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Lou Dobbs Tonight
Obama on the Attack; New Attacks on Obama; A Boring Debate; Red States in America
Aired October 08, 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 a complete vacuum of leadership apparent in Washington, D.C. as our financial crisis worsens. The Federal Reserve now lending the insurance giant, AIG, another $38 billion, if you're keeping track. It's now over $120 billion in three weeks.
The stock market continues its sell off, a sixth straight day of losses. Three of the smartest economic thinkers in the country join me.
And tonight, senators Obama and McCain go on the offensive. How can you tell after one of the most boring presidential debates in history? We'll assess tonight whether either of these candidates really should be president of the United States.
And tonight, spending by state and local governments is out of control. Guess who's broke? Guess who needs a bailout now to be paid for, of course, by the American taxpayers.
All of that, all the day's news and much more tonight from an independent perspective, but you probably already guessed that, straight ahead, here tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Wednesday, October 8th. Live from New York, Lou Dobbs.
DOBBS: Good evening, everybody.
New evidence tonight there's absolutely no economic leadership in Washington. The Federal Reserve today loaning the troubled insurance giant, AIG, another $38 billion. That's on top of the $85 billion that the federal government gave AIG just three weeks ago.
This new money coming even though the White House and congressmen blasted AIG executives just yesterday, for going on a corporate junket at taxpayer expense, costing about a half million dollars. Earlier, the Federal Reserve cut a key interest rate by half a percentage point.
The emergency interest rate cut part of a coordinated action with five other central banks. Despite those rate cuts, the stock market today plummeted for a sixth straight day. The Dow Jones industrials down another almost 200 points, investors losing another $200 billion in market value. Investors have lost now more than $2 trillion in market cap over the past six days. The plunging stock market has led to a huge decline in Americans' retirement plans and their confidence, a top government analyst now estimating the losses of the staggering $2 trillion in that regard over just the past 15 months.
On the campaign trail, Senators Obama and McCain stepping up their efforts to convince increasingly skeptical voters that they have the credentials to lead this country. The presidential candidates intensifying their attacks after last night's debate, a debate that in my opinion, failed to present any significant new ideas on our worsening financial crisis or to inspire in fact much interest.
We have extensive coverage and we begin with Jessica Yellin, reporting on the Obama campaign.
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT (voice-over): In Indiana, linked by a group of sought-after women voters, Barack Obama sounded confident, but cautious and on the attack.
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: But you know I can take four more weeks of John McCain's attacks, but the American people can't take four more years of John McCain's Bush policies.
YELLIN: A new ad takes aim at what Barack Obama calls John McCain's radical health care plan, tells voters to read the fine print.
OBAMA: What he doesn't tell you is that he is going to tax your employer-based health care benefits for the first time ever. So what one hand giveth, the other hand taketh away.
DOBBS: Jessica Yellin reporting. Senator McCain today launching a blistering new attack on Senator Obama, McCain trying to raise new doubts about Obama's economic policies, his judgment, his character and just about anything else you can think of. Ed Henry has our report from Strongsville, Ohio.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): John McCain immediately came out swinging, the morning after failing to score the knockout his campaign so desperately wanted in the second debate.
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Who is the real Senator Obama? Is he the candidate who promises to cut middle-class taxes? Or the politician who voted to raise middle-class taxes?
HENRY: McCain is mostly steering clear of personal attacks on Barack Obama. Leaving that to running mate, Sarah Palin. And now, his wife, Cindy, is raising the stakes. CINDY MCCAIN, JOHN MCCAIN'S WIFE: The day that Senator Obama decided to cast a vote to not fund my son when he was serving sent a cold chill through my body.
HENRY: Now, conservative activists Richard Viguerie (ph) today lashed out at McCain, saying he's not spending enough time really laying out sharp differences with the Democrats on issues like taxes to deal with the financial crisis. Viguerie (ph) saying that time is dwindling down for McCain to win this election. Lou?
DOBBS: Whose side is Viguerie (ph) on?
HENRY: He's a conservative, but he's not too happy with Senator McCain right now.
DOBBS: Well he ought to be kind of excited because I mean that's a new program and an interesting one that McCain came out with, a $300 billion bailout for home owners. Something I called for a year ago. He's in there with it now, 300 billion for home owners that ought to excite folks in the campaign.
And Obama doesn't even like the idea. So it ought to be something -- are they going to use it as a big campaign initiative?
HENRY: Interesting proposal that Democrats had actually first proposed people like Senator Hillary Clinton had been talking about it. And interesting that the $300 billion that John McCain wants the Treasury Department to use to buy up these bad mortgages, it would come out of that $700 billion bailout that I imagine you're still not very happy about, Lou.
DOBBS: Well I'm not very happy about it at all because I think they were a bunch of idiots and sellouts on Capitol Hill and in this White House that absolutely betrayed the principles of this country and really demonstrated some ignorant economic judgment. But the fact is that $300 billion will only be ties twice as much as this government has now given AIG, an insurance company that is on the wane, as it were.
HENRY: You have to wonder when the bailouts are going to end, Lou.
DOBBS: I don't wonder. Thank you very much, Ed. Ed Henry, appreciate it.
