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Lou Dobbs Tonight
Russia Expands its Invasion of Georgia; McCain Blasts Russia; Democrat Convention Conflict; Clinton Campaign Reveals Tactics; Foreign Governments Buying U.S. Assets
Aired August 11, 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: Thank you, John.
Tonight, Russia is expanding its invasion of Georgia as Moscow apparently is trying to recreate the Soviet empire. We'll have complete coverage and an assessment of whether or not the Soviet Union is being rebuilt.
Tonight, troubling new evidence of the harsh impact of our failed trade policies on our working men and women and families in this country. We'll have that report.
And tonight, new tensions between the Obama campaign and supporters of Senator Clinton two weeks before the Democratic National Convention. All of that, all the day's news and much more from an independent perspective, straight ahead here tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Monday, August 11th. Live from New York, Lou Dobbs.
DOBBS: Good evening, everybody.
Russia today opened a second front in its invasion of Georgia. Russian troops advancing into Georgia from the west as other Russian forces are pushing south toward the capital of Tbilisi. The Georgian president and Russia have in effect cut the country in half.
He said that just this afternoon. The Bush administration appearing powerless right now to do anything to stop the Russian aggression. President Bush tonight accused Russia of a dramatic and brutal escalation. This is Russia's largest use of force outside its border since the collapse of the Soviet Union in 1991.
In all of this, the question is where are the European powers, the United Kingdom, Germany, France? We have extensive coverage of the fighting and diplomacy now under way. We begin tonight with a report from Matthew Chance in Tbilisi.
(BEGIN VIDEOTAPE)
MATTHEW CHANCE, CNN SR. INTERNATIONAL CORRESPONDENT: Lou, some extremely serious developments in this escalating, this widening conflict between Georgia and Russia. President Bush has been sharply critical of the extent of Russia's military intervention. As Georgian forces beat a hasty retreat from a strategic town outside the main conflict zones. (BEGIN VIDEOTAPE)
CHANCE (voice-over): Georgia's tiny army is beating a rapid retreat. Routed by the Russians in South Ossetia, their tanks and battle weary troops are now falling back to the outskirts of the country's capital. The strategic town of Gori has been evacuated but Georgia's president says Tbilisi itself is not at risk.
If Tbilisi comes under threat, I will inform the residents 12 hours in advance, he told national television. At this stage, the enemy does not have the resources needed to occupy Tbilisi, he said. There have also been Russian advances in key western towns near Georgia's other breakaway flashpoint, Abkhazia. Russian military action outside the main conflict zones is provoking alarm.
UNIDENTIFIED MALE: (INAUDIBLE)
CHANCE: Georgia's president at least is clearly on edge, visiting heavily bombed Gori earlier in the day, there was a security alert.
(CROSSTALK)
CHANCE: Bodyguards pushed him to the ground, piling flak jackets on top of him. They apparently feared an air strike but no jets were seen or heard. Georgian troops have been in action in South Ossetia. Despite declaring a cease-fire, we witnessed their guns firing into the breakaway province.
(SHOTS)
CHANCE: North of its main town, Tskhinvali Russian troops and South Ossetian rebels came under attack on the main road to the Russian border. They were quick to return fire.
(SHOTS)
CHANCE: This is where the fighting began last Thursday, when Georgian forces moved against separatists inside Ossetia. Russia accuses Georgia of ethnic cleansing.
VLADIMIR PUTIN, RUSSIAN PRIME MINISTER (through translator): Saddam Hussein was hanged for having exterminated several Shiite villages, but the current Georgian rulers, who razed to the ground 10 Ossetian villages in one go, whose tanks rolled over children and old people, who burned civilians alive are being given protection.
CHANCE: And Russia's forces are on the offensive as Moscow flexes its military muscles. Georgia is in no real position to resist.
(on camera): After nearly a week of hostilities, there are still some dramatic battlefield developments taking place but still no sign of an end to the violence that has caused so much destruction and so much loss of life here -- Lou.
(END VIDEOTAPE)
DOBBS: Matthew Chance from Tbilisi. Russia tonight has again refused to comply with U.S. and international demands to accept any kind of cease-fire. In an interview with CNN Russia's deputy prime minister called Georgia an American satellite, the deputy prime minister said Russian troops are simply trying, in his words, to enforce peace.
(BEGIN VIDEO CLIP)
SERGEI IVANOV, RUSSIAN DEPUTY PRIME MINISTER: We have to be sure that Georgia signs an agreement with both South Ossetia and another breakaway province of Abkhazia, that military force will never be used again to settle down a political dispute.
(END VIDEO CLIP)
DOBBS: As the Russian deputy prime minister spoke, Russian troops were enforcing the peace, as he put it, with missiles, bombs and shells and pushing its forces deeper into Georgian territory. President Bush tonight using his strongest language so far to criticize Russia's aggression against Georgia.
President Bush said Russia may be trying to depose the Georgian president, but President Bush just back from Beijing, has no new ideas apparently on how to stop Russia nearly four days after Moscow launched its invasion. That invasion began Friday, when Russian tanks crossed the border into South Ossetia.
