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Lou Dobbs Tonight

Michigan Town Under State of Emergency; Powell Calls on Asian Countries to Challenge North Korea; Top Saddam Aide Captured

Aired June 18, 2003 - 18:00   ET

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

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


ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, June 18. Here now, Lou Dobbs.
LOU DOBBS, HOST: Good evening, everyone.

Tonight, the Michigan town of Benton Harbor is under a state of emergency. Two nights of rioting have injured at least 15 people. The Michigan governor calls it a breakdown between police and community trust.

Police say residents burned several homes and cars overnight and opened fire on police officers. Police then fired back with tear gas.

The rioting began after a motorcyclist was killed in a high-speed police chase.

Ed Lavandera joins us live in Benton Harbor with the latest... Ed.

ED LAVANDERA, CNN CORRESPONDENT: Hi, Lou.

We are at the intersection of Broadway and Empire. And what authorities are telling me here this evening, this is the area that was -- saw the worst rioting last night, two nights of rioting. And the authorities here are preparing for the worst. In fact, they say that they expect it to be worse tonight than it was before.

So clearly hoping that's not the case, but that's what authorities here are prepared for.

Almost 300 authorities. These -- you can see here in the background, a row of state police. They -- we have seen them in several -- in a number of platoons driving through this residential area of Benton Harbor as they prepare to try to disperse as many crowds from loitering, as possible, trying to keep people moving, from standing around, and trying to prevent the same occurrences that we've seen here the last two nights. As I've mentioned, about 300 officers.

There is a curfew that will be enforced strictly tonight. Anyone under the age of 16 will have to be off the streets by 10:00 Eastern time this evening. Authorities say they will be enforcing that rule strictly tonight, as they hope to prevent another night of rioting here in Benton Harbor.

Of course, residents here say this all stems back to several incidents, a longstanding bad history between the residents of this community, they say, and the police are -- the police departments that work this area.

And authorities are also hoping if you might see some of the wind and dust being blown up right now, looks like a storm is about to roll in. So one of the officers that we just spoke with say they almost hope that it rains, it might kind of calm everything down here this evening.

But we'll see how that plays out. We're about four hours away from that curfew, and authorities here say again, they're preparing for another rough night, Lou.

DOBBS: Ed, in terms of the police department, it's a small city, some 12,000 people, a small police department. How extensive are the reinforcements for the Benton Harbor Police Department?

LAVANDERA: Extremely extensive. As you've seen, we have about 150 state police officers, and they've been moving around, as I mentioned here. There was a row of about 20 cars just lined up along this street here on Empire Road. And they tell me that there is a -- several areas around this particular neighborhood where you have seen this.

There's also another area all -- in another part of town where it's that's like a central headquarters for all the officers that have been brought into this area, a total of about 300 officers will be here tonight. So they say they have plenty of backup if it comes to that, Lou.

DOBBS: Ed, thank you very much. Ed Lavandera reporting from Benton Harbor, Michigan.

The mayor of Benton Harbor tonight is calling for calm from residents. Mayor Charles Yarbrough says the situation can be resolved without more violence. And Mayor Yarbrough joins us now. Mayor, good to have you here.

MAYOR CHARLES YARBROUGH, BENTON HARBOR, MICHIGAN: Nice to be here, Lou. Nice talking to you.

DOBBS: This is, I know, an extraordinarily tense time for you and a difficult time. It is all but inconceivable, I think, to most us that a town of 12,000 people in this country could be in the year 2003 going through this. What do you see as the root problem in your community?

YARBROUGH: There's been a problem in this community for quite a while, Lou. The police relationship has not been very kind to our citizens. This is just the straw that broke the camel's back, in my opinion. But I'm here tonight to ask our residents for peace and calm tonight. We're going to investigate this situation, find out who is responsible for it and let the chips fall where they may. I'm telling to our citizens to stay off the streets tonight, and stop the violence. Let's stop destroying our own community, because we live here. DOBBS: Mayor, I know you've got a ...

YARBROUGH: And as the mayor of this -- as the mayor of this community, I have promised our citizens that we will find out who is in the wrong in this situation. It's a sad situation. I would like to state my concerns for the families of the victims (UNINTELLIGIBLE) for the police officers. Everybody feels bad. This is tragic situation to happen in a small town. We're going get to the bottom of it. And as the mayor, Lou, we're going to stop this situation.

DOBBS: Mayor Yarbrough, let me be straightforward about this.

YARBROUGH: OK.

DOBBS: Your community is predominantly African-American. The power structure, if you will, in your community, is African-American. Your police chief is African-American, the predominant number of your police officers. This is not fundamentally, it appears at least, superficially, a racial issue. Why is there such a contest, such tension between your community and this police department?

YARBROUGH: Well, it's not this police department. It's the department from the surrounding communities. Benton township is right across the border from the city of Benton Harbor. So this is not -- the city of Benton Harbor was not involved in this high speed chase in our community. It was police from Benton township. And that's been a longstanding problem with them. Go ahead, Lou, I can't hear you.

DOBBS: A longstanding problem, Mr. Mayor, but let's put in context for our viewers. Something else that's fundamental in your community, and that is an astonishing unemployment rate of about 40, perhaps as many as 50 percent of your population is unemployed in Benton Harbor, is that correct?

YARBROUGH: That is correct.

DOBBS: And the average medium income in Benton Harbor, Michigan, in 2003 is $8,500. Against that backdrop of economic devastation, what can the community do? What has the community been doing? Where have your churches been? Where have your schools, your community leaders -- we're talking about the police force, but where in the world are the institutions of your community to deal with these issues?

YARBROUGH: They've basically been silent. And that's what we're going to have to work on. Everybody has to get involved to solve this problem. The churches, the school system and the city leaders. And I'm the mayor of this community, I'm going to have to take the lead in this. The other city officials are willing to join with me and correct this problem immediately.

DOBBS: Well, Mr. Mayor, Mayor Yarbrough, we appreciate you taking the time and what I know is a very difficult moment for you. I know how concerned you must be for your community tonight, and we obviously hope that you and all the residents of Benton Harbor all of the very best over these troubled hours. Thank you, sir. Later tonight, I'll be talking with Reverend Jesse Jackson about the implications of some that is happening, at least, in Benton Harbor. And we will be discussing what should be done to prevent situations like these throughout this country. Almost unimaginable.

The Bush administration is moving on several fronts tonight to eliminate weapons from what remains of the so-called axis of evil. President Bush today gave a stern warning to Iran about the possession and the development of nuclear weapons. Senior White House correspondent John King will have that story in just a moment.

Also, Secretary of State Colin Powell challenged countries around Asia to stand up to the North Korean nuclear threat. Kitty Pilgrim covering that story.

And the Pentagon today announced the capture of a top aide to Saddam Hussein, who may have information on Iraq's weapons of mass destruction. Senior Pentagon correspondent Jamie McIntyre will have the story.

We begin tonight with senior White House correspondent, John King -- John.

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: Lou, tough words from the president today when it comes to Iran's nuclear program. Also words of support from the president today to those students and others who, in recent days, have flocked to the streets in Iran protesting the policies of their government.

The Bush administration has consistently denied allegations from Tehran that it is inciting those students, supporting those students, encouraging them to take to the street to protest the policies of the hard-line regime in Tehran.

The White House says it has no direct involvement at all. But the president made crystal clear today at a meeting in the cabinet room here at the White House, those students and anyone against the regime in Iran have his full support.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I appreciate those courageous souls who speak out for freedom in Iran. They need to know America stands squarely by their side. And I would urge the Iranian administration to treat them with the utmost of respect.

(END VIDEO CLIP)

KING: The president also making clear yet again that he will not tolerate Iran developing a nuclear weapon. The president says he is working with the international community.

The president's tough talk today comes as the International Atomic Energy Agency says it has a number of questions about Iran's assertion that its nuclear program is solely for energy purposes. The IAEA says it is waiting for answers from Iran. The president says he doesn't need them to be convinced that Iran is trying to develop a nuclear weapon.

The president says he is raising this issue with key allies around the world, and in the president's own words, he said, quote, "We will not tolerate the construction of a nuclear weapon," Lou.

DOBBS: John, that begs the question, what will this administration, what will this government, this country, do should that demand not be met by the Iranians?

KING: Well, the White House is not prepared to answer that question, Lou. They say no options on the table, no options off the table.

They are hoping that international pressure, they are hoping most of all that the support of Russia, which is the supplier of most of the nuclear technology going into Iran, will keep that from being a question that never has to be answered. They say for now, the focus is on diplomatic pressure, and building international support to back up the president's position.

DOBBS: Thank you, John. John King, our senior White House correspondent.

Several Iranians in Paris and London today set themselves afire. They were protesting a French government crackdown against an Iranian group that is opposed to the religious rulers in Iran.

France carried out a massive raid yesterday, in fact, as the Bush administration was calling upon free expression in Iran. France was arresting 165 members of the People's Mujahedeen, who oppose the present Islamist Iranian government. Most of those arrested have been released tonight. A total of four people today set themselves on fire, all of them survived.

Secretary of State Colin Powell today said North Korea is now the greatest threat to world security. The secretary of state urged Asian nations to support the United States' effort to curb North Korean's nuclear program. China, however, has largely remained silent throughout, failing to confront North Korea.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): If China is such a friend, why won't China turn up the heat on North Korea?

LARRY M. WORTZEL, THE HERITAGE FOUNDATION: They like the tension that it creates for the United States and Japan. Although they want to moderate that tension, they don't want to explode into a war, but they don't want to see the United States sort of free as a diplomatic and foreign policy agent in Asia.

PILGRIM: China has been basically propping up North Korea's failing regime, providing about 60 percent of its fuel and 30 to 40 percent of its food. So China has been walking a fine line between its support of North Korea and its desire to be a member of the world community.

But North Korea isn't an easy regime to befriend. China got burned when it hosted talks last April between North Korea and United States. The talks ended in failure.

SOON-YOON LEE, FLETCHER SCHOOL, TUFTS UNIVERSITY: For the Chinese, they went out of their way to host the talks in Beijing, but the North Koreans came out swinging. They were very belligerent. They said, We have nuclear weapons. This was a slap in the face for the Chinese.

PILGRIM: The United States prefers other countries to get involved in talks, five-part talks. Strategically, it works. South Korea and Japan are strong U.S. allies and would bring pressure to bear on North Korea. If China would be tougher, it would work.

Secretary of State Colin Powell, attending an Asian summit in Phnom Penh today, again brought up multilateral talks.

