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LOU DOBBS TONIGHT
Obama's Final Push; McCain's Big Push; Final Four Days before the Election; Border Incursion; E-voting Machines Can't Count; FDA Ignoring Dangers of BPA
Aired October 31, 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: Wolf, thank you. Tonight, a stunning new poll in this presidential campaign. That poll showing that one in seven voters right now remain undecided or could change their minds. We'll have complete coverage.
And tonight, compelling new evidence that many e-voting machines are simply unreliable with only four days before election day. We'll have that report.
And tonight, a LOU DOBBS TONIGHT exclusive. The U.S. border patrol today apprehended six heavily armed men in Mexican military uniforms on the United States side of our border.
We'll have complete coverage. All of that, all the day's news and much more from an independent perspective straight ahead tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Friday, October 31st. Live from New York, Lou Dobbs.
DOBBS: Good evening, everybody. New evidence that this presidential race may be far from over. An Associated Press/Yahoo! poll shows one in seven voters, 14 percent of the voters could change their minds or remain undecided right now.
The poll coming as the candidates battle to win the support of the undecideds, Senator Obama declaring this campaign could turn nasty in the final four days. Senator McCain said, we're coming back strong. We have extensive coverage beginning with Jessica Yellin with the Obama campaign in Chicago.
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT (voice-over): In Florida, the Obama campaign dispatched the poster boy for the message that every vote counts.
AL GORE, FMR. VICE PRESIDENT: By the way, take it from me, elections matter. Every vote matters.
YELLIN: While the candidate himself returned to the state that gave him his first victory.
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: On the day of the Iowa caucus, my faith in the American people was vindicated. And what you started here in Iowa has swept the nation.
YELLIN: He flashed growing confidence that early voting is going his way.
OBAMA: We're seeing the same turnout. We're seeing the same people going and getting in line, volunteers, people participating, a whole new way of doing democracy.
YELLIN: To win, Obama is counting on first-time voters. And his campaign manager says they're turning out. Telling reporters first- time voters make up 19 percent of early voting Democrats in North Carolina and new or sometime voters make up 43 percent of early voting Democrats in Nevada.
In battleground states, he says, the die (ph) is being cast right now, insisting, to win on election day, the burden is on John McCain to not just carry the day but carry it convincingly.
UNIDENTIFIED MALE: Endorsed by Warren Buffett and Colin Powell, a leader will bring us together.
YELLIN: The Obama campaign is feeling so bullish, it's putting up ads in reliably red states, Georgia, North Dakota and -- wait for it -- Arizona. A final show of force on John McCain's home turf.
YELLIN: And, Lou, Barack Obama continues his red state, swing state tour this weekend. Tomorrow he has stops in Colorado, Nevada and Missouri. And on Sunday, three stops in the all-important battleground state of Ohio -- Lou.
DOBBS: Jessica, thank you very much. Wait for it? Did you say wait for it? Jessica, thanks so much. Jessica Yellin from Chicago.
As we reported, a new Associated Press/Yahoo! poll shows one in seven voters are still not committed to a candidate. The AP/Yahoo! pollsters say those uncommitted voters are more likely to be white, less likely to be liberal. They also tend to be voters who strongly backed Senator Clinton's attempt to win the Democratic Party nomination. Pollsters say that many of those voters are simply frustrated with this campaign and politics in general.
Senator McCain today intensified his efforts to win over the uncommitted voters. McCain saying he's gaining momentum, declaring he's coming back. Ed Henry has our report from Columbus, Ohio.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): In the last days, the crowds are finally getting larger for John McCain.
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Thank you, Ohio.
HENRY: And he's feeding off the energy. MCCAIN: I want to tell you, the enthusiasm and the momentum that I feel here in Ohio is going to carry us to victory here in Ohio and throughout this country.
HENRY: McCain aides insist their private polls in battlegrounds like Ohio suggest they're narrowing the gap, with a strong closing case against Barack Obama's tax plan. And McCain is getting a little help from his friends to launch a double-barreled assault. First warning the financial crisis will deepen, if Democrats, poised for gains in the House and Senate, also get the White House.
SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Our opponent in the next four years, Pelosi, Reid, Obama, the tax trifecta from hell. Don't let it happen.
HENRY: Secondly charging that unlike Obama, McCain has the national security credentials that led him to make the right call on the surge in Iraq.
RUDY GIULIANI, FMR. NEW YORK MAYOR: John McCain was right, and I watched him because there was a point in this election cycle where I was an opponent of John McCain's.
HENRY: But the McCain camp knows this is still an uphill battle with the Republican brand so tarnished.
MCCAIN: There's corruption in Washington.
HENRY: But for the first time, the candidate brought up the case of Senator Ted Stevens on the stump.
MCCAIN: We just had a senior member of the United States Senate convicted. I will clean up this mess and make you proud again of people who serve you in Washington.
