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Lou Dobbs Tonight
Former President Ford Hospitalized; Iraq's Historic General Election; Exit Strategy From Iraq; NAM Insists U.S. Manufacturing Jobs Are Plentiful; Border Security Scheduled For House Floor This Week Despite Opposition; Interview With Ken Auletta
Aired December 13, 2005 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: Good evening, everybody.
We begin tonight with new concerns about the health of former President Gerald Ford. President Ford is in the hospital in Rancho Mirage, California. He's undergoing a series of medical tests tonight. His staff insists the tests are routine
Dan Simon reports from Rancho Mirage -- Dan.
DAN SIMON, CNN CORRESPONDENT: Hi, Lou.
I spoke to his longtime press aide a short while ago, and again, she said these are routine tests. But when pressed for more details, she said, look --and I'm paraphrasing here. She said, look, the guy is 92 years old. He's in as good a health as you can expect for being that age.
Mr. Ford was brought here to the hospital late last night. He is undergoing these tests today.
Now, in terms of his overall health, the press aide said he's doing fine. She said he swims every day and he still plays golf. He has had some problems, though, in recent years.
In 2000, he had a mild stroke at the Republican National Convention. And then a few years later, he was playing golf and he had a dizzy spell. And that brought him back here to the hospital.
Again, he's said to be doing OK. He is going through these tests. And we're told that he could be released as early as tomorrow -- Lou.
DOBBS: Thank you very much.
Joining me now for more on President Ford, our national correspondent, Bruce Morton.
Bruce, President Ford obviously much beloved within the Republican Party. Just how important a national figure is President Ford in the country's political history?
BRUCE MORTON, CNN NATIONAL CORRESPONDENT: Well, if you go back to the 1970s and the Nixon administration, very important, Lou. He was the first absolutely unelected vice president we ever had, and, consequently, the first absolutely unelected president.
Formerly, you know, if the president died -- John Kennedy was killed, for instance, Lyndon Johnson became president, there was no vice president. But after that, the Congress and the states passed the 25th amendment, which said the president could appoint a vice president. And if the House and Senate confirmed him, he would take office.
After Spiro Agnew, Nixon's original vice president, resigned in disgrace -- he was a crook and they let him go, he pleaded no contest to a felony count -- Nixon wanted somebody the Congress would approve quickly and easily. And he turned to Jerry Ford, who was the Republican leader back then.
Everybody liked him. The Congress wasn't nearly the poison swamp it is now. Guys could argue issue during the day, go out and have dinner afterward. And Ford, just everybody knew this is an honest, honorable, straightforward guy.
He was made vice president with no difficulty at all. Then, of course, when Nixon had resigned over the Watergate scandal, Ford was suddenly the unelected president. And I still remember, you know, him coming on television saying, "Our long national nightmare is over. The Constitution works."
And it did. He subsequently pardoned Nixon. A lot of people thought that cost him the 1976 election, when he lost narrowly to former Georgia governor, Jimmy Carter.
But Ford then and years later always said, I did what I thought was the right thing. It was the right thing not simply for Nixon, but for the country. We had a lot of Watergate, we had a lot of anguish. It was time for some calm.
DOBBS: Bruce Morton.
Thank you very much.
Turning now to the war in Iraq, four American soldiers killed in combat today, two days before Iraq's historic general election. The soldiers killed near Baghdad -- 2,151 Americans have now been killed in Iraq.
Aneesh Raman reports from Baghdad.
ANEESH RAMAN, CNN CORRESPONDENT: Lou, good evening.
On the 1,000th day since the war began, the violence in Iraq persists. The U.S. military says four U.S. soldiers were killed today while on patrol near the capital, all members of Task Force Baghdad, killed when a roadside bomb detonated. These IEDs, improvised explosive devices, remain the persistent killer of U.S. forces in Iraq.
Meantime, a Sunni sheik who is running for political office gunned down in the city of Ramadi, west of the capital, in the volatile Al Anbar province, known to have a strong insurgent presence. The Sunni sheik just the latest in a number of Sunni politicians and Iraqi election workers who have been assassinated in the build-up to Thursday's election.
Meantime, the country beginning a five-day holiday, entering into virtual martial law. International borders have been closed. Travel within the country is barred. Curfews have been extended.
Early voting also continuing, this time for expatriate Iraqis, taking place in 15 countries throughout the world, from Washington to London to Sydney to Amman. Expatriate Iraqis voting on the country's first permanent four-year government. The rest of the Iraq, the 15.3 million registered Iraqi voters, will get to do that on Thursday.
And another landmark today, aside from the 1,000th day since the war began, today is the second anniversary of the capture of Saddam Hussein, pulled from that spider hole at 8:30 p.m. on December 13, 2003. Hussein now facing his first trial with the charges of crimes against humanity. That trial is set to resume on December 21 -- Lou.
DOBBS: Thank you very much.
Aneesh Raman.
Secretary of State Condoleezza Rice today declared the United States cannot leave Iraq now because a sudden withdrawal would make this country more vulnerable to terrorism. Rice's comments just the latest in a series of speeches by top administration officials on U.S. strategy and conduct of the war in Iraq. President Bush, in fact, will give another major address on the war tomorrow.
