Return to Transcripts main page
Lou Dobbs Tonight
Bush Defends Free Market; Senators Blast the Bailout Plan; Impact of So-Called Free Trade; Battle over Healthcare; Legal Setback for Imprisoned Border Patrol Agents
Aired November 13, 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 President Bush strongly defending the free market, even as this economic crisis devastates working men and women and their families, is this what you call economic leadership? We'll have complete coverage.
And tonight, new evidence there's a complete lack of oversight of this massive Wall Street bailout. One estimate now, saying the bailout will eventually cost as much as $5 trillion, almost twice the entire federal budget.
And a major disappointment for one of the two former border patrol agents at the center of the outrageous miscarriage of justice. We'll have that report, all of that, all the day's news and much more, from an independent perspective, straight ahead here tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Thursday, November 13th. Live from New York, Lou Dobbs.
DOBBS: Good evening, everybody. Leading senators today accusing banks that are receiving federal bailout money of not doing enough to deal with a financial crisis. Senate Banking Committee Chairman, Senator Christopher Dodd, demanded those banks immediately increase their lending to both consumers and business.
There was new evidence today that this economic crisis is in fact worsening. New unemployment claims rising to the highest level since the attacks of September 11th. President Bush, however, insisting that the worst of this crisis is over. Elaine Quijano reports from the White House.
(BEGIN VIDEOTAPE)
ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT (voice-over): As he prepares to host an international financial summit, President Bush said America would continue to lead in the global economy.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The world will see the resilience of America once again.
QUIJANO: But his comments come on the heels of more evidence that right now America's bleak economy is leading in the wrong direction. Last week, more than half a million Americans filed new claims for unemployment insurance. The highest level since the weeks after September 11th. Amid the continued downturn, the president traveled to Federal Hall in the heart of Wall Street. To argue that recent government action is slowly making a difference.
BUSH: Credit markets are beginning to thaw. Businesses are gaining access to essential short-term financing. A measure of stability is returning to financial systems here at home and around the world.
QUIJANO: But some say investors are looking beyond the current president, who has roughly two months left in office. On CNN's "AMERICAN MORNING" economist Jeffrey Sachs (ph) told John Roberts the markets want reassurance from President Bush's successor.
JEFFREY SACHS, DIR., EARTH INST. AT COLUMBIA UNIV.: People want clarity, they want a vision, they want a direction. But an outgoing administration that has failed can't provide it any more. That's the true fact of life.
QUIJANO: But with President-elect Barack Obama steering clear of the summit and some European leaders pushing for a global financial regulation, the outgoing president is defending Western capitalism and free-market principles, even as he acknowledges parts of the system are broken.
BUSH: And the answer is not to try to reinvent that system. It is to fix the problems we face.
(END VIDEOTAPE)
QUIJANO: But critics charge the Bush administration itself has violated free-market principles with its massive $700 billion bailout plan. A plan they note has so far failed to get credit flowing freely again -- Lou?
DOBBS: Indeed, that $5 trillion bailout may in fact be reinventing these free markets. Thank you very much. Elaine Quijano from the White House.
President Bush struggling to deal with this crisis and the number of home owners in danger of losing their homes is soaring. The number of foreclosures skyrocketed by 25 percent in the year to October. Nearly a million families have lost their homes to foreclosure since the housing crisis began in August of last year.
The highest foreclosure rates are in Arizona, Florida and Nevada. Top senators today demanding the nation's banks do much more to help home owners facing foreclosure. Those senators are criticizing as well the Treasury Department and the Federal Reserve for not disclosing critical information about the massive bailout of Wall Street.
By some estimates, the bailout could eventually cost taxpayers a staggering $5 trillion. Lisa Sylvester with our report.
(BEGIN VIDEOTAPE) LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The banks haven't been doing their job, according to members of the Senate Banking Committee. Instead of loaning money given under the bailout program, the senators say some financial institutions are hording the cash. And as more homes head to foreclosure, patience on Capitol Hill is running thin.
SEN. CHRISTOPHER DODD (D), CONNECTICUT: We wanted to see more progress from your friends in the financial sector. More progress in foreclosure mitigation, in affordable lending and in curbing excessive compensation. And if that progress is not forthcoming, then we are prepared to legislate.
SYLVESTER: Others criticize the lack of transparency. Banks have received the money with few strings attached. An inspector- general who is supposed to oversee the bailout program has not been appointed. And the Federal Reserve has denied a Freedom of Information Act request from Bloomberg News (ph) to disclose which firms have received $2 trillion in emergency loans, money that goes beyond the bounds of the federal bailout. And the Fed will not say what collateral banks had to put up.
STEPHEN MOORE, WALL STREET JOURNAL: We don't know where the money went. We don't what the criteria is for spending it and we don't think that there's a transparency that the public should demand when this money -- this kind of money is being spent.
SYLVESTER: Banks are reluctant to share with the public the fact that they need government help. They fear a stigma. If customers worry the institution is in trouble, it could lead to a run on the bank. The Financial Services Roundtable, an industry trade group, saying quote, "we offer transparency, but we believe to protect against contagion and possible negative reaction from consumers and investors, that sensitive information should be protected." One congressman says the public has the right to know.
