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LOU DOBBS TONIGHT
Election Fraud; Fear Grips Wall Street After Sell Off; USS Intrepid Goes Home to New York City
Aired October 9, 2008 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: John, thank you.
Tonight, the left-wing activist group ACORN, charged with widespread election fraud. The Obama campaign denies that ACORN has any significant relationship with Senator Obama. But the Obama campaign, nonetheless, is paying ACORN for countrywide voter registration.
We'll have that special report.
And tonight, a savage selloff in the stock market again. The Dow today losing more than 670 points. Stocks have lost more than $6 trillion over the past year. We'll have complete coverage.
And tonight, new warnings of utter chaos on Election Day. Amid rising concerns about not only voter fraud but e-voting machines that don't leave an audible paper trail.
All of that, all today's news and much more tonight from an independent perspective, straight ahead tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT -- news, debate and opinion. For Thursday, October 9th, live from New York, Lou Dobbs.
DOBBS: Good evening, everybody. The stock market selloff today accelerated the market falling seventh straight session wiping out another $900 billion in market value. Investors, obviously, unconvinced that the federal government's huge bailout of Wall Street will work.
The Dow Jones Industrials today plunging more than 670 points, the Dow dropping below 9,000 for the first time in more than five years, ending the day below 8600. Today's fall comes exactly one year after the Dow's peak was hit last October.
Stocks have lost now more than $8 trillion over the past year, nearly $7 trillion since the beginning of this year. The market erasing all of the gains that it's made since the end of 1995.
The stock market's losses this year, the same as the combined market capitalization as the markets of Great Britain, Germany, France and Japan.
Joining me now for more on today's selloff, two of the best financial journalist anywhere, CNN's Susan Lisovicz and CNN's Poppy Harlow, reporting from action center ground zero. Let me turn to you first, Susan. The mood on that floor today, those professionals, who have seen many of it, all of it, how are they reacting?
SUSAN LISOVICZ, CNN CORRESPONDENT: Well, you know, I think coming into the session there was, I would say, a fair amount of despair. Despair because we have seen savage selloffs in the last week alone. And yet, it is on top of unprecedented and extraordinary moves by the Federal Reserve, by the Treasury Department, central banks all over the world. And the market is not responding.
Everybody was hoping for that moment of capitulation, of the ultimate purge where we could actually find the bottom. It was a fairly quiet day, Lou. Believe it or not, 250 points decline is all too normal these days.
But I would say just prior to the final hour of trading there was a lot of noise on the floor when the Dow broke through 9000 and all the sell, automatic sell programs kicked in.
DOBBS: What were the traders, what were those brokers saying there on the floor? What -- how were they reacting?
LISOVICZ: Well, they're exasperated. They -- on the one hand, they want to see real signs.
DOBBS: Are they afraid?
LISOVICZ: I think that...
DOBBS: I know you got to go back and look at these folks in the face and say, yes, I said you're afraid.
LISOVICZ: I don't think...
DOBBS: But they are afraid?
LISOVICZ: Well, they're humans after all, too. And they have the same concerns that we all do, which is how are we going to put our kids through school, how are we going to save for retirement. And ultimately, let's face it, financial companies are the ones that are doing among the biggest layoffs.
So, yes, I mean, I've seen a lot of people disappear from the trading floor.
DOBBS: I've watch a number of -- several, I should put it -- financial journalists, on television in particular, basically being, frankly, toadies for the administration, pushing this bailout as if it was just the perfect idea, as if somehow they were investing -- invested in this.
And also suggesting, some of them, that people should be putting their money back into the market at this point. It's absolutely irresponsible and I can't imagine what the heck people are thinking about. Poppy, I mean, what in -- what are you seeing?
POPPY HARLOW, CNN MONEY: Here's what they have to do. They have to tell people...
DOBBS: Who's "they"?
HARLOW: ... how it is. Any financial reporter.
HARLOW: Tell people how it is. How it is that we haven't seen the market this low in a long, long time. It is good to buy on the lows and sell on the highs. Whether this is the bottom, it's a huge question that no one knows about.
DOBBS: Yes, but it's a question of -- I really don't believe it belongs in the purview of somebody who's been doing this a few years, frankly, and certainly -- is really the purview of Wall Street professionals. Certainly not, you know, a television journalist or a -- you know, somebody writing for one of these...
DOBBS: Well, I won't even say it.
HARLOW: It's interesting. If you look at something called the VIX index, that's the volatility index, it's a great way to measure how traders feel and how individuals feels. That hit 61 today.
To give you some perspective, in September, the middle of last month, it was at 20. It has jumped. Everyone is betting the market is going to be all over the place but they're mainly betting it's going to be to the downside.
So it shows you how much fear and emotion is running the market, so whether it's a good idea to put money in when that's what's running the market and not fundamental, I think that's a very good question, Lou.
LISOVICZ: I think that what also you're saying, though, you know, they can look at past financial crises, past bear markets, and say, all of these signs, are we getting to the bottom? The volatility, the magnitude of selloffs.
But, Lou, at the end of the day, it's an adjustment.
LISOVICZ: This may not be garden variety recession, OK? And it's becoming clear with the credit markets being frozen...
