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LOU DOBBS TONIGHT

Jobless in America; Illinois Governor Impeached; Warnings to Obama about the FDA; Illiterate in America; Ponzi Schemes; Funding Education; College Cuts; Pirates Free Oil Tanker

Aired January 9, 2009 - 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, the unemployment rate is above now seven percent, is at the highest level in 16 years. We'll be examining President-elect Obama's plan to save or to create three million jobs, as he puts it.

And, tonight, Governor Blagojevich is impeached by the Illinois House of Representatives. We'll have a live report on what is next for the governor and the people of Illinois.

Also tonight, a new warning for the Obama administration about an issue we've been reporting on here for years. Nine of the Food and Drug Administration's own scientists say their agency is suffering from gross mismanagement and corruption. We'll have all of that, all of the day's news straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT; news, debate and opinion for Friday, January 9th. Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody. Americans are losing their jobs at the fastest rate in decades. More than two and a half million people lost their jobs last year, the highest number of people to be unemployed since World War II.

Employers cutting more than half a million jobs in December for a second straight month. This is the first time the economy has lost more than half a million jobs in two consecutive months in seven decades. The unemployment rate last month jumping to 7.2 percent. That's the highest level in 16 years.

The president-elect today said the unemployment report is a stark reminder of the need for urgent action to tackle our economic crisis. President-elect Obama is trying to sell Congress and the public an economic stimulus package he says will create or save three million jobs. Candy Crowley has our report.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT (voice-over): The double trouble that awaits the Obama administration was in evidence when the president-elect arrived at a news conference with two key players in the battle against terrorism and then opened with his take on new devastating job loss figures.

BARACK OBAMA (D-IL), PRESIDENT-ELECT OF THE UNITED STATES: Today's job report only underscores the need for us to move with a sense of urgency. We've received a stark reminder about how urgently action is needed. This is the moment to act and to act without delay. Clearly the situation is dire. It is deteriorating and it demands urgent and immediate action.

CROWLEY: Faced with some preliminary Democratic dissension to aspects of his gargantuan stimulus plan, the president-elect declared himself open to discussion on a fast track.

OBAMA: If it works better than something I've proposed, I'll welcome it. What is not an option is for us to sit and engage in posturing.

CROWLEY: Moving on, no need for a compass to find Obama's message to the U.S. intelligence community either. With his unmistakable reference to the after the fact discovery there were no weapons of mass destruction in Iraq.

OBAMA: We've learned that to make pragmatic policy choices we must insist on assessments rather than solely on the facts and not seek information to suit any ideological agenda.

CROWLEY: Retired Admiral Dennis Blair Obama's choice for director of national intelligence is all in.

DENNIS BLAIR, DIR. OF NAT'L INTELLIGENCE NOMINEE: Intelligence services will support you with facts, interpretations, assessments in a straightforward manner and we will tell you how well we know what we know and what we don't know.

CROWLEY: Ditto, Leon Panetta, former chief of staff to President Bill Clinton who made note of the inscription on the wall of the old CIA headquarters.

LEON PANETTA, CIA DIRECTOR NOMINEE: And ye shall know the truth and the truth shall make you free. If confirmed, Mr. President-elect, I will be honored to lead the men and women of the CIA to seek and speak the truth.

(END VIDEOTAPE)

CROWLEY: Obviously very important nominations for the future of the country. But what the Obama team is well aware of is that when Barack Obama gets into office, his entire focus has to be on the economy for now.

DOBBS: Candy, thank you very much -- Candy Crowley.

Well today's jobs report reveals startling differences in unemployment rates for whites, for Hispanics and blacks. The overall unemployment rate for whites in December was actually 6.5 percent, lower than the national average of 7.2 percent.

The unemployment rate for white youth between the ages of 16 and 19, more than 17 percent. But for Hispanics, the overall unemployment rate last month was almost 9.5 percent. And for Hispanic youth, more than 22 percent. But among blacks, the national unemployment rate was almost 12 percent, 11.7 and more than 28 percent for African-American youth.

Those statistics for whites are little change from a quarter century ago. Today's unemployment numbers for Hispanics are just slightly lower than the equivalent numbers in December of 1983. For blacks, the unemployment rate last month is sharply lower than 25 years ago for all workers and for black youth.

Black workers in December of 1983 were -- had an unemployment rate of just over 17 percent. And black youth had an unemployment rate of a staggering 48 percent.

The president-elect's nominee for labor secretary, Hilda Solis, today declared the job losses are nothing less than a national crisis. In a confirmation hearing on Capitol Hill she said she will push for green jobs to cut the country's dependence on crude oil imports. Solis did not talk about the crisis over illegal immigration and our wide open borders in that hearing. Border security advocates say she is a strong support of measures that would stop federal agents from enforcing our immigration laws.

A barrage of new criticism today for the government's massive bailout of Wall Street. By some estimates, the bailout could cost taxpayers more than $8 trillion by the time all government loans, loan guarantees, and capital injections into banks are included. The head of the oversight panel appointed by Congress, Professor Elizabeth Warren of Harvard University today said the Treasury Department has done virtually nothing to account for all of that money.