Elaine Quijano reports from the White House -- Elaine.
ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Lou, expect President Bush tomorrow to tie in all three components of the U.S. strategy in Iraq, work on the political, the economic, and the security fronts in Iraq. He'll go before a group of scholars and others here in Washington at the Woodrow Wilson Center, and as with all his speeches, including the one in Philadelphia on Monday, the main goal here is really to try to convince the American people that the Bush administration does in fact have a plan for winning in Iraq, and that that plan is working.
Now, yesterday, we also saw President Bush engage in a rare question-and-answer session with members of the audience. The audience yesterday, members of the World Affairs Council of Philadelphia.
Well, today, Republican Senator Rick Santorum, who was with President Bush, said he and Republican Senator Arlen Specter both encouraged the president to take questions.
(BEGIN VIDEO CLIP)
SEN. RICK SANTORUM (R), PENNSYLVANIA: He asked for advice on that, and we said, "Look, this is as good a crowd to open it up to." This was not a friendly crowd. I would suggest that probably more than half the people in that room didn't vote for him.
And we -- we strongly suggested that -- that he open up for questions. And he obviously did so and felt comfortable.
(END VIDEO CLIP)
QUIJANO: Now, Senator Santorum was here, along with a group of other Republican senators, receiving a briefing on Iraq. And White House officials say, later this week, expect Democrats to receive an Iraq briefing, as well.
But this is really all part of the larger White House strategy not only to reach out to the public, but to lawmakers, as well. Lawmakers who want some more answers on Iraq.
But a look at the latest CNN-"USA Today"-Gallup poll shows President Bush still has some convincing to do. Taking a look at the president's overall approval number on Iraq, specifically, first of all, that shows an increase from last month. That number actually up from 35 percent last month to now 39 percent.
But when Americans were asked specifically if the president has a plan to achieve victory in Iraq, only 38 percent said yes and 58 percent said no. So look for President Bush tomorrow, Lou, to again make his case that democracy is taking root in Iraq. But also, amid calls and criticisms by some that U.S. forces should be withdrawn immediately, look for the president to once again appeal for patience -- Lou.
DOBBS: And again, President Bush in all recent national polls sees his approval rating rising.
Elaine Quijano from the White House.
Thank you.
Still ahead, the national debate over illegal immigration turns nasty. Why some are calling critics of illegal immigration un- American.
And tonight, how communist China is slowly sucking the wealth out of the United States and destroying middle class American jobs.
And one major manufacturing group says there are simply not enough Americans sufficiently skilled to fill manufacturing jobs in this country. We'll have that special report for you coming right up.
(COMMERCIAL BREAK)
DOBBS: Tonight, a Jordanian man has pleaded guilty to smuggling more than 200 illegal aliens from Iraq and Jordan into the United States. Immigration officials say 35-year-old Abu Harp (ph) has admitted to taking part in a conspiracy to smuggle those illegal aliens through Ecuador and Peru, and then into the United States.
The smuggling ring was in operation for four years before it was shut down. This just the latest in a string of busts that U.S. immigration officials have undertaken involving Middle Eastern illegal alien smuggling rings.
Congressman Tom Tancredo of Colorado tonight is raising new concerns about the extent of our nation's border security emergency. Congressman Tancredo says over the past year 51 illegal aliens picked up on our borders have been arrested on terrorism-related charges. These charges range from weapons smuggling to illegally wiring large sums of money into the United States.
Congressman Tancredo is a fierce advocate of heightened border security. He says he's increasingly concerned about terrorists who may have already entered this country illegally.
The broadcast has repeatedly stressed the need to solve this nation's massive illegal alien crisis. It has always, this broadcast, been a strong supporter of legal, fair, humane immigration policies. There is a huge distinction between upholding and strengthening laws that made this country great and punishing illegal acts that are damaging this country. But it is a distinction that is getting completely lost amid heated rhetoric of the broken borders debate, particularly the advocates of open borders.
Christine Romans has the report.
(BEGIN VIDEOTAPE)
CHRISTINE ROMANS, CNN CORRESPONDENT (voice over): Buzz words in the debate over illegal immigration in this country: restrictionists, anti-immigrant, Tancradoed, new buzz words and outright name calling as criticism of illegal immigration gets twisted somehow into an assault on the immigrant values that built America. For some, any opposition to illegal immigration is labeled "anti-immigrant."
Linguist Geoff Nunberg says "anti" and "pro" often don't accurately define a position.
GEOFFREY NUNBERG, LINGUIST, UC BERKLEY: Those "anti" and "pro" words always tend to have that polemical character, your anti- immigrant or you're pro illegal alien.
ROMANS: Then there's "restrictionist," promoted by "The Wall Street Journal" on its opinion page, which recently proclaimed, "The restrictionists have the politics wrong." They are talking about politicians and citizens who want America's laws enforced and the borders secured. It's a disparaging term that goes back at least 100 years.
UNIDENTIFIED MALE: I personally don't think that's a very accurate use of the word "restrictionist," but words that have those ethical connotations always tend to be used in these context, precisely because they are so loaded.
