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Lou Dobbs Tonight

Strait of Hormuz Incident; Making Licenses Safer; Who is More Conservative

Aired January 11, 2008 - 19:00   ET


LOU DOBBS, CNN ANCHOR: Wolf, thank you. Tonight, tensions between the United States and Iran rising. The Navy today saying one of our warships fired warning shots in a confrontation with the Iranian Revolutionary Guard last month. We'll have all of that, all the day the news and much more straight ahead here tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Friday, January 11. Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody. New evidence tonight that tensions are rising between the United States and Iran, particularly in the Strait of Hormuz. The U.S. Navy saying for the first time one of our ships fired warning shots at an Iranian speedboat in the Strait of Hormuz last month. News of that incident follows the confrontation last weekend in which Iranian speedboats swarmed three of our warships. No shots were fired. The chairman of the Joint Chiefs, Admiral Michael Mullen, today declared the United States is prepared to meet that threat from Iran. Jimmy McIntyre has our report from the Pentagon. Jamie?

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Lou, today the Pentagon released a new unedited version of the 36-minute video, recounting the events of Sunday in which a U.S. Navy warship encountered those five Iranian speedboats. The video doesn't show a whole lot more than the highlights the Navy released maybe before. On this extended version you can hear the rising concern and mix of voices on the bridge of the USS Hopper as the U.S. sailors are querying the Iranian speedboats.

Near the end, there is an object floating in the Gulf that could possibly be one of those boxes the U.S. Navy says the Iranian boats dumped in front of its warships. The video doesn't answer another key question. Where and when was this ominous threat transmitted that says I'm coming at you, you will explode in a few minutes.

The U.S. Navy has said from the beginning, could not say for sure where that threat, which was heard over an open frequency came from. He said it could have been from Iranian patrol boats or a nearby ship or even a shore station. If the threat came from land though the chairman of the Joint Chiefs, Admiral Mike Mullen (ph) said today that it would suggest a higher degree of coordination.

And as you said, Admiral Mullen today talked about previous incidents and the Navy says that there have been other recent provocations including December 19th the amphibious assault ship, USS Whidbey Island (ph) and -- I'm sorry. The -- back on December 19th, the Whidbey Island (ph) was approaching the Strait of Hormuz. It was approached by Iranian speedboats.

It fired warning shots to make those boats back off. Just three days later, another U.S. warship, a frigate, the USS Carr (ph), also engaged some Iranian boats, but in that case only sounded its horn but made this latest incident more provocative was the number of boats, the objects in the water and the ominous warning that came over the radio. Lou?

DOBBS: And the good admiral thinks this is just fine the way it was handled? Allowing those boats to get that close to U.S. ships on the line?

MCINTYRE: He said don't mistake the restraint for the resolve of the U.S. military. Those commanding officers of the ship are prepared to protect their ships if they feel they're definitely under threat but they're also trying to not be needlessly provoked into a confrontation. Again, the USS Hopper was ready to unload its machine guns on those Iranian speedboats if they hadn't turned away and we saw in a previous incident the U.S. military did fire shots to tell the Iranians to back off.

DOBBS: That raises the next question, the degree to which we were informed of those shots being fired in that incident?

MCINTYRE: Well the Navy said that the incident was quote, "widely publicized", but I found that very few people knew about it. In fact, at the time it appeared the Navy didn't release the name of the ship involved. But clearly they felt that this latest incident was much more dangerous and what the Pentagon is saying universally is that this was a real threat. They took it real seriously and if the Iranians don't back off someone is going to get hurt.

DOBBS: Well it would seem to me that it would be appropriate to make the rules of engagement and passage in the straits or anywhere else for U.S. warships very clear, particularly to Iran which has been most threatening in that region. The concerns on the part of the admiral, the U.S. Navy, the general staff there, how high are they, and do they plan any kind of further announcement to those who might want to be provocative?

MCINTYRE: Well I think they feel like they've made a point with this latest incident, that the U.S. is about at the end of its patience with the way the Iranians are acting. They say it's highly irresponsible, highly provocative and, again, if it keeps up, there is going to be a confrontation.

DOBBS: All right. Thank you very much, Jamie McIntyre reporting from the Pentagon. Thank you, Jamie.

Iran's rising threats to American interests has become an issue in the presidential campaign, certainly among the Republican candidates. During last night's presidential debate in Myrtle Beach, South Carolina, Mike Huckabee declared that Iran should be prepared to see, as he put it, the gates of hell. Huckabee said the U.S. Navy was correct not to open fire on the boats last weekend, but he warned Iran not to target U.S. Navy ships or it will face dire consequences. Huckabee is intensifying his verbal attacks against his GOP rival Fred Thompson. Huckabee declared Thompson has finally woken up and realized there's a presidential race. For his part, Thompson accused Huckabee of supporting what he called liberal policies. Dana Bash reports from Myrtle Beach, South Carolina.


DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Hey Mike Huckabee, take that.

