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LOU DOBBS TONIGHT

Senator Stevens Guilty; McCain Slams Obama; San Francisco Policy Rejected; Election Fraud Risk

Aired October 27, 2008 - 19:00   ET

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


LOU DOBBS, HOST: Thank you, Wolf.
Tonight a bombshell verdict in the Senator Ted Stevens trial. Stevens found guilty of seven charges of corruption. We'll have a live report and we'll examine the political impact.

Also tonight Senator McCain and Obama presenting their so-called closing arguments in this presidential campaign. Obama's spread the wealth agenda at the center of those arguments. We'll be assessing the impact of this fight on voters.

And tonight, some positive news on this economy that you may not be hearing anywhere else but we'll it have all of that positive news, news that most of the media, of course, is ignoring. We'll tell you all about that. I'll be joined by three top economic thinkers as well. All of that, all the day's news, a lot more from an independent perspective straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Monday, October 27th. Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody. A jury today convicted Senator Ted Stevens, the longest serving Republican senator in history of corruption. The jury in Washington finding Stevens guilty of all charges after he failed to disclose gifts and work on his house in Alaska. Afterwards, Senator Stevens said he will fight that verdict with every ounce of energy. That verdict could help Democrats defeat Senator Stevens come November 4th. Kelli Arena has our report from Washington.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): The verdict came in before the election. Just as the senator wanted. But it wasn't what he was hoping for. Senator Ted Stevens was found guilty on corruption charges for lying on financial disclosure forms about more than $250,000 worth of gifts and home renovations that he received.

MATTHEW FRIEDRICH, ACTING ASST. ATTORNEY GENERAL: This investigation continues as does our commitment to holding elected officials accountable when they violate our laws.

ARENA: Stevens faces up to five years in prison on each count, but under sentencing guidelines he's likely to receive much less prison time, if any. The senator had no public comment as he left the courtroom, but kissed his wife and told her, it's not over. His defense team says it will ask for a retrial at a hearing set for February and he's still up for re-election in Alaska.

UNIDENTIFIED MALE: He's done a lot for the state of Alaska. He's done a lot for a lot of us. And he's just a very good, decent human being.

UNIDENTIFIED MALE: He's older now and it's time to move on and let's get some young blood in there.

ARENA: Stevens' conviction hinged on the testimony of Bill Allen, the senator's long-time friend and founder of Veco, an energy contractor. Allen testified he didn't bill Stevens for work on his house. Stevens contends he paid more than $160,000 in bills and didn't know he was getting anything freebies. Legal experts say the case took a turn when Stevens took the stand.

JOSHUA BERMAN, FMR. FEDERAL PROSECUTOR: When Stevens finally took the stand and the prosecutors had their crack at him on cross- examination they made great head way. Some of his responses were questionable and some of the answers he gave just didn't hold water in the juror's eyes.

(END VIDEOTAPE)

ARENA: The senator just released a statement, Lou. I'm quoting here. He says "I am innocent. This verdict is the result of the unconscionable manner in which the Justice Department lawyers conducted this trial."

As you said, Lou, Stevens says he'll fight the verdict with every ounce of energy he has. And Lou, if he wins re-election, he's not required to resign but the Senate could vote to expel him.

DOBBS: Kelli, thank you very much -- Kelli Arena from Washington.

Well, Governor Palin of Alaska said this verdict shines a light on corruption in Alaska. Governor Palin said she was elected to fight corruption saying "that fight must always move forward regardless of party affiliation or seniority or even past service. Governor Palin says she's confident that Senator Stevens will do the right thing for the people of Alaska." Governor Palin did not elaborate on that statement.

Before today's verdict, Senator Stevens was in a statistical dead heat with his Democratic rival Anchorage Mayor Mark Begich. The latest poll gives him 46 percent, Stevens 45 percent, nine percent of the voters undecided. Democrats hope a victory in Alaska would give them a filibuster proof majority in the Senate. Senator Stevens tonight saying he will not drop out of this race.

On the campaign trail, Senator Obama today put the economy at the center of his speeches as he made what he calls his closing argument to voters. Senator Obama said this nation faces a clear choice. Between rewarding wealth alone or rewarding the work and the workers who create it as well. Candy Crowley with our report from Pittsburgh, Pennsylvania.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT (voice-over): Barack Obama's campaign called it his closing argument most notable for the date.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: In one week you can put an end to the politics that would divide a nation just to win an election.

CROWLEY: Twenty-one months after he launched his bid to become the Democratic presidential nominee, Barack Obama's once improbable campaign may be on the precipice of history or not. A transition team is already busy and many Democrats cannot hide their excitement, but whatever he thinks, Obama cannot say in public anything other than this.

OBAMA: We cannot let up for one day or one minute or one second in this last week.

