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Lou Dobbs Tonight

Special Edition: War on the Middle Class

Aired December 07, 2006 - 19:00   ET

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

ANNOUNCER: This is a special edition of LOU DOBBS TONIGHT, "War on the Middle Class" for Thursday, December 7th. Here now, from Buffalo, New York, Lou Dobbs.
(APPLAUSE)

LOU DOBBS, CNN HOST: Thank you, everybody. Thank you. Great to be with you. Thank you so much. Very kind, thank you. Thank you very much. Thank you.

Well, I'm going to start by saying thank you and welcome to the broadcast and what a wonderful welcome to Buffalo, New York. We appreciate it. We're looking forward to this town hall meeting because one of the things that's happening in this country is not enough people are listening to enough people and this is our way of trying to accomplish that as we continue our coverage of what has become nothing less than an outright war on our middle class.

We're here in Buffalo tonight to introduce you at home to some of the people who make up this country's middle class. It's the most underrepresented group of people in this entire country in Washington, D.C. The middle class of this country, I believe, is the foundation of the nation. It is certainly that group of people that makes this great nation work.

And over the next hour, you are going to be meeting working men and women, you're going to be meeting students and community leaders who live in a part of the United States that is simply besieged by forces against which middle class families all across this country are struggling to overcome.

Buffalo's economy, as everyone in this room knows, has been devastated by the loss of manufacturing companies and the elimination of thousands and thousands of what once were good paying manufacturing jobs.

We begin tonight with a look at what is nothing less than a national crisis, the huge and widening disparity between the very rich and the poor in this country, and the too often unreported reality that more and more people in this country are simply falling from the middle class and fewer and fewer people who aspire to the middle class are able to achieve the American dream.

Christine Romans reports.

(BEGIN VIDEOTAPE) CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Census figures show the richest 20 percent of Americans earn more than half the income. The middle of the income scale earned less than 15 percent, a record low. The bottom 20 percent of workers have a record low share as well, barely topping three percent. It's best to be at the very top, where the top 10 percent controls more than two-thirds of the country's wealth.

Labor Department consumption data show living standards rising for the wealthiest, stagnant or falling for everyone else. Meanwhile, the gender gap has narrowed, not because women's pay is rising, but because men's earnings are falling.

(END VIDEOTAPE)

DOBBS: Here now the mayor of Buffalo. Good to have you with us, Mr. Mayor.

MAYOR BYRON BROWN, BUFFALO, NEW YORK: Good to be with you.

DOBBS: Appreciate it.

I am always delighted to sit down with a successful fellow who eked out a victory -- you only got, what, 64 percent of the vote last year?

BROWN: Something like that.

DOBBS: Well, it's good of you to be here and we really appreciate the opportunity to talk to you and to all of the citizens who have joined us here in this wonderful building and talk about the issues that are confronting this community and communities just like it all across the country.

Give us your sense of what is the most important issues facing Buffalo, in your judgment.

BROWN: In my administration, we have focused on three major issues. The first has been economic development, trying to create a climate here where businesses can grow and create good paying jobs for our residents, improving the quality of life and by that we work with our school district to improve educational outcomes in our city -- our school superintendent is here -- and also trying to reduce crime in the city of Buffalo, and finally making city government more efficient, more accountable to the taxpayer.

DOBBS: It is -- all of those are terrific, tough challenges. Your response, I know is as full and strong-hearted as it can possibly be, but these challenges are, for many middle class Americans, in particular in this country, simply overwhelming, as you know. And I know that is happening in a part of your community as well.

The issue of education, Buffalo's school system, like every other school system seemingly in the country is overwhelmed, not delivering its great promise. Public education in this country has always been -- I hope that we can all agree -- the great equalizer in this society.

The idea that half of black students in this country, half of Hispanic students in this country, are dropping out of high school, a third of white students are dropping out, how do we get the real answers on that?

It's one of the questions we're going to be asking here, tonight, Mr. Mayor and throughout this hour. We're going to hear from members of all of you in the audience and we're going to ask you to give us your views, and your questions.

And we're going to turn right now, if I may, Mr. Mayor, to some people and let's get about the business of listening to some folks who don't often get either representation or heard.