Joining me now for more on this presidential campaign, three of my favorite political analysts, CNN contributor and Republican strategist, Ed Rollins -- Ed former White House political director under President Reagan and chairman of Mike Huckabee's presidential campaign -- Ed, good to have you here -- CNN contributor, Pulitzer Prize winning columnist "New York Daily News," Michael Goodwin -- Michael -- and joining us Democratic strategist, Julie Roginsky. Good to have you here, Julie.
Let's start I think that that was one of the most stultifying debates I've ever seen and I'm not a big fan of them to begin with.
JULIE ROGINSKY, DEMOCRATIC STRATEGIST: I'm still waking up from that. That was absolutely the worst debate I've ever seen in my life. But I have to say Obama did what he had to do, which is he's running down the clock, he's ahead. He doesn't need to make any news. McCain, however, should have ramped -- you know he needed to ramp it up a notch and he didn't and...
DOBBS: A notch?
ROGINSKY: A notch...
DOBBS: A notch?
DOBBS: Are you kidding me?
ROGINSKY: He needed to take that to 11 and he took it to about two. I mean he needed to do something to change the tone of his campaign.
MICHAEL GOODWIN, NEW YORK DAILY NEWS: I actually think that McCain's idea on the housing thing, which he kind of snuck in there last night, announced it sort now, his campaign I think says well we put it out before, blah, blah, blah, it's already in the legislation. But where -- why didn't he talk about this when he came suspended his campaign...
GOODWIN: ... come back in the negotiations -- that the $700 billion bailout allows for this money.
GOODWIN: That's what he's saying, that it's in there. But you never heard it from him when he came back to Washington, he suspended the campaign. He didn't raise it in the first debate. He never made it a driving force.
DOBBS: Is there some reason he hasn't?
GOODWIN: I don't know. I mean I think that...
DOBBS: Is this a stealth campaign for president for crying out loud?
GOODWIN: It's a scatter-shot approach.
ED ROLLINS, REPUBLICAN STRATEGIST: He obviously didn't read the bill as did any others. I have a new solution. I think the United States ought to declare bankruptcy. I think that China -- we'll be a socialist government and we're going to bail everybody out. Let the Chinese come in, they do a much better of running a socialist governments than we do and let's...
DOBBS: Well that ought to make corporate America happy.
ROLLINS: Well you know since they basically can't make it in the real world, and I think that this gets more absurd by the day. It just -- when is it going to stop? And when is anybody going to have full disclosure? You know AIG needs $85 billion alone and that's going to straighten them out. They spend 75 billion you know the first week they get the money. Now they're going to get more money because they went off and planned for it in this $400,000 tax paid retreat. They need more. When does it stop?
DOBBS: Well it's not going to stop here tonight because we're going to continue by golly. You ask how absurd can it get? We're going to find out right here.
And we'll be back with our panel throughout this broadcast. We were going to ask you to participate in our poll tonight. The question is -- do you believe the Federal Reserve should continue to pump taxpayer money into the failed insurer, AIG? Yes or no. I'd like to hear how much you think would be the limit. Cast your vote at loudobbs.com. We'll have the results later in this broadcast.
Up next, we'll have more on our worsening financial crisis. Three of the best economic thinkers join us.
Also many state and local governments, well they are facing a budget crisis after years of reckless, irresponsible spending. Does this sound familiar? Guess who will be on the hook for it all if they have their way? We'll find out, as Ed Rollins put it, just how absurd this can get.
The presidential candidates ignoring our worsening economic crisis making promises they can't keep and not talking about issues that they certainly should. We'll be talking about that and reporting to you on the very latest from the campaign trail. Stay with us. We're coming right back.
DOBBS: Well our economic crisis continues, obviously and it's having a devastating effect on this economy and our working men and women and families in this country. But the presidential candidates are still making promises of tax cuts, tax credits and more federal spending, more federal programs. And they don't seem to understand. This is a new world. Lisa Sylvester has our report.
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Senators Obama and McCain are hoping to win big by making big promises. Obama wants to cut taxes for 95 percent of Americans. McCain wants to extend existing tax cuts and throw in a few others.
MCCAIN: I am in favor of leaving the tax rates alone and reducing the tax burden on middle-income Americans.
SYLVESTER: On health care, McCain wants to give every American family a $5,000 tax credit to get health insurance. Obama promises to give the 47 million uninsured access to quality health care.
OBAMA: In a country as wealthy as ours, for us to have people who are going bankrupt because they can't pay their medical bills. There's something fundamentally wrong about that.
SYLVESTER: Energy reform, fixing the foreclosure mess, education, more problems, more promises. But critics say, how about a dose of reality? The nation is saddled with a huge national debt and reeling from a financial crisis of historic proportions.
ALEX CASTELLANOS, REPUBLICAN CONSULTANT: John McCain wanted to give everybody a free house, and Barack Obama wanted to give everybody free health care. And you know, last time I checked, we were, we were adding $1 trillion in spending for, for a bailout on top of $1 trillion for the Iraq war.
SYLVESTER: A former congressional analyst predicts many of these campaign promises are going to be tossed soon after the election.
DAVID WALKER, FORMER U.S. COMPTROLLER GENERAL: There's no question that both candidates are going to have to fundamentally reconsider their promises in light of our current challenge and in light of our deteriorating financial conditions.
SYLVESTER: That means some hard choices ahead for the next president.
SYLVESTER: And just take one aspect, one promise the tax cuts. The Independent Tax Policy Center says both plans would add considerably to the national debt. It estimates that McCain's plan would cut taxes by $4.2 trillion over the next decade.