(CHEERING AND APPLAUSE)
HENRY: And John McCain just wrapped up a raucous rally here in Columbus with Arnold Schwarzenegger, the California governor, at one point joking that he would like to pump up the what he called scrawny little legs of Barack Obama. When he turned to serious policy matters, he also pointed out that John McCain had been in a prison camp longer than Barack Obama has been in the United States Senate and Schwarzenegger also noted that he himself had left Europe four decades ago because of socialism and he did not want to see the United States go down that same path.
What was interesting is it seemed like Arnold Schwarzenegger was making the case a little better than John McCain sometimes does out here on the stump. And I can tell you this crowd reacted very, very strongly, Lou.
DOBBS: That's pretty good -- those are pretty good lines for the campaign... (CROSSTALK)
DOBBS: It's a heck of a time for them to come forward, isn't it?
HENRY: Well, that's what's interesting. I wonder if there are some McCain allies tonight hearing some of those lines and wondering why in the world Arnold Schwarzenegger was not out here on the stump much sooner, especially because, as you know, he has tremendous credibility with Independent voters as somebody who has reached across the aisle, Lou.
DOBBS: All right, Ed, thank you very much. Ed Henry reporting.
The Obama campaign confirmed today it has refused to allow reporters from three pro McCain newspapers to fly on Senator Obama's aircraft. Those reporters ousted from Obama's aircraft are from "The New York Post" "The Washington Times" and the "Dallas Morning News."
The Obama campaign said, quote, "we've had to make hard and unpleasant decisions about limiting some news organizations. They went on to say that in some cases the campaign is simply not in a position to offer space to news organizations at all. "New York Post" editor in chief Carl Allen (ph) said we are happy to be on the outside looking in, adding, it's what makes "The New York Post" special. We're not in the news business to be liked. That resonates somehow on this broadcast.
Obama tonight is leaving his aircraft behind when he travels to Highland, Indiana, for a campaign rally. Instead, he's traveling there by road, from Chicago. Candy Crowley is already in Highland, Indiana, just outside Gary (ph). Candy, just how confident does the Obama campaign seem to be with just a few days to go?
CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Listen, they still say all the right things, we have to work very hard, it's not over until it's over, power doesn't give up easily. However, this is as confident as I have seen them and I'll tell you why.
They are looking at the early voting states. And that's what this campaign has been concentrating on for about the last month. And that is, drive these early voters to the poll. Sorry? Trying to drive these voters in the early voting states to the polls.
Of the nine states that he's going to go to between now and election day, eight of them are early voting states. So here's how they figure this, Lou. They're looking at the stats coming out and they're saying, for instance, in North Carolina, 19 percent of the early voters have never voted before in a presidential campaign.
They are assuming that those voters are there. They have pages and pages and pages of information about these voters. They really have them down block by block. And so that's what they're trying to do now. And as one of them said, even as we speak, the die (ph) is being cast. These voters going early voting they think are overwhelmingly Obama through their information, as well as some of the information you can get from the secretary of state. So they are very pleased. They say, listen, at the rate this is going, John McCain is going to have to over-perform on election day to make up for what's going on and not just heavy early voting but in who those voters are -- sorry, Lou.
DOBBS: Appreciate it, Candy. Thank you very much. Candy Crowley.
One issue that's rarely mentioned by the Obama campaign is the success of our troops now fighting the insurgency in Iraq. Tonight more good news to report about the number of our casualties in Iraq. Thirteen of our troops killed in Iraq over this month.
This is the second lowest monthly total of the entire war in Iraq; 11 of our troops were killed last July; 4,189 of our troops, however, have been killed since this war began; 30,764 of our troops wounded; 13,547 of them seriously.
And the latest casualty figures come as General David Petraeus, formerly takes command of troops in the Middle East and Afghanistan. A ceremony held in Tampa, Florida, General Petraeus widely credited with the surge strategy that has led to this sharp reduction in violence and sharp reduction in American casualties in Iraq.
Up next, new evidence that e-voting machines are simply unreliable and vulnerable to fraud with only four days to go. We'll have a special report.
And we'll have an exclusive report on an armed incursion into the United States from Mexico. We can't say it was the Mexican military, but we can say by men dressed in Mexican military uniforms. We'll have the very latest for you on what's happening at our border. All of that and a great deal more coming right up. Stay with us.
DOBBS: Tonight on Lou Dobbs, tonight exclusive, the border patrol early this morning caught seven heavily armed members of what we now know to be the Mexican military on our side of the border with Mexico. This incident is just the latest in what is a series of suspected Mexican military incursions into the United States. Casey Wian has our report.
CASEY WIAN, CNN CORRESPONDENT (voice-over): LOU DOBBS TONIGHT has learned the border patrol caught seven men in camouflage armed with automatic rifles driving a Mexican military Humvee on the U.S. side of the border this morning near Yuma, Arizona. The Mexican military vehicle was being followed by the border patrol and ran out of gas about 200 yards from the Colorado River, which marks the border shown here in yellow.
