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Lou Dobbs Tonight

White House Proposes Wall Street Overhaul; Interview With Joseph Stiglitz

Aired March 31, 2008 - 19:00   ET


LOU DOBBS, CNN ANCHOR: Thank you, John.
The Bush administration claims to undertake the biggest overhaul of Wall Street regulation in generations, but is the plan for real? Does it hold any hope of relief? What's going on? We'll have the report.

And Nobel Prize winning economist and best selling author Joseph Stiglitz joins me. He says the time to act is now if we're to save this economy.

And a new wave of deadly violence from Mexican drug cartels erupting in northern Mexico now threatening the security of this country; we'll have all of that, all the day's news and much more straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Monday, March 31. Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody.

The media bias against Senator Clinton appears to be worsening tonight. Newspapers and other media across the country are giving an increasing voice to those calling for Senator Clinton to drop out of this race. Many of those pleas are originating with Obama supporters, but some of the calls are coming from columnists whose remarks are picked up by not only other newspapers, but television and the Internet as well.

Those voices in favor of Senator Obama say Senator Clinton should end her campaign for quote "the good of the party." And that a long campaign would quote "tear the party apart and ensure a Republican victory in November", but when it comes to the largest audiences the three nightly broadcast newscasts, the bias is seemingly most pronounced.

The nonpartisan Center for Media and Public Affairs has found that since last December, 83 percent of the reporting on Senator Obama was positive. Only 53 percent of the reporting on Senator Clinton was positive. Joining me now are Lanny Davis, former special counsel to former President Bill Clinton and adviser to the Hillary Clinton campaign, and Howard Kurtz, media critic for "The Washington Post" and host of CNN's "RELIABLE SOURCES" and Jim Zogby, a super delegate for none other than Senator Barack Obama. Good to have you with us. Howard, let me turn to you, first. I mean this is straight forward objective quantifiable research saying point blank the national media has blown it on this campaign.

HOWARD KURTZ, HOST, CNN'S RELIABLE SOURCES: Well those figures are a little dated though, because I think the coverage was starting to be a little more even until the last 10 days when you had this drum beat, as you just described, of columnists, commentators and about 700 cable news segments saying why is Hillary Clinton still in this race. She can't possibly win. I think that should be up to the voters to decide and I think that by making this topic (A) in the race, it means that her message can't get through on the economy or...


DOBBS: But, how many of these reports originating in national mainstream media have referred in headlines and subtitles and cut lines to the call for Senator Clinton's withdrawal without noting that those calls for withdrawal are originating exclusively and without exception with supporters of Senator Obama.

KURTZ: Well, some of the stories have made that clear apparently, for example, calling on her to bow out. But look at my newspaper, "The Washington Post", on Saturday front page headline, Clinton resist calls to drop out; Sunday front page headline, Clinton vows to stay in the race until convention, although that was an interview initiated by the senator saying that she is not getting out, but we won't let her talk about anything else.

DOBBS: Well and Howard Kurtz that is one of the reasons you are here is because you are a honest journalist and tough enough to say it straight up about your own news organization and I commend you for that. I know others do as well.

Let's turn to you, if I may, Lanny Davis, what is the Clinton campaign's response to this? You have watched this go on literally for months now, and there was a "Saturday Night Live", and the senator's reference during the debate to may we get you another pillow, Senator Obama, but this has got to be incredibly frustrating and you have got to do incredibly better.

LANNY DAVIS, FORMER SPECIAL COUNSEL TO BILL CLINTON: Well, let me just make two points, first of all the night before the New Hampshire primary most of the same pundits for saying she was gone because she was going to lose New Hampshire, after the South Carolina caucuses she was going to lose Super Tuesday and then a "Newsweek" columnist actually said she should drop out before Ohio and Texas. She continues to surprise everybody, because she is tough and she fights and she's not going to let them bully her out of this race.

The second point, very quickly, Lou, is the double standard. We had this tremendous media frenzy, because I believe she made an honest mistake where news reporters at the time described and this is from the "Charleston Gazette" at the time in Bosnia that there were snipers protecting the first lady in a combat zone. She made an honest mistake when she said she was fired upon and we had two days or three days of media frenzy.

Now in the last three days we had Barack Obama on the front page of "The Post" yesterday where he misrepresented his father coming over to America through the use of Kennedy money. We have him taking credit for an immigration bill which he actually according to Senator Dodd had very little to do with. We have him saying that he didn't know that Rezko was involved in wrongdoing...

DOBBS: Not to participate...

DAVIS: ... where is the media on...

DOBBS: Not to participate on the bias, Lanny. I think we get the point.

DAVIS: Double standard is my point.

DOBBS: Let me turn to Jim Zogby. At what point -- you certainly are the beneficiary of this imbalanced coverage if I can put it that way, how are you -- how is the campaign going to react to what is almost certainly going to be a I think probably an adjustment?

JAMES ZOGBY, SUPER DELEGATE SUPPORTING OBAMA: I'm not the beneficiary and I'm not going to go through talking points like Lanny did here. Let me make a point though. This game of politics always involves the ability to deal with media and to get your message through and control media and the Clinton people are not doing a good job.

They've tried. Lord knows they have tried. They tried with the Bosnia story. They blew it. They tried with the dream team story to demean and diminish the Obama campaign and they blew it there, too. They have tried to control the message and it has not worked frankly because it has not worked.

The calls for Senator Clinton to leave the race are based on that fact that numerically she simply cannot win and therefore all she can do is do what she is doing, which is try to beat up and draw some blood from...

DOBBS: Whoa, whoa, whoa...

ZOGBY: ... the front-runner...