LISOVICZ: ... that we have to adjust to that reality. It might be a lot more painful and a lot longer. DOBBS: I've seen very little discussion about what's happening in the bottom market. I'm seeing very little discussion of the real economy right now. I'm hearing a lot of discussion about what's happening to some Wall Street firms.
I understand the interest, obviously, in those Wall Street firms that have been bailed out by Hank Paulson, their leading buddy in Washington, D.C. But the reality is, that this real economy is where we live, and it is what we have to focus on, but we're watching an equities market that's in disarray.
And the suggestion that there's anything normal about what's happening here, I mean, you have to harken back to 1987 which was a really a compressed period of time in which we saw dislocation and a market climax to the negative that resulted in a turnaround. It was a very short order.
This is something different. And for anyone to sit up and say otherwise I think is disingenuous, don't you?
HARLOW: Yes, I think we all know that this is certainly something different certainly than what either of us have ever seen. And what's also interesting...
DOBBS: Well, any of us. Any of us.
HARLOW: Any of us. And a lot of us are relating it to the Great Depression, but then when we look at the other economic fundamentals and we look at the unemployment rates, that's no where near where it was during the Depression, but ask anyone how they feel about their 401(k), and they feel like it's a depression.
LISOVICZ: And remember, we're talking about real money here. When you talk about more than $8 trillion in the last year, I mean, that's not just Wall Street big shots. It's all of us, Lou.
DOBBS: Yes, and without question, and the idea that it's real money, it is -- it's beyond real money, because a lot of folks are going to be watching their retirements put in abeyance for several years unless there's some miraculous recovery here.
But one of the things that I think also what's going on here that we ought to keep in perspective, and that is, despite the sort of clamor for Washington to react in something that I've never seen in my professional career, and that is, a president, a speaker of the House, a Senate majority leader, and two presidential candidates talking down markets and talking down this economy.
I think everyone -- I think each of them, to a person, is a fool for having done so. And these are some of the consequences of that absolutely, immature, irresponsible judgment on the people -- on the part of people who should be exercising leadership. Not playing with the politics of fear in both parties.
Let's hope that some lessons have been learned and that we can see some stability return to these markets soon. Thank you both for the excellent job of reporting that you're doing on this selloff. Thank you very much.
LISOVICZ: Thank you, Lou.
DOBBS: The White House today confirmed what we reported here three days ago that the Treasury Department is considering buying stakes in the nation's banks. The White House said the idea is under active and -- active consideration, as it put it.
Officials, apparently, acknowledging the government, so far -- in its efforts so far have failed to restore investor confidence as if we needed further evidence of that fact.
Louise Schiavone has our report.
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice over): As world credit markets sink rapidly, the pressure is on. Knowledgeable sources telling CNN, the goal is to move quickly and within the law.
Among the most effective actions possible using part of the $700 billion rescue money to directly buy preferred bank stocks steadying shaky financial institutions.
HENRY PAULSON, TREASURY SECRETARY: We will use all of the tools we've been given to maximum effectiveness, including strengthening the capitalization of financial institutions of every size.
SCHIAVONE: Sources familiar with the strategy say there's been an evolution of thought and in a world where time is of the essence, it will take too long to start with a broadly discussed U.S. purchase of poorly valued securities.
Treasury Secretary Paulson said, just this week, it would likely take weeks to move on the purchase of acutely weakened or to so-called toxic bank assets. Sources tell CNN the White House and treasury secretary have come to believe that's just too long.
The belief is broadly held.
MICHAEL GREENBERGER, UNIVERSITY OF MARYLAND: It's very, very important that the treasury get a very quick start on this and at least appear to be on top of it and starting to get the money moving out.
SCHIAVONE: The notion of the government as bank investors is controversial, but the broad expectation is it could work.
JD FOSTER, HERITAGE FOUNDATION: From the taxpayer's perspective, it is almost certain that this will end up being good investments. That shouldn't really be the question. The real concern that we ought to have is the general proposition of the governments taking large equity stakes.
SCHIAVONE: Sources say the move to use bailout money to buy bank stocks could begin as early as sometime next week.
SCHIAVONE: Also possible as early next week, the appointment of asset managers to begin treasury's process of wading through bad securities. But sources say treasury lawyers are working feverishly on how to make sure there's no conflict of interests for these experts on distressed stock, assuring that they will work for the taxpayers, Lou, not for the banks that hailed from.
DOBBS: And of course, I'm sure they're moving with all alacrity toward doing that -- the oversight functions fully staffed up.
Louise, thank you very much -- Louis Schiavone from Washington.
On the presidential campaign trail, scathing new attacks by senators McCain and Obama but no new ideas on how to solve what is a worsening financial crisis.
Senator McCain, again, questioning Senator Obama's links with the 1960s radical terrorist Bill Ayers. Senator Obama accused McCain of what he called erratic behavior.
We have extensive coverage tonight. Ed Henry with the McCain campaign in Wisconsin, Candy Crowley is with the Obama campaign in Ohio, and we begin tonight with Ed Henry -- Ed?
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Lou, it's interesting a lot of these campaign events you cover on either side end up being pretty scripted. Today, this town hall meeting in Wisconsin was anything but scripted, instead, a lot of fire and passion from a lot of Republican voters who stood up, took the microphone and told John McCain him that they're not happy about the state of this race.