REP. JEB HENSARLING (R), TEXAS: But we are talking about hundreds of billions and frankly, if you look at it closely, trillions of dollars that are being used and really used in a secret fashion.
SYLVESTER: Lots of taxpayer money on the hook. Few answers.
(END VIDEOTAPE)
SYLVESTER: The Federal Reserve would not comment on the complaints of transparency, citing an ongoing lawsuit that has been filed to compel the agency to release more information. We also contacted the Treasury Department, but officials did not return phone calls or e-mail -- Lou?
DOBBS: So there is no transparency or even a suggestion on the part of either the Federal Reserve or the Treasury Department that they want to be interfered with by the public's right to know?
SYLVESTER: Well indeed. You know, Lou, this is -- we're talking about and you can't emphasize this enough. We are talking about trillions of dollars here. And that, you know, a lot of lawmakers saying we don't know which banks are getting this money.
We don't know what they're putting up as collateral. And so they're saying -- how can we continue to justify giving this money if we don't even know if it's going to go for any good here?
DOBBS: Well there's another issue, too, and that is that without disclosure of what is happening with taxpayer money, this no longer is a democracy and we are no longer free people. And that may be the -- the direction, the determination of the Federal Reserve and this Treasury Department.
But it's about time that somebody, some elected official somewhere in Washington, D.C. decides that it's time to reassert at least the basic tenet of democracy in this society of ours. Thank you very much. Lisa Sylvester.
Executives from the four banks at today's Senate hearing today insisted that none of the bailout money that they're receiving goes towards staff bonuses. The executives from Wells Fargo, Bank of America, Goldman Sachs and JPMorgan Chase promise that the bailout money will be used for loans for what they call credit-worthy borrowers.
There was no explanation about how they could tell the difference between taxpayer money and the rest of the money. Goldman Sachs CEO Lloyd Blankfine (ph) did not attend today's Senate hearing. He sent one of his underlings instead.
You may remember that back in February, "The New York Post" Liz Smith (ph) reported that Blankfine (ph) had said at a dinner that this economy is doing just fine, despite all the evidence to the contrary and arguing with me on the issue.
Blankfine (ph) also complained about my raising concerns about the government's economic policy and immigration policy. I then invited Blankfine (ph) to join me on this broadcast for a full debate.
(BEGIN VIDEO CLIP)
DOBBS: Perhaps Lloyd would like to come on here and show me the error of my ways and educate me perhaps from his lofty Wall Street perch on how millions of Americans are faring and what their prospects are. Lloyd Blankfine (ph), you certainly -- I would love to have you do it and I would love to have you come on and talk to my face and not to my back, partner. You know I know it's not the way you do it on Wall Street there, hotshot, but try it here. Come on down, open invitation.
(END VIDEO CLIP)
DOBBS: Blankfine (ph) didn't respond to my invitation. So tonight let me repeat my invitation to Mr. Blankfine (ph) and while I'm doing this, he could explain why he was so screwed up and wrong about the economy when he was challenging me.
Well, Lloyd, you're welcome here any time so we can separate the facts from your -- your distorted view of what is reality and the impact of this economic crisis on the people who count in this country -- working men and women and their families. Our middle class. Open invitation, as I've already said.
Well another highly-compensated CEO, Bob Nardeli (ph), also a self-styled genius at Chrysler, tonight is appealing for an urgent government bailout of his company. This is the same Bob Nardeli (ph) who received a severance package worth more than $200 million when he was fired from his previous job, as CEO of Home Depot. He didn't do too well there, either.
Nardeli (ph) was appointed to his job at Chrysler by the company's owners, the rather private, some would suggest overly private investment firm, Cerberus (ph). Shares of Chrysler vehicles have plummeted over 35 percent over the past year. But they're a private company, so you can understand why a lot of people are eager to put public funding into their company.
One reason for the worsening condition of our automotive industry is the commitment of successive administrations to something that I guess we could call faith-based economic policies. So-called free trade has devastated our manufacturing industry in this country and caused millions of middle class Americans their jobs and their quality of life. Ines Ferre reports now on the latest trade deficit.
(BEGIN VIDEOTAPE)
INES FERRE, CNN CORRESPONDENT (voice-over): The total U.S. trade deficit in September went down by almost 4.5 percent, compared to August. But our deficit with China soared. More and more Americans are out of work, almost 10 million now. And fewer goods are made in the USA.
LLOYD WOOD, AMER. MANUF. TRADE ACTION COALITION: Literally, millions of opportunities for middle-class jobs have gone offshore. And until you actually start producing more in the United States, you're not going to create the middle-class jobs.
FERRE: Democrats in Congress are now pushing for a bailout for the near-bankrupt big three auto makers to prevent millions more jobs being lost. But so far, there's little indication the plan in Congress will stop the auto makers outsourcing more of their work, especially parts.
ALAN TONELSON, U.S. BUSINESS & INDUSTRY COUNCIL: (INAUDIBLE) U.S. content are not insisted upon, if they're not mandatory, Detroit and also big American parts makers will continue to go offshore and the benefits to the U.S. economy from any bailout package will be much less than is widely expected.
