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LOU DOBBS TONIGHT

Bush: No Pullout From Iraq Until 'Mission is Complete'; Iraqi President Meets With Iran's Supreme Leader

Aired November 28, 2006 - 18:00   ET

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


LOU DOBBS, HOST: Tonight, President Bush declaring he will not withdraw our troops from Iraq until their mission is completed.
We'll have a special report on President Bush's refusal to change strategy in Iraq.

And rising outrage over U.S. corporations investing in countries such as Syria and Iran that sponsor terrorism. Are some U.S. corporations bankrolling radical Islamist terrorism?

We'll have that special report, all of the day's news, straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Tuesday, November 28th.

Live in New York, Lou Dobbs.

DOBBS: Good evening, everybody.

President Bush today insisted he will not give in to pressure to withdraw American troops from Iraq. President Bush declared Iraq is not in civil war, and he blamed the rising violence on al Qaeda.

Meanwhile, the Iraqi president today met with Iran's supreme leader in Tehran. Their meeting comes despite rising evidence that Iran is providing insurgents in Iraq with weapons, training and money.

Suzanne Malveaux reports from Riga, Latvia, on President Bush's determination to win victory in Iraq.

Michael Ware reports from Baghdad on Iran's increasing role in Iraq.

And from the Pentagon, Jamie McIntyre reports on the search for a missing U.S. fighter pilot in Iraq.

We turn first to Suzanne Malveaux -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, the focus of the NATO summit is how to promote democracy in Afghanistan. This is NATO's largest military undertaking. But it is the Iraq war that is overshadowing their agenda.

(BEGIN VIDEOTAPE) MALVEAUX (voice over): Despite the deteriorating conditions on the ground in Iraq, President Bush refused to call the growing chaos and carnage between warring factions there civil war.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: There's all kinds of speculation about what may be or not happening. What you're seeing on TV has started last February. It was an attempt by people to foment sectarian violence, and no question it's dangerous there and violent.

MALVEAUX: Mr. Bush called the bombings in Iraq part of a nine- month pattern of violence fomented by al Qaeda. And his press conference in Estonia, Mr. Bush also continued to rule out direct talks with Iran about the situation in Iraq until it abandons its nuclear ambitions.

But Iraq has already reached out to its neighbor. Monday, its president visited Iran's leader, Mahmoud Ahmadinejad.

BUSH: I hope their talks yield results.

MALVEAUX: It's unclear what kind of results upcoming talks will yield between Mr. Bush and Iraq's prime minister, Nouri al-Maliki, hosted by Jordan's King Abdullah Pressure is growing on President Bush to come up with a working strategy of his own. At the opening of the NATO summit in Latvia, Mr. Bush drew his line in the sand.

BUSH: There's one thing I'm not going to do. I'm not going to pull our troops off the battlefield before the mission is complete.

MALVEAUX: Mr. Bush argued that mission goes beyond Iraq. It is global, that the war on terrorism is an epic struggle involving numerous nations and spanning decades. He used that claim to implore European allies to increase their support for another battlefront, the war in Afghanistan.

(END VIDEOTAPE)

MALVEAUX: The success of both the wars in Afghanistan and Iraq will largely determine Mr. Bush's legacy. Right now, both are in trouble -- Lou.

DOBBS: NATO troops in Afghanistan are fighting the alliance's first ground war in more than a half century. But only a few NATO nations are actually taking part in the fighting.

The United States is leading that fight against radical Islamist terrorists. About 20,000 of our troops are there.

Britain and Canada also heavily engaged in combat. They're supported by Dutch and Danish troops. But other NATO nations such as Germany and France have refused to send their troops to the south of the country, where the fighting, the principal amount of fighting, is taking place. French President Jacques Chirac is now even suggesting that Iran should play a role in helping Afghanistan fight the insurgency. Iran is also challenging U.S. policy in Iraq. Iran's supreme leader, Ayatollah Khamenei, today met with the Iraqi president in Tehran. Ayatollah Khamenei asserted that the United States is the main cause of the escalating violence in Iraq.

Michael Ware joins us now from Baghdad.

Michael, how large a role is Iran playing in Iraq, to the degree we can determine that? And to what accent is Iran driving the insurgency?

MICHAEL WARE, CNN CORRESPONDENT: Well, certainly the insurgency has many different faces, Lou. And what we're talking about here is the Shia insurgency. Essentially, the Shia militias and paramilitary forces, an alignment of which essentially make up the government.

Now, according to U.S. and British military intelligence, most of these groups, political factions and military factions, receive financial aid, military aid, weapons training, and liaison from Iran, particularly from Iran's Iranian revolutionary guard Quds force. So it's equivalent to the Green Berets.

Now, we've heard about them supplying the key components for the most devastating roadside bombs here in Iraq. I've spoken to British troops in the south who say their bases have been mortared by bombs that carry Iranian markings.

We have the chief of U.S. military intelligence talking about C-4 explosives that can be traced back to Iranian batches. And now we have what U.S. intelligence says is Iranian backing of Shia death squads.