Yes, sir.

QUESTION: My name is Charles Gangarossa. I'm the president, chairman of the UAW Local 897.

DOBBS: A union member?

QUESTION: Yes. And a proud one, too.

DOBBS: All right. You know, the reason I say it that way, union membership in this country has dropped to just about 8.5 percent of the private workforce, so it is good to have you with us.

QUESTION: Yes, and I am also a member of UAW Region 9 under the direction of Joe Ashton.

In the last four years I have lost in my plant over 1,200 jobs. Furthermore, we have lost thousands of other jobs in the auto industry. My question to you today is this: What is it going to take for corporations to understand the damage that they are causing to the United States economy and to the middle class?

And also, what is it going to take for corporations to stop sending jobs overseas or out of this country, which is really hurting the middle class and the city of Buffalo as a whole? We have lost a lot of other manufacturing jobs as well so this has to stop.

DOBBS: Charles, thank you very much.

Mr. Mayor, if I can turn to you, let's both take a shot at that. You are working on economic development, trying to replace all those manufacturing jobs. Few cities have lost as many manufacturing jobs as Buffalo, in point of fact. What are you doing? How do you answer the man?

BROWN: Well, I think from my perspective as mayor, one of the things that we've tried to do is open up dialogue between working men and women, unions and companies so that they can find some common ground.

At the end of the day, companies want to produce products in a way that is economically realistic to them, that is affordable to the consumer. But if there is not a dialogue between working men and women and their unions and companies, then we have a situation where at times we lose jobs. So we have tried to foster that dialogue.

DOBBS: I'll add my answer, if I may, Charles. The idea that corporate America can continue the business practice of outsourcing jobs, good paying American jobs, overseas to cheap labor markets, many times offsetting a job that pays $15 to $20 an hour in this country, perhaps more, and replaces it with a job overseas paying about $0.42 an hour, let's say, for example, I don't know what it's going to take for corporate America to find a conscience but that is the first thing that is required.

The second thing is for enlightened public policy. That means principally in Washington, D.C. Mayors of communities all across this country, trying to bring those jobs, but the truth is most of the jobs in this country are created by small business, not big business. And we've got to do far more to stimulate and to support our small businesses.

But we've got to do far more to insist that our corporate leaders act as leaders of American corporations, not as distant U.S. multinationals who are willing to look upon everyone in this room first as a consumer, a taxpayer or an employee and this great nation first as a marketplace rather than the great nation that it is.

If we can change those attitudes we can get a lot done and I hope we're on the way to doing so. Thank you.

We're going to hear a lot more from the audience throughout this broadcast tonight.

Up next, professor Lawrence Southwick will join us. He is an economist at the University of Buffalo. The mayor will be here as well and thank you for staying with us as we continue to look at the challenges and some of the solutions to this war on our middle class as we continue from here in Buffalo, New York.

(APPLAUSE)

(COMMERCIAL BREAK)

DOBBS: Welcome back to our town hall meeting here in Buffalo, New York.

We're talking about the impact of the war on our middle class, the economy in the Buffalo region, the collapse of manufacturing employment over a course of a number of years.

And one of the reasons for those job losses, of course, is corporate America's insistence upon exporting American jobs to cheap foreign labor markets, forcing America's middle class, in effect, into direct competition with the world's cheapest labor.

Bill Tucker reports.

(BEGIN VIDEO CLIP)

BILL TUCKER, CNN CORRESPONDENT: Buffalo, New York lost 1,800 jobs in the private sector in the past year. Leading those losses, manufacturing jobs. Since 1990, the number of jobs in manufacturing have been cut by one third. While that pain is particularly sharp for Buffalo, it is not Buffalo's alone.

Nationally, we lost 3.6 million manufacturing jobs since 1990, a drop of more than 20 percent. U.S. manufacturing simply can't compete with the flood of cheaper imports, so job opportunities that could have been created for American workers have gone to other countries.

(END VIDEO CLIP)

DOBBS: So, what can American cities -- what can Americans do when the manufacturing jobs are eliminated, many of them shipped to those cheap overseas labor markets?