DOBBS: Whoa, whoa, whoa...

ZOGBY: ... and make his candidacy in November...


DOBBS: Numerically you say she can't win.

ZOGBY: Right.

DOBBS: That is in point of fact with certain assumptions made true. ZOGBY: Right.

DOBBS: If you don't make those assumptions, it is not true.

ZOGBY: Well I know, but the assumptions...


ZOGBY: The assumptions they tried to make is she tried to go to Michigan and do a little bit of I think incitement of Michigan voters. It was really not a fair thing to do.


ZOGBY: The fact is that the party rules have been very clear she keeps trying to change...


DOBBS: ... away from those talking points, Jim. Now if I may.

ZOGBY: Yeah.

DOBBS: The point is that neither will Senator Obama have the number of delegates necessary to clinch the nomination.

ZOGBY: But the simple fact here...

DOBBS: But...

ZOGBY: ... is that being about 170 up in pledged delegates and the polling with the super delegates, I think it's pretty clear the direction this is going in and that is all the columnists are saying is that if you cannot win this...


ZOGBY: ... and the only way you can win it is to have a 1968 moment at the convention, then is it in the good of the Democratic Party that you go forward with this? That is the issue that's out there right now.


ZOGBY: But I don't think you can make the case...


ZOGBY: ... that it is not...

DOBBS: Jim, may I say this before I turn...

ZOGBY: Sure.

DOBBS: ... to Lanny Davis that I want to first of all applaud your campaign as Senator Obama for having the best, the best, the best interest of the party at heart in that altruistic motivation is I think persuasive to many. Lanny Davis?

DAVIS: Well, first of all, I went through a series of facts that can't be disputed about misstatements by Senator Obama which I assume were honest mistakes. The media jumped to the word lie when Senator Clinton made an honest mistake. I say there is a double standard and secondly, Jim, with all due respect, you changed what you said. You said she can't win from you are relying on assumptions.

The fact is if she wins the way she surprised in Ohio and Texas, she won Ohio big. We have to win Ohio to win the White House. If she wins Pennsylvania, most of the rest of the primaries and comes in that convention...


DAVIS: ... ahead of John McCain in the polls, then that convention is going to nominate her over Barack Obama, because we are not a suicide party.


DOBBS: OK, I'd like to turn now to Howard Kurtz. As we were watching these -- both Lanny and Jim duel a bit around the talking points and the positions of their campaign and understandably so, what is most troubling is, as you point out and acknowledge, the number of national news organizations, electronic as well as print, we should be absolutely clear, that have really taken on this idea that 10 more states should not vote, that it is perfectly rational that neither Michigan nor Florida should be enfranchised with the vote.

I mean, millions of Democratic voters have been disenfranchised as if there is no party preference whatsoever on the parties of the members of the DNC making these judgments. I mean, the national media is really messing this up a bit, don't you think?

KURTZ: Well, I don't have any problem, Lou, with journalists saying that it's an uphill struggle for Senator Clinton...


KURTZ: ... the delegate math works against her, but when you get into these scenarios, I'm reminding of the fact that many of these same geniuses in the press said last summer that John McCain was dead, he was toast, he was finished and it seems to me he came back and he is the Republican nominee, so there obviously is some chance that Senator Clinton could win this nomination and we ought not in this business say that she ought to get out or suggest that it's hopeless until the voters have spoken.

DOBBS: As an Independent, with no vested interest whatsoever in the Democratic or the Republican side here, I don't recall a race in which we have seen quite the transparent favoritism that we have seen in this campaign.

UNIDENTIFIED MALE: Oh, Lou, I don't think you can't say that. Look, I remember... DOBBS: Well, I was actually asking Howard Kurtz...


DOBBS: ... who is something of an expert on this sort of thing...


DOBBS: ... he can dismiss me if he wishes.

KURTZ: Well, it is certainly true that most of the liberal columnists are for Senator Obama and against Senator Clinton, but you know they are in the commentary business, that's OK.

DOBBS: Sure.

KURTZ: But when that -- when you marry that to news coverage that seems to make the only operative question right now, not who is going to win Pennsylvania or Indiana, but whether or not Hillary Clinton is hurting the party and being selfish by staying in the race, the effect is one that looks like we are not being entirely fair.

UNIDENTIFIED MALE: Could I just -- maybe Jim and I will agree on this. What the news coverage should do is report issues and what Lou you try to do on your program is the candidates debating issues. The personal character attacks by the Obama campaign against Hillary Clinton, the whole stampede to call her a liar rather than an honest mistake is diverting the American people's attention from the issues and that is why she won Ohio, it's why she's going to win Pennsylvania and all of the battleground states that you have to win as a Democrat, because she is right on the issues.

DOBBS: Jim Zogby, you get the last word.

ZOGBY: Well, again, Lanny, I think that that's fine from your point of view. The fact is that you guys have tried to do it all along and it simply hasn't succeeded. The nastiness of this campaign has been one I think that is difficult for all Democrats to deal with, which is why I think there are increasing calls that it just be over.

It is not disenfranchising people. What it is saying to Democrats is do we really need to continue to draw blood and beat up our candidates before November...

DOBBS: So it's a position of the Obama campaign...

UNIDENTIFIED MALE: ... should we not have a different campaign.

DOBBS: It's the position of the Obama campaign that you should simply foreclose...


DOBBS: Ten primaries...


DOBBS: ... and the voters in those states...

UNIDENTIFIED MALE: Not at all. Not at all.

DOBBS: ... and disenfranchise the voters...



UNIDENTIFIED MALE: This is what some Democrats are saying.



DOBBS: And disenfranchise the voters in Michigan and Florida.