They were giving the kind of passion, frankly, we really didn't see at that presidential debate a couple of nights ago, that had a town hall format but turned out to be not that exciting.
Today, what they are basically saying is that they're frustrated that John McCain is behind. They're frustrated at the news media. They don't feel that John McCain is getting a fair shake. They feel, in their own words, that Barack Obama is getting a pass from the mainstream news media.
And they also were making very clear that they're a little frustrated with John McCain, that they think that it's time for him to step up his own game and start taking it directly to Barack Obama out here on the trail.
Take a listen to some of the passion out there.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: When you have Obama, Pelosi and the rest of the hooligans up there to run this country, we got to have our head examined. It's time that you two are representing us, if we are mad. UNIDENTIFIED MALE: ACORN is out there, you have the good Reverend Wright, we have all of these shady characters that are surrounding him. We have corruption here at Wisconsin and voter consternation. I am begging you, sir. I'm begging you.
(END VIDEO CLIP)
HENRY: Now Senator McCain ducked that question about Reverend Wright, though. Senator McCain would basically not discuss whether he'd be bringing up Reverend Wright. He's had indicated previously that he did not want to get into that controversy on the campaign trail.
But on the question of Bill Ayers, he did say this is not a question about Bill Ayers himself. It's a question about Barack Obama and his truthfulness. John McCain asserting that there have been conflicting accounts from Barack Obama about the extent of his relationship with Bill Ayers.
And McCain aides are saying that not only on that issue, but on a whole range of issue, that that's going to be their game plan from now until Election Day, to raise questions about Barack Obama's candor on a whole range of issues, Lou.
DOBBS: Well, you know -- how did Senator McCain respond to those two gentlemen, who, as you say, were impassioned, straightforwardly asking for his representation of their feelings, their circumstances, their perspective in his efforts to win the presidency?
HENRY: He said, he was frustrated as well and that he is planning to take it directly to the --
DOBBS: He was frustrated?
HENRY: -- Democrats moving -- he said he's frustrated in part about the news media coverage. Sarah Palin jumped in at one point as well and said that she wants it to finally be the case that some tough questions will be thrown at Barack Obama, and that she's waiting for Barack Obama to give some straightforward answers.
So clearly, the Republican ticket is feeling a little bit of heat from its own voters about taking this debate more directly to the Democratic side. But we'll see just exactly what they do with that passion that they're -- that sort of being thrown at them, Lou.
DOBBS: Well, did Senator McCain decide to respond in any way, affirmatively saying he's going to raise the energy of his personal campaign, that he is going to take up that frustration, and directly represent those emotions in his campaign going forward?
HENRY: He did suggest that he would pick it up. On the Reverend Wright controversy, though, he did not. On the Bill Ayers controversy, he did. But in general, he suggested that he heard the voices at this town hall meeting and he was going to take it forward, Lou. DOBBS: Well, and somebody's -- someone very, very bright -- perhaps you, Ed -- later, can explain to me the difference between the Reverend Wright, a 20-year association relationship and the Bill Ayers relationship which is something like 15 years.
I'm not sure that I understand his parsing and very careful balancing of those equities. Thank you very much, Ed Henry.
Senator Obama today intensified his efforts to win the support of independent voters in the swing state of Ohio where he's doing very well. Senator Obama today launched a new attack on Senator McCain's economic policies.
Candy Crowley has our report from Portsmouth, Ohio -- Candy?
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Lou, this is a very careful campaign right now. That's what you can afford to be when you are riding high in the polls when you have the money to stick this out through voting day.
So what we have here is a campaign that basically is sprinting through Ohio today and tomorrow. Barack Obama speaking from the teleprompter, but there's always sort of a day of sound bite or two.
And today, as you mentioned, Obama took out after McCain -- the McCain's plan to buy up the bad mortgages and help homeowners by bringing down the mortgage to fit the actual appraisal on their home, and then helping them at a lower interest rate.
Obama said this is nothing but a bailout for the banks that caused the problem, and also hit McCain saying, listen, you know, a couple weeks ago, he didn't want to bail out homeowners at all now he has this big expensive plan.
And it all, as far as Obama's concerned, boils down to that one word, "erratic."
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I don't think we can afford that kind of erratic and uncertain leadership in these uncertain times. We need steady leadership in the White House. We need a president we can trust in times of crisis.
(END VIDEO CLIP)
CROWLEY: According to Obama, other examples include when McCain said the fundamentals of the economy are strong, then the financial markets fell apart. And McCain called it a crisis and rushed back to Washington.
This is all aimed, Lou, at one thing. Really, McCain's enduring strength in the polls. And that is when you ask voters, does he have the experience to be president? And always, McCain outpolls Obama on that issue. So this goes directly to the heart of the strength of John McCain. And it's clearly an effort to say, listen, this man is too unstable to be president. You need that steady hand and that's me -- Lou?
DOBBS: Did any of the Obama campaign staff explain how the senator could object to the $300 billion bailout of homeowners who are under water in this country? He's objecting to it on the basis that it's a bailout of the banks that created the problem.
He and McCain both voted to bail out Wall Street and the banks who created the problem. What is the distinction? Does the staff make that clear?
CROWLEY: Well, no, I mean, this has basically been something that they brought up, because, obviously, it's something that McCain said in the debate so it's sort of been playing out for the past couple of days.
