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Issue Number One
The NAFTA Debate; Latinos & the Economy; Immigration Nation
Aired May 01, 2008 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: All right. You're back in the NEWSROOM one hour from now. I'm Tony Harris.
FREDRICKA WHITFIELD, CNN ANCHOR: And I'm Fredricka Whitfield. ISSUE #1 with news on the economy begins right after a check of the hot stories.
Superdelegate defection. Former Democratic Committee National Chair Joe Andrew withdraws his endorsement for Hillary Clinton. He's now supporting Barack Obama. Andrew announcing his change of heart this morning in Indianapolis. Indiana's primary is next Tuesday.
Flood waters falling in Maine. The St. John River crested at a record 30 feet. That's about five feet above flood stage. Flooding is still widespread on both sides of the Canadian border. More than 100 homes are flooded. Hundreds of people had to flee but the river never spilled over a major levee which spared the downtown area. The international bridge held up despite fears that raging waters might drag it down.
Looking good, one official's assessment of a wildfire burning at the edge of the Grand Canyon Park. The blaze is more than 60 percent contained. Calmer winds have helped firefighters put out the hot spots. Officials say the fire was caused by people. Wildfires are also burning in California, Nevada and New Mexico.
I'm Fredricka Whitfield at the CNN Center in Atlanta. ISSUE #1 with Ali Velshi and Gerri Willis starts right now.
GERRI WILLIS, CNN ANCHOR: It's National Immigration Day and we're breaking down immigration and the economy. Rallies around the nation from New York to Chicago to L.A. and gas prices hit another record high. More and more Americans are falling behind on monthly payments. We'll show you how to deal with debt collectors. ISSUE #1 is the economy. ISSUE #1 starts right now.
Welcome to ISSUE #1. I'm Gerri Willis. Ali will be along in a moment. Immigration rallies are getting under way here in New York and across the states. It's a day of protests for people not happy with U.S. immigration policies.
CNN's Jim Acosta is live right now in the Union Square section of Manhattan.
Jim, hello.
JIM ACOSTA, CNN CORRESPONDENT: Hi, Gerri, protesters calling for an end to immigration raids and deportations will rally here in New York and other big cities across the country today. Organizers launched these mayday immigration rallies back in 2006 as a way to put pressure on the government to respect the rights of the undocumented and illegal immigrants.
Last year in Los Angeles, one of these demonstrations turned violent as protesters clashed with police and because of that, concern that there will be a big police presence at demonstrations from coast to coast.
Now, advocates of legal immigration say that the undocumented are actually a drain on the economy and on local governments because they overwhelm local schools and hospitals but advocates on the undocumented, say many of the immigrants perform a purpose and serve a function in this economy and do many of the jobs that Americans are unwilling to do.
Against that backdrop, the Bush administration has stepped up the immigration raids over the last year or so and immigration advocates say that unfairly punishes immigrant families because many times it's the bread winners that are deported leaving relatives behind.
Gerri?
WILLIS: Sad situation there, Jim. I'm wondering what you're expecting there not just in terms of numbers but in terms of the faces. Do you expect a diverse crowd there in Union Square?
ACOSTA: Absolutely. We should note that the rally isn't going to start for another four hours from now but we're starting to see people gather here. Here in New York City, we're close to the statute of statue of liberty. The huddled masses, the melting pot will spill into the street and we'll not only see immigrants from Latin America countries and from central and south American but we'll also see Asian Americans here, Arab Americans here, many of those immigrant groups have joined Latino and Hispanic groups calling for a loosening of these immigration crackdowns. We've seen them out here in the past and they will be out here again.
WILLIS: We'll be watching, Jim. Thanks for that.
ALI VELSHI, CNN ANCHOR: Another rally will happen in Washington, D.C. Juan Carlos Lopez is there from our sister network CNN en Espanol.
Juan, what are you looking for?
JUAN CARLOS LOPEZ, CNN CORRESPONDENT: Well Ali, it's going to be not much going on in Washington. They are scheduled to meet at 12:30. They are going to protest in front of the headquarters of the area where I am for a press conference. The real rally is expected for 4:00 in Washington. Now, in 2006, the numbers were very high. 2007, it dwindled and we'll see what happens today. It doesn't seem to be a good day for a protest but the numbers, the people may come out this afternoon. VELSHI: Are we expecting that there will be a response to this today? Are they looking for an answer from someone in the administration or the Democratic National Committee or the Republican National Committee?
LOPEZ: They are wanting both parties to work on the immigration reform, they want the government to stop the raids. They want a company in Virginia to rescind some measures that they consider are directed at Hispanic immigrants and they are just looking to raise the pressure on members of congress. But a sign of the pressure or the message that congress is receiving.
It's a press conference today by democrats relating to Latinos and the economy? Not immigration. So they understand that even though immigration is a big concern, Latinos, like all other Americans, are very concerned about the state of the economy and how they are going to fair in the near future.