FRED THOMPSON (R), PRESIDENTIAL CANDIDATE: He believes we have an arrogant foreign policy and the tradition of blame America first.

BASH: And that.

THOMPSON: He believes in taxpayer-funded programs for illegals as he did in Arkansas.

BASH: Suddenly the man whose campaign has faltered from lack of energy perked up with a rapid fire attack. Huckabee's take...

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: You know Fred's finally waking up and kind of realizing there is a race going on. But after eight years in the Senate, I guess he has nothing to show for it other than he attended some meetings and cast some votes.

BASH: The reality, Huckabee has stolen Fred Thompson's conservative son of the south thunder and after Thompson's abysmal showing in Iowa, he skipped campaigning in New Hampshire and focused all his efforts in South Carolina. Thompson advisers liken it to General George Custer's last stand.

(on camera): Is this Thompson going Custer? Is this Custer's last stand for you?

THOMPSON: Oh Custer's last stand? No. It didn't work out too well for Custer.

BASH: It didn't?

THOMPSON: No. I've got another model that I'm going to follow.

BASH: And what is that?

THOMPSON: Wellington at Waterloo (ph).

BASH (voice-over): History buffs recall the Duke of Wellington defeated Napoleon at Waterloo (ph). Battlefield analogies aside, Thompson tells CNN he knows South Carolina's primary means everything.

(on camera): In many ways Fred Thompson stole the show here in Myrtle Beach delivering the kind of one-liners the actor supporters wished they'd heard a long time ago. The question now is whether it's too late.

Dana Bash, CNN, Myrtle Beach, South Carolina.


DOBBS: In the Democratic race former Senator John Edwards devoting nearly all of his energy to the primary battle in South Carolina. Edwards was born in South Carolina where he's presenting himself as the only candidate who can help that state recover from the collapse of its manufacturing industry. Dan Lothian has our report from Summerville, South Carolina.


JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: Thanks, guys. Good to see everybody.

DAN LOTHIAN, CNN CORRESPONDENT (voice-over): Former Senator John Edwards is riding a bus across his native South Carolina, and telling supporters that his roots give him a unique perspective on their struggles.

EDWARDS: You watch the mills close, the jobs leave. It's been devastating for middle-class families and it's something I take very personally, because my grandparents worked in the mills, my dad worked in the mills. Right here in South Carolina, and I know what it means when the mill closes and the jobs leave.

LOTHIAN: At a town hall meeting in Summerville Edwards promised to fight for the middle class, to help lift people out of poverty and push for universal health care. Something that earned him the endorsement of a Clinton, Darrell that is, this Clinton describes himself as a staunch Republican now putting party politics aside to support Edwards the Democrat.

EDWARDS: And you voted for me this time? OK. And, by the way, all the rest of you need to be telling your friends and neighbors, you're looking at the candidate who can get Republican votes, including right here in South Carolina.


DARRELL CLINTON, EDWARDS' SUPPORTER: He's a good mainstream politician looking out for the middle guy.


LOTHIAN: Edwards won South Carolina in 2004 and is trying to recapture that glory and boost his campaign. Since finishing third in New Hampshire, he spent more time than any of his Democratic opponents in South Carolina. Holding town hall meetings and visiting a food pantry. The former senator who says he's in the race for the long haul told me he's in good shape to compete here.

EDWARDS: We have plenty of money to run a serious campaign, and I think more important than that, I don't think voters are going to be controlled by money.


LOTHIAN: Edwards doesn't believe that the voters are paying any attention at all to the horse race. He thinks that they're looking at what he stands for, and he feels that quote -- he feels rather very optimistic about what will happen. Lou?

DOBBS: Dan, thank you very much. Dan Lothian reporting from South Carolina, and he will be focusing his energies on that campaign until the primary in about two weeks.

Coming up next, much more on the presidential campaign, also outrage after the federal government delays tough new rules for drivers' licenses. Jeanne Meserve will have the report for us -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Show me the money, Lou. That's what states are saying about new federal security requirements for drivers' licenses, the story coming up.

DOBBS: Thank you very much, Jeanne. We're looking forward to it.

Also more states killing programs to give away those drivers' licenses to illegal aliens, now only a few states still defying the will of the people on that issue. We'll have that report.

And Senator Hillary Clinton making a blatant attempt to win the support of the Latino vote in this election, hindering to socio- ethnocentric interests, we'll have a special report. Stay with us.


DOBBS: New concerns tonight that a critically important security measure to protect this country from terrorism will not be fully implemented. The federal government has delayed the Real I.D. Act, the law to make it more difficult for terrorists, illegal aliens and identity thieves to obtain drivers' licenses. The federal government now says it will be another nine years before that law takes full effect. Jeanne Meserve has our report.


MESERVE (voice-over): Fraudulent drivers' licenses helped the 9/11 hijackers board planes and carry out their deadly mission. A more secure driver's license is supposed to keep that from happening again.

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: We are eliminating through this measure maybe 99 percent of the risk, maybe 99.9 percent of the risk.