DOBBS: Is that the position?

UNIDENTIFIED MALE: That is not the position of the campaign and Senator Obama himself said she ought to stay in if she wants to stay in. I'm saying this is what others have said, Senator Leahy has said and others have said...

DOBBS: And Senator Dodd and Senator Durbin...


DOBBS: ... and former Governor Bill Richardson...

UNIDENTIFIED MALE: And I would say...

DOBBS: ... or Governor Bill Richardson...

UNIDENTIFIED MALE: ... that the cases of Michigan and Florida need to be dealt with quite separately. They broke party rules. Frankly look I have a huge...

DOBBS: Jim, I've got to break...

UNIDENTIFIED MALE: ... constituency in Michigan. I don't want them disenfranchised, but this was not done right and Michigan unfortunately has to come up with a better way to do it than what they have done so far.

DOBBS: Jim Zogby, thank you very much.


DOBBS: Howard Kurtz, thank you very much, sir. Lanny Davis, thank you, sir.


DOBBS: And we want to hear from you on this question. Do you believe there is a media bias against Hillary Clinton and in favor of Barack Obama? We'd love to hear from you. Yes or no. We'll be bringing that -- those results at the end of the broadcast.

Up next a new plan to bring control to our financial markets, I think. Christine Romans will have our report. Christine?

CHRISTINE ROMANS, CNN CORRESPONDENT: The Treasury secretary offers a bold plan, Lou, to modernize financial market oversights, but he is careful not to call for more regulation of Wall Street. I will have that story.

DOBBS: That is sort of regulation. Christine, we look forward to your report.

And the housing and urban development secretary quits. He cites family reasons, but neglects to mention the fact that there are some FBI agents prowling around. We will have that story.

And the federal government and private industry failing to protect American consumers again, we will have the report and a great deal more straight ahead. Stay with us.


DOBBS: The Bush administration today announced what some are calling the most sweeping overhaul of financial regulation since the great depression, others however are somewhat skeptical. Treasury Secretary Henry Paulson today said his plan will take years to implement and as our Christine Romans now reports the changes will do absolutely nothing for struggling middle-class homeowners who need help and help now.


ROMANS (voice-over): From the treasury secretary a 218-page blueprint to modernize financial market regulation.

HENRY PAULSON, TREASURY SECRETARY: Government has a responsibility to make sure our financial system is regulated effectively. And in this area, we can do a better job.

ROMANS: A better job he says by streamlining an alphabet soup of financial regulators, merging the Securities and Exchange Commission with the Commodity Futures Trading Commission, folding the office of thrift supervision into the office of the comptroller of the currency, and creating a new federal commission to oversee mortgages. Paulson's blueprint is careful not to advocate more regulation, instead updating a creaky system.

PAULSON: I am not suggesting that more regulation is the answer or even that more effective regulation can prevent the (INAUDIBLE) of financial market stress that seem to occur every five to 10 years. ROMANS: Exactly why critics say the plan does not go far enough. The biggest complaint it would give the Fed oversight of but not necessarily new power over investment banks like Bear Stearns rescued by the Fed with taxpayer money.

DEAN BAKER, CTR. FOR ECON. AND POLICY RESEARCH: The investment banks are still basically off of the hook. It's clearly no intent to be more regulation, if anything they say in some ways it could be seen as less regulation.

ROMANS: And it certainly does not certainly address the crisis at hand today.

LAWRENCE SUMMERS, FORMER TREASURY SECRETARY: It is an exaggeration, but to some extent we have had the financial equivalent of Hurricane Katrina here and the right priority is not talking about the organization of regulation at this moment.

ROMANS: The proposal must be approved by Congress and could take years to become law.


ROMANS: Now this was not even designed to be a response to the current financial crisis, instead it's the result of a year-long process to promote quote, "U.S. competitiveness in the global marketplace" by getting outdated regulation out of the way, one critic calling it, Lou, reform written by the bankers.

DOBBS: And I call it just utter and complete deceit, incompetence, and basically balderdash. I mean, how these people can stand up in front of the American people and say this is reform or that it is meaningful or that it is appropriate at this time, and then say that it has nothing to do with the current crisis, and that he was -- Secretary Paulson thinking about this a year ago, at the very same time he was saying that this crisis that we have today originating out of the sub prime mortgage meltdown would not, would not fail to be contained. It is ridiculous.


ROMANS: Is it the investment banking, that you have more oversight there or consolidating too much power under the Fed or all of the above?

DOBBS: Well, the idea that he would say such a thing as we want to have more oversight over investment bankers but not more power over them. Oversight is meaningless without the ability to control or influence or in point of fact outright direct, it would seem to me, Mr. Paulson, but I am just perhaps not fully informed.

And the other part, I mean, the guy -- this man is starting to bother me a lot. You may have noticed that, Christine. The idea that he could suggest that it is neither quote, "fair or accurate to suggest that this is a problem of regulation", what in the world are these people drinking in Washington, D.C.? ROMANS: Well, there are a lot of folks who are critical of this plan but say that you still need to do something -- we do have -- we have a regulatory system...


ROMANS: ... that goes back to the Civil War...

DOBBS: These are...

ROMANS: ... hodgepodge of all the different agencies.

DOBBS: The idiots in this administration have said they don't want regulation. They've said there are free market tiers. They're all about free enterprise, free unfettered enterprise, well you know what? That is how we got here. The idea that we would move away from regulation over the course of the past two administrations, but accelerated to an unbelievable degree in this administration, this should be a recognition by Mr. Paulson and the others in this administration of arrogant incompetence that it is time to take seriously their responsibility to the American people.

