Return to Transcripts main page
Lou Dobbs Tonight
Dems Continue Battle Over Michigan and Florida; High Cost of Illegal Immigration; Are Deadly Imports Putting Profits over Safety?
Aired March 19, 2008 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: Wolf, I knew we would get here. Thank you very much.
Tonight Senator Clinton says it would be un-American to prevent Florida and Michigan delegates from taking part in the Democratic nomination. We'll have complete coverage and compelling new evidence tonight of the high cost of the federal government's failure to secure our borders and is the Bush administration's response to our worsening economic crisis too little, too late or too much? Three of the smartest economists and financial gurus join me.
We'll have all of that, all the day's news and a lot more straight ahead here tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Wednesday, March 19. Live from New York, Lou Dobbs.
DOBBS: Good evening, everybody.
Senator Clinton today declared it would be un-American to prevent a revote in the Florida and Michigan primaries. It is Senator Clinton's strongest challenge so far to Senator Obama and the Democratic National Committee. It's also a challenge to the party's national leadership of course.
We said the Florida and Michigan primaries in January simply don't count. Senator Obama today focused on the war in Iraq. He declared he's the only candidate that voters can trust to end the war.
We have extensive political coverage tonight beginning with Jessica Yellin in Washington, D.C.-- Jessica.
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Well, Lou, the deal to hold a revote in Michigan is on thin ice and the plan to have a redo in Florida is all but dead. Now Hillary Clinton is pointing her finger at Barack Obama.
(BEGIN VIDEOTAPE)
YELLIN (voice-over): Senator Clinton championing revotes in Michigan and Florida issues this challenge.
SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I call on Senator Obama to do the same. This is a crucial test. Does he mean what he says or not? YELLIN: Clinton's aides are going further, accusing the Obama campaign of snubbing those delegate-rich states, even disenfranchising voters. In an exclusive interview with Anderson Cooper, Barack Obama insists...
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: We have consistently said we'll play by whatever rules the DNC has laid out.
YELLIN: The DNC says the plan for a Michigan revote fits its rules. Now the Obama campaign is questioning the legality of a redo. They're concerned the plan would be paid for with private funds. That's a first and anyone who voted in the Republican primary would not be allowed to revote, even though Michigan is supposed to have an open primary.
There's self-interest on both sides of this fight. Obama tends to do better in open primaries. Clinton who is eager to narrow Obama's delegate lead has reason to believe she would gain most from a redo. She won the January 15 primary; Obama was not on the ballot. Michigan's Democratic leaders warn that without a new primary the fallout at the Democratic Convention will be ugly.
SEN. CARL LEVIN (D-MI), INTELLIGENCE COMMITTEE: Now we're in a situation where unless there's a new primary in Michigan, because of a flawed primary which took place before, we're going to have a floor fight or a credentials fight.
YELLIN: Senator Clinton says now it's all up to Barack Obama.
H. CLINTON: Today I'm urging him to match those words with actions to make sure the people of Michigan and Florida have a voice and a vote in this election.
(APPLAUSE)
YELLIN: But Obama is questioning Clinton's motives.
OBAMA: Senator Clinton I have to say on this has been completely disingenuous. As soon as she got in trouble politically and it looked like she would have no prospects of winning the nomination without having them count suddenly she's extraordinarily concerned with the voters there.
(END VIDEOTAPE)
YELLIN: Tonight, Lou, Clinton supporters have announced that they actually raise all the money needed to hold a Michigan revote. It was a last hurdle, but in a statement tonight an Obama spokesperson slams the Clinton campaign for trying to bankroll an election and they won't say if they even approve of the Michigan plan. The Legislature has until tomorrow to pass that plan or it is back to the drawing board -- Lou.
DOBBS: The Democratic Party, Jessica, is in a disastrous position, caught in simple disenfranchisement of voters in both Michigan and Florida, which is intolerable I would think to the people, the Democrats of both Florida and Michigan and at the same time, gripped in a mess over group and identity politics and race and gender.
YELLIN: Just about every party to this discussion agrees with you, Lou. They say this is an absolute mess. What they say is they have to figure out a way to work it out. Nobody has that solution.
DOBBS: Thank you very much, Jessica Yellin.
New efforts tonight to end the deadlock over the Florida primary. Florida has all but abandoned the idea of a revote, but two state senators have proposed a plan that would enable Florida Democrats to at least be seated at the party's convention. Isn't that wonderful?
John Zarrella has our report from Miami -- John.
JOHN ZARRELLA, CNN CORRESPONDENT: Yes, Lou, it would be wonderful if they could get it through and there are a lot of what-if ideas that are floating around out there, the latest coming from State Senate Minority Leader Steve Geller and his plan is this. Take Florida's 210 delegates, 50 percent of those delegates would be awarded based on the results of the January 29 primary, which Hillary Clinton won that beauty contest by 17 points.