MESERVE: Birth certificate, pass ports, Social Security cards, utility bills, the kinds of documents you'll need to bring in person to your Department of Motor Vehicles to get or renew a license. The states will have to verify the documents are authentic, that you are who you say you are. But right now can't do that. DAVID QUAM, NATIONAL GOVERNORS ASSN.: We are going to have to rely on electronic databases a couple years down the road that don't currently exist.

MESERVE: The Department of Homeland Security has significantly reduced the cost of real I.D. to the states by phasing in the program. People under 50 will get the new secure licenses by 2014, but if you are over 50, not until 2017.

(on camera): Osama bin Laden is over 50.

CHERTOFF: I think if he shows up and tries to get on an airplane we're going to spot that.

MESERVE: Zawahiri is over is over 50 years old.

CHERTOFF: You know Jeanne, it's not perfect, but the essence of risk management is to look at populations and say, by and large, we're going to look at the people who have gotten on planes and hijacked them or have gotten on planes and detonated bombs. They are in the pool of 50 and under.

MESERVE (voice-over): 9/11 will be a distant memory by the time Real I.D. is fully implemented.

(on camera): Sixteen years after 9/11, 16 years. Is that too long?

TIM ROEMER, FMR. 9/11 COMMISSIONER: Well, it is too long when it's seven years after 9/11 let alone 16 years after 9/11.


MESERVE: Secretary Chertoff says he would have loved to have done this sooner but states have objected so strenuously, principally because of the cost that six of them have passed laws opting out of Real I.D. If these new rules don't satisfy them, if their licenses don't comply with Real I.D. their citizens will not be able to use their licenses to enter federal buildings or board planes. You can imagine, Lou, what chaos that will cause.

DOBBS: Well, yeah I can imagine the chaos, as you put it, Jeanne. What I can't imagine is the citizens of those states putting up with the ignorant governors and legislators that make it possible for those states to opt out. That's actually acting against the interests of the population and the residents of those states.

MESERVE: Well you can bet the Department of Homeland Security is hoping that the citizens of those states put pressure on their state legislatures and get those measures reversed and get them compliant with Real I.D. That's exactly one of the points they're trying to make today.

DOBBS: One of the things I also I guess I could hope for, while I'm wishing and hoping, Jeanne and if you will, wish and hope along with me, is that the next administration will have the firepower, the fire in its belly and the sense of responsibility to the American people to make certain that all security measures are acted upon quickly and in a timely fashion, rather than the way in which this administration has acted in the years since September 11th. Jeanne, thank you very much. Jeanne Meserve, we appreciate it.

Part of New York Governor Eliot Spitzer's argument, remember when he wanted to grant drivers' licenses to illegal aliens before then he was forced to abandon that plan? Well he said other states were moving in that direction so it was no problem for him to do so as well. Well Governor Spitzer was wrong in every instance. In fact, Governor Spitzer, take a look. Three out of the eight states that you cited that were offering licenses to illegal aliens have now ended that policy. Bill Tucker reports on those states retreating from that policy to issue drivers' licenses to illegal aliens.


BILL TUCKER, CNN CORRESPONDENT (voice-over): The retreat is underway by states who grant drivers' licenses to illegal aliens. There were eight states offering illegals illegal documents to drive but now there are five. Scratch the names of Oregon, Michigan and Hawaii from the list. Michigan's attorney general ruling that it would be inconsistent with federal law for the state of Michigan to effectively grant legal status to persons who under federal law are deemed to be unlawfully present.

In a ruling issued December 27th, the attorney general wrote quote, "only a resident of Michigan may be issued a Michigan's driver's license. A person who is not a lawful resident of the United States cannot be a resident of this state for purposes of obtaining a driver's license". In his ruling, Attorney General Cox also cited security concerns.

MICHAEL COX, MICHIGAN ATTORNEY GENERAL: Driver's license is much more than a car that allows you to get in an automobile. It allows you to close on a loan and a home. It allows you to get most importantly in airports and public transportation.

TUCKER: The state of Oregon too is reversing its policy and as of February 4th it will no longer issue drivers' licenses to illegal aliens. Hawaii insists that it does not give drivers' licenses to illegal aliens saying that it requires all applicants to have valid Social Security numbers.

NEIL BERRO, COALITION FOR A SECURE DRIVERS LICENSE: A tide is moving in this country towards stricter, higher standards and you're going to see the Democratic nominee and the Republican nominee they are going to understand from the electorate that the American people want this to happen.

TUCKER: In Maine there have been efforts to reverse the state's policy but the governor refuses despite the conviction by the U.S. attorney there of individuals who transported illegal aliens to Maine specifically to get them drivers' licenses.

(END VIDEOTAPE) TUCKER: That refusal also stands in the face of a recent investigation of active Maine drivers' licenses which found more than 5,700 drivers' licenses have been issued to drivers with the Social Security number 999-99-9999, and in addition to those, there are another 2,500 drivers' licenses issued to people with no Social Security number. Lou, clearly the logic of Michigan has yet to make it to Maine.