We're back now with Buffalo's mayor.

Good to have you again, Mr. Mayor.

And joining us, economics professor Lawrence Southwick, professor emeritus at the University at Buffalo, part of the New York State University system.

Good to have you with us, professor.

LAWRENCE SOUTHWICK, SUNY BUFFALO: Thank you.

DOBBS: Let me ask you first, Mr. Mayor. As you look at what's happening here in Buffalo, can you replace those jobs with good paying jobs that have an equal purchasing power for employers?

BROWN: We have to find a way to replace those jobs. And one of the ways that we can do that is to focus more attention and more resources to small business.

In the city of Buffalo we have consolidated a number of departments that have -- that work with small business. And we have created a new Department of Economic Development, Permits and Inspection Services, kind of a one stop to provide loans, technical assistance grants.

DOBBS: Is it working?

BROWN: I believe it's beginning to work. We see more and more small business growing in our city.

DOBBS: Professor, your assessment?

SOUTHWICK: Well, on that, that's absolutely correct that one of the major problems for new firms, for small firms is the myriad of regulations that are put on by governments. And these do need to be resolved and simplified. In fact, that's one of the most important things that industrial development agencies can do. DOBBS: All right.

Some questions from our audience?

Yes, sir.

QUESTION: Hi, my name is Brian McIntyre (ph). I'm a Buffalo firefighter and substitute teacher here in the city of Buffalo.

It seems as though corporate America, the private sector is more interested in privatizing, outsourcing, which is breaking the back of the unions. And the unions are the backbones of the middle class society.

So although we may have a growth of small businesses, if we don't have citizens that are able to go into the stores and work and have a decent wage, and then coupled with that, we're having a national dumbing down of our children where we can't compete globally or locally.

So in this great democracy, what are we to do?

DOBBS: Professor?

SOUTHWICK: Well, number one, of course, is education is the area in which we have the greatest advantage over other countries. Human capital, we call it, as economists, that...

DOBBS: I hate that expression.

SOUTHWICK: I'm sorry?

DOBBS: I hate that expression.

SOUTHWICK: Well, I kind of like to think that I have some of it, so that -- but of course, I kept going to school forever.

This is a -- where our people are capable of producing more per person than they were in the prior year, this will allow for wage increases because people will be worth more.

DOBBS: Professor, as you know, productivity has never been higher in this country and yet wages have only -- real wages have only gone up one year out of the last six, while productivity has been skyrocketing in this country. And working men and women have never, never had a lower percentage of the national income than now as compared to corporate share of that income.

SOUTHWICK: Well, we are investing more in physical capital as well. But I would point out that a very few years, most recent years, don't make a long term trend. You really have to go back 30, 40 years. And, in fact, real wages -- I should say real household income has been rising, although it's been cyclical, it's been up and down, In the last couple of years it's up. But prior to that was down.

DOBBS: Let's turn to the audience for some questions. Yes, sir?

QUESTION: Hi, my name is Brendan Biddlecomb (ph) and I represent Buffalo First. Our members are just worried that, you know, when we promote development without considering how this might impact small mom and pop businesses that we can be hurting ourselves in the long run.

And I just want to think -- I wanted to ask what you think we can do to strengthen local businesses on a policy level for the long term.

DOBBS: Mr. Mayor?

BROWN: There absolutely has to be a small business agenda. In Buffalo we are developing a small business agenda, working with small businesses, creating economic development plans, and development plans for commercial areas of our city where small businesses are located.

DOBBS: Professor?

SOUTHWICK: Well, that's correct. Actually, the small businesses are the ones that have the potential to generate the most jobs. If we attract a number of businesses and they are small, first off, we will succeed with some, fail with some, but over time, we will end up with a more diversified economy which will be much more secure.

DOBBS: All right. Let's continue.

Yes, ma'am?

QUESTION: My name is Jennifer Seeger (ph). I'm a student graduating this year from Elmira College.

I'm wondering what do you think government and corporate officials are doing to encourage students to stay in this area and areas like upstate New York after they graduate. And what do you think is being done to encourage jobs to be brought here and stay here?