CROWLEY: The speech is a mixed bag now. A return to the hope message that launched his campaign.

OBAMA: In one week we can choose hope over fear and unity over division. The promise of change over the power of the status quo.

CROWLEY: An echo of the issue that propelled him in the early months of the primary.

OBAMA: As president, I will end this war.

CROWLEY: He talks better days ahead and bipartisanship. He calls John McCain a man who has served honorably and then blasts him for lying.

OBAMA: He is spending these last weeks calling me every name in the book because that's how you play the game in Washington. If you can't beat your opponent's ideas, you distort those ideas and maybe make some up.

CROWLEY: Obama began this final week of the '08 election in Canton, Ohio, an economically distressed city inside a swing county in a swing state. To deny Ohio to John McCain would likely deny him the election.

(END VIDEOTAPE)

CROWLEY: And, Lou, as you said, in these final days of the campaign it is all about the economy, the economy, the economy, in particular taxes. Several weeks ago the Obama campaign looked at some of the polling and thought that perhaps John McCain was beginning to make some head way by claiming that Barack Obama was going to raise everybody's taxes. Obama has been very, very firm and consistent on this point.

We hear about it every place we go and he says, listen, I'm only going to tax those working Americans who make $250,000 and over. He estimates that's about 95 percent of Americans getting a tax cut. They believe finally, that their word is beginning to get out, certainly, it is a big crowd-pleaser almost everywhere we go, Lou.

DOBBS: All right, thank you very much, Candy Crowley.

Well Senator McCain today escalated his assault on Senator Obama's tax policies. Senator McCain calling Senator Obama "Barack the Redistributor." McCain also warned that Obama, Speaker Nancy Pelosi and Senator Harry Reid are a dangerous threesome -- Ed Henry with our report from Dayton, Ohio.

(BEGIN VIDEOTAPE)

ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): After meeting with his economic advisers in the critical battleground of Ohio, John McCain lashed out at Barack Obama with a final week pitch on taxes that seems to be helping McCain chip away at Obama's lead in key states.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: My approach is to get spending under control and cut taxes and encourage individuals to invest in our markets or buy a home and to encourage businesses to hire more workers. Senator Obama's approach is to radically increase spending. And then raise taxes to pay for it.

HENRY: With Democratic chances of a filibuster-proof Senate increasing, McCain ramping up his efforts to rally Republicans to the polls by warning about the dangers of one party controlling the entire government.

MCCAIN: Now this election comes down to how you want your hard- earned money spent. Do you want to keep it invested in your future or have it taken by the most liberal person to ever run for the presidency and the Democratic leaders, the most liberal, who have been running Congress for the past two years? Nancy Pelosi and Harry Reid.

(BOOING)

MCCAIN: You know, my friends, this is a dangerous threesome.

HENRY: McCain is also pouncing on a 2001 radio interview in which Obama seemed to express regret that the civil rights movement had not gone further by redistributing wealth in America.

OBAMA: The Supreme Court never ventured into the issues of redistribution of wealth. And sort of more basic issues of political and economic justice in this society.

HENRY: Fodder for the McCain camp repeated attack that Obama is preaching socialism.

MCCAIN: That's what change means for the Obama administration, the re-distributor.

(BOOING)

MCCAIN: It means taking your money and giving it to someone else.

HENRY (on camera): But the Obama camp insists that his words are being misinterpreted. That he was only talking about redistribution in a narrow legal context. As to whether the high court can create rights to an education, for example, or whether that should be handled by a legislature, but the McCain camp is not buying that explanation and they plan to continue to push this message hard. Lou?

(END VIDEOTAPE)

DOBBS: Thank you, Ed -- Ed Henry reporting there. Senator Joe Biden today declaring charges that Senator Obama is a Marxist are absurd. Biden today defended comments he made in a television interview in Florida last week. In that interview the anchor asked Biden if Obama's spread the wealth agenda is Marxist. Sean Callebs has our report from Miami.

(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT (voice-over): Confronted by WFTV anchor, Barbara West, Joe Biden momentarily lost his cool.

BARBARA WEST, WFTV: How is Senator Obama not being a Marxist if he intends to spread the wealth around?

SEN. JOSEPH BIDEN, (D-DE) VICE PRESIDENTIAL CANDIDATE: Are you joking? Is this a joke?

WEST: No.

BIDEN: Is that a real question?

WEST: That's a question.

(LAUGHTER)

BIDEN: He is not spreading the wealth around. He's talking about giving the middle class an opportunity to get back the tax breaks they used to have.

CALLEBS: West went on.

WEST: What do you say to the people who are concerned that Barack Obama will want to turn America into a socialist country, much like Sweden?

BIDEN: I don't know anybody who thinks that except the far right wing of the Republican Party.