Take the other 50 percent, split them 50/50 is one option or Geller says take them and divide them up proportionately based on how the two candidates finish in either the total delegate count from all the primaries or the total popular vote. Besides that, Geller then went on to issue a strong challenge to the two candidates.
(BEGIN VIDEO CLIP)
STEVE GELLER, FLORIDA STATE SENATE: Show your leadership. We want to be the president of the United States, we want to be able to negotiate with Hugo Chavez and Kim Jong-Il and the Republicans and I'm not putting them in the same -- but you want to be able to negotiate with everybody. Start by showing that you can negotiate with each other.
(END VIDEO CLIP)
ZARRELLA: Now today, the "Miami Herald" came out with its own poll of 600 registered Democrats and in that poll they found that 44 percent of those surveyed, Democrats said they wanted the results of the January 29 primary to stand, 44 percent. Twenty percent said they would like a revote.
What's even more interesting, and should be a big concern to the Democratic Party is that 24 percent of the people surveyed said that if Florida doesn't count, if it has no say, then they would be less likely to vote for either of the Democratic candidates come November -- Lou.
DOBBS: By the way, our poll here on this broadcast came to about three times that conclusion, about 75 percent saying that they should not support the Democratic candidate if they are disenfranchised. I think Steve Geller has got a wonderful idea, though John. I mean that really gets to it.
If these two candidates are not mature and intelligent and capable enough to come to a satisfactory conclusion for the voters of both Michigan and Florida, it's unlikely they would be able to represent well the interests of all of the people of this union.
ZARRELLA: You know and Lou, everybody has told us that the bottom line on this is that it's in the hands of the two candidates. If there's a resolution, certainly in Florida and probably as well in Michigan it's in the hands of the two candidates. No one else is going to be able to revolve this.
DOBBS: Obviously it appears that Senator Clinton would be the principle beneficiary of the revote, but Senator Obama it is unlikely will be able to withstand her call for a revote without paying a severe, severe political price for it. John, thank you very much. John Zarrella.
Senator Obama today declared he's the only presidential candidate who will end the war in Iraq. The senator said Clinton and McCain talk tough on national security, but he says they have policies that will make the country less secure. Senators Clinton and McCain immediately responded, blasting Obama's policy on Iraq.
Candy Crowley has our report from Charlotte, North Carolina.
(BEGIN VIDEOTAPE)
CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT (voice-over): The fifth anniversary of the war in Iraq finds Democrats wrestling with the central question that began their '08 campaign, who can best end the war, Hillary Clinton or Barack Obama?
OBAMA: So ask yourself, who do you trust to end the war? Someone who opposed the war from the beginning or someone who started opposing it when they started preparing a run for president.
CROWLEY: In Fayetteville, North Carolina not far from Fort Bragg, Obama argued a central tenet of his campaign for a job with no more awesome power than that of commander in chief. He argued that he had the judgment to be against the Iraq war from the beginning and Clinton did not. His argument now incorporates the presumptive Republican nominee.
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: We continue to be concerned about Iranian taking al Qaeda.
OBAMA: Just yesterday, we heard Senator McCain confuse Sunni and Shia, Iran and al Qaeda. Maybe that's why he voted to go to war with a country that had no al Qaeda ties. Maybe that's why he completely fails to understand that the war in Iraq has done more to embolden America's enemies than any strategic choice that we have made in decades.
CROWLEY: Criticized as naive by McCain, Clinton and George Bush, Obama took every opportunity to link the three together, arguing that their support of the war has made the country less safe.
OBAMA: We have a security gap when candidates say they will follow Osama bin Laden to the gates of hell but refuse to follow him where he actually is. What we need in our next commander in chief is not a stubborn refusal to acknowledge reality or empty rhetoric about 3:00 a.m. phone calls.
CROWLEY: A Clinton campaign spokesman shot back that Obama took practically no action to end the war before he started his White House run.
(END VIDEOTAPE)
CROWLEY: A McCain strategist said that a lot of Barack Obama's future sightings of what would happen if we pulled away from Iraq are based on foolish suppositions -- Lou.
DOBBS: I suppose at some point we in the media should come up with a non partisan quantifiable objective answer to what is being cast by each of these candidates in terms of Iraq policy.
CROWLEY: Absolutely.
DOBBS: Has any one of them expressed a vision for the Middle East for Iraq within the next five and ten years?
CROWLEY: Well you're right. At this point, it's been so Iraq- centric. Now Obama did have a fairly expensive speech today, but on the Middle East itself you're right, we have not seen a total vision about OK, where would we go, what would be U.S. policy going forth, how would we settle what has as you know been an ages-long disputes in the Middle East?