ROMANS: Congressman J.D. Hayworth has been called a restrictionist for not supporting the president's guest worker program and pushing for tougher border enforcement. But Hayworth will have none of the name calling.
REP. J.D. HAYWORTH (R), ARIZONA: When they call those of us who support this legislation anti-immigrant, they have left out one important word: anti-illegal immigrant.
(END VIDEOTAPE)
ROMANS: There's name-calling, and then there are euphemisms. Temporary worker programs, for example, there's nothing temporary about the workers who have entered this country illegally by the millions over the past 20 years. And then there's undocumented worker, the politically correct alternative to illegal alien, even though people who are here legally are legal resident aliens.
DOBBS: The rhetoric and the attempt to control language, which is, frankly, in my -- in my judgment, part of the whole political correctness movement in this country that is insidiously fostered by corporate America itself, through certain academic institutions, most academic institutions. The idea that "The Journal" or anyone else would use the term "restrictionist" to describe those who would enforce our laws, both legal immigration -- demanding legal immigration, not illegal immigration, and calling for border security is remarkable.
If we want to restrict something, it is simply the prospect of terrorism. If we want to restrict something, it is simply those who would violate our laws. It is a perversion.
ROMANS: Now, linguists say it's like we're reading out two of different dictionaries. Somewhere in there is what the real language is saying. But it's like two different dictionaries.
DOBBS: It's -- perhaps that is the case, but it is certain of one thing: this is one country where we should be focusing on commonality and similarities rather than differences, and we should be looking to the national interest, not special interests.
ROMANS: And solutions, not language.
DOBBS: Well, unfortunately, too few people are looking at solutions in this country, particularly in Washington. Perhaps that will not always be the case if we have our way here.
Christine Romans.
Thank you.
Still ahead, $200 billion and rising fast. Stunning new numbers on our nation's count of controlled trade deficit with none other than communist China.
Also, espionage behind the red curtain. Communist China's prying in search of sensitive U.S. secrets, all the while denying it. We'll have our special report on the truth of the matter.
And why one of this nation's largest advocacy groups seems to be pandering to our nation's manufacturing elite, or at least the U.S. multinationals, in what is an outright war against our middle class.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: Tonight, a new report reveals our exploding trade deficit with communist China, now an estimated $200 billion, could soon grow even larger. While cheap Chinese exports are flooding into this country, U.S. exports to China are falling behind exports from other countries.
Lisa Sylvester reports.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice over): U.S. trade with China is not a two-way street. Imports from China have exploded in the last two decades. But a GAO report finds the United States is losing market share when it comes to exports to communist China.
ALAN TONELSON, U.S. BUSINESS & INDUSTRY COUNCIL: Our current trade patterns with China are leaching well from us rather than adding to wealth here.
SYLVESTER: The U.S. share of world good exports to China dropped from 12 percent in 1995 to 9 percent in 2004. Meanwhile, Taiwan and South Korea's share of exports expanded. During those same years, the U.S. trade deficit with China ballooned from $34 billion to a whopping $162 billion.
The United States is losing ground on exports to China in a range of sectors; aircraft, automaking, chemicals, electronics and high tech. No surprise the same fields that have seen mounting job losses.
MICHAEL WESSEL, U.S.-CHINA ECON. & SECURITY REVIEW: We're still doing a lot of creativity, a lot, if you will, masterminding of the products here. But there are fewer and fewer jobs connected to that. And when you look at the production of us, where is the bulk of the jobs, much of that is shifting to Asia.
SYLVESTER: Significant, because U.S. business groups have long argued trade liberalization would fling open the doors to new Chinese consumers. Instead, China has become an export platform. Asian countries provide parts and components to Chinese firms, who ship off the finished goods to the United States.
(END VIDEOTAPE)
SYLVESTER: One reason China has been able to sell goods here so cheaply is because the Chinese government controls its currency to suit its needs. Senators Charles Schumer and Lindsey Graham have introduced a bill aimed at leveling the playing field. That bill would slap a tariff on Chinese goods. It's on the docket, and it could be brought up early next year -- Lou.
DOBBS: It could be, but the U.S. Treasury Department doesn't have the guts to straightforwardly say that China is manipulating its currency, even though it is pegged to the U.S. dollar.
Thank you very much, Lisa Sylvester.
Well, despite communist China's flagrant manipulation of trade laws and its -- and this currency, trade officials around the world are still trying to blame the United States for what many call the world's trade imbalances.
Tonight's quote of the day comes from India's commerce minister, who says, "The United States is an offensive exporter. If they are going to enter the world market with subsidized prices, it is the Indian farmer who is not competing against the U.S. farmer but the U.S. Treasury."
That from India's commerce minister, Kamal Nath. Apparently, the commerce minister didn't take note of the fact that this country will run about a $700 billion trade deficit this year.
We don't export enough, frankly, Mr. Minister, to be offensive.
The federal government tonight trying to impose its largest-ever fine on a company for violating "Do Not Call" rules and succeeding. The Federal Trade Commission is fining DIRECTV more than $5 million for "Do Not Call" violations. They say telemarketers hired by DIRECTV called up households whose numbers were on the national "Do Not Call" registry.
