes in policy decisions instead of saying, "We're going to carefully and thoughtfully consider what our responsibilities are and carry them out."

KING: We're going to take a break.

And up next, Lou Dobbs will debate New Mexico Governor Bill Richardson on illegal immigrants. Man the battle stations. Things may heat up when LARRY KING LIVE comes back.

(BEGIN VIDEO CLIP)

DOBBS: The government of Vicente Fox and his party have absolutely stifled the aspirations of the Mexican people. I'm not aware of a single guest worker program that's ever worked anywhere in the country.

No one, no one is entitled to come to this country in any other fashion than legally.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We've also got to remember this though during this debate that illegal immigration is a problem but we need to remember that immigrants have been one of the great strengths of the United States of America.

For generations immigrants to this country have risked everything because of the dream of freedom and they've assimilated into our society and they've contributed to our economy and they contributed to the greatness of America.

(END VIDEO CLIP)

KING: Lou Dobbs remains with us. His book is "War on the Middle Class." Joining us in Santa Fe, New Mexico is Governor Bill Richardson, Democrat of New Mexico, former ambassador to the U.N.

Lou, there is sometimes accusations about racism when it comes to your thoughts on immigration. Here's an e-mail from Largo, Florida.

DOBBS: Sure.

KING: We'll start with this for Lou and then Bill can comment.

And the question is, "Lou, the oranges are rotting here on the trees in Florida because there are not enough pickers who will pick them once you have gotten rid of all of those pesky immigrants." Who's going to pick the oranges, Lou?

DOBBS: Well, I think that one of the things that's kind of interesting, not only in Florida but, Larry, also in California, Arizona, in particular, growers complaining about the fact that we've been enforcing border security and stopping the flow of illegal immigrants into their fields whether picking citrus or whether picking produce. The fact is that the flow of illegal aliens continues across those borders.

If those growers would like to know who's going to pick those fruits, perhaps they might consider this. The president is fond of saying that illegal aliens will do the work that Americans won't do but he doesn't finish the sentence.

They won't do the work that Americans -- they will do the work that Americans won't do for slave wages. And what we have witnessed for the past 20 years is the absolute exploitation of illegal labor in this country. And, if the growers would like to raise their prices, perhaps we've done -- we've reported on the broadcast, for example let's raise the wages for the produce fields in particular. Let's double those wages. You know what that adds to the price of lettuce per head in the grocery store, ten cents a head, ten cents a head.

You show me an American who won't pay ten cents a head to make certain that people have well-paying jobs and stable, secure employment. I think it's mindless to suggest otherwise.

KING: Governor, your response.

GOV. BILL RICHARDSON (D), NEW MEXICO: Well, first, I want to say that Lou Dobbs does speak for a lot of the middle class and we disagree very strongly in immigration issues but he is very strong in protecting workers.

One of the things I just agreed with is wages. I mean the Congress gives itself eight pay raises but doesn't increase the minimum wage for the average American. What I would like Lou to concentrate more is, yes, I agree we got to secure the border but not with this silly fence that the Congress voted on which is only going to be half the border. They paid for about 20 percent of it. It was a political ploy.

I'd like to see more border patrol. And, by the way, I think the National Guard is helping out here on the border. But what he doesn't concentrate on, Larry, is what do you do with the 12 million that are already here? You can't deport them and you can't have a comprehensive solution without dealing with the 12 million here. What I think you need to do is give them an earned legalization, not an amnesty. Let them earn their being able to stay here.

KING: All right, Lou, what's wrong with that?

DOBBS: Well, there are a number of things wrong with it. The governor and I have discussed this over time and I have as well the greatest respect for Governor Richardson on so many areas. No governor has been more advanced in his thinking and his actions. For example, on the issue of the integrity of our electoral system and e- voting and I want to congratulate the governor here tonight.

But in terms of immigration, I have said all along comprehensive immigration reform is a code word. It's become a code expression for amnesty first and I will -- I will even accede to the use of earned legalization ahead of border and port security.

I've said throughout this entire debate that there is one logical syllogism that can't be defeated. We cannot reform immigration, governor, in my opinion, unless we can control immigration. And, we can't control immigration unless we control our borders and our ports.