ROMANS: Senator Chris Dodd today I think he called it a wild pitch. And you know, they are really pushing for some help for the homeowners, you know and as...

DOBBS: You mean the two million people...

ROMANS: Right.

DOBBS: ... in this country who are going to need that help.

ROMANS: Right. Absolutely.

DOBBS: But we...

ROMANS: It will take years, Lou. The last reform was what, I think it took eight years for the gram leap (ph). I mean I think...

DOBBS: Gram leap (ph)...

ROMANS: ... eight years or maybe even almost a decade to get that one through.

DOBBS: I think it was around eight years and that changed the course of world history, didn't it? Thank you very much. It gave the lobbyists just enough time to get in there...


ROMANS: ... you can imagine that the cottage industry and the lobbyists already over this one.

DOBBS: Well, I hope they end up where they belong. Thank you very much, Christine Romans. In the midst of our housing crisis, the Bush administration's top housing official today resigned. Housing and Urban Development Secretary Alphonso Jackson is by the way leaving for family reasons, as he put it. He is also under criminal investigation for giving lucrative government contracts to personal friends. Jackson today said he is resigning to spend more time, as I said, with his family. Louise Schiavone has the real story.


LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Amid historic turmoil in the nation's housing market, the secretary of housing and urban development has decided to quit.

ALPHONSO JACKSON, HUD SECRETARY: There comes a time when one must attend diligently to personal and family matters. Now is such a time for me.

SCHIAVONE: That following calls for Jackson's removal, the latest from two key senators stating quote, "we are deeply troubled by the growing number of allegations of impropriety on the part of HUD Secretary Alphonso Jackson. We call on you to immediately request Secretary Jackson's resignation", end quote.

At issue, charges of cronyism and falsehoods beginning with the 2006 speech by the HUD secretary in Dallas where he said he denied federal business to a contractor who said he didn't like George Bush. Jackson later said that was basically a lie, but his troubles didn't end there. Ethics watchdog group lawyer, Melanie Sloan.

MELANIE SLOAN, CITIZENS FOR RESPON. & ETHICS IN WASH.: There has been lots of controversies with Mr. Jackson getting involved in contracting issues.

SCHIAVONE: Questioned, HUD contracts in New Orleans and the Virgin Islands to Jackson friends, and accusation by the Philadelphia housing authority that Jackson threatened to withhold federal dollars after it rejected a deal with another friend, and questions from some members of Congress over whether he's been completely forthcoming with them.

SEN CHUCK SCHUMER (D), NEW YORK: Certainly, he leaves under a cloud and this is the worst kind of cloud to leave under in terms of how you did these contracts, not doing them on the up and up.

SCHIAVONE: HUD's inspector general found no quote, "direct evidence" of political favoritism, but did note that in many cases where Jackson interjected himself in a contract decision, the contractor had quote, "Democratic affiliations".


SCHIAVONE: Jackson spokesman at HUD said there will be no comment on the various accusations, but Lou critics say Secretary Jackson's tenure as HUD secretary has made it all the more remarkable by the fact that he's been almost invisible, and the administration's response to the housing crisis, sidelined perhaps by reported federal probes into his own problems. Lou?

DOBBS: Yes, it's not likely that many people could have even named the secretary of housing and urban development. Thank you very much, Louise Schiavone from Washington.

We'll have much more on our economy, proposed regulation of our financial system, the real cost of the war in Iraq and more. I'll be talking with Nobel Prize winning economist Joseph Stiglitz and the author of the "$3 Trillion War" next.

Also ahead, a rash of deadly violence along our border with Mexico, it is now claiming thousands of lives. We will have a special report.

And truckers across the country, many of them have had a belly full of this government's lack of industry regulation and support and oh yes, they are not too thrilled with that so-called energy policy either, they are fighting back. We will have their story and more as we continue.


DOBBS: Independent truckers are calling for a nationwide trucking strike tomorrow. They are fed up with skyrocketing gas prices and federal government refusal to pass legislation that would guarantee fuel surcharges go to the trucker, not the middleman. Bill Tucker has our report.


BILL TUCKER, CNN CORRESPONDENT (voice-over): Seventy percent of all the cargo shipped in America is shipped on a truck, according to the Owner-Operator Independent Drivers Association, a trade association representing truckers.

TODD SPENCER, OWNER-OP, INDEP. DRIVE. ASSN.: Obviously our country cannot survive without this mode of transportation. It certainly can't survive without the small business truckers that actually are the backbone of the industry.

TUCKER: And these truckers say they may be the backbone, but that their backs are being broken. That is why they say they will be among the truckers tomorrow who want to make a simple point.

JIMMY SEPULVEDA, INDEPENDENT TRUCKER: The point of this slowdown is going to be to just make America aware of what going on and how it is affecting us, the truck drivers and how it affects America, also.

JOHN HERMAN, INDEPENDENT TRUCKER: Our cost out here of truckers are going up and up and up and up. Our costs are going up and up and up and the revenue is not there to keep up with our high costs of what is going on out here.

TUCKER: Fuel prices are up almost 50 percent in the last 12 months, but fuel surcharges being added to shipping bills are added not by truckers. It is added by brokers who connect shippers and truckers. There is no law saying that the brokers have to pass that surcharge on to truckers. Some do, but many brokers don't, truckers say.

DAVID BOWMAN, INDEPENDENT TRUCKER: It is a struggle week by week just to be able to pay your bills and have food on the table.

TUCKER: In addition to not being legally required to pass on fuel charges, brokers do not have to reveal how much commission they are making for connecting the truckers to each load that is shipped. It is a lack of transparency the independent truckers say that hurts not only them, but the companies who ship as well.