VELSHI: Thank you for that update. We'll be checking in with you throughout the day. Juan Carlos Lopez in D.C.
Now NAFTA is one of those issues that sparks issues. It's associated with trade. NAFTA is the North American Free Trade Agreement. It eliminated most taxes on products that were traded between the United States, Canada, and Mexico. And it phases out tariffs over time.
There's a lot of debate over whether or not NAFTA is good for this country and good for you. David Lewis is an economist and vice president of Manchester Trade, an international trade consulting firm in Washington and in Atlanta, CNN's own Rick Sanchez. Welcome to both of you.
Rick, let me start with you. We've talked about this several times. You say that NAFTA may only -- may not be good for Americans but maybe not even good for Mexicans.
RICK SANCHEZ, CNN CORRESPONDENT: That's the story you get when you go -- I've traveled around Latin America and talk to people who live there and talking to officials, especially in the countryside, the people who are -- the and they will tell you that NAFTA is devastating the Mexican countryside. And as a result, those people are leaving, by some estimates, as much as 6 million since NAFTA began. And as a result, and here's the part that many Americans feel is the problem, they end up coming here to the United States as illegal immigrants because they are desperate to go somewhere.
And I know it sounds real complicated. Let me make this as simple as I possibly can. This is a lemon being grown by a person who for generations has been growing lemons, in a place in Mexico. And he's been selling this lemon for 25 cents. Suddenly with NAFTA, there's another lemon to compete with. That's the American lemon. And, okay, this is the Mexican lemon. He's selling it for 25 cents. He sells it to his neighbor, takes it to the plaza. All of a sudden the other lemon comes from the United States without tariffs and would billions and dollars of subsidies that you and I are paying. So the American, very wealthy farmers, can put their lemons into the marketplace. They can't compete. They can't sell their lemons. They quit and then they come to the United States.
VELSHI: David, I don't know if you have any problems props with you or fruits and vegetables, but what is your take on how Rick explained NAFTA and the problems that we have with it?
DAVID LEWIS, VP, MANCHESTER TRADE LTD.: He's right on target but the problem is, what did the Mexican government do for 14 years in terms of reforming its economy, making the agricultural sector more competitive and as a result of the growth, the massive growth in the GDP and the economy of Mexico over 15 years and that is not a NAFTA problem or a U.S. problem. That is a problem of the government of Mexico and it's a problem that many other countries in Latin America have picked up on, like Chile, like Central America, to realize that just the trade relationship is not enough to advance economic development.
VELSHI: Bring that back here. How, David, is that affecting American -- NAFTA has come up as an issue in this election. We have Barack Obama and Hillary Clinton talking about changing, about scrapping it. We have John McCain who says that he's very much in favor of NAFTA and more deals. How does that play out for the voters?
LEWIS: Unfortunately, it's a political deal. The NAFTA relationship is the number one relationship for this economy globally. It's more important than all of Europe and Japan put together. Canada is our number one trading partner. Mexico is our number three trading partner. We're talking about 450 million people trading together, a $16 trillion market, increasing U.S. exports to this country, increasing our imports from competitive goods at the supermarket.
VELSHI: Rick looks like he's going to jump out of his seat.
SANCHEZ: So it's a lot of numbers. My question is a lot more simple. How do you make it fair for a guy who's trying to sell a lemon that he's growing in his backyard when he's having to compete with a lemon that has $10 billion of U.S. taxpayer money poured into it.
LEWIS: It's melons, avocados.
VELSHI: Hang on. You're both talking about an interesting fact. We've all been paying more for so many things, including the food we eat. What does NAFTA, whether it's -- because for the price that we pay for things or the jobs that we have, making and growing things, how does it affect us here?
LEWIS: 35 percent of our agricultural trade is not with Mexico. In many cases it's seasonal because many of our products don't compete with their products at different seasonal stages. So you're talking about a good chunk of the basket, of the supermarket which comes in cheaper, better quality, because of the growth in Mexican exports into this country. It's important at the consumer level and that's one of the largest areas of growth in this economy. SANCHEZ: David, let me challenge you on that a little bit. If that's the case, why are we seeing 600 million people -- pardon me. 6 million from 1994 to 2004 leaving the countryside and coming to the United States if they are growing something that really is being purchased in the United States? That doesn't sound to me like a healthy market.
LEWIS: No. What it means is that there's been an imbalance in the Mexican economy in terms of how that government and how the economy made or did not make adjustments and in more cases than not, they did not make adjustments. Secondly --
SANCHEZ: So you're saying --
LEWIS: The strength of the U.S. economy, because immigrant is the most -- they are coming to this economy because there's a demand in this economy for their labor and that's a fact. And it's more important than the demand in Mexico. And it's a big responsibility on the Mexican side.