CALLEBS: It's become a YouTube favorite. But infuriated the Obama camp, something that surprised West, the anchor at the center of the controversy who wonders if this is how Democrats will respond if they win.

WEST: I think it was actually a silly reaction on their part. I think it was an overreaction and I think that Joe Biden and all of the candidates on either ticket, are seasoned enough people that they should be able to respond to any questions that are thrown their way.

CALLEBS: The Obama campaign canceled an interview WFTV had scheduled the next day with the senator's wife, Jill, basically saying, "from now on the station wouldn't get any more Biden or Obama interviews." An Obama spokeswoman says, quote, "let's be clear. The station's interview with Joe Biden wasn't tough. It was just absurd. Republicans and their allies are looking for any excuse they can find to change the subject because by their own admission, if they keep talking about the economy, they're going to lose."

The anchor's husband, Wade West, has been a political strategist and has done work, she says, with Republicans and Democrats. Records show Wade West has donated $2,250 to Republican candidates since the year 2000.

WEST: He is no longer a consultant, let me say. Has never worked at all for anyone in the Bush administration or done any consulting during the Bush administration.

CALLEBS: West says she's not a mouthpiece for the GOP and says she's been tough on John McCain, asking about reports Sarah Palin was straying off message.

WEST: Is that indicative that she believes your ticket is not going to win? That she's positioning herself for the future?

MCCAIN: That's pure baloney.

(END VIDEOTAPE)

CALLEBS: And Barbara West says she has received about 10,000 e- mails on the way she handled the interview and she says most of those support her. Meanwhile, Biden won't let go of the issue. He brought it up again today on the campaign trail in North Carolina, saying, Lou that it is an example of a mean campaign that is out there fostering, quote, "ugly innuendo". Lou?

DOBBS: OK. I mean why would they attack the station like that? You just heard -- as you just reported, I mean we just heard Barbara West ask an awfully tough question of Senator McCain. I mean that was sort of a condescending response on the part of Joe Biden, wasn't it? Well, you can't respond to that.

CALLEBS: I can't respond to that.

DOBBS: I apologize.

CALLEBS: I can tell you...

DOBBS: It's a rhetorical question.

(CROSSTALK)

CALLEBS: Yeah, people are saying, why not just answer the question. Certainly, you made more of a big deal out of it by digging in your heels and continuing to talk and talk and talk about it and then not granting that station that is right in the heart of the I-4 corridor, one of the most important areas in this battleground state saying we're not going to talk to you anymore. It's like, we're going to take our toys and go home.

DOBBS: And coming on a day in which the report as Ed Henry had a portion of the tape from the -- from the public radio station in Chicago from seven years ago in which Barack Obama is talking about reparative economic policy, redistributive economic policy. It's sort of a peculiar day and an unfortunate day perhaps for the Obama campaign not to be giving straight-forward answers on the issue.

And if I may say, and I may, because it's only my opinion, two things. One, Barbara West handled herself, I think with great class and with equanimity, given the situation, very professional. And secondly, Sean Callebs, as always, we appreciate your reporting. Thank you, sir.

A reminder today of the national security challenges facing the next president, whether it be Senator McCain or Senator Obama. U.S. special operation forces killed at least seven people in a cross- border raid into Syria from Iraq. Syrian officials declaring that four American helicopters crossed into their country, two of the helicopters landed at a farm five miles inside Syria. An American official telling CNN the raid was successful. That official saying U.S. troops killed an Iraqi man suspected of working with al Qaeda working to smuggle terrorists into Iraq.

In the war in Afghanistan, what some people call now "the other war" insurgents killed two more of our troops. That attack took place at a police station in northern Afghanistan. A suicide bomber exploded a bomb during a meeting with Afghan police. Twelve of our troops have been killed so far this month in Afghanistan, the same as in Iraq, 537 of our troops have been killed in Afghanistan since the beginning of this war seven years ago.

Still ahead, much more on the political impact of that guilty verdict in the Senator Ted Stevens' trial. Also Governor Sarah Palin faces charges she's a diva from one of Senator McCain's top advisers. Who is that adviser? What in the world is going on? Dare we ask the tough questions here?

And a stunning setback for San Francisco Mayor Gavin Newsom and his sanctuary policy for illegal aliens. We'll have that special report. Stay tuned, Mr. Mayor.

(COMMERCIAL BREAK)

DOBBS: Another setback tonight for San Francisco Mayor Gavin Newsom and his illegal alien sanctuary policy. A California state appellate court has ruled the city must comply with state law, a state law that requires San Francisco police to notify federal immigration authorities when they arrest suspected illegal aliens on drug charges. Casey Wian has our report.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): San Francisco Mayor Gavin Newsom used to loudly proclaim his city a sanctuary for illegal aliens vowing that city officials including the police, would not work with federal immigration authorities.