TUCKER: Now several truckers I spoke with today used this simple analogy. Can you imagine using a real estate broker when you have no idea how much commission they are charging? And those truckers ask can you imagine using a broker who is charging 30 or 40 percent if you knew in fact that is what they charge. Then, Lou you...


DOBBS: Why are they putting up with that?

TUCKER: They are not. That is what this is about...


DOBBS: But why not create an exchange, I mean in this day of computer automation and efficiency, it looks like it would be a simple thing to put this together.

TUCKER: You would think that it would be, but the truckers are afraid -- the independent truckers are afraid to challenge the brokers because, Lou, if they do they are afraid they won't get loaded, then their business will be worse than it was before.

DOBBS: Well, somebody is going to have to do something, it seems, because this isn't just simply about the lack of an energy policy and an effective administration. This is, I mean this is going to the very essence of their business.


DOBBS: All right. And how are we going to know that they are striking tomorrow? Is it going to be just a slowdown? Are they pulling over to the side of the road?

TUCKER: Well, they're not striking because as you know, Lou, this is no union. This is a loosely organized group of people.

DOBBS: Right.

TUCKER: They're going to be pulling over, parking on the side of the road, not carrying any goods.

DOBBS: All right. Bill Tucker, thank you very much.

Let's take a look at some of your thoughts now. Marilyn in Illinois, "I don't see why we should bail out the banks or the homeowners, I don't hear anyone suggesting bailing out the people whose 401 (ks) tanked due to the falling stock market, do you?" Good point.

And Janet in Michigan writes, "President Bush willingly bailing out the fifth largest bank is just one more indication of who butters his bread. He's out of touch with Americans."

And Joan in Virginia writes, "Lou, you are a breath of fresh air. You hold both Democrats and Republicans accountable without bias. Keep holding their feet to the fire so the American people can get the truth."

We love hearing your thoughts. Send them to us at Each of you who's e-mail is read will receive a copy of my book, "Independence Day."

And please join me on the radio Monday through Friday for "The Lou Dobbs Show," a three-hour radio show. Each afternoon, Monday through Friday. Go to to find local listings for the show on the radio.

And up next, the media bias against Senator Clinton, in favor of Senator Obama. I'll be joined by three of the best political minds in the country.

And hundreds of people killed in a new wave of Mexican cartel violence near our southern border. We'll the report.

And Bush administration officials offering a plan to stop our economic crisis after it's finished. The plan falls woefully short of any expectation. I'll be joined by Nobel Prize winning economist Joseph Stiglitz who has a few ideas of his own and a brand new, important book, "The Three Trillion Dollar War."

Stay with us.


DOBBS: And the war in Iraq, six more of our troops have been killed by insurgents. Four soldiers were killed in explosions in Baghdad. A fifth soldier died of wounds he received last week. A Marine was killed by an explosion in Al Anbar province.

Thirty-eight of our troops have now been killed by insurgents this month. Four thousand 12 of our troops killed since the war began; 29,496 of our troops wounded, 13,189 of them seriously.

At least 300 people have been killed by drug cartel violence in Mexico this year. Mexican President Felipe Calderon has employed more than troops and federal agents to combat the bloodshed, but as Casey Wian reports now, a new wave of deadly violence erupted in northern Mexico that further threatens the security of Americans. (BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): A dead body surrounded by Mexican federal agents. A pistol lies in the dirt. More bodies in a vehicle. A bullet-riddled police car. Overhead, a soldier leans out of a helicopter, assault rifle ready. Seems like these are common throughout northern Mexico, just across the U.S. border.

UNIDENTIFIED FEMALE (through translator): There's a lot of fear. You can't be walking around at any time during the day, especially at night.

WIAN: On Friday, more than 2,000 Mexican troops stormed into Juarez, adjacent to El Paso, and confronted two drug cartels battling for control of the region.

UNIDENTIFIED MALE (through translator): Here lately we've seen a surge in narco-trafficking and violence, and murders, a lot higher than ever.

WIAN: Since January 200 people, including 20 law enforcement officers, have been killed in Juarez alone.

GUILLERMO PRIETO, SECRETARY OF SECURITY, CIUDAD JUAREZ (through translator): We can't hide the fact that the latest news is that the homicides have gone up like never before.

WIAN: The mayor of Juarez told CNN in Espanol that no innocent agents have been injured in the recent violence, but still, federal troops are setting up 10 military bases in Juarez and nearly four dozen mobile command posts.

The "Dallas Morning News" says that, according to U.S. and Mexican officials, drug cartels have recently held training camps in at least half a dozen places close to the U.S. border.

More than 5,000 people have been killed in the past two years by violence involving drug cartels. President Felipe Calderon has deployed tens of thousands of troops to battle narco-traffickers, while the U.S. Congress is considering a $1.4 billion military aid package to help fight Mexican drug cartels.


WIAN: About 100 miles from Juarez, the police chief of Paloma is no longer at his post. He fled to the United States two weeks ago after he received death threats and two deputies quit. He's now in Immigrations and Customs Enforcement Custody, and he's requesting asylum, Lou.

DOBBS: And all of the rather cute people who would suggest that $1.5 billion is either too much or too little to be supporting the Mexican government, we should point out that the drug trade across that border between the United States and Mexico amounts to somewhere between -- and these are the best estimates possible -- $25 and I've seen estimates as high as $100 billion a year.

What we do know is those who are not interested in securing the borders, they're interested therefore in not winning the war on drugs, because Mexico continues to be the principle source into the United States of methamphetamines, cocaine, marijuana and heroin.

