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Lou Dobbs Tonight

Chemical Weapons Found in Iraq?; Leader of Iraqi Governing Council Assassinated

Aired May 17, 2004 - 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.


(BEGIN VIDEOTAPE)
LOU DOBBS, CNN ANCHOR (voice-over): Tonight, a dramatic discovery in Iraq. American troops find what could be the first evidence that Saddam Hussein may have had chemical weapons.

Assassination in Baghdad. A suicide bomber killed the president of the Iraqi Governing Council.

DONALD RUMSFELD, SECRETARY OF DEFENSE: Terrorists are working to break the will of the United States government and the American people.

Former Secretary of State Henry Kissinger is my guest tonight to discuss the growing geopolitical challenges to the United States around the world, from Iraq to Syria to North Korea to Taiwan and the global war on terror.

Fifty years after the end of segregation in our schools, President Bush says many children still don't receive an equal education.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: While our schools are no longer segregated by law, they are still not equal in opportunity and excellence.

DOBBS: Tonight, Reverend Jesse Jackson joins me to talk about our social progress over the past half century.

"Exporting America," it turns out there's good reason to be concerned about the export of American jobs to cheap overseas labor markets. A new study shows the pace accelerating in corporate America.

And tonight, you'll meet four fabulous young students who are already brightening this country's future.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Monday, May 17. Here now for an hour of news, debate and opinion is Lou Dobbs.

DOBBS: Good evening.

Tonight, American troops have found what appears to be nerve gas in Iraq and insurgents have killed a top Iraqi government official. The soldiers found sarin gas in an artillery shell that exploded while bomb disposal experts were diffusing it. It could be the first evidence that Saddam Hussein had weapons of mass destruction before the United States overthrew his regime.

Also today, insurgents killed the president of the Iraqi Governing Council in a suicide bomb attack near the coalition's heavily-guarded headquarters in Baghdad.

Senior Pentagon correspondent Jamie McIntyre reports -- Jamie.

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, today, Lou, Secretary of State Colin Powell called Izzadine Saleem an Iraqi patriot.

The president of the Iraqi Governing Council was waiting in a convoy at a U.S. checkpoint along the street preparing to enter the Green Zone when a bomb was detonated, apparently had been rigged with artillery shells and hidden inside a red Volkswagen. President Saleem was among nine people killed, including the bomber.

Meanwhile, another roadside bomb that was being diffused exploded over the weekend providing more evidence that Iraq once had weapons of mass destruction. Five soldiers part of a bomb disposal team were sickened suffering nausea and eye irritation when it turned out the artillery shell used in the bomb tested positive for sarin nerve gas.

(BEGIN VIDEO CLIP)

BRIG. GEN. MARK KIMMITT, U.S. DEPUTY CHIEF OF OPERATIONS: It was a weapon that we believe was stocked from the ex-regime time and it had thought to be an ordinary artillery shell set up to explode like an ordinary IED and basically, from the detection of that, and when it exploded it indicated that it actually had some sarin in it.

(END VIDEO CLIP)

MCINTYRE: The bombers apparently didn't even know that they were using a chemical shell instead of one that explodes. Pentagon officials are saying it doesn't mean much even if the tests do confirm sarin because it said it could have simply been scavenged from one of the many dumps of ammunition across Iraq.

Meanwhile, some 36,000 -- 3,600, rather, 3,600 U.S. troops assigned to the defense of South Korea are getting notices that they will ship out to Iraq. All of them are soldiers from the 2nd Brigade, 2nd Infantry Division. They'll leave for Iraq in mid-summer. Now, the normal tour of duty in South Korea is one year unaccompanied. That is without your family. That means for some of these soldiers, they will spend up to two years away from their families -- Lou.

DOBBS: Jamie, the soldiers injured in the explosion of the artillery shell containing sarin, what is their condition tonight?

MCINTYRE: Well, three of them are said to be fine after suffering some nausea and eye irritations, other one seemed to be a little more serious. Again, the initial tests tested positive for sarin. That was a field test. They're doing some more testing to follow up to see exactly what was in that shell, but they do think it was some sort of nerve agent.

DOBBS: Jamie McIntyre, our senior Pentagon correspondent, thank you.

Joining me now, Vivienne Walt, "TIME" magazine in Baghdad.

Vivienne, let me begin by asking you the murder, the assassination of Saleem, what will be the impact there?

VIVIENNE WALT, "TIME": Well, he wasn't a very high profile person, Lou. He wasn't like Pachachi or Chalabi, the names we've been hearing.

However, he was a fairly key behind-the-scenes player, especially now, for one reason, and that is that he had good contacts with people in southern Iraq, particularly who are very close to Muqtada al-Sadr, the radical cleric, the cleric whose Shiite militia have been battling U.S. troops for a month now.

I met Izzadine Saleem just a few days before he was killed and he told me that he was growing increasingly frustrated because he was trying to open a line of communication to Sadr to help dissuade him to disarm his militia. He was a man who actually might have succeeded in doing that. He had enormous credibility in southern Iraq.

DOBBS: With the murder of Saleem, is there any informed judgment as to who might have killed him?

WALT: Well, there are two separate versions.

There's the version on the Internet. There's a new group that we've never heard of called the Arab resistance movement that has come out and claimed responsibility. The U.S. officials tonight seemed to dismiss that a little bit in Baghdad. They are sure it's the work of Abu Musab al-Zarqawi, al Qaeda's man in Iraq, the man they think also beheaded the young guy, Nick Berg, last week, whose videotape shocked people so much.

So I think that it's still unclear and like a lot of these incidents in Baghdad, it also might never be known.

DOBBS: Vivienne, we have seen over the past six weeks obviously April the worst, the bloodiest month for American troops in Iraq since the war began, the violence seems to be escalating. And geographically, is it moving, spreading, as it seems to be, across the country?

WALT: Sorry, I missed that question, Lou. Could you repeat it?

DOBBS: I will certainly try.

We have been, obviously, witnessing escalating violence for the past six weeks, April the bloodiest month, the deadliest month for our troops in Iraq. The violence appears to escalate. Is it escalating geographically as well as -- is there any direction that you can discern?

WALT: Well, this is the really worrying thing.

It seems like the moment that coalition forces squelch this rebellion in one place, it pops up in another. And this has been going on and on for the last month, really. We've had major battles overnight last night in Nasiriyah, where coalition forces tell us they fought these militia for sometimes six hours at a time. These are really incredible daily reports that we're getting.

It's something really like we heard during the war itself last year. We haven't heard this fighting just week after week between then and now. The other worrying aspect, of course, is that it seems to be inching closer to Baghdad.

DOBBS: Vivienne Walt, we thank you very much for being with us live from Baghdad.

Later in the broadcast, I'll be talking with former Secretary of State Henry Kissinger about the challenges to U.S. foreign policy around the world from Iraq to Syria to North Korea and Taiwan and the global war on terror.

And now our poll question of the evening: Do you believe Saddam Hussein's Iraq possessed weapons of mass destruction, yes or no? Cast your vote at CNN.com/Lou. We'll have the results for you later in the broadcast.

In Kansas today, President Bush among thousands who marked the Supreme Court's landmark decision 50 years ago to desegregate this nation's schools. President Bush helped dedicate a national historic site at the Topeka school at the very center of the Brown vs. Board Of Education decision.

Dan Lothian is in Topeka with a live report -- Dan.

DAN LOTHIAN, CNN BOSTON BUREAU CHIEF (voice-over): The Brown Museum, the former Monroe Elementary School, this is a former auditorium where some of the plaintiffs in the case would often meet.

As you mentioned, today, this museum was officially dedicated. Also there was a ceremony marking 50th anniversary of Brown vs. the Board of Education. President Bush and other dignitaries were there. Thousands were in attendance, also one of the sisters of Linda Brown, the young girl at the center of this landmark case.

(BEGIN VIDEO CLIP)

CHERYL BROWN HENDERSON, PRESIDENT, BROWN FOUNDATION: Let us not be seduced by the media myths that Brown was only about one family that stood alone. Let us not be seduced by any sense that the work has been done. Brown remains unfinished business.

(END VIDEO CLIP)

LOTHIAN: A lot of things have changed here in Topeka. In fact, the city now has its first African-American mayor, but he even says there's still a long way to go to reach that final road of equality -- back to you, Lou.

DOBBS: Dan, thank you -- Dan Lothian reporting from Topeka, Kansas.

The anniversary of the Brown decision comes as the president is struggling to appeal to African-American voters. The latest polls show President Bush has lost support among black Americans since taking office.

Senior White House correspondent John King reports.

(BEGIN VIDEOTAPE)

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): Sunday services as the First Iconian Baptist Church in Atlanta. Prayer comes first but politics also is part of the mission here. And the pastor has a prediction.

UNIDENTIFIED MALE: It is going to be an extremely close election. But we know that if our people turn out we're going to have another administration come November 3. KING: Churches like this were supposed to be a major part of the Bush reelection strategy and its hope of attracting more votes from middle class and especially younger African-Americans.