DOBBS: Thank you very much, Candy, as always for your terrific outstanding reporting. Candy Crowley.
Time now for our poll. The question is: Do you believe Florida and Michigan Democrats should vote Independent in the next election if they're disenfranchised?
Yes or no. Cast your vote at loudobbs.com. Those results upcoming, we'll freshen this vote tally for the benefit of the Democratic National Committee and both Senators Obama and Clinton.
Up next, Americans become more pessimistic about our economy. Christine Romans will have our report -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, despite hundreds of billions of dollars in defense spending, low interest rates, tax cuts, the economy is on the verge of a recession. What's going on -- Lou?
DOBBS: Well certainly it's a lack of stimulation. Christine, we look forward to your report.
Also, the federal government's failure to secure our borders is crippling the finances of state and local governments particularly the state of California, that special report upcoming.
And has Senator Obama shifted his position on border security and illegal immigration? We'll have that report as well, much more straight ahead. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Could it be that Senator Obama is shifting his position on illegal immigration and border security -- the senator campaigning in North Carolina today where he made these remarks on the issue.
(BEGIN VIDEO CLIP)
OBAMA: My position is, is that we need to get control of immigration. We have to have better control of our borders. We've got to have better surveillance, better border security. We have to crack down on employers who are purposely hiring undocumented workers because they don't want to pay American workers a decent wage.
(END VIDEO CLIP)
DOBBS: Well the senator went on to reiterate his support for the Dream Act, for comprehensive immigration reform, of course who hasn't changed that much. He's been a staunch supporter of amnesty all along. The senator also saying that building a fence along our border with Mexico is an issue that should be revisited, however and he does continue to support those driver's licenses for illegal aliens even though this country is moving (INAUDIBLE) a direction more states reducing and eliminating that privilege for illegal aliens.
California like many other states is dealing with the harsh realities of our economic crisis. The state is proposing deep cuts in education, health care, law enforcement to help reduce that deficit, as we reported to you here yesterday. A major cause of California's budget crisis is the federal government's failure to secure our borders and to enforce immigration law.
Casey Wian has our report.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): California Governor Arnold Schwarzenegger blames a drop in revenue from the sub prime mortgage and housing meltdowns for the state's $14.5 billion projected budget deficit next year.
GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: It's terrible to take money away from education and it is terrible to take money away from law enforcement and it is terrible to take money away from prisons and from health care, all of those things. But you can't give people more money than you have.
WIAN: Another reason the Golden State doesn't have enough money is on the other side of the balance sheet, massive spending on social services for illegal aliens totaling tens of billions of dollars, according to a December Congressional Budget Office study. California has about a quarter of the nation's estimated 12-plus million illegal aliens. They account for 27 percent of the state's population without health insurance. According to the Federation for American Immigration Reform, that cost taxpayers $1.4 billion in 2004. The group, which opposes illegal immigration and promotes border security estimates California spends another 1.4 billion on law enforcement for criminal illegal aliens.
FAIR says education is the largest expenditure, costing the state $7.7 billion. The Center for Immigration Studies, which supports a lower immigration policy, estimate 13 percent of California public school students are illegal aliens or their children.
STEVEN CAMAROTA, CTR. FOR IMMIGRATION STUDIES: California has other problems, not just illegal immigration, but illegal immigration is clearly a significant drain on the state budget. Illegal aliens do pay taxes, just not enough to come close to covering the education and health care and infrastructure costs associated with them.
WIAN: The Congressional Budget Office study concurs, finding the tax revenues that unauthorized immigrants generate for state and local governments do not offset the total costs of services provided to those immigrants.
(END VIDEOTAPE)
WIAN: Perhaps that's one reason Governor Schwarzenegger recently asked President Bush to extend the deployment of National Guard troops on the southern border, a request that has so far gone nowhere -- Lou.
DOBBS: As most requests of this administration on anything to do with border security that seems to be their favorite destination. That is nowhere.
Casey, thank you very much. Casey Wian.
A substance from communist China that may have led to 19 deaths in this country has finally been identified by the Food and Drug Administration. We'll have that report.
And our economic crisis worsens, working men and women and their families increasingly pessimistic. We'll have a special report.
Stay with us. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: The Food and Drug Administration now says it may have finally found the contaminant in the popular blood thinner Heparin. The agency says the ingredient was made in communist China and was not approved for use in the United States. It got here any way of course.
As Louise Schiavone reports, the ingredient may have caused more than a dozen deaths in the United States.
(BEGIN VIDEOTAPE) LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): A new twist on the investigation into the contaminated drug thinner Heparin. The Food and Drug Administration says it's identified a foreign substance, Hyper-Sulfated Chondroitin Sulfate (ph) very similar in molecular structure to the active ingredient in Baxter International's Heparin.