Obama's plan would reduce taxes by $2.9 trillion. Both candidates also are promising to substantially increase spending, but no real answers on how the fiscal hole will be plugged. Lou?
DOBBS: You know I guess I think there might have been a follow- up question on that issue last night in the debate. What do you think, Lisa?
SYLVESTER: You know this question has come up at the debates.
SYLVESTER: And the candidates, they refuse to answer the question. What will they do to plug this fiscal hole? And again and again, the voters aren't getting that answer, Lou.
DOBBS: You know I think the voters are figuring out that both of these guys, I mean after we go through all of the lies that these two presidential candidates have uttered in now two debates, the lies that the vice presidential candidates uttered, I think the American people are starting to get a sense, we've got a little leadership problem in this country. Lisa, thank you very much.
Let me turn now back with Ed Rollins, Michael Goodwin and Julie Roginsky. Ed, this is getting to be a little un-funny. The American people are looking at two candidates who are distorting, misstating or outright lying every time they show up and debate. Let's forget that every day on the campaign trail. But we're starting to have not only a crisis in leadership this is a crisis of integrity.
ROLLINS: Well first of all, the best thing is that Barack Obama did not accept the challenge to have 10 of these things like they did last night...
DOBBS: Can you imagine...
DOBBS: Ten of these town hall...
ROLLINS: ... would have -- would have...
DOBBS: Oh, you're right.
ROLLINS: The tragedy though is the American public is getting up close and seeing at a time of real crisis the leadership void. I mean, obviously Bush is gone or should be gone shortly. And the Congress is at the lowest numbers. But this is the future. And I think people are basically starting to say -- wow. This is not much better.
ROGINSKY: You know, I will say this has been going on for ages. After 9/11, we were told to go shopping. We went to war and nobody -- our taxes got lowered. Nobody ever came to the American people ever in the past 10 years or eight years and said you know what, we're in a tough crisis.
DOBBS: Yes, but Julie...
ROGINSKY: Times are hard.
DOBBS: ... we're talking about two men running for president of the United States.
ROGINSKY: I completely agree with you.
DOBBS: And neither one of them is showing either vision, character, capacity, leadership.
ROGINSKY: But Lou...
DOBBS: And we...
ROGINSKY: But Lou...
DOBBS: And we have -- we have a crisis facing this country now, $53 trillion in unfunded liabilities. And an economy that is you know and absolutely breaking down, markets that are melting down.
DOBBS: And we've got to listen to these buffoons talk about...
DOBBS: ... it's crazy.
ROGINSKY: But look at John McCain, John McCain wants to continue the war in Iraq. That's his prerogative...
DOBBS: Look, I understand...
ROGINSKY: John McCain wants...
DOBBS: ... talking points, but let me tell you...
ROGINSKY: They're not talking points, they're for real.
DOBBS: You tell me what Barack Obama's doing...
ROGINSKY: Barack Obama...
DOBBS: ... any better.
ROGINSKY: ... specifics.
DOBBS: That's what I'm saying...
ROGINSKY: But at least...
UNIDENTIFIED MALE: Well can I...
GOODWIN: One of the realities of course from this is one of them will be president. And then upon becoming...
DOBBS: I'm with you so far.
GOODWIN: Upon becoming president, they will have to make some decisions that the country is not prepared for. And so at some point, we're going to go back to the polarization again. Because there's going to be, this president has not been elected on a mandate to fix the problems, and therefore there's going to be more polarization...
DOBBS: They won't...
GOODWIN: ... more stalemate.
DOBBS: They won't talk about free trade, outsourcing, off shoring or production, the impact on working people in this country, which is by the way, legitimately the purview of the Democratic candidate for president, and he's not dealing with that issue. I challenged both of these presidential candidates and their campaigns over two months ago to make one simple, just one simple resolution that no member of their administrations will be permitted to lobby the federal government for a period of five years. Neither candidate, neither of these candidates has had the guts to respond. I mean, that, that's telling as well, isn't it?
ROGINSKY: Well, we live in a 24-hour news cycle where people talk in sound bites and sadly what people, you know any elected official does these days is talk in sound bites that are very poll- driven. And that's exactly what you're seeing here.
ROLLINS: (INAUDIBLE) the tragedy is these two had the opportunity in the last three weeks, one of them could have stepped up and said, listen, I can't do the health care for everybody. I can't do this or that. You know I've got to basically make some very tough decisions. I can't give tax cuts for everybody. I've got to fix this problem. The country would have applauded.
DOBBS: I talked last night with Senator Claire McCaskill and former Governor Mitt Romney. I asked them both the same question -- neither one of them could give a direct answer. If this is what's become of the political leadership in this country -- I mean we are in, we are in major trouble. We have put in jeopardy so much by putting up with this kind of nonsense on our, our polling-driven, homogenized packaged candidacies for every office, from you know from unfortunately, from mayor through president.
We'll be back with our panel in just a moment. Next, states and cities across the country facing their own crises, considering drastic cuts to their budgets, even the most basic services and where will the bailouts end? We'll talk with three of the sharpest economic thinkers anywhere in this country here next.
DOBBS: State and local governments all across the country facing severe budget crises. California and other states for years have been spending money that they didn't have, don't have, and never will. Now those state governments -- well they're begging for massive taxpayer- funded bailouts of their own. Kitty Pilgrim has our report.