COLIN POWELL, SECRETARY OF STATE: There was a consistent view that it affected North Korea's neighbors just as much as it attracted U.S. interests, and therefore it should be dealt with in a multilateral way.

(END VIDEOTAPE)

PILGRIM: Japan and South Korea have toughened their rhetoric in the last month. They've threatened economic sanctions. If North Korea continues to escalate this Issue, it may end up pushing China off the fence, Lou.

DOBBS: Pushing China off the fence, but in point of fact, with the a huge trade relationship, the open relationship with China to this point, why in the world is the United States not demanding more and creating a linkage with commerce and political relationships?

PILGRIM: It seems that there's an effort right now to go very gently into this situation. And that leaves plenty of room for escalation later and a lot of demanding later on. That's what diplomats say.

DOBBS: Kitty, thanks a lot. Kitty Pilgrim.

Well, U.S. forces have captured the highest-ranking official in Saddam Hussein's regime so far. Abid Hamid Mahmud al-Tikriti was Saddam's personal secretary and his senior bodyguard. He was number four in the regime behind only Saddam Hussein and his sons, the Ace of Diamonds in the deck of most-wanted Iraqis.

Senior Pentagon correspondent, Jamie McIntyre, joins us now with details of the capture -- Jamie.

JAMIE MCINTYRE, SENIOR PENTAGON CORRESPONDENT: Well, Lou, Pentagon sources say he was captured in a raid by U.S. special operations forces Monday near Tikrit, along with some relatives and other members of Saddam Hussein's special security forces. Aside from his two sons, no one has been closer to Saddam Hussein than the man seen standing beside him here, General Abid Hamid Mahmud, Saddam Hussein's cousin, personal secretary, national security adviser, and senior bodyguard.

General Mahmud is the Ace of Diamonds in the U.S. military's deck of the 55 most-wanted Iraqis and fourth on the most-wanted list behind only the other aces, Saddam Hussein and his sons Qusay and Uday.

Essentially third in command, Mahmud may knew -- may know the location of hidden weapons of mass destruction, perhaps even Saddam Hussein himself. In fact, sources say the U.S. kept Mahmud's capture a secret for a day in hopes that Saddam Hussein might be nearby.

U.S. troops have rounded up some 400 suspects in three days of Operation Desert Scorpion, but still no Saddam Hussein. What the U.S. has found are stockpiles of weapons, including hundreds of rocket- propelled grenades, the weapon of choice for attacking U.S. forces, and stacks of cash, which the U.S. believes may have been used to pay bounties to Iraqis willing to attack U.S. troops.

(BEGIN VIDEO CLIP)

MAJ. GEN. RAY ORDIERNO, COMMANDER, U.S. ARMY 4TH INFANTRY DIVISION: They try to recruit individuals and will say, If you kill Americans, we'll pay you so much money. And so they pay them in cash. And they have different kinds of cash to pay different kinds of people.

(END VIDEO CLIP)

MCINTYRE: At two farmhouses outside Tikrit raided today, soldiers from the 4th Infantry Division found more than $8 million U.S. and 300 to 400 million Iraqi dinars, and uncounted euros and British pounds, along with a large cache of gems valued at over a million dollars.

Meanwhile, in Baghdad, the violence continues. American troops killed two Iraqis after Saddam Hussein's former soldiers tossed stones during a protest outside the headquarters of the U.S.-led forces. Hours later, an attacker gunned down a U.S. soldier who was guarding a propane gas distribution point, Lou.

DOBBS: Jamie, thank you very much. Jamie McIntyre, senior Pentagon correspondent, reporting from Washington.

Well, Congress today officially began an inquiry into the intelligence that led up to the war against Saddam Hussein. At issue is whether intelligence officials exaggerated the threat posed by Iraq's weapons. The House Intelligence Committee held its first closed-door hearing on the matter today. The Senate Intelligence Committee plans to hold hearings tomorrow.

Later tonight, former ambassador Jeane Kirkpatrick joins us on the hunt for Saddam's weapons of mass destruction, the reliability of U.S. intelligence, and the prospects for real peace in the Middle East.

And tonight, face-off, debating the biggest issues of the day. Tonight, two leading experts face off on the issue of depression or recovery.

Money talks, and Chief Charles Moose heard the call. The Maryland police chief today resigned. Moose led the investigation into last year's sniper attacks in the Washington, D.C., area. The chief had been at odds with Montgomery County officials about his plans to write a book about that investigation. The county ethics commission ordered him to drop the project. Moose said their decision violated the free speech rights.

Still ahead here, face off, depression or recovery? William Greider of "The Nation," Stephen Moore of The Club for Growth.

And later, emerging diseases, the threat of the SARS virus and how one hospital staff managed to avoid disaster in this country, quick thinking and the right response. Peter Viles will have our special report.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: On Wall Street today, stocks closed mixed. The Dow fell after Eastman Kodak cut its earnings forecast. The Dow lost 29 points on the day. Kodak, by the way, accounted for three-quarters of that loss on the Dow. The Nasdaq, however, up on the day, up 9 points, and the S&P down nearly 2 points on the day.

Susan Lisovicz is here now with the markets -- Susan.

SUSAN LISOVICZ, CNN FINANCIAL NEWS: It is confession season, after all, Lou, and Kodak's warning about the impact of SARS on its Asian business sent its shares plunging 10 percent.

"The New York Times" also spooked investors, saying fewer travel- related ads due to SARS would hurt its bottom line.

And Clorox, the company known for bleach, said its earnings would not match projections because sales of Kingsford Briquettes, charcoal, are slumping because of the unusually wet spring.

Morgan Stanley shares shed more than 5.5 percent today on word that second-quarter profits fell 25 percent as the firm wrote down the value of its airline leasing business.

And Bear Stearns lost 3 percent. Its profits rose by nearly a third from a year ago.

Techs bucked the negative trend today, a sweetened bid one reason why. Oracle raising its offer for PeopleSoft by more than 20 percent to $6.3 billion. PeopleSoft, whose chief executive, Craig Conway, used to work for Oracle's Larry Ellison, took out a new ad saying Oracle is trying to eliminate competition. But PeopleSoft said it will consider the bid.

No love lost between those two executives, Lou.

DOBBS: No love lost, and we're back to hostile bids, and one wonders the some point whether this is going to start a process of consolidation in an industry that desperately needs it.

LISOVICZ: And likes that M&A activity.

DOBBS: Exactly. Susan, thank you very much. Susan Lisovicz on the market.

Well, 73 executives now (UNINTELLIGIBLE) corporate America have been criminally charged since this scandal began, 16 of them from Enron. Sam Waksal, the only executive so far sentenced to jail since Enron started all of this with bankruptcy 562 days ago.

When we continue here, the deadly SARS virus, and how one Pennsylvania hospital avoided disaster, perhaps for all of us. Peter Viles will have our special report, and Dr. Beatrice Hahn joins us.

Also tonight, face-off, is this economy looking up or headed for depression? William Greider, Stephen Moore face off tonight.

And Saddam's weapons of mass destruction, will they be found? Does it matter? I'll be joined by former U.S. ambassador to the United Nations Jeane Kirkpatrick, next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight, we continue our week-long special look at emerging diseases and their threat to this country.

SARS, severe acute respiratory syndrome, has now killed 801 people around the world. Monday on this show, Health and Human Services Secretary Tommy Thompson blamed the Chinese government for the spread of the virus.

(BEGIN VIDEO CLIP)

TOMMY THOMPSON, SECRETARY OF HEALTH AND HUMAN SERVICES: ... is the SARS problem. We had the big epidemic because China wouldn't let us come in and see what was taking place. We got alerted to the SARS problem sometime in the early part of February, but we really never got in to really examine it until sometime in March. If we could have got in there with our wonderful experts and researchers at CDC, we could have possibly contained it.

(END VIDEO CLIP)

DOBBS: To date, no one in this country has died of the SARS virus, in part because of the quick actions and good thinking of two health care workers.

Peter Viles now takes a look at how they, working in Pennsylvania, spotted the disease this spring and acted very quickly to contain it.

(BEGIN VIDEOTAPE)

PETER VILES, CNN FINANCIAL NEWS (voice-over): April 14, Bethlehem, Pennsylvania. A middle-aged man walk into the emergency room at Lehigh Valley Hospital. Now, he doesn't know it, and the nurses don't know it, but at that moment, he brings a deadly infectious disease into the hospital.

(on camera): Now, the reason that you probably haven't heard about this SARS case in Pennsylvania is that no one died and no one was infected, because health care workers in this emergency room in this hospital, even though they had never seen this virus before, were prepared for it, and they made the right decisions.

(voice-over): The first smart decision, get the man away from other patients. Chris Lewis runs the emergency room.

CHRIS LEWIS, EMERGENCY SERVICES, LEHIGH VALLEY HOSPITAL: He just -- you know, he just was really sick-looking. And that is what I remember saying to the nurse as I -- because I don't usually get involved in the patient care, I just helped get him back to a bed. And I turned to the nurse and said, Boy, he just really looks sick.

VILES: It wasn't obviously a case of SARS. Two doctors had already told the man he did not have SARS. He had tested negative for pneumonia, had not traveled to Asia. But he was short of breath, and he had recently been to Toronto. So nurses and doctors at the hospital used common sense.

LEWIS: The physician came in and kind of said, you know, This is a little more suspicious than we really would have thought. Let's get him to an isolation room.

VILES: The next smart decision, no visitors, and anyone who goes near the patient needs full protection -- gown, mask, goggles, and gloves. Debra Wilson was the head nurse.

DEBRA WILSON, LEHIGH VALLEY HOSPITAL: When everyone entered the room, they had gown, gloves, mask, and goggles. So all he saw was their eyes, mostly.

VILES: The patient, whose identity has not been released, recovered in a week. Dr. Thong Le treated him.

DR. THONG LE, INFECTIOUS DISEASE PHYSICIAN: If you can take a step back and think of the possibilities, this could potentially be a disastrous case for us, if we potentially have this gentleman to the floor unprotected, no isolations, in fact, (UNINTELLIGIBLE) people on the way.

VILES: SARS has not killed in the United States, but the disease is alive, and it crosses borders very easily. The Bethlehem case began in Hong Kong. A Canadian man was infected at a hotel there, flew home to Toronto, then in the hospital passed the virus to an elderly man, who, in turn, passed it to the Pennsylvania man at a religious retreat.

That man drove back into the United States carrying the virus.

Dr. Luther Rhodes has been studying infectious diseases for three decades at Lehigh Valley, and despite the success there, he believes a deadly outbreak in this country is probable.