(BEGIN VIDEO CLIP)

PROF. ELIZABETH WARREN, OVERSIGHT CMTE. CHMN.: Now, this isn't rocket science. This isn't some strange thing we're asking for. If you're going to take that much money from American taxpayers, you've got to have the banks tell what they are going to do with it. We have to have some way of telling if it's working.

(END VIDEO CLIP)

DOBBS: Warren reinforcing what we've been saying on this program for literally months now, more than a year. There is absolutely no accountability in any part of this bailout or the efforts of the Federal Reserve.

Well in the political corruption scandal in Illinois tonight the State House of Representatives has voted 114-1 to impeach Governor Rod Blagojevich. Afterwards the governor said that vote was no surprise to him because state lawmakers have been opposing his policies and him for years. Susan Roesgen reports now from Chicago.

(BEGIN VIDEOTAPE)

GOV. ROD BLAGOJEVICH (D), ILLINOIS: From the very moment of my re-election, I've been engaged in a struggle with the House to try to get things done for people. I've worked very hard and continue to keep pushing and prodding the House to pass a capital construction program.

SUSAN ROESGEN, CNN CORRESPONDENT (voice-over): Governor Rod Blagojevich spent most of a 10-minute news conference touting all the ways he says he's helped the people of Illinois. State lawmakers say people in Illinois should be fed up.

UNIDENTIFIED MALE: You ought to be disgusted. You ought to be mad as hell, because this is our state. This is our system.

ROESGEN: Lawmakers knew about the accusation that the governor tried to sell Barack Obama's open Senate seat but a legislative investigative committee found so much more. Charges that the governor's office hired an interpreter for the deaf who didn't know sign language, started a cheap prescription drug plan to bring in drugs illegally from Canada and that the governor withheld funding for Chicago's children's hospital waiting for a campaign donation.

UNIDENTIFIED MALE: The House does adopt Resolution 1671 that Governor Blagojevich is hereby impeached.

ROESGEN: In voting to impeach him lawmakers called Blagojevich everything but a scoundrel.

UNIDENTIFIED FEMALE: It's amazingly fitting that Governor Blagojevich face impeachment today, of all days, on his self admitted hero Richard Nixon's birthday.

ROESGEN: And what did the governor do while lawmakers were voting to impeach him?

UNIDENTIFIED REPORTER: How can you job when you've been impeached, Governor?

ROESGEN: The governor had been invited to tell his side to the legislature but never appeared. Later, he was as defiant as ever.

BLAGOJEVICH: A lot of senior citizens in Illinois have had the benefit of being able to afford their medicine at prices they can afford. The House is impeaching me for that. Is that an impeachable offense? I am not guilty of any criminal wrongdoing. That issue will be dealt with on a separate course and in an appropriate forum, a federal court, and I'm confident that at the end of the day, I will be properly exonerated.

(END VIDEOTAPE)

ROESGEN: And Lou, I'm here outside the governor's house. We haven't seen him since he had his news conference. You mentioned, Lou that the vote was 114-1. That one no vote turned out to be a Democrat, a representative from here in Chicago. You know the governor is also Democrat. And he said that he simply did not believe that he had enough information to go with an impeachment "yes" vote -- Lou.

DOBBS: Thank you very much. A lonely feeling it must be for the House member. Thank you very much -- Susan Roesgen from Chicago. Well another elected official in trouble tonight. The mayor of Baltimore, Maryland, Sheila Dixon (ph), campaigned on an anti crime and anti corruption platform. Mayor Dixon (ph) today was indicted on charges she accepted illegal gifts while serving as mayor and city council president. The gifts included travel, fur coats, gift cards intended for the poor. Mayor Dixon (ph) declared she's done nothing wrong and she refused to resign. She now faces 12 counts under that indictment.

Turning overseas, Israel and Hamas today ignored a United Nations cease-fire resolution. Israel said its aircraft and troops attacked another 70 Hamas targets in Gaza, including the home of a top Hamas official. Hamas responded with a barrage of rockets launched into Israel. More than 30 Hamas rockets struck southern Israel. The Israeli offensive is now two weeks in duration.

Later, is communist China supplying weapons to Hamas? We'll have the evidence.

And how the recession could affect college football. We'll have a special report.

And a startling warning from within the Food and Drug Administration about the FDA's mismanagement and corruption within the agency.

And actor Patrick Swayze hospitalized. We'll have the very latest on his condition here next.

(COMMERCIAL BREAK)

DOBBS: We have reported on this broadcast for years the gross mismanagement of the Food and Drug Administration. Now a group of FDA scientists has written a letter to the president-elect warning him of the serious problems facing the agency. The letter includes complaints of corruption as well as mismanagement. Louise Schiavone has our report.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): The FDA scientist who wrote the letter belonged to a group that tests medical devices. CNN has obtained the six-page letter written to John Podesta, head of the Obama transition team. The scientist allege quote, "the scientific review process for medical devices at FDA has been corrupted and distorted by current FDA managers, thereby placing the American people at risk", end quote. It's not news to the scientific community in Washington.