DOBBS: Well, I don't understand Maine which is supposedly a bastion of independent-minded Americans putting out for the DMV that would allow that number 999 on those Social Security -- on those drivers' licenses, others without it. I mean, are the people in Maine going put up with this nonsense...

TUCKER: There are efforts underway to try and repeal the policy but the governor and secretary of state, their answer, Lou, is what we've heard so many times, which is well you know this isn't our problem. The federal government created this problem.

DOBBS: They're just complete idiots. I mean let's be really honest. It may not be entirely their jurisdiction but those drivers' licenses speak to the very security of the residents of their state. These are irresponsible state officials. And I'd be delighted to have the governor join me here, the secretary of state to defend this kind of nonsense. And by the way, the fact that we're seeing these states withdraw that ridiculous policy in giving drivers' licenses to illegal aliens perhaps even the governor of Maine could wake up long enough to figure out it was not in the interest of his citizens. Perhaps the citizens of Maine could point it out to him. Is he a Democrat, a Republican, an -- what the heck is he?

TUCKER: He's a Democrat. And you'd think he might be persuaded by the convictions by the U.S. attorney up there, people trafficking in illegal aliens to Maine to get drivers' license.

DOBBS: I got to say, Americans, in any state in this union have got to get rid of governors who act like this. This is irresponsible. This is acting against the interests of the United States. I mean this is total dereliction and irresponsibility. I mean it is absurd, the Michigan attorney general, my gosh, he is pointing out what is the fundamental logic of the situation, and it seems to me at least the law. What in the world has happened in Michigan?

TUCKER: Well he is doing something that's very interesting because he takes an argument traditionally used by the open border illegal alien advocates, which is the states can't do anything because it's a federal jurisdiction. And he said you're right. It is a federal jurisdiction and under federal law these people are here illegally, so we can't confer legal status on them by giving them a state issued document.

DOBBS: And every attorney general in the union should be paying attention to it, and every illegal employer of illegal aliens in this country ought to be paying attention, because folks have had a belly full of this elitist nonsense coming from both political parties saying, go ahead, we're going to wink and nod and let you hire illegal aliens and confer the rights and benefits of citizenship on those who are here illegally. The attorney general of Michigan, Michael Cox is his name?

TUCKER: Michael Cox.

DOBBS: He is to be complimented for setting a foundation for a perspective on law that should be absolutely followed across this country.

TUCKER: Well you know and we should point out, he was just re- elected, so he's clearly in step with the mainstream people of Michigan, re-elected in 2006.

DOBBS: Yes and based on the polls I would say he is in perfect order with the American people and the will of majority here. Bill Tucker, thank you.

Well still ahead, Senator Clinton, well, she -- she apparently wants to pander to the pro-illegal alien open borders lobby. Wait until you hear what she is saying now, just when you thought she was succeeding too.

And another big city sues lenders over their role in what is a worsening mortgage and credit crisis in this country, but don't worry. The White House says everything's fine. Stay with us. We'll be right back.


DOBBS: Senator Clinton is on the west coast tonight. She's been campaigning in Nevada and California. She's made some rather provocative statements. Among them an obvious effort to win Latino votes while pandering to the pro-illegal alien open borders pro- amnesty lobby. Casey Wian reports now on what the senator had to say most recently.


CASEY WIAN, CNN CORRESPONDENT (voice-over): Senator Hillary Clinton visited a largely Latino neighborhood in Las Vegas yesterday, her campaign swung by a Mexican restaurant and when a man shouted out my wife is illegal, Senator Clinton responded, no woman is illegal, then paused before adding no man is illegal either. The senator's comments were picked up and reported by the "Las Vegas Review-Journal" and she repeated them today in Los Angeles.

HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: He said my wife, she is an illegal woman. I said there are no illegal women. There are only people. And I want to have comprehensive immigration reform that will help people.

WIAN: The words are similar or identical to those often displayed on signs and shouted at pro-amnesty demonstrations, an example of Clinton's aggressive effort to win Latino votes.

H. CLINTON: You know we're all connected and all of our problems are interconnected, and yet we treat them as though one is guacamole, one is chips. Well you know they may look different but they're all connected.

WIAN: At the home of an immigrant family a man asked Clinton what she would do for those who are working illegally in the United States. She talked about border security, employer sanctions and amnesty.

H. CLINTON: I also believe we've got to do more to help the people who are here, 12 million people here and I think we should have -- give people a chance to come out and -- and let, you know let them have the chance to come out of the shadows, so to speak, not afraid.

WIAN: In California, nearly 25 percent of eligible voters are Latino.


WIAN: Both Clinton and Barack Obama have picked up endorsements by key Latino leaders in western states and both remain firmly committed to amnesty for illegal aliens, though Hillary Clinton remains ahead of Barack Obama among Latinos in most polls, Lou.