The hummer was equipped with a turret-mounted machine gun. No shots were fired. The border patrol says the soldiers claim they were lost and believed they had not crossed into the United States because they remained on the south side of a newly constructed border fence. The border patrol says it took the men into custody and transferred them to the nearby San Luis Port of Entry where they were processed and returned to Mexico along with their vehicle and weapons which is standard border patrol procedure.
REP. TOM TANCREDO (R), COLORADO: This is not an uncommon occurrence, often time it is a result of the Mexican military providing cover essentially for drug transportation across into our country and/or creating a diversion, so it will draw our people away from the place where the drugs are coming across.
WIAN: Efforts to contact the Mexican government were unsuccessful. Previously it has said its troops were under orders to remain more than a mile from the U.S. border. In August, the border patrol acknowledged Mexican troops have crossed the U.S. border illegally 42 times since last October.
WIAN: According to Congressman Tancredo, the U.S. State Department for the first time lodged an official complaint with the Mexican government about military incursions just a few weeks ago. The State Department did not respond to our request for comment -- Lou.
DOBBS: Unbelievable. The first protest to the Mexican government comes with just about three months left in the Bush administration.
WIAN: Yeah, it seems that U.S. officials especially in the Bush administration are all too willing to believe the story of the Mexican government that these are simply accidental incursions and not something much more sinister, Lou.
DOBBS: Well of course, these are the same irresponsible, incompetent fools in the Department of Homeland Security who probably haven't noticed that Mexico remains the principal source of methamphetamines, heroin, cocaine and marijuana into the United States, 42 incursions. I mean that's simply crazy!
WIAN: It's really amazing. And when you have the stated policy of the Mexican government that the military is not supposed to go anywhere near the U.S. border, this really raises a lot of questions. I will add that the border patrol says it checked out all seven of these men for criminal background and for immigration violations. They all came up clean. So they returned these men to their military commander in Mexico, which the border patrol says is probably going to mete out much greater punishment than anything that can happen to them in the U.S.
DOBBS: Or perhaps the rewards will be even greater given their likely connection in these incursions, too, as you pointed out, the drug trade. Thank you very much, Casey -- Casey Wian.
Well evidence, as if we didn't need -- as if we did need it in any way, of corruption within the Mexican military, the Mexican Defense Department tonight is reporting that five members of the Mexican military are now under investigation for links to one of Mexico's most powerful drug cartels. Those five men reportedly have direct relationships with a suspected drug lord.
This is just the latest evidence of corruption at the highest levels of the Mexican military and Mexican government. Earlier this week, we reported to you on investigations of officials in the Mexican attorney general's office for its ties to the drug cartels and the arrest of a Mexican government immigration official for smuggling drugs into the United States.
Well, the federal government, the U.S. government, is working to prevent corruption and fraud on Election Day as best it can. The Department of Justice says it will deploy more than 800 federal observers to monitor our election Tuesday. Those monitors will be going to voting sites in 23 states, including sites of past problems, in states such as Florida, Ohio and Louisiana. The Justice Department saying it will be investigating and prosecuting any cases of voter fraud.
New revelations tonight that flawed electronic voting machines will still be used in the upcoming election, as we've reported to you, 31 states use those faulty machines. The flaw found in those machines, well, they just don't always count votes correctly. A considerable flaw, if you think about it. Bill Tucker has our report.
BILL TUCKER, CNN CORRESPONDENT (voice-over): Betty McGary (ph) is the director of the Butler County, Ohio, Board of Elections. She's worked every election since 1978 in Butler. It was Betty and her workers who uncovered the flaw in these Premier voter machines. It's a flaw that Premier admitted to this August telling the Ohio secretary of state that quote, "Premier Election Solutions has determined that a sharing violation may occur resulting in the contents of the affected memory cards not being posted."
In plain English, the votes don't always add up correctly. Some votes can be lost when votes from multiple machine memory cards are tallied. It's a big problem. The machines are used in 31 states.
BETTY MCGARY, BUTLER COUNTY BOARD OF ELECTIONS: We're all using the same software. We're all using the same hardware with Premier. Every county in the nation that's using this system, I feel, needs to be on high alert Tuesday night to make certain that all their memory cards are counted and accounted for.
TUCKER: High alert echoes the calls from voting advocates like the Brennan Center (ph), Verified Voting and Common Cause.
SUSANNAH GOODMAN, COMMON CAUSE: Buyer beware, election official beware, voters beware and we are issuing -- reminding election officials that this is a serious problem, that if they don't have rigorous post election cross-checking procedures, that votes can be lost.
TUCKER: But that such a problem even exists eight years after the controversial 2000 election is inexcusable.
JACK YOUNG, DEMOCRATIC PARTY ATTY.: There ought to be severe consequences to any company and any system that allows second-rate machinery. Remember, we're talking about tabulating votes. We're talking about simple every day tabulation of votes for certain candidates. This is sort of rote, easy stuff to do.