FERRE: The U.S. Business and Industry Council says in 2006, U.S. manufacturers imported about a third of their steering and suspension parts. The same for engines and engine parts. And almost 46 percent of lighting systems were brought in from abroad.
(END VIDEOTAPE) FERRE: And the trade balance in manufacturing is so bad that just to give you an example, between January and September of this year the U.S. imported almost five times the amount of cars that it exported.
DOBBS: It is -- it's a very unhappy equation. We use the expression balance. It's outright a deficit. Even though the economists like to talk about a balance. We haven't been near a balance in so long in this country. What is the reaction?
I mean what is -- anybody saying about the suggestion that so long as we're off-shoring so much of the production, and in this country, for Chrysler, for General Motors, for Ford and outsourcing so much of the parts work, what is the direction? Anybody talking about changing the rules here?
FERRE: Well and that's the thing. If these companies get a bailout, then would there be any kind of strings attached saying you need to create this amount of jobs, you need to have this amount of parts, American-made parts. And not just with that industry, but also all the manufacturing industries.
DOBBS: Yes, it's amazing to me how many of the so-called geniuses who have been saying that outsourcing is not a big problem. Off-shoring is not a big problem. Now that we desperately need a manufacturing base that has been reduced -- and this is important for everybody to know.
The manufacturing employment levels in this country are now at the same level as 1942. This country, we talked about the energy, energy independence. We have an absolute dependency on foreign producers in so many areas of our economy, it's staggering. Ines, thank you very much. Ines Ferre.
Tonight there are new doubts that the car makers will be receiving a federal bailout, at least soon. Senate Banking Committee Chairman, Senator Chris Dodd, said he doesn't believe there are enough votes in the Senate to pass a bailout for Detroit. The senator said he doesn't know a single Republican who supports the bailout.
And concerns about the automobile industry did nothing to hold back the stock market, however. The Dow Jones industrials surging more than 550 points today. The Dow back above 8800. At one point, however, the Dow was below 8000 after today's disappointing economic reports.
Still ahead here tonight, Governor Sarah Palin holds her first formal news conference with the national media. It didn't go exactly according to plan. And a few other governors weren't too happy with the attention she received.
And President-elect Obama has made health care reform a top priority during his campaign. His proposals, however, come with a high cost. A cost this country won't likely be able to afford. We'll have that report, next. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: President-elect Obama has repeatedly said affordable health care is a top priority of his presidency. Democrats in Congress wasting no time putting forward their own proposals. But as Kitty Pilgrim now reports, all of these health care plans come with a multibillion-dollar price tag at a time when government funding is being stretched beyond its limits.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): On the campaign trail, Barack Obama made a personal pledge to fix the nation's health care system.
SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: As someone who watched his own mother spend the final months of her life arguing with insurance companies because they claimed her cancer was a preexisting condition, they didn't want to pay for her treatment, I will stop insurance companies from discriminating against those who are sick and need care the most.
PILGRIM: Obama, true to that pledge, has ranked health care high on his list of priorities, third after the economic crisis and energy independence. But his own party is already proposing solutions. Democratic Senator Max Baucus announced a health care plan quite similar to Obama's but would require all Americans to be covered.
SEN. MAX BAUCUS (D), MONTANA: These days, people are losing their jobs and that means they're losing their health insurance, too. Twenty-five million Americans have some insurance, but it's lousy insurance. A big illness can sink them financially. Health care spending, the medical bills play a role in half of household bankruptcy cases.
PILGRIM: For his part, Obama's plan is to expand Medicaid to more people, require coverage for all children, create a national exchange so the uninsured can purchase insurance from a private insurer or a public government program. Obama advocates subsidies to lower-income individuals and small businesses, to help them purchase insurance.
According to consulting firm Price-Waterhouse-Coopers (ph), Obama's plan would cost the federal government $75 billion in the first year and would provide health insurance to 95 percent of all Americans, including two-thirds of the 47 million people who do not have insurance.
(END VIDEOTAPE)
PILGRIM: Now one of the reforms Obama is proposing is offering tax subsidies for the uninsured and small businesses that cannot afford to offer coverage to their employees. But growing health care costs could make the Obama plan cost $1 trillion cumulatively over the next 10 years, Lou.
DOBBS: That would be a fifth of the bailout for this newly socialistically-tended government of ours, wouldn't it?
PILGRIM: These numbers are big.
DOBBS: Well they're big, but you know what, they are looking kind of relatively small compared to a bailout of $5 trillion. It's hard to keep things in perspective when you're throwing this much money in all directions, isn't it?
PILGRIM: It is.
DOBBS: Kitty, thank you very much. Kitty Pilgrim.
Well the Catholic Church is severing its ties to the left-wing activist group, ACORN. The U.S. Conference of Catholic Bishops saying ACORN's involvement in voter registration fraud this election is part of its reason. ACORN is being investigated in 13 states now.
Back in June, the Catholic Church cut off its funding to ACORN and allegations that the founder's brother embezzling nearly $1 million from the group played a part in that decision. The FBI is of course now investigating ACORN's involvement in voter registration fraud and the number of states in which ACORN is being investigated has risen to 15 states.