DIANA ZUCKERMAN, NAT'L CTR. RESEARCH WOMEN & FAMILIES: Their bosses actually tell them change what you've written here. I don't like what you've written here. People are being harmed by this and people are going to die as a result of this.

SCHIAVONE: Of particular concern in this letter is the FDA Center for Devices and Radiological Health, which regulates items ranging from rubber gloves to contact lenses to heart stints to mammogram machines. The scientists charge that scientists and doctors have been threatened and told to ignore FDA regulations. Devices have not been properly labeled. Officials have recommended the removal of Black Box warnings, manufacturers have marketed their products without FDA approval. FDA insiders say it's not a Bush administration problem, it's a systemic problem.

CARL NIELSEN, FORMER DIR., FDA IMPORT OPERATIONS: It is so broken, the new administration should consider all senior executive managers to tender their resignation and let the next commissioner decide whether or not they stay or not based on their performance and outcome on safety.

SCHIAVONE: The Food and Drug Administration tells CNN quote, "the agency is actively engaged in a process to explore the staff members' concerns and take appropriate action."

(END VIDEOTAPE)

SCHIAVONE: Lou, the FDA also says it's working closely with the Obama transition team and is prepared to address their concerns directly -- Lou.

DOBBS: Louise when they said the agency is taking a look at all of this and is going to take care of those concerns, this is the same managers who are accused of incompetence and corruption, trying to tell us whether or not the agency is incompetent and corrupt. That doesn't make a lot of sense, does it?

SCHIAVONE: Well there's a team of scientists and physicians in the FDA who have been very frustrated about the signals that they get from some of the managers, and that's why these scientists are hoping that Tom Daschle, if he is confirmed to be HHS secretary just goes straight to the FDA, asks everyone to tender their resignation and starts all over again...

DOBBS: Right.

SCHIAVONE: ... restructuring, transparency, the whole works.

DOBBS: An early task for the likely secretary of HHS, Tom Daschle. Thank you very much -- Louise Schiavone.

Doctors in London today announced the birth of what they call the first baby to be born without a cancer-causing gene. The baby girl was born from an embryo screened to ensure that the embryo is free of the so-called BRCA-1 (ph) gene. The baby now has a reduced risk of breast cancer as an adult. The BRCA-1 (ph) gene runs in the newborn's family. The controversial screening procedure does raise among some serious ethical questions about genetic testing.

Actor Patrick Swayze tonight is in a hospital after being stricken with pneumonia. Swayze has been fighting pancreatic cancer for a year. In an interview just this week he admitted that his illness has scared him but he is determined to fight. Swayze says he is determined to live long enough for researchers to find a cure. And we'll bring you the very latest on Swayze's condition as information becomes available.

Up next, a century-old tradition on one American college campus has ended because of our economic crisis. We'll have the story.

And, next, a shocking new report exposing the alarming number of Americans who cannot read. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: More bad news on the quality of education in this country and a disturbing new report showing that one in seven adults in this country can't read well enough to fill out a job application or to understand simple directions -- one in seven. Lisa Sylvester has our report.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: (INAUDIBLE) bones.

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): In Washington, D.C., adults, many of them in their 40s and 50s, are learning to read for the first time. One out of seven adults in the United States lacks basic literacy skills. What that means is they cannot read a sentence or comprehend even the most basic paragraph in English.

The extensive survey was done by researchers at the Department of Education, who followed a large cross section of Americans from 1992 to 2003. Why are so many unable to read in the United States, a first world country that mandates public education for children?

DAVID HARVEY, PROLITERACY: Why so high? Three reasons. Young people who drop out of high schools, failing schools, people with learning disabilities which may be undiagnosed in some circumstances and immigration.

SYLVESTER: The states with the highest illiteracy rates are California, 23 percent, Florida, 20 percent, New York, 22 percent, and the District of Columbia and Texas, both at 19 percent. Literacy experts say those who can't read often struggle to find jobs.

If they do find work, they are among the lowest paid. And illiteracy is a cycle that perpetuates itself. Parents who are illiterate are unable to read to their children and not able to teach them basic reading skills.

RITA DANIELS, EXEC. DIR., LITERACY VOLUNTEERS: Based on what we know now we will be the first generation whose children are less educated than we are, less smart than we are, because we failed them. So what it means for our nation is that we have children that we are rearing who will need tremendous help in order to be successful in jobs.

SYLVESTER: U.S. workers have to be globally competitive but it's becoming tougher to keep up with so many adults unable to read and write.

(END VIDEOTAPE)

SYLVESTER: This report for the first time offers data on the county level. Researchers and educators can now identify precisely where to direct resources. Now some states have made significant progress since the last report was issued in 1992. Mississippi decreased its illiteracy rate from 25 percent to 16 percent by making a concerted effort to push education and to bring that rate down -- Lou.