MAYOR GAVIN NEWSOM, SAN FRANCISCO: We're a sanctuary city. We don't cooperate with the federal government as it relates to these raids.

WIAN: But now a California appeals court has upheld a state law requiring local police to notify federal authorities when immigrants, legal and illegal, are arrested on drug charges. Now the case returns to a lower court where a taxpayer lawsuit joined by the conservative group "Judicial Watch" seeks to prove San Francisco is violating the law.

TOM FITTON, JUDICIAL WATCH: I think San Francisco's sanctuary policy is on the ropes. This court decision is another nail in its coffin. When you have Gavin Newsom running away from some of his sanctuary policies there in San Francisco, on top of this court ruling, that eviscerates a key part of that policy, I think the people of San Francisco are finally going to have some more law and order in their city.

WIAN: This summer, San Francisco was discovered to be actively hiding dozens of illegal alien felons from Immigration and Customs Enforcement. Under pressure Newsom increased that policy. Criticism intensified after Anthony Bologna (ph) and his two sons were gunned down allegedly by an illegal alien gang member who had been protected from deportation by San Francisco's sanctuary policy.

Just last week according to an Immigration and Customs Enforcement official, San Francisco police were, quote, "extraordinarily supportive during the take down of more than two dozen alleged MS-13 gang members on narcotics trafficking charges. Eleven other suspects were arrested for immigration law violations. Neither San Francisco police nor the mayor's office would comment for CNN, but a city spokesman told the "San Francisco Chronicle" the ruling would have no bearing on the city sanctuary law.

(END VIDEOTAPE)

WIAN: A federal law enforcement source says San Francisco remains very selective in its assistance prosecuting violations of immigration law. The fact that there is any cooperation Immigration and Customs Enforcement says is a welcome change, adding sanctuary policies are a real risk to public safety and national security. Lou?

DOBBS: Yeah, I mean this just into the city of San Francisco officials. I mean where is Gavin Newsom? My old buddy just isn't out there you know talking the talk right now about sanctuary, is he?

WIAN: Well, you could say the tone has changed but there's no tone. I mean you know a year ago he was out there holding press conferences, buying ads, advertising San Francisco was a sanctuary for illegal aliens. He's being very quiet now and according to ICE, his police officers are beginning to cooperate, Lou.

DOBBS: God, you would -- you can't even imagine why they would not. I mean this is about the safety of the people of San Francisco. It's also about the law, whatever. When it comes to this issue, I mean Gavin Newsom, other mayors like him, Mayor Villaraigosa in Los Angeles, they would be affected by the same state ruling, would they not?

WIAN: This court ruling gives a precedent that shows that cities do have the right to help federal immigration authorities enforce immigration law. That's what the legal experts are telling us, Lou.

DOBBS: And the responsibility. Thank you very much, Casey -- Casey Wian.

Well a top Mexican government immigration official reportedly under arrest tonight after U.S. authorities found 170 pounds of marijuana in his pick-up truck at an Arizona border crossing. Customs and Border protection officials confirm they found 79 packages of marijuana located in a spare tire in the fuel tank of his pick-up truck.

According to reports, Francisco Celaya-Carrillo (ph) said he was entering the United States just to do some shopping. Officials wouldn't confirm the identity of the man that they now have in custody.

Up next, the news on the economy is not all bad. I'm telling you, I'll say it again. There will not be a depression, no matter what the national media says and what all of these savants have to offer up. We'll be talking with the people who really know. Three of the sharpest economic thinkers in the country join me here next.

And new fears of widespread election fraud just days before voters cast their ballots. That's right, another investigation of ACORN. We'll have a special report next.

(COMMERCIAL BREAK)

DOBBS: Well a continuing threat of voter fraud, election fraud, a new lawsuit alleging the state of Colorado has illegally eliminated as many as 30,000 voters from its registration roles. The battleground state of Colorado is the latest state to report voter registration problems. And as Louise Schiavone now reports there are questions about how many votes will actually be counted and how many of them will be legal.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Amid reports of record voter registration nationwide, accounts of mischief abound, some of them clearly absurd. In Lake County, Illinois, where the congressional seat is hotly contested, officials report more than a thousand suspicious registrations including Princess Nudelman (ph) the fish and a voter whose ethnicity was listed as canine.

WILLARD HELANDER, CLERK, LAKE COUNTY, IL: I believe we're seeing the full blossom of its potential showing itself. Oh yes, there's been misappropriation but this level is shocking.

SCHIAVONE: Republicans by and large, considered the underdogs are warning that groups sympathetic to the Democrats have been turning up thousands of faulty documents raising concerns in general about third-party registration groups.

PROF. EDWARD FOLEY, OHIO STATE UNIV.: It's not like they are notary publics. You know in the old days, you know to notarize an official legal document you had to go to somebody who was authorized, you know who was sworn to uphold the law in that way, well that's not what this process is.