Officials say this fine is a warning to companies that they're not off the hook when their telemarketing partners violate the privacy regulation.
Just ahead, an outrageous new effort to kill legislation designed to secure our national borders. You won't believe who is behind it. Or perhaps you will.
Also tonight, the war on the middle class. The National Association of Manufacturers has the gall to say there aren't enough skilled workers in this country to manufacture products. That special report coming up.
And then, the World Trade Organization meeting in Hong Kong. My guest tonight says globalization and free trade agreements are good for this country. Sebastian Mallaby, columnist of "The Washington Post," joins us.
And red storm rising. U.S. security experts say communist China is going to extreme lengths to spy on this country and getting away with it.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: There is an escalating battle over a series of systematic hacker attacks against computers in this country. Tonight, new information linking these attacks to the communist Chinese government and its efforts to spy on the United States.
Kitty Pilgrim reports.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice over): Chinese hackers not only hit Pentagon computers, some experts believe it was a communist Chinese military operation. The hacking ring code named Titan Rain came to light a few months ago after published reports in "TIME" magazine. But now experts have had time to analyze the data.
ALAN PALLER, SANS INSTITUTE: Somewhere between five and 20 individuals working in Guangdong province were penetrating U.S. sites. They did all of it without making a single keystroke error, and all in under 30 minutes.
And I reviewed dozens of attack scripts. No one, none of the attackers who are amateurs, do this without making mistakes. This is a -- such a highly disciplined activity that my estimate is that it's a military group.
PILGRIM: Paller says he analyzed some places "TIME" says China hacked: Redstone Arsenal, home of the Army Aviation and Missile Command; Fort Huachuca, Army Systems Engineering Command; Defense Information Systems Agency in Arlington; U.S. Army Space and Strategic Defense Installation in Huntsville.
So far, Paller believes no classified information has been compromised yet.
In September, about the time Titan Rain became public, Congress held hearings that investigated reports of an estimated 2,000 to 3,000 Chinese front companies operating in the United States.
Cyber security expert James Lewis says he also has detected Chinese hacking and believes China often uses front companies in the United States for stealing both government and corporate secrets.
JAMES LEWIS, CENTER FOR STRATEGIC & INTERNATIONAL STUDIES: Front companies are a normal technique in espionage. So you could very well have Chinese front companies that wouldn't be a surprise to anyone.
You know, the issue again is, is it -- is it, you know, the Chinese government, is it Chinese companies, is it Chinese individuals, is it foreign governments using Chinese, you know, front?
(END VIDEOTAPE)
PILGRIM: Now, corporate secrets also have military applications. Experts we talked to today say cyber spies not only try to get into the computer that run the U.S. government and U.S. corporations, but actually they try to get in and stay in to continuously mine the data that comes into them with a very steady feed -- Lou.
DOBBS: It is clear that the United States government is trying to understate the impact of these hacker attacks, which are systematic and obviously originating from the Chinese military. Why in the world is the United States government not responding and controlling what is happening in these instances, whether it be front spy organizations and corporations and firms, or whether it be hackers?
Are we incapable? Are we impotent?
PILGRIM: We talked to a lot of outside experts outside the government and they were very forthcoming about the repeated attempts of outside intelligence agencies to hack into U.S. government computers.
DOBBS: And why is the United States government not doing something to either stop it, to end it, or to respond?
PILGRIM: I think that they probably are, but they are not talking.
DOBBS: All right. Kitty Pilgrim.
Thank you.
You've got to hand it to the National Association of Manufacturers. I've got a lot of good friends over there at the NAM.
Tonight, it's sticking by its delusional outlook on the state of this nation's manufacturing sector, the organization itself, even if not all of its members. The NAM continues to insist tonight that U.S. manufacturing jobs are plentiful in this country. It said the problem is really a lack of skilled American middle class workers, even in the crisis-ridden automobile industry.
Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): Well over 100,000 people have applied for 2,000 jobs at the new Toyota plant in San Antonio, Texas, and that's for a plant that's not even open yet.
Twenty one hundred positions are open at companies supplying the plant, and 2,700 people have applied for the job since this past Sunday.
That shouldn't be, according to the National Association of Manufacturers. A recent report by NAM found that, quote, "90 percent of manufacturers report moderate to severe shortages of qualified production employees, including machinists, operators, craft workers, distributors and technicians."
Not everyone sees labor as the problem.
JARED BERNSTEIN, ECONOMIC POLICY INSTITUTE: Really, the problem with our manufacturing has very little to do with the skills of the workforce and much more to do with macroeconomic development and globalization that has tilted against that sector in a big way, not this week, not this quarter but for the last 10 years. TUCKER: First he notes that today's manufacturing workforce is twice as educated today as it's ever been. It's a fact of the workforce that is reflected with the changing nature of the workplace.
JEFFREY OWENS, PRES., ADVANCED TECH. SERVICES INC.: We're a believer that it's not hopeless and that the United States needs a strong manufacturing base. We have a lot of great people and a lot of investment in this country in manufacturing.