SANCHEZ: That turns into a wonderful deal if you're a big-time U.S. farmer. First of all, because you have the subsidy, you get your product into Mexico at the expense of the Mexican product. The Mexican farmer dries up, has to come to the United States, and then ends up working in some cases as an illegal immigrant for an American farmer.
LEWIS: Exports into the U.S. have increased as a result of NAFTA. Again, you have to look at it sector by sector, region by region in Mexico to get a sense of what is the final balance. But the fact remains, as I said at the beginning, the Mexican economy did not adjust the way it should have as a result of the growth.
VELSHI: OK. We have to end it there. We've got the point that if it's not helping out the people who we're trading with, and that's affecting our immigration situation, then that's an issue that we have to deal with. Thank you to both of you, David Lewis and Rick Sanchez. We'll be talking about NAFTA coming up a little later on in the program. Lou Dobbs will be joining us live.
WILLIS: We've got a red hot conversation going on on immigration. Weigh in on today's quick vote. The question today, would allowing more immigrant workers into the country boost economic growth or cost Americans their jobs? Log on to CNNmoney.com to vote. We'll bring you the results later in the show.
VELSHI: Folks across the country dealing with higher costs. Congress is addressing the issue right now. We'll check in on them. You're watching ISSUE #1 right here on CNN.
(COMMERCIAL BREAK)
WILLIS: Welcome back to ISSUE #1. More and more American families are getting caught in the squeeze of a weak economy and rising gas and food prices. It's getting the attention of lawmakers on Capitol Hill. These are live pictures meeting two hours ago, they are holding a hearing about how are high food prices impacting American families. It's not just families feeling the pinch. Rising food prices are also hurting charity, such as food banks, and even farmers are complaining about their financial bottom line.
VELSHI: Immigration day rallies get underway and we want to know where candidates stand on border security and illegal immigration. It's a topic getting much attention today.
CNN's Dan Lothian is live in Indianapolis with the CNN Election Express.
Dan, are the candidates talking about it? Are they using the mayday opportunity to talk about illegal immigration issues?
DAN LOTHIAN, CNN CORRESPONDENT: Ali, we're not really hearing anything about illegal immigration or border security issues. It's not something that's been brought up on the campaign trail at least over the last couple of months. They've been focusing on the economy and health care. And part of the reason is because all of the candidates seem to have similar positions when it comes to border security and illegal immigration. Take a look at where all of the candidates currently now stand. They support Bush's reform of immigration. And it would increase funding and improve border security it would improve enforcement of existing laws. It would provide a legal path way to citizenship for some illegal immigrants and all three of the candidates authorized to construct a 700 mile fence along the U.S. and Mexican border.
Now Senator McCain, one of the reasons perhaps we haven't heard as much from him, sometimes when he's spoken out on illegal immigration, he's been out of step with the republican base. You might remember back in the summer, he was really emphasizing the whole pathway to citizenship first and then border security second. He was criticized by republicans for doing that. So he's kind of flipped that, really emphasizing more border security rather than the pathway to citizenship.
Again, an issue where all of the candidates pretty much seem to be on some what of the same page and they are focusing on the other issues rather than this one.
VELSHI: All right. Dan Lothian. Thank you at the CNN Election Express in Indianapolis.
Gerri?
WILLIS: Up next, a retail chain announces plans to close more than a dozen stores. We'll tell you which one and what it means for the nearly 1,300 employees.
Plus, we're talking NAFTA with Lou Dobbs. You're watching ISSUE #1.
(COMMERCIAL BREAK)
VELSHI: Welcome back to ISSUE #1. In the headlines, the housing slowdown is certainly not helping Home Depot. This morning the largest home improvement retailer announced that they will shut some 15 underperforming store, most of them located in the northeast and the Midwest. That's going to have an impact on an estimated 1300 employees. The Atlanta-based company also says that they are shelving expansion plans, scrapping 50 new proposed stores. A few weeks ago, Home Depot reported the first ever drop in sales for the first quarter.
WILLIS: Buying a home is a major part of the American dream, especially in the Hispanic community. Earlier I spoke with Julie Stav, a best-selling personal finance author and a personal finance magazine.
JULIE STAV, PERSONAL FINANCE EXPERT: Thank you for having me.
WILLIS: I have a serious question for you here. When we look at the his panic community and how they've fared in the subprime meltdown, you've seen so many people in the Hispanic community ending up with subprime loans when they could have gotten prime loans. What happened?
STAV: Well, for one, buying a home, owning a little piece of America is not just an American dream, it's our dream, too. As immigrants we come from institutions go down overnight so we hold real estate very dear to our heart because it's something tangible that we can hold. Number two, we have not just the magic of money to learn but the language of English. So we're dealing with two obstacles and understanding what we're getting into.