But they said, listen, this doesn't really help homeowners. This helps those banks that gave out the bad loans in the first place. But more than that it's just another vehicle for Obama to question whether McCain, frankly, has the temperament to be in the White House. I mean that's the aim of kind of all of this.
DOBBS: OK. Candy, thanks very much. Candy Crowley from Portsmouth, Ohio, thank you.
Coming up next here more on the complete absence of political and economic leadership in this country and whether anyone can step up.
Also, a left-wing activist group linked to Senator Obama. Are they trying to steal the election outright? We'll have that special report on widening investigations into an outfit called ACORN.
And rising concerns that illegal aliens may be allowed to vote and influence the outcome of this election.
Stay with us, we're coming right back.
DOBBS: New evidence tonight that the so-called community left- wing activist group ACORN is involved in widespread voter registration fraud. And point of fact, ACORN is a left-wing special interest group that's been under investigation for, literally, years in various parts of the country for voter fraud and embezzlement.
Tonight, the Lake County, Indiana Board of Election says ACORN submitted literally thousands of fraudulent voter registrations cards over the past few days alone.
Drew Griffin has been investigating ACORN. He's joining us now from Chicago bureau with the very latest for us -- Drew?
DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT: Lou, let me set this up a little bit. Lake County is a very Democratic county in the Republican state of Indiana. Barack Obama wants to turn Indiana this election. And if it turns his way it will be largely because of the voters in Lake County who turn out again heavily Democratic.
ACORN who supports Barack Obama in this presidential campaign went out and tried to register as many new voters in Lake County as they possibly could. The deadline was October 6th. They came in with 5,000 new applications. And when the registrations office began going through them, they found a pattern -- every single one of them was fraudulent.
GRIFFIN (on camera): A lot of them?
RUTHANN HOAGLAND (R), LAKE COUNTY ELECTIONS BOARD: 50 percent. We had close to 5,000 total from ACORN, and so far, we have identified about 2100.
GRIFFIN: So roughly half of them...
HOAGLAND: Roughly half.
GRIFFIN: ... are bad.
GRIFFIN: Registered to a dead person, registered to a person who lives at a fast food shop?
GRIFFIN: Or just all of them, amazingly, in the same hand?
HOAGLAND: Yes. Yes. All the signatures look exactly the same. Everything on the card filled out looks just the same.
GRIFFIN: Ruthann, fraud?
HOAGLAND: We have no idea what the motive behind it is. It's just overwhelming to us.
GRIFFIN: Lou, I took a look at these registration forms and, indeed, they're all in the same hand. You can tell they're all written by the same person. They showed us the death certificates of some of these people who are registered there.
The workers have been diligently trying to go through all these new ones. But finally, they had to just put them aside. 2,100 of these applications are fraudulent. The other 2900 have been placed to the side. They haven't even looked at them yet.
They want to take care of the actual good applications of real new voters who really want to vote in this election. But they're scared. They're scared they don't know what's out there and who or what is going to show up at the polls when voting actually begins in the ballot boxes.
DOBBS: Drew, the -- woman with whom you were speaking, a terrific public servant, I -- we have got wonderful people like her all over the country. She seemed very sweet, she would not commit to the fact that somebody writing in the same handwriting for thousands of times to register dead people would be committing fraud.
But listen, you've been looking into this story for days and days now. We're seeing it from Vegas to Ohio to Pennsylvania to Indiana, all over the country, and these investigations are opening up. How can there be any doubt about what's at work here?
GRIFFIN: You know, each individual county, Lou -- and that's what's happening there. And let me tell you, Lake County, they are so afraid of anybody calling them partisan, for every worker, every job in that elections office, one person is a Republican, one is a Democrat.
Both Republicans and Democrats are coming to me and saying, look, this is fraud. This is registration fraud. But each county has to look at it and usually what happens is, after the fact, after the election, the boards look at it, they file criminal charges, people are charged with these.
But it takes years to get these charged filed and for any kind of actual convictions to come through.
DOBBS: Where is...
GRIFFIN: And that's too late.
DOBBS: Where is the Justice Department? And why is this being permitted to go on?
GRIFFIN: I think that's a very good question but I will ask the Justice Department tomorrow morning.
But, again, if the jurisdiction of the local county that has to go through the legal process, you know, so that's what this board will recommend, a decision to the county attorney.
DOBBS: All right. Drew, thank you very much, as always, outstanding reporting.
Well, new evidence tonight that the Obama campaign is substantially connected to ACORN, despite disavows from both ACORN and the Obama campaign. And new questions tonight as well about just how much money ACORN receives from the federal government.
As Bill Tucker reports some members of Congress are now calling for all federal funding of any part of ACORN to be halted.
BILL TUCKER, CNN CORRESPONDENT (voice over): House Republican leader John Boehner wants all federal funding to the Association of Community Organizations for Reform Now, or ACORN, to end it now. He's joining a course of Republican members who are furious over repeated charges of voter registration fraud against ACORN.
Last month, 39 members of the House sent a letter to the Department of Justice asking the attorney general to investigate ACORN.
REP. TOM FEENEY (R), FLORIDA: We shouldn't be funding any political activity with taxpayer dollars. Jefferson said it was the essence of tyranny to force a man to contribute to a cause he doesn't believe in.