At the time, President Bush and his father, former President George H.W. Bush were in Beijing attending the dedication ceremony of the new U.S. Embassy and the opening of the Olympics. The White House issuing a statement calling on all parties to de-escalate the tension and avoid conflict, conflict which is now five days in the performance.
President Bush later met with Russian Prime Minister Vladimir Putin on two occasions to discuss the crisis. The White House calling those conversations candid and honest, but Russia refused to back down. In point of fact, Russia intensified its assault Saturday, launching air strikes on Georgia's capital and other towns and cities far outside the disputed regions.
President Bush, however, remaining busy at the Beijing Olympics. At one point, he even patted a U.S. volleyball player on her back. Later, President Bush made a new statement on Georgia, saying Georgia is a sovereign nation and its territorial integrity must be respected. Once again, Russia ignoring President Bush and advancing deeper into South Ossetia Sunday, forcing Georgian forces to withdraw from the region.
Meanwhile, President Bush still at the Olympics, meeting with U.S. and Chinese baseball players. The president again leaving it to his officials to issue another statement on his behalf. The White House said quote, "the president believes the Russian response has been disproportionate", end quote. The Russian response to that was quick and decisive. The Russian military opened a second front in the war, attacking Georgia from Abkhazia and President Bush tonight returning to the White House once again, calling upon Russia this afternoon to accept an immediate cease-fire and to withdraw from Georgia.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Russia has invaded a sovereign neighboring state and threatens a Democratic government elected by its people. Such an action is unacceptable in the 21st century.
(END VIDEO CLIP)
DOBBS: During those remarks, President Bush mistakenly said it appears there could be an effort under way to depose Russia's newly elected government. He intended, of course, to refer to Georgia, a mistake that reflects the president's fatigue after his long flight from Beijing back to Washington.
The State Department today said it has helped its 170 American citizens leave Georgia, as the fighting there is escalating. Those Americans left Georgia in two separate convoys. There are about 2,000 American citizens who live in Georgia. At the United Nations, U.S. Ambassador Zalmay Khalilzad is trying to convince the Security Council, which of course includes Russia as a permanent member, to pass a strong resolution demanding Russia end its aggression.
(BEGIN VIDEO CLIP)
ZALMAY KHALILZAD, U.S. AMB. TO IRAQ: The purpose is to put pressure on Russia, to expose what they are doing to all the members of the Security Council and to the world beyond that is watching what's happening in the Security Council and in Georgia and to incentivize Russia to accept a cease-fire or to be willing to pay increasing price if it does not.
(END VIDEO CLIP)
DOBBS: As Ambassador Khalilzad was speaking, pro-Georgia demonstrators were protesting outside the United Nations, calling on the Security Council to pass a tough resolution against Russia's actions.
On the campaign trail, Senator McCain is calling for a tough U.S. response to Russia's invasion of Georgia. Senator McCain said Moscow seems determined to overthrow the Georgian government. And meanwhile, Senator Obama, who is vacationing in Hawaii, tonight strongly criticized Russia's aggression.
The senator saying there's no possible justification for Russia's attacks. Ed Henry has our report.
(BEGIN VIDEOTAPE) ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): Appearing in Pennsylvania with Tom Ridge, the former homeland security secretary, John McCain tried to showcase his own foreign policy credentials.
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: The United States and its allies should continue efforts to bring a resolution before the United Nations Security Council condemning Russian aggression.
HENRY: With Barack Obama vacationing in Hawaii, McCain has the stage to himself to try and show he has the experience to handle a crisis and claim he was ahead of the curve months ago, when he started denouncing Russian leader Vladimir Putin's anti-democratic moves.
MCCAIN: We must remind Russia's leaders that the benefits they enjoy from being part of the civilized world require their respect for the values, stability and peace of the world.
HENRY: Obama has been getting briefings on the situation in Georgia and spoke out Friday, though he was not quite as forceful in denouncing Russia.
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I wholeheartedly condemn the violation of Georgia's sovereignty. I think it is important at this point for all sides to show restraint and to stop this armed conflict.
HENRY: McCain's offensive harkens back to the 3:00 a.m. ad Hillary Clinton ran in the Democratic primaries to suggest Obama was not up to the job.
UNIDENTIFIED MALE, CAMPAIGN COMMERCIAL: It's 3:00 a.m. and your children are safe and asleep, but there's a phone in the White House and it's ringing. Who do you want answering the phone?
HENRY: The ad didn't work for Clinton, but the McCain camp thinks the issue may resonate more in the general election with Independent voters concerned about security. Though McCain's claim to have a handle on national security could be slightly undermined by mispronouncing the name of Georgian President Mikhail Saakashvili three times.
MCCAIN: Mikhail Saakashvili, President Saakashvili, President Saakashvili.