DR. LUTHER RHODES, LEHIGH VALLEY HOSPITAL: It's an almost certain occurrence. First of all, we've had SARS, we will have SARS, SARS is not going to disappear.

(END VIDEOTAPE)

VILES: Now, globally, the numbers on SARS are very encouraging. The growth rate now well below 1 percent per week. It had been as high as 30. But viruses often have seasonal fluctuations, the flu does. And officials in Asia are bracing for the disease to reassert itself this fall, Lou.

DOBBS: First, Pete, that is the likelihood, that it will be reintroduced this fall because of the seasonality.

VILES: Sure, that is the fear right now. We haven't been through seasons with it, but that's certainly what officials are expecting right now.

DOBBS: Next steps in this country.

VILES: They need a faster diagnostic test. This guy went to the hospital on Monday. They didn't know until Friday that he had SARS. We need something quicker. They're working on that now. But until they have that, if you have a cough or a fever, you really shouldn't be on an airplane. They need to get to a point where they test people quicker so they know who really has it.

DOBBS: Pete, thank you very much. Peter Viles.

Well, Dr. Beatrice Hahn says there is no way we can avoid being exposed to emerging diseases, but she says we can contain the damage they do with quick action.

Dr. Hahn is a virologist at the University of Alabama in Birmingham and joins us tonight.

Dr. Hahn, thank you for being with us.

In this...

DR. BEATRICE HAHN, VIROLOGIST, UNIVERSITY OF ALABAMA: Thank you, Lou, for having me.

DOBBS: In this era, what it seems to be, at least, an era of emerging diseases crossing over from animals to human beings. Is there anything that can be done?

HAHN: Lou, animals have been the source of infectious diseases of humans since time immemorial. And so while the diseases that we see may be new, the phenomenon is not. And as human change their lifestyles, microbes will take the opportunity to take advantages of these changes.

DOBBS: Is fundamentally this an issue of globalization, the internationalization of all our lives, Dr. Hahn?

HAHN: Certainly, the concept of global village plays a big role here, because we're no longer isolated just because we live on different continents. I mean, we have to take this into consideration when we plan our strategies to combat future outbreaks of this sort.

DOBBS: In your judgment, what is the greatest threat to all of us on this planet right now, from viruses, crossover, emerging viruses?

HAHN: The trick here, Lou, is that you cannot predict the next outbreak. You cannot predict what virus will cross over. But you can predict that it will happen. So I think the most important thing is to get prepared.

DOBBS: And how do we do that, Dr. Hahn?

HAHN: I think we need a global network of public health surveillance that is functioning. We need to train people in other countries so they can recognize new emerging diseases fast. We need to then have a mechanism to get samples to experts, expert laboratories that are equipped to do that. And I think the WHO has had a fairly good success in containing SARS, doing exactly that. But we can improve on that.

DOBBS: Dr. Beatrice Hahn, we thank you very much for joining us here tonight.

Tomorrow on this broadcast...

HAHN: Thank you.

DOBBS: ...we'll continue our reports on emerging diseases when we take a look at the West Nile virus and the lessons we've learned so far and the threat that remains.

Still ahead tonight, Reverend Jesse Jackson joins us to talk about the rioting in Benton Harbor, Michigan and what can be done there and also about some inequity on Wall Street.

U.S. intelligence under the microscope. Where are Saddam Hussein's weapons of mass destruction? Former U.S. ambassador to the United Nations Jeane Kirkpatrick will be here.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: The Roman Catholic bishop of Phoenix, Arizona has resigned. Bishop Thomas O'Brien has also been charged with leaving the scene of an accident in which a 43-year-old pedestrian was killed.

Showers and thunderstorms continue to plague several central and southern states tonight. Downpours in Denver turned roads into rivers there today.

In Arizona, a wildfire has forced residents of one mountain town to leave their homes. Two hundred acres of pine trees on Mount Lemon destroyed.

An heir to the Max Factor cosmetics fortune is in custody in Mexico tonight. Andrew Luster was captured by a bounty hunter in Puerto Vallarta. Luster fled this country during his January rape trial in California, where he was sentenced to 140 years in prison in absentia.

Turning to our "Quote of the Day," from the man who caught Andrew Luster. "We eat his name for breakfast. We eat his name for dinner. We dream his name at night until he's captured. And then we take this great big sigh of relief when he is captured, and within minutes the phone rings, 'Boom!' and there's another one."

That from successful bounty hunter Duane "Dog" Chapman, who tonight we nominate to go after another one -- how about Osama bin Laden?

Turning now to tonight's poll question: "Which institution bears the greatest responsibility for failing the community of Benton Harbor, Michigan? City government? Churches? Schools? Or all of the above?" Cast your vote at cnn.com/lou. We'll have the results later in the show.

Now the final results of yesterday's poll. The question: "What do you look for when buying a car first?" Eighteen percent of you said safety; 21 percent style; 21 percent said fuel efficiency; 40 percent said price.

Some of you thought we left out a couple of important choice and we'll share your thought about those omissions later.

The search for weapons of mass destruction in Iraq has divided lawmakers on Capitol Hill. As we reported earlier, the House Intelligence Committee today held a closed door hearing on U.S. intelligence that led up to the war against Saddam Hussein. Critics charge the Bush administration exaggerated the threat.

Jeane Kirkpatrick, former U.S. ambassador to the United Nations, senior fellow at the American Enterprise Institute joins me now from Washington, D.C.

JEANE KIRKPATRICK, FMR. U.S. AMB. TO U.N.: Thank you. Good to have you with us.

DOBBS: The search for weapons of mass destruction -- do you think it will ultimately be successful?

KIRKPATRICK: Yes, I think it will ultimately be successful. I don't know that for certain, but I think so.

DOBBS: And at this point, why haven't we found them? We had apparently such good intelligence, as suggested by Colin Powell in his February appearance at the United Nation. One had the sense that we knew precisely what was going on.

KIRKPATRICK: Well, I think we knew a very great deal about what was going on. It's also true that time has passed since we knew exactly what was going on.

We have various source of information, each one of which is recorded as reliable and, you know, we generally regard our own intelligence sources as reliable. But I, for one, have regarded the inspection agencies of the United Nations, in which we played a significant role, as reliable. And those are international inspection groups. And they're drawing from everywhere. They're highly qualified scientists. And they were acceptable to the U.S. and to Great Britain and other highly -- very advanced countries.

And, you know, the most important set of inspectors were UNSCOM. And UNSCOM began its inspections of Iraq's weapons of mass destruction in 1991, at the time that the Iraq was trying to get a cease-fire in that first Gulf War.

DOBBS: Ambassador?

KIRKPATRICK: What?

DOBBS: If I may -- the fact is that Hans Blix, himself, the chief weapons inspector says not much could have been produced had not the president sent 200,000 troops into the region. And against that backdrop, is it essential that we have U.N. weapons inspector back in Iraq to carry out and to help in this search?

KIRKPATRICK: Well, I don't think it's essential. But I think it's essential that we remember and, you know, recall and understand that United Nations inspection teams, beginning in 1991 and continuing over, you know, intermittently from that time until 1999, inspected the Iraqi terrain in order to identify weapons of mass destruction, as they identified a very great many of them.

Now whether -- you know, what happened to them, we don't know for certain, but that they identified them and they reported to the world, to the U.N. and to the world what they had found there is clear, is perfectly clear.

DOBBS: Let me turn...

KIRKPATRICK: What?

DOBBS: Ambassador, if I may, to the issue now of Iran, the Bush administration both through the offices of Secretary of State Powell as well as the president himself saying there will simply be no toleration by this country of nuclear weapons in the possessions of the Iranians. What are your thoughts? KIRKPATRICK: Well, I certainly -- I certainly hope we are not going to be confronted with an Iran with nuclear weapons. I think that it's very dangerous. You know, Iran is a dangerous country. It's a rogue state, like North Korea. It's a rogue state. And those are not the people that we want to have weapons of mass destruction, that's for sure.

DOBBS: And if you will parse for us the relationship between United States and China, in which China has been perhaps a silent partner with North Korea here and is doing remarkably little, as requested by the world community, to halt its nuclear weapons program.

KIRKPATRICK: Well, my description of the relationship between China and North Korea is that it's complex. My description of the relationship between China and United States is that it's complex.

China does a good many things that we wish they wouldn't do, not the least of which is to support -- give North Korea almost unconditional support. I have believed for many years personally that China was the source for North Korea's nuclear technology, in fact. This is a -- and I think it probably is. I think it was probably the principal source for Pakistan's nuclear technology as well.

DOBBS: And at that point, we're going to have to conclude. We're out of time. Ambassador Jeane Kirkpatrick, we thank you for being with us here tonight.

KIRKPATRICK: Well, thanks for asking me. Bye-bye.

DOBBS: Coming up, face-off the economy. Are we ready for a rally or are we headed for a depression? We'll hear two sides of that discussion next.

And Reverend Jesse Jackson will be here to share his views on the mayhem in Michigan, battered shareholders on Wall Street and a great deal more.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: We're kicking off a new segment tonight, "Face-Off." Tonight's topic, the economy. Are we tumbling headlong into depression or bounding toward recovery in boom times? Stephen Moore is the president of the Club for Growth in Washington. He says this economy is on an upswing. Bill Greider, William Greider is a national affairs correspondent with "The Nation." He says we're headed for what he calls a small d depression. Gentlemen, it's great to have you both here.

You write in "The Nation," Bill, the prospect, the possibility of depression, why so?

WILLIAM GREIDER, THE NATION: Well, I think the -- we're still living with this heavy, heavy blanket across the American economy and the world of excesses from the last decade. Which is everything from mountainous debts for corporations, households, overcapacity of production, which stifles new investment, and above all, a financial potential for deflation. All of which to me adds up to a kind of the conditions flirting with a low-grade depression. I mean small d, not the horrendous unwinding of the 1930s, but severe enough for not just people, but countries.

And I -- my argument is that the government -- the odds are bad enough that the government ought to be at least beginning a debate about taking decisive, dramatic steps to counteract that.

DOBBS: Steve Moore, you've just heard Bill Greider say there ought to be stimulus -- you and your ilk of tax cutters have gotten exactly what you want, and yet, here is Bill Greider saying much more is needed to be effective. What do you think?

STEPHEN MOORE, THE CLUB FOR GROWTH: Well, Bill Greider has called three of the last zero depressions, and I think that, Lou, this economy is actually in good shape. Chicken Little is wrong here. If you talk about stimulus, don't forget, it was just a month ago we passed this new tax cut. I'm very bullish on this tax cut. July 1 is the date when Americans are going to start seeing more money in their paychecks. You're already, just since this tax cut took effect, three or four weeks ago, Lou, you've seen a nice rally in the market. I calculate that the market is up by about $800 billion in net wealth as a result of the tax cut and the coming expansions, so I tend to be very positive.