TUCKER: And in this election there is a lot of counting to do. In Ohio, Betty McGary (ph) says she's never in her 30 years of working the polls, seen anything like the voter turnout she's seeing this year.
TUCKER: The question of liability remains an open question. Ohio is currently engaged in a lawsuit against Premier Voting Solutions, which was formerly known as Diebold (ph). And unless Ohio's results are a landslide, problems with Premier machines might make it very likely, Lou, of course, that those results will be challenged.
DOBBS: Well and as they well should be. But the liability issue is laughable. The liability of course is our electoral system and we, the American people. If there are any questions that go beyond Election Day and night. This is -- this is terrible. And we're not talking about -- at least we used to not be talking about some third world banana republic in which this sort of thing could happen. Counting votes is a straightforward, elementary mathematical process.
TUCKER: And it's only one part of it. There's no subtraction or division. It's just all simple addition. It's not sending a man to the moon for crying out loud.
DOBBS: Well we haven't done that either for 40 -- almost 40 years -- '72, I guess -- I could do the math on that, 36 years. Thank you very much -- a little display of mathematical prowess...
DOBBS: I can do a little math, not much but a little. Thank you, Bill Tucker.
That brings us to tonight's poll question. Do you believe our e- voting machines should actually be able to count and record votes? I repeat, do you think our machines should actually be able to just go ahead and count and record votes or do you think that maybe it's too much to ask? Yes or no, we'd love to hear from you. We'll have the results later in the broadcast.
Up next, who's benefiting from the federal bailout of Wall Street? Well not our struggling middle class. We'll find out what can be done to help our working men and women when three of the nation's best economic thinkers join me.
And the FDA blasted again for approving a chemical used in baby bottles. Why can't this agency do its job, actually protect the American consumer? What is going on and why in the world are you and I putting up with it? Stay with us.
DOBBS: Well as I said, we're going to bring you up-to-date on what is going on with the FDA. But I do also want to share with you what we have just received from the U.S. border patrol, as our Casey Wian just reported. After 42 incursions by the Mexican military in the United States, another incursion by seven members of the Mexican military on a Humvee in the Yuma sector of the border patrol.
The border patrol making a decision to send out a press release, trying to explain it, after they found out that we had learned about the incursion. Here's the news release. And just if I may share with you what's going on and how much the top officials of Homeland Security are playing politics while the men and women of the U.S. border patrol risk their lives every day to protect this nation.
The press release, I don't know if you can see that there. It reads, "Mexican military makes accidental incursion into the United States." The bottom says "the incident remains under investigation." So, I mean, it's -- this is the kind of nonsense that the men and women -- the rank in file of the border patrol have to put up with every day, playing politics with this nation's borders from the highest officials of the Department of Homeland Security and of course the Bush administration.
Our thanks to the men and women of the border patrol and you know, I want to just say to all of you at the top of the border patrol and the Department of Homeland Security, who are political appointees, following the wishes of this discredited president, good riddance and I can't wait until January 20th.
Turning to the FDA, the Food and Drug Administration is facing sharp criticism from its own advisory board now because it's failed to protect American consumers from dangerous products. We're starting to see a pattern here, aren't we, ladies and gentlemen?
The FDA has long insisted that a chemical found in those plastic items Bisphenol A (ph) BPA is safe they said. But the advisory board now says the agency ignored the dangers of BPA, which by the way, has been simply banned by other government agencies in other nations. Now, the question is, what action will the FDA take? Louise Schiavone has our report.
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Amid demand from consumer and environmental groups for a fresh review of the potential threats from the commonly used plastics chemical Bisphenol A...
VOICE OF URVASHI RANGAN, CONSUMERS UNION: The report underscores the severe limitations in the FDA analysis, including omission of hundreds of scientific studies in its assessment.
VOICE OF JENNIFER ROGERS, REPRODUCTION HEALTH TECH. PROJECT: We want to emphasize the growing body of evidence that indicates that this chemical is harmful especially to the developing fetus, infant and child.
SCHIAVONE: An advisory board has sent the FDA a critical report on BPA that states, quote, "The margins of safety defined by FDA as 'adequate' are, in fact, inadequate." Of special concern, BPA's potential link to hormone disruption and brain development in infants and youngsters. While the FDA commissioner says he's open to reviewing the report's findings...
ANDREW VON ESCHENBACH, FDA COMMISSIONER: Let me be clear. There's no shame in having one's hypothesis or previous tenets questioned or disproved.
SCHIAVONE: The FDA officially has no safety concerns about BPA. Today's action merely suggests that the FDA review the independent findings, even though some members of the independent panel said they should be calling for a ban on BPA in plastic products like baby bottles.
LARRY SASICH, SCIENCE ADVISORY BOARD CMTE.: We develop a lot of really good science and here it is and we don't do anything with it.
SCHIAVONE: The plastics industry says consumers have nothing to fear.