Here, for example, Lou is the tail fin of an .81 millimeter mortar round. This landed just days ago in a Sunni neighborhood here in Baghdad. It was fired from a Shia area.

What's most interesting about this is that we don't know exactly where it came from, but what we can tell you is that it's date-stamped this year, 2006. It clearly, from its condition, has not been buried in the desert.

So at some point this has crossed Iraq's border. They're not making them here. So it's crossed the border and come into the hands of a Shia militia -- Lou.

DOBBS: Let me ask you, Michael, among the field commanders there with whom you've talked, how much frustration is there that the United States has not been able to first successfully interdict those kinds of shipments of material in support of the insurgency, as well as the personnel who are also being used, according to many reports? And to what degree is the fact that the militias remain armed -- is that within the control of the forces should the Iraqi government and the United States decide to disarm the militias?

WARE: Well, the United States and the Iraqi government, for what it is, and beyond the prime minister's office and the office of the national security adviser, one wonders what there is of this government. Because beyond that, it's essentially this alliance of militias.

As we said, intelligence claiming that many of them are backed by Iran anyway. The U.S. and Prime Minister Nouri al-Maliki, as has been said many times in the past, have not only called upon the militias to disband and disarm, but are now insisting upon it. Yet, we've seen no movement.

DOBBS: Right.

WARE: There is no incentive, Lou, for the militias to disarm and there's nothing to force them. Not even 140,000-plus American troops.

DOBBS: And the frustration among the field commanders, has there been any expressed by those field commanders about the inability to control either the borders or to interdict those supplies?

WARE: Absolutely. I mean, Iraq's borders on both the eastern and western fronts remain porous. Fighters and material keep pouring in from the west to support al Qaeda and the Sunni insurgents. The exact same can be said of the eastern border with Iran.

I've spent a lot of time on both borders. With the troop numbers here in the country now, it's simply impossible to seal these borders off.

I've had British intelligence officers tell me that when it comes to combating Iran, it's as though we are sleepwalking, one of them said. And essentially, the Sunnis claim that the Brits maintain an appearance of stability in the south by trading off, accommodating with these Iranian-backed militias so that attacks are few, yet the influence of Iran and its surrogates is great.

DOBBS: Michael, thank you very much. Very revealing, as always. Thank you.

Michael Ware from Baghdad.

Insurgents in Iraq have killed another of our Marines. The Marine was killed in Al Anbar Province, west of Baghdad. Sixty-two of our troops have now been kill in Iraq this month, 2,882 troops since the war began. Another 21,921 of our troops wounded, 9,847 of them so seriously they could not return to duty.

A U.S. commander in Iraq today says he expects elevated levels of violence to continue after last week's bombings in Sadr City that killed nearly 200 people. The attacks provoked a wave of reprisals.

And the United Nations Security Council today voted unanimously to extend the mandate of the U.S.-led coalition in Iraq. That vote held at the request of the Iraqi government. The mandate of the multinational force has now been extended until the end of next year.

U.S. troops in Iraq tonight are searching for a missing Air Force fighter pilot. The pilot is unaccounted for after his F-16 jet crashed near Falluja yesterday.

Jamie McIntyre with a report from the Pentagon.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice over): By the time the U.S. military got to the scene, a farm field 20 miles northwest of Baghdad, all they found was the wreckage of the single- seat F-16 smoldering in the late-afternoon sun. The markings for the plane's home base, Cannon Air Force Base in New Mexico, could be seen on the tail fin.

Nearby was the intact canopy and a tangled parachute harness. But there was no sign of the pilot, who the military thinks was unable to eject and probably died in the crash.

MAJ. GEN. WILLIAM CALDWELL, SPOKESMAN, MULTINATIONAL FORCE, IRAQ: It does not appear to have been shot down, but rather crashed into the ground. But there was no report of a parachute. The assumption is at this point that he probably crashed with his aircraft at that site.

MCINTYRE: The pilot's wingman, flying another F-16, reported the plane went down in enemy territory in the insurgent stronghold of Al Anbar Province after conducting a low-level strafing run to protect U.S. troops engaged in fierce ground combat. Overhead, U.S. planes could see insurgents swarming the crash site.

BRIG. GEN. STEPHEN HOOG, AIR COMPONENT, MULTINATIONAL FORCE: Immediately after the crash we had both additional fighters overhead, as well as intelligence surveillance assets. Those assets did observe insurgents in the vicinity of the crash site.

CALDWELL: There were several major fights going on up there, all in close proximity of each other. And the situation was very volatile.

MCINTYRE: It was several hours before the U.S. military could secure the area. Video aired by the Al-Jazeera network appeared to show a body before it was taken away. The U.S. military was able to collect DNA samples and launched a search for the pilot, who is officially listed as missing.

Had the pilot ejected, it would have automatically activated an emergency beacon, even if the pilot was incapacitated.