Could it have been introduced in China to stretch the product and profits? Its possible says a former FDA chief counsel.
PETER BARTON HUTT, FMR. FDA CHIEF COUNSEL: Here what you would be doing is selling Chondroitin, a very common cheap ingredient at Heparin prices. Adulteration has been going on for centuries.
SCHIAVONE: But with identification of the ingredient come even more questions. The Food and Drug Administration telling LOU DOBBS TONIGHT quote, "the FDA is continuing to investigate how the contaminant got into Heparin. We still have not linked the contaminant to the adverse events that have been reported", end quote.
The FDA is ruling nothing out, but the Chinese laboratory that makes the active ingredient and Wisconsin's scientific protein laboratories which assembles the final ingredients say the contaminant was not introduced by the Chinese laboratory. This former director of FDA import operations says the Chinese laboratory is still responsible for the product it ships.
CARL NIELSEN, FMR. FDA DIR. OF IMPORT OPERATIONS: The reality is, very little is known by FDA, but industry knows. Somebody has to know. Industry does work differently in countries like China; there can be a lot of gaps that pose product security issues.
SCHIAVONE: Baxter International acknowledged four distinct cases of allergic reactions to Heparin, but noted in a statement quote "At this point, neither Baxter nor the FDA has confirmed that allergic reactions to Baxter's Heparin have caused any fatalities".
(END VIDEOTAPE)
SCHIAVONE: But Baxter says it has no idea how the contaminant got into the product. The FDA believes that as many as 19 deaths may have been associated with the contaminated Heparin, whose active ingredient originated in Chinese factory that the FDA failed to inspect until after possible adverse effects were reported -- Lou.
DOBBS: Louise, thank you very much. Louise Schiavone from Washington.
Let's take a look at some of your thoughts now. Thousands of you e-mailing in about our poll question last night. That question we asked: Whether you would still attend your church if the United States was being cursed from the pulpit?
Gloria in South Carolina said: "There is no way I would attend a church with a minister spewing such hate as Reverend Wright. The church should be about uplifting people and preaching the word of God." Jimmy in Virginia: "If I heard those comments at my church, I would call for the pastor's resignation from the congregation before he had time to take a seat."
Steven in Georgia: "I don't get it, Lou. What do you want Barack Obama to do? Run his minister out of town on a rail? Why is it so important to you and others that he be ex-communicated from Obama's life? Are there no friends in your world whose views on some things you differ?"
I have no friends who would ever say, "God damn America."
And if there is a question you want answered here, I think it is if Senator Obama wants to be a leader, why did he not lead in the relationship with his pastor rather than be a meek follower in over a 20-year period in that church. That seems to me to be a relevant question.
We'll have more of your thoughts here later in the broadcast. Each of you whose e-mail is read here receives a copy of my book, "Independents Day: Awakening the American Spirit". Please join me on the radio Monday through Friday for "The Lou Dobbs Show", our new three-hour radio broadcast. Go to loudobbs.com to find local listings for "The Lou Dobbs Show" on the radio.
Up next, is the Bush administration's response to our economic crisis adequate? Is it too little? Is it too late or too much? Three of the best economists, financial analysts and experienced Wall Streeter's will join me.
And new concerns that the economic crisis is worse than the Bush administration has admitted, we'll have that special report.
And Detroit's controversial mayor, Kwame Kilpatrick, is still refusing to resign. I'll be talking about that and a lot of other things with three of the best political analysts in the country.
Stay with us. We're coming right back.
(COMMERCIAL BREAK)
DOBBS: President Bush's approval rating has now fallen to a new low according to our latest CNN poll. The CNN/Opinion Research Corporation poll shows President Bush with an approval rating of 31 percent. That compares to a rating of 71 percent at the beginning of the Iraq war five years ago today.
President Bush defended his conduct of this war over the past five years today. The president said at the Pentagon that a victory in Iraq is necessary to keep the U.S., the United States safe. He also said the surge has been successful and continued U.S. presence in Iraq is critical. The president also acknowledged the high cost in the lives of our troops.
Two more of our troops killed in Iraq, one in a vehicle accident, one in a shooting incident. Nineteen of our troops have been killed there so far this month; 3,992 of our troops killed since the war began; 29,451 of our troops wounded; 13,170 of them seriously.
The hundreds of billions of dollars spent in wartime generally acts as a stimulus for the economy. Five years into this war in Iraq, our economy may be in recession. Middle class Americans are without question losing their jobs, and many of them their homes. And a vast majority of us now say spending on the war is hurting our economy, not helping it.
Christine Romans has our report.
(BEGIN VIDEOTAPE)
ROMANS: War can be an economic machine, using vast amounts of steel, concrete and lumber to build operating bases, to say nothing of aircraft, vehicles, ammunition. But has something changed?