(END VIDEOTAPE)
TUCKER: Critics of current manufacturing policy point out that if you want to attract and keep a workforce, all you have to do is pay them and offer ongoing training unlike, Lou, companies such as Delphi which are currently attacking its workforce and offering 50 percent wage cuts.
DOBBS: Or higher, and in point of fact, the entire automobile industry in this country.
This is a remarkable statement for the NAM.
And I think we should be clear here.
We always invite our friends at the National Association of Manufacturers to join us when they come out with something even remotely outrageous. This one goes beyond that.
Where is the national association representative? We want -- we'd like to talk to them any time on this broadcast and make sure that they're getting a fair hearing on their views and their judgments.
TUCKER: Well, I assure you we gave them that effort today, Lou. Calls to the office were not returned.
DOBBS: And it's remarkable -- the last time we asked for the executive director of the NAM to join us. He agreed but pulled out at the last minute.
So it's hard to keep the marketplace of ideas vibrant if the National Association of Manufacturers doesn't believe in free markets -- and I'm sure they do. I hope that they will reconsider.
Bill Tucker, thank you.
It's an outrage.
That brings us to the subject of our poll.
Do you believe the National Association of Manufacturers claim that there are enough skilled -- that there are not enough skilled American candidates for manufacturing jobs in this country?
Cast your vote at loudobbs.com. We'll bring you the results here later in the broadcast. The World Trade Organization began a day -- its sixth day, global trade summit in Hong Kong today. Those talks are under way and protesters out in force. Farmers from developing countries clashing with Hong Kong police. They denounced WTO proposals to open up their country's agriculture markets to foreign competition.
The goal of these particular WTO talks is to lower or eliminate global trade barriers in agriculture, manufacturing and services, but deep division between particularly rich and poor nations could cause these talks to collapse. Our expectations are that it will simply be an understated result, as will be the expectations, by the end of this six-day period.
My guest tonight says despite these deep divisions at the WTO and China's flagrant manipulation of its currency, globalization and free trade are thriving. And he says it's the United States to blame for much of the trade problems with China in particular.
The "Washington Post" columnist Sebastian Mallaby joins us here tonight.
Sebastian, good to have you with us.
SEBASTIAN MALLABY, "WASHINGTON POST": Good to be with you, I think. Although I've been listening to all these people who pull out of your interviews and maybe they know something that I don't.
(LAUGHTER)
DOBBS: No, not all of these people. Actually just one, and that would be the head of the National Association of Manufacturers.
It turns out, Sebastian -- you need not worry, we start out in agreement.
I agree with you that the United States is to blame for idiotic trade policies and the results of those trade policies. The only difference is I think you and I will disagree on what those trade policies ought to be.
How can you say that all of this is so good for the United States when we've run 29 consecutive years of trade deficits?
MALLABY: Well, I think, you know, one example which I read about recently in the "Washington Post" was about Wal-Mart, which is a company which sort of, you know, symbolizes globalization, if you like. You know, it's costing some American jobs, it's also pushing prices down for U.S. consumers.
And when you look at those two effects and you try and figure out which of them matters more, the cost reductions for U.S. consumers are so unbelievably big. We're talking more than $200 billion a year just in cost savings because of the prices going down because of Wal-Mart.
This is sort of way bigger than food stamps or any other anti- poverty program that the federal government puts out there. And so the welfare benefits from these reduced prices as one example of what goes on with globalization are bigger than the wage suppression which you may also get.
DOBBS: So wage suppression which you may also get, as you point out, and if you -- would you agree that if it rises above $200 billion, then it would be a bad economic bargain on a macro level, not simply on a company level?
MALLABY: Sure.
I mean, if trade destroyed more wealth than it created, it would be bad, yes.
DOBBS: So if we look at the situation where we look at a deficit that's running at about $618 billion projected, and we're looking at as of right now a current account deficit that approaches $800 billion, rising at the rate of just about 20 percent a year, 1/12th of our economy, how in the world does that turn out to be a good thing if we're looking at a $4 trillion external trade debt?
MALLABY: Well, the question here is -- which is a difficult one to discuss -- but, you know, is the trade deficit...
DOBBS: We dare to be dull here.
MALLABY: All right. OK.
Is the trade deficit the right measure of whether we have the right -- OK, so basically it's the gap between savings and investment, if you want to get technical about this. And...
(CROSSTALK)
DOBBS: Well, savings and investment isn't all that technical.
MALLABY: All right.
So -- well, that's what's driving these appalling trade deficit numbers.
DOBBS: And so you don't think that idiotic trade policies have anything to do with it, something we call and certainly this administration and the previous call free trade that is anything but?
MALLABY: No, I don't.
DOBBS: Why not?
MALLABY: Because I think, you know, what creates a trade deficit is to do with how much a country is saving and how much it invests, and the gap between those things is by economic sort of rules the same as your current account deficits.
So the reason why it's gone up recently is you've had an enormous amount of saving and not much investment.
DOBBS: Because the United States has had an enormous amount of savings?
MALLABY: Because -- sorry, it's the other way around.
DOBBS: Yes, it is. Yes, it is.