Bill is certainly right, there are some negative signs in this economy, especially the rest of the world, but I think the outlook looks better now than it's looked in a long time.

GREIDER: The country ought to have learned from the recent debacle in the stock market that the stock market is not the economy, not the real economy of production and consumption. Secondly, we have a very vivid and ominous model to look at. Japan has been in this condition roughly for 12 years. It's the second largest economy in the world. It fell in the ditch after its financial bubble collapsed in the start of the 1990s. Like Mr. Moore and others, it thought a recovery was under way so it didn't want to do too much or overdo what it was doing, and the recovery then fades, and then it tries something else. It's been doing that for 12 years.

MOORE: Except, Bill, don't forget, what Japan did is exactly what we have to avoid doing in the United States, which is Japan has had a massive public works spending expenditure increase. The government in Japan has grown faster than the government of any other country. And in fact, I think those were very wrongheaded approaches.

Japan ought to do what we're doing here in the U.S., Lou, and that is cut taxes, spur investment, keep interest rates low. You know, we have now interest rates, mortgage interest rates below 5 percent now for the first time in 60 years. It's some great news.

GREIDER: The Bush -- the Cato-Bush right view of things is a kind of trickle down gains (ph).

MOORE: It worked in the '80s. Worked in the '80s.

GREIDER: Well, we're not in the '80s, that's the distinction, isn't it? We're not in a normal business cycle. Neither was Japan. There's three broad strokes. The Federal Reserve has to reinflate the currency, that is induce an artificial monetary inflation to take the pressure off wages, off companies and off of debtors, generally.

Second, we need a much more focused and directed stimulus than the Bush administration has yet delivered. Maybe some quick-acting tax cuts for the broad ranks of consumers, but really spending that puts people back to work and regenerates economic activity.

Third and most controversial, and I don't say we're at that point yet, we may need a broad program for debt liquidation and temporary relief. And those -- those three together may be necessary if we're going to get out of the ditch. And I just I'm not ...

(CROSSTALK)

DOBBS: We've got to give Stephen Moore the final say here.

MOORE: We've already had this massive expansion of government spending. The government has been on a spending binge for the last several years. In fact, I think that's something that's holding back the economy.

But I just want to repeat this one point, Lou. We just passed this tax cut three or four weeks ago. Liberals said it would have two impacts -- that it wouldn't help the stock market, and it would cause interest rates to rise. And what's happened over the last three or four weeks, the stock market has risen and interest rates are now lower than they've ever been. So I think so far so good for the tax cut.

DOBBS: Gentlemen, I would love to continue this.

GREIDER: Here's the risk...

DOBBS: I guess I'm going to. Bill, you get a quick last word.

(CROSSTALK)

GREIDER: The historic risk is that the political system, and I mean both political parties, and I hope not, but possibly the Federal Reserve, will cling to their orthodoxy, Dr. Moore's orthodoxy of wait and see and let nature take its course. That's when history goes off the rails, when people...

(CROSSTALK)

DOBBS: Bill Greider, Stephen Moore, we thank you both. I really wish we had more time. But we're going to have to leave it there. I find at least it interesting that there is unanimity of view, that you both think that the deficits be damned, tax cuts ahead.

(CROSSTALK) DOBBS: Thank you very much, gentlemen. I appreciate it. Bill Greider, Stephen Moore.

Checking now on the trade deficit itself. Tonight the trade deficit stands at more than $235 billion. We'll take a look at the budget deficit in just a moment.

And coming up next, firing back, Reverend Jesse Jackson will be here to talk about these riots in Michigan, shareholder rights and discrimination in the workplace, just to name a few issues.

And many of you wrote in in response to yesterday's poll question on purchasing a car. We'll share some of your thoughts next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: As we report early yes, the town of Benton Harbor, Michigan tonight is on a high alert. A state of emergency in fact. The death of a black motorcyclist during a high speed police chase sparked two nights of rioting there. Many residents saying they've been unfairly targeted by police from surrounding white communities.

Joining me from CNN center in Atlanta, is the Reverend Jesse Jackson.

Jesse, good to have you here.

REVEREND JESSE JACKSON, RAINBOW PUSH COALITION: Good be with you.

DOBBS: Are you planning to go up to Benton Harbor, Michigan?

JACKSON: Well, we'll talk with some of the officials and some ministers from Benton Harbor. We're saddened by the situation. It's almost always some recrimination of excessive force, distrust and high unemployment that triggers these social explosions.

DOBBS: This not high unemployment, this is amazing -- it's just incredible unemployment. We're talking about an unemployment rate in Benton Harbor, Michigan of 40 to 50 percent. You can't even imagine in my opinion anywhere in this country having 40 to 50 percent unemployment.

JACKSON: Well, that's called high. Maybe I understated that. I think, the other part of it is one of every three black males 20 to 29 is in the correctional system. That's a real crackdown on young black males. 900,000 young black males in jail, 600,000 college. In every state more blacks in jail than there are in college. So what we see in Benton Harbor, looking through a crisis through a keyhole. There's a real crackdown by the criminal justice system and we cannot meet President Bush and Attorney General John Ashcroft to discuss these matters.

DOBBS: Well, before we turn to that, Jesse, let me ask you this. The fact is that this young man is charged with running from police up to 100 miles an hour. Yet the community responds by saying that the police should not have chased him. The schools, we don't know what their role is here. The mayor is very concerned, obviously. The ministers, the priests, the rabbi in that community. This community is not only a pained community, but a very sick community in what we can learn as far as reacting to law enforcement in that way, and the leaders react that way.

JACKSON: When people have no access to capital, to jobs, to education, don't have good communication, then others (UNINTELLIGIBLE) explosion. So some of us are not concerned about the rioting, we should be concerned about the unemployment and about the school expulsion rate. There must be some commitment to hope to offset this abounding despair. We hope it ends, but you know the formula, for explosion is just there.

DOBBS: Let me ask you this. And our hearts go out to these people obviously, but the community, to reach this level of unemployment with a black power structure, a black police chief, and about 12 percent of the population there is white.

Why in the world isn't there a coming together? Why in the world can't something been done? Why hasn't something been done in that community to establish standards for the kids, for the young people, to try to bring jobs.

JACKSON: This is the case of children who have been left behind. When you have these tax cuts for the top one percent you have the offshore avoidance schemes for the rich and there is no plan to employee these youth, to train these youth...

DOBBS: Jesse, I'm with you 100 percent. I think that cuts taxes for the top one percent of this country is abysmal economic, it may be good politics, but it's terrible economics. But I also know in this country, in this America with which I'm familiar the first reaction to a community is not to say about a young man exceeding the speed limit running from the police that it's the police fault.

JACKSON: You know what happen often, Lou, in those cases is many communities now stop high speed chases, because they are dangerous to whoever may get caught in the crossfire. I don't think people are trying to justify it they're simply trying to explain it took more than this one incident. This one incident simply trigger, it was a spark. But there's a fuel of discontent and agony underneath this. So we would do well not just to look at the guy who was chased, who was killed.

DOBBS: By the way, Jesse, I'm not saying this to assess blame, I assure you. What I'm talking about it's symptomatic of the problems that community faces, that's the first reflex. The fact that we've got 40 to 50 percent unemployment, as I said, anywhere in this country is crazy, it's unforgivable. But I don't understand why the community leaders aren't there making it better.

JACKSON: We have the resources left these child behind. Behind in education, jobs, healthcare. But we're leaving them behind. That says that this issue in Benton Harbor is symptomatic of a national crisis and that's why the Department of Justice and the Department of Labor have some role in trying to bring about an end to the misery there.

DOBBS: All right. Jesse Jackson, I want to talk to you about a host of issues, I'm going to have to ask you to come back because we're out of time. Get to Benton Harbor, Michigan. Partner, I hope you can do some good there, that's a community that needs some help from all of us and we all hope for the very, very best over this evening.

JACKSON: Well, I tell you, these kids when they're caught they go to jail, but when Enron, Halliburton, (UNINTELLIGIBLE), WorldCom, when they get caught, they pay less in fine than they stole in the crime. So it's hard to have credibility when that happens.

DOBBS: It rhymes, but it's -- Jesse, it rhymes and that's why we put up that corporate America criminal scoreboard here every night. It is good to have you here, Jesse, thank you. Jesse Jackson.

It leads us to the "Thought of the Day" on public uprisings and riots.

"The limitation of riots, moral questions aside, is that they cannot win and their participants know it. Hence, rioting is not revolutionary but reactionary because it invites defeat. It involves an emotional catharsis but it must be followed by sense of futility." Martin Luther King Jr.

Checking the national debt. Tonight it tops more than $6,600 billion, an increase of $6 billion overnight. Still ahead here, the preliminary results of tonight's poll and some of you're thoughts on our series of special reports on emerging diseases this week. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Results of our poll tonight, the question, "Which institution bears the greatest responsibility for failing the community of Benton Harbor, Michigan?" Thirty-one percent of you said city government, 4 percent said the churches, 1 percent the schools, 64 percent said all of the above.

Taking a look now some of your thoughts. E. Fenik of East Greenwich, Rhode Island said, "If you want to investigate emerging diseases take a look at Lyme Disease which affects more people than SARS and West Nile put together." We will, in fact, have a special report this Friday on this little understood disease that costs this country $2 billion a year, 20, 000 new case of Lyme Disease reported last year alone.

Robert Devine of Ocean View, Hawaii wrote on Microsoft's battle against spam, "Please convey the thanks of all over-spammed computer users to Bill Gates for taking the abusive spammers to court."

We just did, Robert. It's not just Microsoft, however that's fighting spam. Several other communities including AOL TIME WARNER, the parent of this networks also fighting back.

Many of you wrote about last night's poll asking what you look for first in buying a car.

Rudy Panent of Salem, New Hampshire, said, "To me the most important element when buying a new car is reliability. While safety and style, fuel efficiency and price are important if the car is not reliable, I'm not driving it anywhere."

Rudy, you certainly have a point.

And J. Lucas, of Carthage, Missouri, said, "You neglected to include performance. There are still a few of us out here who actually enjoy blowing the doors off a safe, stylish, fuel-efficient, cheap car."

You go, J. Lucas, but drive safely.