Five years after the Iraq war began, seven of ten Americans associate the war with economic weakness. Since 9/11, there have been historically low interest rates, tax cuts, incredible housing market wealth and hundreds of billions of dollars in defense spending. Yet ...
ALAN TONELSON, U.S. BUSINESS & INDUSTRIAL COUN.: Even though we have record economic stimulus, we have nothing close to record economic growth. That should tell us that the nation's engines of genuine wealth creation have been weakening, not strengthening over time.
ROMANS: Tonelson points to another factor, the defense budget as a percentage of the economy is falling because of growing liabilities for entitlements like Medicare and Social Security. Defense spending was one-third of the economy in World War II but shrank to around four percent of gross domestic product by 2007.
Lakshman Achutham says a housing market meltdown and high oil prices are overwhelming any economic boost from defense spending. And he says, the economy has changed.
LAKSHMAN ACHUTHAN, ECONOMIC CYCLE RESEARCH INST.: Nowadays all of that money isn't spent here. Just like every other multinationals in this world, the U.S. military is outsourcing and looking for the cheapest source of materials for its effort and that's not always in the U.S.
ROMANS: The air force, for example, recently awarded a $35 billion contract for aerial refueling tankers to the European parent of airbus and U.S. partner Northrup Grumman. Much of the plane will be built overseas but assembled in the U.S.
(END VIDEOTAPE)
ROMANS: The secretary of the Air Force recently testified to a long list of defense products paid for by taxpayers but made by foreign companies. That said, statistics hard to come by about how much of the defense spending stays in the domestic economy, how much goes to innovation here or research and development. What we do know is the nature of defense spending is changing, it's not the boost to the economy that it was in times past.
DOBBS: It's not necessarily domestic is the way to look at it.
Christine, thank you very much. Christine Romans.
Up next, help for our middle class homeowners struggling to avoid now foreclosure. Will it be enough? We'll hear from three leading authorities on our markets and economy.
And Democrats divided, they're battered. The battle over Michigan and Florida, Senator Clinton's challenge to Senator Obama and all of the talk about race and gender. All a big boost to the Democratic Party seeking the white house this year.
All of that, a great deal more, straight ahead. Stay with us.
(COMMERCIAL BREAK)
DOBBS: The federal government has stepped in to free up billions of dollars that should help struggling middle class families refinance their mortgages and to avoid foreclosure. The government loosening restrictions on government backed mortgage companies, Freddie Mac and Fannie Mae, a move that could inject up to $200 million into the mortgage crisis.
All of this coming a day after the fed slashed interest rates for a third time in as many months. Home foreclosures hit by the way a record high in the fourth quarter and were up 60 percent last month over a year ago. Mortgage delinquencies also hitting the highest levels in more than two decades and analysts predicting as many as two million homes could go into foreclosure this year.
Gasoline prices, here is some more good news. Gasoline prices remain of course near records highs of almost $3.30 a gallon. Despite the government's efforts to restore confidence, stock prices ended lower across the board, the Dow, the S&P and the NASDAQ all down more than two percent, giving back nearly three-fourths of yesterday's big interest rate rally.
Joining me is Michael Holland. He's the chairman of Holland and Company, founder of the Holland balance fund. Laura Tyson, professor at the Haas School of Business at the University of California Berkeley, former economic adviser to President Clintons, and Peter Morici, professor of economics at the Smith School Of Business at the University of Maryland.
Good to have you all with us.
Peter let many ask you to begin with. Is there any indication that the steps now taken, dramatic by historic standards, in terms of trying to deal with the foreclosure crisis, in trying to deal with the credit market crisis and the housing crisis, will they, in your judgment, succeed?
PROF. PETER MORICI, SMITH SCHOOL OF BUSINESS: I don't think they're anywhere near enough. We need a comprehensive program to help people who are down on their mortgages, something like the resolution trust corporation that we had during the savings and loan crisis.
The federal government is big on the banks. They've loaned them $600 billion to take bad paper off their books but yet Treasury Secretary Paulson is running around the country saying even if you owe more than your home is worth, you should pay your mortgage any way. It's totally absurd that a single mother with three kids and $100,000 mortgage is held to a higher standard than Citigroup.
DOBBS: Do you agree, Professor Tyson?
PROF. LAURA TYSON, HAAS SCHOOL OF BUSINESS: I do. I think we need much more help going directly to the households themselves. I think that's the only way to deal with getting the crisis handled, even for the large institutions. Because basically the core of this is the mortgage and the mortgage backed security market.
We have to find - we have to stabilize the asset values and right now we're in a declining property price foreclosure spiral, downward spiral. I think we need something, one of the proposals out there that Senator Dodd and Barney Frank suggest that really look at using something like an RTC is the way to go.