MAJ. GEN. LARRY ARNOLD, U.S. AIR FORCE (RET.): In today's world, with our GPS locations, we know exactly where you are within just meters.

MCINTYRE: But in this case, no beacon ever went off, another sign the pilot may have been unable to eject.

(END VIDEOTAPE)

MCINTYRE: When a pilot is down, the U.S. military insists it pulls out all the stops to get there first. But in this case, all the U.S. technology was triumphed by the simple fact -- trumped, rather, by the simple fact that the insurgents were already there -- Lou.

DOBBS: Jamie, thank you very much.

Jamie McIntyre.

Federal law enforcement officials today announced new indictments against suspected radical Islamist terrorists in this country. The U.S. attorney in Houston, Texas, said two men, one American, the other Pakistani, planned to attack coalition forces in Afghanistan. The Pakistani was in this country illegally. He had a student visa that had expired.

A federal magistrate ordered both men held without bond.

Coming up here next, one of the country's leading authorities on Iran joins us to assess Tehran's rising challenge to U.S. policy in Iraq.

Also, are some U.S. companies helping finance radical Islamist terrorism?

We'll have that special report.

And the chief of the U.S. Border Patrol says stopping terrorists from entering this country is his priority. How is he going to do that?

We'll have the story.

And we'll introduce you to a local sheriff showing the federal government how to enforce illegal immigration laws.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: The chief of the U.S. Border Patrol today admitted that our porous borders are a gateway for terrorists and threaten our national security. And one federal program seems to be having some success training local law enforcement to enforce immigration laws.

Casey Wian reports on the remarks by the head of the Border Patrol.

Bill Tucker reports on the program helping a sheriff's department deal with illegal immigration.

We begin with Casey Wian -- Casey.

CASEY WIAN, CNN CORRESPONDENT: Lou, while politicians in Washington, D.C., debate the merits of a border fence and illegal alien amnesty, the head of the Border Patrol says they should instead focus on preventing terrorists from crossing our borders.

(BEGIN VIDEOTAPE) WIAN (voice over): Border Patrol chief David Aguilar told a Texas homeland security conference it's critical to stop illegal aliens and drugs but more important to prevent another terrorist attack on U.S. soil.

DAVID AGUILAR, BORDER PATROL CHIEF: It is not just illegal immigration. It is not just narcotics. It is national security. We must not lose sight of the fact that there are those that see our country's borders as gateways, gateways to martyrdom, and a means to achieve their extremist goals of destroying our way of life.

WIAN: He emphasized the point with video of more than a hundred illegal aliens.

AGUILAR: I would ask anybody to tell me where the narcotic trafficker is, where the person looking for a job is in there, or more importantly, where that person trying to hide amongst that group is -- that is trying to come into this country a hurt (ph) to the United States.

WIAN: Aguilar did not take a position on amnesty for the millions of illegal aliens already in the United States, and he downplayed the importance of 700 miles of new border fencing. He says the 12,000-agent Border Patrol is beginning to receive the resources it needs.

One key senator advocates doubling the number of Border Patrol agents.

SEN. JOHN CORNYN (R), TEXAS: We are a nation of immigrants and we are the better for it. But we are also a nation of laws. And we can't look ourselves in the mirror today and lay claim to that heritage as a nation of laws with such rampant disregard for our laws, whether it's our immigration laws at the border or at the work site. And it has devastating consequences.

WIAN: Cornyn says it's time the Border Patrol receive the same sophisticated technology now used by the U.S. military.

(END VIDEOTAPE)

WIAN: The Border Patrol says an 8 percent decline in apprehensions of illegal aliens this year is evidence its strategies are beginning to pay off, because, Lou, it says fewer people are now trying to cross the border illegally.

DOBBS: And yet, to hear Aguilar, who is a fine, decent fellow, say what we've been saying on this broadcast for literally the past four years, as if it is some sort of revelation, Casey, and yet at the same time acknowledge that we're not doing nearly enough to secure these borders, where is the sense in all of this?

WIAN: Well, I think it is an effort by the chief of the Border Patrol to try to refocus the national debate on border security strategy, because people have gotten so bogged down in the issue of illegal alien amnesty, in the issue of 700 miles or 300 miles or 2,000 miles of fences along the border. As he rightly points out, these are only parts of the solutions to this problem. It's multifaceted. He needs a lot more resources and a true national commitment to securing the border, which we haven't seen from Washington -- Lou.

DOBBS: It is a shame that Aguilar thinks that he has to have some sort of politically correct permission from Americans who have, by vast majorities in every poll, said they want that border secure, five years after September 11th, for the very reasons that we've been talking about on this broadcast. Mexico is the number one source of the most dangerous drugs being imported into this country. It is a potential gateway, as he says, to terrorists into this country, which we have been saying since September 11th.

And the fact that illegal immigration, because there's some sort of ideological, hidebound orthodoxy, both the left and the right, that doesn't want to deal with the issue, it's unexcitable.