(END VIDEOTAPE)
HENRY: Now just in the last couple of hours, Senator Obama in Hawaii put out a new statement about the situation on the ground in Georgia. He said quote, "no matter how this conflict started, Russia has escalated it well beyond the dispute over South Ossetia and invaded another country. Russia has escalated its military campaign through strategic bombing and the movement of its ground forces into the heart of Georgia. There is no possible justification for these attacks", that from Senator Obama. But obviously, taking a step back, what a dramatic turn in U.S.- Russian relations when it started in 2001 for this administration, Mr. Bush saying that he had looked into Mr. Putin's eyes, saw into his soul, suggested warmth between the two nations. Now they appear on the brink of possibly of another Cold War, Lou.
DOBBS: Ed, is there any discussion, any expression of concern, even alarm, there among the staff and the White House that the United States intelligence did not have any apparent understanding or knowledge that Russia was about to take these actions with massive forces, including hundreds of tanks entering the disputed territory of South Ossetia, but now Georgia itself?
HENRY: Certainly concerned. It had to be one of the topics that was discussed. As soon as the president got back from China, he had an emergency national Security Council meeting in the Situation Room here at the White House. They must have spoken of that.
The president himself talked and referred to intelligence moving forward, suggesting that potentially the Russians were going to bomb a civilian airport in Tbilisi. But you're absolutely right, looking backward, you certainly have to wonder why the U.S. didn't see at least some of this coming, Lou.
DOBBS: Ed Henry, thank you very much -- reporting from the White House.
The United States is now airlifting Georgian troops from Iraq to Tbilisi so that they can join in the fight against the Russian forces. So far, U.S. transport aircraft have carried nearly 1,000 of those Georgian troops back to Tbilisi.
Two thousand Georgian troops are serving with our troops in Iraq. Georgia's contingent in Iraq is the third largest national coalition after the United States and Great Britain. Much more on Russia's invasion of Georgia here tonight and how the United States and Europe should respond. We'll have that.
And a new threat to unity in the Democratic Party just two weeks before the Democratic National Convention. Stay with us. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: Democratic leadership tonight bracing for conflict at the Democratic National Convention which begins two weeks from tonight. Hundreds of Senator Clinton's supporters want their candidate to be nominated and they are prepared to fight for that privilege. As Bill Schneider now reports, there is deep division within the Democratic Party as the convention draws near.
(BEGIN VIDEOTAPE)
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): Hillary Clinton will address the Democratic Convention Tuesday night on the 88th anniversary of women getting the right to vote. HILLARY RODHAM CLINTON (D-NY), FORMER PRESIDENTIAL CANDIDATE: We are one party. We share one vision.
SCHNEIDER: Sounds like she's playing good soldier, but some of her supporters may not be ready to lock arms and sing Kumbaya. There will be more than 10,000 reporters at the convention, and very little real news. Political conventions have become heavily scripted.
OBAMA: Our staffs are in communication with Senator Clinton's staffs, but I don't expect any problems.
SCHNEIDER: The media will be looking for conflict. One pro- Clinton group says it has filmed a television commercial for Senator Clinton that will run next week on cable and Denver television. Another pro-Clinton group is planning marches and rallies the day Clinton speaks.
What do they want? Senator Clinton's name placed in nomination, something she would have to sign off on. Plus speeches on behalf of her candidacy and a roll call vote. Over 1,600 delegates will be Clinton supporters.
UNIDENTIFIED MALE: Two hundred Clinton delegates is all it would take if they really wanted to be difficult to make a mess at the convention.
SCHNEIDER: Senator Clinton seemed to encourage them when she said:
H. CLINTON: I think that you know people want to feel like OK, it's a catharsis, we are here, we did it and then everybody get behind Senator Obama.
SCHNEIDER: A catharsis?
OBAMA: I don't think we are looking for catharsis. I think what we are looking for is energy and excitement about the prospects of changing this country...
SCHNEIDER: See? Conflict already.
(END VIDEOTAPE)
SCHNEIDER: Now, the Democratic platform includes a compromise on the health care issue, which could have provoked a very divisive debate at the convention. The draft platform embraces guaranteed health care for all Americans. A Clinton priority. But it doesn't require all Americans to purchase health insurance as Clinton wanted. Instead, it favors Obama's approach, requiring coverage for all children and making insurance more affordable for adults -- Lou.
DOBBS: As an ideal, as a goal, platform conflicts have not had a terrific history in conventions in either party of having any meaning whatsoever in subsequent months and years from their occurrence.
SCHNEIDER: What they do is they expose divisions. I remember deep division when Reagan challenged President Ford over detente. It just exposed the division in the party. But no one reads a platform after the convention.
DOBBS: How profound is this division, in your judgment, right now two weeks ahead of the convention, for the Democratic Party between Senator Obama supporters and those of Senator Clinton?
SCHNEIDER: I think Obama does have the support of most of Hillary Clinton's supporters. Something like 60, 70 percent, according to the polls. But there are some, according to a third, who are still holding out and they may never vote for Obama. Whether it's his economic policies, some people suspect racism, there could be many reasons, but a lot of her supporters just are not going with Obama.
DOBBS: Bill Schneider, our senior political analyst, we thank you.
SCHNEIDER: OK.