DOBBS: And Michael Holland, your thoughts in terms of the market? Have we seen the bottom of the market, have we seen the bottom in the housing crisis? Is the federal government acting appropriately and the Fed as well?
MICHAEL HOLLAND, CHAIRMAN, HOLLAND & COMPANY: The Fed for sure. Let's go to the easy part first. A year ago they were way behind the curve. They've done some smart and creative things. As many people have said before myself, they can't do it by themselves in terms of this particularly the housing thing.
They can't affect it in the way that Professor Tyson was talking about. What happened today was very significant. The Fannie Mae Freddy Mac announcement today, that's going to be $200 billion worth of funds put out there. This is a first step. I don't think it's a solution back to the professor's comments. Other parts of the government have picked up.
DOBBS: Let me say. I've been critical of the administration for failing to do that. I want to say, President Bush, to Henry Paulson of all people, congratulations, you're using your brains.
HOLLAND: Finally. Overdue.
TYSON: Finally.
DOBBS: It's nice to see the government that's been barely moving to act.
HOLLAND: At the end of the day here we actually had the dollar surprisingly strong. I think we had some things going on. We had the three-month treasure bill trading at a .56 percent yield. It hasn't been that since 1954. We have some crazy things going on indicate we may have seen the worst to your original question. DOBBS: We're looking for good news here on this economy in any direction. Michael Holland, thank you for that. We all appreciate it. We cheer you.
Peter, let me ask you this. Are we at the bottom? Is the homeowner likely to see appreciation in prices anytime soon? Are we going to see recession, onset of recession and if so what strength, what duration?
MORICI: I think that we're in a recession that will last longer than the average length of a recession which is eight months. It began in my mind, it started the Monday after black Friday. That's when retail sales stopped and they haven't picked up since.
I don't think we're going to get out of the mess until we get the New York banks operating properly again and that is get their ability to securitize mortgages again so that the banks can make mortgages not just the Fannie Mae. But unfortunately that requires the New York banks to clean up their act.
DOBBS: To be honest with you, I'm a little nervous about letting them do much of anything right now. I'm about to cheer on glass Steigel's return.
MORICI: I understand that. We may have to bust them up. We may have to segregate them out. These are the banks we have and they're not functioning as banks. They're prowling for other opportunities in other places.
DOBBS: I'm going to turn to Michael Holland in a minute to talk about the reasons that may be taking place.
Professor Tyson, your thoughts?
TYSON: My thoughts are, I agree with Peter. I think we're in a recession. I think that one of the tragic things a bout this recession is that it will turn out to be the case that since the end of World War II, we haven't had a recession start after the last one without a gain in median family income.
We've had a period of growth which your earlier part of your show was talking about which has not generated any gains for the average worker in the median family. If we're in another recession and we were in a recession in 2001, that's a terrible record.
Whatever the role of the New York City banks or the financial center banks, it seems to me at this point in time, that we need to have the government involved in a mechanism that helps the millions of potential foreclosures into some kind of restructuring situation. In order to do that, we are going have to get the government involved in the process.
That's why the idea of having the FHA bring buyers and sellers of the mortgage assets together at a guarantee and help in the restructuring is a creative idea. It's saying we will work with the banks and will price the assets. DOBBS: You've done all but the impossible. Suggest a combination of aggressiveness on the money center banks and getting the government back involved.
HOLLAND: She wants the best the Clinton administration had.
DOBBS: There is also the issue as to how many more of the Bear Stearns are there. There are rumors, as you know, on the street that a major firm --
HOLLAND: Back to the comment before. We're in a bear market. We are in a recession. We've probably seen, with Bear Stearns, seen the cataclysmic event that has always marked the bottom of previous cycles.
MORICI: I don't agree.
HOLLAND: I'm sure a lot of people don't. The reason, back to Lou's comment here Peter, is that the Federal Reserve has just said, with respect to Bear Stearns, there will be no more Bear Stearns. Our tax dollars and all the viewers are going see another Bear Stearns is not going to happen.
They have done something different than the British where they took over Northern Rock. They've said to JPMorgan. You take it over, we'll just guarantee it as taxpayers. Nationalized by proxy but it's done and they have stood there and said we will do that in the future. No more Bear Stearns.
DOBBS: I was going to give you the last question. I am going ask you, in terms of Bear Stearns, will there be another, Peter?
MORICI: I think there will be. There's another one out there. We don't know where it is. The New York banks have a lot of bad paper.
HOLLAND: As a taxpayer, you'll rue the day you said that.
DOBBS: As a taxpayer, there's much to rue.
TYSON: We need a policy to deal with some of the bad paper. We're letting them find the price of the bad paper. You can see that the price of the bad paper can go so low, it's less than the value of a building.
DOBBS: The good news is, homeowners facing foreclosure and difficult times, it's a populist impulse in the government. I want to give again credit to the Bush administration for taking action.