It's inexcusable what this Congress, this president, this government permits at that border.

WIAN: It seems that it would be a very simple solution, Lou. You just secure the border, and then you stop the illegal movement of drugs and people north, the illegal movement of money and guns south. You take care of a lot of these problems. But the federal government doesn't seem to be in a hurry to do anything about it, Lou.

DOBBS: It was once easy enough to say that the Mexican government was corrupt on the issue of those drugs flowing across the border of the United States. It is becoming increasingly clear that at least four state governments and a federal government is corrupt in this war on drugs which this nation refuses to fight.

Casey, thank you very much. Casey Wian.

Coming up next, Nobel Prize winning economist Joseph Stiglitz says the day of reckoning has come for this administration, this Congress the rest of us where the economy is concerned. Another day is arriving when we get the price tag for the war in Iraq. I'll be joined by Nobel Prize winning economist and author Joseph Stiglitz, author of "The Three Trillion Dollar War."

And former president Bill Clinton tells his party to chill out. We'll have that story and more with three of the sharpest political minds in the nation. Stay with us.


DOBBS: The Bush administration today, as we have reported, called for what some say is the most sweeping overhaul of Wall Street regulations since the stock market crash of 1929. And Treasury Secretary Henry Paulson today said this new proposal isn't a response to the circumstances of the day. It's much more high blown than that.

Joseph Stiglitz is Nobel Prize winning economist, former chief economist at the World Bank, also, the coauthor of the new book, "Three Trillion Dollar War: The True Cost of the Iraq Conflict," and also professor of economics at Columbia University just to keep busy.

Good to have you with us.


DOBBS: Let's start with this proposal. I -- I have to tell you, I'm just shaking my head as I think about Henry Paulson, the treasury secretary, saying it's neither accurate nor fair to suggest that this is a failure of regulation, what's happening with our credit markets. STIGLITZ: He's wrong. It is a failure of regulation. In fact, one of the ironies of this whole discussion is they want to give more power to the Fed. The Fed, which flooded the market with liquidity, which did not put in regulations until after the crisis, in fact, closing the barn door after the horse is out. And now to reward them for their excellent job, they want to give them more power.

DOBBS: Is -- the arrogance and the incompetence of this administration. I have seen incompetent administrations, of course, before in various quarters, but it's so pervasive in this one.

But when talking about regulation, the idea that first of all this administration after of its nonsense about free markets unfettered and free trade, irrespective of cost, to be coming back to even talking about regulation, there is -- the lack of intellectual honesty here is just, to me, horrific.

STIGLITZ: Well, one aspect that I -- they bailed out Bear Stearns.

DOBBS: Right.

STIGLITZ: So you know, if you believe in free and unfettered markets, why not let it just collapse? Well, good reason. The good reason is that it might have led -- led to the collapse of the whole financial market.

But that's why you have regulation. You just don't build better hospitals. You try to stop the diseases before they lead you to be in the hospital.

DOBBS: There are so many, I guess, pandemics at large right now, whether it is in terms -- in terms of economic policy, foreign policy, domestic policy, as a result of this administration's misguided policies. But nothing more toxic, more corrosive than the war in Iraq where we've lost, as I just reported and as I report each night, more than 4,000 fatalities and almost 30,000 wounded, and more than 13,000 of them seriously.

But the economic costs, as well. It is, again, just simply tremendous, as you document in your new book, "The Three Trillion Dollar War."

STIGLITZ: It's hard to conceive...

DOBBS: Three trillion dollars.

STIGLITZ: It's hard to conceive of what that number means. But just to put a couple of examples, to put it in a frame, you know, a few years ago the administration said we have a fundamental problem with our Social Security system.

DOBBS: Right.

STIGLITZ: They wanted to scare the American people.

DOBBS: Right.

STIGLITZ: Well, in the last five years, we've created an unfunded entitlement...

DOBBS: Right.

STIGLITZ: ... for our veterans, the people who fought for us.

DOBBS: And many of whom -- whom will have to -- will require intensive care for the rest of their lives.

STIGLITZ: Yes. And we're talking about hundreds of billions of dollars.

DOBBS: Right.

STIGLITZ: This is the first war in America's history when, as we went to war we already had a deficit, the administration asked our young people to go fight, but didn't say we ought to have shared sacrifice. Instead, it gave a tax cut for the richest Americans.

DOBBS: Right.

STIGLITZ: And so every dollar of this war has been financed by borrowing; 40 percent of this has been borrowing from abroad. First time since the Revolutionary War.

DOBBS: For the first time since the Revolutionary War, as well, we have a -- we have a national debt of $9 trillion, a trade debt of $6 trillion. And that trade debt is rising faster, including the capital that we have to borrow to sustain ourselves. That -- that debt is rising faster than our national debt.

I mean, is there at any point at which we're going to come to terms with the devastating reality of our economy? Whether it's $53 trillion in unfunded liabilities or that $9 trillion national debt, a $6 trillion trade debt, and a $3 trillion war?

STIGLITZ: No. But the war is in one sense at the core of the problem we're facing today, because it's the one thing that is a single, you know, the single biggest piece.

Over $1 trillion of the amount of the increase in the debt, national debt, in the last five years, going forward, is due to the war alone. By 2017, the war, itself, will be responsible for over $2 trillion of the national debt.

DOBBS: And we don't have an election until November, I might point out. Joseph Stiglitz, it's always good to have you here.

STIGLITZ: Nice to be here.

DOBBS: Thanks.

The book is "The Three Trillion Dollar War."

Coming up at the top of the hour, "THE ELECTION CENTER" and Campbell Brown.

Campbell, what are you working on?