(BEGIN VIDEOTAPE) KITTY PILGRIM, CNN CORRESPONDENT (voice-over): According to the National League of Cities, 79 percent of cities predict budget deficits in 2009. And the National Conference of State Legislatures is talking about spending gaps of $40 billion next year. But Citizens Against Government Waste says government has been on a spending binge.
TOM SCHATZ, CITIZENS AGAINST GOVT. WASTE: The idea by most legislators is -- oh, let's create a new program. When times are good, we can go out and spend more money. When times are not so good, we also have to go out and spend money, to help people. There's never a time that legislators sit back and evaluate the effectiveness of the programs that they already have.
PILGRIM: According to the Goldwater Institute (ph), actual growth in state and local government spending, ran six percent a year over the last six years. But based on population and inflation, that spending should have been 3.7 percent a year. Most states have so- called rainy day funds, for when times get tough.
But 31 states limit the amount of money that can be put into the fund, at two to 10 percent of appropriations or revenues. And five states don't have rainy day funds at all.
SCOTT PATTISON, NATL ASSN. OF STATE BUDGET OFCS.: There's a lot of argument about how much of rainy day funds states should have. And our view is that getting them up to about 10 percent has been pretty significant. If they get too high, you have elected officials on the right who want to give tax cuts and you have elected officials on the left who want to spend more on programs, so you have a hard time keeping the savings account in the bank.
PILGRIM: State and local governments have also continued their hiring binge, even as private-sector unemployment rates have been climbing. Local governments added 47,000 jobs and states 16,000 in the first quarter of this year.
PILGRIM: Now almost all states have balanced budget requirements. But they usually spend as much money as they take in, in revenues. And very few have the discipline or the incentive to cut programs in boom times. Lou?
DOBBS: Kitty, thank you very much.
Time now for some of your thoughts; Robin in Ohio, "Dear Lou, I'm no longer referring to the rescue bill as a bailout. It really was a sellout." I think you got it.
And Janette in Oregon wrote in about the sellout -- "No bonuses to executives of failed companies, not one cent." We wish.
John in Texas, "Since we're close to a general election, why didn't we put this on the ballot and see how Americans feel about the bailout-sellout?" One of the reasons is the nation doesn't have a -- a device for a national referendum. It would be nice if we could fix that one, certainly.
We'll have more of your thoughts here later in the broadcast. Up next, 78 million Americans nearing retirement, will their 401(k)s be there when they need it? And why don't they have pensions? We'll have that report.
And if there was a clear winner in last night's debate, it certainly wasn't the American people. Our panel of political analysts joins me here again -- we'll be talking about that -- and $38 billion more for AIG, bringing the total in three weeks to over 120 billion.
Six straight days of losses on Wall Street, how about it -- that bailout-sellout is really working, huh? Three of the nation's top economic thinkers join me. We'll talk about some possible solutions. Stay with us. We'll be right back.
ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion. Here again Mr. Independent, Lou Dobbs.
DOBBS: I don't know about you, but I've about had a bellyful of all the -- those folks in Washington, D.C., elected officials in the House, the Senate, White House just talking pure nonsense to this country. I want to talk with some folks -- and I hope you will join me in the sentiment -- who knows what they're talking about, who have some ideas that we need to listen to.
Three of the best thinkers on economics in the country -- in Washington, Richard McCormick (ph), he's editor, founder and publisher of "Manufacturing and Technology News" (ph) -- Richard good to have you here. Tonight in Oklahoma City is Dr. Pat Choate. He's vice presidential running mate with Ross Perot back in 1996, the author of "Dangerous Business: The Risks of Globalization For America" -- and Pat, great to have you with us.
CHOATE: Good to be back.
DOBBS: And in Rochester, David Cay Johnston, Pulitzer Prize- winning journalist, best selling author of "Free Lunch: How The Wealthiest Americans Enrich Themselves At Government Expense." Well -- and thank you very much David for being here.
Let's start if I may with you David. We just saw AIG go back -- they're going to get another $38 billion in the space of three weeks. Apparently that's all they needed to get to 100 -- over $120 billion. At what point do you think we ought to get just a little aggravated about this so-called bailout?
DAVID CAY JOHNSTON, AUTHOR, "FREE LUNCH": Well, a lot and that's an enormous amount of money, $120 billion. We couldn't afford $7 billion for health care for children, we have 120 billion. And you know this transaction, Lou, is about AIG was loaning out securities that it has. The government hasn't said if they were stocks, bonds or something else. And getting cash and people came in and said, excuse me, we want our cash back. We don't want to hold these securities any more. So Uncle Sam is effectively cashing these people out. We're giving the money to AIG and who's AIG cashing out? Not a word from the Federal Reserve about the real beneficiaries of this. AIG is just the pass- through.
DOBBS: You don't suppose it could be Goldman Sachs, do you? I just can't imagine the possibility that a penny of it went there.
Oh, my gosh. Pat Choate, I mean, we are -- you know I want to stay as positive -- is there some reason that we are not hearing one of the people whose responsible for leadership in this country, either economic or political -- the president, Nancy Pelosi, Harry Reid, Henry Paulson, either one of these presidential candidates -- just say, the one thing that needs to be said.
And so I'm going to say it and see how much trouble I get in with you.