DOBBS: Senator Clinton supporting comprehensive immigration reform to the bitter end. So does Barack Obama. The reality, I want to just point out again in a very non-partisan, absolutely objective way, the Congressional Budget Office and looking at the legislation supported by both of those senators and the entire flight of Democratic candidates and point of fact found that it would deal with only 25 percent of the issue, the problem of illegal immigration, would be, frankly in my judgment disastrous in terms of U.S. immigration policy.

It's a sham. And the fact that the senator and Senator Barack Obama continue to press it, I think creates a tremendous problem for the Democratic candidates in this presidential race.

WIAN: Absolutely. And it also belies the notion that many Latinos don't favor illegal alien amnesty. That's been proven before, as we've documented in elections in Arizona and they're forgetting about the independent voters who might vote Democrat, if not for their support of amnesty for illegal aliens, Lou.

DOBBS: And again, while the senators may be very comfortable in particular and the Democratic candidates in pandering to the left wing side of the Democratic Party, during the primary season, there may be some considerable discomfort in a general election for whomever succeeds at pandering best, if you will, within that primary system. Casey, thank you very much, Casey Wian from Los Angeles.

Let's take a look now at some of your thoughts. Sandra in Arizona said, "Dear Lou, illegal immigration seems to be an issue the Democrats and the mainstream media think they can ignore or minimize its importance. I believe they do so at their peril come Election Day." And as I just said, I agree with you. John in Oklahoma, "Lou, I'm a paint contractor and I wish I could be as vague as our presidential candidates when trying to convince a customer to use me for their job".

We'll have more of your thoughts here later in the broad caste. Each of you whose e-mail is read here receives a copy of my new book, "Independents Day: Awakening the American Spirit". The book that the Democrat Party, Republican Party, and most of their candidates don't want to you read. Certainly corporate America doesn't. Fool them, anyway.

Time now for our poll question -- does it make you suspicious of Senator Clinton's position on illegal immigration when she says things like quote, "no woman is illegal, and no man is illegal either"? Yes or no. Cast your vote at We'll have the results here later.

Coming up next, new poll numbers on the presidential election campaign. The first national poll since the New Hampshire primary, we'll results for you.

Also tonight, one measure of consumer confidence plummeting to a record low. Concerns about the economy, and a possible recession.

And another city has had a bellyful of the financial institutions responsible for much of the mortgage and credit crisis. We'll have that report as well. Stay with us. We're coming right back.


DOBBS: Across America our mortgage and housing crisis continues to takes a devastating toll. Now the mayor of Cleveland, Ohio, has decided to fight back. The city is suing at least 21 major investment banks accusing them of initiating a crisis that is ravaging his city. Christine Romans has our report.


CHRISTINE ROMANS, CNN CORRESPONDENT: Foreclosed, abandoned and condemned. Looted and stripped bare of value; windows, plumbing, siding, gutters down spouts, gone. This is how the sub prime mortgage crisis looks in one Cleveland neighborhood. City officials say foreclosures led to abandoned homes, and that led to crime. The city's working-class neighborhood saw it among the worst in the nation for foreclosures but Cleveland's mayor says no neighborhood is untouched and he blames powerful financial companies.

MAYOR FRANK JACKSON, CLEVELAND, OHIO: This foreclosure crisis was created by slick marketing and an exploitation of homeowners.

ROMANS: He compares the actions of these 21 companies to organized crime syndicates and is suing them, filing suit in Cuyahoga County Court charging they signed off on and even fueled shady sub prime deals. The city hopes to recover hundred of millions of dollars in damages for lost property tax revenue, the cost of demolishing abandoned homes and the fire and police costs in neighborhoods glided by foreclosure.

JACKSON: The cost of the city skyrocketed because of the damages that the investment firms have imported upon our community.

ROMANS: The city's director of law says Wall Street firms are in violation of Ohio public nuisance laws, the result, he says, of a multi-trillion dollar scheme of buying, selling and repackaging risky sub prime mortgages. 14,000 foreclosures in Cleveland over the past two years, the city says last year it demolished 1,000 abandoned homes.

Most of the 21 banks and lenders named in the suit did not respond to requests for comment. A handful offered an official, no comment. Citigroup denied the allegation and said it would "Contest the suit vigorously." J.P. Morgan says it shares the city's concern about foreclosures. "We work with borrowers whenever possible to keep them in their homes."


ROMANS: Two of the companies sued by Cleveland, Bank of America and Countrywide Financial, sued just as they announced that Bank of America will buy Countrywide for some $4 billion. That a bailout for the beleaguered mortgage lender that could result in a payout for Countrywide's embattled CEO. A payout, Lou, of at least $100 million.

DOBBS: Well, America's a great place to be an idiot CEO screwing up his or her company these days. It sin credible what is being put forward, and to have, to b school geniuses going through their black shoal structures and deciding what a -- what a man who has just screwed up a company is worth. I mean, it's an absurdly and to watch the supply siders and their little bias models try to suggest there's some sort of competitive market for the services of a man or woman who's that misguided in their guidance.