Well in Miami today Governor Palin and 15 other Republican governors met to heal wounds and demonstrate party unity and find some sort of direction, but the big draw for more than 100 reporters there, something Governor Palin never did during the campaign, she held a formal press conference. Take a listen to how she responded to a question about her celebrity.
(BEGIN VIDEO CLIP)
GOV. SARAH PALIN (R), ALASKA: I don't know if it's political celebrity, but I want to put to good use my experience that I have as the governor of an energy-producing state to help our nation become energy-independent. And you know we're going to focus here on what we can do as a team of Republican governors together.
(END VIDEO CLIP)
DOBBS: Well teamwork wasn't on the minds of everybody there. The press conference was all of 11 minutes long. It ended after just four questions. Cut off because Governor Rick Perry of Texas was a little concerned about I guess the feelings of some of the governors being upstaged by the Alaska governor.
She had in point of fact been asked all the questions, it looked like she would be asked all the questions in the time remaining. So Governor Perry tried to cut it off abruptly. But unfortunately for him, there was another question, and so they just kept going.
One unhappy Republican governor, who asked not to be named -- you know -- I mean I love these people with so much guts. These are the people that want to be the political leaders of this nation. They don't even have the guts to put their name out front -- said, quote, "unfortunately it sent a message that she was the defacto (ph) leader of the party."
I'm sure there will be more whining from these anonymous sources and anonymous governors. You know somebody like that should stay anonymous for a very long time. Well in Governor Sarah Palin's home state of Alaska the Senate contest is one of three races still undecided.
But recently-convicted Senator Ted Stevens has fallen behind his Democratic rival Mark Begich (ph). Begich (ph) is now ahead. He surged in the lead. He had a 3,000 vote deficit, now he's up 814. The results of the election not yet final and certainly not yet officially certified.
Senator McCain back on the campaign trail, he's trying to prevent Democrats from winning a filibuster majority, filibuster-proof majority in the Senate. McCain appearing in the state of Georgia, where he's campaigning for his colleague, Saxby Chambliss, who's in a tight runoff with Democrat Jim Martin (ph).
That rematch set for December 2nd. Senator Saxby Chambliss just missed by a narrow, narrow margin of 50 percent. The required 50 percent vote that would have prevented a runoff. In Minnesota Republican incumbent Norm Coleman has an unofficial lead of 206 votes over his Democratic challenger, comedian Al Franken.
The results of an automatic recount won't be however near us. The count begins Tuesday. Franken has filed suit now, asking for data on voters whose absentee ballots were rejected. The lawsuits are expected to multiply.
And still ahead, you'd expect the president-elect to be facing all the tough questions, but his transition team now wants to know all about the people looking for jobs in their new administration. We'll have that report.
And a major setback for one -- for both of the former border patrol agents who are at the center of an outrageous, miscarriage of justice. That story is next.
(COMMERCIAL BREAK)
DOBBS: Well a judge today refused to overturn Ignacio Ramos' most serious charge in the federal court hearing. This comes even as the appellate court threw out some of his other convictions. Casey Wian has our report from El Paso, Texas.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): Former border patrol agent Ignacio Ramos acknowledges supporters as he arrives for re- sentencing at an El Paso, Texas federal court. He has served nearly two years of an 11-year sentence, for shooting and wounding an illegal alien drug smuggler in 2005.
This summer, a federal appeals court overturned two of his six convictions, but the court upheld the most serious charge of using a gun to commit a crime, which carries a 10-year mandatory minimum term. Attorney David Botsford asked the lower court for a reduction in the remainder of Ramos' sentence, based on the fact that a week after he reported to prison he was beaten by suspected illegal alien inmates. He's been in protective custody, solitary confinement, 23 hours a day, ever since.
DAVID BOTSFORD, ATTORNEY FOR IGNACIO RAMOS: Eight and a half, nine years in solitary confinement is pretty close to cruel and unusual punishment. As I articulated to the judge the conditions under which he's currently forced to endure are more onerous and less beneficial than those foreign detainees being held down in Guantanamo Bay.
WIAN: Judge Kathleen Cardone (ph) refused to reduce his sentence, but did agree to write a letter to the Bureau of Prisons, asking that Ramos be transferred to a minimum-security prison, where illegal aliens are not permitted. That decision is entirely up to the Bureau of Prisons.
UNIDENTIFIED REPORTER: Given that there's been another setback, what gives you hope now?
MONICA RAMOS, WIFE OF IGNACIO RAMOS: The commutation. It's something that we have already filed. And we're in hopes with the change in administration, maybe Bush on his way out or Obama coming in, that we will, we'll have some sort of victory.
UNIDENTIFIED MALE: He was willing to do that.
WIAN: The previous night supporters held a candlelight vigil for Ramos and former fellow agent, Jose Compean, whose 12-year term was also upheld a day earlier by the same judge.
T.J. BONNER, PRES., NAT'L BORDER PATROL COUNCIL: The president of the United States holds it within his power with the stroke of a pen to commute the sentence of these two agents.