But as you said, it's technical but one can follow along if one struggles.
MALLABY: Right.
DOBBS: The fact is that we have 29 consecutive years of trade deficits. We have a $4 trillion external trade debt. We have CEOs talking about good old American competitiveness and efficiency and productivity.
We have the National Association of Manufacturers, Sebastian, talking about we just -- yes, we're just a bunch of dumb Americans; we're not smart enough to work at manufacturing.
Meanwhile, two-thirds of all of our R&D dollars are going into manufacturing. It comprises just about three quarters of our exports. We're being outcompeted across the board in terms of technology. And everyone who said that we shouldn't be concerned about those 3 million manufacturing jobs we lost -- said, hey, don't worry about it because we're a technology economy, but in turn -- in point of fact, China exports more technology than we do.
Where are we going to get the bounce and level out these little problems?
MALLABY: There's plenty of stuff we should worry about, OK.
And we should worry about our education. We should worry about the fact that when I was in India two weeks ago, I was in one state, Tamil Nadu, which has a population of about 60 million people and in that one state the number of engineers has gone from about 4,000 graduates 20 years ago to 85,000 now. So it's a 20-fold increase in 20 years.
DOBBS: You and I agree on that. Absolutely.
(CROSSTALK)
MALLABY: And so there are plenty of things that we shouldn't be complacent about.
I just don't think that trade barriers are the right answer.
DOBBS: Well, who said anything about trade barriers?
MALLABY: OK.
So when you're saying the WTO, you have concerns about that agreement...
(CROSSTALK) DOBBS: Well, the reason I'm concerned about the WTO -- Sebastian, I'm not concerned about barriers.
I'm just a little curious. The Doha Round -- we're just about 30 percent of the world economy. Do you know what percentage of the benefits in terms of national income will come to the United States over the course of the next 10 years if it were accepted as it is now?
MALLABY: I suspect quite a big percentage, actually.
DOBBS: Well, you would be wrong. It's about 5 percent. It's about 5 percent.
MALLABY: Which numbers are those?
I've looked at World Bank numbers, for example.
DOBBS: They are World Bank numbers, yes. Actually, they are.
And in point of fact, if you look at the other part of globalization, and the World Trade Organization, we got a little problem.
I'm not quite as sanguine as you, because the United States has 70 percent of the world's trade deficits and we're destroying middle- class American jobs every single day in this country by exporting them to cheap overseas labor markets.
You love India, I love India. But I'll tell you something, when we hear the Indian commerce minister start talking about U.S. subsidies while they're employing millions of children under the age of 12 for cents a week to work in their economy and to create exports into this economy so we can have cheap prices, I don't think it sounds very American -- maybe great global, but it ain't real American.
MALLABY: But if trade is the root of all evil, how do you expect...
DOBBS: I didn't say trade is the root of all evil. I said stupid trade policies are the root of this evil.
MALLABY: All right, but you seem to regard the current trade policies as stupid.
DOBBS: I consider them abysmally utterly ...
MALLABY: And in the last 10 years ...
DOBBS: ... and completely idiotic if you have any interest in the well-being of the country.
MALLABY: And in the last 12 years GDP per capital in the United States has gone up a lot, right?
DOBBS: It has indeed.
MALLABY: Good, so something is going right.
DOBBS: Well, yes, but that ...
MALLABY: In the post-war period, the last 60 years, prosperity has gone a lot. We had a problem not in the post-war period ...
DOBBS: Sebastian, this has been ...
MALLABY: ... we had a problem in the 1930s with protectionism.
DOBBS: Absolutely. And if we were in the '30s we would know how to deal with the issue in retrospect. Unfortunately, it's a little more difficult to look at these trade policies and come to anything other than the conclusion, after 29 years of trade deficits, that something isn't working quite right, at least I think so. I understand you disagree. It's good to have you here. Come back, we'll continue the conversation.
MALLABY: OK, thanks.
DOBBS: Sebastian Mallaby.
Still ahead, big changes at the top of the American Red Cross. And we'll tell you why the head of the organization has resigned.
A big court ruling that could go a long way in sealing the border with Mexico.
And turmoil at one of this country's oldest and most respected newspapers. I'll be talking with Ken Auletta, the author of a "New Yorker" magazine piece here next, and how the "New York Times" may have lost its way. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Tonight, one of the boldest and most important efforts to secure our nation's borders is under attack. Legislation designed to tighten border security and to stop employers from hiring illegal aliens is scheduled to go to the House floor this week.
But some Americans determined to keep our borders wide open are now working with the Mexican government to fight that legislation. Casey Wian reports.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): It's 171 pages but the goals of the Border Protection Anti-Terrorism and Illegal Immigration Control Act are fairly simple.
UNIDENTIFIED MALE: All those in favor will say aye.
WIAN: Congressman James Sensenbrenner's bill would provide more manpower and resources for the Border Patrol and other immigration authorities. It would increase penalties for illegal alien smuggling, repeated illegal entries, and crimes committed by illegal aliens. And it would require all employers to verify the legal status of their workers.