SCHIAVONE: The acid test though is at the ballot box where there are still concerns that voters, though deceased, can still cast a ballot. CNN obtained this document from the New York City Board of Elections indicating a vote was cast in 1991 by the late Congressman Joseph Addabbo, despite the fact that he had died five years earlier.

New York suspects it was a clerical error, possibly due to the fact that there's an Addabbo Junior, a man now running for State Senate and whose campaign charges that are reporting is, quote, "a desperate attempt to distract from the issues and raise the specter of scandal", end quote. Also there's the issue of electronic voting machines which are still acting up.

GERRY HEBERT, CAMPAIGN LEGAL CENTER: What we're seeing already in this early election cycle is reports from voters with touch screen machines, in particular, that they are pressing a certain candidate and the opposite candidate is lighting up.

(END VIDEOTAPE)

SCHIAVONE: Lou, advice from the experts, if you get into a voting booth where the electronic screen is acting up do not move to the cast your ballot option. Call a poll worker immediately. And, Lou, additional problems in the state of Virginia tonight where just a short time ago, the NAACP filed suit against Governor Tim Kaine, charging that the state is not prepared to handle an unprecedented turnout of voters in next week's presidential elections. That suit asks that the federal government take control, add voting machines and keep the polls opened two hours later than usual. Lou?

DOBBS: Here we go. All right, Louise Schiavone, thank you.

Well, in Indiana, Indiana Secretary of State Todd Rokita says his office has found evidence now of multiple criminal violations including possible state and federal racketeering laws in connection with fraudulent voter registration applications filed in Lake County.

An investigation is now underway targeting the left wing organization, yes, ACORN. This election will be the most expensive in history, according to a new report from the Center for Responsive Politics. Get ready for this.

The 2008 elections for the White House and Congress and state office will cost a staggering $5.3 billion. The presidential race alone, that cost will amount to more than $2.4 billion. The presidential candidates have raised and spent nearly $1.6 billion alone.

That's double the candidate's fund raising just in 2004. It has tripled the fundraising of 2000. This is also the first time the candidates for the White House have raised and spent more than $1 billion in an election campaign. The biggest corporate contributor, by the way, turns out to be Goldman Sachs.

Goldman's political action committee has contributed more than $5 million to the 2008 election campaigns. Citigroup and JPMorgan are close behind contributing more than $4 million each. And you wondered why Wall Street was getting a bailout.

Well tonight's poll, do you believe this nation is getting its money's worth in this $5 billion election, giving -- given what we're getting in the way of inspiration and ideas from these candidates? Yes or no. Cast your vote at loudobbs.com. We'd love to hear from you on this, $5 billion is pretty good.

Up next, Senators Obama and Biden on the defensive on their "spread the wealth agenda." Is the agenda socialist, Marxist, what is it? Three top political analysts join us.

And Senator McCain and Governor Palin may not be as united as they appear on the campaign trail. Anonymous sources say Governor Palin is a diva. We'll report on that.

And the economy is weakening but there are some signs of hope for working men and women and their families. There's good news in this economy. Three of the best economic thinkers in the country join me here next to tell you what to expect.

(COMMERCIAL BREAK)

DOBBS: When you hear the word "economy" it's become fashionable to attach the word crisis to it. There's however some good news on the economy tonight so let me get to that, if I may.

Crude oil prices trading lower again today, down 93 cents. Crude oil closing at $63.22 a barrel. $63.22 a barrel, that's the lowest price level in five months. And gasoline prices have moved sharply lower, as well. The new Lundberg survey reporting the national average for a gallon of regular gas has dropped to $2.78, that's a record 53-cent drop in just two weeks.

On the housing front, sales of new homes unexpectedly improving, jumping almost 3 percent in September to 464,000 homes, still the worst September performance since 1981. But the report was better than Wall Street expectations and it was positive. Home builders are offering tremendous incentives like paying closing costs and appliance upgrades trying to encourage sales and, of course the matter of median home prices dropping.

Joining me now, three of the best economic thinkers in the country, in our Washington D.C. bureau, Professor Peter Morici of the Robert H. Smith School of Business at the University of Maryland. Professor, good to have you with us. Pulitzer Prize winning journalist, David Cay Johnston; also the author of "Free Lunch, How the Wealthiest Americans Enrich Themselves at Government Expense." David, good to have you here. And with me here in New York, Charles Calomiris, he is professor of finance and economics at Columbia Business School, also a research associate for the National Bureau of Economic Research. Those are the folks I should point out, who declare officially whether we're in recession or not. Good to have you with us.

PROF. CHARLES CALOMIRIS, COLUMBIA BUSINESS SCHOOL: Good to be here.