ROMANS: Congressman Barney Frank said he would encourage him to give some of that money that he's made over the past few years, some of the many, many millions he's made from this company to the nonprofits helping people foreclosed upon.

DOBBS: One would hope. Hope that the U.S. Chamber of Commerce and all of the brilliant folks on Wall Street who've earned those -- just billions of dollars in bonuses and who participated in the financial structure that permitted the sub prime mortgage crisis to first are established and the seeds of this destruction to take place. I mean, it's absurd.

ROMANS: In Cleveland, Lou, they knew in Cleveland this was the town that was in trouble in some of these neighborhoods; pockets of poverty. Not a place that according to the city, was good place to be pushing sub prime loans.

DOBBS: Well, it's going to be interesting to see how these suits go. Unfortunately, as we all know, it's going to be less than timely for many of the people who are going to lose their homes. Thanks, Christine Romans. Stock prices today plunged as the impact of the mortgage crisis continues to widen and to become far more apparent. The Dow Jones industrials down nearly 250 points today for the year already. The Dow Jones industrials have lost nearly 5%. The NASDAQ lost nearly 8% and the nation's largest financial firms are scheduled to report earnings beginning next week. Merrill Lynch is now expected to take a $15 billion hit as a result of bad investment decisions, or in the case of this mortgage crisis, and credit crisis. The reality is, they're turning to just about anyone overseas who can provide capital for their balance sheets.

Another financial institution suffering from our credit crisis is being bailed out by foreign investor for a second time. Published reports tonight that Citigroup has just completed a deal to secure $14 billion in new capital from China, Kuwait and elsewhere. Two months ago Abu Dhabi invested $7.5 billion in Citigroup.

New national polls out tonight show our economy is now the number one issue in the presidential race, as you might expect. And Bill Schneider now has more including the latest on voter preferences on the presidential candidates.




SCHNEIDER: And one for McCain.

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: But tonight we sure showed them what a comeback looks like!

SCHNEIDER: But only McCain gained support of republicans nationally, nearly tripling support. McCain is the clear republican front-runner with Huckabee second. Where's Rudy? He's waiting in the weeds. Make that the swamps, of Florida. Meanwhile, he's draining support.

In the democratic race there was one for Obama.


SCHNEIDER: And one for Clinton.

SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: Let's give America the kind of comeback that New Hampshire has just given me.

SCHNEIDER: Both winners gained support among democrats nationally. Obama six points. Clinton nine. Edwards won nothing and got nothing. Clinton has re-established herself as a democratic front-runner especially among democratic women. Since New Hampshire, the gender gap among democrats has become gigantic. The campaign has another front-runner. The economy is now the front running issue, rising above the war in Iraq, among democrats as well as republicans. Just in time for the Michigan primary.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: How Michigan is doing, how the manufacturing sector, how the domestic auto manufacturing sector is doing really is a pretty good bellwether of what bellwether of what the future holds for this country.

SCHNEIDER: That's not good news. Michigan's economy is reeling from job losses and the number of Americans who believe the whole country is in a recession is now over 60%.


SCHNEIDER: Independents can vote in the Michigan primary on Tuesday, because it's a state with no party registration. Well, they did in 2000, and that helped John McCain beat George Bush in Michigan in that primary and could help him again.

But here's something interesting. The democratic race in Michigan is between Hillary Clinton and uncommitted. All the other candidates took their names off the ballots because the early Michigan primary breaks party rules, and there's a campaign going on to try to persuade voters to vote uncommitted in a show of strength for change in this country. Lou?

DOBBS: In other words in support of Edwards and Obama.

SCHNEIDER: Edwards, Obama, or any of the other possibilities yes. That's the idea. They want people to vote uncommitted. It's really to show of anti-Clinton sentiment.

DOBBS: It's really pathetic, because Michigan is a state facing some of the most severe economic problems, contending with all of the challenges. Governor -- the entire state is dealing with issues. Because they moved their primary forward, the Democratic Party is stripped of the delegates for this primary. Half of delegates for the republican primary. I mean, this is -- this is contemptible partisan politics in the state of Michigan.

SCHNEIDER: Right. What they're depending on, pretty reliable. Whoever the party nominees are, go to the convention and say, the delegates from Michigan are welcomed to come to our convention. We're not going to write off the say the state of Michigan. It's a major state.

DOBBS: What do you mean not write it off they have just writ didn't off. Nothing but pabulum being pushed by partisan democrats trying to rationalize doing precisely what they say they're not going. They are stripping Michigan of its political influence in their convention.

SCHNEIDER: They are proposing to do that. What I'm saying is, they hope, their expecting, the nominees will have second thoughts.

DOBBS: Well, it's just about as ignorant a bunch of partisan politics on the part, by the way, of 9 republicans 50% less offensive and objectionable in the state of Michigan, because at least they're giving Michigan half of their delegates they normally would. I find it contemptible, Bill. I really do.

SCHNEIDER: And the same thing in Florida.

DOBBS: Yeah, peddles this nonsense.