TARA WALL, REPUBLICAN NATIONAL COMMITTEE: We want to make sure that we tap into the nearly 40 percent of 18-29-year-old black Americans who do not consider themselves Democrats. They're independents and they are willing to look at the Republican Party.

KING: The president and top advisers have vowed to do much better than the tiny 9 percent of the African-American vote he received four years ago. But Mr. Bush received just percent African- American support in CNN/ USA Today /Gallup polling over the past two months, compared to 87 percent for Democrat John Kerry.

Opposition to the war is one reason.

CORNELL BELCHER, DEMOCRATIC POLLSTER: Over 60 percent of African-Americans today think that Iraq was not worth the cost of lives and money.

KING: Economic worries another.

BELCHER: Middle class African-Americans are losing ground. After seeing some progress for the last eight, nine years, they literally are losing ground and they're blaming Bush for it.

KING: Top Bush political strategist Karl Rove warns Republicans can not survive as the majority party if they pull just 9 percent of the African-American vote for president.

(on camera): And the Republican National Committee is planning a major outreach effort it says will tap some 6,700 African-American activists and target African-American businesses, historically black colleges and African-American churches in key November target states.

WALL: Our hope is to get as many African-American voters signed up and voting for President Bush as we possibly can.

KING (voice-over): But with Mr. Bush's standing among African- American so low, even many allies view the outreach effort as a critical long-term project, but unlikely to bring a major turn around for the president and fellow Republicans this year.

John King, CNN, the White House.

(END VIDEOTAPE)

KING: In his first campaign for governor back in 1994, George W. Bush received 15 percent of the African vote. When he ran for reelection, he almost doubled that to 27 percent. No one at the White House or the Bush-Cheney campaign thinks that President Bush can double that 9 percent, just nine percent he received in campaign 2000.

But, Lou, they very much believe it is critical to try to get the president up into double digits. Certainly somewhere in the teens they think would help him quite a bit if he can get there -- Lou.

DOBBS: John, thank you -- John King, senior White House correspondent.

Still ahead here, 50 years after the end of segregation in our schools, does our educational system offer equal opportunities? The Reverend Jesse Jackson is my guest.

And surprising new research on the export of American jobs to cheap overseas labor markets. The pace of overseas outsourcing is accelerating, and fast. We'll have a special report.

All of that and more, a great deal more, still ahead here.

(COMMERCIAL BREAK)

DOBBS: My next guest says 50 years after the Brown decision, this country still lacks a national commitment to equal education.

Reverend Jesse Jackson joins me now from Topeka, Kansas.

Good to have you with us.

A half century later, Jesse, the testing scores are, frankly, abysmal for minorities in this country. What is at the root of the problem, in your judgment?

REV. JESSE JACKSON, FOUNDER, RAINBOW/PUSH COALITION: Well, first of all, the backdrop of Brown, this ended legally 335 years of official racial policy for our country.

In many ways, this was the rebirth of America here 50 years ago. And so, while the law changed, the culture reacted violently. It took us 10 years after Brown to get a public accommodations bill, 11 years to get the right to vote. And rather than a national will to educate all of our children, we have gone into privatizing schools and voucher schemes and Leave No Child Behind with unfunded mandates.

We don't quite yet get it, that we need to educate all of our children as part of our national security.

DOBBS: And the fact that blacks continue in this country to test so poorly despite the fact that billions of dollars have been spent, Brown vs. the Board of Education, extraordinary efforts taken on the part of a host of community organizations, including yours, and hundreds around the country, what is required to change the result to bring real equal opportunity into education in this country?

JACKSON: Well, see, Lou, it's not just a black-white gap. It is a rural-urban gap. It's an urban-suburban gap. It indeed is a resource gap.

We speak of testing gaps. But then there's of access to decent housing gap, a health care gap, an income gap, a life expectancy gap. So you just can't put the school out of the context of some complete plan, because jobs and education and health care are all connected and each matters.

DOBBS: Well, one of the most promising aspects -- and I think this is a little known, certainly little-reported fact -- and that is that blacks in this country with a bachelor's degree have a lower unemployment than their white peers. That's remarkable progress. What are your thoughts?

JACKSON: Well, that is remarkable progress.

I also have a study that shows that blacks with the same degree as whites make 25 percent less. As a matter of fact, blacks and browns work hard and make less and pay more because of predators and get less, live under stress and don't live as long.

And so, you know where the progress has been the most significant? In the military, for example, blacks are seen as added value. There's a really recruiting retention commitment, a national interest one. On the athletic field, the blacks have done so very well in football, basketball, baseball. Why? Because whenever the playing field is even and the rules are public and the goals are clear, we do well.

And, so what is lacking at this point is an appreciation of the value of choosing as it were prenatal care, Head Start and day care on front side of life, rather than pay for jail care and welfare on the backside.

DOBBS: Both candidates for the highest office in the land, that is, President Bush and Senator John Kerry, which of them in your opinion has addressed with the most significant policy initiative the needs of blacks in this country?

JACKSON: Well, the extent to which Mr. Bush has had the power to address it and spoke eloquently of Leave No Child Behind, which is an unfunded mandate, which results in what? It results in our exporting jobs and importing labor. He could have done more.

To the extent to which Mr. Kerry supports affirmative action for women and people of color, it is a commitment to inclusion. But I think the bigger issue is that we need, really as Congressman Jackson suggests, a constitutional amendment for equal, high quality, public education for all children, whether you're black, white, black, white, brown, Appalachia, Alabama, rural Kansas.

We must have a national commitment and see it as our national security interest to educate all of our children. In each state today, 50 years later, there are more black men in jail than there are in college in each state in the country. And, Lou, that's not a good thing.

DOBBS: Senator -- Reverend Jesse Jackson, we thank you very much for being here. We appreciate it.

JACKSON: Lou, it is a first down, but not a touchdown. And so we must go forward, but we certainly cannot rest on our laurels.

DOBBS: Or rest for another 50 years.

Thank you very much, Jesse Jackson.

JACKSON: Thank you. Thank you.

DOBBS: Massachusetts today became the first state to allow gay and lesbian couples to marry. Hundreds of couples lined up at courthouses around the state to apply for marriage licenses and exchange vows. Seven couples who sued the state for the right to marry were the first to take advantage of the new law.

The Massachusetts Supreme Court ruled last year that same-sex unions are legal under the state's constitution.

Still ahead here, shifting American troops from one geopolitical confrontation to another. We'll be talking with former of Secretary of State Henry Kissinger about U.S. foreign policy and challenges around the world.

"Exporting America," a shocking new report on the number of Americans who now stand to lose their jobs to cheap overseas labor markets. It is a trend that few want to recognize, but it shows no signs of slowing down.

And our special report tonight, "Made In America," one Silicon Valley firm has managed to stay competitive, imagine that, and keep all of its business and jobs in America.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Nearly a million American jobs will be exported to cheaper foreign labor markets by the end of next year, that according to new estimates from Forrester Research. Forrester now says 830,000 jobs will be sent out of the country by the end of next year, 40 percent more than the company originally projected and reported.

Peter Viles has the story.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): It's a major anxiety, but it's also a mystery how many American jobs are being shipped overseas, a mystery because companies often keep outsourcing a secret and much of corporate America likes to minimize the entire trend anyway.

Consider these recent analyses. The technology lobby: "Offshore outsourcing creates many more jobs than displaced." The Business Roundtable: "Yes, jobs are leaving, but only 100,000 white collar jobs a year." McKinsey & Company: "Oh, it's about 200,000 service jobs per year."

MARCUS COURTNEY, WASHTECH: They're being published by the same corporations that are exporting jobs overseas. So they have a direct interest to downplay the real impact and effect.

VILES: The most widely-quoted estimate comes from Forrester Research that 3.3 million jobs will move overseas by 2015. Now Forrester has a new analysis with some surprising findings. It says the long-term picture hasn't really changed now predicts 3.4 million jobs by 2015. But, in the short term, all the media coverage of outsourcing has actually caused the trend to accelerate.

Job losses will average 257,000 service jobs this year and next, but those jobs will be hard to tally because -- quote -- "the potential for bad P.R. will force more companies underground and into an offshore witness protection program."

(END VIDEOTAPE)

VILES: The investigative arm of Congress is also studying this issue, scheduled to report initial finding on the extent of jobs lost through outsourcing in September, in time for the election, Lou.

DOBBS: This report coming from the government, it will be out in September?

VILES: A preliminary version out in September, but they're also going to add up the jobs that are -- quote, unquote -- "insourced," brought by foreign. So that's -- if you will, fans of this kind of globalization will weigh insourcing vs. outsourcing, which is not necessarily an analysis everyone signs on to in the first place.

DOBBS: Well, I would just like to put myself down as being one of those folks who does not sign on in any, way, shape or form.

VILES: Sure.

DOBBS: Let's go now to Cambridge, Massachusetts.

Pete, thank you very much.

The vice president of Forrester Research, John McCarthy, joins us tonight.

This is a fascinating study, John. I love the suggestion that corporations are moving into the witness protection program because of outsourcing. Why in the world would fine, upstanding folks doing honorable things, taking care of the interests of their employees, their communities and their national interests feel that they have to slink around?