WIAN: But for now the agents return to prison with a longer sentence than the now imprisoned illegal alien drug smuggler they tried to apprehend.
(on camera): LOU DOBBS TONIGHT has learned the law firm Bracewell and Giuliani (ph), as in former New York mayor, Rudy Giuliani, has volunteered to work on the agent's computation effort. As Compean's attorney says, they know their way around Washington -- Lou?
(END VIDEOTAPE)
DOBBS: Casey, thank you. Casey Wian reporting from El Paso. We will of course continue to bring you the latest developments on this outrageous miscarriage of justice against those two former border patrol agents.
An open borders group in South Carolina is demanding the federal government stop workplace enforcement raids. The South Carolina Christian Action Council says those raids are disturbing because quote, "the United States says it's a welcoming country."
The group also says last month's raid at a Greenville plant is the reason it's speaking out against workplace enforcement. Three hundred illegal aliens were arrested in that raid and for the Action Coalition's -- well information, we brought into this country more than two million people legally last year.
And more than a million, a million people took the oath of allegiance as new naturalized citizens last year. Pretty welcoming, I'd say.
Time now for some of your thoughts; Claire in Louisiana said: "I'm amazed at how the taxpayers' money is abused on big parties. As a school principal, I am ashamed that money is being wasted while we're struggling to make sure students have all the materials they need due to the lack of funds. How about bailing out our schools and improving education? No more parties!"
I'll talk to the folks over at AIG. They're very important people. You might -- it might take a while to get through to them.
And Bill in New Jersey: "I don't think this government can manage a Wendy's without bankrupting it."
And Christy in Georgia: "You stated the trickle down theory correctly. It trickles down and flows up."
We'll have more of your thoughts here later. And each of you whose e-mail is read here receives a copy of my book, "Independents Day: Awakening the American Spirit," now available in paperback.
For more than a year now, we've been reporting on this broadcast about our government's repeated failure to stop the importation of dangerous products from Communist China. Finally tonight, we can report to you that the Food and Drug Administration has announced that shipments of dozens of Chinese imports are being held until they can be tested for the industrial chemical, melamine. As early as last May, China admitted children were being sickened by melamine-tainted infant formula. By September, four children had died, more than 10,000 hospitalized. I ask again tonight -- why has it taken so long for the FDA to take some action to protect the American consumer?
Well up next, President Bush says he strongly supports free markets, unless there's a market meltdown. What in the world is this president thinking about? I'll be joined by three of my favorite radio talk show hosts. And President-elect Obama -- well, he's preparing a smooth transition to power. Well, one of the world's leading historians will put it all in context for us and tell us what we should expect. And you won't believe what the Obama transition team is now asking people who want jobs in the new administration. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: Welcome back. President-elect Obama's transition team is asking tough and very personal questions of applicants for positions in the new administration. Those questions are designed of course to avoid potentially controversial nominations, embarrassing revelations and future scandals of any kind. Deborah Feyerick has our report.
(BEGIN VIDEOTAPE)
DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): Got a secret? If you want to work in the Obama White House, those doing hiring want to know about it. Anyone with anything that could seriously embarrass the president-elect need not apply.
LARRY SABATO, UNIVERSITY OF VIRGINIA: It's better to be thorough and careful than sorry later. And, you know, when you think about it, it's a privilege, not a right, to be a cabinet officer.
FEYERICK: The seven page questionnaire for people seeking high level positions covers everything -- like who you know, who you've lived with, whether you keep a potentially incriminating diary, your Internet aliases and links to your pages on Web sites like Facebook and MySpace, as well as personal blogs.
SABATO: A president facing difficult problems like Barack Obama doesn't need unnecessary controversy.
FEYERICK: Remember what happened when President Bush named Bernie Kerik to head homeland security?
BERNARD KERIK, FORMER BUSH CABINET NOMINEE: It was something that I felt was just something we -- I couldn't move forward on.
FEYERICK: Kerik had to withdraw his name, citing a nanny's questionable immigration status. More embarrassing information on Kerik surfaced later.
President Clinton got blind-sided when he tried nominating sitting judged who had also hired undocumented nannies.
Even Sarah Palin's selection raised questions whether she had been vetted closely enough.
With the Obama administration, the 63 questions cover character, loyalty, family ties and potentially unlawful behavior. The vetting process among the most intense ever -- a reflection, his spokeswoman says, of Obama's desire to change the way Washington does business.
SABATO: If you want to be extremely powerful and influential in a new administration, you do have to submit to some indignities.
(END VIDEOTAPE)
FEYERICK: Now there are also questions about filing taxes, household employees and whether you or any member of your family owns a gun and if so, was that gun used to hurt anyone. And the final question covers any possible memory lapses, by asking whether there's anything, anything at all that could embarrass the applicant, their family and of course the president-elect. Lou?
DOBBS: This could be the smallest administration in recent history.
FEYERICK: Five people, maybe.
DOBBS: Incredible. The business about a gun? Do you own a gun and have you ever shot and killed someone or shot and wounded someone? I don't know what that would be.
FEYERICK: I'm sure that if somebody did that, they probably need not apply.
DOBBS: I imagine you're right. Thanks very much, Deborah. A litmus test of self-selection, I believe, thank you.