We love hearing from you. Send us your thoughts at loudobbs@cnn.com. That's are show for tonight, thanks for being with us. For all of us here good night from New York.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com





Asian Countries to Challenge North Korea; Top Saddam Aide Captured>


Aired June 18, 2003 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, June 18. Here now, Lou Dobbs.
LOU DOBBS, HOST: Good evening, everyone.

Tonight, the Michigan town of Benton Harbor is under a state of emergency. Two nights of rioting have injured at least 15 people. The Michigan governor calls it a breakdown between police and community trust.

Police say residents burned several homes and cars overnight and opened fire on police officers. Police then fired back with tear gas.

The rioting began after a motorcyclist was killed in a high-speed police chase.

Ed Lavandera joins us live in Benton Harbor with the latest... Ed.

ED LAVANDERA, CNN CORRESPONDENT: Hi, Lou.

We are at the intersection of Broadway and Empire. And what authorities are telling me here this evening, this is the area that was -- saw the worst rioting last night, two nights of rioting. And the authorities here are preparing for the worst. In fact, they say that they expect it to be worse tonight than it was before.

So clearly hoping that's not the case, but that's what authorities here are prepared for.

Almost 300 authorities. These -- you can see here in the background, a row of state police. They -- we have seen them in several -- in a number of platoons driving through this residential area of Benton Harbor as they prepare to try to disperse as many crowds from loitering, as possible, trying to keep people moving, from standing around, and trying to prevent the same occurrences that we've seen here the last two nights. As I've mentioned, about 300 officers.

There is a curfew that will be enforced strictly tonight. Anyone under the age of 16 will have to be off the streets by 10:00 Eastern time this evening. Authorities say they will be enforcing that rule strictly tonight, as they hope to prevent another night of rioting here in Benton Harbor.

Of course, residents here say this all stems back to several incidents, a longstanding bad history between the residents of this community, they say, and the police are -- the police departments that work this area.

And authorities are also hoping if you might see some of the wind and dust being blown up right now, looks like a storm is about to roll in. So one of the officers that we just spoke with say they almost hope that it rains, it might kind of calm everything down here this evening.

But we'll see how that plays out. We're about four hours away from that curfew, and authorities here say again, they're preparing for another rough night, Lou.

DOBBS: Ed, in terms of the police department, it's a small city, some 12,000 people, a small police department. How extensive are the reinforcements for the Benton Harbor Police Department?

LAVANDERA: Extremely extensive. As you've seen, we have about 150 state police officers, and they've been moving around, as I mentioned here. There was a row of about 20 cars just lined up along this street here on Empire Road. And they tell me that there is a -- several areas around this particular neighborhood where you have seen this.

There's also another area all -- in another part of town where it's that's like a central headquarters for all the officers that have been brought into this area, a total of about 300 officers will be here tonight. So they say they have plenty of backup if it comes to that, Lou.

DOBBS: Ed, thank you very much. Ed Lavandera reporting from Benton Harbor, Michigan.

The mayor of Benton Harbor tonight is calling for calm from residents. Mayor Charles Yarbrough says the situation can be resolved without more violence. And Mayor Yarbrough joins us now. Mayor, good to have you here.

MAYOR CHARLES YARBROUGH, BENTON HARBOR, MICHIGAN: Nice to be here, Lou. Nice talking to you.

DOBBS: This is, I know, an extraordinarily tense time for you and a difficult time. It is all but inconceivable, I think, to most us that a town of 12,000 people in this country could be in the year 2003 going through this. What do you see as the root problem in your community?

YARBROUGH: There's been a problem in this community for quite a while, Lou. The police relationship has not been very kind to our citizens. This is just the straw that broke the camel's back, in my opinion. But I'm here tonight to ask our residents for peace and calm tonight. We're going to investigate this situation, find out who is responsible for it and let the chips fall where they may. I'm telling to our citizens to stay off the streets tonight, and stop the violence. Let's stop destroying our own community, because we live here. DOBBS: Mayor, I know you've got a ...

YARBROUGH: And as the mayor of this -- as the mayor of this community, I have promised our citizens that we will find out who is in the wrong in this situation. It's a sad situation. I would like to state my concerns for the families of the victims (UNINTELLIGIBLE) for the police officers. Everybody feels bad. This is tragic situation to happen in a small town. We're going get to the bottom of it. And as the mayor, Lou, we're going to stop this situation.

DOBBS: Mayor Yarbrough, let me be straightforward about this.

YARBROUGH: OK.

DOBBS: Your community is predominantly African-American. The power structure, if you will, in your community, is African-American. Your police chief is African-American, the predominant number of your police officers. This is not fundamentally, it appears at least, superficially, a racial issue. Why is there such a contest, such tension between your community and this police department?

YARBROUGH: Well, it's not this police department. It's the department from the surrounding communities. Benton township is right across the border from the city of Benton Harbor. So this is not -- the city of Benton Harbor was not involved in this high speed chase in our community. It was police from Benton township. And that's been a longstanding problem with them. Go ahead, Lou, I can't hear you.

DOBBS: A longstanding problem, Mr. Mayor, but let's put in context for our viewers. Something else that's fundamental in your community, and that is an astonishing unemployment rate of about 40, perhaps as many as 50 percent of your population is unemployed in Benton Harbor, is that correct?

YARBROUGH: That is correct.

DOBBS: And the average medium income in Benton Harbor, Michigan, in 2003 is $8,500. Against that backdrop of economic devastation, what can the community do? What has the community been doing? Where have your churches been? Where have your schools, your community leaders -- we're talking about the police force, but where in the world are the institutions of your community to deal with these issues?

YARBROUGH: They've basically been silent. And that's what we're going to have to work on. Everybody has to get involved to solve this problem. The churches, the school system and the city leaders. And I'm the mayor of this community, I'm going to have to take the lead in this. The other city officials are willing to join with me and correct this problem immediately.

DOBBS: Well, Mr. Mayor, Mayor Yarbrough, we appreciate you taking the time and what I know is a very difficult moment for you. I know how concerned you must be for your community tonight, and we obviously hope that you and all the residents of Benton Harbor all of the very best over these troubled hours. Thank you, sir. Later tonight, I'll be talking with Reverend Jesse Jackson about the implications of some that is happening, at least, in Benton Harbor. And we will be discussing what should be done to prevent situations like these throughout this country. Almost unimaginable.

The Bush administration is moving on several fronts tonight to eliminate weapons from what remains of the so-called axis of evil. President Bush today gave a stern warning to Iran about the possession and the development of nuclear weapons. Senior White House correspondent John King will have that story in just a moment.

Also, Secretary of State Colin Powell challenged countries around Asia to stand up to the North Korean nuclear threat. Kitty Pilgrim covering that story.

And the Pentagon today announced the capture of a top aide to Saddam Hussein, who may have information on Iraq's weapons of mass destruction. Senior Pentagon correspondent Jamie McIntyre will have the story.

We begin tonight with senior White House correspondent, John King -- John.

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: Lou, tough words from the president today when it comes to Iran's nuclear program. Also words of support from the president today to those students and others who, in recent days, have flocked to the streets in Iran protesting the policies of their government.

The Bush administration has consistently denied allegations from Tehran that it is inciting those students, supporting those students, encouraging them to take to the street to protest the policies of the hard-line regime in Tehran.

The White House says it has no direct involvement at all. But the president made crystal clear today at a meeting in the cabinet room here at the White House, those students and anyone against the regime in Iran have his full support.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I appreciate those courageous souls who speak out for freedom in Iran. They need to know America stands squarely by their side. And I would urge the Iranian administration to treat them with the utmost of respect.

(END VIDEO CLIP)

KING: The president also making clear yet again that he will not tolerate Iran developing a nuclear weapon. The president says he is working with the international community.

The president's tough talk today comes as the International Atomic Energy Agency says it has a number of questions about Iran's assertion that its nuclear program is solely for energy purposes. The IAEA says it is waiting for answers from Iran. The president says he doesn't need them to be convinced that Iran is trying to develop a nuclear weapon.

The president says he is raising this issue with key allies around the world, and in the president's own words, he said, quote, "We will not tolerate the construction of a nuclear weapon," Lou.

DOBBS: John, that begs the question, what will this administration, what will this government, this country, do should that demand not be met by the Iranians?

KING: Well, the White House is not prepared to answer that question, Lou. They say no options on the table, no options off the table.

They are hoping that international pressure, they are hoping most of all that the support of Russia, which is the supplier of most of the nuclear technology going into Iran, will keep that from being a question that never has to be answered. They say for now, the focus is on diplomatic pressure, and building international support to back up the president's position.

DOBBS: Thank you, John. John King, our senior White House correspondent.

Several Iranians in Paris and London today set themselves afire. They were protesting a French government crackdown against an Iranian group that is opposed to the religious rulers in Iran.

France carried out a massive raid yesterday, in fact, as the Bush administration was calling upon free expression in Iran. France was arresting 165 members of the People's Mujahedeen, who oppose the present Islamist Iranian government. Most of those arrested have been released tonight. A total of four people today set themselves on fire, all of them survived.

Secretary of State Colin Powell today said North Korea is now the greatest threat to world security. The secretary of state urged Asian nations to support the United States' effort to curb North Korean's nuclear program. China, however, has largely remained silent throughout, failing to confront North Korea.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): If China is such a friend, why won't China turn up the heat on North Korea?

LARRY M. WORTZEL, THE HERITAGE FOUNDATION: They like the tension that it creates for the United States and Japan. Although they want to moderate that tension, they don't want to explode into a war, but they don't want to see the United States sort of free as a diplomatic and foreign policy agent in Asia.

PILGRIM: China has been basically propping up North Korea's failing regime, providing about 60 percent of its fuel and 30 to 40 percent of its food. So China has been walking a fine line between its support of North Korea and its desire to be a member of the world community.

But North Korea isn't an easy regime to befriend. China got burned when it hosted talks last April between North Korea and United States. The talks ended in failure.

SOON-YOON LEE, FLETCHER SCHOOL, TUFTS UNIVERSITY: For the Chinese, they went out of their way to host the talks in Beijing, but the North Koreans came out swinging. They were very belligerent. They said, We have nuclear weapons. This was a slap in the face for the Chinese.

PILGRIM: The United States prefers other countries to get involved in talks, five-part talks. Strategically, it works. South Korea and Japan are strong U.S. allies and would bring pressure to bear on North Korea. If China would be tougher, it would work.

Secretary of State Colin Powell, attending an Asian summit in Phnom Penh today, again brought up multilateral talks.

COLIN POWELL, SECRETARY OF STATE: There was a consistent view that it affected North Korea's neighbors just as much as it attracted U.S. interests, and therefore it should be dealt with in a multilateral way.