DOBBS: Yes, it's a sad commentary as well when we look at a 15 percent illiteracy rate as progress in this country. As you point out, the largest states in this country, with one in five adults illiterate, and there's this sort of high-bound political correct orthodoxy that doesn't want to deal with this issue.

It is truly troubling to see the public hypocrisy on the part of our elected officials, on the part of both political parties, all sorts of interest groups here. When people are paying -- in this society and the economy is paying a high price for this.

SYLVESTER: Yes, you can't ignore the fact in this economic situation where people are having a tough time finding jobs as it is. Now compound that when somebody can't even fill out a job application or can't read in English. I mean that is a huge problem here, Lou.

DOBBS: Absolutely and there's another problem. It took the Department of Education five years to come out with this report covering a span that ended in 2003? What the heck is wrong with those people?

SYLVESTER: Yes that is a very good point. I mean this report was actually -- they had gathered all the data it was completed in 2003. But then they had to develop the statistical models and they had several attempts at trying to develop this model. And so here it is six years later and now we're finally getting this report. So a long-awaited report, Lou.

DOBBS: Think about how many people they could have educated to read in the course of that five-year period. Thank you very much -- Lisa Sylvester. We appreciate it.

A new rule that requires all federal contractors to use the E- Verify program to check employee eligibility to work in this country and to check whether or not they are in this country legally and lawfully has been delayed by the Department of Homeland Security for a month. The rule was to go into effect next week, but it's been blocked by a lawsuit brought by, who else the U.S. Chamber of Commerce.

That's right. The same Chamber of Commerce that was denied a standing in a lawsuit in Arizona because they have no standing. The Chamber is just one of open borders pro amnesty groups trying to kill the E-Verify program. As we've reported here extensively, that's because the E-Verify program is 99.6 percent accurate.

It works. And this scares the dickens out of ethnocentric open borders amnesty advocates and the biggest amnesty business advocate, the U.S. Chamber of Commerce. Imagine that.

Well a common legal tactic used by illegal aliens to avoid deportation shut down today by the Bush administration. The Bush administration ruling that illegal aliens do not have a constitutional right to challenge their deportation because of mistakes made by their lawyers.

Up next here, the Bernard Madoff scandal. The biggest financial fraud in history. We'll have that report from our special investigations unit.

Also, some very candid remarks by former Vice Presidential candidate Governor Sarah Palin about the presidential election and Caroline Kennedy.

Also tonight, Governor Blagojevich impeached by the Illinois House of Representatives. What does that mean? Four of the best political analysts will join us to talk about that, the upcoming Obama administration and our raging economic crisis. Stay with us.

(COMMERCIAL BREAK)

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion. Here again Mr. Independent, Lou Dobbs.

DOBBS: Joining me now four of our political analysts, all CNN contributors and great Americans -- Republican strategist, former White House political director, chairman of the Mike Huckabee presidential campaign, Ed Rollins -- Ed, great to have you with us -- and columnist Michael Goodwin of the "New York Daily News" and Democratic strategist Robert Zimmerman and professor of political science and professor of law at Vanderbilt University in Nashville, Tennessee Carol Swain -- Professor, good to have you with us.

UNIDENTIFIED FEMALE: Thank you.

DOBBS: Let's turn first to what appears to be, without question, a change in the rhetoric of this administration to be Mr. Obama talking without question in, again, today the rhetoric of fear when he has built his entire -- he built his entire election on campaign of hope. What is going on?

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: Well I think it's -- in the economic issue it's really about galvanizing the Democratic Congress and the Republican members into action. And I think the goal here is to build a bipartisan coalition to pass this package. And very frankly, I think it may be very -- it's very wise, especially in light of today's just very sad economic numbers.

DOBBS: The 7.2 percent unemployment rate.

ZIMMERMAN: Exactly.

(CROSSTALK)

UNIDENTIFIED MALE: Record number since World War II. (CROSSTALK)

DOBBS: Ten million people are unemployed.

ZIMMERMAN: That's right. And so I think it's important to galvanize this Congress into action and to galvanize into action hopefully by the middle of February.

(CROSSTALK)

DOBBS: Go ahead, Carol.

PROF. CAROL SWAIN, VANDERBILT UNIVERSITY: I think it's unfortunate that we have to do it using fear because we know every time there's certain types of language used the markets always react to that language. And it would be good if there was a way we could galvanize people using positive words and encouragement and hope. That would be a change.

DOBBS: I think that's an interesting point, Professor. I was talking with Bill Isaac, former chairman of the FDIC. He was talking about in the 1980s, during the savings and loans crisis, he pointed out all of this rhetoric about the greatest crisis since the depression is greater nonsense. We had a far more severe crisis in this S&L crisis than anything to this stage in our economy. We had 3,000 banks close in the 1980s in the S&L crisis. We're looking at just about 50 banks that have failed in this crisis. I mean, this is -- and no one, he points out, would have been talking about - would have been trying to scare the public or the Congress into action.

ROLLINS: Well, we also had 11 percent unemployment in 1982. I mean, we've been through this process before. I think the key thing is, and I think what's causing a lot of this consternation is the president's messages -- new president-elect's message is not clear yet. He's talked about 15 different proposals. I don't think there's any confidence in the stimulus packages that have been put forth so far. And his own party is starting to go off.