DOBBS: Now let me get to the backdrop of that. We've seen the Pell Grants actually be reduced in their funding. We don't have a national program, as we once did, to drive students into mathematics and natural sciences.

Professor, what are we doing?

SOUTHWICK: Well, that's the area of the greatest and -- particularly in salaries. That's where students would be well-advised to go.

We might point out, of course, that western New York, since she wants to live here, is one of the most affordable places to live.

DOBBS: We're going to continue that. It's affordable, but a middle class has got to make enough money to afford it, right? BROWN: Right now, Buffalo has about $3.6 billion of economic development projects that have been proposed. We have to work hard to make sure that those projects become reality. If they do, that would provide more jobs for students like the young lady that just spoke.

DOBBS: Working students -- and we're going to get back to that answer -- I don't know if you're satisfied with the answer. Let's see if we can follow that up.

Coming up, we're going to be hearing from more members of our audience here in Buffalo and our panel about the war on the middle class, how it's affected the lives of people here in Buffalo as our town hall meeting continues from this beautiful city.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Welcome back to Buffalo, New York, our town hall meeting.

Public education, as I've said, in my opinion, is the great equalizer in this great society of ours. Unfortunately, that great equalizer isn't working for a huge number of Americans. It's certainly part of the assault on this country's middle class as they try to achieve the American dream.

The quality of education is now out of reach for many.

And joining me now is Tom Loveless. He's the director of the Brown Center on Education Policy.

Also joining us tonight is Buffalo Superintendent of Schools James Williams.

And we thank you, sir, for being here as well.

Tom, thank you very much.

TOM LOVELESS, DIRECTOR, BROWN CENTER ON EDUCATION POLICY: Thank you.

DOBBS: Let's hear first from some of our audience.

Who has a question?

Yes, ma'am?

QUESTION: Hi, my name is Amy Kedrin (ph). I'm a graduate student at the University of Buffalo. I also work in the nonprofit sector here.

And as we talked about earlier tonight, we know that our corporations are failing us and that our small businesses are sustaining us. I want to stay in this area and yet, still, our cities, like Buffalo, and across the country are subsidizing our corporations more than our small businesses, the small businesses that keep more money in our area.

So what can we do to redirect those subsidies to those small businesses, create more jobs and keep people like me in areas like Buffalo, New York?

DOBBS: Well, you know, I can turn that over to you, Tom. Let me take a first quick stab and that, is when you talk about subsidizing, the mayor has talked about the efforts here. Professor Southwick talked about the efforts here. Subsidizing businesses to remain here, I know is a challenge for the young people who come from western New York, from the Buffalo region.

The answers are not easy, but they start with a decision on the part of my judgment of local, state and then federal governments to invest in our young people. In education, first and foremost.

The idea that there is any shortcut here I think is mistaken. The fact -- the idea that too many people express that we have a long- term -- the No Child Left Behind Act, for example. It's a 10 year program. In my judgment, and we'll turn it over to Tom, we don't have time for a 10 year program which effectively measures the problem but doesn't solve it.

And we need to move to real solutions. And that's happening. I have to say, we're so proud, I'm proud that so many of you are spending the time with us here in Buffalo for this town hall meeting so that we can hear from you. And folks like us all around the country are hearing you.

I wish I had a good straightforward answer on that one. It's a tough one, particularly in Buffalo.

LOVELESS: It is and I study schools. I don't study small businesses, but you are quite right. And I think schools are part of that equation. The public school system is very much a middle class institution. They fail when the middle class leaves and they succeed when the middle class sticks with them and does well.

So, I don't think there's going to be any easy answer, but as long as schools can be attractive to the middle class, the community can stay vibrant.

DOBBS: And do we have another question?

Yes, sir?

QUESTION: Hi, I'm Ed Martinez (ph) and I'm the president of the Hispanic Alliance of Western New York.

My question about education is I think it's failing our children. But in particular, in urban America, we're talking about school districts that too often our students are being labeled learning disabled. In Buffalo, close to 20 percent of our students are deficient in some area of their education. Those -- the dropout rate is still too high. Those that are going on to college aren't prepared for the economy that's changed. We've moved from an industrial area to a service sector. We're not prepared. And so if we're going to sustain Middle America, how do we fix our school system to prepare our children for the changing economy?