JOHN MCCARTHY, VICE PRESIDENT, FORRESTER RESEARCH: Well, you know Corporate America, Lou. They always shy away from controversy. And, clearly, as you've pointed this, is a very controversial subject, so they're doing anything they can to minimize the amount of, you know, the spotlight shining on them.

DOBBS: Are you surprised in your new estimates, as you've brought forth the research, that you were going to see a 40 percent increase above your original investment?

MCCARTHY: Yes and no, yes in the sense that we've seen how the visibility has driven activity. We've seen the numbers that are consistently reported by a lot of the vendors who are taking the work offshore.

But until you actually do the numbers, you have an inkling they're going up. But until you actually do them, there is a level of surprise when you get to that final number.

DOBBS: I guess my surprise is not so great, John, because, frankly, our viewers are telling us stories that are remarkable, widespread and, frankly, tragic.

You suggested that publicity about this issue was actually driving jobs. Explain that.

MCCARTHY: Yes.

I think what's happened is that, up until the original "BusinessWeek" article of January '03, a lot of people kind of weren't paying that much attention to what was going to in offshore from a services point of view. Most of the focus was on the traditional manufacturing jobs that were going offshore. Now that continued momentum, all of those articles, whether it be in the major nationwide press or the local press or even the industry-specific magazines, all talk about the different things that people are doing and the amount that they're saving.

And that has left a lot of organizations saying, asking questions like, why aren't we doing that or what's the potential savings for us or what should our strategy be? And that's forced in a time of, you know, where economic slowdown and price transparency brought on by the Internet, that's focused a lot of companies to kind of take a good, hard look at it and in some cases start moving jobs to other locations.

DOBBS: What about the role of the enablers, the facilitators, Accenture, McKinsey, Booz Allen, etcetera?

MCCARTHY: You have got a mix of different companies there.

In the case of Accenture, EDS, IBM, they're reacting to pressure from their customers and the competitive pressure that's being exerted as particularly the Indian vendors grow at three and four times the rate that U.S. vendors are growing at. So part of it is competitive in response to what's going on and part of it is demands from customers.

(CROSSTALK)

DOBBS: Well, surely, Forrester isn't suggesting that the Indian I.T. industry is about to overwhelm the technologists who were innovating, surely not.

MCCARTHY: Yes and no. If you look at some of the biggest verticals that spend on services from those U.S. companies are financial services. Those a lot of the leading edge companies in taking work offshore. While there may be whole industries where that's not a competitive threat, some of the leading edge industries, that are big part of the revenue for those companies do in fact -- are seeing a competitive challenge.

DOBBS: So what you're really saying here is outsourcing in fact is empowering competition and in fact, empowering very significant competition.

MCCARTHY: Certainly in those verticals where you see a high presence of the Indian vendors and it does vary dramatically buy vertical depending on how much the industry as a whole spends on technology and how reliant it is on technology to drive the business.

DOBBS: How do you square up your numbers with those suggesting that the Indian outsourcing industry will be a $50 billion industry over the next year?

MCCARTHY: That would be extremely high. The most aggressive numbers that I've seen for all of the Indian offshoring industry are in the neighborhoods of 15 percent -- of 15 billion, so that would be a tripling and I just don't think they'll hire that many people to grow at that rate.

DOBBS: John McCarthy, we thank you very much for being with us here. John McCarthy, Forrester Research.

This week we're featuring some of the many American companies that are proud to make their products in this country. Supracor of San Jose is one such company. The firm's founder says he's determined to keep his workers' jobs here.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): In the heart of Silicon Valley, Curtis Landis is thriving with a business idea he came up with two decades ago. His company, Supracor makes a unique plastic honey comb material that it fashions into products as diverse as seat cushions for wheelchairs and shoes for race horses. The products are sold around the world, but they're all made entirely in the USA.

CURTIS LANDI, PRESIDENT, SUPRACOR: I want to keep the technology here in the states where it belongs.

PILGRIM: Landi won't move any part of his operation offshore in order to protect his company's 27 patents and here, here he still retains quality control.

LANDI: Why be at mercy of someone else, when you can control it here and assure your customers what they're going to get for their money.

PILGRIM: Supracor employs 50 people at the San Jose manufacturing facility and headquarters. Many have been with the company for 15 years.

LANDI: The greatest feeling I get as an entrepreneur is when I go into the back, into the facility here and to see the employees punching out on their time cards to go home and on payday to know that I've contributed to their livelihood.

PILGRIM: Landi says labor costs, taxes, sky high utility bills and endless regulations are a constant battle, but he's determined to stay in the fight.

LANDI: As long as there's air in my lungs and blood flowing through my veins this company will stay right here in America.

(END VIDEOTAPE)

PILGRIM: Landi says lawmakers need to wake up to the vital role of small businesses in creating jobs in the United States. He'd like to see more incentive like tax breaks so high costs don't force small companies to move their work offshore to survive -- Lou.

DOBBS: And as he points out 80 percent of the jobs in this country are created by small business and good for him. Delighted to acknowledge his values.

Kitty Pilgrim, thank you very much.

When we continue another deadly day in Iraq as the deadline for the handover of sovereignty approaches and strong words from China to Taiwan. Former Secretary of State Henry Kissinger is my guest, we'll be talking about the rising geopolitical challenges to this country around the world.

And some of the brightest young minds in this country, we'll meet four shining exams of America's bright future here. Stay with us. (COMMERCIAL BREAK)

DOBBS: As we reported, the military today said it discovered sarin nerve gas in an explosive device in Baghdad, an artillery shell, in fact. It is the first evidence of weapons of mass destruction in Iraq since the war began. The discovery is only one of the many geopolitical concerns the United States faces tonight in addition, the pentagon now says we will have to transfer nearly 4,000 U.S. troop from South Korea to Iraq. China has warned Taiwan's president that his campaign for independence could cause him should he follow its path to burn in his own flames.

Joining me now for more on these developments and how they are affecting U.S. foreign policy is former Secretary of State Henry Kissinger.

Professor, good have you with us.

HENRY KISSINGER, FORMER SECRETARY OF STATE: Good to be here.

DOBBS: Let's begin with Iraq. This is a small indication, at least, that there could be -- have been weapons of mass destruction in Iraq.

How significant, first, would you judge this preliminary evidence?

KISSINGER: Well, we, it's never been clear what happened to the weapons of mass destruction. They were there and they were used. President Clinton lifted a whole catalog of weapons of mass destruction they had in 1998. Blix, the U.N. inspector, said they were there as late as 2001 and what happened to them between 2001 and 2004?

That's never been clear.

DOBBS: Never clear, even more troubling that neither our intelligence agency nor those of apparently any other country able to discern it. The issue of weapons of mass destruction aside Iraq is in chaos. We can describe it a lot of ways but the fact is that Iraq is not with the assassination of Salim today, the president of the Iraqi Council. This -- what is required to put U.S. strategy in Iraq and indeed the Middle East on track.

KISSINGER: Well it isn't primarily the fault of American strategy. This is a struggle of various Iraqi groups with each other. A lot of what goes on in the Shi'ite area, for example is the struggle between al Sadr and the more modern element under (UNINTELLIGIBLE), and we are sort of in the middle of these. What goes on in Baghdad is an attempt by the Sunni, traditional Ba'athists to get preeminent and with the deadline of June 30th anybody who has any muscle at all is trying to demonstrate it. We'll have -- we'll have to create a security system. We'll have to get Iraqis involved in this.

DOBBS: I guess that's what troubles me, professor is that we will have to create a security apparatus and approach there that here for we've been unsuccessful in doing, and we've had a year to do it. We've had less than two months now to do so. What is there to suggest that whatever strategy, whatever tactics we'll employ that they'll be any more successful post-June 30th than pre-June 30th.

KISSINGER: Let me say something on the other (UNINTELLIGIBLE).

DOBBS: Sure.

KISSINGER: If we withdraw from Iraq and if that leads to a demonstrable American defeat or any American -- American defeat, the moderates in the Islamic world are going to be routed. And struggle between the radical Islam and the western world and southeast Asia. So we have to find a way to do it. Now you asked me how to do it. Well, the first thing is we have a government. I think we will have to be involved. Other nations initially not so much in supplying troops as in supplying a commitment to help train, to create a certain (UNINTELLIGIBLE) between ourselves so it doesn't look as if every security effort makes the new government American stooges.

DOBBS: That's almost impossible to avoid, is it not? If one is in fact the primary occupying force in a country. Is it really ultimately sensible of us to pretend we're not there?

KISSINGER: We can't pretend we're not there. We have to defeat the clear challenges to authority as occurred in these various cities and I'm uneasy when it leads to compromises, between the insurrectionists and our forces even if it's convenient for the moment.

DOBBS: Let's turn to the issue...

KISSINGER: And we can do that.

DOBBS: You suggested compromises and you being uncomfortable. Syria, the United States has now applied economic sanctions because of its support of terrorists when clearly this administration two years ago, two and a half years ago said the terrorists are supporting terrorists. You're the enemy of this nation, this looks like a marked compromise. What's your judgment?