DOBBS: Peter, let me begin with you. This economy today shows some spark, at least transactionally. Houses are selling at a much lower price, 9 percent decline in price. But we're seeing some improvement. Gas prices are down. Crude oil is down. I say, yay! Am I being a little too enthusiastic at this point?

PROF. PETER MORICI, UNIVERSITY OF MARYLAND: Well, enthusiastic can be tempered in the environment is good news. This is a good time to buy your first home. If you live a large city close to the city core, such as in Manhattan or nearby Brooklyn your housing prices aren't falling very much. In fact, they may still have risen a bit and if you're near retirement this is a good time to charge out. Sell and move to that retirement home that's likely fallen much more in value.

We're likely to see much less inflation going forward. It's not just oil prices. Other commodity prices are falling too so inflation will be less of a problem and make it easier to pull ourselves out from this as we get going in the next couple of months.

DOBBS: So do you agree? I mean is there the beginning a little hope of life in the economy that would suggest that this is going to be a tough period but at least, a period that we can handle?

CALOMIRIS: Well, Lou, I wish I could be that optimistic.

DOBBS: Let me move on to someone else then.

CALOMIRIS: I agree with what Peter said. But the problem, of course, is the lower oil prices and lower gas prices are really forecasting something. They are not just falling randomly. They are falling because they are forecasting global contraction and demand.

The U.S. economy entered a recession, I believe, in June. The recession is going to be not over with, certainly, until the middle of next year and perhaps, even longer. And I think the markets are spooked by the prospect not only of the recession, but also, of the uncertain political atmosphere that's going to come from this financial crisis. DOBBS: Let me give a great example of what is going on in that regard. This report today in the South Florida Sun Sentinel, Wayne Huizenga, the owner of the Miami Dolphins who we all know, he says he wants to sell the Dolphins before Senator Obama raises taxes. He says that no date has been set for selling up to 45 percent more of the team to Steven Ross but the presidential election is among the issues weighing on his decision. He wants Obama -- Obama he says, wants to double the capital gains tax or almost double it. I'd rather give it to charity than to him according to Huizenga. Does he have a point, David?

DAVID CAY JOHNSTON, JOURNALIST: He wouldn't be giving it to him. He would be giving it to the government. If you have a very large asset and you think that you have a large capital gain to reap, you may want to reap it now because we'll see higher capital gains taxes. Especially all three branches are under the control of the Democrats. In the long run that actually may not be a bad thing because this goes to the conversation with Joe the plumber. What it will enable us to do is lower the very heavy tax burden on people way down the chain. People who make 50 to $75,000 a year in this country pay a larger share of their income to the federal government than people that make $100 million a year.

DOBBS: But if we put that into the middle 20 percent of income earners in this country, the real defined middle class by income they're only paying 4.7 percent to have total federal income taxes, right?

JOHNSTON: Yes. Especially if you have children. One of the things President Bush did was families with children who make under $60,000 he lowered their taxes in a very significant way. No question about that.

DOBBS: Well, it's not much to move from 4.7 percent of total taxes. This seems to be a bit of a political gambit when we talk about eliminating taxes for the middle class and then -- if he's talking about removing that tax there's not much there to begin with, is there Charles?

CALOMIRIS: Well I think that this is one of the problems we hear from Senator Obama. He's going the make sure taxes are cut for 95 percent of the people. But when 30 percent of the people pay zero taxes it's hard to figure out how you cut the taxes for them. It's a problem. I favor, obviously progressive taxation but I think you're making an important point which is really anything that will significantly raise tax revenue at this point is going to have to go after a significantly increasing the progress in an already highly progressive system.

DOBBS: Tax the dickens out of the wealthy.

CALOMIRIS: Exactly. And that means increasing marginal tax rates.

DOBBS: I'm glad I can still sort out what you economists are saying. Speaking of that, let me ask you this, Peter. This economy -- and you're being more cautious than you. We have an economy that is being hollowed out and has been for sometime by a so-called free trade policy that is not serving the nation well. We're seeing exports decline rapidly.

Are we going to see a transition to something that represents, in my opinion at least, a rationale economy in which we restore some self sufficiency when it comes to manufactured products? Give us your thought.

MORICI: Well, if President Obama, if there is to be one, wants to get the economy going and has a big stimulus package focused say on construction and providing health care and things of that nature, that's going to run the trade deficit all the way up to say $1 trillion a year unless we do something with the way we do trade with China and our imports of oil.

With regard to China, the sanest thing we could do, the sanest thing we could do is put a tax on dollar yen conversions to adjust the currency - the Chinese currency up since they won't do it. We could take the tax revenue to balance the deficit. That would be a wonderful thing to do and it would create all kinds of manufacturing jobs in the United States that should stay here that are leaving, not because of the comparative advantage but because of Chinese currency manipulation and subsidies.