PAT CHOATE, AUTHOR, "DANGEROUS BUSINESS": OK.
DOBBS: So I'm going to say it -- there won't be a depression in this country. End of discussion. There will not be.
Is there some reason we can't hear them say that as well?
CHOATE: No, there's no reason whatsoever. I mean, this is a solvable problem. First thing the Congress gave the administration, the Federal Reserve and the secretary of the treasury, all the authority they need, and they gave them all the money they need, to make the job work.
It's this piecemeal approach that the administration is taking, that's consuming the money. If they continue with the piecemeal action, $700 billion won't be enough. $1 trillion won't be enough. They'll be back at a third and fourth time.
What we need to hear someone say is we want a whole solution to this. And there have been several people -- Bill Isaac, me and others -- that have laid out how to go about this. But I think that the candidates and the administration are in a panic, and they just can't hear. They're just trying to get across the election line.
DOBBS: They may be trying to get across the election line. You may be right. But the fact that they -- that neither the administration nor the Democratically-led Congress are talking with Pat Choate, with Bill Isaac and -- others, who have gone through this process -- I mean why in the world they are not talking to some of the wise men of this country in terms of economics and business?
You know, I pick up the phone and I call David K. Johnson in a hurry.
You know, Richard, I'd call you. I'd want to know what's going on. But folks have been ignoring you for a long time and me, talking about outsourcing, talking about offshore production tearing this country apart.
And -- people talk about the -- Richard, they talk about dependency on oil, but don't talk about our dependency on foreign producers for our clothing. We can't clothe ourselves, our rising dependency for our food supplies, 85 percent of our consumer electronics and our computers, our technology.
I mean, Richard, where in the world are we headed here?
RICHARD MCCORMACK, PUBLISHER, MANUF. & TECH. NEWS: You know, manufacturers have been talking about this for years. Manufacturing has been in a depression for the last five or six years. They've come to Washington, they've warned everybody.
The National Academy of Sciences wrote a report that said "The Gathering Storm." We better do something to avoid this gathering storm. And now -- look, we're in the storm. And partly, a big part of the reason for that storm is subprime mess and housing fiascos.
But a lot of it has to do with the fact that we've lost our production capability. Our industrial base is pretty much disappeared in this country. There's still a lot of production, but we're just importing so much more than we're actually producing.
DOBBS: And at some point, because we're importing over $3 trillion a day in capital to buy those products, those goods, we're not going to be able to do that. At which point, we won't have time to gear up a production capacity, right?
MCCORMACK: Well, you know, I've been thinking a lot about this. Ronald Reagan was a hero among Reagan Democrats because -- he understood one thing. He understood that in order to be a military superpower, you have to be an economic superpower.
And when Japan started targeting our industries, he went to bat for our industries. He went to bat for American workers. They held him in high esteem. The Soviet Union collapsed, not because it lacked military might, but because its economy just collapsed.
They were in Afghanistan, it kind of feels like we didn't learn a single thing from what happened 20 years ago. That wasn't that long ago, either.
David, your thoughts?
JOHNSTON: Well, the -- there's no question that while in the very long run, globalization should make us all better off as a world. In the short run, the management of it has been done by the financier class. It's been done for their benefit.
It's had horrible effects. And the idea that we cannot make enough of our own goods is just astonishing. We need to pay attention to have strong domestic industries that keep people employed and promote social stability. DOBBS: Well, I think that's terrific. As a matter of fact, it's one of the things that I've been reporting on for sometime. And as I look at what we are doing, one looks at the comparisons here, Pat Choate, between the depression -- and I say there will not be a depression.
But when one looks back to the depression, one can say, well, there are far more government employees today, there are far more people working for the government than there were then. We have fewer in agriculture.
But the reality is we also have far fewer in manufacturing. It is hard to look -- at this economy and say, you know, this is the sector that's going to drive us out of this likely recession -- we're not in it yet -- this likely recession or reverse this economic slowdown.
Where is that sector? What, in your judgment, will be the -- catalyst that turns things around for this huge economy of ours?
CHOATE: Well, for the longer-term, what we've got to do is bring manufacturing back. You can't be a great economy without a strong manufacturing base. We need to get on with rebuilding our infrastructure and use that to bring part -- back part of our manufacturing base.
But I think you've touched on it directly when you talk about trade policy. We've got to step away from this crazed ideology of one-sided free trade. We've got to take a look at the rest of the world and say that we're going to bring some semblance of balance to these accounts.
DOBBS: Yes. You should have heard...
CHOATE: It has been on trade policy that is killing us here.
DOBBS: You should have heard Mitt Romney yesterday talking -- I mean he wanted to just talk about balancing mutual and reciprocal trade, which is something I've advocated for years and you have as well, even longer. And he wanted to construct that as somehow protectionism.
This is the kind of mindless nonsense emanating from the corporate establishment in this country. To me it is disgusting.
We'll be back with our panel in just a moment.
Up next, the big loser in last night's presidential debate -- you, me, about 300 million American citizens. Three of our best political analysts in the country joins me -- or rejoin me, I should say. And why employees of private companies may have a lot more to lose in this slowdown than government employees, local, state and federal.
We'll be telling you about that as well next. Stay with us, we're coming right back. (COMMERCIAL BREAK)
DOBBS: Millions of Americans are concerned about their retirement savings. And middle-class workers with private retirement plans, 401(k)s, have even more reason to be concerned.