DOBBS: Well stunning revelations tonight from within the Clinton campaign. A new article in "The Atlantic Magazine" reveals a campaign strategy that targets Senator Obama's background and to use it against him in the campaign. In those e-mails, former Clinton strategist Mark Penn said Obama's quote "roots to basic American values are limited", end quote. Mary Snow has our report.
(BEGIN VIDEOTAPE)
MARY SNOW, CNN CORRESPONDENT (voice-over): A behind the scenes look at Hillary Clinton's fight for the Democratic nomination reveals turmoil and in-fighting. "The Atlantic Monthly" obtained hundreds of campaign e-mails and memos, including one by then Clinton senior strategist, Mark Penn.
In it he suggests Clinton use Obama's boyhood in Indonesia and Hawaii against him, saying that instead of showing diversity, it also exposes a strong weakness for him, his roots to basic American values and culture are at best limited. "I cannot imagine America electing a president during a time of war who is not at his center fundamentally American in his thinking in his values. How we could give some light to this contrast without turning negative."
JONATHAN MARTIN, POLITICO.COM: Her top representative suggesting that angle is striking. I mean these are the sort of things that you see in e-mails that are circulating about Obama. It's the sort of subterranean smear campaign against him, but you'd never see these things actually voiced by the candidate.
SNOW: Democratic strategist James Carville says there are at times what he termed extreme opinions thrown around in campaigns.
JAMES CARVILLE, CNN POLITICAL ANALYST: Had Senator Clinton followed Mark Penn's advice, it would have cost her much more angst and grief than it would have done her good.
SNOW: Is Obama's boyhood a theme that Republican Senator John McCain might use?
AMY HOLMES, CNN POLITICAL CONTRIBUTOR: I think it would be very dangerous for John McCain to try to be going after Barack Obama based on these themes of patriotism or who is more American. And we saw that when Hillary Clinton even attempted to do it, that the backlash was immediate and intense.
(END VIDEOTAPE)
SNOW: Now as for a response, a Clinton spokeswoman called the article old news. And as for that controversial memo suggesting Obama be portrayed as lacking American roots, the spokeswoman said everyone knows from the campaign she ran that Senator Clinton did not take that advice -- Lou.
DOBBS: Well it's actually more profound and emphatic than that, isn't it, Mary? She not only did not take that advice, one doesn't know that she even considered it, but we do know she fired him.
SNOW: That's right. But according to the timeline of these memos, she did not fire Mark Penn until much later on than this memo was written.
DOBBS: How much time?
SNOW: I don't have -- I don't want to be quoted exactly, but...
DOBBS: Well you are going to be because you're on the air.
SNOW: I'm on the air.
DOBBS: So we'll leave it at indeterminate amount of time.
SNOW: That's right.
DOBBS: Thank you very much, Mary. Mary Snow.
Well the state of Ohio tonight is suing an electronic voting machine maker after touch screen voting machines malfunctioned during the primary in March. Ohio Secretary of State Jennifer Brunner saying that she had filed suit against Premier Election Solutions, formerly Diebold. That lawsuit claiming the Premier machines malfunctioned in 11 of the 44 counties using them.
The Ohio lawsuit claims those machines dropped votes that were only recovered by election workers hours later. Just last week, Ohio Secretary of State ordered all counties using electronic voting machines to have paper ballots on hand. This is a trend that is growing all across the country.
In fact, 57 percent of this nation's registered voters live in counties that will be using paper ballots in November. And according to an Associated Press survey, more than 100 million registered voters live in counties that will rely on paper ballots rather than electronic machines this fall. Record oil profits are financing a new threat to our national security. A shadowy group of foreign investors is buying up critical American assets. That story is next.
(COMMERCIAL BREAK)
DOBBS: Russia widening its invasion of Georgia. Is Russia trying to recreate the Soviet empire? I'll be talking with three of the world's leading authorities on Russia here next.
(COMMERCIAL BREAK)
DOBBS: Crude oil prices today falling to the lowest level since May. Crude prices dropping to $114 a barrel, more than $30 below the record of $147 a barrel hit on July 11th. In spite of recent declines, months of record oil prices mean record profits for oil exporting nations, of course. Now, foreign governments are using some of those oil profits to buy up critical American assets. And as Lisa Sylvester reports, this raises serious questions about national security.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Have you been feeling that pain at the pump? While consumers are paying record amounts for gas, oil-producing countries have racked up record profits. OPEC countries earn nearly as much in the first half of this year as they did all of last year. They are pouring that windfall into Sovereign Wealth Funds, funds owned and managed by foreign governments, and the funds owned by Middle Eastern states are snapping up U.S. assets.
MICHAEL MADUELL, SOVEREIGN WEALTH FUND INST.: I think that Sovereign Wealth Funds will keep on growing in size. I mean right now they are nearly four trillion U.S. dollars in size and you know we predict them to be maybe 12 trillion years from now.
SYLVESTER: One such fund, the Abu Dubai Investment Council just bought up a 90 percent stake in New York's Chrysler building. But U.S. landmarks are only part of the land grab. Also being sold off, interests in U.S. banks.