TYSON: I would like to give credit to the U.S. congress.
MORICI: Don't hold your breath, Lou.
DOBBS: Michael Holland, thank you very much. Appreciate it, all of you.
Coming up at the top of the hour, the "ELECTION CENTER" and Campbell Brown.
Campbell, tell us all about it.
CAMPBELL BROWN, CNN ANCHOR: Thanks Lou.
Well we've got a lot of reaction to Senator Obama's speech on racism including from the candidate himself. We're going to hear what he's saying today and lots more.
Plus, Tennessee's governor has a plan to end the Democrats delegate mess in one felt swoop. He's going to tell us about that.
And Russell Simmons stops by to talk about hip hop for votes. We'll see you at the top of the hour.
DOBBS: I accept. Thank you for doing that for me.
And a reminder to vote in our poll tonight. The question is: Do you believe Florida and Michigan Democrats should vote Independent in the next election if they are disenfranchised by their party?
Cast your vote at loudobbs.com. Yes or no, we'll have the results upcoming.
And up next, I'll be talking about race and politics in the race for the white house. And why Senator Obama says he's shaken up.
Also ahead, more on the state of confusion in the states of Michigan and Florida.
Stay with us. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: Detroit's mayor, Kwame Kilpatrick, still refusing to resign despite calls for him to step down despite and investigations of his conduct. The Detroit City Council approved a resolution yesterday calling for Kilpatrick to step down.
The resolution non binding and the mayor extraordinarily dismissive of it. Prosecutors will announce next week about whether perjury charges will be brought against him about having an affair with a member of his staff and his conduct that lead to the firing of two police officers and a wrongful firing suit that cost the city more than $6 million.
Joining us, New York Daily News columnist, Errol Louis, New York Bureau Chief Washington Post, Keith Richburg and syndicated columnist, Miguel Perez.
And the Democratic Party seems absolutely ensnarled in group and identity politics, gender and sex and race. What in the world -- how in the world with the party extricate itself from a mess?
MIGUEL PERREZ, SYNDICATED COLUMNIST: It's getting worse and worse. Not in terms of gender and race that are really dividing the party. It's only benefiting the republicans, McCain, you know fortunately for him, had a tremendous disadvantage because of the war, because of the economy.
DOBBS: Because of George W. Bush.
PEREZ: Because of George W. Bush. Because of the third term. We see him now gaining an advantage because the Democrats can't get their act together.
DOBBS: Errol, your thoughts?
ERROL LOUIS, NEW YORK DAILY NEWS: There's a good chance they'll reproduce the fratricide of 1972 or 1980, snatch defeat from the jaws of victory. When the voters were involved back in the last few weeks when you had a string of primaries and caucuses, you would have an outbreak of common sense. Force the pundits to admit they're wrong.
Now we're in a lull. I can't wait until April 22 just like the candidates because in between, you get all of the noise and nonsense. It has nothing to do with the very serious issues you were talking about today.
DOBBS: Keith?
KEITH RICHBURG, WASHINGTON POST: I have to agree with that. It's a testament to the Democratic Party that you have the opportunity for the first African-American and woman to be the nominees. It's unfair it's breaking apart the Democrats.
DOBBS: Who should have stepped aside?
LOUIS: Nobody thought Senator Obama was going to go anywhere when he first announced.
DOBBS: At least with Senator Clinton I'm sure but obviously he's taken the issue of race and brought to it a new level. Demonstrating that race is not so important and at the same time demonstrating, Miguel, that it is very important and just as potential divisive as ever in this country.
I've got to do one thing if I may. I've just got to read you one paragraph. I got a letter, from a woman named Linda, but I'm not going to say too much about her because I want to maintain her privacy without getting her permission.
She wrote me at about 12:30 this morning, this wonderfully long e-mail. The subject, shedding some light on anger in the black community and Linda lives in Greenbelt, Maryland. I won't say anymore about here. Amongst the many things she did is she opened a wonderful window for me into the issues of race, her own history, she is African-American, took me back in the letter with her through four generations.
We had an opportunity to talk today. I had the most marvelous conversation. And I got to thinking you know this Senator Obama thing which is nothing than made necessary and forced upon him by Reverend Wright and all of his ugliness.
I don't know what it's going to cost Senator Obama but Senator Obama, the price is worth it for the opportunity to talk to Linda. Positives happening. We can make them happen and people follow their hearts and allow us to have windows into one another's souls. Do you agree?
LOUIS: I think, it was the intended effect. There are moments. Think back to New Hampshire when Senator Clinton under a great deal of political pressure shed a tear or choked up or whatever and the general understanding was she found her voice, in her own words. I think that's what happened here.