TUCKER: But when it comes to cutting off funding, there's a problem. Nobody has a handle on how much money ACORN receives from federal resources.
REP. STEVE GARRETT (R), NEW JERSEY: I would absolutely say, no, we do not have a handle on that. And the reason is -- as I said a moment ago, ACORN is an umbrella organization of 75 different organization, as I understand it, and so they have, if you want to use the word "tentacles," out in all of these. And in any piece of legislation, you will probably not see the word ACORN in it.
TUCKER: Representative Garrett says that within the federal rescue of Fannie Mae and Freddie Mac, there's a $500 million set aside for community organizations like the groups that make up ACORN.
Financial Services Committee chairman, Barney Franks, says no money goes to ACORN. And a spokesman for ACORN says it receives no money from federal sources, calling itself, a, quote, "nonprofit, nonpartisan social justice organization," which refuses to accept federal moneys, saying funding comes from donations and membership fees.
Opponents call that laughable, claiming that at least 40 percent of ACORN's funding is supplied by federal sources.
TUCKER: And ACORN has been paid $800,000 by the Obama campaign to register voters. And there's another connection between ACORN and the Democratic presidential candidate Obama. Obama, along with the Department of Justice, represented the group in a lawsuit to force the state of Illinois to comply with voter registration law, Lou.
DOBBS: So, to -- again, to be clear, there is no question that the Obama campaign is paying ACORN...
TUCKER: That's correct. DOBBS: ... for voter registration? And that now that ACORN is being with fraudulent registration, voter fraud, in effect, across a number of states all across the country?
TUCKER: That is absolutely correct.
DOBBS: And there is no federal investigation at this point? This is absolutely obscene and outrageous.
Bill, thank you very much. Bill Tucker.
Well, ACORN is under investigation for embezzlement and voter fraud among other things in at least eight states. Authorities are investigating ACORN's voter registration drives. And ACORN employees, some of them have been convicted of voter fraud.
Former Ohio secretary of state Ken Blackwell is calling for closer scrutiny of Senator Obama's connections to ACORN.
The Obama campaign Web site, by the way, fight the smears responded today by attacking Blackwell, saying, quote, "Blackwell's attacks against ACORN and community organizers constitute a vile Republican pattern of mockery and viciousness against this noble profession.
Community organizers are the very individuals Republicans should be celebrating for helping people help themselves rather than depending on the government."
That gets a little complicated since ACORN is depending on, obviously, the government and political organizations. And after disavowing a relationship with ACORN, despite all of those investigations across eight states right now into ACORN and voter fraud, the Obama campaign, obviously, supporting ACORN.
That brings us to the subject of our poll tonight. Are you concerned that radical left-wing activist groups are trying to manipulate the outcome of this presidential election? Yes or no. Cast your vote at Loudobbs.com. We'll have the results for you here later.
Up next, more questions tonight about widespread election fraud. It could result in eligible voters being turned away from our polls. We'll have a special report.
And the Dow plunging almost 700 points now at a five-year low. And two of the nation's leading economic thinkers join me here. We'll be talking solutions tonight.
Are you listening, Hank Paulson and buddies on Wall Street?
We continue in one moment. Stay with us.
DOBBS: As we've been reporting, new threats to the integrity of our voting system, just 26 days before the election. Tonight, evidence that eligible voters have been removed from voter rolls are blocked from registering in key wing states.
And as Lisa Sylvester reports, new concerns arise about whether illegal aliens will be allowed to vote in this election as well.
LISA SYLVESTER, CNN CORRESPONDENT: New concerns over voter registration. First, the sheer volume, millions are registering to vote and election officials scrambling to keep up. Election experts believe turnout could be higher than the 1960 election when 64 percent of eligible voters cast ballots.
KIMBALL BRACE, ELECTION DATA SERVICES: All of the candidates are seeking to register more and more people. And election administrators have been caught in many instances flat-footed with so many registration records.
SYLVESTER: There is also a worry that people who are eligible and entitled to vote will be turned away when they go to the polls. According to a "The New York Times" analysis, six swing states appear to be violating federal law by taking some eligible voters off the election rolls or not allowing some voters to register at all. "The Times" says the removals appear to be due to mistakes in handling voter registration files.
MICHAEL MCDONALD, GEORGE MASON UNIVERSITY: Well, if these are swing states and this is a close election this has the potential to be a very big deal because there could be voters who are showing up on Election Day and they're going to find out that they're not registered to voter anymore.
SYLVESTER: and the environment is ripe for potential fraud. The community group A.C.O.R.N. is under investigation for allegedly filing hundreds of bogus registrations in Missouri and Nevada. The Center for Immigration Studies is keeping a watchful eye to make sure non- citizens do not vote in the election.
STEVE CAMAROTA, CENTER FOR IMMIGRATION STUDIES: Our voter registration system and voting system basically goes on the honor system. So fraud has always been a problem and it may be a growing problem.
SYLVESTER: With such razor-thin margins in swing states a few thousand votes could make a big difference.
SYLVESTER: The "Help America Vote Act" required states to consolidate county voter registration list to one state wide list. Election experts say that's one of the reasons election offices are overwhelmed.