As Bill Tucker now reports, middle-class Americans are not only bailing out Wall Street, they're also bailing out those government- funded pensions.
BILL TUCKER, CNN CORRESPONDENT (voice over): The collapse of stock prices, the turmoil in the financial markets -- all underscore the uncertainty of our economic futures. Suddenly, retirement looks uncertain, at best, for many.
DREW NANNIS, AARP: The uncertainty factor, especially in this economy, is weighing heavy on the minds of everybody close to retirement or far away from retirement.
TUCKER: But some can worry less than others. While the S&P 500 index was plummeting 25 percent, in the second quarter of last year to the third quarter of this, traditional pension funds declined 10 percent according to the Federal Reserve board.
90 percent of state and local government employees and all federal employees have traditional pension plans where benefits are defined and guaranteed. Yet, workers and retirees in the private sector are increasingly left to fend for themselves and their 401(k) investments.
The simplest and biggest difference between pension plans and 401(k) plans? Professional management with long-term perspective.
BETH ALMEIDA, NATIONAL INSTITUTE ON RETIREMENT SECURITY: What we know about pension funds is that they're prudently managed, meaning there's sort of a long-term strategy that the fund is following in terms of its asset allocation, in terms of the investment decisions that are driving where money's going.
TUCKER: Seven million people currently receive state and local pensions and an average of 21,000 per year, according to the National Association of State Retirement Administrators. And they get their payments regardless of the market's fluctuations.
TUCKER: And there is another very big difference between pension funds for public employees and other retirement funds that we should take note of. When a public pension fund suffers a hit, it's up to the taxpayers to provide sufficient funds to guarantee the benefits.
It's a guarantee not enjoyed by any other retirees, Lou.
DOBBS: You mean in the private sector. TUCKER: In the private -- in the private sector, correct.
DOBBS: Yes. Well, that doesn't seem quite right, does it?
TUCKER: Well, I think that we ought to get on the train, too. Everybody else is getting on the train. I don't know why we can't get there as well?
DOBBS: You mean the pension plan?
TUCKER: The guarantee everything you got (INAUDIBLE).
DOBBS: We're going in tonight, the pension plan, funded and guaranteed by the taxpayer.
TUCKER: I like that.
DOBBS: Now there's an idea. We want a bailout, too, here. Guaranteed. But don't we all?
I love America. Suddenly bailouts are the way to live.
TUCKER: It's nice.
DOBBS: It's great. What a -- unbelievable.
A reminder now -- thank you, Bill. A reminder now to vote on our poll, do you believe the Federal Reserve should continue to pump taxpayer money into the failed insurer AIG? And if you say yes, we really do want -- cast your vote at Loudobbs.com, because we've got a lot of other insurance companies, I'm sure, would like some money, too.
I think just about everybody would like a little money about right now. And a reminder, to please join me on the radio Monday through Friday for "THE LOU DOBBS SHOW" tomorrow. My guests include David Walker, president/CEO of the Peterson G. Peterson Foundation on a nation that is bankrupt.
Professor Peter Morici, the University of Maryland, and James Taranto of the "Wall Street Journal" among my guests tomorrow. Go to Loudobbsradio.com to get the local listing for "THE LOU DOBBS SHOW" on the radio.
Up next, I'll be talking with some of those terrific political and economic minds that you've already been introduced to, and one of the most boring presidential debates in history. We're going to make it so exciting, and the way we're going to that we're going to reduce it from 90 minutes to 90 seconds. You don't want to miss that. We'll be right back.
DOBBS: Well, neither Obama or McCain particularly impressive in last night's debate. Some would say that's being kind. In fact, we thought their 90 minutes of boring blather could be boiled down to just about 90 seconds and now we prove it.
TOM BROKAW, NBC NEWS: Who do you have in mind to appoint to that very important post?
MCCAIN: I like Meg Whitman. She knows what it's like to be out there in the marketplace.
OBAMA: Warren would be a pretty good choice -- Warren Buffett. And I'm pleased to have his support. But there are other folks out there.
MCCAIN: My friends -- my friends -- my friends -- at the end of the day, my friend...
OBAMA: We're going to have to change the culture -- we're going to have to change the culture. We have it change our policies -- fundamentally change -- I am cutting more than I'm spending. So that it will be a net spending cut.
MCCAIN: You know what Senator Obama has voted for -- is proposing? $860 billion of new spending now?
OBAMA: Senator McCain talks a lot about drilling.
MCCAIN: Drilling offshore. Oil drilling. We've got to drill offshore, my friends.
OBAMA: We are going to have to deal with energy.
MCCAIN: It was an energy bill loaded down with goodies. Billions for the oil companies. You know who voted for it? Might never know. That one. You know who voted against it? Me.
OBAMA: Senator McCain suggests that somehow, you know, I'm green behind the ears and he's somber and responsible.
MCCAIN: Thank you very much.
OBAMA: Senator McCain, this is a guy who sang, "bomb, bomb, bomb Iran." Is this a quick follow up on this? I think...
MCCAIN: If we're going to have follow-ups, and I would want a follow-ups...
BROKAW: No, no. I know that. I'm just a hired help here. So I mean...
OBAMA: You're doing a great job, Tom.
BROKAW: And you're in my way of my script there, if you will move.
(END VIDEO CLIP)
DOBBS: And so it was, Julie, Michael, could you step back just a little bit?