Now if you can defeat the logic of that, I will move to a discussion in immigration reform. But until we have those borders secure, I don't see how we can move ahead.

KING: But, the governor brought up, Lou, what do you do about the 12 million already here?

DOBBS: I don't think that there's anything wrong with a status quo until we can meaningfully change it, do you governor?

KING: OK -- governor.

RICHARDSON: Well, yes, I think it is a problem, Lou, because what you're going to see is without an earned legalization program you're going to have local law enforcement around the country in the 50 states try to do the job of law enforcement that the federal government and the border patrol and the INS should do. That's the big problem.

So, what you need, I believe, is two steps. One, control the borders. I'm totally with you on that but you also have to deal practically with the 12 million that are here that live under the shadows. They're working. Nobody knows where they stand.

And then you have local law enforcement. You have states like mine having to deal with their education or their health care. Why not do a comprehensive package? And this is where I think President Bush is basically right. You got to have a comprehensive solution.

DOBBS: Let me, Larry if I may, let me just put forward a couple thoughts on that. One is that we've seen the Senate and the president sign legislation moved by the House for 700 miles of border fence.

And what they funded was $1.2 billion or 320 miles of that fence and that $1.2 billion will be applied to one year's building and construction of that fence with all sorts of caveats that will, I think you would agree, governor, will mean that that fence doesn't get completed as it's presently laid out and legislated. That's a sham.

RICHARDSON: I would agree.

DOBBS: And the fact...

RICHARDSON: I agree.

DOBBS: ...this government continues to play games with the American people. We're five, we're more than five years after September 11th and you and I, governor, and you, Larry, we're sitting here talking about whether or not we need to secure our borders and our ports. This is hypocrisy and a sham and we've got to deal honestly with it.

And the American people, particularly the middle class, who as I said are the foundation of this country have got to demand better of their legislators and reject the insult that Republicans and Democrats alike are trying to perpetrate.

KING: Let me get a break and we'll come right back. We're going to hold Governor Richardson over into the next segment.

By the way, we'll have another debate for Lou Dobbs in a little while, Robert Reich, who was the former secretary of labor in the Clinton administration. He'll be discussing outsourcing.

The book is "War on the Middle Class, how the Government, big Business, and Special Interest Groups are Waging war on the American Dream and how to Fight Back."

By the way, Lou Dobbs will have a couple of specials coming. We'll be telling you about them when we come back.

(BEGIN VIDEO CLIP)

DOBBS: As you look at the madness, the absurdity, the inefficiency, the ineffectual nature of government, I mean it is stunning what we are doing as a sovereign nation to control our borders.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: Tomorrow night on LARRY KING LIVE, a rip-roaring debate on right versus left with Dennis Prager, Ed Schultz, Andrew Sullivan and Arianna Huffington.

A programming note, next Wednesday at 7 p.m. Eastern, Lou will be demanding answers. Why more Americans than ever are living in poverty and without healthcare? It's a CNN special live from Kansas City called "War on the Middle Class," just like his book. Once again, that's next Wednesday at 7:00 p.m. Eastern.

We've done some man on the street interviews today for Lou. And Bill Richardson, the governor of New Mexico remains with us. Let's go to this question taken on the street in Washington.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Mr. Dobbs, other than using our national guard, what do you think we can do to increase border security?

(END VIDEO CLIP)

DOBBS: Well, I think, Larry, I think that straightforwardly, we've got to -- where appropriate, put in a fence along our southern border. The reason I say that is that it is the most effective. We have done so along Smugglers Gulch, as the governor knows in San Diego and southern California. And it has been remarkably effective. It allows us to use our border patrol most effectively and most efficiently. I think we need to add border patrol agents without question.

The governor, Governor Richardson said that the border patrol has been helpful with his state and Mexico. I think that's right. But it's an onerous burden to put on the national guard and it's the proper role of the border patrol and we need top continue to deploy them.

KING: Governor? RICHARDSON: Well, two other points. One, enforce the law that says that those that knowingly hire illegal worker will be punished.

DOBBS: Amen, brother.