Critics say this process of compiling this list is not always transparent and often there is not enough oversight. We should mention though that several of the states defended their actions saying they've done nothing wrong or illegal -- Lou.
DOBBS: All right, Lisa. Thank you very much, Lisa Sylvester from Washington.
Up next here, a legendary aircraft carrier returning to New York City, a symbol of this nation's commitment to our wounded warriors. The president of the Intrepid Fallen Heroes Fund joins me.
And another brutal day on Wall Street. Can the government restore confidence in the market? Two of the best economic thinkers in the country join me to assess the answer to that question.
We'll be right back.
DOBBS: Joining me now on this massive sell-off on Wall Street and the bailout of Wall Street, William Isaac, chairman of the Secura Group and the former chairman of the Federal Deposit Insurance Corporation, one of the leaders in the bailout of the S & Ls in the 1980's crisis. Peter Morici, professor at the Robert H. Smith School of Business at the University of Maryland. Thank you both for being here.
Let me turn to you, professor, first, another sell-off on Wall Street. Just about $7 trillion since the peak one year ago today. Is there any prospect at all that what the Treasury has done to this point and that the Fed has done to this point is having any positive effect whatsoever?
PETER MORICI, PROFESSOR, UNIVERSITY OF MARYLAND: Well, I think the evidence is in the stock market. Clearly, there's no confidence in what the administration has done so far. Or what the Federal Reserve has done either alone or in concert with other central banks.
It's hoisted upon the banks nearly $1 trillion in liquidity, yet the banks don't seem to be able to find a way to make new loans. Largely, the New York City banks are stashing the money in their vaults looking for other businesses to get into.
It's as if we gave General Motors $25 billion couple weeks ago to retool and they announce they were going into the beer business. In the case of Citigroup and the others, they're going into more speculative activities.
We're not going to get anyplace; even buying equity in the banks won't do because it's just giving them more cash. And unless we're going to compel them to return to conventional commercial banking practices and in the case of New York City banks to consolidate the loans of regional banks and sell them to fixed-income investors.
DOBBS: Bill Isaac, I have been amongst those supporting a plan that you put forward. And you feel quite differently. You believe that it's absolutely essential that the federal government move in and improve the capitalization of banks and to improve their balance sheets, so that they can, in point of fact, begin lending, and to break this credit crisis?
WILLIAM ISAAC, CHAIRMAN, SECURA GROUP: That's right, Lou.
There's really two actions we need right now. And Secretary Paulson actually hinted at both of them yesterday but didn't really do anything. So I think the markets have not responded yet. And if he'll take these actions and take them quickly, I think we can get -- we can move beyond this crisis.
The first one is that they, the FDIC needs to use its authority, which the Secretary of the Treasury has to ask the FDIC to use, to declare that there's an emergency in our financial markets and if the FDIC does that and then announces that it will protect all general creditors when a bank fails during the period of this crisis, then I believe that the credit markets will unfreeze. Right now, banks won't even lend to banks, much less customers of banks.
ISAAC: We really need to get this crisis atmosphere behind us. And the FDIC can do that with a simple announcement.
Right now, banks don't know who's going to fail next and how the government is going to handle the failures. We need to bring some stability, we need to bring -- reduce the anxiety in the markets.
Secondly, I believe that the Treasury ought to be using much of the money in that bailout bill not to buy loans because that doesn't do anything. They're just throwing liquidity in the systems that that has too much liquidity already. What we need to do is get capital into the banks through that bailout fund and you leverage that 10 to 1.
And the banks -- if the Treasury were to put, let's say, $300 billion or $400 billion of that bailout fund into capital into banks, banks will be able to loan ten times that. So we're increasing lending capacity by $3 trillion to $4 trillion. That's desperately need. Banks don't have the capital to lend right now. They love to lend but they can't because they don't have the capital.
DOBBS: We should explain very quickly, the so-called capital requirements for every dollar of capital a bank is able to loan, $10 in money.
Let me ask, you know, to me, bill, that makes all the sense in the world. Professor Morici, do you agree?
MORICI: No, I don't. If we use the new facility that was created and we buy back securities from the banks, they have the option of taking that cash they receive and turning it into capital. They can issue common shares and count the cash they receive as capital.
The problem here is an unwillingness to participate in normal commercial banking practices --
DOBBS: Wait, wait. Let's ask Bill Isaac to respond to that.
ISAAC: That's not right. The Treasury needs to -- buying $700 billion of loans all that does is take $700 billion out of the $15 trillion system. And that's not going to help at all.
What we really need to do is have Treasury invest that money into the banking system in the form of capital, and that will -- as you said, Lou, that will cause --
MORICI: We don't agree. The fact of the matter, the banks could take the money you that give them in exchange for their bad paper and turn that into capital if they chose to by issuing common shares.
The real key issue here --
ISAAC: To whom? To whom?
MORICI: -- is compelling the banks to behave differently if you buy in. I'm for buying equities, if you compel management changes.
DOBBS: Let me ask you this. This move today to lower the rates by the Fed, the concerted rate, the impact today has been deleterious, I think we can say. Are we going to see further rate cuts and will it have effect, Professor Morici?
MORICI: I think we'll see further rate cuts but unless there's a change in the basic behavior of the banks, no.
DOBBS: And Bill Isaac, you get the last word.
