Return to Transcripts main page

Lou Dobbs Tonight

President-Elect Obama Holds First News Conference; Automobile Industry Struggles to Survive; Economic Crisis Sends Shock Through Nation

Aired November 07, 2008 - 19:00   ET


LOU DOBBS, CNN ANCHOR: Tonight President-elect Obama says he'll take swift action to tackle what he calls "the greatest economic challenge of our lifetime." We'll have complete coverage of his first news conference as president-elect and tonight our automobile industry struggling to survive, suffering crippling losses and running out of money.
And, tonight, the economic crisis sending shockwaves through state and local governments as well. We'll tell you what that means for your taxes and government services.

All of that, all the day's news and much more tonight, from an independent perspective, straight ahead.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Friday, November 7th.

Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody.

President-elect Obama today held his first news conference and promised a rescue plan for our middle class. Obama declared he will restore growth and prosperity but warned it will not be quick nor easy.

The president-elect's news conference coming as the unemployment rate rose to the highest level in 14 years. Now 6.5 percent. More than 10 million Americans are unemployed.

We have extensive coverage, beginning with Jessica Yellin, reporting on Obama's news conference.


JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT (voice over): Flanked by some of the nation's top economic and business leaders, President-elect Barack Obama sought to reassure skittish Americans he's focused on repairing the nation's economy.

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: We are facing the greatest economic challenge of our lifetime. And we're going to have to act swiftly to resolve it.

Immediately after I become president, I'm going to confront this economic crisis head on by taking all necessary steps to ease the credit crisis, help hard-working families and restore growth and prosperity.

YELLIN: He put his considerable political capital behind a new economic stimulus plan that would extend unemployment benefits, aid families facing foreclosure, provide support to small businesses, local government and the auto industry.

OBAMA: I want to see a stimulus package sooner rather than later. If it does not get done in the lame duck session, it will be the first thing I get done as president of the United States.

YELLIN: It came against a backdrop of more bad economic news. This time, spiking unemployment rates.

OBAMA: I think that a new president can do an enormous amount to restore confidence, to move an agenda forward, that speaks to the needs of the economy and the needs of middle class families all across the country.

YELLIN: He held the press conference fresh from a meeting with his new economic team, many of whom are on the short list for jobs in his administration.

To impatient reporters, Obama made it clear it will be weeks before he names his full team.

OBAMA: I want to move with all deliberate haste, but I want to emphasize deliberate, as well as haste.

YELLIN: The president-elect did hit a note familiar from the high-octane speeches on the campaign trail, a call for unity.

OBAMA: Now is a good time for us to set politics aside for a while and think practically about what will actually work to move the economy forward.


YELLIN: As meaningful as what Obama said is how he said it. The president-elect sounded somber. A seeming acknowledgement that in these tough economic times, he has his work cut out for him -- Lou?

DOBBS: Jessica, thank you. Jessica Yellin, reporting from Chicago.

The president-elect today also tackled national security issues in his news conference. Candy Crowley at that news conference, one of the few reporters called upon by the president-elect to ask a question -- Candy.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: You know, Lou, one of the things that Barack Obama's going to be, in addition to chief steward of the economy, of course, is commander in chief. And as such, he's been receiving this top intelligence briefings.

Now, presumably, from these briefings, which he will get daily, he knows exactly what the sitting president knows about things.

What I asked him was whether he had changed his mind, having gotten all of this top secret information, did he change his mind about anything that he had said over the course of the campaign trail.

He wouldn't bite, but he did talk about how he felt about the quality of intelligence gathering.


OBAMA: I have received intelligent briefings. And I will make just a general statement. Our intelligence process can always improve. I think it has gotten better. And -- you know, beyond that I don't think I should comment on the nature of the intelligence briefing.


CROWLEY: Now, for the past several days, Obama has also been receiving congratulatory telephone calls from various world leaders. And he has also gotten a congratulatory note from Iran's Ahmadinejad. He has not yet responded to that note, saying that he was still looking at it.

But as for whether he would send low-level envoys to Iran, obviously, a country, an enemy country, if you will, of the U.S., but one of those that Barack Obama has said he will talk to, to see if there was any kind of common territory between the two of them.

Clearly, at this point, Obama could find no common territory.


OBAMA: Let me state -- repeat what I stated during the course of the campaign. Iran's development of a nuclear weapon, I believe, is unacceptable and we have to mount an international effort to prevent that from happening. Iran's support of terrorist organizations, I think, is something that has to cease.


CROWLEY: So it sounds like, Lou, that when the president-elect takes over as president of those low-level envoys sent to Iran will not go immediately.

DOBBS: All right, Candy, thank you very much. Candy Crowley.

President-elect Obama's news conference lasted less than 20 minutes, including his initial statement. Nine reporters asked questions, but not one of those reporters asked a question about the sign on the president-elect's podium, announcing the, quote, office of the president-elect, whatever that is. Presumably it is Obama's campaign headquarters under a new name.

Well, new evidence tonight of the scale of the economic crisis facing this president-elect and this nation. The latest unemployment report shows the economy lost nearly a quarter million jobs last month, more than a million jobs so far this year.