WIAN: Well, listening to Aguilar's remarks today, it sounded to me as if they were directed toward political leaders in Washington and not to ordinary Americans, who are far too aware of the problems created by our open borders -- Lou.

DOBBS: Well, good for David Aguilar to at least begin to take up the issue. Perhaps he can find some support in Washington, D.C. We'll keep our fingers crossed. We can't do much better than that.

Casey, thank you very much.

Casey Wian.

The sheriff of Mecklenburg County in North Carolina has something to be proud of. He and his deputies have identified almost 2,000 illegal aliens, and among them, about 1,000 convicted criminals, marking them for deportation. That's right, local law enforcement dealing with federal immigration laws.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice over): This man has a criminal history of breaking and entering, felony larceny. He was deported August 14th.

This man, convicted of drug possession and of smuggling and harboring illegal aliens, he was deported August 8th.

This man, multiple drug charges and weapons charges. He's currently in jail and awaiting a deportation hearing.

Since May, the sheriff's office in Mecklenburg County, North Carolina, has identified more than 940 criminal illegal aliens in the county jail and marked them for deportation. Another 1,000 illegal aliens not facing criminal charges have been given notices to appear and released. The sheriff's office is working in cooperation with Immigration and Customs Enforcement, using the authority known as 287- G under the federal immigration code.

SHERIFF JIM PENDERGRAPH, MECKLENBURG COUNTY, NC: Without hesitation, the people in Washington and the people in virtually every state capital in this country have been asleep at the wheel and are so out of touch with reality about what's going on in this country, one day some of them are going to wake up and say, what happened?

TUCKER: The people he's referring to are Congress and the president, who he sees as responsible for letting the illegal alien crisis get out of hand. Sheriff Pendergraph has company.

Training began this week for deputies in Orange County, California, where 24 deputies are being trained. To date, ICE has trained police in Florida, Alabama, North Carolina, Arizona and California in immigration enforcement. Fourteen more departments in six states have requested similar training.

The reason for the increased interest is as plain as the map in Mecklenburg County.

PENDERGRAPH: When you remove a thousand people from a community that have committed a crime, it's going to make a difference in the crime rate.

TUCKER: And remember, that's only since May.

(END VIDEOTAPE)

TUCKER: Now, Sheriff Pendergraph says the problem has grown so big, so huge, that solving it will take the involvement of sheriff and police departments across the country actively supporting, Lou, what he calls the dramatically underfunded Department of Immigration and Customs Enforcement.

DOBBS: And the sheriff puts the lie to every one of those communities and cities, counties in this country, some 50 of them, providing sanctuary laws. First, they're all in violation of the federal 1956 immigration law. They are absolutely irresponsible in terms of their communities, and they're liars, because he is showing precisely what local law enforcement can do lawfully, legally, constitutionally and, in my opinion, responsibly.

TUCKER: And even more remarkably, Lou, he doesn't have an immigration court and he doesn't have a detention center. That hasn't stopped him. He ships his folks down to Atlanta, Georgia, and has them taken care of down there.

DOBBS: And we should point out that this program, 287-G, it's still the most underfunded. And so it's ridiculous what's happening.

There are days I think there ought to be criminal prosecutions of every one of these people who fail to enforce laws. I mean, it really is truly disgusting.

Thank you very much, Bill Tucker. And good for the sheriff. That brings us to the subject of our poll tonight. Do you believe local law enforcement should be trained by Immigration and Customs Enforcement to screen the citizenship status of criminals? Yes or no?

Cast your vote at loudobbs.com.

Pay attention, Houston. You may love the results here later in the broadcast.

Up next, American companies doing business in countries that support terrorism. Some familiar corporate names on the list. We'll have those names and the report.

Selling your home may not bring the big payoff that you have been expecting, and the wait may be even longer than you ever imagined.

We'll have that special report.

And our students aren't making the grade. You've probably heard that before. But a new report shows employers saying recent graduates simply unable to do their work because they didn't do their homework.

That story and more still ahead here.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: American companies doing business in countries that sponsor terrorism. The federal government is now investigating some of those deals, but the deals may not, believe it or not, be against the law.

Lisa Sylvester has our report.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice over): A Ford authorized dealership opened in Syria this year. A Ford Land Rover subsidiary sells vehicles in Sudan through a U.K. distributor. And Mazda Motor Corporation, which Ford has a 33 percent ownership interest in, has set up shop in Iran. The State Department lists all three nations as official state sponsors of terrorism.

CLARK KENT ERVIN, CNN SECURITY ANALYST: Most Americans don't realize that it's legally permissible to engage in trade with countries like this.

SYLVESTER: Under federal law, U.S. companies are not banned from doing business in Syria. Foreign subsidiaries of U.S. corporations can operate in Iran and Sudan as long as the parent companies have no control over the foreign entities. It's not clear if Ford Motor Company's dealings are illegal. The Securities and Exchange Commission is seeking clarification from Ford.

Legal issues aside, ethical questions have been raised.