KISSINGER: With Syria?

DOBBS: Correct.

KISSINGER: In Syria we have applied sanctions and I don't consider that a compromise. I think that's the right thing to do.

DOBBS: You don't think that stronger rhetoric would have suggested something beyond economic sanctions? I can't think of an example and I know, professor, you have the most canvas in terms of watching and mind but I can't think of a time in which economic sanctions have worked.

KISSINGER: They worked in the case of Libya. I think the first thing we have to do is get control of the security situation in Iraq and we have to do that with a combination of our forces and after a government exists on June 30, other nations that have a lot to lose from radical Islam have to involve themselves in some fashion. Until then, we have to do it alone.

DOBBS: There are a host of issues I want to talk to you about tonight. We are out of time, but let me turn to ones you raised. Now talking about the outrage or absence of outrage among Arab states. Foreign countries, by my count, at least, did express their dismay and condemnation of the act. What in the world...

KISSINGER: The murder of Berg?

DOBBS: Of the murder of Berg. What in the world are we to do in that region now?

KISSINGER: Well, I think the secretary of state, Secretary Powell was absolutely right. It is sort of sickening to have these countries criticize the operations of a minority of American troops that are being brought to justice in our own system and not condemning cutting off the heads of the "Wall Street Journal" reporter and David (ph) Berg on television...

DOBBS: To say nothing of the deaths of 736 Americans in Iraq. Well, Dr. Henry Kissinger, as always, instructive. We thank you very much for spending some time with us.

KISSINGER: Pleasure to be here.

DOBBS: Thank you.

A reminder now to vote on our poll. Do you believe Saddam Hussein's Iraq possessed weapons of mass destruction? Yes or no. Cast your vote at CNN.com/lou. We'll have the results for you a little later in the broadcast. Still ahead here, you'll meet some teenagers who are part of this country's very bright future. They're all finalists in one of the world's largest celebrations of science and innovation and all of the best stuff that makes this such a great country. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight, America's bright future, young people across the country have turned some new ideas into a national competition. A steering wheel, for example, that wakes up a sleepy driver. A hybrid power system that can drive a vehicle or run a forklift, just two of the projects from Intel's International Science and Engineering Fair.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): 17-year-old Ryan Young and 18-year-old Elliott Belden hail from Winona, Minnesota. They call themselves car guys. They created this car that runs on what they call reverse hybrid technology.

ELLIOTT BELDEN, INTEL ISEF FINALIST: Our car is a electric motor supplemented by a gasoline engine. So all forward motion cars are primarily electric and then the charging capacity of it is the gasoline.

DOBBS: The technology could also be used to run forklifts indoors.

RYAN YOUNG, INTEL ISEF FINALIST: It can run entirely on the electric motor meaning there is going to be no exhaust emissions, however when you go outside you can run off the gasoline engine as well to recharge the batteries.

DOBBS: 17-year-old Katherine Vienot from Bartlesville, Oklahoma invented steering wheel to awaken a sleeping driver.

KATHERINE VIENOT, INTEL ISEF FINALIST: There's a little bracket here and whenever you move the steering wheel a connector touches either side. Whenever, like, say, you're starting to fall asleep and it's just in the middle, within five or six seconds the buzzer will sound.

DOBBS: If a driver dozes off, sensors detect the driver is loosening grip on the steering wheel.

14-year-old George Hotz is from Hackensack, New Jersey. His robot can detect and draw the layout of the territories surrounding it.

GEORGE HOTZ, INTEL ISEF FINALIST: It detects objects using the infrared sensors which bounce a beam of light off something and by receiving it you can tell how far away the object is. Then this data is processed by this board here and then the data is sent up to this board which is wirelessly sent to a computer. Then this computer draws a map of it.

DOBBS: George says his robot can help a buyer determine the floorplan and the layout of new properties.

(END VIDEOTAPE)

DOBBS: Now that's impressive, but just wait until you meet these four young scientists who are joining us tonight here in the studios. I'd like to introduce Ryan Young and Elliott Belden, gentlemen, good to have you with us.

And Katherine Vienot, Bartlesville, Oklahoma, as a matter of fact. George Hotz, good have you with us.

First, like everyone else, I'm impressed, my compliments. What made you -- let me start with you, Ryan, you guys, what made you start work on this?

YOUNG: Both Elliott and myself had always been into cars and so when it came time to do the science project, naturally, we wanted to do something dealing with the automotive industry. In the news today you always hear about hybrid vehicles because of their high fuel mileage and the technology that goes into them and so we decided to explore a different type of hybrid system. DOBBS: I was the same way at your age. I was interested in cars so I decided to go out and just design a whole new technology and create a new vehicle. What's been your reaction to the reaction to your project?

BELDEN: Everybody has been really, like, they've been looking at it like it's a newer thing. It's right on the cutting edge of everything so everyone's been looking at that kind of how can these kids actually even think of building this. We've gotten a lot of people that have thought that other people built this for us, no, but everything on the cars was fabricated from me and Ryan and a couple of other kids from our high school. So it was pretty crazy.

DOBBS: Well, very cool.

And Katherine, speaking of cool, the idea of a steering wheel to alert a driver when dozing off, how did that idea occur to you?

VIENOT: Actually, I started driving last year and I heard numerous stories where people would tell me they had close calls, and so I decided I'd do something about it.

DOBBS: That's great, but how did this -- how did the idea of the sensors and the wheel and the pressure of the grip, how did that come to you?

VIENOT: Well, I knew that, you know, with the gas, whenever you're running low, there's this little sound that goes off, a beeper, so I knew maybe an audible alarm would be good. So I started thinking about that and it just went off from there. So.

DOBBS: Well, that's remarkable. And George, robotics? Everybody I guess in your class is thinking about robotic, right?

HOTZ: Yeah, robots are great. They're really cool, yeah.

DOBBS: And the idea of bringing your -- what was the inspiration? The thought?

HOTZ: Well, if you've seen those new Roomba vacuum cleaners, they're not the most intelligent, they just bump into things and back up. So I thought if it first made a map and then sent the map to a computer, the computer could tell the robot exactly where to vacuum on like one path instead of multiple passes like the Roomba has to do. So.

DOBBS: I have to say, I'm sitting here listening to you, and I have to remind myself and I think everyone listening to you, they're seniors in high school. And I just -- I'm sorry?

VIENOT: You're a freshman, right?

HOTZ: Yeah, I'm a freshman.

DOBBS: Freshman?

HOTZ: Surprise!

DOBBS: Oh, boy. If you don't feel good about this country because of these folks, I just -- I can't tell you what in the world we could do for you. It's a great pleasure, a great honor to be with you. We wish you all the very best. Thanks a lot.

Thank you.

Tonight's thought is on innovation. "Just as energy is the basis of life itself, and ideas the source of innovation, so is innovation the vital spark of all human change, improvement and progress." Theodore Levitt.

Just ahead here, oil prices surging again. Christine Romans with that story. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Stocks today down again. The Dow down more than 100 points. The Nasdaq down more than 27. The S&P 500 down more than 11. It's disgusting.

Christine Romans is here with the market and a few other thoughts on prices.

CHRISTINE ROMANS, CNNFN CORRESPONDENT: It's new lows for the year for stocks, and oil added another 17 cents. And some on Wall Street will ballyhoo the assassination of the Iraqi leader for higher oil prices, but the fact is, Lou, oil supplies are lower and demand is skyrocketing, not only here, but around the world.

At the same time, foreign demand for U.S. stocks is plunging, and that raises currents tonight about how we finance this current account deficit. Foreign appetite for U.S. stocks has soured over the past few month, and in March, foreigners dumped $13 billion of American stocks. As the S&P retreated, foreigners simply bailed out. They sold more stocks in March than in any month on record, and that's scary to a lot of people with such a huge trade deficit that we're absolutely dependent on foreigners to support our habits, our runaway Wal-Mart habits.

DOBBS: Absolutely. We're pretty good buyers.

ROMANS: We certainly are.

DOBBS: We may not be making enough stuff, but we can buy it.

ROMANS: We can buy it like the best of them.

DOBBS: Christine, thanks a lot. Appreciate it.

Still ahead here, the results of tonight's poll question. But first, a reminder. Check out our Web site for the complete list of companies we have confirmed to be exporting America. More than 600, rising fast. Cnn.com/lou. We'll continue in a moment. Please stay with us. (COMMERCIAL BREAK)

DOBBS: The results of our poll tonight -- 19 percent of you say Saddam Hussein's Iraq possessed weapons of mass destruction. A rather skeptical 81 percent say they do not.

And that's the broadcast for tonight. Thanks for being with us. Please join us tomorrow. Former Pentagon adviser Thomas Barnett says the key to our future is a radical overhaul of our military, to deal with what he calls great powers and small minds. Please join us. And we'll also be welcoming Congressman Dana Rohrabacher of California. He's fighting to keep American citizens from losing their health care benefits to illegal aliens. That's tomorrow tonight.