Well interesting to note, the application for the Obama administration is seven pages long. But as we reported to you last night, the application for any part of that $700 billion federal bailout, is two pages long. New concerns tonight, in Senator Obama's hometown after Mayor Richard Daley today issued a dire warning. Here it is.
(BEGIN VIDEO CLIP)
RICHARD DALEY, MAYOR, CHICAGO: Huge layoffs are coming in November and December, the next year, there's going to be huge layoffs. And all the corporations, CEOs have come in to tell me. That's just the beginning. It's not their end result. This is a very frightening economy.
(END VIDEO CLIP)
DOBBS: Well Mayor Daley saying the country hasn't seen anything like this, at least in Chicago, since the Great Depression. Our economy, of course, is the most pressing challenge facing this nation and the president-elect. Joining me now, Harvard University professor, Niall Ferguson, he's author of the new book just out today, "The Ascent of Money: A Financial History of the World." Good to have you with us.
NIALL FERGUSON, AUTHOR: Nice to be back, Lou.
DOBBS: "The Ascent of Money." The timing could not be more impeccable. The idea that we could be in this kind of a mess. It obviously occurred to you, or you wouldn't have begun writing this. What was the warning sign that you saw?
FERGUSON: Two years ago I was at a conference of investment bankers and hedge fund managers. And I suggested that they should watch out for a liquidity crisis that was coming their way, and they kind of pooh-poohed and jeered me. And I went away thinking, you know, people are not ready for this and ordinary folks aren't ready for it. They're not ready for the shock that's going to hit them and they need to see this in historical context because it's going to be as big, as Mayor Daley said, as big as the Great Depression.
DOBBS: This is as big as the Great Depression. Whatever the dimensions of this ultimately turn out to be, there's no question that the federal response is massive. We're talking about at least right now, $2 trillion injected through the Federal Reserve itself. Approaching $1 trillion, once the $700 billion bailout is, is completed. What is, what are your thoughts about the, this bailout and the response of the government?
FERGUSON: Well this is the big difference between now and the Great Depression. Because back then, the Fed did next to nothing. In fact, if anything it made matters worse and the U.S. government simply wasn't in the position to borrow $2 trillion at the drop of a hat. I call this the Great Repression. We're trying to repress a depression, by pouring trillions of dollars into the financial system. And you know, it's not yet clear that it's going to work. We're certainly stuck with a big recession. And it's a still a possibility that we could end up with something worse.
DOBBS: Something worse. And that nod, as one watches these markets, as volatile as they've been, the sell off. Hank Paulson, the treasury secretary, going back to late September, as they're pushing for this bailout, saying we could have an absolute meltdown, a disaster.
Obviously the stock market has sold off to a five-year low already. Despite all of this money, this injection of liquidity into the economy, and then we have people talking about the Obama administration to be, talking about a large stimulus package in addition.
FERGUSON: There are two big worries here. One is that you can pour money into banks that are near-dead. But you can't force them to lend it out and to create new credit. It's a little bit like Japan in the 1990s. The banks are on life support, but they're not actually generating any new loans. They're just trying to stay alive. The other big worry is the bond market. How much can the international bond market absorb of new 10-year treasuries? If it's $2 trillion, the deficit could be as big as that next year. At some point, I think foreign investors, including the Chinese are going to say, enough, already. And then it could get very ugly in the bond market.
DOBBS: How ugly?
FERGUSON: Well ugly enough to drive yields up. And if yields go up, the cost of government borrowing going up and the thing begins to spiral out of control. Then you have to worry about the dollar. That's been propped up by Asian central banks, has been for years now. It's rallied recently, rather like the stock market rallied today. But these rallies are illusory. They're bumps on the way down. And I think none of your viewers should be in any doubt about just how serious this is. That's why you need the historical perspective because this is beyond our memory, really. We have to go back to the '30s to encounter something quite this scary.
DOBBS: How long, the economic crisis? We won't characterize it as either a depression or a recession. How long the crisis before we begin to see growth return, some vigor in this economy?
FERGSUSON: Well we're used to recessions lasting maybe a quarter or two quarters, but this is going to be something that lasts years. Japan had a lost decade if you remember in the 1990s. There was next to no growth in that period. And the situation is similar. It begins with a real estate crash. It ends with the banks in desperate difficulty. Huge government bail outs, zero interest rates. The Japanese tried all this in the 1990s and didn't get much of a response. So this is for the long haul.
And I think we have to hope to get away with just low growth, rather than the catastrophe of the depression. That's what we're going to try to avoid. But I must say, I get more and more pessimistic, particularly about the international coordination. I mean, I don't expect much of this G-20 meeting that's coming up, except talk. But it was that absence of international coordination that caused a lot of the trouble in the '30s.
DOBBS: All right, Niall Ferguson, thank you very much. The book is "The Ascent of Money." I recommend it to you highly. Thanks for being with us.
FERGUSON: Thank you.