WILLIS: So are you saying that people misunderstood these mortgages or they got mortgages put to them that they didn't need or want or shouldn't have been sold to them?
STAV: Both. Sometimes we don't understand what we sign but many times, perhaps the institutions sees as us way too eager to own that home without knowing that we can afford to keep it and afford to live it in.
WILLIS: You say that people in your community are eager to buy the home. Hispanics consider it a sacred investment. Describe that.
STAV: Well, when you own a little piece of land, you own something tangible that you can pass on to your children. When we come from countries where the money that you put in a bank is not FDIC insured. It's not safe. You own a land and that's something that nobody can take away from you. So when we come here, that's our dream. We want to own that little piece of earth that we can hold close to our heart and nobody can take away no matter what happens and we can pass it on to our children. That's why we hold it so dear that when we see someone that can now show us or at least tell us that the dream is attainable, the only question we ask, where do I sign?
WILLIS: I think a lot of people jump to those conclusions. Let's focus on what is going on in the election. Is there any candidate out there who is really responding to concerns about the housing, the economy, the issues that are really number one for everybody, including Hispanics right now?
STAV: We have the same issues as everybody else and the economy is in this soap opera that we have going on. However, we also have the issues of immigration. The issue of why is it that we are able to get a number that allows us to buy property, to establish businesses, to invest but yet it doesn't allow us to work. Work. It allows us to pay taxes. That's why it is. So nobody is talking about those issues, I don't care whether it's a republican or a democrat, they are just staying away from that.
WILLIS: Interesting thought. When we look at the election, obviously, many issues coming to the fore. Do you think there's any ISSUE #1 in the Hispanic community?
STAV: Number one, and surveys have been done, millions of dollars have been spent by country throughout the country. Number one for us is our children's education, number two, retirement, number three is our homes. So go figure, that's exactly what you would want for your kids.
WILLIS: All right. Julie, thank you so much for that. We appreciate your time today.
STAV: My pleasure.
VELSHI: Up next on this May 1st immigration day, the true impact of immigrants on the economy here in the United States.
Plus, we'll talk live with Lou Dobbs about NAFTA.
Then why some folks in Mexico are feeling the economy problem that the United States has.
We'll help you deal with debt collectors. ISSUE #1 is coming right back right here on CNN.
(COMMERCIAL BREAK)
VELSHI: You're watching ISSUE #1 on CNN. It's May 1st, a day known as Labor Day in many countries. It's been called immigration day for the last few years by people who want to draw attention to immigrant workers. This is a rally, a live shot of a rally in Chicago at the union park in Chicago, courtesy of WLF, our affiliate. This is one of many places in the United States where people are assembling with various issues to bring to light about immigration, both legal and illegal. I want to give you some sense of the numbers that we're talking about. Here in the United States, there are 148 million workers all together. It's the thought that there are up to 10 percent of those people are legal, foreign workers. Five percent are illegal, foreign workers.
Now we can figure out those numbers, but what do illegal immigrants typically do? According to the Pew Hispanics Center it breaks down like this. Thirty-one percent of them are in service occupation, 19 percent in construction and extractive work, 15 percent in production, installation, and repair, 12 percent in white collar jobs, sales and administrative support, 10 percent in management, 8 percent in transportation and 4 percent in farming.
Now in some of those occupations, when you compare it to how many people from illegal immigrant communities occupy those professions versus those who are not, take a look at the service occupations in the United States. Thirty-one percent of illegal immigrants occupy service-type jobs versus 16 percent of native workers. When you look at manual labor, 42 percent of illegal immigrants occupy those sorts of jobs versus 22 percent of native workers. And in white collar jobs, 23 percent of illegal immigrants occupy those jobs versus 62 percent of native workers.
We're going to discuss that a lot more with our own Lou Dobbs and other things to do with trade and how it affects immigration. But first, it's time to get you caught up on your latest headlines. Don Lemon is live right now in the CNN "Newsroom."
Don.
DON LEMON, CNN CORRESPONDENT: Thanks, Ali. We'll be following that rally in Chicago and throughout the country all afternoon right here in the CNN "Newsroom."
But first we want to tell you about this, about flood waters. That are falling in Maine today. The St. John River crested at a record 30 feet in Fort Kent. That's about five feet above flood stage. More than 100 homes are flooded. Hundreds of people had to flee. Flooding is still widespread on both sides of the Canadian border. The international bridge held up despite fears raging waters might drag it down.
And we have a sad story to report out of northern Kentucky. One person is dead in a school bus accident. The bus collided with a dump truck around 7:00 Eastern. Local reports say 10 students and the drivers of the bus and the truck were taken to a hospital. A hospital spokesperson says all of the injuries appear to be minor.