Now the government of Mexico is leading a lobbying effort against the border security measure. Mexican Foreign Relations Secretary Luis Derbez says his government is "trying with great force to prevent" the bill from passing.
He is asking business, community, and religious groups to make themselves heard. In Los Angeles, illegal alien advocates answered his call with inflammatory rhetoric distorting the bill's potential impact.
ANN MARIE TALLMAN, MALDEF: It basically legislates discrimination in our country.
DANIEL HUANG, ASIAN PACIFIC AMERICAN LEGAL CTR.: Racist immigration laws and policies systematically excluded Asians from entering the United States, for instance, the Chinese Exclusion Act of 1882. Today we see that same anti-immigrant sentiment.
REV. ERNESTO MEDINA, EPISCOPAL PROVOST: The term slave or slavery is one that now is difficult to say, and I dream of a time of when we, as a people together in this nation, will find the terms undocumented worker, or one who is illegal or whatever, comes out with the same kind of negative, you know, desire to put soap in one's mouth.
WIAN: Perhaps the soap should be reserved for those that equate border security and law enforcement with racism and slavery.
UNIDENTIFIED MALE: The committee stands adjourned.
WIAN: The bill has been approved by the House Judiciary Committee and is likely to go before the full House this week.
(on camera): Committee staffers expect a wave of amendments designed to weaken the Sensenbrenner bill, but they still expect it will pass despite the disinformation campaign.
Casey Wian, CNN, Los Angeles.
(END VIDEOTAPE)
DOBBS: A federal judge in California today rejected the latest legal challenge to the proposed construction of a border fence near San Diego. Environmental groups tried to challenge a decision by Homeland Security Secretary Michael Chertoff to waive environmental laws and build the fence. They claim the secretary had no authority to waive those laws but the judge disagreed.
The new fence will cover 14 miles of open border including the popular crossing point known as "Smugglers Gulch." And just a few minutes ago, environmentalists had vowed not to give up, saying they said they would once again appeal that ruling. That would leave only about 1,980 miles of border to fence.
Still ahead, a surprise proposal from the Canadian government that Americans might welcome.
And troubled times at the "New York Times." Ken Auletta joins me next about his new article in the "New Yorker" on the "New York Times." Stay with us.
(COMMERCIAL BREAK)
DOBBS: Coming up, Wolf Blitzer in "THE SITUATION ROOM." Wolf, what are you working on?
WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou.
We're working on a lot, including a 1,000 days at war from the first strikes to the fall of Saddam Hussein to an historic election. We'll take you there.
Plus CSI contamination -- how mystery DNA ended up on evidence in two states.
Also free fall survivor -- a pregnant woman whose parachute malfunctioned drops from the sky at 50 miles an hour and lands on her face. Find out how she lived to tell her incredible story. She is going to be joining us here in THE SITUATION ROOM.
All that coming up as well as "Brokeback Mountain," the controversial film about two cowboys in love, drawing critical acclaim and seven Golden Globe nominations. We'll take a closer look at some of the controversy.
All that, Lou, coming up right at the top of the hour.
DOBBS: Looking forward to it. Thank you, Wolf.
My guest tonight has written a fascinating new article on what has been a tumultuous time for the "New York Times" and its leadership. Ken Auletta wrote about several recent crises in the news room. Ken joins us now.
Good to have you, Ken.
KEN AULETTA, "THE NEW YORKER": Nice to be here.
DOBBS: Your article is riveting in that it -- amongst other things you point out that Judy Miller, her fate had been decided certainly before she or anyone else had done it by the publisher and the editor.
AULETTA: That was a surprise to me. That was actually one of the revelations I came across in reporting the story. They had met over the summer, talked, had email exchanges and decided, probably by late September, when Judy was still in jail that she could not come back to the paper.
DOBBS: It was extraordinary period also that the "New York Times" had a very public airing of its own tortured conflicts between the editor, between the editors, it's reporters, certainly, the most prominent there, Judith Miller, and the business itself all the while. The challenges you laid are remarkable.
Are these crises, are they scarring the institution forever?
AULETTA: I think the "New York Times" remains the greatest newspaper in the world by far.
DOBBS: I would agree with you.
AULETTA: And that was true yesterday, will be true tomorrow. I think The Times, like every institution, faces credibility problems. When you see polls showing that two-thirds of the American public doesn't believe the press or they think we're biased. That's a big number. That's a growing number.
DOBBS: It's also perhaps, if I may say, a very healthy way to look at the press, too, I think. It's perhaps over reaching burden that we would want to assume to always be credible. I think we should always want skepticism and challenge.
AULETTA: You don't want the public to be cynical about us just as you don't want us to be cynical about the people.
DOBBS: If we can work out that relationship in this wonderful craft, it would be great.
AULETTA: The larger issue, and the news room feels this, Judy Miller is something that bothers people at the "New York Times." She is an unpopular figure. They felt she made mistakes and they removed her from that.
DOBBS: As she points out, she acknowledged those mistakes.
AULETTA: Well --
DOBBS: Perhaps not in the forum that some would have had her.
AULETTA: Very late to acknowledge those mistakes, but in any case that's not the big issue that is bothering people at The Times.