CAL DOOLEY, AMERICAN CHEMISTRY COUNCIL: BPA is safe in the way it's used in products today.
SCHIAVONE: Maybe. Maybe not says the board's consumer representative.
SASICH: I can't see harm to limiting or removing BPA exposure to infants and children for a period of time until a better answer to this safety question can be answered.
SCHIAVONE: The FDA has until February to respond to the science board's report.
SCHIAVONE: Lou, a ban on BPA in baby bottles could fly into place if Congress approved one. Meanwhile, the FDA's entire approach to the issue could change rather quickly depending upon what happens next Tuesday -- Lou.
DOBBS: All right, thank you very much, Louise. Louise Schiavone. Again, it just -- it's hard to even assimilate the disregard and the indifference of the FDA to the lives and the safety, the health of American citizens they are there to protect. Thank you, Louise. Thank you very much. Louise Schiavone.
Let's take a look now at some of your thoughts. Kevin in North Carolina, "One thing I hope and wish the next president will do is to make Congress actually work and do something. Probably too much to ask though." Charles in West Virginia: "With all the money spent on the election by Senator McCain and Senator Obama and the cost of the Wall Street bailout, we could have fed, clothed and sheltered many Americans that needed it. Shame on these two candidates, the CEOs on Wall Street, the ACLU and our government leaders for condoning, aiding and abetting such an injustice to our society."
Ted in California: "Lou, after the Tuesday election, whoever is the winner can declare before all that 'my loyalty to my party ends, where my loyalty to my country begins.'"
We'll have more of your e-mail later in the broadcast. And each of you who's e-mail here receives a copy of my new book, "Independence Days: Awakening the American Spirit," now available in paperback.
Up next, will there be a stunning surprise on Election Day? Three top political analysts join us. We'll be talking about those uncommitted voters and their role. And huge bonuses for Wall Street executives at taxpayer expense, of course. Three of the best economic thinkers in the country join me. We'll be right back, stay with us.
DOBBS: Joining me now, three of the country's top economic thinkers, William Isaac, he's chairman of the Secura Group, former chairman of the Federal Deposit Insurance Corporation. Good to have you with us, Bill.
Pulitzer Prize winning journalist, David Cay Johnston, author of "Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense." David, great to have you.
And Joseph Stiglitz, professor of economics at Columbus University. The co-author of "The Three Trillion Dollar War," most recently, and oh yes, a Nobel laureate, I think I might add to the plaudit. Good to have you with us.
JOSEPH STIGLITZ, COLUMBIA UNIVERSITY: Nice to be here.
DOBBS: Bill Isaac, let me turn to the discovery that, well, banks, about $108 billion worth of bonuses in the offing, $20 billion going to the executives of Morgan Stanley, of Goldman Sachs and Merrill Lynch, just, for example. How do you feel about the recapitalization plan now?
WILLIAM ISAAC, SECURA GROUP: Well, Lou, it -- we need to recapitalize our banks. I think the bonuses are a separate issue and if we have any way to deal with them, we should. I would remind you, though, Lou, that a number of the banks that got this recapitalization program, of the first nine, a number didn't want it and really actually resisted it and they were told they had to take it in order to -- so that the other banks that did need it wouldn't look out of place. So, I think we have a delicate situation here. I think we ought to be able to do something about these bonuses, though. That is pretty shocking.
STIGLITZ: It's not just the bonuses, though, it's also, they're paying out dividends and you can see the big difference...
DOBBS: About half of the money, by the way, at this point is marked for dividend payments, which is entirely insane.
STIGLITZ: And contrast the way the U.K. handled it and the way the U.S. handled it. In the U.K., they said there's a sense of accountability, the CEOs had to go. They said no dividends. And they imposed these conditions and the banks clearly needed the money and they took it. It wasn't such a big deal. Paulson seemed to give the impression that if some did and some didn't, it would be a disaster. It turns out that Barclays turned to private sector, interestingly private sector turns out to be a foreign government.
DOBBS: Barclays, the British bank, choosing not to participate in the British recapitalization plan because they did not want to be involved in what they considered more intrusive government activities in their business. But, they have the capital and the wherewithal to do that. That was not available to CitiGroup, that was not available to these other banks with the exception of JPMorgan Chase, though, Joe. These folks...
STIGLITZ: But, they were undercapitalized...
DOBS: And the arrogance of these institutions not to understand that this is a crisis and that this is -- this is a world that's got to change. Bill, you know, Bill Isaac, I just want to say to you, these bonuses need to be stopped. And I just want to test you on this, because you were the first to come straight out and say recapitalize them. Yet, we're watching executives behave just as they did from the corruption scandals of 2002 through to today, irresponsibly, out of self interest and without standards that are remotely approaching ethical conduct.
ISAAC: Well, I would -- I would just repeat that there are banks that are getting this money who don't need it, in some cases didn't want it and it was forced upon them. And I think we need to distinguish those from banks having a lot of problems and didn't have any options...