(END VIDEOTAPE)

PILGRIM: Japan and South Korea have toughened their rhetoric in the last month. They've threatened economic sanctions. If North Korea continues to escalate this Issue, it may end up pushing China off the fence, Lou.

DOBBS: Pushing China off the fence, but in point of fact, with the a huge trade relationship, the open relationship with China to this point, why in the world is the United States not demanding more and creating a linkage with commerce and political relationships?

PILGRIM: It seems that there's an effort right now to go very gently into this situation. And that leaves plenty of room for escalation later and a lot of demanding later on. That's what diplomats say.

DOBBS: Kitty, thanks a lot. Kitty Pilgrim.

Well, U.S. forces have captured the highest-ranking official in Saddam Hussein's regime so far. Abid Hamid Mahmud al-Tikriti was Saddam's personal secretary and his senior bodyguard. He was number four in the regime behind only Saddam Hussein and his sons, the Ace of Diamonds in the deck of most-wanted Iraqis.

Senior Pentagon correspondent, Jamie McIntyre, joins us now with details of the capture -- Jamie.

JAMIE MCINTYRE, SENIOR PENTAGON CORRESPONDENT: Well, Lou, Pentagon sources say he was captured in a raid by U.S. special operations forces Monday near Tikrit, along with some relatives and other members of Saddam Hussein's special security forces. Aside from his two sons, no one has been closer to Saddam Hussein than the man seen standing beside him here, General Abid Hamid Mahmud, Saddam Hussein's cousin, personal secretary, national security adviser, and senior bodyguard.

General Mahmud is the Ace of Diamonds in the U.S. military's deck of the 55 most-wanted Iraqis and fourth on the most-wanted list behind only the other aces, Saddam Hussein and his sons Qusay and Uday.

Essentially third in command, Mahmud may knew -- may know the location of hidden weapons of mass destruction, perhaps even Saddam Hussein himself. In fact, sources say the U.S. kept Mahmud's capture a secret for a day in hopes that Saddam Hussein might be nearby.

U.S. troops have rounded up some 400 suspects in three days of Operation Desert Scorpion, but still no Saddam Hussein. What the U.S. has found are stockpiles of weapons, including hundreds of rocket- propelled grenades, the weapon of choice for attacking U.S. forces, and stacks of cash, which the U.S. believes may have been used to pay bounties to Iraqis willing to attack U.S. troops.

(BEGIN VIDEO CLIP)

MAJ. GEN. RAY ORDIERNO, COMMANDER, U.S. ARMY 4TH INFANTRY DIVISION: They try to recruit individuals and will say, If you kill Americans, we'll pay you so much money. And so they pay them in cash. And they have different kinds of cash to pay different kinds of people.

(END VIDEO CLIP)

MCINTYRE: At two farmhouses outside Tikrit raided today, soldiers from the 4th Infantry Division found more than $8 million U.S. and 300 to 400 million Iraqi dinars, and uncounted euros and British pounds, along with a large cache of gems valued at over a million dollars.

Meanwhile, in Baghdad, the violence continues. American troops killed two Iraqis after Saddam Hussein's former soldiers tossed stones during a protest outside the headquarters of the U.S.-led forces. Hours later, an attacker gunned down a U.S. soldier who was guarding a propane gas distribution point, Lou.

DOBBS: Jamie, thank you very much. Jamie McIntyre, senior Pentagon correspondent, reporting from Washington.

Well, Congress today officially began an inquiry into the intelligence that led up to the war against Saddam Hussein. At issue is whether intelligence officials exaggerated the threat posed by Iraq's weapons. The House Intelligence Committee held its first closed-door hearing on the matter today. The Senate Intelligence Committee plans to hold hearings tomorrow.

Later tonight, former ambassador Jeane Kirkpatrick joins us on the hunt for Saddam's weapons of mass destruction, the reliability of U.S. intelligence, and the prospects for real peace in the Middle East.

And tonight, face-off, debating the biggest issues of the day. Tonight, two leading experts face off on the issue of depression or recovery.

Money talks, and Chief Charles Moose heard the call. The Maryland police chief today resigned. Moose led the investigation into last year's sniper attacks in the Washington, D.C., area. The chief had been at odds with Montgomery County officials about his plans to write a book about that investigation. The county ethics commission ordered him to drop the project. Moose said their decision violated the free speech rights.

Still ahead here, face off, depression or recovery? William Greider of "The Nation," Stephen Moore of The Club for Growth.

And later, emerging diseases, the threat of the SARS virus and how one hospital staff managed to avoid disaster in this country, quick thinking and the right response. Peter Viles will have our special report.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: On Wall Street today, stocks closed mixed. The Dow fell after Eastman Kodak cut its earnings forecast. The Dow lost 29 points on the day. Kodak, by the way, accounted for three-quarters of that loss on the Dow. The Nasdaq, however, up on the day, up 9 points, and the S&P down nearly 2 points on the day.

Susan Lisovicz is here now with the markets -- Susan.

SUSAN LISOVICZ, CNN FINANCIAL NEWS: It is confession season, after all, Lou, and Kodak's warning about the impact of SARS on its Asian business sent its shares plunging 10 percent.

"The New York Times" also spooked investors, saying fewer travel- related ads due to SARS would hurt its bottom line.

And Clorox, the company known for bleach, said its earnings would not match projections because sales of Kingsford Briquettes, charcoal, are slumping because of the unusually wet spring.

Morgan Stanley shares shed more than 5.5 percent today on word that second-quarter profits fell 25 percent as the firm wrote down the value of its airline leasing business.

And Bear Stearns lost 3 percent. Its profits rose by nearly a third from a year ago.

Techs bucked the negative trend today, a sweetened bid one reason why. Oracle raising its offer for PeopleSoft by more than 20 percent to $6.3 billion. PeopleSoft, whose chief executive, Craig Conway, used to work for Oracle's Larry Ellison, took out a new ad saying Oracle is trying to eliminate competition. But PeopleSoft said it will consider the bid.

No love lost between those two executives, Lou.

DOBBS: No love lost, and we're back to hostile bids, and one wonders the some point whether this is going to start a process of consolidation in an industry that desperately needs it.

LISOVICZ: And likes that M&A activity.

DOBBS: Exactly. Susan, thank you very much. Susan Lisovicz on the market.

Well, 73 executives now (UNINTELLIGIBLE) corporate America have been criminally charged since this scandal began, 16 of them from Enron. Sam Waksal, the only executive so far sentenced to jail since Enron started all of this with bankruptcy 562 days ago.

When we continue here, the deadly SARS virus, and how one Pennsylvania hospital avoided disaster, perhaps for all of us. Peter Viles will have our special report, and Dr. Beatrice Hahn joins us.

Also tonight, face-off, is this economy looking up or headed for depression? William Greider, Stephen Moore face off tonight.

And Saddam's weapons of mass destruction, will they be found? Does it matter? I'll be joined by former U.S. ambassador to the United Nations Jeane Kirkpatrick, next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight, we continue our week-long special look at emerging diseases and their threat to this country.

SARS, severe acute respiratory syndrome, has now killed 801 people around the world. Monday on this show, Health and Human Services Secretary Tommy Thompson blamed the Chinese government for the spread of the virus.

(BEGIN VIDEO CLIP)

TOMMY THOMPSON, SECRETARY OF HEALTH AND HUMAN SERVICES: ... is the SARS problem. We had the big epidemic because China wouldn't let us come in and see what was taking place. We got alerted to the SARS problem sometime in the early part of February, but we really never got in to really examine it until sometime in March. If we could have got in there with our wonderful experts and researchers at CDC, we could have possibly contained it.

(END VIDEO CLIP)

DOBBS: To date, no one in this country has died of the SARS virus, in part because of the quick actions and good thinking of two health care workers.

Peter Viles now takes a look at how they, working in Pennsylvania, spotted the disease this spring and acted very quickly to contain it.

(BEGIN VIDEOTAPE)

PETER VILES, CNN FINANCIAL NEWS (voice-over): April 14, Bethlehem, Pennsylvania. A middle-aged man walk into the emergency room at Lehigh Valley Hospital. Now, he doesn't know it, and the nurses don't know it, but at that moment, he brings a deadly infectious disease into the hospital.

(on camera): Now, the reason that you probably haven't heard about this SARS case in Pennsylvania is that no one died and no one was infected, because health care workers in this emergency room in this hospital, even though they had never seen this virus before, were prepared for it, and they made the right decisions.

(voice-over): The first smart decision, get the man away from other patients. Chris Lewis runs the emergency room.

CHRIS LEWIS, EMERGENCY SERVICES, LEHIGH VALLEY HOSPITAL: He just -- you know, he just was really sick-looking. And that is what I remember saying to the nurse as I -- because I don't usually get involved in the patient care, I just helped get him back to a bed. And I turned to the nurse and said, Boy, he just really looks sick.

VILES: It wasn't obviously a case of SARS. Two doctors had already told the man he did not have SARS. He had tested negative for pneumonia, had not traveled to Asia. But he was short of breath, and he had recently been to Toronto. So nurses and doctors at the hospital used common sense.

LEWIS: The physician came in and kind of said, you know, This is a little more suspicious than we really would have thought. Let's get him to an isolation room.

VILES: The next smart decision, no visitors, and anyone who goes near the patient needs full protection -- gown, mask, goggles, and gloves. Debra Wilson was the head nurse.

DEBRA WILSON, LEHIGH VALLEY HOSPITAL: When everyone entered the room, they had gown, gloves, mask, and goggles. So all he saw was their eyes, mostly.

VILES: The patient, whose identity has not been released, recovered in a week. Dr. Thong Le treated him.

DR. THONG LE, INFECTIOUS DISEASE PHYSICIAN: If you can take a step back and think of the possibilities, this could potentially be a disastrous case for us, if we potentially have this gentleman to the floor unprotected, no isolations, in fact, (UNINTELLIGIBLE) people on the way.

VILES: SARS has not killed in the United States, but the disease is alive, and it crosses borders very easily. The Bethlehem case began in Hong Kong. A Canadian man was infected at a hotel there, flew home to Toronto, then in the hospital passed the virus to an elderly man, who, in turn, passed it to the Pennsylvania man at a religious retreat.

That man drove back into the United States carrying the virus.

Dr. Luther Rhodes has been studying infectious diseases for three decades at Lehigh Valley, and despite the success there, he believes a deadly outbreak in this country is probable.

DR. LUTHER RHODES, LEHIGH VALLEY HOSPITAL: It's an almost certain occurrence. First of all, we've had SARS, we will have SARS, SARS is not going to disappear.