DOBBS: Up next, three of my favorite talk show radio hosts will be talking with us about economics too, perhaps not on quite so elevated terms. They will, but I don't be. And Vice President-elect Joe Biden. He meets with a man he once called the most dangerous vice president in history. He apparently had a moment of courage there where he could go talk with him, got over it. We'll be right back. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Joining me now, three of the best radio talk show hosts in the country. Here in New York, Mark Simone, WABC Radio; John Gambling, WOR Radio. Good to have you gentlemen with us. And in Detroit, the lady tonight, Mildred Gaddis of WCHB. Good to have you with us tonight, Mildred.
MILDRED GADDIS, WCHB DETROIT: Hi there, Lou.
DOBBS: Let me do this. Let me start with first of all, the mayor of Detroit finally -- well acknowledged that there was a law more important than his ambition. And he's gone. What are your thoughts?
GADDIS: Well, you know, unfortunately it took a long time. But yes, he is gone. And again, Lou, I'm happy to say to you that there is a law making its way through the Michigan legislature that would not allow any elected official, convicted of a felon while in office, to ever run for public office again. So that's the great thing, looking forward to its passage.
DOBBS: Kwame Kilpatrick, right now, I'm sure has got his lawyers looking for a loophole. Let's turn to the president today at the G- 20. Folks, here is our president talking about himself as a free- market guy.
(BEGIN VIDEO CLIP)
BUSH: We're faced with the prospect of a global meltdown. And so we responded with bold measures. I'm a market-oriented guy. But not when I'm faced with the prospect of a global meltdown. And at Saturday's summit, we're going to review the effectiveness of our actions.
(END VIDEO CLIP)
DOBBS: Mark, I'm a market-oriented guy. But with the face of a global market meltdown?
MARK SIMONE, WABC RADIO: It wasn't Churchillian, the speech. It looks like he's got the towel on his neck. It's after the game, he's coming out of the locker room. He's already pack being, he's ready to leave, he's thinking about January. His heart doesn't seem in it anymore.
JOHN GAMBLING, WOR IN NEW YORK: I hope somebody's heart is in it, because everybody is losing heart over where we are today. And I have to tell you, it's a mess. I hope that, I hope they can figure out what's going on and whether or not it's going to be effective because nobody else has been able to do that.
DOBBS: We just heard one of the smartest guys I know, Niall Ferguson, talking about the bumps along the way here, Mildred. And the fact, he did not sound like he's the most optimistic fellow, about $5 trillion being thrown at the problem and seeing the problem resolved. What are your thoughts?
GADDIS: You know what, Lou, it seems that nobody anywhere seems to know how to assess this problem and how to fix it. All of these brilliant minds, some of them are claiming that if you'll just give us the money, we'll do the right thing with it. Who knows what in the world is happening in Washington and the president just two days ago, said, I'm willing to do some dancing here with you if you give me what I want. If you don't, I'm going to take my ball, I'm packing and I'm leaving. The future looks economically horrific at this point.
DOBBS: Well, $25 billion bailout for Detroit. We heard today, Chris Dodd says there aren't enough Republicans here who would support that. And I love the idea, that the Democratic majority, but there aren't enough Republicans. I mean, I am so tired of the weasel nonsense and the partisan absurdity. At one point it's laughable. At the other point, it's just crazy. It's insane.
Go ahead, John.
GAMBLING: Mildred, excuse me, it's absolutely insane what's going on now. Not only are we going to throw another $25 billion at possibly GM and Detroit, what happens if that doesn't solve any problem, which I don't think it will to begin with? You're going to have to throw another $25 or another $50.
DOBBS: We're at 25 already. GAMBLING: I'm talking about the 25 on top of the 25. So just because you've invested so much, you can't then let it blow up. You've got to just keep pumping money at it.
DOBBS: You're a free-market oriented guy, aren't you, Mark?
SIMONE: Let's say it's the right idea to throw the money in, the $25 billion. Why would you hand it to the same management that made these mistakes? Why would you bet on the losing horse again and again?
DOBBS: You mean like we're doing with the banks? Like we're doing with all the financial institutes?
SIMONE: You've got the same bumbling management, don't keep them there. And then they talk about oversight. Who's going to be the oversight? These politicians who have never run anything?
DOBBS: They haven't put together -- they have not stamped the oversight board. They haven't put in the oversight monitor. These people -- this is a joke. And the joke's on the American people, as usual. Yes, Mildred?
GADDIS: You know, Albert Einstein said the thinking that has brought me to this place that has created some new thinking, some new problems. That way of thinking cannot solve. Every expert that you talk to, no matter what side you're on is saying -- that the bailouts aren't going to solve the problem. They're still going to be thousands of people who are laid off their jobs.
DOBBS: Right.
GADDIS: Thousands of people who are going to be affected by the impact no matter what happens. You know, what are these companies committed to doing so that sometime down the road we don't find ourselves back in the same place? Now that's not a comfortable thing for me to be saying sitting here in the city of Detroit.
DOBBS: You're going to hear from some friends in Detroit there, Mildred.
SIMONE: But you can't keep curing the symptom and not the disease. You've got to plug the leak and you can't keep financing the same bad business model. Something has to change.
GAMBLING: And you can't have the same managers. I'm talking about Congress now and the administration. They are the ones who created this mess and they don't want to admit that for a second but they are the cause of this.