SARAH STEELMAN, MISSOURI STATE TREASURER: Why would we want to be helping any of those countries through our investments? Because they spread terrorism. They buy the bullets that come back and shoot our soldiers.

SYLVESTER: Missouri's treasurer, Sarah Steelman, announced the state is dropping corporations from its worker pension fund that do any business in terror hubs. The list includes about a dozen American firms.

FRANK GAFFNEY, CENTER FOR SECURITY POLICY: So what we're interested in doing here is raising an alarm with the American people that their money, unbeknownst to them, of course, their money is being used by foreign companies to help make our enemies more dangerous.

SYLVESTER: Finding out which companies are doing business in these terror hotspots is difficult.

ROGER ROBINSON, CONFLICT SECURITIES ADVISORY GROUP: I think regrettably it's pretty clear that publicly-traded companies that all of us own in our portfolios are providing vital life support to the governments of terrorist-sponsoring states.

SYLVESTER: The companies are not forthcoming with these investments and the U.S. government does not disclose the information because it's protected by the Trade Secrets Act.

(END VIDEOTAPE)

SYLVESTER: A Ford spokesperson told CNN the companies operations in these nations are extremely small and lawful. And the company "doesn't believe a reasonable investor would find it material from a quantitative standpoint."

But reminiscent of South Africa and apartheid, there's now growing pressure to convince companies like Ford to pull out of these terrorist states altogether -- Lou.

DOBBS: One would think that the issue of law would not even be relevant in the consideration of these companies. Rather, as you suggest, a matter of ethics, and of course some national loyalty. But perhaps that's too much to think of in these days.

SYLVESTER: And indeed, Lou, in fact, there are some other big names. Halliburton, Conaco-Phillips. They have also been publicly slammed for investing in these countries. They have said that they will continue their ongoing operations there, but they will not take on any new business deals. But to this day, they're still doing business there, and there are a number of other American companies that are doing the same, Lou. Very surprising.

DOBBS: Lisa, thank you very much. Lisa Sylvester from Washington.

Time now to look at some of your thoughts. Gary in Arizona: "If they build a fence on the border, how will my grandchildren get into Mexico for a better life?"

And Ron in Illinois: "My comment concerns holiday spending this year. In my house, the question was decided long ago. You see, I'm a person George Bush truly believes no longer exists: An unemployed American citizen. Hard to believe, but true. As a result, I won't be spending a penny on holiday gifts. In fact, as far as I'm concerned, the holidays have been outsourced, along with my job. Remember, outsourcing is good for America, but not for Americans."

Mike in California: "Loved reading your latest book, 'War on the Middle Class.' One thing I think we need to do is collect $5 from every working American and start our own lobby on K Street and buy the laws we want. The money we could amass should blow the other special interests away."

Or maybe we could do something cheaper and just get rid of the lobbyists. Think about it. Meanwhile, we'll consider your idea, too.

And send us your thoughts at loudobbs.com. More of them coming up here later. Each of you whose e-mail is read here receives a copy of my new book, "War on the Middle Class."

Up next, highly distressing news for middle-class homeowners tonight, the worst of it involving mortgage interest rates. That special report coming up.

And failing grades. Employers issue a report card on graduates from our schools and colleges.

And violent protests on the streets of Mexico reaching into the Mexican Congress. We'll have that story coming up here next.

(COMMERCIAL BREAK)

DOBBS: Not good news for our middle class homeowners tonight. The value of their largest asset, their home, is down. Millions of Americans with adjustable rate loans are also finding their mortgages more and more expensive these days. Christine Romans has the story.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): For sale signs popping up across the nation. They're staying up longer, and home prices are falling. A record price drop for a single family home last month to $221,000, down 3.5 percent. The market for condos, even worse.

DAVID LERFEAH, NATIONAL ASSOCIATION OF REALTORS: I do expect home prices to drop for the remaining months of this year, and for some metros, maybe into next year. But we should start the new year with the housing contraction over for the nation.

ROMANS: But for millions of Americans, there is serious trouble. The value of their biggest asset is falling. They've tapped their home equity dry, and their adjustable rate mortgage payments are rising.

According to mortgage guarantor Freddie Mac, half a trillion dollars in mortgages reset to higher rates this year. More than $1 trillion more next year. It's even worse for millions of Americans who were enticed into exotic loans.

ALEXIS MCGREE, FORECLOSURES.COM: And if your income hasn't gone up, that means those folks are having a hard time making ends meet. A lot of those people are ending up on our foreclosure list when they're unable to go out and get a new loan or sell their house.

ROMANS: Her data show foreclosures up 44 percent so far this year, triple digit increases in New Hampshire, Massachusetts and Alabama.

(END VIDEOTAPE)

ROMANS: For years, the best defense in the war on the middle class was homeownership, but today those mortgage payments are going up much faster than incomes for millions of Americans. It's becoming more difficult to afford your own house, Lou.

DOBBS: More difficult doesn't even cover it, in point of fact, when we look at those numbers that you're putting in front of us with those adjustable rate mortgages for the newest, most recent homeowners. I mean, this is staggering.