(END VIDEOTAPE)

VILES: Now, globally, the numbers on SARS are very encouraging. The growth rate now well below 1 percent per week. It had been as high as 30. But viruses often have seasonal fluctuations, the flu does. And officials in Asia are bracing for the disease to reassert itself this fall, Lou.

DOBBS: First, Pete, that is the likelihood, that it will be reintroduced this fall because of the seasonality.

VILES: Sure, that is the fear right now. We haven't been through seasons with it, but that's certainly what officials are expecting right now.

DOBBS: Next steps in this country.

VILES: They need a faster diagnostic test. This guy went to the hospital on Monday. They didn't know until Friday that he had SARS. We need something quicker. They're working on that now. But until they have that, if you have a cough or a fever, you really shouldn't be on an airplane. They need to get to a point where they test people quicker so they know who really has it.

DOBBS: Pete, thank you very much. Peter Viles.

Well, Dr. Beatrice Hahn says there is no way we can avoid being exposed to emerging diseases, but she says we can contain the damage they do with quick action.

Dr. Hahn is a virologist at the University of Alabama in Birmingham and joins us tonight.

Dr. Hahn, thank you for being with us.

In this...

DR. BEATRICE HAHN, VIROLOGIST, UNIVERSITY OF ALABAMA: Thank you, Lou, for having me.

DOBBS: In this era, what it seems to be, at least, an era of emerging diseases crossing over from animals to human beings. Is there anything that can be done?

HAHN: Lou, animals have been the source of infectious diseases of humans since time immemorial. And so while the diseases that we see may be new, the phenomenon is not. And as human change their lifestyles, microbes will take the opportunity to take advantages of these changes.

DOBBS: Is fundamentally this an issue of globalization, the internationalization of all our lives, Dr. Hahn?

HAHN: Certainly, the concept of global village plays a big role here, because we're no longer isolated just because we live on different continents. I mean, we have to take this into consideration when we plan our strategies to combat future outbreaks of this sort.

DOBBS: In your judgment, what is the greatest threat to all of us on this planet right now, from viruses, crossover, emerging viruses?

HAHN: The trick here, Lou, is that you cannot predict the next outbreak. You cannot predict what virus will cross over. But you can predict that it will happen. So I think the most important thing is to get prepared.

DOBBS: And how do we do that, Dr. Hahn?

HAHN: I think we need a global network of public health surveillance that is functioning. We need to train people in other countries so they can recognize new emerging diseases fast. We need to then have a mechanism to get samples to experts, expert laboratories that are equipped to do that. And I think the WHO has had a fairly good success in containing SARS, doing exactly that. But we can improve on that.

DOBBS: Dr. Beatrice Hahn, we thank you very much for joining us here tonight.

Tomorrow on this broadcast...

HAHN: Thank you.

DOBBS: ...we'll continue our reports on emerging diseases when we take a look at the West Nile virus and the lessons we've learned so far and the threat that remains.

Still ahead tonight, Reverend Jesse Jackson joins us to talk about the rioting in Benton Harbor, Michigan and what can be done there and also about some inequity on Wall Street.

U.S. intelligence under the microscope. Where are Saddam Hussein's weapons of mass destruction? Former U.S. ambassador to the United Nations Jeane Kirkpatrick will be here.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: The Roman Catholic bishop of Phoenix, Arizona has resigned. Bishop Thomas O'Brien has also been charged with leaving the scene of an accident in which a 43-year-old pedestrian was killed.

Showers and thunderstorms continue to plague several central and southern states tonight. Downpours in Denver turned roads into rivers there today.

In Arizona, a wildfire has forced residents of one mountain town to leave their homes. Two hundred acres of pine trees on Mount Lemon destroyed.

An heir to the Max Factor cosmetics fortune is in custody in Mexico tonight. Andrew Luster was captured by a bounty hunter in Puerto Vallarta. Luster fled this country during his January rape trial in California, where he was sentenced to 140 years in prison in absentia.

Turning to our "Quote of the Day," from the man who caught Andrew Luster. "We eat his name for breakfast. We eat his name for dinner. We dream his name at night until he's captured. And then we take this great big sigh of relief when he is captured, and within minutes the phone rings, 'Boom!' and there's another one."

That from successful bounty hunter Duane "Dog" Chapman, who tonight we nominate to go after another one -- how about Osama bin Laden?

Turning now to tonight's poll question: "Which institution bears the greatest responsibility for failing the community of Benton Harbor, Michigan? City government? Churches? Schools? Or all of the above?" Cast your vote at cnn.com/lou. We'll have the results later in the show.

Now the final results of yesterday's poll. The question: "What do you look for when buying a car first?" Eighteen percent of you said safety; 21 percent style; 21 percent said fuel efficiency; 40 percent said price.

Some of you thought we left out a couple of important choice and we'll share your thought about those omissions later.

The search for weapons of mass destruction in Iraq has divided lawmakers on Capitol Hill. As we reported earlier, the House Intelligence Committee today held a closed door hearing on U.S. intelligence that led up to the war against Saddam Hussein. Critics charge the Bush administration exaggerated the threat.

Jeane Kirkpatrick, former U.S. ambassador to the United Nations, senior fellow at the American Enterprise Institute joins me now from Washington, D.C.

JEANE KIRKPATRICK, FMR. U.S. AMB. TO U.N.: Thank you. Good to have you with us.

DOBBS: The search for weapons of mass destruction -- do you think it will ultimately be successful?

KIRKPATRICK: Yes, I think it will ultimately be successful. I don't know that for certain, but I think so.

DOBBS: And at this point, why haven't we found them? We had apparently such good intelligence, as suggested by Colin Powell in his February appearance at the United Nation. One had the sense that we knew precisely what was going on.

KIRKPATRICK: Well, I think we knew a very great deal about what was going on. It's also true that time has passed since we knew exactly what was going on.

We have various source of information, each one of which is recorded as reliable and, you know, we generally regard our own intelligence sources as reliable. But I, for one, have regarded the inspection agencies of the United Nations, in which we played a significant role, as reliable. And those are international inspection groups. And they're drawing from everywhere. They're highly qualified scientists. And they were acceptable to the U.S. and to Great Britain and other highly -- very advanced countries.

And, you know, the most important set of inspectors were UNSCOM. And UNSCOM began its inspections of Iraq's weapons of mass destruction in 1991, at the time that the Iraq was trying to get a cease-fire in that first Gulf War.

DOBBS: Ambassador?

KIRKPATRICK: What?

DOBBS: If I may -- the fact is that Hans Blix, himself, the chief weapons inspector says not much could have been produced had not the president sent 200,000 troops into the region. And against that backdrop, is it essential that we have U.N. weapons inspector back in Iraq to carry out and to help in this search?

KIRKPATRICK: Well, I don't think it's essential. But I think it's essential that we remember and, you know, recall and understand that United Nations inspection teams, beginning in 1991 and continuing over, you know, intermittently from that time until 1999, inspected the Iraqi terrain in order to identify weapons of mass destruction, as they identified a very great many of them.

Now whether -- you know, what happened to them, we don't know for certain, but that they identified them and they reported to the world, to the U.N. and to the world what they had found there is clear, is perfectly clear.

DOBBS: Let me turn...

KIRKPATRICK: What?

DOBBS: Ambassador, if I may, to the issue now of Iran, the Bush administration both through the offices of Secretary of State Powell as well as the president himself saying there will simply be no toleration by this country of nuclear weapons in the possessions of the Iranians. What are your thoughts? KIRKPATRICK: Well, I certainly -- I certainly hope we are not going to be confronted with an Iran with nuclear weapons. I think that it's very dangerous. You know, Iran is a dangerous country. It's a rogue state, like North Korea. It's a rogue state. And those are not the people that we want to have weapons of mass destruction, that's for sure.

DOBBS: And if you will parse for us the relationship between United States and China, in which China has been perhaps a silent partner with North Korea here and is doing remarkably little, as requested by the world community, to halt its nuclear weapons program.

KIRKPATRICK: Well, my description of the relationship between China and North Korea is that it's complex. My description of the relationship between China and United States is that it's complex.

China does a good many things that we wish they wouldn't do, not the least of which is to support -- give North Korea almost unconditional support. I have believed for many years personally that China was the source for North Korea's nuclear technology, in fact. This is a -- and I think it probably is. I think it was probably the principal source for Pakistan's nuclear technology as well.

DOBBS: And at that point, we're going to have to conclude. We're out of time. Ambassador Jeane Kirkpatrick, we thank you for being with us here tonight.

KIRKPATRICK: Well, thanks for asking me. Bye-bye.

DOBBS: Coming up, face-off the economy. Are we ready for a rally or are we headed for a depression? We'll hear two sides of that discussion next.

And Reverend Jesse Jackson will be here to share his views on the mayhem in Michigan, battered shareholders on Wall Street and a great deal more.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: We're kicking off a new segment tonight, "Face-Off." Tonight's topic, the economy. Are we tumbling headlong into depression or bounding toward recovery in boom times? Stephen Moore is the president of the Club for Growth in Washington. He says this economy is on an upswing. Bill Greider, William Greider is a national affairs correspondent with "The Nation." He says we're headed for what he calls a small d depression. Gentlemen, it's great to have you both here.

You write in "The Nation," Bill, the prospect, the possibility of depression, why so?

WILLIAM GREIDER, THE NATION: Well, I think the -- we're still living with this heavy, heavy blanket across the American economy and the world of excesses from the last decade. Which is everything from mountainous debts for corporations, households, overcapacity of production, which stifles new investment, and above all, a financial potential for deflation. All of which to me adds up to a kind of the conditions flirting with a low-grade depression. I mean small d, not the horrendous unwinding of the 1930s, but severe enough for not just people, but countries.

And I -- my argument is that the government -- the odds are bad enough that the government ought to be at least beginning a debate about taking decisive, dramatic steps to counteract that.

DOBBS: Steve Moore, you've just heard Bill Greider say there ought to be stimulus -- you and your ilk of tax cutters have gotten exactly what you want, and yet, here is Bill Greider saying much more is needed to be effective. What do you think?

STEPHEN MOORE, THE CLUB FOR GROWTH: Well, Bill Greider has called three of the last zero depressions, and I think that, Lou, this economy is actually in good shape. Chicken Little is wrong here. If you talk about stimulus, don't forget, it was just a month ago we passed this new tax cut. I'm very bullish on this tax cut. July 1 is the date when Americans are going to start seeing more money in their paychecks. You're already, just since this tax cut took effect, three or four weeks ago, Lou, you've seen a nice rally in the market. I calculate that the market is up by about $800 billion in net wealth as a result of the tax cut and the coming expansions, so I tend to be very positive.