Missile strike in Somalia. The U.S. takes aim at Islamist militia leader Adan Hashi Ayrow. American officials say he has close ties to al Qaeda. His group, al-Shabab, is considered a terrorist organization by the Bush administration. U.S. officials are still assessing whether Ayrow was killed in the strike. A spokesman for his group says Ayrow was among those killed. Local sources tell CNN at least 10 people died in that.
People have been standing in line in Atlanta for days. Not for concert tickets, not for the latest gadget, it involves children and it could affect you, too. Extreme measures parents are taking for their tots in the preschool wars. Make sure you join us at the top of the hour in the CNN "Newsroom" for that story and much, much more, including some breaking news coming from the CDC right here in Atlanta.
I'm Don Lemon. Now back to Ali Velshi.
VELSHI: Don, thanks very much for that. As we mentioned earlier in the program, if you bring up NAFTA, usually folks have a very strong opinion about it one way or the other. Now one of those who has not hidden his feelings on NAFTA or much else is our own good friend Lou Dobbs, who joins me now to speak about NAFTA.
It's related to immigration day. It is related to politics and people coming into this country. Tell me your take on NAFTA. You heard we had a discussion on it earlier.
LOU DOBBS, CNN: Well, let's talk just for a second. You said immigration day. And I see all these graphs here on this broadcast saying immigration nation. Where does this come from? Is this immigration day? I mean -- where does that come from?
VELSHI: It's been deemed by people as immigration day who take part in these rallies and these . . .
DOBBS: Really?
VELSHI: You know that.
DOBBS: But this is CNN and we're putting up immigration nation, immigration day. You know what today really is, don't you, Ali? I mean I'm sure the management of CNN and all the other networks, cable networks do. Not? Know what it is?
See, in 1961, this day, May 1st, was designated as law day. Not immigration day, not immigration nation, but law day in which public buildings are supposed to be adorned by American flags. We should be celebrating law in America. And what are we celebrating? We've got rogue cable news networks talking about immigration nation and immigration day. What's that about?
But your question was? I'm sorry.
VELSHI: My question was, how does NAFTA tie into immigration?
DOBBS: OK. Here's how it ties into illegal immigration. Let's start there first.
NAFTA is basically a framework by which the United States had advanced its trade debt by $75 billion, in the case of Mexico. We now have a trade deficit with Mexico of $75 billion. We have a trade deficit with Canada of $65 billion. That's a net drag, a net drag, on this economy. And the result is, more than a million jobs, most of them manufacturing jobs, have been lost over the course of the past 14 years. That's just the reality.
In terms of immigration, what it has done is facilitated the migration, as the Mexican government likes to frame it, or the illegal immigration as it is, into the United States. And four industries in this country employee predominantly the preponderance of illegal aliens in their workforce. They are, as you cited earlier, construction, leisure, hospitality, that is hotels, restaurants and landscaping. And what is happening in all four of those industries? In all four industries, wages have declined over the past seven years.
The results?
VELSHI: Because there are more people available to do that work for less money.
DOBBS: Because those illegal employers and hotels, restaurants, construction, and landscaping have driven prices down by bringing in labor that would accept lower wages. Professor George Morehouse at Harvard University estimates that we see wages depressed by about $200 billion a year for the legal workforce in this country as a result.
VELSHI: Is it offset by the fact that maybe we get product or services that are cheaper because the wage behind it is lower? Do we -- at a time when we're worried a great deal about inflation, do we get some things cheaper because of all these illegal immigrant work in the United States?
DOBBS: Sure we do. Sure we do. I mean, it's been a really bafo (ph) deal, hasn't it. What's the inflation rate running? It's over 4 percent. We are watching legal businesses being driven out of business because other businesses hiring illegally, illegal aliens, are undercutting them and the result is a spiral down in wages and profits and the result is a lower, lower consumer base for American- made products and even those exports from China that we all have learned to treasure so much at big box retailers, like Wal-Mart.
It's a joke. The joke is on the American worker. And it's not very funny.
VELSHI: You've written on this a great deal. You've talked about this for a long time, so I'm not going to ask you to encapsulate it. But what -- while they're on the campaign trail talking about NAFTA, what's the most logical thing for these candidates to say about NAFTA and other trade deals?
DOBBS: Well, as they have begun to say, and I think Senator Clinton has been particularly strong on the issue, she's been talking about renegotiating these deals. And then we watch the buffoon, George W. Bush, and Stephen Harper in Canada, and Felipe Calderon, the president of Mexico, kind of laughing, cackle about it. But their laughter does not disguise the fact that this country has lost a million -- more than a million jobs as a result of NAFTA. It does not disguise the fact that we've lost about $150 billion as a result of trade deficit. That adds to a $6 trillion trade debt by this country. It does not mask the fact that 6 million -- it's an estimated 6 million -- Mexican workers have illegally entered the United States seeking wages to compensate for the money they've lost.