For all of us here, good night from New York. "ANDERSON COOPER 360" is next.

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


Aired May 17, 2004 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
LOU DOBBS, CNN ANCHOR (voice-over): Tonight, a dramatic discovery in Iraq. American troops find what could be the first evidence that Saddam Hussein may have had chemical weapons.

Assassination in Baghdad. A suicide bomber killed the president of the Iraqi Governing Council.

DONALD RUMSFELD, SECRETARY OF DEFENSE: Terrorists are working to break the will of the United States government and the American people.

Former Secretary of State Henry Kissinger is my guest tonight to discuss the growing geopolitical challenges to the United States around the world, from Iraq to Syria to North Korea to Taiwan and the global war on terror.

Fifty years after the end of segregation in our schools, President Bush says many children still don't receive an equal education.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: While our schools are no longer segregated by law, they are still not equal in opportunity and excellence.

DOBBS: Tonight, Reverend Jesse Jackson joins me to talk about our social progress over the past half century.

"Exporting America," it turns out there's good reason to be concerned about the export of American jobs to cheap overseas labor markets. A new study shows the pace accelerating in corporate America.

And tonight, you'll meet four fabulous young students who are already brightening this country's future.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Monday, May 17. Here now for an hour of news, debate and opinion is Lou Dobbs.

DOBBS: Good evening.

Tonight, American troops have found what appears to be nerve gas in Iraq and insurgents have killed a top Iraqi government official. The soldiers found sarin gas in an artillery shell that exploded while bomb disposal experts were diffusing it. It could be the first evidence that Saddam Hussein had weapons of mass destruction before the United States overthrew his regime.

Also today, insurgents killed the president of the Iraqi Governing Council in a suicide bomb attack near the coalition's heavily-guarded headquarters in Baghdad.

Senior Pentagon correspondent Jamie McIntyre reports -- Jamie.

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, today, Lou, Secretary of State Colin Powell called Izzadine Saleem an Iraqi patriot.

The president of the Iraqi Governing Council was waiting in a convoy at a U.S. checkpoint along the street preparing to enter the Green Zone when a bomb was detonated, apparently had been rigged with artillery shells and hidden inside a red Volkswagen. President Saleem was among nine people killed, including the bomber.

Meanwhile, another roadside bomb that was being diffused exploded over the weekend providing more evidence that Iraq once had weapons of mass destruction. Five soldiers part of a bomb disposal team were sickened suffering nausea and eye irritation when it turned out the artillery shell used in the bomb tested positive for sarin nerve gas.

(BEGIN VIDEO CLIP)

BRIG. GEN. MARK KIMMITT, U.S. DEPUTY CHIEF OF OPERATIONS: It was a weapon that we believe was stocked from the ex-regime time and it had thought to be an ordinary artillery shell set up to explode like an ordinary IED and basically, from the detection of that, and when it exploded it indicated that it actually had some sarin in it.

(END VIDEO CLIP)

MCINTYRE: The bombers apparently didn't even know that they were using a chemical shell instead of one that explodes. Pentagon officials are saying it doesn't mean much even if the tests do confirm sarin because it said it could have simply been scavenged from one of the many dumps of ammunition across Iraq.

Meanwhile, some 36,000 -- 3,600, rather, 3,600 U.S. troops assigned to the defense of South Korea are getting notices that they will ship out to Iraq. All of them are soldiers from the 2nd Brigade, 2nd Infantry Division. They'll leave for Iraq in mid-summer. Now, the normal tour of duty in South Korea is one year unaccompanied. That is without your family. That means for some of these soldiers, they will spend up to two years away from their families -- Lou.

DOBBS: Jamie, the soldiers injured in the explosion of the artillery shell containing sarin, what is their condition tonight?

MCINTYRE: Well, three of them are said to be fine after suffering some nausea and eye irritations, other one seemed to be a little more serious. Again, the initial tests tested positive for sarin. That was a field test. They're doing some more testing to follow up to see exactly what was in that shell, but they do think it was some sort of nerve agent.

DOBBS: Jamie McIntyre, our senior Pentagon correspondent, thank you.

Joining me now, Vivienne Walt, "TIME" magazine in Baghdad.

Vivienne, let me begin by asking you the murder, the assassination of Saleem, what will be the impact there?

VIVIENNE WALT, "TIME": Well, he wasn't a very high profile person, Lou. He wasn't like Pachachi or Chalabi, the names we've been hearing.

However, he was a fairly key behind-the-scenes player, especially now, for one reason, and that is that he had good contacts with people in southern Iraq, particularly who are very close to Muqtada al-Sadr, the radical cleric, the cleric whose Shiite militia have been battling U.S. troops for a month now.

I met Izzadine Saleem just a few days before he was killed and he told me that he was growing increasingly frustrated because he was trying to open a line of communication to Sadr to help dissuade him to disarm his militia. He was a man who actually might have succeeded in doing that. He had enormous credibility in southern Iraq.

DOBBS: With the murder of Saleem, is there any informed judgment as to who might have killed him?

WALT: Well, there are two separate versions.

There's the version on the Internet. There's a new group that we've never heard of called the Arab resistance movement that has come out and claimed responsibility. The U.S. officials tonight seemed to dismiss that a little bit in Baghdad. They are sure it's the work of Abu Musab al-Zarqawi, al Qaeda's man in Iraq, the man they think also beheaded the young guy, Nick Berg, last week, whose videotape shocked people so much.

So I think that it's still unclear and like a lot of these incidents in Baghdad, it also might never be known.

DOBBS: Vivienne, we have seen over the past six weeks obviously April the worst, the bloodiest month for American troops in Iraq since the war began, the violence seems to be escalating. And geographically, is it moving, spreading, as it seems to be, across the country?

WALT: Sorry, I missed that question, Lou. Could you repeat it?

DOBBS: I will certainly try.

We have been, obviously, witnessing escalating violence for the past six weeks, April the bloodiest month, the deadliest month for our troops in Iraq. The violence appears to escalate. Is it escalating geographically as well as -- is there any direction that you can discern?

WALT: Well, this is the really worrying thing.

It seems like the moment that coalition forces squelch this rebellion in one place, it pops up in another. And this has been going on and on for the last month, really. We've had major battles overnight last night in Nasiriyah, where coalition forces tell us they fought these militia for sometimes six hours at a time. These are really incredible daily reports that we're getting.

It's something really like we heard during the war itself last year. We haven't heard this fighting just week after week between then and now. The other worrying aspect, of course, is that it seems to be inching closer to Baghdad.

DOBBS: Vivienne Walt, we thank you very much for being with us live from Baghdad.

Later in the broadcast, I'll be talking with former Secretary of State Henry Kissinger about the challenges to U.S. foreign policy around the world from Iraq to Syria to North Korea and Taiwan and the global war on terror.

And now our poll question of the evening: Do you believe Saddam Hussein's Iraq possessed weapons of mass destruction, yes or no? Cast your vote at CNN.com/Lou. We'll have the results for you later in the broadcast.

In Kansas today, President Bush among thousands who marked the Supreme Court's landmark decision 50 years ago to desegregate this nation's schools. President Bush helped dedicate a national historic site at the Topeka school at the very center of the Brown vs. Board Of Education decision.

Dan Lothian is in Topeka with a live report -- Dan.

DAN LOTHIAN, CNN BOSTON BUREAU CHIEF (voice-over): The Brown Museum, the former Monroe Elementary School, this is a former auditorium where some of the plaintiffs in the case would often meet.

As you mentioned, today, this museum was officially dedicated. Also there was a ceremony marking 50th anniversary of Brown vs. the Board of Education. President Bush and other dignitaries were there. Thousands were in attendance, also one of the sisters of Linda Brown, the young girl at the center of this landmark case.

(BEGIN VIDEO CLIP)

CHERYL BROWN HENDERSON, PRESIDENT, BROWN FOUNDATION: Let us not be seduced by the media myths that Brown was only about one family that stood alone. Let us not be seduced by any sense that the work has been done. Brown remains unfinished business.

(END VIDEO CLIP)

LOTHIAN: A lot of things have changed here in Topeka. In fact, the city now has its first African-American mayor, but he even says there's still a long way to go to reach that final road of equality -- back to you, Lou.

DOBBS: Dan, thank you -- Dan Lothian reporting from Topeka, Kansas.

The anniversary of the Brown decision comes as the president is struggling to appeal to African-American voters. The latest polls show President Bush has lost support among black Americans since taking office.

Senior White House correspondent John King reports.

(BEGIN VIDEOTAPE)

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): Sunday services as the First Iconian Baptist Church in Atlanta. Prayer comes first but politics also is part of the mission here. And the pastor has a prediction.

UNIDENTIFIED MALE: It is going to be an extremely close election. But we know that if our people turn out we're going to have another administration come November 3. KING: Churches like this were supposed to be a major part of the Bush reelection strategy and its hope of attracting more votes from middle class and especially younger African-Americans.

TARA WALL, REPUBLICAN NATIONAL COMMITTEE: We want to make sure that we tap into the nearly 40 percent of 18-29-year-old black Americans who do not consider themselves Democrats. They're independents and they are willing to look at the Republican Party.