I mean, I think, Robert, in fairness to my party, we're not going to participate. We're not going to pay for things we don't believe in and you've got the votes, you can push it through and this president is going to have to the country and put lots of pressure on these members to get them back into line, which he has the tools to do that.

DOBBS: Your party isn't going to do things -- my god, your president said he's abandoning free market principles to save the free market system.

GOODWIN: Well, you know what Lou, there's another part of this is, too, which is that the cities and states all want bailouts. At the same time, the cities and the states are raising taxes. So, here's Obama saying I want to stimulate spending on the local level by consumers, I want to give a tax cut of $1,000. Meanwhile, here in New York and across the country, mayors and governors are raising taxes and fees to balance their own budget. So, a lot of the federal stimulus will just be sucked up by the local governments. (CROSSTALK)

ZIMMERMAN: It's going to be very interesting to know if my party does have the votes to pass the Obama package...

DOBBS: I love this "my Party" stuff. I like that.

ZIMMERMAN: ...because the reality is, while you have the strong Democratic majorities in the House and Senate, many of them come from very red states and conservative districts. So, I think he's going to have to look to moderate Republicans, northeastern Republicans in particular, to get the package through. And I think that's going to be...

GOODWIN: There are no more moderate Republicans.

ZIMMERMAN: Just one from Maine.

ROLLINS: Remember the Maine.

DOBBS: Professor, you were going to say?

SWAIN: One of the things that really bothers me with the rhetoric that I hear is that it sounds like the ends justifies the means, that whatever it takes to get something done, we'll do it, without real thought about the consequences. And there's so many consequences that we just don't know.

DOBBS: Well, I think you're right. And I think one of the things that we do have to look at is, that comparison between the '80s and now, and the fact that the national news media, by the way, is just buying all of this rhetoric. And first and foremost, from a Republican president and the Democratic leadership of the 110th Congress, which put together a 700 billion package, rolled out $7 trillion in federal aid and assistance and guarantees without blinking an eye and now we're being asked by the new president to do much the same. It's crazy.

We're going to be back. We're going to take a quick look here at what's happening with unemployment. There is some good news. And since I'm being a little critical of the -- for the first time, really, Barack Obama's president-elect office on the issue of fear, I want to give the president-elect, if I may, just a little positive news and some positive aspects you might want to consider talking about, instead of using that Bushian fear stuff.

Up next, an inside look at the Bernard Madoff Ponzi scheme, we'll have that report. The impact of the country's economic crisis and college sports. And we'll be back with our panel, stay with us.

(COMMERCIAL BREAK)

DOBBS: We're back with our panel: Ed Rollins, Michael Goodwin, Robert Zimmerman, Carol Swain. I just want to, if we may, take a look at some of the minority unemployment numbers that are not being reported. They're being reported here because it's extraordinarily important. For the Hispanics, for the 7.2 percent national rate, Hispanics, the overall unemployment rate, is just about 9.5 percent. It's significantly more, Hispanic youth, more than 22 percent among Blacks. The national unemployment rate, 11.7 percent and more than 28 percent for African-American youth.

These numbers, as we look back 25 years ago, they represent just about the same for Whites and significant improvements, we should all be pleased to report, significant improvement over 25 years ago. Professor Swain, what is your reaction?

SWAIN: Well, again, if you look at the Black unemployment rate, it's still, in my opinion, almost five points higher than the White unemployment rate and it should be a concern about so much disparity.

DOBBS: And three points higher than Hispanics, without question. It is troubling that this would persist. The war on poverty was started in this country 1965, 43 years ago. And for us to even have to discuss this in these terms is deeply troubling.

ROLLINS: Well, I think one of the things that's very important, the new programs, the new stimulus programs are going to have to be training programs for many of these young people who need jobs, need to be trained in jobs. A lot of it is education, but at this point in time, it would be a terrible tragedy, if we spent trillions and trillions of dollars again and didn't get kids, teach them to be electricians, teach them to be road builders, do whatever and contribute back to the society.

DOBBS: Do you know radical what you just said is. I mean, we don't teach people to do things in this country anymore.

ROLLINS: Right. There's a tremendous need in this country for skill workers. And we used to train them in the federal shipyards, use to train them in apprentice programs.

DOBBS: When this country actually made things.

ROLLINS: Actually made things. We need to get back to doing that.

GOODWIN: And one of the problems now, of course, with all of the education money that is spent on the local as well as the federal level, the idea everybody has to go to a four-year college, I mean, that's sort of the goad of all of our education spending. A, it's not going to happen, but, B, it's not necessary. People can...

SWAIN: I agree.

GOODWIN: ...can learn and have a great life and be good citizens, you know, with a lot of jobs if education can help prepare them for.

DOBBS: If we also make -- if we uphold the contract that has built this country with our middle class. And that is that you will be able to earn a living wage and that our middle class will not be put into competion with the cheapest lane borrow cheapest labor in the world. And at the same time, Professor Swain, we've got to stop a dropout rate that is 50 percent for Blacks, 50 percent for Hispanics in our high schools.