ROLLINS: Perfect. I thought that was great. I like that highlight reel. 90 seconds...
DOBBS: Well, I'm not going to -- we call it 90 seconds, we wouldn't call it highlights, necessarily.
ROGINSKY: You're making me relive the nightmare of this debate.
ROLLINS: 24 times, my friend and the only person who wasn't his friend was his opponent on the stage last night.
ROGINSKY: That guy.
ROLLINS: It was all -- the bottom line we've now seen three senators and one governor in this process. Two of the senators have basically talked about the last three decades of me, me, me. I did, I did, I did, whether it was Biden or McCain. And the problem is that that's what all of those people think -- me, me, me, as opposed to them out there, the people that they're supposed to represent.
DOBBS: What happened to the other senator, Senator Obama.
ROLLINS: He hasn't been there long enough. He's only been there a year.
DOBBS: Well, he's warming up.
ROLLINS: In the year he was there...
DOBBS: So we've just heard from a distinguished panel of economic thinkers, they're going to join us, they're coming back with us -- they're with us now. And so I want to understand what the politics are here.
You've heard the idea that this bailout is not working. It's not sufficient. It's not comprehensive as the sort of the buzz word -- mercifully no one used it on this panel until I did that.
It is -- it's an absurdity. There's no political strength or will or sufficient character to say, we're going to go after this. Neither one of these candidates are saying them, Michael.
GOODWIN: Well -- another one consequence of that, Lou, and because of the weak leadership, you've really now got sort of the effective U.N. of the world financial system running all of this. So you've got this coordinated interest cuts today from around the globe.
Think of this now, the consequences, the sovereignty issues. Now -- you know, an American president really has kind of lost control of an American economic system, if he ever had it. But now you've got a world group of bankers.
DOBBS: Do you agree with that, Pat Choate? CHOATE: Yes, it is. And basically, we have, in our own history, two examples of how to deal with that. In the 1930s, we had the Reconstruction Finance Corporation that stepped up and put money in for stock in the banks. And the country did very well.
And we did something more elegant in the 1980s when we had major bank problems. We found in our own history the way to solve this.
CHOATE: And basically what we need to make these candidates focus on, we have a real financial crisis that can do us enormous harm if something is not done now.
ROGINSKY: But they're almost putting out fire after fire. Where is comprehensive plan? Where is the sort of Bill Bretenwood's(ph) conference of having -- of saying this is the problem, let's deal with it.
CHOATE: Exactly. Exactly.
ROGINSKY: It doesn't exist.
JOHNSTON: That's a very, very good question to raise because we have known since at least August of 2007, there was big risk of this, Bernanke is an expert on the depression. Where was the plan? What kind of government doesn't have people planning for things?
ROLLINS: There's not one of these guy would have lent a dollar to anybody who didn't walk in with a business plan. Here's my financial disclosure, here's what I owe. We haven't got a clue who we're bailing out. We're just basically shoveling money out the door as they say trust me, trust me.
DOBBS: Richard McCormack, are -- do you -- are you struck by the irony that we are watching hundreds of billions of dollars leaving the treasury of the United States and the Federal Reserve and at the same time we have heard for the past 15 to 20 years the federal government can't do anything to help out the manufacturers of this country.
You're just trying to have to deal with the consequences of these ignorant free trade policies. By the way, we're going to devastate you. We're going to put your workers into direct competition.
We're putting the entire middle class of this country in direct composition with the cheapest labor in the world and these fools wouldn't step up to support anyone.
MCCORMACK: No, you know, actually, they didn't. And they did just the opposite. They -- they favored basically the people who are outsourcing, the multinational companies that are outsourcing, the retailers, the importers, the foreign agents of all those -- the shipping companies. So -- our government has done just the opposite. It has not represented the interests of domestic producers or domestic manufacturers. And that's what we really need right now. We need a government that steps up and supports our basic industrial infrastructure.
There are ways do that. And none of them mentioned it. They've just avoided the issue altogether. Long term that's the only way we survive this mess.
DOBBS: All right, we're going to talk about that when we come back here in just a moment. But first, I want to turn to our colleague Campbell Brown.
Campbell, what have you got coming up at the top of the hour?
CAMPBELL BROWN, CNN ANCHOR: Well, at the top of the hour, Lou, we are going to start with the latest on the financial crisis, what is going on. Ali Velshi will be here as he is every night to explain it all to us.
And then in a few minutes, we're also going to cut through the bull about what is happening right now on the campaign trail. Race baiting is making a comeback. We'll also go through the highs and lows of last night's debate and the -- some of the most important voters from one of this year's most important states -- women from Ohio tell us what they want to hear from the candidates and say that they are not hearing it from the candidates, at least not yet.
Lou, we'll see you at the top of the hour.
DOBBS: Got a deal. And we'll be back with our panel here next. Stay with us.
DOBBS: We're back with Ed Rollins, Michael Goodwin, Julie Roginsky, Richard McCormack, Pat Choate and David Cay Johnston.
Let me just turn this, if I may, to you first, David. Do have you a high level of confidence that what we have embarked upon in this so-called bailout which our viewers in this broadcast and listeners on my radio show call an outright sellout, any hope that it will succeed without significant alteration and focus upon different objectives?