KING: The president and top advisers have vowed to do much better than the tiny 9 percent of the African-American vote he received four years ago. But Mr. Bush received just percent African- American support in CNN/ USA Today /Gallup polling over the past two months, compared to 87 percent for Democrat John Kerry.

Opposition to the war is one reason.

CORNELL BELCHER, DEMOCRATIC POLLSTER: Over 60 percent of African-Americans today think that Iraq was not worth the cost of lives and money.

KING: Economic worries another.

BELCHER: Middle class African-Americans are losing ground. After seeing some progress for the last eight, nine years, they literally are losing ground and they're blaming Bush for it.

KING: Top Bush political strategist Karl Rove warns Republicans can not survive as the majority party if they pull just 9 percent of the African-American vote for president.

(on camera): And the Republican National Committee is planning a major outreach effort it says will tap some 6,700 African-American activists and target African-American businesses, historically black colleges and African-American churches in key November target states.

WALL: Our hope is to get as many African-American voters signed up and voting for President Bush as we possibly can.

KING (voice-over): But with Mr. Bush's standing among African- American so low, even many allies view the outreach effort as a critical long-term project, but unlikely to bring a major turn around for the president and fellow Republicans this year.

John King, CNN, the White House.

(END VIDEOTAPE)

KING: In his first campaign for governor back in 1994, George W. Bush received 15 percent of the African vote. When he ran for reelection, he almost doubled that to 27 percent. No one at the White House or the Bush-Cheney campaign thinks that President Bush can double that 9 percent, just nine percent he received in campaign 2000.

But, Lou, they very much believe it is critical to try to get the president up into double digits. Certainly somewhere in the teens they think would help him quite a bit if he can get there -- Lou.

DOBBS: John, thank you -- John King, senior White House correspondent.

Still ahead here, 50 years after the end of segregation in our schools, does our educational system offer equal opportunities? The Reverend Jesse Jackson is my guest.

And surprising new research on the export of American jobs to cheap overseas labor markets. The pace of overseas outsourcing is accelerating, and fast. We'll have a special report.

All of that and more, a great deal more, still ahead here.

(COMMERCIAL BREAK)

DOBBS: My next guest says 50 years after the Brown decision, this country still lacks a national commitment to equal education.

Reverend Jesse Jackson joins me now from Topeka, Kansas.

Good to have you with us.

A half century later, Jesse, the testing scores are, frankly, abysmal for minorities in this country. What is at the root of the problem, in your judgment?

REV. JESSE JACKSON, FOUNDER, RAINBOW/PUSH COALITION: Well, first of all, the backdrop of Brown, this ended legally 335 years of official racial policy for our country.

In many ways, this was the rebirth of America here 50 years ago. And so, while the law changed, the culture reacted violently. It took us 10 years after Brown to get a public accommodations bill, 11 years to get the right to vote. And rather than a national will to educate all of our children, we have gone into privatizing schools and voucher schemes and Leave No Child Behind with unfunded mandates.

We don't quite yet get it, that we need to educate all of our children as part of our national security.

DOBBS: And the fact that blacks continue in this country to test so poorly despite the fact that billions of dollars have been spent, Brown vs. the Board of Education, extraordinary efforts taken on the part of a host of community organizations, including yours, and hundreds around the country, what is required to change the result to bring real equal opportunity into education in this country?

JACKSON: Well, see, Lou, it's not just a black-white gap. It is a rural-urban gap. It's an urban-suburban gap. It indeed is a resource gap.

We speak of testing gaps. But then there's of access to decent housing gap, a health care gap, an income gap, a life expectancy gap. So you just can't put the school out of the context of some complete plan, because jobs and education and health care are all connected and each matters.

DOBBS: Well, one of the most promising aspects -- and I think this is a little known, certainly little-reported fact -- and that is that blacks in this country with a bachelor's degree have a lower unemployment than their white peers. That's remarkable progress. What are your thoughts?

JACKSON: Well, that is remarkable progress.

I also have a study that shows that blacks with the same degree as whites make 25 percent less. As a matter of fact, blacks and browns work hard and make less and pay more because of predators and get less, live under stress and don't live as long.

And so, you know where the progress has been the most significant? In the military, for example, blacks are seen as added value. There's a really recruiting retention commitment, a national interest one. On the athletic field, the blacks have done so very well in football, basketball, baseball. Why? Because whenever the playing field is even and the rules are public and the goals are clear, we do well.

And, so what is lacking at this point is an appreciation of the value of choosing as it were prenatal care, Head Start and day care on front side of life, rather than pay for jail care and welfare on the backside.

DOBBS: Both candidates for the highest office in the land, that is, President Bush and Senator John Kerry, which of them in your opinion has addressed with the most significant policy initiative the needs of blacks in this country?

JACKSON: Well, the extent to which Mr. Bush has had the power to address it and spoke eloquently of Leave No Child Behind, which is an unfunded mandate, which results in what? It results in our exporting jobs and importing labor. He could have done more.

To the extent to which Mr. Kerry supports affirmative action for women and people of color, it is a commitment to inclusion. But I think the bigger issue is that we need, really as Congressman Jackson suggests, a constitutional amendment for equal, high quality, public education for all children, whether you're black, white, black, white, brown, Appalachia, Alabama, rural Kansas.

We must have a national commitment and see it as our national security interest to educate all of our children. In each state today, 50 years later, there are more black men in jail than there are in college in each state in the country. And, Lou, that's not a good thing.

DOBBS: Senator -- Reverend Jesse Jackson, we thank you very much for being here. We appreciate it.

JACKSON: Lou, it is a first down, but not a touchdown. And so we must go forward, but we certainly cannot rest on our laurels.

DOBBS: Or rest for another 50 years.

Thank you very much, Jesse Jackson.

JACKSON: Thank you. Thank you.

DOBBS: Massachusetts today became the first state to allow gay and lesbian couples to marry. Hundreds of couples lined up at courthouses around the state to apply for marriage licenses and exchange vows. Seven couples who sued the state for the right to marry were the first to take advantage of the new law.

The Massachusetts Supreme Court ruled last year that same-sex unions are legal under the state's constitution.

Still ahead here, shifting American troops from one geopolitical confrontation to another. We'll be talking with former of Secretary of State Henry Kissinger about U.S. foreign policy and challenges around the world.

"Exporting America," a shocking new report on the number of Americans who now stand to lose their jobs to cheap overseas labor markets. It is a trend that few want to recognize, but it shows no signs of slowing down.

And our special report tonight, "Made In America," one Silicon Valley firm has managed to stay competitive, imagine that, and keep all of its business and jobs in America.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Nearly a million American jobs will be exported to cheaper foreign labor markets by the end of next year, that according to new estimates from Forrester Research. Forrester now says 830,000 jobs will be sent out of the country by the end of next year, 40 percent more than the company originally projected and reported.

Peter Viles has the story.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): It's a major anxiety, but it's also a mystery how many American jobs are being shipped overseas, a mystery because companies often keep outsourcing a secret and much of corporate America likes to minimize the entire trend anyway.

Consider these recent analyses. The technology lobby: "Offshore outsourcing creates many more jobs than displaced." The Business Roundtable: "Yes, jobs are leaving, but only 100,000 white collar jobs a year." McKinsey & Company: "Oh, it's about 200,000 service jobs per year."

MARCUS COURTNEY, WASHTECH: They're being published by the same corporations that are exporting jobs overseas. So they have a direct interest to downplay the real impact and effect.

VILES: The most widely-quoted estimate comes from Forrester Research that 3.3 million jobs will move overseas by 2015. Now Forrester has a new analysis with some surprising findings. It says the long-term picture hasn't really changed now predicts 3.4 million jobs by 2015. But, in the short term, all the media coverage of outsourcing has actually caused the trend to accelerate.

Job losses will average 257,000 service jobs this year and next, but those jobs will be hard to tally because -- quote -- "the potential for bad P.R. will force more companies underground and into an offshore witness protection program."

(END VIDEOTAPE)

VILES: The investigative arm of Congress is also studying this issue, scheduled to report initial finding on the extent of jobs lost through outsourcing in September, in time for the election, Lou.

DOBBS: This report coming from the government, it will be out in September?

VILES: A preliminary version out in September, but they're also going to add up the jobs that are -- quote, unquote -- "insourced," brought by foreign. So that's -- if you will, fans of this kind of globalization will weigh insourcing vs. outsourcing, which is not necessarily an analysis everyone signs on to in the first place.

DOBBS: Well, I would just like to put myself down as being one of those folks who does not sign on in any, way, shape or form.

VILES: Sure.

DOBBS: Let's go now to Cambridge, Massachusetts.

Pete, thank you very much.

The vice president of Forrester Research, John McCarthy, joins us tonight.

This is a fascinating study, John. I love the suggestion that corporations are moving into the witness protection program because of outsourcing. Why in the world would fine, upstanding folks doing honorable things, taking care of the interests of their employees, their communities and their national interests feel that they have to slink around?