ISAAC: Well, he's just wrong on the facts. If the banks are going to issue capital, they've got to be paid for, and the Treasury or somebody is going to have to pay for it. Right now, nobody else wants the capital so the Treasury is going to have to pay for it.
DOBBS: Bill Isaac, we thank you for being with us. Peter Morici, thank you very much.
While Peter Morici and I don't often disagree, I'll guarantee you, I think that Bill Isaac has got the correct idea and one which I hope this Treasury Secretary has got the sense to listen to.
Thank you both, Professor Morici, Bill Isaac, thank you.
Still ahead here, the impact of this Wall Street sell-off on the presidential campaign. I'll be talking with three of my favorite radio talk show hosts about what their listeners are saying and what they think the prospects are.
Stay with us. We'll be right back.
DOBBS: Joining me now, two of my favorite radio talk show hosts all across the country: in San Diego, Roger Hedgecock, KOGO --this program being simulcast, I understand as well. Roger, good to have you with us. In Detroit Mildred Gaddis, WCHB; Mildred, good to see you, you are sparkling as always. In Washington, D.C., Joe Madison of Sirius XM radio. Joe good to see you.
All of you have said that the economy is the number one issue for your listeners. Let me turn to you first, Joe, is there any sense that there is one of these candidates actually knows what he's talking about?
JOE MADISON, SIRIUS XM RADIO: No. Obviously, no, straight up, I mean, they do not and quite candidly --
DOBBS: Bless their hearts.
MADISON: And I think quite candidly, they know that as soon as this election is over, the people are going to have to really get into, I'll think of a better word, but they're going to have to really jump Congress and the President to get this thing turned around because everybody's hurting.
It's not them. It's not those. It's not that one. It's all of us.
DOBBS: Mildred, you know, we've talked on this broadcast for some time since actually September 11th about sharing sacrifices. It looks like we've arrived there. This isn't what any of us have in mind. How are your listeners reacting?
MILDRED GADDIS, WCHB IN DETROIT: Well, Lou, they're very frustrated. And here in Michigan, the world knows what's happening here and what has happened with unemployment. And they're concerned that people are unwilling to declare what really is existing in this country right now and admit the fact that we are in a recession.
But here's what they are saying. They believe that John McCain -- they tie him very closely to the Bush administration. So they literally tuned out what he has to say about what's happening now and seem to be more willing, even if Barack Obama isn't on it, the perception in their minds seems to be he's closer to it than John McCain is.
DOBBS: Even after he said $300 billion in help for homeowners who are under water?
GADDIS: Pardon me?
DOBBS: Even after John McCain stood up and said he wants to give $300 billion to homeowners facing foreclosure and whose homes are under water?
GADDIS: Even that far because of their disdain for the Bush administration. And John McCain here in Michigan as you know has pulled out and he has been unable to separate himself from George Bush.
DOBBS: Roger Hedgecock out in San Diego, give us your perspective. ROGER HEDGECOCK, KOGO IN SAN DIEGO: Well, Lou, we're almost out here, we've almost transcended this political bipartisanship and petty bickering. These economic problems have now gotten so much worse than the presidential campaign offers any solution to. We have a situation where today HUD was talking about 5 million illegal alien home mortgaged loans that have gone bad.
DOBBS: Five million?
HEDGECOCK: We now have a tsunami of bad debts -- five million.
And remember, Tom Tancredo said last week that he had 10,000 illegal alien foreclosures in his congressional district alone. So we need to go back and understand where this started. This started with giving loans to people who shouldn't have had them in the first place, and now the rest of the taxpayers are being faced with a bill that we or our great grandchildren will never pay.
MADISON: You see, this really angers me, because I'm sitting here, Lou and Roger and Mildred and wondering, how is it that people who are illegal get loans when people in my community who are legal have a difficulty getting loans, and if they do get them, they're often from predators?
DOBBS: Well, you know what the reason is? You can say thank you to the United States Treasury Department, and to the regulators of the banking industry, the controller of the currency, the FDIC, and the Federal Reserve who encouraged the creation of a quote, unquote "market" and permitted the removal of -- and just simply the avoidance of the issue of tax ID in order for these banks not only to give bank accounts, but also to give mortgages and low-interest financing to illegal aliens.
MADISON: Lou, I just got a mortgage, and let me tell you. They wanted everything but my first child.
DOBBS: Well, you're not trustworthy, though, Joe.
MADISON: Oh, that's right.
DOBBS: We wouldn't know where to find you.
GADDIS: Lou, one of the areas of frustration for many Americans who play by the rules try to get it right is there is absolutely no talk about the penalty for those who have broken the rules. And people are very upset that what they're talking about now is using taxpayers' dollars to reward people who have literally been corrupt and in many instances broke the law.
MADISON: And this AIG thing sets my listeners off. I mean, man, they're ready to tar and feather and arrest them right now.
DOBBS: Roger, you're transcending this presidential campaign out there with -- I guess with the worst of reasons and an economy that is creating great pain in the state of California. What is the reaction to AIG and all of this talk of, you know, that we have heard for years about free markets and happy results? You just keep your hands off of it and keep the government away from it.
What is the reaction? How do your listeners and how do you put that in some perspective?