SWAIN: I certainly agree and I believe in community colleges, they are much underrated.

DOBBS: Community college -- I just want to make a pitch. Community colleges are the best bargain in higher education in the country.

ZIMMERMAN: Absolutely.

DOBBS: Now, I'm not just talking about just financially but educationally. I'm talking about the education, the quality of education.

ZIMMERMAN: And they're also a key to rebuilding the middle class. If you look at the job losses in the most recent reports, they're coming out of manufacturing or coming out of construction and if we're going to reopen the middle class to America again, it means reinvigorating our labor unions and also providing the kind of job training that's...

GOODWIN: Oh, we're into card check now, we're into card check.

ZIMMERMAN: No, we're also, we're also into using this job stimulus package to really, in fact, use it as a transformational time.

DOBBS: It may be your party, Robert Zimmerman, but what about our country?

(LAUGHING)

ZIMMERMAN: It's about country.

SWAIN: I need to get in here. My first degree was from a community college, it was a community college that opened the door to the rest of my education.

DOBBS: Good for you.

SWAIN: It got me into the middle class.

ROLLINS: Me, too. My father was a shipyard worker, I went to junior college, went to junior college for a long time.

(LAUGHING)

Went to state college for a long time.

DOBBS: That's not the issue. It paid off. But you know what? We've really got to ensure that those opportunities that both you and Carol are talking about and I think all of us were very fortunate, we've got to make sure that this next generation has that opportunity. Thank you very much. We appreciate it. Let's turn to a story that just infuriates me and I'm sure you. Bernard Madoff remains under house arrest, tonight. He's not in jail. He is, though, waiting trial in the biggest financial fraud in history. CNN and "Fortune" magazine taking an inside look at Madoff in a one-hour special, this weekend. Special Investigations Unit correspondent, Abbie Boudreau joins us now from Atlanta - Abby.

ABBIE BOUDREAU, CNN SPECIAL INVESTIGATIONS UNIT: Well Lou, I'm looking into how the SEC handled this case and the person whose job it is to figure that out is David Kotz. He's the inspector general assigned to this particular case and I met up with him after a congressional hearing to ask how he plans to figure out whether regulators failed to do their jobs in this case.

(BEGIN VIDEO CLIP)

Some members of Congress today said that the SEC failed miserably. Do you think that that's a fair statement?

DAVID KOTZ, SEC INSPECTOR GENERAL: Oh, we haven't conducted that investigation yet, so...

BOUDREAU: but do you think that statement is fair?

KOTZ: Well, as we complete our investigation, I'll be able to tell you, but I really do have to go.

BOUDREAU: But; do you feel like the SEC dropped the ball in this case?

KOTZ I need to find that out after I finish my investigation.

(END VIDEO CLIP)

BOUDREAU: Obviously, no one is wanting to answer any questions right now, including the inspector general, who, I think, Lou, did a really good job of not really answering my question.

But, who we really want to talk to is the SEC chairman, Christopher Cox. I think most people want to hear more of what he has to say about his agency and how the investigation is coming along. We asked him several times to sit down with us in an interview, but his press secretary told us no due to what he said were scheduling issues.

DOBBS: Abbie, again, an excellent job of reporting. We're looking forward to your report. But again, every SEC chairman, through the Clinton administration, through the Bush administration, should be held responsible for this. I could not help but note Arthur Levitt, the SEC chairman, former SEC chairman, writing an article on how to avoid these scandals in the "Wall Street Journal" this past week. One of the ways is to have SEC chairmen who are not publicly cowards and who take seriously the responsibilities to the investing public.

Abbie, thank you very much. We look forward to that report. Abbie Boudreau. More on the Madoff story this weekend in our CNN/"Fortune" special investigation, MADOFF, SECRETS OF A SCANDAL. Abbie Boudreau with that at 8:00 p.m. Eastern both Saturday and Sunday.

Our struggling economy forcing cuts in places that we might not otherwise expect. Western Washington University has been playing football now for more than a century, but because of a tightening budget and a weakening economy, the university has decided to drop its football program. Bill Tucker has our report.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN NEWS CORRESPONDENT (voice-over): The Western Washington Vikings will conquer no more on the football field. After going 6-5 and winning the Dixie Rotary Bowl on December 6, there season and the program is over. The players were told Thursday.

LYNDA GOODRICH ATHLETIC DIR W WASHINGTON UNIV: They took it well in that they handled it well. I think they're very disappointed and very emotional. I think they're unsure of what the future holds for them.

TUCKER: They Vikings played the game since 1903, but the costs to field the team in 2009 were too high and the university, like the rest of the country, is tightening its belt.

EILEEN COUGHLIN, VP STUDENT AFRS W WASHINGTON UNIV: Well, this was a very tough call for us. The reality is, we had a combination of fiscal issues that came together and really indicated for us to keep quality overall, we needed to make a tough decision.