What is bothering them and what is bothering people at newspapers across this country is the readership of newspapers is in decline. And we look at younger readers reading less than even the older readers are.
With the advent of things like the Internet, people in news rooms are worried and they should be worried. Where are our readers going to come from? Where are we going to get the $200 million a year to support this great institution.
DOBBS: A remarkable news room as you point out. It's management, let's begin with the publisher, Arthur Salzburger, Jr. the title of the article is "The Inheritance," a job he effectively did inherit. Is he one person as you pointed out going to be fired?
AULETTA: No. I think he has the support of the family. One of the things I found -- DOBBS: Who own 60 percent of the voting stock.
AULETTA: They own the voting stock. You attack Arthur Salzburger, you attack the family. That's the attitude I was able to detect.
DOBBS: The conflict, you point it out again, between Claude Abrams representing the "New York Times" and initially Judith Miller -- there seems to be a conflict there in terms of ideology. The "New York Times," as you and I both agree, the country's greatest newspaper. It is also a liberal newspaper.
In one -- as the editors notes and Judy's responses, her reporters, note, if you will, the conflict, ideologically, there's something systemic going on there as well that's remarkable.
AULETTA: I think that overstates it some. I mean there's no question that there's a tendency on the part of critics to blame Judy for the Iraq war. If you want to blame someone, you might want to start with the president. But nevertheless --
DOBBS: Let write that down. It wasn't Judy Miller or the "New York Times."
AULETTA: Or the "Times." A lot of reporters have made some of the same mistakes she made.
DOBBS: Absolutely.
AULETTA: Less prominently though. The issue is that there was an issue between Claude Abrams wanting to make this, and The Times wanting to make this a basic First Amendment issue. They on principle stood on that. I don't give them credit for not doing due diligence. Not knowing what her notes said.
DOBBS: And you put that squarely on the publisher and the editors. It's a fascinating article, Ken Auletta's "The Inheritance" in "The New Yorker." On newsstands near you everywhere, the best ones, any way.
Thanks, Ken.
DOBBS: Still ahead why the United States wants Canadians to be nice to this country. Stay with us. That story is next.
(COMMERCIAL BREAK)
The president and CEO of the American Red Cross, Marsha Evans, today announced her resignation. Evans and the entire Red Cross organization have been under severe criticism for the response to the Hurricane Katrina disaster.
The Red Cross criticized in part for its slow response to hard hit areas of the Gulf Coast and how it coordinated relief efforts with local organizations. And tonight an unusual appeal from our ambassador to Canada. The U.S. ambassador to Canada wants Canadians to be nice to Americans. The reason for the ambassador's appeal is that some Canadian politicians are criticizing the United States to win political points in their election campaign.
The ambassador did not name any Canadian politician in particular but Canadian Prime Minister Paul Martin has blasted the United States on a wide range of issues as his government received vote of no confidence because of a broad scandal.
Perhaps Martin should focus on the issues that matter directly to Canadians, but let me assure you, Canada, for most of us Americans we're delighted to watch another country with politicians that are just as fouled up as ours. Have at us, if you must.
The results of our poll tonight. Ninety-seven percent of you do not believe the National Association of Manufacturers claim that there are not enough skilled American candidates for manufacturing jobs in this country. We'll pass that on to the NAM.
Finally tonight our tribute to our troops serving this nation around the world. Every night on this broadcast we share thoughts from some of the men and women serving this nation far from home this holiday season.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Hi. This is First Sergeant Jennifer Elkins from Taiji, Iraq. I'd like to wish my family and friends in Concord, North Carolina, a Merry Christmas and Happy New Year. I love you, Kyle (ph).
UNIDENTIFIED MALE: Hi. I'm SK1 Jimmy Santiago, with Customs Papa (ph) here in Kuwait. I would like to wish everybody back home in the Bronx and back in Melbourne, Becky and her family, a very Merry Christmas and a Happy New Year.
UNIDENTIFIED MALE: Hello. My name is Evian Oliver (ph) and I'm a specialist in Tikrit, Iraq. I just want to say hello the everybody in Playing Field, New Jersey, and hello to my wife, Erica Harold (ph).
UNIDENTIFIED FEMALE: Hi, my name is Specialist Kristen Piatt (ph), serving in Baghdad, Iraq, and I just want to say Happy Holidays and Merry Christmas to all my family in Warwick, Rhode Island.
UNIDENTIFIED FEMALE: Hi, I'm First Lieutenant Gale Lohse (ph) here in sunny Kuwait. I'd like to say Merry Christmas and Happy New Years to my family and friends in Utica, New York.
UNIDENTIFIED MALE: Hi. my name is Corporal Lugo, here in Camp Fallujah, Iraq with CLV8 Alpha Company. I'd like to say Merry Christmas to my mom and dad back home in Lilafari (ph), New Jersey, and the rest of my family, Merry Christmas.
(END VIDEO CLIP) DOBBS: Merry Christmas and Happy Holidays to all our men and women in uniform. Thanks for being with us tonight.
For all of us here, good night from New York. THE SITUATION ROOM with Wolf Blitzer starts right now -- Wolf.
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