SCHNEIDER: The same is happening in Florida. They are being stripped of all democratic delegates and half the republican delegates and I think we know that's a pretty important state.

DOBBS: A pretty important state and it's pretty clear. The democratic and republican it's parties represent in this country, more of the same, and when one of these candidates, as all of them are doing, whether republican or democrat, talking about change, they're not fooling anybody. This is the same old nonsense perpetrate bide both republicans and democrats. Bill, thank you very much. Bill Schneider.

Coming up here next, presidential candidates keep pushing a vague message of change over experience and over almost anything. And Senator Clinton's provocative comments on illegal immigration, well will it help or hurt her in this campaign? We'll have that assessment next. Stay with us. We're coming right back.


DOBBS: Three of my favorites to see what's happening in politics. No small task I assure you. Here in New York, Pulitzer Prize winning columnist New York Daily News Michael Goodwin, Miguel Perez, syndicated columnist, good to you have with us, in D.C., Jonathan Martin,, thank you to being with us.

Let's begin if I may with you, Michael. In Las Vegas yesterday, Senator Clinton said, no woman or man is illegal. What in the world is going on?

MICHAEL GOODWIN, NEW YORK DAILY NEWS: Well, she's unleashed, having won in New Hampshire. She's feeling her oats and I think she realizes she's in a real battle and so this is going to be, I think, a micro targeting for every ethnic group, every racial group, gender, whatever breakdown.

DOBBS: Do identity and group politics are with us.

GOODWIN: Absolutely. And what's interesting, of course, you didn't see that so much in New Hampshire and Iowa, essentially it's a white, Christian state. Now it's everything's gone.

DOBBS: As Jon Stewart said to me last night on his show, he said the diversity of cold white people in Iowa for the caucuses and colder white people in New Hampshire. So I suppose that reference -- I'm sorry. It struck me as amazingly funny. What do you make of this?

MIGUEL PEREZ, SYNDICATED COLUMNIST: For us minority voters, the fact that the primary system is set up this way is not very beneficial. We don't live Iowa and we don't live in New Hampshire. We have to wait, African Americans wait to get to South Carolina. Latinos have to wait to get involved in Nevada. Maybe now that it's finally getting to us. Yeah. They do have to appeal to certain groups. It's American history, Lou. It's happened throughout history that candidates go out and campaign among certain ethnic groups. That's what's happening now.

I don't approve of Hillary's pandering. I don't necessarily am not going to vote for her because she likes guacamole and chips.

DOBBS: She didn't say she liked it. A great national issues in terms of guacamole and chips. My god!

GOODWIN: Even that's not consistent with her position on immigration. She voted for the fence as a stand-alone vote. But that was then. She could swap.

PEREZ: That's unfortunate.

Jonathan, before -- your thoughts on this? Is pandering simply what we have to put up with from any candidate? What do you think?

JONATHAN MARTIN, POLITICO.COM: The Democratic Party is made of an amalgam of politicians. You get to places like South Carolina and like Nevada, ethnic differences come to the fore. And the fact is there are a lot of black votes that will be in the democratic primary in South Carolina. Hispanics in places like Nevada and so the issues naturally are going to change and, yes, Lou, pandering can rear its head.

DOBBS: And you know what? I think it's fun to examine when it does, because it really shows the rest of the country. It's still -- it's a nation that has some pretension to democracy and the majority will seek out representation this year. That's going to be the difference this year. I don't think a single one of these candidates, either in the republican party or in the democratic party figured out that there is an awakening on the part of independents, at least that they're not going to put up with anymore of this nonsense and there will be a rule in the majority or there will be something else, because this is not going to continue.

GOODWIN: I suspect what they're thinking, Lou, is I've got to get through the primaries first, one state at time and then worry about the general election if I'm fortunate enough to get there. Play it state by state, group by group.

DOBBS: Business as usual.

PEREZ: Unfortunately come off as complete hypocrites.

DOBBS: Because they are.

PEREZ: Trying to please everybody. That's unfortunate.

DOBBS: And -, Jonathan, my gosh. Racial tensions in the democratic race; Obama supporters taking comments made by both Bill and Hillary Clinton to be racist. What in the world is going on? MARTIN: Both Clintons in the closing day days of the New Hampshire prime primary referred to Obama's campaign as a fairy tale, and then Senator Clinton herself in an interview again, one day before the New Hampshire primary, said that, you know, Dr. King, could not have done what he did in the '60s without the action of President Johnson. These were sort of two comments taken by many in the black community as sort of indirect swipes and this is now being turned into an issue in the South Carolina primary. Like I mentioned, again, about half of the democratic primary will be comprised of black voters. Now, there's no question about it --

DOBBS: The other half, by the way, as our colleague Roland Martin reminded me, the other half will be white.

MARTIN: Yes, sir.

The fact is that the black votes are key in South Carolina and the Obama campaign obviously wants to get out as many blacks as possible, and when the Clintons give them fodder like this, naturally, they'll take advantage of it.