ROMANS: It really is. And those exotic loans, Lou, a lot of people are in real trouble with those exotic loans.

DOBBS: Exotic, my foot.

ROMANS: Yes.

DOBBS: They're just for the most part an outright scam.

Thank you very much. Appreciate it.

Many high school and college graduates are sorely lacking in the skills that they need to hold their first jobs. That's the conclusion of a new report compiled by major employer groups. The study is called, quote, "are they really ready to work?" Kitty Pilgrim has the answer.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): The new kids in the office lack basic academic skills and also life skills, such as teamwork and leadership.

LINDA BARRINGTON, THE CORPORATE BOARD: It was more negative than we expected. Even among college graduates, over a quarter of employers said they saw deficiency in written communications with new entrants who had a four-year college degree.

PILGRIM: This was no academic exercise. This survey was conducted by real-life employers about real-life employees in the workforce today. Four hundred employers found many of their first- time workers lacked 20 of the essential skills to job success.

Basic education levels scored poorly. Seventy-two percent of employers said high school graduates were deficient in writing in English. Fifty-three percent of employers said high school graduates were deficient in mathematics.

College graduates didn't do much better. The e-mail generation can't write, spell or communicate.

Half of employers found two-year college graduates lacking basic skills -- grammar, spelling, written communication.

In terms of competitiveness, it's a disaster.

DONNA KLEIN, CORPORATE VOICES: If we want to maintain our economic superiority in terms of the private sector, we're dependent on a very well-skilled entry level workforce. And this study really indicates that we're really not where we need to be for the future.

PILGRIM: Even essential job skills, old-fashioned get up and go needed improvement -- leadership, professionalism, social responsibility, teamwork, oral communication and problem solving.

(END VIDEOTAPE)

PILGRIM: Knowledge in foreign languages will increase in importance in the next five years, more than any other basic skill, that's according to 60 percent of the companies. And three quarters of the CEOs reported having difficulty finding qualified workers. They say it's a very big problem and very important to global competitiveness -- Lou.

DOBBS: You know, I'm torn on that kind of a report. Who are these corporations that are having so much trouble?

PILGRIM: There's 400 corporations, they are mid-range corporations...

DOBBS: Big old corporations?

PILGRIM: They are mid-range corporations, and they couldn't find the right skills.

DOBBS: They couldn't find those skills. You know, I always suspect, by the way, when I hear people talking as those people you interviewed, frankly I found them not so communicative myself and I think they could use a little rehabilitation.

But secondly, what happened in the last six years? Suddenly Americans are so stupid? I don't believe that for a minute. I know we've got huge problems in education, but what in the heck is wrong with these companies? And I really suspect their motives for these kinds of studies -- it sounds like they're trying to lay the foundation for more H2B visas. They're trying to lay a foundation for an agenda altogether separate -- let's go back to those 400 companies and find out how much they're investing in their local communities, in public education and trying to do something about the very problems they're talking about. Can we do that?

PILGRIM: Absolutely.

DOBBS: Let's carry on this story just a little further.

Thank you, Kitty.

Coming up next, the president of the American Iranian Council joins me. We'll be talking about Iran's role in the stabilizing of Iraq or the sponsorship of terror or both.

And it could be an infringement of free speech. It could be ridding the nation of a horrible pollution of language.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Iran's Supreme Leader Ayatollah Khomeini today met with the Iraqi president in Tehran. Khomenei, blaming the United States' presence in Iraq for the unrest in that country. He said Iran is standing by to help restore order in Iraq.

Joining me now is Hooshang Amirahmadi. He is the Director of Rutgers Center for Middle Eastern Studies and the founder and president of the American Iranian Council.

Good to have you with us, professor.

HOOSHANG AMIRAHMADI, RUTGERS UNIVERSITY: Thank you.

DOBBS: The idea that the Iraqis are meeting with the Iranians to discuss stability in their country at a time when it is -- that nation is either in civil war or very near it, what are the prospects as a result of those discussions?

AMIRAHMADI: Very little. I think that stability in Iraq, in the last analysis, is in the hands of the United States of America. I think if we leave that place, that place will descend into chaos, a chaos that they haven't yet seen.

DOBBS: Yet Khomeini says, with his great munificent visage and tone, that the Americans...

AMIRAHMADI: He's speaking -- he's speaking for the Arab states. He's not speaking his heart. The honest view is that Iran does not want the United States to leave Iraq.

DOBBS: Let's be blunt. What does Iran want?

AMIRAHMADI: Iran wants U.S. stay in Iraq and bleed...

DOBBS: And bleed? AMIRAHMADI: ... and bleed, so that it can get concessions, and it can actually make sure that it will not be the next target. Iran has serious problems with the United States, you know, over the enrichment of uranium, over the terrorism issue, the Arab-Israeli peace, the human rights and so on. So the best outcome for Iran would be for the U.S. to stay and bleed, as opposed to leave, because the moment the U.S. leaves Iraq, Iraq is going to descend into tremendous chaos, into civil war and disintegration. And that will not serve Iran's interests, not at all.