JOHN MCCARTHY, VICE PRESIDENT, FORRESTER RESEARCH: Well, you know Corporate America, Lou. They always shy away from controversy. And, clearly, as you've pointed this, is a very controversial subject, so they're doing anything they can to minimize the amount of, you know, the spotlight shining on them.

DOBBS: Are you surprised in your new estimates, as you've brought forth the research, that you were going to see a 40 percent increase above your original investment?

MCCARTHY: Yes and no, yes in the sense that we've seen how the visibility has driven activity. We've seen the numbers that are consistently reported by a lot of the vendors who are taking the work offshore.

But until you actually do the numbers, you have an inkling they're going up. But until you actually do them, there is a level of surprise when you get to that final number.

DOBBS: I guess my surprise is not so great, John, because, frankly, our viewers are telling us stories that are remarkable, widespread and, frankly, tragic.

You suggested that publicity about this issue was actually driving jobs. Explain that.

MCCARTHY: Yes.

I think what's happened is that, up until the original "BusinessWeek" article of January '03, a lot of people kind of weren't paying that much attention to what was going to in offshore from a services point of view. Most of the focus was on the traditional manufacturing jobs that were going offshore. Now that continued momentum, all of those articles, whether it be in the major nationwide press or the local press or even the industry-specific magazines, all talk about the different things that people are doing and the amount that they're saving.

And that has left a lot of organizations saying, asking questions like, why aren't we doing that or what's the potential savings for us or what should our strategy be? And that's forced in a time of, you know, where economic slowdown and price transparency brought on by the Internet, that's focused a lot of companies to kind of take a good, hard look at it and in some cases start moving jobs to other locations.

DOBBS: What about the role of the enablers, the facilitators, Accenture, McKinsey, Booz Allen, etcetera?

MCCARTHY: You have got a mix of different companies there.

In the case of Accenture, EDS, IBM, they're reacting to pressure from their customers and the competitive pressure that's being exerted as particularly the Indian vendors grow at three and four times the rate that U.S. vendors are growing at. So part of it is competitive in response to what's going on and part of it is demands from customers.

(CROSSTALK)

DOBBS: Well, surely, Forrester isn't suggesting that the Indian I.T. industry is about to overwhelm the technologists who were innovating, surely not.

MCCARTHY: Yes and no. If you look at some of the biggest verticals that spend on services from those U.S. companies are financial services. Those a lot of the leading edge companies in taking work offshore. While there may be whole industries where that's not a competitive threat, some of the leading edge industries, that are big part of the revenue for those companies do in fact -- are seeing a competitive challenge.

DOBBS: So what you're really saying here is outsourcing in fact is empowering competition and in fact, empowering very significant competition.

MCCARTHY: Certainly in those verticals where you see a high presence of the Indian vendors and it does vary dramatically buy vertical depending on how much the industry as a whole spends on technology and how reliant it is on technology to drive the business.

DOBBS: How do you square up your numbers with those suggesting that the Indian outsourcing industry will be a $50 billion industry over the next year?

MCCARTHY: That would be extremely high. The most aggressive numbers that I've seen for all of the Indian offshoring industry are in the neighborhoods of 15 percent -- of 15 billion, so that would be a tripling and I just don't think they'll hire that many people to grow at that rate.

DOBBS: John McCarthy, we thank you very much for being with us here. John McCarthy, Forrester Research.

This week we're featuring some of the many American companies that are proud to make their products in this country. Supracor of San Jose is one such company. The firm's founder says he's determined to keep his workers' jobs here.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): In the heart of Silicon Valley, Curtis Landis is thriving with a business idea he came up with two decades ago. His company, Supracor makes a unique plastic honey comb material that it fashions into products as diverse as seat cushions for wheelchairs and shoes for race horses. The products are sold around the world, but they're all made entirely in the USA.

CURTIS LANDI, PRESIDENT, SUPRACOR: I want to keep the technology here in the states where it belongs.

PILGRIM: Landi won't move any part of his operation offshore in order to protect his company's 27 patents and here, here he still retains quality control.

LANDI: Why be at mercy of someone else, when you can control it here and assure your customers what they're going to get for their money.

PILGRIM: Supracor employs 50 people at the San Jose manufacturing facility and headquarters. Many have been with the company for 15 years.

LANDI: The greatest feeling I get as an entrepreneur is when I go into the back, into the facility here and to see the employees punching out on their time cards to go home and on payday to know that I've contributed to their livelihood.

PILGRIM: Landi says labor costs, taxes, sky high utility bills and endless regulations are a constant battle, but he's determined to stay in the fight.

LANDI: As long as there's air in my lungs and blood flowing through my veins this company will stay right here in America.

(END VIDEOTAPE)

PILGRIM: Landi says lawmakers need to wake up to the vital role of small businesses in creating jobs in the United States. He'd like to see more incentive like tax breaks so high costs don't force small companies to move their work offshore to survive -- Lou.

DOBBS: And as he points out 80 percent of the jobs in this country are created by small business and good for him. Delighted to acknowledge his values.

Kitty Pilgrim, thank you very much.

When we continue another deadly day in Iraq as the deadline for the handover of sovereignty approaches and strong words from China to Taiwan. Former Secretary of State Henry Kissinger is my guest, we'll be talking about the rising geopolitical challenges to this country around the world.

And some of the brightest young minds in this country, we'll meet four shining exams of America's bright future here. Stay with us. (COMMERCIAL BREAK)

DOBBS: As we reported, the military today said it discovered sarin nerve gas in an explosive device in Baghdad, an artillery shell, in fact. It is the first evidence of weapons of mass destruction in Iraq since the war began. The discovery is only one of the many geopolitical concerns the United States faces tonight in addition, the pentagon now says we will have to transfer nearly 4,000 U.S. troop from South Korea to Iraq. China has warned Taiwan's president that his campaign for independence could cause him should he follow its path to burn in his own flames.

Joining me now for more on these developments and how they are affecting U.S. foreign policy is former Secretary of State Henry Kissinger.

Professor, good have you with us.

HENRY KISSINGER, FORMER SECRETARY OF STATE: Good to be here.

DOBBS: Let's begin with Iraq. This is a small indication, at least, that there could be -- have been weapons of mass destruction in Iraq.

How significant, first, would you judge this preliminary evidence?

KISSINGER: Well, we, it's never been clear what happened to the weapons of mass destruction. They were there and they were used. President Clinton lifted a whole catalog of weapons of mass destruction they had in 1998. Blix, the U.N. inspector, said they were there as late as 2001 and what happened to them between 2001 and 2004?

That's never been clear.

DOBBS: Never clear, even more troubling that neither our intelligence agency nor those of apparently any other country able to discern it. The issue of weapons of mass destruction aside Iraq is in chaos. We can describe it a lot of ways but the fact is that Iraq is not with the assassination of Salim today, the president of the Iraqi Council. This -- what is required to put U.S. strategy in Iraq and indeed the Middle East on track.

KISSINGER: Well it isn't primarily the fault of American strategy. This is a struggle of various Iraqi groups with each other. A lot of what goes on in the Shi'ite area, for example is the struggle between al Sadr and the more modern element under (UNINTELLIGIBLE), and we are sort of in the middle of these. What goes on in Baghdad is an attempt by the Sunni, traditional Ba'athists to get preeminent and with the deadline of June 30th anybody who has any muscle at all is trying to demonstrate it. We'll have -- we'll have to create a security system. We'll have to get Iraqis involved in this.

DOBBS: I guess that's what troubles me, professor is that we will have to create a security apparatus and approach there that here for we've been unsuccessful in doing, and we've had a year to do it. We've had less than two months now to do so. What is there to suggest that whatever strategy, whatever tactics we'll employ that they'll be any more successful post-June 30th than pre-June 30th.

KISSINGER: Let me say something on the other (UNINTELLIGIBLE).

DOBBS: Sure.

KISSINGER: If we withdraw from Iraq and if that leads to a demonstrable American defeat or any American -- American defeat, the moderates in the Islamic world are going to be routed. And struggle between the radical Islam and the western world and southeast Asia. So we have to find a way to do it. Now you asked me how to do it. Well, the first thing is we have a government. I think we will have to be involved. Other nations initially not so much in supplying troops as in supplying a commitment to help train, to create a certain (UNINTELLIGIBLE) between ourselves so it doesn't look as if every security effort makes the new government American stooges.

DOBBS: That's almost impossible to avoid, is it not? If one is in fact the primary occupying force in a country. Is it really ultimately sensible of us to pretend we're not there?

KISSINGER: We can't pretend we're not there. We have to defeat the clear challenges to authority as occurred in these various cities and I'm uneasy when it leads to compromises, between the insurrectionists and our forces even if it's convenient for the moment.

DOBBS: Let's turn to the issue...

KISSINGER: And we can do that.

DOBBS: You suggested compromises and you being uncomfortable. Syria, the United States has now applied economic sanctions because of its support of terrorists when clearly this administration two years ago, two and a half years ago said the terrorists are supporting terrorists. You're the enemy of this nation, this looks like a marked compromise. What's your judgment?