DOBBS: Is this really fodder? I mean who has been more sensitive, more representative of African American interests than Bill Clinton, for God's sake.

GOODWIN: Lou, this is political. Of course it's fodder and it's tactical too. I mean Obama wants to keep her on the defensive, you know maybe run up the score in South Carolina, make her spend more money, create doubts about her, because he hasn't won it yet. So he should win South Carolina, but that's what she did, what she's doing with women. That's what he's going to do with blacks.

PEREZ: Look, Obama doesn't need to be playing the race card here. It's very unfortunate this happened because the momentum is with him. In the African American community, a lot of them African Americans with Hillary realizing that this guy is winning electable and going with him. He doesn't need to play these games.

DOBBS: Is it going to cost him?

PEREZ: Absolutely. We shouldn't be playing the race card.

DOBBS: I don't think we should be playing the race card at any point. One of the things we're going to be talking about are the number of people playing the race card, including, of course, Al Sharpton, in a sports venue, for crying out loud. More with our panel here in a moment.

Coming up at the top of the hour, "OUT IN THE OPEN" and Rick Sanchez. Rick?

RICK SANCHEZ, CNN ANCHOR: Hey Lou, I have a camera set up right now at Las Vegas Airport. At any moment, O.J. Simpson's plane is going to land there. We're going to get some shots of him. It's unbelievable that I would even be reporting this, but it looks like Mr. Simpson may be going back to jail. We're going to explain to you why a judge is asking him to go back and do "splaining" as they say. Again, is he going to be embarrassed? Is he going to be angry? You'll see the reaction as it happens.

And then the latest on this breaking unbelievable story about a missing corporal, this marine who was pregnant. She's now been discovered to be dead. They've just found her body, and the real question is, for folks over at Camp Lejeune, if she told superiors that she had been raped by some man, why wasn't that man separated from her, put in the brig, something. A lot of questions to be asked and we'll try to ask those questions. Back to you.

DOBBS: Thank you, Rick. Rick Sanchez "OUT IN THE OPEN" next. More on the president's campaign here with our panel. Stay with us. We're coming right back.


DOBBS: We're back with Michael Goodwin, Miguel Perez, Jonathan Martin,, your paper Ben Smith reporting on the racial tensions now between Clinton and Obama's camps, Andrew Cuomo and this thing over a comment about shuck and jive, Al Sharpton taking on a Golf Channel anchor for a comment, an idiotic comment about Tiger Woods. What in the world is going on here?

MARTIN: Well, Cuomo's comment about shucking and jiving was not directed towards Obama but it's being interpreted as such by some who are Obama supporters. The fact --

DOBBS: Political convenience?

MARTIN: Of course. The Clintons and some of their allies here have said things that have not been the most sort of smartly worded shall I say and the Obama campaign, like every campaign looking for every advantage going into the South Carolina primary is jumping on these things.

DOBBS: Too much reporting in my opinion. I don't know what you think, Miguel, too much reporting in country. People swallow it up, regurgitate it on their front pages or their broadcasts without context accepting the idea that suddenly Al Sharpton is the arbiter of good taste and judgment, that we're going to put up with political tricks in the case of Andrew Cuomo who has an outstanding record both on race relations and having good judgment. By the way, shuck and jive? I'm not completely guaranteed, convinced, that that is an expression that is solely limited to one ethnic group in this country.

PEREZ: Petty little stuff we're hung up on here.

DOBBS: Absolutely.

PEREZ: The fact we have important issues we should be discussing in detail and getting all worked up over little comments is ridiculous. Absolutely.

GOODWIN: The danger is that this will become the campaign.

DOBBS: Absolutely.

GOODWIN: The will drive the campaign for two, three, four days back and forth, back and forth. People's reactions to it. Whether Clyburn in South Carolina now endorses Obama over Clinton's comment. That becomes the campaign. The big issues get lost.

DOBBS: Bill Richardson is out of the campaign. He was the aspiring Latino Hispanic candidate. He's filed himself as such. Your thoughts?

PEREZ: Interesting that he was waiting to get out west so that he could get some Hispanic votes in the primary and didn't even wait. I think Mr. Richardson has been running for vice president all along. I think he's on Hillary's camp all along. I think he will endorse Hillary very soon. I'm surprised he didn't do this in New Hampshire, because if they called on him and said, listen, we need you in New Hampshire because we need to win, he would have endorsed her then. I think it's going to happen any time now.

DOBBS: We're out of time. Would you agree that the idea that looking at the Hispanic vote in this country is monolithic, either democrat or republican is absolutely about certified?

PEREZ: No. We're all waiting for Bloomberg.

DOBBS: Gentlemen, thank you very much for being with us. Jonathan Martin,, New York Daily News Michael Goodwin, Miguel Perez, syndicated columnist. Always Miguel good to have you with us. Bloomberg, here you come.

Still ahead, more thoughts ant results of our poll and some of Jon Stewart's thoughts on our polling here. Stay with us. We'll be right back.