RICHARDSON: A new relationship with Mexico where Mexico actually does something with creating jobs so that the flow doesn't come into America. But I do believe the most effective means is more equipment, more radars, more detection, and more border patrol. There are not enough human beings that are trained that patrol the border. The guard has helped, but they're going to be gone in a couple of years. So I just believe you need as massive increase.

And where I disagree with Lou is I just think this fence is not going to work because you're going to find a new industry of people trying to come over the fence, under the fence. You're going to see it's not going to be built. Lou, you're right. It's a sham. It was a political vote so that Republicans could go home and say, hey, we did something about border enforcement.

DOBBS: Well, I think, governor, I would agree with you on a number of points.

But first, I think that illegal aliens will always -- those -- there will be people who will to try to become illegal aliens enter this country illegally. But I do think that you raise one of the most important deterrents and that is to shut down employers of illegal aliens. And when I say shut them down, I mean come down with a hammer. Because what they're doing to this economy, they've created a trillion dollar underground economy in this nation.

The taxes on which, by the way, would eliminate the current budget deficit, which would be extraordinarily helpful. They would also eliminate the high cost of maintaining for those illegal employers of illegal aliens. Taxpayers, in your state, in other states around this country, 42 of states, in point of fact, the taxpayer is paying for the healthcare and the social services for the employees of those illegal employers.

And that's just entirely wrong. It's upside-down. And I think that we need to come down with heavy, heavy fines, $50,000 to $100,000 with the first time it occurs. We have every protection in place and it could be used within a month if we were to put our energy behind it. And I think the second time it happens, we should be talking about executives going to jail.

KING: Lou writes extensively about this in his book. Have you read the book yet, Governor?

RICHARDSON: No, I hope Lou sends me a free autographed copy.

DOBBS: It's on its way, it's on its way, governor.

RICHARDSON: No, I'll buy one. No, I will read it.

KING: Thanks, Bill. RICHARDSON: Lou is very -- he's very good. And I like Lou. I disagree with him but he's always let's an opposing point of view come forth and that's what you need in this kind of television, Larry. Thank you for having me.

KING: Thanks, governor. Governor Bill Richardson, Democrat of New Mexico and of course Lou Dobbs.

Still ahead, the issue that made Lou Dobbs a lot of friends in the heartland and enemies on Wall Street. Robert Reich dares to debate Lou Dobbs on outsourcing, that's next.

(BEGIN VIDEO CLIP)

DOBBS: That only damned idiots in Congress and in this administration would assume that the American people are so stupid as not to notice. That you've got a homeland security department that is nothing more than a joke.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: Lou Dobbs remains, of course. The anchor and managing editor of "LOU DOBBS TONIGHT" and the author of "War on the Middle Class." We're joined in Berkeley, California by Robert Reich, who served as secretary of labor for President Clinton. He's a best- selling author himself, author of "The Work of Nations and Reason." He's now professor of public policy of the University of California at Berkeley.

We'll start with Mr. Reich. We know, Robert, what Lou's feelings are on outsourcing. Are you in favor of it?

ROBERT REICH, AUTHOR: Well, I'll tell you what, Larry. First of all, let me say that I agree with Lou that the middle class is getting shafted in so many ways. Most of the benefits of economic growth are going to the very top.

And Lou, congratulation on this book. I was asked to debate with you. The thing that I think is the most debatable of all of your contentions is the notion that outsourcing is somehow bad or it is getting out of control. It is potentially a problem for us with regard to college graduates 30 years from now or maybe 25 years from now, if India and China continue on the path they're now continuing, they're now on.

But right now it's very, very small. If you're a college graduate in the United States, you're doing fairly well. The people I worry most about and I think you do as well, Lou, are the people who don't have any education beyond high school who are dropouts from high school, who are really in a workforce that are being -- they're being paid almost nothing.

DOBBS: Right.

REICH: And we have a lot of them. We have a new category of people called the working poor in this country.

KING: So you're saying outsourcing is not a big problem now?