In 2000, there were 20 Sovereign Wealth Funds managing assets of several hundred billion dollars. Today, 40 funds with assets of more than $2 trillion. And since these funds are controlled by foreign governments, that's raised concerns on Capitol Hill.
SEN. RICHARD SHELBY (R), ALABAMA: As Sovereign Funds acquire stakes in a wider variety of economic sectors, I believe we need to ensure that our national security is not compromised by our openness.
SYLVESTER: And it's not just the oil-rich countries that are buying up U.S. assets. China with large piles of money is also buying up pieces of the American economy.
(END VIDEOTAPE) SYLVESTER: And these funds are not transparent. It's often not clear where is the money coming from, who controls it. The director of the U.S. National Intelligence said earlier this year that there are major national security concerns about the financial capabilities of Russia, China and the OPEC countries and their potential to exert financial leverage to achieve political end -- Lou.
DOBBS: And this of course is not an issue as to whether or not these funds or any other investor should be permitted to invest in the United States but rather is the review of what assets can be purchased from a national security basis. The committee on foreign investment in the United States absolutely ham-handed and ineffectual in assessing exactly that issue.
SYLVESTER: You know and Congress has just talked about this issue a lot. I mean this goes back to the Dubai Ports deal...
DOBBS: Right.
SYLVESTER: ... where they talked about stronger controls and more authority (INAUDIBLE), but we still haven't seen a lot of that. And meanwhile, we are seeing these foreign governments, these are foreign governments, who are buying these U.S. assets and really no one is paying attention to this.
DOBBS: No one is paying attention. In fact, the Bush administration and its economic team looking to the World Bank and the International Monetary Fund to set standards and parameters for investment on the part of Sovereign Wealth Funds in this country, lacking both either -- well, I will say it appears both the intelligence and knowledge to set those limits as a sovereign nation. It's a troubling time in many respects. Thank you very much, Lisa. Lisa Sylvester.
Well time now for some of your thoughts. Frank in Massachusetts said: "Thanks for all your hard work representing the country's hard working middle class. All of our overpaid thoughtless politicians should be fired from their posts. Keep up the good work." We'll sure try.
And Mario in New York said, "Lou, we all talk about how bad Congress is, but we are the ones who put the same ones in time after time. Most of them should have been gone years ago. Like you say, we have the best government money can buy." I'm afraid you're right. It's not too hot.
Barbara in Maryland, "Lee Iacocca said it all when he said throw the bums out. Congress is with very, very few exceptions, corrupt, arrogant, greedy, unethical, egocentric, self-serving and other adjectives that wouldn't be allowed in print." We won't use too much of that print but it's tempting from time to time. She concluded saying, "I love my country but I am ashamed of her leaders."
We'll have more of your thoughts later in the broadcast.
President Bush accusing Russia of what he called a dramatic and brutal escalation of its invasion of Georgia. What should the United States be doing about it? And where in the world are the European powers? Three of the country's leading authorities on Russia join me here next. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Joining us now for more on Russia's invasion of Georgia and how the United States and European powers should be responding, I'm joined by three of the world's leading authorities on Russia; in Massachusetts, Marshall Goldman, Professor Emeritus at Wesleyan College. Good to have you with us, Professor. Professor Goldman is author of "Petrostate, Putin, Power and the New Russia." In our D.C. bureau, Ariel Cohen, senior research fellow at the Heritage Foundation. Good to have you with us. Here with me in New York, Professor Lincoln Mitchell, assistant professor of international politics at Columbia University. Good to have you here.
Marshall, let me turn to you first, if I may. Russia is behaving in such a way that many people are now starting to say this is the old Soviet Union posing as the new Russia.
MARSHALL GOLDMAN, WESLEYAN COLLEGE: Well, I think I would agree. During the early '90s, Russia lost its status as a superpower. It was basically bankrupt just ten years ago. It was coming apart at the seams, different parts were leaving, and now it's come back. It's financially in good shape. The oil price increase has rewarded Russia enormously. It's got lots of money. The economy is in good shape. Putin is determined to restart what used to be the Russian empire.
DOBBS: Watching the response, the Security Council, to this point, the G-8 nations, so-called, this administration, the United Kingdom, France, Germany. Ariel Cohen, this looks like frankly a fumbling incompetent response to a very precise, tough strategy on the part of Russia. Are the western powers simply being overwhelmed by Russia in this engagement?
ARIEL COHEN, HERITAGE FOUNDATION: Europe is dependent on supply of Russian natural gas and is limited in its response. I think the United States should send secretary of state to coordinate the response in Europe. Russian membership in the G-8, the club of eight advanced democracies should be suspended. Russia is not behaving as a democracy. Russian membership in WTO and hosting of the winter Olympics in 2014 in a town that is barely outside of the war zone should be at stake as well.
DOBBS: With that at stake, why are we not hearing more forceful language and action by those countries most dependent upon Russia, all of western Europe dependent upon Russia for not only natural gas, as you cite. In fact, half of its natural gas but a third of its crude oil, and with that proximity to Georgia, obviously the invaded sovereign nation here, the European powers look as though they are both impotent and incapable of mustering political will to limit the ambitions of Russia.