I'll be glad to -- let's pull those few, and I mean few, out. What do you think about the excessive compensation, the fact that these folks have to be legislated against to stop the expensive spending taxpayer money on dividend at a time when we're trying to break the back of a credit crisis, a liquidity lock?
ISAAC: I think that for the banks that really are in trouble and needed this capital, that there ought to be restraints on their salaries and on their dividends. I really do.
STIGLITZ: ...that the Federal Reserve is taking some crappy assets, really bad assets, as collateral for money that we're giving them. So, you know, there's a lot going on here that goes beyond that and this is voluntary on the part of the fed. We didn't have to do that.
DOBBS: Right. STIGLITZ: So the point is if you're going to be playing the game, you ought to be participating. The game here is to keep our economy going. And those who aren't playing that game ought to -- the fed ought to sat I'm sorry, we're not going to take -- let's go back to the old regime of only taking T-bills as collateral.
DOBBS: David Cay Johnston, give us your thoughts. Here we have an economy that in this week we have seen a .3 percent contraction in the economy, we've seen the fed reduce the benchmark interest rate by 50 basis points, that right now is 1.5 percent, and the stock market has moved up just about nine percent this week. Take that as a -- tell us how you would interpret all of that.
DAVID CAY JOHNSTON, AUTHOR, "FREE LUNCH": Well, I think that we're still in the territory where we don't know where the real trouble is. We haven't seen banks fold yet. This idea that we had to force money on to some of the banks that are reasonably healthy so the bad banks wouldn't look bad is -- I find bizarre, although clearly we need to have credit flowing, that is the central problem that we need to address. There is one thing about these dividends that's going to come to the fore very soon. The law that lets you only pay 15 percent tax on the dividends, those dividends have to come out of profits. So, when investors get their statements in January, if they say they're regular dividends and they have to pay 35 percent tax rate on them if they're in the top tax bracket, that means it's your and my tax dollars going to those dividends, not profits earned by those banks.
DOBBS: And your thought about that, Bill Isaac?
ISAAC: Well, I -- again, I think that we've got two types of banks that are in this program, those who need it and those who don't. And I really think we need a distinction bedetween those. For example, there are a the lof reasonable banks we're trying to get to accept this money. Colin Frost in Texas refused it. And we would like more banks to accept this program because we're really trying to get credit flowing again and we need capital to do that. So, I think we have to distinguish between the ones who really need it and the ones who don't.
DOBBS: As we wrap this up, are you feeling any better about the direction of this economy?
STIGLITZ: No. It is actually very disappointing. In fact, I'm feeling worse. Although, not surprised, the numbers on consumer confidence the lowest since the series began being collected in 1967.
DOBBS: Sharpest decline
STIGLITZ: The sharpest decline and the consumption numbers are looking very bad. And I don't see a quick turnaround. And it's very disappointing that we spent so much money and got so little for it.
DOBBS: David Cay Johnston, thank you very much, Bill Isaac, thank you very much, Joe Stieglitz. Up next, Senator Obama tries to win over uncommitted voters in the final days of this campaign, so does Senator McCain and he needs some much-needed star power on the campaign trail, he gets it from Governor Arnold Schwarzenegger. Three of the best political analysts in the country join me here, next. We'll be right back.
DOBBS: Joining me now three of the best political analysts and CNN contributors -- Republican strategist Ed Rollins who served as White House political director under Ronald Reagan and chaired Mike Huckabee's presidential campaign. Pulitzer Prize winning columnist, "New York Daily News," Michael Goodwin. Democratic strategist, Democratic national committeeman, Robert Zimmermann. Good to have you here. We've got -- let's start out with the poll, the Yahoo!/Associated Press poll showing one in seven voters, right now, either undecided or perfectly willing to flip on the candidate they've chosen at this point, 14 percent of the voters in that category.
Is that stunning, Robert?
ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: Not particularly, no. Not realistically especially when you look at the progression of this race. First of all, it's important to note, not just how the other polls show consistent support for Obama, but what I think is interesting is even if you assume all the undecideds swing towards John McCain, Barack Obama now in the battleground states is doing about 50 percent or increasing his momentum. And in polling you want to watch, the trend, not the actual final number. So I think...
DOBBS: Do you agree with that, ed?
ED ROLLINS, REPUBLICAN STRATEGIST: The only reason they hold elections is to see if the polls are right.
You know, there's always a segment -- I mean, it always amazes me that when you, after two years of an election and millions and millions in advertising and all the campaigning we've had, that you always have this seven, eight to14 percent that can't make up their mind. And half of them sometimes don't even vote. Then there's a whole bunch who make up their mind actually on Election Day. But, you know, two-thirds of the voters decide by party or partisanship. And my sense is this one's pretty much set in concrete, it's not like this 14 percent is all of a sudden going to jump one way or the other.
DOBBS: all right. Michael?