REICH: I'm sorry? I'm saying Larry, it's not a big problem now. If we don't improve our educational system, particularly primary and secondary education, it will be a big problem. But right now, it's not a problem. It's not a zero sum game. It's not as if there are a certain number of good jobs, or even a certain number of jobs, to be allocated between us and them.

KING: Lou?

DOBBS: Well, Robert Reich, first of all, it's a pleasure, Larry, for me to have an opportunity to be with him. Robert Reich was a real Secretary of Labor, representing labor in this country, taking the job just as responsibly as I think one of the greatest labor secretaries, John Dunlop did. And I think John Dunlop would have been very proud of his legacy being carried on by Robert Reich.

That said, Mr. Secretary...

KING: Here it comes.

REICH: Here it comes. I'm girded for it. Go ahead.

DOBBS: Outsourcing, as best we can judge, whether it be the McKinsey (ph) study or any number of others, we're looking 15 million middle class jobs at risk in this country. And we have to examine why those jobs are being sent overseas. Fifteen middle class jobs, I've had people, Robert, suggest to me, well, you know, this is not a zero sum game, it's a creative destructionism.

Creative destructionism has led to the loss of four million manufacturing jobs over the past six years in this country. It has led to the loss of an estimated three million jobs through outsourcing. Those are jobs that are replaced in our employment by salaries that are approximately 20 to 30 percent less than the jobs lost to overseas outsourcing. We have at risk 15 million jobs between and the next nine years that will go overseas. And there are jobs that, as you suggested, are rising up the ranks of our knowledge workers.

And it is a very serious issue, because American workers right now are participating ever less in the national income. Corporate taxes are less than they've been since World War II. The corporate share of national income has risen to a record level since World War II, while labor is participating at an ever diminishing rate.

This is a serious problem. It is an absolute serious problem, and the fact that it may be incipient in an economy of 140 million jobs because it will influence 15 million means nothing to me. It just means more pain for our middle class, and it's a middle class that we have to sustain. And we have got to find representation for that middle class, even at the Department of Labor.

REICH: Oh, Lou, you're not going to get any real argument from me. In fact, I've been arguing much the same. It's a little bit awkward for me to be on the conservative side of this argument right now, but let me try. I'm going to try, because I think that again, you're making some important points, but I don't want the audience to feel that somehow there are only a limited number of jobs.

Let me give you an example here. Let me just give you one example, because very recently I was asked to help out at a ribbon- cutting ceremony, a new plant was opening in the Midwest, the governor, who shall remain nameless, was a friend of mine and had lured this manufacturing plant from Europe to the Midwest. And I went in the plant to see all the new jobs that were being created, and it turned out there were only, I only counted 11 jobs, because it was mostly numerically-controlled robots and computers.

These manufacturing plants, whether they are in the United States or abroad, are being revolutionized by technology. We are losing manufacturing jobs, but it's not just globalization that's causing it. We're losing them because of technology. Even, Lou, if we were so rash as to put a -- and we could put a big iron curtain around the United States and not trade with anybody, we would still be losing manufacturing jobs because of technology.

DOBBS: Robert Reich, don't you do one of those Bush administration things and set polar extremes in an argument, and suggest that those Hobson's choices are our only policies.

REICH: No, I don't think they're Hobson's choices. And I am concerned, as you are, for the loss of good middle class jobs. But I think that education is so much the key to it, though.

DOBBS: I couldn't agree with you more. It's why I am deeply resentful that corporations, U.S. multi-nationals are off-shoring production, closing plants with good jobs, and moving that production, not for the purpose of productivity enhancements, or efficiency, or innovation, but moving them offshore simply to achieve -- the code words are efficiency, productivity and competitiveness, you know that what those are code words for, cheaper labor, and reintroduce those products and services that they're creating overseas now, that were once American-based, back into a $12 trillion consumer economy.

And Robert Reich, you know as well as I do, that's the game and the person that is at the very brunt of that impact is the middle class. Wages in this country has been stagnant for 35 years, and if we don't start protecting our middle class, we're not going to have much to protect at all.

REICH: Lou, what are you going to do? I mean, let's talk practicals here.

DOBBS: OK.