COHEN: I think the Europeans need to understand if they don't understand, we need to explain, somebody very soon here need to explain to them this is the moment of truth for Europe, for the west and for the world, and that international aggression should not stand and there should be consequences for what Russia is doing. If Europeans or Americans, for that matter, do not want to send troops to Georgia, there are other ways to punish Russia and to roll Russia back. What Russia is doing is not just old Soviet Union. It's Old Russian Empire.
In my book, "Russian Imperialism," I'm asking the question will Russia stop what it was doing for centuries and become a regular nation state, or will continue to be an empire? I think today --
DOBBS: We will let Professor Mitchell answer that.
PROF. LINCOLN MITCHELL, COLUMBIA UNIVERSITY: I don't think Russia is anywhere near behaving like a regular state. That's the short answer to that.
I think as far as what countries are doing here, the only country, we have actually heard strong talk. I think strong words are necessary, but far from sufficient in this conflict. The only country that's done anything substantive is Ukraine. You may ask why Ukraine. The reason is Ukraine also shares a border with Russia. Ukraine is a country struggling to create a path that would move itself toward the west. They have said you can't bring your navy back to this base.
I think when you talk about Europe, bear in mind there are countries in Europe, the Balkan states, Poland, Ukraine, who are very threatened here. Those countries want action and they are ready to do something. It's the other European powers that haven't.
DOBBS: You mentioned the Ukraine. In fact, they have already felt the power of Russia on the issue of natural gas and energy sources, has used that as a bludgeon against them. It appears that the Balkan states, the Ukraine, are in precisely under the same threat, Professor Goldman, as Georgia.
GOLDMAN: Well, in many ways, they are. As has been pointed out, natural gas for Eastern Europe and for Western Europe, for that matter, comes almost entirely from Russia and Germany gets 42 percent of its natural gas from Russia. It's not substitutable. If they cut off that gas, as you mentioned they did in January 2007 and 2008, you can't go anywhere else. So this, I think, has basically neutralized the Germans and to some extent, the other parts of Western Europe as well. I think that as much as anything explains this very cautious reluctance to criticize Russia for what it's just done.
DOBBS: What are the limits of American power here in terms of a response? And why would the United States not find it appropriate, Dr. Cohen, to step back at least publicly and defer to the lead of the European powers which are first the most proximate and certainly the most affected by whatever transpires in Georgia.
COHEN: I think President Bush was trying to do that. He was working the phones with Nicolas Sarkozy. The president of France is now the incoming president of the European Union but the Russians ignored the pleas of the French and the Americans and I think the president made a rather strong statement today at the White House, but both Ukraine and Germany are key issues here. Ukraine, because then President Vladimir Putin threatened Ukraine with unacceptable language. He said Ukraine may be dismembered. He said it only this past march at the NATO summit and the peninsula may be detached from Ukraine.
DOBBS: Very quickly. I want to get to this point. The United States has limited options in response. Obviously, the European powers, less powerful militarily than the United States. Is there any response that could be taken by any public policy decision taken, geopolitically, by the United States, the UK, Germany, France and the other European powers that would matter one whit to the ambitions of Russia and Vladimir Putin?
MITCHELL: It's very clear, Russia will continue doing what it wants to do in Georgia until either it achieves its goals or until somebody stops it. This is of course, a very important question. I think clearly one could think of military options but there's not a lot of wisdom to pursuing that.
DOBBS: Professor Goldman?
GOLDMAN: I have to agree. There were almost no weapons. During the nuclear age, we had our weapons, they had theirs. Now there's almost nothing to counter what the Russians are doing.
DOBBS: Professor Cohen, Professor Goldman, Professor Mitchell, we thank you very much for being with us.
Our poll question tonight is do you believe that the European powers should be leading the western response to Russia's invasion of Georgia. We would like to hear from you on this issue. Cast your vote please at loudobbs.com. We'll have the results here later in the broadcast.
Why the United States' failed trade policies are helping communist China's economy and now hurting this nation's struggling middle class. That story's next.
(COMMERCIAL BREAK)
DOBBS: As we have reported extensively on this broadcast, this country's failed faith-based free trade policy, so-called, have helped communist China's economy grow at the expense of America's middle class. One of the worst hit sectors in our troubled economy is manufacturing.
Bill Tucker has our report.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT: Manufacturing employment grew from 100 million in 2002 to 110 million in 2005. Not in the United States, but in communist China, according to the latest figures available. From 2004 to 2005 alone, sector exploded by six million jobs, according to the conference board, a business add advocacy and research group.
In comparison, manufacturing in the United States is in decline. In the past two and a half years, we have lost more than 700,000 jobs. About 13 million people here are employed in manufacturing, accounting for about 20 percent of our economy.
ROBERT SCOTT, ECONOMIC POLICY INSTITUTE: That sector is in trouble. It's grown at the slowest rate since the great depression over the last seven years, and it's not growing fast enough to maintain its vitality.