CAMPBELL BROWN, HOST, "THE ELECTION CENTER": Well, Lou, at the top of the hour, we've got Governor Mario Cuomo. He says that Barack Obama and Hillary Clinton need to stop fighting and team up or the Democrats are headed for disaster. He's got a plan, he says, to make it happen. And we're going to ask him if he honestly thinks that that is possible.

We're also going to look at whether John McCain really does need to reintroduce himself to voters as he's doing this week. And we're going to show you where the campaigns are spending all their millions of dollars. We have a hint. It has to do with "Wheel of Fortune."

That's all coming up, CNN's "ELECTION CENTER" at the top of the hour -- Lou.

DOBBS: Thank you, Campbell.

And a reminder to vote in our poll. The question is, do you believe there's a media bias against Senator Hillary Clinton and in favor of Senator Barack Obama? Yes or no? Cast your vote at We'll have the results now, coming up in just a few moments.

And next, I'll be talking with three of the brightest political thinkers in the country. Stay with us. We're coming right back.


DOBBS: Joining me now, Ed Rollins, Republican strategist, former campaign manager for Governor Mike Huckabee; and Michael Goodwin, Pulitzer Prize-winning columnist, "New York Daily News"; Robert Zimmerman, Democratic National Committeeman and super delegate in support of Senator Hillary Clinton. All three are contributors to LOU DOBBS TONIGHT.

Good to have you with us.

Let me ask you this question, if I may. Will the -- will the Republicans ever get a voice in this campaign? Because it's all Barack Obama and Hillary Clinton. Do you feel a little left out?

ED ROLLINS, REPUBLICAN STRATEGIST: No, I don't feel left out at all. I think it's a very important time for John McCain to go put his finance team together and to do the things that he's doing.

DOBBS: Does that mean time to go raise a heck of a lot of money?

ROLLINS: A heck of a lot of money. You know, the key thing is McCain wasn't ready to go full bore. The Democrats, obviously, have these great lists and these great donors. And my sense is they'll put them back together.

DOBBS: It's always been the party of the wealthy, the Democrats. ROLLINS: Well, they've become the party of the wealthy. I guess it -- I guess Republicans have been a lot more wealthy.

But I think the bottom line here in all of the rhetoric about the Democrats destroying themselves -- and I reminded my friend Robert tonight -- when Ronald Reagan and Ford clobbered each other in '76, 90 percent of the Republicans, which is a very high number, still voted for Ford. The Democrats will come back. We'll have a very competitive fall.

DOBBS: How did that election come out?

ROLLINS: A slight loss, but Ford would have lost by a much bigger margin.

DOBBS: And Robert, are you in any way -- are you inspired by Mr. Rollins' history lesson?

ROBERT ZIMMERMAN, DEMOCRATIC NATIONAL COMMITTEEMAN: Made me flinch a little bit. I mean, right now the Republicans are very glad to hold our coats while the Democrat candidates go at it with each other, but I don't think they're not too distressed about watching Barack Obama and Hillary Clinton dominate the news.

DOBBS: Well, let's listen to what former President Bill Clinton had to say about this issue, this very issue.


BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: We are strengthening the Democratic Party. Chill out. We're going to win this election if we just chill out and let everybody have their say.


DOBBS: Aren't you inspired?

ZIMMERMAN: Hey, I'm chilled out.

ROLLINS: You're cashed out.

ZIMMERMAN: I'm cashed out, too.

Well, the reality, though, of this is that you do have record high turnouts in the Democratic primaries, record high Democratic registration...

DOBBS: So you're feeling good about it?

ZIMMERMAN: I'm feeling good about the fact that this vote must go forward. I'm not feeling good about the dialogue that's taken place between the two camps.

DOBBS: I don't know if you had the opportunity to listen to Howard Kurtz from "The Washington Post," one of the most respected media watchdogs, if you will, saying clearly and unequivocally and the latest surveys showing that Senator Barack Obama has received by 83 to 53 percent the most favorable coverage on nightly news broadcasts. Your reaction? I know what Robert's will be.

MICHAEL GOODWIN, COLUMNIST, "NEW YORK DAILY NEWS": Well, I'm not surprised by the numbers, but I think something has changed, though, Lou, I think in the Democratic race.

Yes, Senator Clinton got -- got banged up over the Bosnia thing, which was stupid on her part. But I think that the Obama connection to Jeremiah Wright, I believe, is a kind of ticking time bomb for the whole party. And it may only happen in the general election, but I think Jeremiah Wright is a big, big train wreck for who is ever the Democratic nominee.

And Obama, every time he talks about it, I think he makes it worse. This thing that he would have quit the church, had Wright not retired. The problem is the most infamous remarks that Wright made were made five and six years ago. But Obama didn't talk about quitting the church until he got the heat in the campaign.

So there are a lot of issues about -- about Obama and Wright that I think are still to come out.

ROLLINS: Well, the first and foremost is how can you let your two daughters sit there and listen to this hatred, Sunday after Sunday. And I think that's certainly something that, if the Democrats don't use it against them, the Republicans certainly will use it against them in the fall.

DOBBS: Senator Clinton, she really made one statement about all of this, and that was it. It was on a Monday. She was trying to change -- I would assume she was trying to change. I have no certain firsthand knowledge -- but trying to change direction from the Bosnia misspeak.


DOBBS: Or lie or whatever you want to characterize it as. But will Senator Clinton, in your judgment, go after Senator Obama on this basis, because there really has been no test from her camp. And I don't know why, but at least intuitively, I feel that until she addresses it directly herself, it probably won't have much of a staying power until the general election.