DOBBS: John, you get their admission to that, and I'll buy you breakfast.
GAMBLING: Absolutely, exactly. How about dinner though?
DOBBS: You got it. We'll be back with our panel in just a moment. Up at the top of the hour "CAMPBELL BROWN: NO BIAS, NO BULL." Campbell, tell us all about it.
CAMPBELL BROWN, CNN ANCHOR: Hey there, Lou. Well in just a few minutes, what it takes to be considered for a top job in the new Obama administration. We're going to show you some of the 63 questions on the official seven-page test. We're also checking out a report that Hillary Clinton could be one of those people filling out the form. Find out what she may be considered for. We're going to have that right at the top of the show. And chief business correspondent Ali Velshi will be here to answer some pretty simple, noble questions, we believe, to see if the first installment of the government's financial bailout is working before they spend another $100 billion of taxpayer money -- Lou?
DOBBS: Thanks, Campbell. Look forward to it and a reminder to join me on the radio Monday through Friday for the "Lou Dobbs Show." Go to LouDobbsRadio.com to get your local listings.
And next, we'll be talking about that report on Senator Hillary Clinton in line for a top position. John Gambling has a few ideas about where -- we'll be back with him, with Mildred and Mark. Stay with us.
(COMMERCIAL BREAK)
DOBBS: We're back with Mark Simone, Mildred Gaddis and John Gambling.
John, we're getting reports just as we went to break that the Obama administration, that the president-elect is thinking about apparently Hillary Clinton as possibly secretary of state.
GAMBLING: Oh, as secretary of the state. Well, she might bring her own furniture with her. If she comes back and there are some other things that are missing from the White House as well.
DOBBS: Well, now, this is a tough crowd here.
GAMBLING: Listen, you asked.
DOBBS: What do you think, Mark?
SIMONE: You know, has anybody ever thought about this? The whole point of Obama. Hillary was inevitable. He came along and said we don't need the Clintons back, we need new fresh leadership. As soon as he gets in, he appoints everybody from the Clinton administration to come back except Hillary Clinton. So as long as you have the whole administration there, you might as well bring her back.
GAMBLING: Bring Bill back too.
DOBBS: What do you think, Mildred?
GADDIS: How legitimate is that rumor? Is it real legitimate?
DOBBS: We're reporting it as sources saying and, you know, I --
GADDIS: I didn't realize that they truly had kissed and made up. That's interesting.
SIMONE: It's probably a Hillary rumor.
DOBBS: You sound like you're being careful all of a sudden here Mildred, come on, let's get out there.
GADDIS: I don't believe the rumor. It may very well be valid, but I find it very difficult to believe.
DOBBS: Because -- because you think that the senator has other things she wants to do or?
GADDIS: I think that if Hillary Clinton wants to come -- certainly secretary of state is an impressive position. It will be interesting. It certainly will be interesting. I think she wants to be president.
DOBBS: Mildred, I've never heard you pull your punches before.
GADDIS: She wants to be president, but that's a high-profile position. I just don't believe it.
SIMONE: You know, one thing about the Obama campaign, there was never a leak in two years that was so impressive. As soon as he hires all these Clinton people, leaks are everywhere now.
GAMBLING: There's no way Hillary Clinton --
DOBBS: Mark is still working over the Clinton administration.
SIMONE: How much time do we have?
GAMBLING: What do you think he does on his radio show every day?
GADDIS: It's going to be interesting.
GAMBLING: I can't believe that she -- that Obama would bring her in as secretary of anything, let alone secretary of state.
SIMONE: It's a great idea. Better sleep with one eye open though.
DOBBS: Well, OK.
GAMBLING: Et tu, Brute.
GADDIS: She will be there to answer that 3:00 a.m. telephone call in the morning.
SIMONE: It will be bill saying where are you?
DOBBS: I'm telling you, trying to man up here. All right. Thanks guys, appreciate it. Mildred Gaddis, thank you very much. Mark Simone, John Gambling, thank you all. Still ahead, we'll have more of your thoughts. We're coming right back.
(COMMERCIAL BREAK)
DOBBS: Let's take a look at some of your thoughts now. Patricia in Pennsylvania: "Lou, keep up the fight for border patrol agents who are in jail for doing their job. Where is the justice in the United States?" Well, that's a good question.
And Kyle in Oregon: "Lou, thank you for keeping America updated on the Ramos and Compean cases. It seems like no one else is willing to touch the subject, but you've taken it head on." Unfortunately, to no avail.
Robert in Texas: "If American Express wants a government loan, give it to them. Just make sure they pay the highest interest rate they charge any of their credit card customers." That's an interesting idea.
And Karen in Minnesota: "Hi Lou. Hank Paulson reminds me of one of these wind-up toys, where you turn the crank, the top pops up, and out comes Bozo. Respectfully, Karen."
And Mickey in Montana: "Love your show, dude. Glad to see that there is someone in the media that actually cares about this country and isn't afraid to address the real threats to our country. Keep up the good work."
And I want to say thank you. We love hearing from you. Send us your thoughts to LouDobbs.com.
We thank you for being with us. 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.