KISSINGER: With Syria?

DOBBS: Correct.

KISSINGER: In Syria we have applied sanctions and I don't consider that a compromise. I think that's the right thing to do.

DOBBS: You don't think that stronger rhetoric would have suggested something beyond economic sanctions? I can't think of an example and I know, professor, you have the most canvas in terms of watching and mind but I can't think of a time in which economic sanctions have worked.

KISSINGER: They worked in the case of Libya. I think the first thing we have to do is get control of the security situation in Iraq and we have to do that with a combination of our forces and after a government exists on June 30, other nations that have a lot to lose from radical Islam have to involve themselves in some fashion. Until then, we have to do it alone.

DOBBS: There are a host of issues I want to talk to you about tonight. We are out of time, but let me turn to ones you raised. Now talking about the outrage or absence of outrage among Arab states. Foreign countries, by my count, at least, did express their dismay and condemnation of the act. What in the world...

KISSINGER: The murder of Berg?

DOBBS: Of the murder of Berg. What in the world are we to do in that region now?

KISSINGER: Well, I think the secretary of state, Secretary Powell was absolutely right. It is sort of sickening to have these countries criticize the operations of a minority of American troops that are being brought to justice in our own system and not condemning cutting off the heads of the "Wall Street Journal" reporter and David (ph) Berg on television...

DOBBS: To say nothing of the deaths of 736 Americans in Iraq. Well, Dr. Henry Kissinger, as always, instructive. We thank you very much for spending some time with us.

KISSINGER: Pleasure to be here.

DOBBS: Thank you.

A reminder now to vote on our poll. Do you believe Saddam Hussein's Iraq possessed weapons of mass destruction? Yes or no. Cast your vote at CNN.com/lou. We'll have the results for you a little later in the broadcast. Still ahead here, you'll meet some teenagers who are part of this country's very bright future. They're all finalists in one of the world's largest celebrations of science and innovation and all of the best stuff that makes this such a great country. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight, America's bright future, young people across the country have turned some new ideas into a national competition. A steering wheel, for example, that wakes up a sleepy driver. A hybrid power system that can drive a vehicle or run a forklift, just two of the projects from Intel's International Science and Engineering Fair.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): 17-year-old Ryan Young and 18-year-old Elliott Belden hail from Winona, Minnesota. They call themselves car guys. They created this car that runs on what they call reverse hybrid technology.

ELLIOTT BELDEN, INTEL ISEF FINALIST: Our car is a electric motor supplemented by a gasoline engine. So all forward motion cars are primarily electric and then the charging capacity of it is the gasoline.

DOBBS: The technology could also be used to run forklifts indoors.

RYAN YOUNG, INTEL ISEF FINALIST: It can run entirely on the electric motor meaning there is going to be no exhaust emissions, however when you go outside you can run off the gasoline engine as well to recharge the batteries.

DOBBS: 17-year-old Katherine Vienot from Bartlesville, Oklahoma invented steering wheel to awaken a sleeping driver.

KATHERINE VIENOT, INTEL ISEF FINALIST: There's a little bracket here and whenever you move the steering wheel a connector touches either side. Whenever, like, say, you're starting to fall asleep and it's just in the middle, within five or six seconds the buzzer will sound.

DOBBS: If a driver dozes off, sensors detect the driver is loosening grip on the steering wheel.

14-year-old George Hotz is from Hackensack, New Jersey. His robot can detect and draw the layout of the territories surrounding it.

GEORGE HOTZ, INTEL ISEF FINALIST: It detects objects using the infrared sensors which bounce a beam of light off something and by receiving it you can tell how far away the object is. Then this data is processed by this board here and then the data is sent up to this board which is wirelessly sent to a computer. Then this computer draws a map of it.

DOBBS: George says his robot can help a buyer determine the floorplan and the layout of new properties.

(END VIDEOTAPE)

DOBBS: Now that's impressive, but just wait until you meet these four young scientists who are joining us tonight here in the studios. I'd like to introduce Ryan Young and Elliott Belden, gentlemen, good to have you with us.

And Katherine Vienot, Bartlesville, Oklahoma, as a matter of fact. George Hotz, good have you with us.

First, like everyone else, I'm impressed, my compliments. What made you -- let me start with you, Ryan, you guys, what made you start work on this?

YOUNG: Both Elliott and myself had always been into cars and so when it came time to do the science project, naturally, we wanted to do something dealing with the automotive industry. In the news today you always hear about hybrid vehicles because of their high fuel mileage and the technology that goes into them and so we decided to explore a different type of hybrid system. DOBBS: I was the same way at your age. I was interested in cars so I decided to go out and just design a whole new technology and create a new vehicle. What's been your reaction to the reaction to your project?

BELDEN: Everybody has been really, like, they've been looking at it like it's a newer thing. It's right on the cutting edge of everything so everyone's been looking at that kind of how can these kids actually even think of building this. We've gotten a lot of people that have thought that other people built this for us, no, but everything on the cars was fabricated from me and Ryan and a couple of other kids from our high school. So it was pretty crazy.

DOBBS: Well, very cool.

And Katherine, speaking of cool, the idea of a steering wheel to alert a driver when dozing off, how did that idea occur to you?

VIENOT: Actually, I started driving last year and I heard numerous stories where people would tell me they had close calls, and so I decided I'd do something about it.

DOBBS: That's great, but how did this -- how did the idea of the sensors and the wheel and the pressure of the grip, how did that come to you?

VIENOT: Well, I knew that, you know, with the gas, whenever you're running low, there's this little sound that goes off, a beeper, so I knew maybe an audible alarm would be good. So I started thinking about that and it just went off from there. So.

DOBBS: Well, that's remarkable. And George, robotics? Everybody I guess in your class is thinking about robotic, right?

HOTZ: Yeah, robots are great. They're really cool, yeah.

DOBBS: And the idea of bringing your -- what was the inspiration? The thought?

HOTZ: Well, if you've seen those new Roomba vacuum cleaners, they're not the most intelligent, they just bump into things and back up. So I thought if it first made a map and then sent the map to a computer, the computer could tell the robot exactly where to vacuum on like one path instead of multiple passes like the Roomba has to do. So.

DOBBS: I have to say, I'm sitting here listening to you, and I have to remind myself and I think everyone listening to you, they're seniors in high school. And I just -- I'm sorry?

VIENOT: You're a freshman, right?

HOTZ: Yeah, I'm a freshman.

DOBBS: Freshman?

HOTZ: Surprise!

DOBBS: Oh, boy. If you don't feel good about this country because of these folks, I just -- I can't tell you what in the world we could do for you. It's a great pleasure, a great honor to be with you. We wish you all the very best. Thanks a lot.

Thank you.

Tonight's thought is on innovation. "Just as energy is the basis of life itself, and ideas the source of innovation, so is innovation the vital spark of all human change, improvement and progress." Theodore Levitt.

Just ahead here, oil prices surging again. Christine Romans with that story. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Stocks today down again. The Dow down more than 100 points. The Nasdaq down more than 27. The S&P 500 down more than 11. It's disgusting.

Christine Romans is here with the market and a few other thoughts on prices.

CHRISTINE ROMANS, CNNFN CORRESPONDENT: It's new lows for the year for stocks, and oil added another 17 cents. And some on Wall Street will ballyhoo the assassination of the Iraqi leader for higher oil prices, but the fact is, Lou, oil supplies are lower and demand is skyrocketing, not only here, but around the world.

At the same time, foreign demand for U.S. stocks is plunging, and that raises currents tonight about how we finance this current account deficit. Foreign appetite for U.S. stocks has soured over the past few month, and in March, foreigners dumped $13 billion of American stocks. As the S&P retreated, foreigners simply bailed out. They sold more stocks in March than in any month on record, and that's scary to a lot of people with such a huge trade deficit that we're absolutely dependent on foreigners to support our habits, our runaway Wal-Mart habits.

DOBBS: Absolutely. We're pretty good buyers.

ROMANS: We certainly are.

DOBBS: We may not be making enough stuff, but we can buy it.

ROMANS: We can buy it like the best of them.

DOBBS: Christine, thanks a lot. Appreciate it.

Still ahead here, the results of tonight's poll question. But first, a reminder. Check out our Web site for the complete list of companies we have confirmed to be exporting America. More than 600, rising fast. Cnn.com/lou. We'll continue in a moment. Please stay with us. (COMMERCIAL BREAK)

DOBBS: The results of our poll tonight -- 19 percent of you say Saddam Hussein's Iraq possessed weapons of mass destruction. A rather skeptical 81 percent say they do not.

And that's the broadcast for tonight. Thanks for being with us. Please join us tomorrow. Former Pentagon adviser Thomas Barnett says the key to our future is a radical overhaul of our military, to deal with what he calls great powers and small minds. Please join us. And we'll also be welcoming Congressman Dana Rohrabacher of California. He's fighting to keep American citizens from losing their health care benefits to illegal aliens. That's tomorrow tonight.

For all of us here, good night from New York. "ANDERSON COOPER 360" is next.

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