DOBBS: Before I answer you -- answer that -- Tom, let's turn to James Williams, the superintendent of the Buffalo schools.

Mr. Williams, your answer?

JAMES WILLIAMS, SUPERINTENDENT OF BUFFALO SCHOOLS: Well, one problem in this country, education is structurally flawed. Until we change the structure of public education, we're not going to make progress.

The school system is operating the same way today as they operated when I finished school in 1962. We start school at 8:00, we get out at 3:00. We have first period, second period, third period, etc. We didn't change the structure. We need a longer school day, longer school year.

Now, I've been in Buffalo 18 months. And this is a great community. We talked about small businesses. We're getting ready to start, in conjunction with the mayor, (INAUDIBLE) high school to start training our students on how to start a business, because we believe that small businesses are the way to go.

But also, we have a billion dollar construction project here where we are renovating every school in this city. That's not happening any place else in the country.

DOBBS: Where you getting all that money?

WILLIAMS: I borrowed it from the mayor.

DOBBS: And we know where you got it, Mr. Mayor.

WILLIAMS: The state -- this is something that the legislature in this state really put together prior to me coming here.

DOBBS: Let me -- Mr. Martinez (ph), we're going to get back to you in just a minute. We're going be back with the mayor, Superintendent Williams and Tom, we'll get back to you, I'm going to get your answer on the same thing.

But I've got to tell you it delights me every time I hear that a community is investing in its youth and its education because there is no important investment, in my opinion.

Gentlemen, thank you. We'll be back here in just a moment as we continue this conversation about our nation's educational crisis.

Forty-seven million Americans have no health insurance. We'll hear from a man who runs the country's largest nonprofit healthcare organization about the challenges we all face. He has some solutions.

All of that and a great deal more as we continue from Buffalo, New York.

(COMMERCIAL BREAK)

ANNOUNCER: This is a special edition of LOU DOBBS TONIGHT, "War on the Middle Class." Here again from Buffalo, New York, Lou Dobbs.

DOBBS: Welcome back to our town hall meeting here in Asbury Hall in downtown Buffalo.

Right now we turn to our audience once again to explore their questions, to hear about their concerns.

Yes, ma'am?

QUESTION: My name is Sharon Ball (ph). I'm a local preacher at St. Lougani Zion Church (ph) and I am also a government worker. But my question is, how can the middle class really get back to where it needs to be as long as education is tied -- public education is tied to local economies?

I don't understand how poor people or middle class people can really get the benefits that wealthy people have that send their children to private schools or Ivy League schools and they come out of those schools with the top jobs in this country.

DOBBS: That's a fundamental question.

Tom, I said we'd get back to you. Your turn.

LOVELESS: OK.

DOBBS: In the future, if you want to enter the middle class, you need to study, for instance, algebra and geometry. You need to know it and that wasn't true 30 or 40 years ago, and the fact is that American kids, about half of them, don't know algebra and geometry when they finish high school.

So the one thing we have to do is establish some very high standards, make sure that every kid in the country and every school in the country attain those standards.

DOBBS: How are we doing compared to other countries in mathematics and sciences?

LOVELESS: We are mediocre, and let me just show you in terms of the gap between the United States and the highest achieving countries. Singapore on all the tests scores at the very top. The average Singapore student who is in ninth grade is two years ahead of the average American student in terms of math and science.

DOBBS: So you're saying Singaporeans are just a heck of a lot smarter than us dumb Americans.

LOVELESS: No, they're not smarter at all but what they do is they go to school, like the superintendent said earlier. They go to school a lot more. They spend more -- they have a longer school day...

DOBBS: How long are they in school?

LOVELESS: They have a longer school day by an hour-and-a-half or so. They have a longer school week. They have a longer school year. They do more homework. When you add all that up together, they just spend a lot more time on academic subjects.

DOBBS: Superintendent Williams?