We have a mess here and we have, in point of fact, amongst these three candidates, complete support for illegal immigration. Comprehensive immigration reform that would solve only, according to the congressional budget office, only a quarter of illegal immigration and consume 75 percent of the legal visas for the next five years. This is -- you know, and some people try to characterize me as a racist, a xenophobe. People who have no concept of what they're talking about. They are marginal in their political agenda. And they're complete fools in their ideology. The reality is, this country has to come to terms with its economic future for the sake of our citizens.
VELSHI: The only characterization I'm going to make is of a very busy guy. You've got a radio show this afternoon that you've got to work on.
DOBBS: I do. I've got a TV show.
VELSHI: And you've got a TV show.
DOBBS: We're going to be talking about law day on my radio show and we're going to be talking about why it is all the fools in this country, like lemons, start talking about immigration on May 1st instead of law day, which is what it is, and why the executive producers of shows like this one don't understand the country they live in and have no sense of obligation to the reality that transcends the nonsense that you're seeing spewed about immigration nation and immigration day because it's law day and this is America.
VELSHI: Like I said, he doesn't hide his views. Lou, good to see you. Thanks for being with us. I really appreciate it.
DOBBS: Good to see you, Ali. Thank you. You're (ph) the best.
VELSHI: Gerri.
GERRI WILLIS, CNN ANCHOR: Immigrants not only stimulate our economy here, but also the economies in their own home country. But with our economy in a rut, remences (ph), that's the money they send back to their family, they're getting smaller and fewer in between. CNN's Harris Whitbeck has that story.
(BEGIN VIDEOTAPE)
HARRIS WHITBECK, CNN CORRESPONDENT, (voice over): Times are tough in Tejaro, Mexico. Camilo Izquierdo is 77 years old and diabetic. His livestock is his life line.
CAMILO IZQUIERDO, TEJARO RESIDENT, (through translator): I am sick and I have been sick for quite some time. The medicine keeps getting more expensive and I just don't know what to do anymore.
WHITBECK: He and his wife have 13 children. Seven moved to the United States, including the eldest, Eduardo, now a legal U.S. resident living in Los Angeles. Every month he mails $200 back home to pay for his father's medicine. But several months ago, the money stopped.
IZQUIERDO: He says things are getting too expensive over there. He even says things are worse there in California than over here.
WHITBECK: As the money from his son started to dwindle, Camilo started selling off some of his goats so he could buy medicine. He used to have about 130 goats. He's now down to about 40. But to make matters even worse, a drought in the area pushed up the price of the feed for his remaining livestock. Camilo is now really hoping the U.S. economy will rebound so at least some money will start flowing in.
Eduardo works as a window installer. His hours have recently been slashed.
EDUARDO GUTIERREZ, CALIFORNIA RESIDENT: I seen the recession back in the '90s, but this is worse, as far as I can tell. This is really bad.
WHITBECK: Not being able to help his parents hurts.
GUTIERREZ: It is tough. In a way I kind of feel bad I can't help my parents.
WHITBECK: Lots of other families in Tejaro rely on help from relatives working in the United States. Eduardo says he's not thinking of leaving the U.S. yet but knows Mexicans who are.
GUTIERREZ: They're doing bad right now. A lot of people doing bad.
WHITBECK: Hard times on both sides of the border.
Harris Whitbeck, CNN, Tejaro, Mexico.
(END VIDEOTAPE)
WILLIS: Up next, dealing with debt collectors. It's never fun but we're going to guide you through it. What they can do, what they can't do.
Plus, we're going to open up the Help Desk on this immigration day. The address, issue1@cnn.com. You're watching ISSUE NUMBER ONE.
(COMMERCIAL BREAK)
VELSHI: Welcome back to ISSUE NUMBER ONE.
Record prices at the pump and near record profits for big oil. Exxon Mobil posted its second highest profit ever this morning. The robust $10.89 billion for the first quarter of the year. That's three months. The figure, however, fell short of Wall Street estimates as oil falls to almost $110 a barrel today, down from nearly $120 earlier in the week. The report is expected to draw more calls for eliminating government tax breaks for big oil companies or a gas tax holiday as suggested by two of the presidential candidates.
WILLIS: More and more Americans in this economy are falling behind on their bills and that's creating a hay day for debt collectors. Now these debt collectors, they can be pushy and worse but we're going to tell you how to deal with it and stand up for yourself. Gerri Detweiler is the author of "Stop Debt Collectors" in Tampa. Gerri, welcome.
GERRI DETWEILER, AUTHOR, "STOP DEBT COLLECTORS": Thank you.
WILLIS: I feel like I've got an echo in here, Gerri, Gerri.
Let's get right down to this, though, because Americans across the country are having such a problem with debt collectors. It's the number one complaint of people to the federal government, the FTC. Seventy thousand people last year complaining that debt collectors were doing their worst, insulting them on the telephone, harassing them by telephone, making claims for debts that they don't even owe. What is going on here?