ZIMMERMAN: Well, you know, that's a very interesting question. Realistically, Hillary Clinton cannot make this an issue without having the media gang up on her in terms of her running a negative campaign. The facts are out there. Reporters like Mike Tobin (ph) who put the facts before the American people, along with other journalists.

And Democrats will have to make their own judgment about Barack Obama. Clearly, his life does not reflect Reverend Wright's rhetoric, but his failure to separate himself clearly enough is the issue.

DOBBS: All right. This is something that's going to make Ed Rollins feel very, very good if we can put this up on, full screen, on the trips to Iraq of the three most relevant senators in this -- in this presidential campaign. Senator McCain enjoying quite an advantage over Senator Clinton and Senator Obama.

First, trips to Iraq, McCain -- are we going to have that or are we not? We're working on it, I'm told, reliably by our crack crew. Senator McCain, eight trips to Iraq. Three trips on the part of Senator Clinton. Senator Barack Obama has been to Iraq, once.

When we talk about experience, talk about the war and about the efficacy of policy...

ROLLINS: Well, no one can compete with McCain on experience. I mean, you have two junior senators who are arguing that their experience is every bit as important. McCain has been there for 25 years and he has the foreign policy experience.

The critical thing here is this is going to be about his experience or their experience or about the future. And I think that the Democrats get in the game, start talking about the future, maybe they have a chance.

If they don't it becomes about experience and who best to be the commander-in-chief, John McCain will win this thing in a close race.

DOBBS: I mean, that number -- those set of numbers, 8-3-1, those are powerful numbers to me. Maybe all single digits, but they're powerful numbers.

GOODWIN: Well, obviously, very important, particularly if things go well in Iraq. If things go badly in Iraq, then those numbers reverse and having been there and having been so associated with the war and the surge, as McCain is, then it works against him.

And I think he was lucky this week that events beyond his control, which is the Shia on Shia fighting, seems to have died down for now. That had the potential to become a disaster.

DOBBS: Robert Zimmerman -- Robert Zimmerman wants to point out the error of your ways in assessing the situation in Iraq. And we're going to do exactly that, but Mr. Zimmerman, when we come right back with our panel. Stay with us.


DOBBS: Well, Robert Zimmerman has got a view on this. What is it?

ZIMMERMAN: About Iraq? Let's go to Iraq.

DOBBS: Exactly.

ZIMMERMAN: OK. You know something? The American people have made their decision about the Iraq war. They recognize that, despite the heroism of our military, this war was a mistake. It was tragically and inexcusably executed. And so, no matter how John McCain wants to justify the surge, the fact that we're achieving success militarily is not the issue. The issue, Mike, is the fact that the Iraqi military is not achieving on their own, and the Iraqi government is not stepping up.

So this issue is going to be a major issue in the election, and it's going to ultimately show that, for all of McCain's trips to Iraq, he didn't learn a great deal.

DOBBS: Let me throw out this hypothetical. Let's assume, since always the hypotheticals go to how bad it gets. Let's assume the casualties, American casualties in Iraq, continue to be considerably more modest than they were a year ago, that there's at least a stability established, and maintained, through the election.

This is not going to work to benefit of either the Democratic candidates for the nomination.

ZIMMERMAN: It's going to work to the benefit of those people who recognize...

DOBBS: It will work to the benefit of the nation, but I don't think, politically it will work to the benefit of the candidates.

ZIMMERMAN: I don't agree. I don't agree, because the criminal negligence of the Bush administration, and John McCain...

DOBBS: OK, established -- wait a minute -- the criminal negligence of the Bush administration, I think we can say at least figuratively, accepted, stipulated, so be it. But this is John McCain.

ZIMMERMAN: And John McCain's defense of the surge, defense of the policy of staying the course is going to be I think ultimately work against his credibility in terms of having a viable foreign policy.

DOBBS: Is Senator Clinton going to have to come out against, strongly and directly, Reverend Wright for his anti-American stance, his relationship with Obama? Is she going to have to deal with the fact that, as, after all of the so-called misstatements by everyone, that Senator Obama has made another misstatement about his own father and the relationship to the Kennedys? Where does this go?

ZIMMERMAN: I'm not his spokesperson. I'm not any adviser to the campaign...

DOBBS: No, I...

ZIMMERMAN: But just speaking personally, she has gone on record with her point of view, and I must tell you, Lou...

DOBBS: OK, if you don't know the answer, just say so.

ZIMMERMAN: I'll give you the answer. Every Democrat knows the facts. Reverend Wright is not about race; it's about hate speech, and that should be more aggressively condemned by the Obama campaign.

DOBBS: How about the Clinton campaign?


ROLLINS: ... this is hate speech.

ZIMMERMAN: I just did.

ROLLINS: Very nice. If a Republican had done this, they'd be basically banished from politics in America. And I think to a certain extent, that's the double standard.

DOBBS: You get the last word.

GOODWIN: I think what Reverend Wright said is really so anti- American that it's a test of presidential leadership for any candidate in this year. And so, I think Senator Clinton has got to do it. Obama won't do it, Clinton must, and McCain surely will.

DOBBS: All right. Thank you very much, Robert Zimmerman. Thank you, sir. Michael Goodwin, thank you. Ed Rollins, as always, good to see you back from wherever it is...

ROLLINS: Thank you.

DOBBS: ... people with great leisure time and lots of money go.

And a big response to our poll tonight. The results: 73 percent of you say there is definitely a media bias against Senator Hillary Clinton, and one in favor of Barack Obama.

Thanks for being with us tonight. Good night from New York. "THE ELECTION CENTER" with Campbell Brown begins right now -- Campbell.