DOBBS: Peter Morici, thank you very much. David Cay Johnston, thank you. We're smack out of time. Thank you very much, gentlemen. We appreciate it. Please come back soon. As a matter of fact, I hope you can come back every day this week. We'll talk economics because this is so important to get a handle on so thank you very much, gentlemen.

Still ahead here, a McCain aide says Governor Palin is a diva. A diva because she's a girl you say things like to and is going off message. But wasn't she supposed to be a maverick? How does a maverick get called a diva because she acts like a maverick? We'll try to figure that out.

And we'll have more on Joe Biden's testy interview with that Florida anchor who kicked his -- we'll talk about that with three of the best political analysts next. Stay with us. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Joining me now are not only three of the best political analysts in the country, all CNN contributors, but also, my favorite starting with Ed Rollins, Republican strategist, White House political director under President Reagan, chair of Mike Huckabee's presidential campaign, good to see you. And Michael Goodwin, Pulitzer Prize winning columnist, the New York Daily News, Michael, good to have you here. And Democratic strategist, Democratic National Committeeman, Robert Zimmerman, Robert, good to have you with us.

You're supporting a re-distributor. You know of all the money being spent on a campaign if you're going to call somebody a name, can't you come up with something better than "re-distributor?

ED ROLLINS, REPUBLICAN STRATEGIST: I have a lot better names to call Obama but I won't do it.

DOBBS: You would think -- what's going on?

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: It's called a week from Election Day. Election Day is coming up in seven days and that's what this is all about. They tried Marxist. They tried socialist. They tried everything else and now they are trying re-distributor.

DOBBS: Now that was another thing. Your candidate, Senator Barack Obama, today said that he's called the -- McCain has called him every name in the book, that son of a gun. I can't think of a name he's called him. Re-distributor? Spread the wealther? Socialist?

ZIMMERMAN: For that reason alone, that lack of creativity speaks volumes, doesn't it?

DOBBS: Well, that is fascinating.

ROLLINS: The one term that he's called him which is what the National Journal calls him is the most liberal member of the United States Senate. And the second most liberal member is Bernie Sanders who's a socialist and Biden is number three so somewhere in there is --

DOBBS: Michael, I think we have a referee here. The idea that we're down to re-distributor. Today, all of the emphasis is on the 2001 interview with the public radio station in Chicago, I believe WBEZ FM there where he's talking about a program that they did called "constitution slavery" and he started talking about redistributing the economics and talking about a reparative economics. Fascinating that it's only now coming out.

MICHAEL GOODWIN, NEW YORK DAILY NEWS: Well, you know, it's all part of the mystery of Obama. We don't know a lot about him. And that's what McCain has been trying to fill in the blanks of course, in the most negative way as possible but I think Obama has left his shirt tail untucked in a lot of cases.

And another example today, Lou, Chuck Schumer, big senate leader, New York senator, came out today on several different television interviews I saw and say that Obama almost certainly wouldn't raise taxes right away. And then later said, you know, depending on the economy, maybe you couldn't cut them right away either. But he was talking about four years. So I think the notion that this promise is somewhat vague and somewhat tenable with the whole term is not something people are familiar with. It was a surprise to me.

DOBBS: Is ambiguity the great friend of your candidate, Senator Obama?

ZIMMERMAN: I think in this case it's clarity. The reality of the situation is Barack Obama presented his economic program before the economic collapse. I'm not his spokesperson nor Chuck Schumer's but it would make sense that he would time whatever he's going to be economically based upon the best way to bring us out of this recession. Ronald Reagan had to raise taxes to save social security in 1982. To so obviously I think it's important that Obama take a pragmatic approach and I think he's showing that.

GOODWIN: But shouldn't he say that? I don't think it should come from Chuck Schumer if that is the policy that he's not ...

DOBBS: He may be vanguard of a new direction in the language of the campaign. What do you think?

ROLLINS: He was offered the opportunity in three debates. Three different times both of them were asked what difference would you make? What changes would you make? Nothing. There's been no dialogue whatsoever of any change or any alteration. A lot of people would be concerned about him not raising taxes right now. I mean I think it would benefit this economy. I think a lot of Democrats would be concerned and a lot of Republicans --

DOBBS: Barney Frank wants 25 percent of the military budget reduced.

ROLLINS: The amazing point is --

DOBBS: My point is it's hard to keep you Democrats happy. You want your taxes raised. You want budgets cut and then others say quite the opposite.

ZIMMERMAN: And also remember the Democrats who were elected in 2006 that put the Democrats in the majority are conservative, moderate Democrats.

DOBBS: You have to be very careful, don't you?

ZIMMERMAN: Not me. But --

DOBBS: It's one of the great contrasts to look at how conflicted the Democratic Party is to put it up against the totally agreeable one Republican, one Democrat. We'll be back in just a moment with our panel.