DETWEILER: Well, with the economy the way it is, we're seeing a lot of companies that are saying, look, I need to raise some money so I'm going to go back to those debts that I haven't been able to collect and try to make some money off of them. Debt collection is one of the biggest growing . . .
WILLIS: You know, people don't even know this. People may not even owe this money, correct?
DETWEILER: They may not even owe the money. It may be incorrect. It may be disputed. Even if they do owe it, look, if you owe it, you can pay it, great. But if you can't, you may have other priorities, like putting fuel in the car and food on the table and, frankly, that credit card debt may not be at the top of the list.
WILLIS: And these folks, you know, confirm this for me, they are using tactics that are illegal. What is beyond the pale (ph)? What are the kinds of things these companies are doing that is too much that is illegal?
DETWEILER: Well, Gerri, I had a friend who was told by the debt collector, she was eight months pregnant, if she did not pay by Friday, she would spend the weekend in jail. That's something that's completely illegal. But often they'll tell you, look, if you don't pay right away, we're going to take the money out of your paycheck, we're going to tell your employer, we're going to tell other people. All those things are not allowed.
WILLIS: All right. OK. So lots of problems there that we're seeing. What do you do if you're being harassed by a debt collector? Whether you owe them money or not, what are the steps to take?
DETWEILER: Look, the very first thing you want to do is exercise your right and ask for verification of the debt. So tell them . . .
WILLIS: Well, what does that mean? How do they give us that?
DETWEILER: Say put it in writing and say send me something. That buys you some time. They may not show you the original contract, but it gives you some time to decide how you're going to deal with that debt and whether you actually owe it.
WILLIS: And are they legally required to send me proof of some sort?
DETWEILER: They are required to verify the debt in writing. But the proof, sometimes it's iffy.
WILLIS: All right. Next step. Do I call a debt counselor? I mean, what else can I do if -- let's say I do owe that debt or I owe something like it, how can I get these people off my back?
DETWEILER: Well, if you owe the debt, then start negotiating. Try to settle it for less than what you owe. A lot of times they buy these debts for pennies on the dollar. So if you can pay them 25 cents on the dollar immediately, that's better than nothing. They'd rather get their money, move on to the next person.
WILLIS: And, Gerri, if I don't owe that debt, if that is not my bill, what do I do?
DETWEILER: Put it in writing to the debt collector. Tell them to stop contacting you. If they don't, you need to talk to a consumer law attorney.
WILLIS: Wow. OK, Gerri, thank you so much for helping us out today. We appreciate it.
DETWEILER: Thank you.
VELSHI: Thank you, Gerri and thank you, Gerri.
Up next, the airlines have found yet another way to charge you more for an plane ticket. We'll have the details.
Plus, answers to your e-mail questions. Please, don't be afraid to log on and send us a question. The address, issue1@cnn.com because you are watching ISSUE NUMBER ONE.
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VELSHI: Happening now. We are looking at live pictures. On the left of your screen, Milwaukee. On the right, Chicago. These are two May Day or immigration day or law day rallies, depending on who you ask. These are gatherings of people who have opinions on the nation's immigration laws and they're happening across the country. These are two of the ones that we're looking at right now, Milwaukee and Chicago.
Well, if you're traveling anywhere, expect to pay more for air travel. How much more depends on the ever rising price of jet fuel. Starting tomorrow, British Airways says it will increase its fuel surcharges on all flight tickets as the carrier tries to tap down on rising fuel costs, which British Airways says has doubled in two years and now accounts for nearly a quarter of all the airlines operating costs. Analysts say expect other air carriers to do the same in the hopes of capturing or mitigating higher fuel costs.
Gerri. WILLIS: You know it's that time of the show when we answer your questions. We take your e-mails and we take them seriously. Here to answer them, Ryan Mack is with Optimum Capital, Donna Rosato, she's from "Money" magazine, and our very own Allan Chernoff.
Welcome to all of you and thanks for coming.
We want to answer this first question. It's from Peter who asks, "I'm a first-time buyer taking advantage of this down real estate market. I'm getting ready to lock in my loan. Given all the news about the economy and the Fed cutting rates, how should I time the market in order to get the best rate for my loan?"
Donna, what do you think?
DONNA ROSATO, SENIOR WRITER, "MONEY": This is a good time to lock in. Interest rates have been coming down. The 30-year . . .
WILLIS: What are they, 6.01?
ROSATO: Actually 5.8 on a 30-year fixed is the last that I saw. So it's slightly down from about 6.1 about a month ago. So we're starting to see that . . .
WILLIS: I think I've seen that numbers from Mortgage Bankers Association. We may be having different sources.
ROSATO: Yes. But we're seeing it come down. But one thing to keep in mind is that, even though the Fed is cutting interest rates, mortgage rates are tied to the 10-year bond. So you want to keep your eye on that.