WILLIAMS: I totally agree. Our curriculum in this country is usually that thick. If you go look at outside of this country it's that thick. And they teach until you learn the skills. We cannot meet the same standards in 2006 based on a 1960s structure and that is the major problem, in my opinion, that we have in public education in this country.

DOBBS: Here in Buffalo, about 20 percent of the kids in the public schools are identified as having some sort of learning disability. Twenty percent, higher than the state average. Is that a -- is there something unique here or is that simply a school system that has failed a whole bunch of kids?

WILLIAMS: It's generally a problem. What we've done in this country is we've separated special ed from general ed and if you look at those 20 percent, 4,000 of them are learning disabled. You can educate learning disabled. And we confuse discipline problems with special ed and we are bringing in a consultant the next couple of days to look at our total system of special education.

DOBBS: Right.

We want to continue this conversation. We're going to be right back in one moment. You have a question and we're going to be right back to you if you can be patient with us.

Coming up, we'll also be talking about this country's healthcare crisis. It's devastating middle class Americans. We're going to have some solutions here tonight. We'll be joined by a distinguished medical professional, more than 30 years service in practice in government, academia, who knows what he's talking about and he knows how to fix much of what ails us.

We'll be right back with all of these good folks from Buffalo, New York.

(COMMERCIAL BREAK)

DOBBS: We have another question on education.

Yes, sir.

QUESTION: Yes. Actually, what I'm going to ask, given what you've heard tonight is going to seem crazy, but in the coming weeks, they are going to announce in Buffalo that a number of schools are closing with excellent test scores because of the enrollment. They're private Catholic schools. What can we do to...

DOBBS: Why are they closing?

QUESTION: Because enrollment is low and too few people can afford that education. What can we do in the community to get past this special interest so that the money follows the kids to the education choice that's best for them?

DOBBS: Superintendent Williams?

WILLIAMS: Did he say Catholic schools?

DOBBS: He did.

WILLIAMS: Oh, well, we're developing better public schools, so I like the competition. When I came here we had 15 charter schools -- and I believe in competing. And to compete, you have to have rigorous curriculum. You have to hold people accountable and you have to have quality teachers, and we're working on those things.

But we are competing to -- this year, we have got 1,200 additional ...

DOBBS: I'm not hearing a lot of sympathy from the superintendent about those Catholic schools.

It's one -- you know, I happen to be a great fan -- the great thing about America is choice, but I happen to be a fan of public education. It changed my life. I come from a working class family. I would never -- I can tell you six public school teachers turned my entire life in a different direction. That's something I think we ought to have for every kid.

For those who can benefit from a parochial education, private schools, God bless, but let's invest in our public schools, because that is our future.

One of the most devastating parts of this war on the middle class is we have the world's greatest healthcare system, but our middle class is being priced out of it. Many middle class Americans simply can't find healthcare insurance. They are either being priced out of healthcare insurance or it's not available as more corporations drop that healthcare for their employees.

Lisa Sylvester has the report.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Many middle class Americans are playing a game of health roulette. Go without insurance and pray that they don't get sick. The number of uninsured Americans has reached an all-time high. Nearly 47 million cannot afford health insurance. That's six million more than just five years ago.

More troubling is that an increasing number of them are children. One in nine children is uninsured. Healthcare costs have been soaring at the same time employers have been picking up less of the tab. Government analysts project that within the next decade, Americans will spend one of every five dollars on healthcare.

(END VIDEOTAPE)

DOBBS: Here now with us is Dr. Henry Simmons. He is president of the National Coalition of Healthcare. This group is the largest nonprofit in the entire country dedicated to providing healthcare for all Americans. Dr. Simmons, good to have you with us.

HENRY SIMMONS, PRESIDENT, NATIONAL COALITION OF HEALTHCARE: Thank you.

DOBBS: I want to start right now and turn to this audience and get their questions as we deal with what you know is a tough and challenging issue.

Yes, ma'am.

QUESTION: Hi. My name is Rita Sal (ph). I am an early intervention service coordinator and I am a mom of three boys, two are with me. This is Christopher and this is Scotty.

DOBBS: Hey, Christopher, hey Scotty.