HEDGECOCK: I think people out here and my listening audience, Lou, are saying, look, it was government regulation that caused this problem. It was government mandates and the Fannie Mae/Freddie Mac regulations which opened up easy credit to people who shouldn't have gotten it in the first place and now it's suddenly our problem.
We think that these outrages like AIG, and I'm with Joe. I mean, our listeners have just about had it with this. When we had this $440,000 party being thrown with $85 billion, after the $85 billion bailout of this company, and the CEO walking away with $5 million or whatever it was, that kind of outrageous stuff is just making people very angry.
DOBBS: Let me just say, if you and your listeners are upset by that, folks, I mean, we've got word that one of the plans was -- because the executives of AIG felt so badly after getting caught, they were going to spend millions of dollars to run commercials apologizing to the taxpayers for spending that half million. But apparently their PR person prevailed and the PR person had more sense than the executives.
We thank you very much, Joe. Great to have you here. Mildred, Roger, thank you very much for joining us. Great to see you all.
A reminder now to vote on our poll. Are you concerned that radical left wing activist groups are trying to manipulate the outcome of the presidential election? We'd like to hear from you. Yes or no; cast your vote please at LouDobbs.com. We'll be back in just a few moment with the results.
Up next, honoring our heroes, Bill White, the president of the Intrepid Fallen Heroes Fund and the Intrepid Sea, Air and Space Museum joins me next to talk about the tireless efforts on behalf of our men and women in uniform.
Stay with us. We're coming right back.
DOBBS: At the top of the hour, "The Election Center" with Campbell Brown. What are you working on?
CAMPBELL BROWN, CNN ANCHOR,: Hey, there Lou. What a difference a year makes. Last year this day, the DOW set a record high, today it dipped back below 9,000; down more than 30 percent this year. Our Ali Velshi though says that this actually signals good news. He's going to have to explain that to me. But we'll talk about that tonight.
Also, Lou, another ugly day on the campaign trail as you know. Some of today's rallies sounded a little bit like anger management seminars. We're going to hear about that. And then Barack Obama says McCain's plan to help people with troubled mortgages is actually a plan to reward shady banks and lenders. We're put that to our no bias noble test.
And we're cutting through the bull with the sheriff who is on the people's side in this mortgage crisis -- Lou.
DOBBS: All right. Thank you.
Up next here, honoring the brave men and women who serve this nation in uniform. I'll be talking with the president of the Intrepid Fallen Heroes Fund, Bill White, next.
We'll be right back.
DOBBS: The USS Intrepid became a floating museum on New York's Hudson River after it was decommissioned. Joining me now, Bill White is president of the Intrepid Sea, Air and Space Museum, president of the Intrepid Fallen Heroes Fund, and co-author of the new book "Intrepid: The Epic Story of America's Most Legendary Warship."
Bill great to have you with us and congratulations on the Intrepid being returned to her berth where she belongs.
BILL WHITE, PRESIDENT, INTREPID FALLEN HEROES FUND: That's right. Thank you so much, Lou. She is back in New York after $115 million extreme makeover, a brand-new aircraft collection, brand new exhibits, beautiful new pier, going to open up to the public on November 8th, for Veteran's Day weekend.
DOBBS: What a great time to reopen this wonderful museum. And it's such a great ship, great museum. Tell us just quickly if you could a couple of new -- the new exhibitions.
WHITE: Yes, well, we've got a brand-new aircraft collection, so we've got the Blackbird spy plane, the British Airways Concorde --
DOBBS: Two of my favorites.
WHITE: There you go. We've got a Marine aircraft in honor of Lou Dobbs, "Semper Fidelis." Some great aircraft to visit. All of the new exhibits inside, we got an exploreum (sp) for kids to crawl up on and get kind of hands on and really understand the service and sacrifice.
DOBBS: A lot more for the kids here, which kids love this.
DOBBS: You wouldn't have to do anything and they would love it.
WHITE: That's true.
DOBBS: Your new book -- tell us about that. It's a great story about this great ship.
WHITE: It's kind of like you got to read the book before you see the movie. So -- please check out the book. It's a story about five kamikaze (sp) attacks, 270 sailors gave their life on the Intrepid. That's what the lesson of the Intrepid is -- about service and sacrifice. Giving of yourself for a higher cause and we hope that the young people in this country will understand that the Intrepid is very important today in the lessons that they are learning out there
DOBBS: And -- talking about -- honoring service -- the Fallen Heroes Fund, those that want to contribute to it -- where do they go on the web?
WHITE: That's right. We're building this traumatic brain injury center for those service members who need our help -- fallenheroesfund.org. The can also see all the information on how to contribute, help out and support the troops today.
DOBBS: There you see it -- fallenheroesfund.org. We even have the number up there. It will be on our website as well -- and the website of course -- of course, we encourage you to do as much as you can for the folks we owe so much to.
You're one of those folks, we owe a lot to, Bill White -- thanks.
WHITE: God bless you, Lou --thank you, sir.
DOBBS: Tonight's poll results: 77 percent of you are concerned that radical left wing activist groups are trying to manipulate the outcome of this presidential election.
We thank you for being with us tonight. We ask you to join us tomorrow. For all of us here, thanks for watching. Good night from New York. The "ELECTION CENTER" with Campbell Brown begins right now -- Campbell?
BROWN: Thanks, Lou.