WILLIS: All right. Well, great advice. OK, so you should lock it in. Great numbers there.
OK. Scott in Georgia asks, "how does it affect your credit when you pay off and close more than one credit card a month?"
Ryan, we get this question all the time. People are obsessed with their credit score and credit cards. What's your advice?
RYAN MACK, PRESIDENT, OPTIMUM CAPITAL MANAGEMENT: Well, paying off your credit is great. However, canceling all your cards is not always so great. Thirty percent of your FICO score is the balance that you owe for your credit cards, compared to how much you can borrow. So as you pay off your card, your FICO score goes up. However, as you cancel your cards, your line of credit goes down, thereby that can actually decrease your FICO score. So you might want to go ahead and cup up your credit cards at first and then maybe cancel one card every six months, allowing time in between to (INAUDIBLE) that FICO score to recover.
WILLIS: That's interesting.
Allan. ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Gerri, you raise an interesting point. You know, we get so many questions about this. So many people are trying to play a game here. How do I manipulate my score so I can get a better credit score and then borrow more money. I think the whole idea is, you really don't want to carry debt on your credit cards. Just get it away.
WILLIS: It's expensive.
CHERNOFF: Very expensive.
WILLIS: It's probably the most expensive debt that consumers have, right?
CHERNOFF: Totally. It's rule number one, I think, in personal finance.
WILLIS: Yes.
ROSATO: The best thing you can do quickly is just to pay any debts that you have, pay them quickly and pay them on time. You know, that's going to give a quick boost.
WILLIS: To your credit score, absolutely. OK.
We've got a really interesting question here that I don't even think that we can answer, but we're going to give it a shot. It's from Ralph in California. He asks, "when is the real estate market expected to turn around?"
Now before we get -- we jump in here, I just want to give you a couple of facts. The head of Fannie Mae said just this week that he is waiting until 2010 -- 2010 he thinks that it's going to take. Economy.com these are folks that we follow all the time -- they think it's summer '09. Now this is bad news for anybody out there who owns a house or bought one at the peak of the market.
Ryan, let's start with you. Where's it going? When's it going to get better?
MACK: Well, I mean, credit is still tightening. And we have a lot of individuals in the past three years who have bought a home and they might have taken out a line of credit and now they're upside down on their home. So that might slow down things a little bit further. Pending home sales are as low as they've been since 2001. So a lot of things are going against us.
But we've been here before. I mean, the long-term view is always the best view to take. And make sure we're patient. You're buying homes responsibly. And I would say 18 to 24 months, things should start turning around.
WILLIS: A long time.
ROSATO: And if you look at the big picture here, the housing slump really started in 2006, but we've only really recently seen double digit drops in home prices. And that's why the worst isn't -- we haven't seen it yet. But most of the economists that we talk to say 2010.
WILLIS: We actually -- we wanted to show people prices, because we actually put together a graphic with that. And it shows that jump up in prices and then the dive.
Allan.
CHERNOFF: Gerri, it's important for people to recognize here that the housing market is so different than the stock market, right? We see the stock market, it bounces back instantaneously it seems. Housing is just so much slower. It take as long time for people to reconcile themselves to a change in the market, to lower their price, get buyers to actually meet the price that they're willing to sell at. It's a slow process.
WILLIS: It's not a quick thick. All right, guys, great job today. Ryan Mack, Donna Rosato, Allan Chernoff, thanks so much for your answers today.
Ali.
VELSHI: Thank you, Gerri.
Well, you've got one last chance to chime in on the cnnmoney.com Quick Vote. Log on right now. The results are coming up next. There's the question on your screen. You're watching ISSUE NUMBER ONE right here on CNN.
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WILLIS: You're looking live at an immigration day rally in Chicago, or law day, or whatever we're calling it now, OK, courtesy of our affiliate WLX (ph). The march is just under way. Lots of folks there.
VELSHI: Yes, it just looked like a little -- few people when we first started looking at that. But look at that stream of people going through. Whatever they think it's called, they are people worried about immigration in this country and they're doing something about it.
WILLIS: And, you know, people on both sides of that equation, you know, pro, they're con. I think we covered both sides of that.
VELSHI: All right. Let's take a quick look at a quick poll. Time to get results of today's Quick Vote. Twenty-eight percent of you think that allowing more immigrant workers into the country would boost economic growth. But the majority of you, 72 percent, think it would cost Americans their jobs.
WILLIS: Time now for your latest headlines. CNN "Newsroom" with Don Lemon and Melissa Long, it starts right now.
DON LEMON, CNN ANCHOR: May Day in America. For the third straight year, a day of rallies, marches and demonstrations for immigrant rights. We're live from coast to coast.
MELISSA LONG, CNN ANCHOR: And a breakout story.