QUESTION: My question is we have health insurance, we have through my husband's job -- actually, my husband works two full-time jobs to help provide for our family, and I work fee for service. And he also receives Medicaid through what we call a waiver program.

He needs so much special equipment, so many meds, environmental modifications to the home that we simply can't afford, and we're being denied. He needs a special bed to sleep in that costs $11,000, and we've been waiting for it for two and a half years. This wheelchair has seen better days. We've been waiting for a new one since March.

What can families like mine do? And it's not just my family, I see it in my work. I am reaching out in the appeals process for what he needs, but we have insurance and we're still denied.

DOBBS: Dr. Simmons?

SIMMONS: Before I answer that question, it's very important -- I think it's important to point out to this audience that the three issues we've been talking about tonight -- jobs, education and healthcare -- are all tied together. And healthcare has become so expensive and inefficient and major quality problems that the cost of that healthcare is rising so rapidly that it's adversely affecting jobs, leaving less over for education.

And we have a system that's the most expensive in the world. It's not structured to take care of your son. It's structured to take care of people who are acutely ill, and 20 percent of our nation share your son's problems.

DOBBS: What percent?

SIMMONS: And we don't have a system designed to take care of it. We have a huge problem here that's got to be addressed.

DOBBS: By public policy.

SIMMONS: By public policy. Absolutely.

DOBBS: And that isn't much of an answer for you.

SIMMONS: But the honest answer is you cannot get the help you need in the present system and we've got to restructure it. It's probably the most critical thing our nation needs to do domestically. It's the number one problem facing our society.

DOBBS: Next question. Yes, sir?

QUESTION: I am Paul Nasker (ph). I'm the chairman of the board of the Amherst Chamber of Commerce, a suburb of Buffalo. We represent some 2,000 businesses in the Buffalo-Niagara region.

My question is this. What is a small business to do in order to pay for this healthcare for their employees and still be able to compete in this world economy? Even survive in this world economy?

SIMMONS: Well, you point out a very important problem. Small business is being especially disadvantaged under the existing system's structure. But so is big business.

One of the reasons this city has lost so many manufacturing jobs is because the huge cost of healthcare to corporate America, which is the major payer for private sector healthcare.

Again, the answer for small business, for our nation, is major national policy changes.

DOBBS: Why don't we take this down to its roots, and that is we have got the finest healthcare system in this country, finest medical care, brilliant doctors, wonderful nurses. We have got corporations fleeing from those high costs of healthcare insurance. We've got companies talking about they want to participate in the global economy, they want to call it international trade globalization.

But the fact is, that we've got a group of people politically in this country saying to the middle class, you're going to be -- you're going to be the cannon fodder in this competition between our middle class and the cheapest labor in the world, because we want these corporations to be competitive. And so we've got to cut your healthcare costs. And the federal government is saying we've got to have these laissez-faire capitalist policies because we want to be competitive.

So if the world is changing, why is it such a nasty word to say that we go to a single payer system? Mitt Romney in Massachusetts proposing an intelligent, in my opinion, very intelligent program, in which you put people together in pools. We can talk about national healthcare, universal healthcare coverage. Call it what you want to. But this country has a responsibility to all the people in this room and Americans, all but the very poor and the very rich, are the ones being hammered, because there is no program for the middle class.

SIMMONS: Lou, first of all, we no longer have the finest healthcare system in the world. I hate to say that as a physician, but that is not true.

But secondly, there are solutions, and one of the solutions would be for us to change national policy and adopt exactly what you said.

But there are about three or four different ways to achieve universal coverage, which we've got to do.

DOBBS: Right.

SIMMONS: So I think the most important thing for your audience to know is this is a soluble problem, but not within the present policy decisions being -- that have been made to this point by our government.

DOBBS: OK. We'll be right back. Thank you very much.

Up next here, our special town hall meeting from Buffalo, and we're going to hear more from the members of this audience, more of what they're thinking about. And hopefully, we'll do better on the solutions as we continue. Stay with us.

(COMMERCIAL BREAK)

DOBBS: We're back, coming to you from Asbury Hall in downtown Buffalo, New York.