Up next at the top of the hour, Campbell Brown, No Bias No Bull.

Campbell, what are you working on?

CAMPBELL BROWN, CNN ANCHOR: Lou, the countdown is on. Election eight days away from now. Every minute counts. Tonight, both presidential candidates fighting it out in Pennsylvania.

We're also going to talk about what we've been hearing about the Republican infighting. We'll dig into this widening rift between Sarah Palin and her McCain campaign handlers. Some of them describing her as a diva who's going rogue.

Plus, breaking news tonight. Senator Ted Stevens has just put out a statement about the future of his campaign, now that he has been convicted on corruption charges.

Also, I sat down with Charles Barkley today. He's got some pretty strong feelings about racism in the campaign. We talk to him, all ahead.

Lou?

DOBBS: All right. Rogue diva, huh? We'll talk about that here next. I love the concept, rogue diva, sounds very sinister. Campbell, thanks very much. Look forward.

Up next, more talk with our panel. Your thoughts on this presidential campaign. It just keeps getting better and better. Stay with us. We'll be right back.

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DOBBS: I'm back with Ed Rollins, Michael Goodwin and Robert Zimmerman.

This has been a historic and bizarre presidential election, but this from telling our Dana Bash, one of the sources within the McCain campaign, saying that "Governor Palin is a diva who's going off message. She is a diva. She takes no advice from anyone. She's playing for her own future and she sees herself as the next leader of the party."

ROLLINS: Spoken by a former Giuliani aid I'm sure, or a Romney aide.

DOBBS: I mean, where do -- I mean, I don't even know what to make of that. You've got a campaign that is supposed -- don't you remember them sitting up there, the Republican National Convention, you know, he's a maverick, she's a maverick, we're all mavericks and then the first complaint is, she's a maverick. I mean, what's that --

ZIMMERMAN: To quote your friend, Joy Behar, they're both desperadoes.

DOBBS: Did you torture the word desperate and go to desperado?

ZIMMERMAN: That was implied. John McCain has to move his rallies indoors to make it look larger and she's getting 25,000 people per stop. I think that's what's fueling some of this but I'm glad to see that while John McCain can't find a good name to call Senator Obama, he's got good names to call Governor Palin.

GOODWIN: I think what's going on is the Republican campaign is reading the same polls we all are and they're getting a little --

DOBBS: You mean, the battleground states, we're sitting at about 3 points?

GOODWIN: That's not the polls I think they're reading.

DOBBS: Their internals show -- GOODWIN: If she is a maverick, she's going to go off message. Isn't that what a maverick does?

ROLLINS: She's been ill served by this campaign. She's gone out and done everything they've asked her to do. She's gone out and hammered away on Biden and Obama every single day and I think she has basically kept the base energized. And I think she's brought as many Democrats over as Biden brought Republicans over. But that was not her job. I think at the end of the day, it's always going to be about Biden --

ZIMMERMAN: In defense of John McCain, I don't often say that.

ROLLINS: We don't you need to defend him. We're in enough trouble already.

DOBBS: Go ahead.

ZIMMERMAN: It might have helped the ticket if she could describe the constitutional duties of being vice president, which she couldn't seem to be able to get out.

ROLLINS: I watched Joe Biden talk to a little boy in a schoolyard and he went on for about 45 minutes and the kid asked him that very question, and he explained them all and how he's going to run the entire government. I don't think a great plagiarizer should necessarily --

DOBBS: I would love to wrap it up on the spirit on -- I just feel good when we all come together like that. Thank you very much gentlemen. Appreciate it.

Up next, the results of our poll and we'll have some of your thoughts about this elevated campaign. Stay with us.

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DOBBS: Tonight's poll results. 85 percent of you say this nation isn't getting its money's worth in this $5 billion election, given the lack of new ideas and inspiration from these candidates.

Time now for some of your thoughts.

Doug in Ohio wrote in to say, "I really think that the people of this great nation need to think long and hard about who they're going to vote for. In my opinion, neither candidate is worthy of anyone's vote. I can't remember who originally said it, but the definition of insanity is doing the same thing over and over again, yet expecting different results."

Verne in California, "Lou, it would be nice to see some of the guilty on Wall Street and Capitol Hill spend some of their vacation time in jail instead of a worldwide cruise."

James in New York, "Lou, I've just registered as an independent thanks to you and your plain talk back. I do believe that whoever wins this election, nothing will change. Special interests and corporate America will rule. Lou, can we start your presidential campaign?" No, no, no, but thank you for the thought.

We love hearing from you. Send us your thoughts at loudobbs.com.

Thanks for being with us tonight. Please join us here tomorrow. For all of us, thanks for watching. Good night from New York.

Campbell Brown: No Bias, No Bull starts right now.

BROWN: Thanks, Lou.