TUCKER: The sector is losing its vitality. Last year when adjusted for inflation, analysis of Commerce Department figures show the manufacturing sector here grew by a mediocre 2.25 percent. Advocates for American manufacturers call that figure disappointing and disturbing.
ALAN TONELSON, U.S. BUSINESS & INDUSTRY COUNCIL: You have had Washington flooring the gas on the American economy, putting more stimulus into the economy than at any other peacetime period in U.S. history. Record low interest rates, enormous budget deficits, a weak dollar, and yet American manufacturing's performance, growth, has only been so-so.
TUCKER: Groups like the U.S.-China Business Council, representing the multi-national corporations with factories in China, argue that job losses in the manufacturing sector are not a sign of weakness, but of strength, saying the jobs were lost because of improvements in productivity.
(END VIDEOTAPE)
TUCKER: But the anemic growth rate of the sector flies in the face of that argument. The simple truth is, our manufacturing economy is stagnant. Communist China's is exploding and neither Congress nor the president have been willing to craft policies to strengthen our manufacturing sector. Perhaps, Lou, the answer is simple and stark as the fact that they don't realize what is going on in our manufacturing sector.
DOBBS: Or there is a different agenda, perhaps. Troubling within manufacturing on a host of reasons, of course, for national security concerns, the ability to achieve not only independence in terms of foreign production of energy, from foreign production of energy, but 80 percent of our computers and consumer electronics for our so-called knowledge and technology economy are imported from foreign producers. Manufacturing people forget when they talk about the importance of education in this economy, manufacturing is the largest single employer of engineers and of scientists, the highest job skills and knowledge in this economy.
Bill, thank you very much. Alarming news and hopefully, news to which there will bring awakening on the part of our elected officials. We can hope. Bill Tucker.
Up at the top of the hour, the "ELECTION CENTER" with Campbell Brown.
Campbell, what are you working on?
CAMPBELL BROWN, CNN ANCHOR: Well Lou, we're going to stay with that breaking story that you have been talking about pretty much everything that you need to know about what is going on in Georgia and Russia. Georgia's president calls Russia's invasion occupation and annihilation of his country. We are going to hear what the presidential candidates, John McCain and Barack Obama, are saying about it. We will also put it to our no bull test.
Also, we are checking the facts to see how much of the truth John Edwards was telling when he went public about his affair.
We've got all of that coming up in the "ELECTION CENTER," Lou.
DOBBS: Thank you very much, Campbell. Look forward to it.
And a reminder to join me on the radio Monday through Friday for the Lou Dobbs Show. Tomorrow, my guests will include David Satter, author of "Darkness at Dawn, the Rise of the Russian Criminal State." Go to LouDobbsRadio.com for the local listings in your area, the Lou Dobbs Show on the radio.
Presidential candidates using the invasion by Russia of Georgia to highlight how they would handle overseas conflicts. We will talk with three of the best political analysts about what these candidates are saying and what voters are thinking.
Stay with us. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: Joining me now, three of the best political analyst in the country, CNN contributor, New York "Daily News" columnist, Errol Louis, Errol also host of the morning show of WWRL in New York City; Ben Smith, senior political reporter, Politico, good to have you with us. CNN contributor, syndicated columnist, Diana West. Great to see you, Diana.
Let's start with an invasion that apparently this administration and no one else saw coming. Is this just another demonstration of the absolute incompetence on the part of the intelligence agencies of this nation?
DIANA WEST, SYNDICATED COLUMNIST: Well, what would we have done about it?
DOBBS: Let's save that question and get to mine.
WEST: Well, I suppose yes, because we were all surprised, watching the Olympics that this happened certainly.
DOBBS: Now let's get to yours.
WEST: OK. That is why this gets so interesting because we're hearing this is unacceptable from President Bush, from John McCain, I think from Senator Obama, although he's a little bit more nuanced perhaps, but what are we going to do about it? This goes to the fallacy of these international organizations Senator McCain is calling on very specifically to get behind him and do something about it if he becomes president.
DOBBS: Errol?
ERROL LOUIS, NEW YORK DAILY NEWS: Well, I think it also knocks the props out of two important things we've heard as received wisdom for years now. We've heard the United States is the only superpower left in the world. Try telling them that in the Kremlin. We heard the whole point of spreading democracy is a round the world is democracies don't make war on each other. Well, apparently they do.
DOBBS: If you're going to buy into the idea Russia is behaving like a democracy, I think we will have a long debate.
LOUIS: If you -- you kick the ties in Georgia, it's not the kind of democracy most Americans would recognize or even support.
DOBBS: Let's talk about democracies that are. If it weren't for the democracy of Ireland, for crying out loud, we'd see a centralized state in the European Union, thanks to the Lisbon treaty and we have the European Union behaving as an impotent shadow that is quivering in fear apparently of Russia.
BEN SMITH, POLITICO.COM: You can't have it both ways here. Either they're on the verge of being some terrible empire or they're an impotent shadow. I mean I think Russia kind of ...