This building, by the way, is a beautiful building, constructed in 1873, it was saved by -- from demolition just about 10 years ago by singer Ani DiFranco and Scott Fisher (ph). They bought it. They created this beautiful hall. They spent a lot of money and they did it for the community. We want to thank them and we want to thank all of you and our special guests here tonight.

We have a question from a member -- you've got to be pretty proud of those folks.

That's real participatory democracy backed up with a little extra capital. That's kind of nice when that happens. Some other questions from our...

Yes, ma'am?

QUESTION: Hi, my name is Mary Hall (ph) and I'm a secretary for the International Brotherhood of Teamsters, Joint Council 46.

I heard tonight a lot about keeping small business here. And my concern is the flight of high quality jobs going out of this area due to either national or international companies coming in, purchasing smaller companies, promising job security, good wages and then turning around within a few years, selling those companies and -- only to leave broken promises, empty buildings and jobless people. And I want to know what we can do about it.

DOBBS: Mayor Brown?

BROWN: Well, I think one of the things that we have to do about it is really reach out to our congressional representatives and let them know how concerned we are about that. It's not an issue that we can solve by ourselves on the local level, but we really have to speak collectively in one voice on issues like that, reach out to our congressional representatives and let our voices be heard.

DOBBS: Professor?

SOUTHWICK: Well, one of the major problems here, of course, is that the governments in New York State are more expensive than in the rest of the country, so naturally, people want to have their businesses elsewhere. We need to make them less expensive, more efficient here and make people want to be here with their businesses.

DOBBS: Who's next?

Yes, sir?

QUESTION: Lou, Jon Kazerowski (ph), former president of the United Autoworkers.

My question is to you with all the jobs that we are losing, especially in the auto industry, leaving and outsourcing our work to foreign countries that we can't compete. It's a shame that our Congress lets these people get away with it and all these corporations, we ought to put a tariff on every single product that comes into the United States like they do to us.

DOBBS: That's an interesting -- how about this one? How about instead of a tariff, although there may be an occasion in which they are appropriate, I don't know. But I would be far more in favor of us actually building something in this country, creating services and products in this country and exporting it to the countries that are exporting to us. You know, balanced, mutual, reciprocal trade.

The problem with talking about tariffs is someone is going to call you a protectionist. The truth is this country has allowed its productive factor -- its factors of productions, its productive plants to be shipped, in some cases, entire factories to be shipped overseas and the jobs that are left are not exactly wonderful.

So it's more complicated than a tariff and people have to ask the honest question. Why isn't this country exporting more? And why aren't we making more?

We're going to take a quick break. We'll be right back with you. I apologize. More from Buffalo, New York in just a moment.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Welcome back.

I promised you that you could get in that quick question.

QUESTION: Thank you, Mr. Dobbs.

Hi, my name is Chris Bograd (ph). I'm a machinist at American Axle, Tonalona (ph) Forge, UAW Local 846.

And I'm wondering -- you touched on it in your book, but what are we going to do to fight back at this? Are there anyone in government or business that cares about these issues?

DOBBS: The fact is, some changes are taking place in Washington. But I truly don't believe either political party is committed to representing the people represented in this town hall meeting, the middle class. And until you demand that they do, I would withhold a vote for a party and cast it for the candidate that most looks after my economic interests and my principles.

That's the best answer I can give you.

I want to say thank you to all of you. We've been discussing major issues, and, obviously, some of them are so complicated that the answers are going to take a while to make into a reality.

The loss of good paying American jobs, the cheap overseas labor market putting our middle class into direct competition with cheap foreign labor. We've got to stop that, we've got to come to grips with it.

We've also got to be doing a lot better in terms of healthcare. Again, I believe that it starts here at the local level.

Government inaction, whether at the local level or at the federal level, can't be tolerated any longer.

So as we conclude here tonight, I just want to say to you that I happen to be a great believer and I apologize to the folks of Buffalo, but I brought this message from New York City. A fellow by the name of Yogi Berra used to say that, in very simple words, "The future ain't what it was." It's up to us to make certain that our future is a great one.

Thank you all for being with us. We wish you all the best.

And good night from Buffalo, New York.

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