REICH: What's the specific answer to all of this? I mean, I've come up with some solutions, I've racked my brains, I've tried as Labor Secretary to do what I could do. But give me the answer. Let's hear it and let's talk about it.

DOBBS: Larry, do you want the answer now, or do you want to take a break?

KING: I'll take a break. That's what I'm trying to do. I run a show, I got to take a break.

We'll come back and pick right up, and then in the last segment, some other type questions for Lou Dobbs, that he may not be thinking of. But we'll be back with Lou Dobbs and Robert Reich, don't go away.

DOBBS: We have got great issues facing the working people in this country and their families. And neither party, neither party is doing much to help.

(COMMERCIAL BREAK)

KING: OK, Robert Reich, you said Lou doesn't have the answer. What do you have?

REICH: Well, I don't know that Lou does haven't the answer. I'm prepared to listen to Lou.

KING: OK. I thought you said he didn't.

REICH: Here's one idea I had.

KING: OK>

REICH: Here's one I have floated. I don't know whether -- it's certainly not the answer, but I think that in all trade treaties, we ought to require other countries to make their minimum wage half the median wage, so that as those countries prosper because of trade, that prosperity goes to a large number of people. We build up middle classes abroad.

KING: Lou?

DOBBS: Larry, Robert is talking about one of the great deficiencies of the many deficiencies of the NAFTA Treaty, and that is no protection for labor no, protection for environment, no side letters were agreed upon. And we're paying a great price, as are the citizens of Mexico to this day.

A couple of answers, Robert Reich. In terms of outsourcing and in terms of 30 years of consecutive trade deficits, a couple of things. One, the first thing I would do is insist that this country follow the same trade practices as our principle trading partners, that is mutual, reciprocal trade as the foundation of any trade partnership. We would not be exercising this -- this madness called free trade, which is anything but free. We've run up $5 trillion in trade debt in the past six years, as you know. That's unsustainable. We're paying a terrible price for it. That's money that's not being invested in this economy, in our young men and women, and in our future.

The second thing I would do is, if we're going to have free trade, let's have free trade. Let's be honest. We don't have free trade with China. We have a $202 billion trade deficit. It will be much higher this year, but as of last year, $202 billion with China.

We have business people and economists as well saying, well, you know, those lower prices are important for our consumers. Our inflation rate in this country is approaching five percent. Those Nike shoes that are built overseas, why do they cost $110 here and who gets the money? We need to start asking questions.

Corporate America was thriving with corporate tax rates above 50 percent and suddenly there is the great myth that those tax rates are much too high at 35 percent. You know, corporate executives say, you know, you can't raise taxes on us, we'll just pass it through to the consumer. But when you say we'll raise your wages, they don't say, well, we'll just pass them through to the consumer. No, that will shut down the business. It's -- we've got to begin to be honest.

KING: Robert? Do you have a point?

REICH: Well, you know, Lou, I wish I could disagree with you to make this an interesting debate. I'll try. I think you are saying exactly what I have seen and observed and worried over and tried to reverse.

The fact is that wages -- and this is the most important part. The economy continues to grow and in fact we've had a lot of growth in the economy, but median wages are stuck in the mud. And for blue collar workers, people who are hourly worker, 80 percent of our workforce are blue collar, they're working wages adjusted for inflation are actually going downhill.

No, Lou, you're emphasizing trade and outsourcing. I'll tell you, I want to go back to this issue of education, of making sure people get the skills they need because it seems to me that is so much more important than the issue of outsourcing.

KING: Robert, I don't mean to cut in, but we're running short on time. Have you read the book yet?

REICH: I started the book but I like Governor Richardson, am waiting for my autographed copy as well. I want to start distributing books to some friends.

DOBBS: It's got a bang-up ending.

REICH: But it's a terrific...

KING: ... We're costing Dobbs money tonight.

REICH: It's a terrific book and I congratulate you on it.

DOBBS: Thank you very much, Robert, great to talk to you.

KING: Thank you, Robert Reich and Lou Dobbs. We'll be back with our remaining moments with Lou and some other areas of discussion right after this.