JOHNSTON: No. This is just throwing money at problems. There doesn't appear to be any comprehensive plan to what they're doing. And there's no recognition that stock markets go down. I mean this is awful for people who have savings, including me, and investments, but they go down.
And we can't defy gravity. We can't artificially pump this up. And those hedge funds out there, for every dollar that they have their equity, they have 30 bucks in and the long-term capital management say some people have $250 of borrowed money for each dollar of borrowed money for each dollar of their own. DOBBS: And the idea that they -- this government of ours just ran out and said they'll guarantee all of the money -- the money markets funds and -- but not all of the commercial bank deposits.
What kind of madness is that, David?
JOHNSTON: This is budget deficit as far as the eye can see. And inflation eventually -- even though we have deflating assets, if their approach is to just keep throwing money at this, we will end up with enormous inflation.
ROGINSKY: I have to say, you know, you ask -- we have to change the objectives. I don't know what the objective is. What's the objective? Nobody has ever defined to us what the objective is right now because nobody has a grand strategy as to what we're trying to accomplish here. I'm still not clear as to what it is.
GOODWIN: David's point about just throwing money into problems. This is weakening the government in the long run. And so we are now turning more and more to sovereign countries and sovereign well funds to buy our assets. So we're talking a year and a half ago with -- there was a big fight over Dubai want to buy the ports -- some American ports. Now we're begging foreign governments to come in and buy, lend us money, take care of us.
I mean we are weakening ourselves.
DOBBS: Yes, lend help? They're talking about taking capital positions of ownership positions that would eventually mean outright ownership.
Doctor Choate, let me ask you this. We have -- we have a situation, as David Cay Johnson suggested, in which people are not talking about -- you know, business cycles are a normal part of life. Recessions do occur.
And I would love -- I would love to hear one of our political leaders, if we can call them that, say, you know, folks, we're going to have a recession. We're going to have a problem. We have had them before. We will prevail. We will overcome.
We will not have a depression because we are committed as a nation to doing this, this and this. Not a single presidential candidate, not a single elected official has stepped forward to do that. What are your thoughts?
CHOATE: I think, first of all, we are in a recession. And it's going to be a deep recession. But it need not be a depression. What we really need immediately after the election is for the Bush administration and whoever is president to get together and work out a plan.
Apparently they can't do anything before the election. But remember between the election and the change of administrations, we are going to have a ten-week period. We have seen the Dow Jones drop 20 percent in the last month. We need the next president and this administration to get together and work out a plan or we could see another 10, 15, 20 percent drop in the Dow Jones by the time the new president comes in, Lou.
DOBBS: Richard McCormack, are you shocked, surprised, that the real economy has not been part of the discussion here on bailouts, sellouts, whatever up want to call them, but no part of the Bush administration or the Democratic leaderships in interest and initiatives on correcting this economy? The real economy isn't even under discussion here.
MCCORMACK: It is not mentioned. Basically what's been mentioned is throwing more debt at bad debt. And at some point you have to pay off your debts and you have to have a plan to pay off your debt. Somehow you're going to have to sell products...
MCCORMACK: ... that people in the United States want to buy that are made in the United States and maybe people in the rest of the world would want to buy, too. So there's no -- there has been no mention of that. And that's frustrating for the manufacturing production community in the United States. Very, very frustrating.
DOBBS: And it's -- obviously, such that it's known frustration for some years now.
When we -- you know -- the suggestion that we would have a -- a post-election summit of some kind. Isn't it about time -- too, and the people in the country said, you know I've had enough of your bolaber (sp), your talk, your promises and your lies and that by the way, could cover everyone from these presidential candidates through our elected officials in both Congress and the White House. And now we want to see action.
ROLLINS: Well the first action they can do is they can go and vote for anybody who's there. If they walked in and voted against every member of Congress today, that would send a very loud signal. You wouldn't defeat a bunch of them, but you certainly would shake up a lot of them and they may basically decide they're going to go back and actually start to work right after the election from November through January where today they're basically going to go on vacation to do whatever else they are going to do.
GOODWIN: Well, yes -- look, I think Congress has gotten away with this here, because there's supposed to be checks and balances in our system. That's Congress' job to oversee the administrator -- the executive branch. It completely failed.
DOBBS: Hang on. If we have a Democratic president a Democratic Nancy Pelosi, and a Democratic Harry Reid, this is going to be a hoot, isn't it?
(CROSSTALK) ROGINSKY: You have Hank Paulson and Bernanke come to Congress and say: I've got a three page plan, by the way, rubber stamp it. (INAUDIBLE) to some extent, because this is going to be the biggest steamroll job in the history of the United States.
DOBBS: This broadcast is committed to one thing -- that's very nice. The reality is they got steamrolled. The politics appear to be dominating both parties, and the Congressional Democratic leadership as well -- from this Republican White House. Period.
CHOATE: And Lou -- if you're running for office right now and Ed, correct me if I'm wrong, you're going to do everything you can avoid asking questions because you have no control over what the administration is doing.
DOBBS: And -- we witnessed that in that so called debate last night. Thank you all. Appreciate it very much for you joining us here on the broadcast tonight and enlightening us.
Our poll results: 98 percent of you said the Federal Reserve shouldn't be continuing to pump tax payer money into the failed insurer AIG.
Thank you for being with us. The ELECTION CENTER with Campbell Brown begins right now -- Campbell?
BROWN: Thanks, Lou.