MICHAEL GOODWIN, NEW YORK DAILY NEWS: Look, I think for McCain, it's almost a mathematical impossibility to run the table in every battleground state. That's what he's got to do. Now, they're all -- the one chance he has is they're all within the margin of error and, nonetheless, he really can't afford to lose any of the main ones. So, I think that's the problem for him. So, the odds are so heavy against him. On the other hand, I will say, I do still think the tax issue has some resonance and with three more days to go, that's his only card, I believe.
DOBBS: Well, let's talk about that. As we're just listening to, just moments ago, Nobel prize winning economist, Joe Stieglitz, saying to all of us here watching this broadcast that, you know, he's a little more pessimistic about the direction of this economy. And I heard Barack Obama today say rather clearly that he couldn't -- telling my colleague, Wolf Blitzer, that he could not say with certainty what the priorities would be should he be elected president because the reality is he may be fighting a very serious war on a very serious economic crisis. Your reaction?
ZIMMERMAN: Well, I think it's a very frank and honest statement, and quite frankly, I think both he and John McCain should have said during the course of these debates, laid out the economic crisis this country is confronting and discuss what they cannot do. I think they avoided that issue and it was unfortunate. But I think here, though, if you look how this issue is playing out politically, the economy is just not a winner for John McCain. He can -- one, he's not been able...
DOBBS: You're still campaigning, aren't you?
ZIMMERMAN: No, not in the least.
DOBBS: I'm asking you about the economy and the ability here to deal with...
ZIMMERMAN: I'm talking about strategically.
DOBBS: And I'm talking about it in terms of governance.
ZIMMERMAN: It's your show.
DOBBS: Well, I'm trying to, if you would, embrace the idea that we're talking about governance and to correlate that to the -- if you will, the electoral expectation. I don't think that they're even remotely close now, even though your candidate has acknowledged that, you seem to resist it.
ZIMMERMAN: No, I agree with what you said. I think, he's got to lay out the -- I think the reality is for the American people, when he takes his oath of office, the economy is going to truly tie his hands.
ROLLINS: I don't think anybody has a confidence in either McCain or Obama that they're going to have the magic answers. I think people are so disappointed in Bush and his team and they don't think they have a clue what's going on here, all they know is they keep coming up with different programs and changing programs. And I think if Obama had hit a home run on the economy and he basically did what Robert said in one of the debates, says this is serious, I can't do all the things I'm going to do, he's still out promising those things, the key thing -- he can't answer this question. I'm going to raise questions on everybody who makes $250,000 and I'm going to give everybody else a tax break, but does that really help the economy and how much money is that and how am I going to do it? And those are unanswered questions. And that's the backbone of this program. DOBBS: We're going to be back to answer some questions with our panel and also ahead, "Heroes," our weekly tribute to the men and women who serve this nation in uniform. Tonight, we bring you the story of Sergeant First Class John Adams. We'll be right back.
DOBBS: Coming up at the top of the hour, Campbell Brown, NO BIAS, NO BULL. Campbell, you going to be talking on politics by any chance tonight?
CAMPBELL BROWN, NO BIAS, NO BULL: I don't know, we were thinking we might touch on that a little bit, Lou. Coming up in just a few minutes, we're going to start with the crazy, long lines in states that have early voting. Why are people being forced to wait two, four, today even 10 hours?
Also, reports tonight, Barack Obama now looking at potential cabinet members. But wait a minute, still an election, isn't there? And speaking of that, we've got more changes in the CNN electoral map, tonight. John King's going to be here. I also sat down with Bill Maher who picks out his the highlight and low light of this year's election campaign. We'll see you in a bit, Lou.
DOBBS: Thank you, Campbell.
And we're back now with Ed Rollins, Michael Goodwin and Robert Zimmerman. This issue of, right now, a three-headed monster. I can't rember exactly how some Republican said it, but some truth in it -- controlling Congress, controlling the White House. What do you think?
GOODWIN: Well look, one party rule generally doesn't work and I think anybody who wants to...
DOBBS: And Republicans just proved that.
GOODWIN: And that's exactly right. And so for the Democrats to be arguing, you know, we can do it where they didn't with the White House and the Senate and the House, it doesn't inspire a lot of confidence. I personally prefer divided government. I think it works best, I think it sort of 00 that is the way the institutional checks and balances worked best is through partisanship, competing partisanship.
DOBBS: You seem to be resisting that idea, Robert Zimmerman.
ZIMMERMAN: Well, it made sense in 2006 when George Bush was president, to have a Democratic Congress; however, the reality here, two interesting aspects to this, first and foremost, facing so many international problems, be it economic...
DOBBS: That you want...
ZIMMERMAN: A government speaking with one voice.
DOBBS: Ah, there is. (LAUGHTER)
ZIMMERMAN: Here's a fly in the ointment, though.
UNIDENTIFIED MALE: Hugo Chavez.