DOBBS: Well, when you say disintegration, that that would not serve Iran's interests, you pique the attention of anyone involved in this. And that is to say, then what is wrong with disintegration? Why not a tri-partite division of that country into the Kurds, the Sunnis, the Shia and everyone deal with it?

AMIRAHMADI: It would not stop there. Yes, it would not stop there.

I mean, the fact that, on the Iranian side and on the Turkish side, you have Kurds.

DOBBS: Right.

AMIRAHMADI: The Kurds, when they get their own independent state, it will be the beginning of their movement to get the Kurds in Iran, the Kurds in Turkey to join.

On the Shia side, the Shias have also -- they can flow into the Iranian side...

DOBBS: So further destabilization?

AMIRAHMADI: Absolutely. They will spill over into the larger region.

DOBBS: All right. So what is the outcome? We've got people talking, and presumably the Baker-Hamilton commission, the Iraq Study Group, talking about moving forward with Syria and Iran, both state sponsors of terrorism and enemies of the United States.

AMIRAHMADI: Yes. Well, let's say that both -- Iran and Syria have different objectives...

DOBBS: Right.

AMIRAHMADI: ... in Iraq. And they pursue different aims, I'd have to say. For Syria also wants -- Syria also wants the U.S. to stay in Iraq and bleed. What they wanted to get out of this is a start on that process that is putting together the international tribunal against them for the Hariri case, and the Golan Heights.

DOBBS: Professor, let me ask you this: if that is what they want us to do, why shouldn't we do the opposite?

AMIRAHMADI: Well, the unfortunate fact at the moment is that we have cornered ourselves in that part of the world. But I think we should speak tough. I think I do -- I have spent twenty years of my life...

DOBBS: Aren't you just about sick and tired of bloviating braggadocio on the part of U.S. leaders and, at the same time, not accomplishing anything?

AMIRAHMADI: Well, the problem is -- what I mean by talking tough, I don't mean really just talking tough, I mean taking actions toughly.

I tell you what will work. Let's say the U.S. and Iran -- U.S. and Iran have serious problems. One of the problems just recently come out would be the Iraq issue. But there are other problems that have been there for 20 some years.

DOBBS: We've got just less than a minute.

AMIRAHMADI: Yes.

What I think the U.S. should do, it should give a country like Iran a big deal on the positive side, and also a huge deal on the negative side and let Iran decide, basically say, here is the huge carrot, and then here is, under the table, a huge stick. You have to take -- we cannot...

(CROSSTALK)

DOBBS: ... OK, I understand. Carrots and sticks. I got that.

AMIRAHMADI: But big ones, huge. You haven't gotten it yet.

DOBBS: We've got $469 billion appropriated for the war in Iraq. We are bleeding, as you know.

AMIRAHMADI: Yes.

DOBBS: And the truth is, bleeding for what? In the convenience or the interest of Iran? I'm not interested in that, and I don't think most Americans are.

AMIRAHMADI: I think, I mean, the U.S. has long-term interests in that part of the world. This is...

DOBBS: If we get rid of the oil, how long-term?

AMIRAHMADI: It's not just only the oil.

DOBBS: If we get rid of the oil, how long-term are our interests? About five minutes?

AMIRAHMADI: No, I think we have tremendous problems in the region that we have to deal with.

DOBBS: No, the region does have tremendous problems. I just don't know whether they're ours if we pull oil out of the equation. AMIRAHMADI: I think we have Israel there. We have other allies in the region.

DOBBS: Professor Amirahmadi, I have to break here.

We're out of time.

Great to have you.

AMIRAHMADI: All right. Thank you for having me.

DOBBS: Coming up next, the "SITUATION ROOM" with Wolf Blitzer -- Wolf.

WOLF BLITZER, CNN ANCHOR: Lou, coming up at the top of the hour, the former president of the United States Jimmy Carter right here in the situation room, and he's mincing no words, saying President Bush has made one of the greatest presidential blunders of all time.

Also, Muqtada al-Sadr, the man many credit with keeping the Iraqi government in power, has a dangerous new ally. That would be Hezbollah, a group the U.S. labels a terrorist organization.

And a split in the once vaunted Christian Coalition. The new president quits. The reason may surprise you.

All that, Lou, coming up right here in the "SITUATION ROOM".

DOBBS: Wolf, thank you very much.

Today, a fight broke out in Mexico's Congress. Supporters of Felipe Calderon, who is due to be sworn in as president of Mexico this Friday, took on supporters of leftist Andres Manuel Lopez Obrador, who was defeated in the election. The incident started when conservative legislators reacted to rumors that leftist lawmakers were planning to take over Congress.

Still ahead, I'll be talking with Reverend Jesse Jackson about his call to expunge to n-word from our vocabulary.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: New repercussions tonight over a racist rant by comedian Michael Richards, perhaps best known for playing Kramer on the TV show "Seinfeld".