TUCKER: Western Washington's decision is contrary to national trends. Since 2000, 27 schools have added football programs while seven, actually now eight, have dropped the game. The Web site let them play is part of an effort to restore the football program at California Santa Clara University which dropped its program in 1993. Rick Medeiros is part of that effort and he explains why football is important to his school.

RICK MEDEIROS, WWW.LETTHEMPLAY.COM: The look at it as something that's important for the life of the school, it's who they are, it's part of their tradition. They see all of these other benefits, including the alumni giving back to the school and bringing the alumni back to the school.

TUCKER: Schools which add football also reported increase in male enrollment at a time of decreasing attendance nationally. But money was the bottom line at Western Washington, it wasn't academics.

During the same time that Oklahoma was graduating 46 percent of its football players, in Florida, 68 percent, Western Washington was graduating 83 percent of its student athletes.

(END VIDEOTAPE)

Ninety-six young man played for Western Washington, those on scholarships will continue to receive their scholarships, those that want to transfer, Lou, they can do so without losing any of their eligibility.

DOBBS: Well, that's terrific, it's also sad that they had that high of graduation rate amongst their scholar athletes. And it is unfortunate that so many division one football programs are failing to graduate more of their students. Certainly, it is striking that Florida is graduating far more of its athletes than the University of Oklahoma.

TUCKER: Florida is right in line with the division one average for football programs, which is 67 percent. So, Florida is there, yes and that is exemplary, sadly enough, against the graduation rates at Oklahoma.

DOBBS: Well, we want to congratulate both schools for a spirited contest last night. And our congratulations, of course, to the Florida Gators for winning the national championship. Thank you very much. And good luck to Western Washington University.

TUCKER: Absolutely.

DOBBS: We appreciate it, Bill Tucker, as always. Thank you.

Coming up next, a Saudi oil tanker. Well, the pirates have given it up after they've paid off the pirates.

And Israel -- that's one way to handle piracy -- and Israel says it's trying to stop Hamas rocket attacks from Gaza. One way might be to tell the Chinese to quit giving them rockets. We'll have that story, next.

(COMMERCIAL BREAK)

DOBBS: Pirates off the coast of Africa have reportedly freed an oil tanker that they have been holding for ransom and reportedly, those pirates received a $3 million ransom to set the tanker free. U.S. Navy photos, which you are looking at here, show what appear to be the ransom being dropped by parachute onto the deck of that ship. The Saudi tanker, the Sirius Star, had $1 million worth of crude oil aboard when pirates seized it back on the 15th of November.

Piracy, of course, has is rampant in the Gulf of Aden. Some 300 mariners from other ships are still being held and we will, of course, be updating you on that as we learn more about the ransom and the disposition of the Sirius Star.

Israel tonight says incessant rocket attacks by Hamas led to its invasion of Gaza, but who is supplying those rockets to Hamas? We're joined now by Gordon Chang, he's the author of "The Coming Collapse of China," along with CNN military analyst, General David Grange.

Thank you both for being here. Gordon, you say straight forwardly that China is providing those rockets, both directly and indirectly to Hamas. GORDON CHANG, AUTHOR: Yeah, those rockets were manufactured by Szechuan Aerospace Industry Cooperation, they were purchased by Iran, they went by a round-about route, including Yemen and some other places and they ended up in Hamas's hands.

Now, Iran makes the same type of weapon, 122 mm rocket, but Hamas uses the Chinese version because it's better and I suspect that the Iranians want some measure of deniability so they don't use Iranian rockets, they use the Chinese ones.

DOBBS: When you say better, you're talking about they have a longer range?

CHANG: They have a longer range. They can go 40 miles and they can hit targets far deeper into southern Israel, like the school in Beersheba that was attacked on December 31.

DOBBS: Why is it that the national news media, that the Bush administration, for that matter the transition team of the, to-be Obama administration, and the Israelis themselves are not focusing on these facts?

CHANG: Well, Israel has talked to China privately about China's relationship with Hamas and has gotten nowhere. So, I suspect that Israel is looking towards Washington. But Washington, for some reason, and I think it's because you know, we have this very indulgent attitude towards the Chinese, really isn't do anything.

DOBBS: How extensive, General Grange, is China's involvement in the Midwestern -- the conflict between the Palestinians and the Israelis?

BRIG GEN DAVID GRANGE, CNN MILITARY ANALYST: I think there's a lot of influence, there's a lot of influence not only by China, but by Russia providing weaponry, I mean, a lot of the Israeli mission was to interdict that rocket infiltration, the cache sites, the supply dumps of those rockets set for continuous barrage into Israel. And it's a destabilizing effect using surrogates. And here, you are using surrogates. It's not nation to nation, you're doing a cutout through Iran to supply the surrogates and you disrupt it...

(CROSSTALK)

DOBBS: Instead, as have been, custom through the Cold War, instead of -- well, they are rogue states, but also terrorist organizations now rather than nation states?

GRANGE: Yeah, it's a (INAUDIBLE) state. It's a terrorist organization, it's also a political party and has an army supplied by people we deal with, other nations.