DOBBS: I only want it one way. That's for you to hear me clearly when I speak. That is I was referring to the European Union as an impotent shadow. The state of Russia as a burgeoning of restoration project to the Soviet Union empire days.
SMITH: Right. I'm just saying I think what Russia is doing right now is the difference between -- you can argue about whether the EU is too strong or something like that. They're clearly showing they're a totally different animal right now.
DOBBS: It seems to me they're rather impotent.
How about you, Errol?
LOUIS: They're dependent, as your report shows. I mean they're dependent on gas from Russia. This was the whole point of the post cold war world was to sort of create a European community in which you couldn't have nations going to war with each other. The old cold war barriers had to stay down. Germany can't all of a sudden get too harsh with Russia because it was supplying 40 percent of their natural gas.
SMITH: When it ran the other way, when gas prices were lower, we had lots of leverage, we could threaten to pull loans from the INS, John McCain used to do. We just don't have leverage anymore. DOBBS: We don't have leverage. The roles are actually reversed between Russia circa 1991 and the United States, now 2008. We are the nation that looks for all the world to be on the verge of being a debtor nation in perpetuity and Russia is resurgent, not only economically but militarily.
WEST: I think what this crisis underscores, because this is once again, a crisis complicated and deepened by oil, this kind of crisis, I mean I would have liked to have seen the president come home early from Beijing and perhaps call Nancy Pelosi into the Oval Office and have a discussion about energy and drilling.
DOBBS: That hasn't gone well so far.
WEST: It hasn't. It hasn't gone well at all.
DOBBS: If I may, speaking of two ineffectual leaders and a host of issues.
WEST: It's nice to imagine.
DOBBS: Maybe this is what we're looking at right now. We have had two presidential candidates, one of whom is on vacation, really not acknowledge the limits of power here, nor the role of the European Union, as if it's some sort of irrelevancy, when it is proximate and most affected by whatever policy decisions are made, because it is dependent upon Russia for 30 percent of its crude oil, 50 percent of its natural gas. What are the options?
LOUIS: Here are the options. What we need are big ideas. We need candidates who will step forward and say, as leaders of the free world, we will lead the European Union to where they need to be.
DOBBS: We will lead the European Union. That is kind of arrogance on the part of American leaders that has gotten us to this point. At least if it's arrogance, couldn't it be private? We'll talk about the private arrogance and public arrogance of both Senator Obama and Senator McCain on this issue next. We'll be back with you, Ben Smith.
Stay with us. We're coming right back.
(COMMERCIAL BREAK)
DOBBS: What are the moral responsibilities of this nation and European nations that have invested in Georgia and geopolitical and geo-economic terms, what should we be doing? What should the Europeans be doing here?
SMITH: In a sense, we are the one whose probably owe the Georgians more. This is considered the coalition of the willing, who sent the troops Iraq and the third biggest country there. What do we owe them? Apparently we do not owe them a war with Russia and nobody has suggested that.
DOBBS: BP is the third investor in the world's biggest pipeline upon which Europe is dependent. There is a deep partnership there as well.
SMITH: Absolutely. But I mean, it's Russia's game. Nobody has even hinted at the notion we will resist them military.
DOBBS: Where are these candidates? Do you think that both of these candidates have done well? Do you think Senator McCain, as is conventionally considered, apparently, has done better and improved his lot as a forceful leader that voters would respond to?
SMITH: McCain has always viewed Russia with great suspicion, seeing as, you know, seeing it the way almost everybody now sees it. And he came out instantly and said, you know, and said that this is a real invasion when it wasn't totally clear to everybody that it was. It then became that Bush, Obama and everybody else has kind of followed.
DOBBS: Do you agree?
WEST: I do. I do. But at the same time, by invoking all of the different international groups, NATO, G-8...
DOBBS: The WTO.
WEST: Yes. And also the EU. He is calling upon these groups to do something, and it remains to be seen whether there's any will or grat (ph) in these groups to actually affect any changes in this.
DOBBS: Your assessment?
LOUIS: The old issue that's been dogging the McCain campaign, his connection with lobbyists, I think it sort of pokes its head up here. He's got a top staffer who's been on the payroll of the Georgian government for a long, long time. And you know, it may not lead him in the wrong direction, but the fact that you have got influence there is something that he has got to answer for.
DOBBS: And is it interesting that Senator Obama has been far more constrained, in his rhetoric at least?
LOUIS: Well, indeed. That's right. And, frankly, less plugged in. I mean, McCain was Johnny on the spot because he has got an inside connection to the Georgian government.
DOBBS: And therein the conundrum. Those lobbyists with influence and sometimes knowledge that is helpful, at least to candidates if not to government. I had to throw that in.
Errol, thank you very much. Diana, thank you. Thank you. I appreciate it.
Our poll -- 92 percent of you responding that the European powers should be leading the Western response to Russia's invasion of Georgia.
Thank you for being with us tonight. Please join us here tomorrow. For all of us here, we thank you for watching. Good night from New York. "The Election Center" with Campbell Brown starts right now -- Campbell.