Bill is certainly right, there are some negative signs in this economy, especially the rest of the world, but I think the outlook looks better now than it's looked in a long time.

GREIDER: The country ought to have learned from the recent debacle in the stock market that the stock market is not the economy, not the real economy of production and consumption. Secondly, we have a very vivid and ominous model to look at. Japan has been in this condition roughly for 12 years. It's the second largest economy in the world. It fell in the ditch after its financial bubble collapsed in the start of the 1990s. Like Mr. Moore and others, it thought a recovery was under way so it didn't want to do too much or overdo what it was doing, and the recovery then fades, and then it tries something else. It's been doing that for 12 years.

MOORE: Except, Bill, don't forget, what Japan did is exactly what we have to avoid doing in the United States, which is Japan has had a massive public works spending expenditure increase. The government in Japan has grown faster than the government of any other country. And in fact, I think those were very wrongheaded approaches.

Japan ought to do what we're doing here in the U.S., Lou, and that is cut taxes, spur investment, keep interest rates low. You know, we have now interest rates, mortgage interest rates below 5 percent now for the first time in 60 years. It's some great news.

GREIDER: The Bush -- the Cato-Bush right view of things is a kind of trickle down gains (ph).

MOORE: It worked in the '80s. Worked in the '80s.

GREIDER: Well, we're not in the '80s, that's the distinction, isn't it? We're not in a normal business cycle. Neither was Japan. There's three broad strokes. The Federal Reserve has to reinflate the currency, that is induce an artificial monetary inflation to take the pressure off wages, off companies and off of debtors, generally.

Second, we need a much more focused and directed stimulus than the Bush administration has yet delivered. Maybe some quick-acting tax cuts for the broad ranks of consumers, but really spending that puts people back to work and regenerates economic activity.

Third and most controversial, and I don't say we're at that point yet, we may need a broad program for debt liquidation and temporary relief. And those -- those three together may be necessary if we're going to get out of the ditch. And I just I'm not ...

(CROSSTALK)

DOBBS: We've got to give Stephen Moore the final say here.

MOORE: We've already had this massive expansion of government spending. The government has been on a spending binge for the last several years. In fact, I think that's something that's holding back the economy.

But I just want to repeat this one point, Lou. We just passed this tax cut three or four weeks ago. Liberals said it would have two impacts -- that it wouldn't help the stock market, and it would cause interest rates to rise. And what's happened over the last three or four weeks, the stock market has risen and interest rates are now lower than they've ever been. So I think so far so good for the tax cut.

DOBBS: Gentlemen, I would love to continue this.

GREIDER: Here's the risk...

DOBBS: I guess I'm going to. Bill, you get a quick last word.

(CROSSTALK)

GREIDER: The historic risk is that the political system, and I mean both political parties, and I hope not, but possibly the Federal Reserve, will cling to their orthodoxy, Dr. Moore's orthodoxy of wait and see and let nature take its course. That's when history goes off the rails, when people...

(CROSSTALK)

DOBBS: Bill Greider, Stephen Moore, we thank you both. I really wish we had more time. But we're going to have to leave it there. I find at least it interesting that there is unanimity of view, that you both think that the deficits be damned, tax cuts ahead.

(CROSSTALK) DOBBS: Thank you very much, gentlemen. I appreciate it. Bill Greider, Stephen Moore.

Checking now on the trade deficit itself. Tonight the trade deficit stands at more than $235 billion. We'll take a look at the budget deficit in just a moment.

And coming up next, firing back, Reverend Jesse Jackson will be here to talk about these riots in Michigan, shareholder rights and discrimination in the workplace, just to name a few issues.

And many of you wrote in in response to yesterday's poll question on purchasing a car. We'll share some of your thoughts next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: As we report early yes, the town of Benton Harbor, Michigan tonight is on a high alert. A state of emergency in fact. The death of a black motorcyclist during a high speed police chase sparked two nights of rioting there. Many residents saying they've been unfairly targeted by police from surrounding white communities.

Joining me from CNN center in Atlanta, is the Reverend Jesse Jackson.

Jesse, good to have you here.

REVEREND JESSE JACKSON, RAINBOW PUSH COALITION: Good be with you.

DOBBS: Are you planning to go up to Benton Harbor, Michigan?

JACKSON: Well, we'll talk with some of the officials and some ministers from Benton Harbor. We're saddened by the situation. It's almost always some recrimination of excessive force, distrust and high unemployment that triggers these social explosions.

DOBBS: This not high unemployment, this is amazing -- it's just incredible unemployment. We're talking about an unemployment rate in Benton Harbor, Michigan of 40 to 50 percent. You can't even imagine in my opinion anywhere in this country having 40 to 50 percent unemployment.

JACKSON: Well, that's called high. Maybe I understated that. I think, the other part of it is one of every three black males 20 to 29 is in the correctional system. That's a real crackdown on young black males. 900,000 young black males in jail, 600,000 college. In every state more blacks in jail than there are in college. So what we see in Benton Harbor, looking through a crisis through a keyhole. There's a real crackdown by the criminal justice system and we cannot meet President Bush and Attorney General John Ashcroft to discuss these matters.

DOBBS: Well, before we turn to that, Jesse, let me ask you this. The fact is that this young man is charged with running from police up to 100 miles an hour. Yet the community responds by saying that the police should not have chased him. The schools, we don't know what their role is here. The mayor is very concerned, obviously. The ministers, the priests, the rabbi in that community. This community is not only a pained community, but a very sick community in what we can learn as far as reacting to law enforcement in that way, and the leaders react that way.

JACKSON: When people have no access to capital, to jobs, to education, don't have good communication, then others (UNINTELLIGIBLE) explosion. So some of us are not concerned about the rioting, we should be concerned about the unemployment and about the school expulsion rate. There must be some commitment to hope to offset this abounding despair. We hope it ends, but you know the formula, for explosion is just there.

DOBBS: Let me ask you this. And our hearts go out to these people obviously, but the community, to reach this level of unemployment with a black power structure, a black police chief, and about 12 percent of the population there is white.

Why in the world isn't there a coming together? Why in the world can't something been done? Why hasn't something been done in that community to establish standards for the kids, for the young people, to try to bring jobs.

JACKSON: This is the case of children who have been left behind. When you have these tax cuts for the top one percent you have the offshore avoidance schemes for the rich and there is no plan to employee these youth, to train these youth...

DOBBS: Jesse, I'm with you 100 percent. I think that cuts taxes for the top one percent of this country is abysmal economic, it may be good politics, but it's terrible economics. But I also know in this country, in this America with which I'm familiar the first reaction to a community is not to say about a young man exceeding the speed limit running from the police that it's the police fault.

JACKSON: You know what happen often, Lou, in those cases is many communities now stop high speed chases, because they are dangerous to whoever may get caught in the crossfire. I don't think people are trying to justify it they're simply trying to explain it took more than this one incident. This one incident simply trigger, it was a spark. But there's a fuel of discontent and agony underneath this. So we would do well not just to look at the guy who was chased, who was killed.

DOBBS: By the way, Jesse, I'm not saying this to assess blame, I assure you. What I'm talking about it's symptomatic of the problems that community faces, that's the first reflex. The fact that we've got 40 to 50 percent unemployment, as I said, anywhere in this country is crazy, it's unforgivable. But I don't understand why the community leaders aren't there making it better.

JACKSON: We have the resources left these child behind. Behind in education, jobs, healthcare. But we're leaving them behind. That says that this issue in Benton Harbor is symptomatic of a national crisis and that's why the Department of Justice and the Department of Labor have some role in trying to bring about an end to the misery there.

DOBBS: All right. Jesse Jackson, I want to talk to you about a host of issues, I'm going to have to ask you to come back because we're out of time. Get to Benton Harbor, Michigan. Partner, I hope you can do some good there, that's a community that needs some help from all of us and we all hope for the very, very best over this evening.

JACKSON: Well, I tell you, these kids when they're caught they go to jail, but when Enron, Halliburton, (UNINTELLIGIBLE), WorldCom, when they get caught, they pay less in fine than they stole in the crime. So it's hard to have credibility when that happens.

DOBBS: It rhymes, but it's -- Jesse, it rhymes and that's why we put up that corporate America criminal scoreboard here every night. It is good to have you here, Jesse, thank you. Jesse Jackson.

It leads us to the "Thought of the Day" on public uprisings and riots.

"The limitation of riots, moral questions aside, is that they cannot win and their participants know it. Hence, rioting is not revolutionary but reactionary because it invites defeat. It involves an emotional catharsis but it must be followed by sense of futility." Martin Luther King Jr.

Checking the national debt. Tonight it tops more than $6,600 billion, an increase of $6 billion overnight. Still ahead here, the preliminary results of tonight's poll and some of you're thoughts on our series of special reports on emerging diseases this week. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Results of our poll tonight, the question, "Which institution bears the greatest responsibility for failing the community of Benton Harbor, Michigan?" Thirty-one percent of you said city government, 4 percent said the churches, 1 percent the schools, 64 percent said all of the above.

Taking a look now some of your thoughts. E. Fenik of East Greenwich, Rhode Island said, "If you want to investigate emerging diseases take a look at Lyme Disease which affects more people than SARS and West Nile put together." We will, in fact, have a special report this Friday on this little understood disease that costs this country $2 billion a year, 20, 000 new case of Lyme Disease reported last year alone.

Robert Devine of Ocean View, Hawaii wrote on Microsoft's battle against spam, "Please convey the thanks of all over-spammed computer users to Bill Gates for taking the abusive spammers to court."

We just did, Robert. It's not just Microsoft, however that's fighting spam. Several other communities including AOL TIME WARNER, the parent of this networks also fighting back.

Many of you wrote about last night's poll asking what you look for first in buying a car.

Rudy Panent of Salem, New Hampshire, said, "To me the most important element when buying a new car is reliability. While safety and style, fuel efficiency and price are important if the car is not reliable, I'm not driving it anywhere."

Rudy, you certainly have a point.

And J. Lucas, of Carthage, Missouri, said, "You neglected to include performance. There are still a few of us out here who actually enjoy blowing the doors off a safe, stylish, fuel-efficient, cheap car."

You go, J. Lucas, but drive safely.

We love hearing from you. Send us your thoughts at loudobbs@cnn.com. That's are show for tonight, thanks for being with us. For all of us here good night from New York.

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Asian Countries to Challenge North Korea; Top Saddam Aide Captured>