Civil rights activists, joining ranks to purge the n-word from culture and society. And among these leading the charge, Reverend Jesse Jackson, who invited Richards on his own radio talk show.

I talked with Jackson earlier, asked him whether he believed Richards is really sincere in his apology.

(BEGIN VIDEOTAPE) REV. JESSE JACKSON, PRES., RAINBOWPUSH COALITION: Time will tell if he is genuinely sorry. This rage was quite deep and quite violent. The profanity, the excessive use of the n-word, the lynching from the tree. And so, I really think acknowledgment and contrition to getting the glass out of the wound, and then he'll have to earn and regain trust. So we will know in time whether he is, in fact, genuinely sorry.

DOBBS: You, Maxine Waters, the Congresswoman, a number of others have said, speaking to entertainers, public figures, just take the n- word out of your vocabulary. Do you think that that will happen?

JACKSON: We certainly hope that radio and TV and HBO and BET will stop -- will stop playing it, artists will stop doing it because there is freedom of speech and then there is unprotected speech, there is speech that's slanderous and violent and injurious. And this word conjures up great pain because of its roots.

And where it plays out in the real world, Lou, is that when some white kid calls a black kid that name in school and there is a fight. And one is kicked out of school and the other stays, I heard, on the record. So kind of we're parsing the atmosphere with a term that has no good use. You cannot sanitize this term.

DOBBS: No, you can't sanitize it. You can't sanitize entertainment and creativity, artistic creativity. The idea that -- in this country we have a man who's used this word. He's insulted, frankly, himself more than anyone else, no matter what he was trying to do, I think you would agree with that.

JACKSON: Yes. You see, but what's worse than that is that while this guy melted down, because he had failure (ph) in the first place -- look at nighttime TV, not one black comedian. We had Arsenio Hall on fifteen years ago, when Bill Clinton played his saxophone -- of course, Arsenio had an audience.

Here, the other day, we had "The Cosby Show", the number one show. Now there is zero. We had Max Robinson on "ABC World News" 20 years ago. Now there is zero. So this kind of cultural lockup, you put all the focus on the comedian and ignore the impact of Trent Lott, who's legacy is worse than Michael Richards, who has real power.

DOBBS: Well, let's not leave out Oprah and Montel Williams, two pretty good talents there.

JACKSON: But then it's all day, all night, all white. And that does not represent the American marketplace, nor it's talent. We should, in fact, be more sensitive, more caring and more inclusive of all of us. A one big tent America is the America of our dreams.

DOBBS: There's a boycott of "Seinfeld", is that correct?

DOBBS: Yes. There are those who said that that show was virtually all white, and so we don't want to buy Kramer for Christmas. It's a way of finding some way to fight back and say to other people, there's no market for exclusion and there's no market for hate. We, in fact, want to be a better nation. I hope that Seinfeld will see the implications of this and other shows, as well. We want to have shows that look like the American audience.

DOBBS: And what do you say to people then who would say, then there should be an absolute boycott of rap and other similar forms of entertainment?

JACKSON: People can make their own choices. It's our own way -- this broad cross-sectional organization -- of saying we want to draw the line. And please accept this as voluntary, as a moral appeal, but we cannot sanction this kind of behavior. And we know that this rage, this rant of violent language and the hate and the lynching scene, we must roundly, as Americans, reject that.

It should touch all of us deeply enough, so black and white and brown and Latino (ph) should find some common ground in saying no to this kind of degenerate and painful use of language.

DOBBS: Does in some ways, Jesse, the idea of taking this to a boycott end making a determined effort to stop this word, does it in some ways, however, though, take Michael Richards off the hook for his extraordinary, disgusting behavior? When this is really one man revealing a soul that is -- I mean, he's -- this man is obviously in severe trouble.

JACKSON: Well, he stands to make money off of the "Seinfeld" seven, the season, and so it's way of saying we don't want to pay Kramer for Christmas, given this conduct and this behavior.

But I think people are going to react in many different ways, Lou, around the country. But I think that there's a groundswell of saying, let's be more inclusive, let's be more representative, and let's stop the use of the n-word, and that which would be injurious and violent. And let's, in fact, become better citizens and better people.

DOBBS: Reverend Jesse Jackson.

Thanks for being here.

(END VIDEOTAPE)

DOBBS: Better citizens, better people, those are words to live with and for.

Still ahead, the results of tonight's poll. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Ninety-three percent of you say local law enforcement should be trained by Immigration and Customs Enforcement to screen citizenship status.

Paying attention sanctuary cities and counties across the country? Time now for one last e-mail. Thomas in Maryland said, "Lou, a lawsuit should be filed to force the American civil Liberties Union to remove the word "American" from their name, as they longer represent Americans when they support illegal aliens' rights."

Thanks for watching.

Good night from New York.

The "SITUATION ROOM" begins now with Wolf Blitzer -- Wolf.

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