DOBBS: And why, Gordon, is the United States government not responding, here? You talked about an indulgent attitude. It looks more like a cowering on the part of this administration. Could that have some -- could the fact that we are dealing, trading with a country in the case of communist China, that holds a trillion dollars in hard reserves of our currency?

CHANG: Well, I'm sure that has something to do with it because people in Washington correctly feel that China has a lot of leverage over the U.S. because of this. But, you know, we also have this view that if we're just nice to the Chinese, they're going to reciprocate and sort of be responsible citizens of the international community.

But the Chinese sort of look at our friendliness as a sign of weakness, so they continue bad conduct and they see that we reward them for it, so they don't to destabilize the international system. And there are many officials in Beijing who say if they continue to destabilize the world, that they will be the last men standing.

DOBBS: That has to be part of the strategic understanding on the part of the U.S. military, yet there has been to, at least to my knowledge, no strategic response on the part of the United States extraordinary activity on the part of the Chinese in this hemisphere. Their investments in this hemisphere, their cooperation with Venezuela, with other nation states, they have taken control of the canal that the United States abandoned, the Panama Canal, if this is a strategic piece of infrastructure in the hemisphere, that is certainly it.

GRANGE: Both ends. Both ends are controlled.

DOBBS: But why in the world...

GRANGE: This is a regular warfare and this is like potro- politics, Sharia finance, using information to indirectly attack you during peacetime to set conditions for future conflict if it comes about.

DOBBS: Well, let's talk about the conditions for any kind of resolution because there are those suggesting that the United Nations, for some reason, have gained some standing in the public, at leleast in the national news media, because they're calling for a cease-fire. This is the same organization that's been discredited by most rational observers, but now it's in fashion again, apparently.

What should be the template for some cease-fire and a stabilization between Hamas and the United States - General.

GRANGE: Well, having done several peacekeeping and peace enforcement operations, Chapter 6s and Chapter 7s, most of them do not have teeth. And the thing is, you have, who's on the Security Council? Russia and China. And, so you, one, have to put peace officers, keepers, that are not influenced by a particular party or country. The other thing is, actually I would put Chinese peacekeepers in there and hold them responsible.

DOBBS: What do you think of that idea, Gordon?

(LAUGHING)

CHANG: I think they might stop selling rockets to Hamas. DOBBS: Well, and it would be nice too if the national news media in its reporting on a United Nations direction for a cease-fire, would report on who is on that Security Council and explain the competing interest.

Thank you very much. Gordon Chang, we appreciate it. General David Grange, thank you, sir.

GRANGE: Pleasure.

DOBBS: Up at the top of the hour CAMPBELL BROWN: NO BIAS, NO BULL. Campbell, what are you working on?

Lots of big news today. Rod Blagojevich impeached today and the news conference following was pretty unbelievable, even had a little poetry in it. We're going to listen to some of what the governor had to say tonight.

CAMPBELL BROWN, NO BIAS, NO BULL: Hey there, Lou. Lots of big news, today. Illinois governor, Rod Blagojevich impeached, today, and the news conference following was pretty unbelievable, even had a little poetry in it. We're going to listen to some of what the governor had to say, tonight.

Also, we'll take a NO BIAS, NO BULL look at the selling of Barack Obama's economic plan, just as some serious now questions are being raised of the $350 billion of our money that the government has already spent.

Also how a crusader for the rights of people in wheelchairs is making a six figure income, business owners hate when he rolls in, but it's all legal. Is it right, though. We'll talk about that, as well -- Lou.

DOBBS: Looking forward to it. Thank you, Campbell.

Up next here, Hollywood preparing for one of its biggest acts, the Golden Globe Awards. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: The Golden Globe Awards taking place this weekend in Los Angeles. The "Curious Case of Benjamin Button," "Frost/Nixon" and "Doubt" leading the way among movies with five nominations each. Actor Heath Ledger, who died last year, up for best supporting actor for his performance as the "Joker" in "The Dark Night."

And now, many of you are writing in about mismanagement at the FDA. Stanley in South Carolina said, "Having the FDA assist the Centers for Disease Control is like a blind person saying he'll drive you to the store."

And Bob in California, "To be fair, if you pay the state of California late you must pay interest and penalties, it's only fair that California pays us the same penalties and interest if they are late." How about if they're just in IOUs? Cliff in California said, "If California citizens can't use the IOUs as cash to pay their own bills, will they get interest when the IOUs are finally paid?" a lot of folks in California starting to figure this deal out.

And Larry in Kentucky, "Hey, Lou! How about giving the California State legislatures an IOU instead of a paycheck until they work with the governor and balance the state budget?" That is a terrific idea. Arnold Schwarzenegger, are you listening?

And Suzann in North Carolina said, "Lou, Bozo should be highly offended. These politicians are making him look bad."

We love hearing from you. Go to loudobbs.com and send us your thoughts, there. Thanks for being with us, join us tomorrow. CAMPBELL BROWN: NO BIAS, NO BULL starts right now -- Campbell.