ZIMMERMAN: Here's the fly in the ointment., though. You've got the new -- the Democrats who won in 2006 and are winning in 2008 are from Republican conservative districts. The idea...
DOBBS: They feel better about that...
ZIMMERMAN: I think the leadership is going to have a very hard time, which is very liberal, thinking they can just deliver the Congress automatically.
DOBBS: So, you like the idea of checks and balances, but just under one party?
ZIMMERMAN: You caught me.
ROLLINS: Where you're will really going to catch him is Democrats speaking with one voice, Democrats following one leader. Ask Jimmy Carter the last time he had both houses of Congress, in about one year they basically moved away from him, so...
ZIMMERMAN: That's Bill Clinton.
DOBBS: Well, as Democrats have suggested that six years of, you know, of a Republican Party controlling all of the government was a bad idea, now it's their turn because that was such a wonderful idea, but the other part is it really doesn't matter because this is about uniquely and individually about Congress, about the Senate, and about the president and what one thinks about gridlock or checks and balances...
ROLLINS: It's going to be big numbers. Democrats whether they get 60 or not, there's a couple moderate Republicans who will vote with them on some critical issues, so they will have the 60 votes in the Senate and certainly they'll have another 25 or 30 members of the House, so they can do whatever they want to do.
DOBBS: Are you thinking landslide?
GOODWIN: Certainly at this point, I would say yes, unless McCain finds some magic in the next 48 hours.
DOBBS: And Robert Zimmerman, would you like to manage expectations?
ZIMMERMAN: No matter what I say, I can't win. I'm just looking forward to big turnout.
DOBBS: All right. So you think you've it in the barrel?
ZIMMERMAN: I'll tell you that Tuesday night. DOBBS: No actually, how about Monday night? We're going to locked that down. Thank you very much.
And please be sure to tune in to CNN HEADLINE NEWS Monday, November 3 and Tuesday, November 4, Election Day. We'll bring you a special live edition of LOU DOBBS TONIGHT on HEADLINE NEWS, 9:00 p.m. LOU DOBBS TONIGHT, Monday, November 3 and Tuesday, November 4. That's election night, isn't it? Live at 9:00 p.m. Eastern on HEADLINE NEWS.
Up next, "Heroes." Tonight we bring you the story of Sergeant First Class John Adams and the Army's honor of his bravery.
DOBBS: And now our tribute to the men and women who serve this nation in uniform. We introduce you now to Sergeant First Class John Adams. Sergeant Adams awarded a Bronze Star with Valor after a close range firefight in Iraq. Philippa Holland has his story.
PHILIPPA HOLLAND, CNN NEWS CORRESPONDENT (voice over): Sergeant First Class John Adams wanted a life of adventure when he enlisted with the Army, 14 years in, he's accomplished his mission, several, in fact. Among them, service in South Korea and peacekeeping in Kosovo. In 2004, Sergeant Adams deployed to Baquba, Iraq as part of a quick- reaction force where they conducted combat patrols and provided security to crucial supply routes. On a routine nighttime mission, Adams stopped to investigate a car parked on the side of the road.
SGT 1ST CLASS JOHN ADAMS, U.S. ARMY: When the vehicle came into view, I had a pistol that had a laser grip attached to it. When I shined the light in the area of a man that was working on the side of the car, two men ran out from the front of the vehicle firing automatic weapons at me.
HOLLAND: Adams killed the insurgent, radioed for support and continued the fight, driving the remaining insurgents into the darkness. An inspection of the vehicle uncovered a devastating plot to bomb the route.
ADAMS: They were actually burying an improvised explosive device, what we call "daisy chained," which is multiple IEDs bound together to go off at one time. There was a, about a 250-vehicle convoy going through the next day of supplies, fuel, oil and I think they had intelligence that that convoy may have been going through, so hopefully we prevented that.
HOLLAND: Sergeant Adams' search also led to the discovery of a substantial weapons cache. His quick reactions earned a Bronze Star with Valor.
ADAMS: I still don't think of myself as a hero. I was out there just doing my job, just like everybody else was. It was my mission to find whatever suspicious activities were going on and stop it. HOLLAND: The U.S. Army also honors the service in the unique way. For the heroism, he was selected for the America's Army Real Heroes Campaign, where, in addition to his duties as a recruiter, he makes appearances across the nation to put a face to the U.S. Army.
ADAMS: I was told a long time ago, when I joined the Army that there's two people within your career that you never forget, and one's your drill sergeant and the other's the recruiter. Hopefully I was that person that was the final steppingstone for them to join and hopefully make a better life for themselves and our nation.
HOLLAND: Philippa Holland, CNN.
DOBBS: Great soldier and a great sentiment.
Well, turning now to our poll results, 80 percent of you say e- voting machines should actually be able to count and record votes.
We thank you for being with us tonight, for all of us here, good night from New York. Campbell Brown, NO BIAS, NO BULL, starts right now -- Campbell.