(COMMERCIAL BREAK) KING: By the way, we're proud to announce tonight that Lou Dobbs joins exalted company on October 28th. This program, as you know, airs seven days a week. On Saturday and Sunday, we feature highlights of programs during the week. Lou Dobbs starting October 28th will be seen seven night as week in his regular time spot at 6:00 Eastern. Congratulations.

DOBBS: Well thank you very much, Larry. I'm privileged and exalted to be in such exalted company as yours.

KING: Let's get a call, Sante Fe, New Mexico, hello.

CALLER: Hi, Lou, I love you. Thank you for covering subjects that nobody else is covering. I feel like I am informed as a result of you. My question is, I will vote. How are we going to know if this election is going to come out straight this time?

DOBBS: Well, I complimented Governor Richardson early, Larry and I thank you for the nice words. But Governor Richardson has taken strong steps in his state to ensure the integrity of the elections. I hope every governor in the four weeks we have remaining does so because e-voting is creating a perilous risk to this democracy of ours and there is no excuse for us not to be prepared with a trail of paper, records of our ballots on electronic voting machines and nothing else should be acceptable.

KING: Lou, someone wanted to know, what do you do to relax? You appear very serious.

DOBBS: Well, I'm very serious. As you can tell, Larry, I'm pretty passionate about what we're talking about because I really care.

KING: But, what do you do on Sunday afternoon?

DOBBS: I -- well, I watch football and I'll go work on the farm or I'll just walk around and kind of stare off into space every once in a while. But, that's what I do. I spend time with my family. I love doing that.

KING: We have an e-mail from Ron in Columbia, South Carolina. The middle class is also providing a large number of troops for the global war on terror. Where are the elites' children? Why has patriotism become an optional virtue for the elite?

DOBBS: I think that that question goes right to the heart of much of these issues. I happen to be one of those people, when I say, Larry, that the middle class of this country is a foundation of our very society we have to, in this country, particularly in this time of war both on global war on terror, the war in Iraq and Afghanistan, I believe in shared burdens and shared sacrifices.

We've got to come to terms with the fact that we are not as a nation, whether we're talking about taxes or military service or national service, sharing those burdens. And I think that it's really important for the future of our nation that we come to terms the fact that that is our responsibility. We've been blessed with the greatest free enterprise democracy in the history of the world. It's ours to lose and right now we're not doing what we should to to preserve it.

KING: Will CNN, do you think permit you to endorse a political candidate for president, say if you feel it passionately?

DOBBS: You know, I haven't talked with Jon Klein about that and I -- the truth is, I don't think that is my role. I'm a person who's committed to issues, to ideals. I think the people -- people watching your broadcast, Larry, are perfectly capable of making up their own minds about it. My job is to bring the facts, that independent nonpartisan reality and put it in front of them so they can make those decisions and have their votes count and to make a determination about this country's future.

KING: We only have a minute left. Technically, not technically, you don't need this. You don't need to take a populous stand. You're very successful. You earned a lot of money. Why?

DOBBS: Because it's the right thing to do. And sometimes that's what makes you -- makes it all worthwhile. You know, I started out -- I came up from a poor family. Both my parents working. I was the beneficiary of a public school system. They gave me every opportunity. I've gotten lucky. I'm not a self-made person. Wonderful people have helped me along the way and I sure want to pay back.

KING: When you left CNN, was there the return a happy one?

DOBBS: Indeed, it was. I wouldn't have, as you know, I wouldn't have been back. I will say this, we've compounded the happiness since I did return. I've never enjoyed this craft, never had more fun taking on the issues and frankly raising a little hell from time to time to make it count.

KING: Thanks, Lou, I'll see you in New York next trip in.

DOBBS: Larry, it's a privilege, thank you very much.

KING: Lou Dobbs, the anchor and managing editor of CNN's "LOU DOBBS TONIGHT" and the author of the new book, "War on the Middle Class," how the government, big business and special interest groups are waging war on the American dream.

Tomorrow night, right versus left with Arianna Huffington, Dennis Prager, Andrew Sullivan and Ed Schultz. I'll just sit back and referee. Right now I'll sit back and watch "A.C. 360" hosted by Anderson Cooper. Anderson, what's ahead?

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