Barack Obama was trying to take the easy way out. His back was against the wall, partly because of his own negligence. He had to do something. He did something dramatic. It may or may not pay off for him in the near term. He found his voice, we're all the better for it.
DOBBS: Let me read part of what she said. You asked why Senator Obama didn't leave the church. Perchance because the good he saw in Reverend Wright outweighed the not so nice. Perhaps what he got from Reverend Wright is something he could only get there. These thoughtful. I can't even tell you how thoughtful and wonderful the letter is.
PEREZ: I think the speech was wonderful. It does open a tremendous dialogue that we should take advantage of all of us, including Senator Clinton. It's good that he did it. What do you have to say about it? All of that is fine, but the fact still remains that the minister is still going to be a problem for Senator Obama, because he sat there.
Now we don't know the details of what he heard; might be too much to say he didn't get up and walk out of a service. That's fine. But why keep going back? Why did he keep going back when he knew he was going hear the anti-American rhetoric? He's an elected official. That's still a problem for me.
DOBBS: We have more issues to talk about, on this subject.
We'll be back in just a moment. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Errol Louis, Keith Richburg and Miguel Perez and I are back with you.
Keith, where does Obama go with this from here?
RICHBURG: As we've been talking about, I think he's done what he had to do. He gave the speech. There will still be questions out there. Do we have them as journalists or is the general public satisfied? Nobody brought up the issue of race today. It will be interesting to see how this plays out.
DOBBS: How many journalists where there?
RICHBURG: We weren't asking the questions.
DOBBS: We weren't asking the questions. Another problem for both this candidate and Senator Clinton; both of whom are far less accessible than Senator McCain. That will be interesting in the general election, as well.
Miguel, I know you've got some serious reservations about that speech.
PEREZ: Well, no I have reservations with "The New York Times" editorial saying that it's hard to imagine how he could have -- Obama could have handled this better. It takes very little imagination on the part of "The New York Times" because I can imagine how he could have done a better -- everybody can imagine how he could have --
DOBBS: What bothered you most about that speech?
PEREZ: Well -- what he may have heard, it's not clear now -- he said her heard some things that were controversial. We don't know what he heard. We know that the reverend has been saying some terrible things. So, did he sit there and listen to this?
DOBBS: Right. Well -- he did acknowledge that he had -- he changed the record a bit in terms of what he had heard and his reaction to it.
Florida and Michigan, Errol. Senator Clinton, it looks like she's on the side of the angels here saying she wants those voters enfranchised; she wants those delegates seated and she wants them to count.
LOUIS: Well --
DOBBS: With a little personal interest in it.
LOUIS: A slight personal interest.
It's easy to be on the side of the angels after you know the outcome of the contest, and you want to then set the rules. I think -- it doesn't look very good as far as the chances of those delegates making it in through a revote. They may split them down the middle, meaning that they'll essentially be of no use to either candidate in getting an advantage.
The delegations -- as you go back through the history about how this came about, they were warned and they were warned and their local political leadership really kind of threw them to the wolves.
DOBBS: And everybody knows they've got to demonstrate their registration, too. But you don't want to disenfranchise anybody at the polls, even when everybody knows the rules. You want to err on the other side if possible in this country. That's been our tradition. RICHBURG: Well -- there's another question about the disenfranchisement. And I love Michigan; it's my home state, I grew up there, went to University of Michigan. But they screwed this one up.
But -- because people were told this is --
DOBBS: Well, they're not alone.
RICHBURG: They're not -- because they were told that this a beauty contest, these votes don't count, think of all the people who didn't bother to go out and vote. Now those people are disenfranchised. So you can't say the people who voted are --
DOBBS: Do the four of us agree there should be a re-do here? I -- just out of curiosity. I strongly believe that the people in Michigan -- the Democrats in Michigan and in Florida should be enfranchised, be given another opportunity to vote on this race. Do we agree?
PEREZ: Re-doing the election is the only answer. When I hear Hillary Clinton saying, excuse me, but I should be given my -- in two unfair elections, she should get the delegates. Come on, that's crazy.
RICHBURG: Yes, that shouldn't count.
LOUIS: A re-do would just take them back to stalemate. So -- she's playing for time and she's trying to sort of make something happen for her campaign. But it's not clear that a re-vote would really change the outcome, which is one more reason to do it actually.
DOBBS: Well it would enfranchise those folks who deserve to be there.
(CROSSTALK)
DOBBS: Go Florida; go Michigan.
Thank you very much, Errol.
Thank you very much, Keith.
Thank you very much, Miguel.
Appreciate it.
And the results of our poll -- 67 percent of you say Florida and Michigan Democrats should vote Independent in the next election if they are disenfranchised.
Thanks for being with us tonight. Join us here tomorrow. Good night from New York.
The "ELECTION CENTER" with Campbell Brown begins now -- Campbell?
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.voxantshop.com