The unemployment rate rose from just over 6 percent to 6.5 percent. That is the highest unemployment rate since 1994.

The automobile industry today announcing more job cuts as it is trying to come to grips with just a dramatic slump in sales and rapidly accelerating losses. President-elect Obama said the automobile industry is the backbone of American manufacturing and he promised the industry additional help. Bill Tucker has our report.


BILL TUCKER, CNN CORRESPONDENT (voice over): American automakers are reeling, plant closings, production cutbacks, capital spending slashed. GM and Ford cutting another 10 percent of salaried employment costs on top of previously announced cuts.

Merit pay increases, gone. Bonuses, gone. Ford will no longer match employee's contributions to the company's retirement plan. Chrysler is on its own. GM announced merger talks are over, saying it may just barely have the money it needs for day-to-day operations by the end of this year.

It certainly seems a helping hand from Washington is necessary.

PROF. PETER MORICI, UNIVERSITY OF MARYLAND: The trick in assisting the Detroit three is to engage them in building the kinds of cars that make America energy independent, not energy dependent.

If we focus the assistance of the automobile industry in that direction, not only will we save them from collapse but we might create a good export industry in the process.

TUCKER: The plight of the automakers underscores a brutal fact of October's unemployment report. More than one-third of the jobs lost were manufacturing jobs. Advocates for domestic manufacturers are urging President-elect Obama to focus on manufacturing as a way to lead an economic turnaround.

LLOYD WOOD, AMER. MANUF. TRADE ACTION GOAL: And one of the biggest reasons why is because for every manufacturing job created, you have a tremendous multiplier effect in jobs created everywhere else.

TUCKER: But not every industrial economist is holding his or her breath.

ALAN TONELSON, U.S. BUSINESS & INDUSTRY COUNCIL: I don't see much evidence, unfortunately, that President Obama recognizes the overriding need to boost domestic production in order to put our economy back on the right track, again, back on the track of sustainable and healthy growth.

TUCKER: In the 10 years from 1997 to 2007, Tonelson says the economic sector was an economic lager, growing at only one-third of the overall economic growth rate. (END VIDEOTAPE)

TUCKER: And during that time, our trade deficit grew from more than $100 billion to more than $700 billion, as we continuously failed to produce more than we consumed. The last time we were in a trade -- surplus, Lou, in case you're interested, was back in 1973.

DOBBS: All right, thank you very much. A sobering review, if you will. Thank you very much, Bill Tucker.

The automobile industry's struggle to survive is just another illustration of the collapse of our manufacturing employment in this country. It was just a little over 13 million people working in our factories last month. That's just 8 percent of our workforce.

Manufacturing employment -- get ready for this -- manufacturing employment in the United States is now at the lowest level since 1942. The latest manufacturing jobs total, 30 percent lower than the all- time peak. That all-time peak of 19.5 million manufacturing jobs, in June of 1979.

We'll have much more on the economic crisis ahead. I'll be talking with Nobel Prize-winning economist Paul Krugman.

Also, communist Chinese hackers breaking in to White House computers. Why haven't we heard from the Bush administration? We'll tell you about China's cyber attacks against the United States.

And our economic slowdown is devastating state and local governments. We'll have that special report on hard times ahead.

We'll be right back.


DOBBS: State and local governments across the country tonight bracing for tax hikes and cutback of services. New York mayor Michael Bloomberg warning that top unpopular cuts are coming to New York.

And as Casey Wian reports, the entire state of California, once again, in dire financial straights.


CASEY WIAN, CNN CORRESPONDENT (voice over): California governor Arnold Schwarzenegger is desperately trying to close an $11 billion state budget deficit. So he's called a special session of the state legislature to consider a massive tax increase and deep spending cuts.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: In the six weeks since I've signed the last budget, the mortgage crisis has deepened, unemployment has increased and the stock market has lost more than 20 percent of its value.

I know how painful this is to everyone here in California. Many of Californians have lost their homes, they've lost their jobs. Retirement funds have disappeared. And everyone is worrying about the future.

WIAN: In the future, under Schwarzenegger's plan, Californians will pay an extra 1.5 percent in sales taxes. In some cities that will boost the rate above 10 percent. Sales tax will also be charged on lots of additional services from automobile repairs to a round of golf, veterinary bills, even a trip to Disneyland.

State programs will be slashed including more than $2.5 billion from education. Also scaled back, healthcare for low-income adults, grants for seniors and the disabled, as well as vacations and overtime for state employees.

If that's not bad enough, many California cities are adding to the pain. San Diego plans to lay off police staff, close fire stations, libraries and recreational facilities.

MAYOR JERRY SANDER, SAN DIEGO: I'm asking the citizens of San Diego to do their part in helping us through this difficult time. We all know that government can't solve every problem.

WIAN: Los Angeles is also considering layoffs and 9 percent spending cults for large city departments.

From coast to coast, state and local governments are in trouble, prompting this plea from the mayor of New York.

MAYOR MICHAEL BLOOMBERG, NEW YORK CITY: New Yorkers must pull together. Every city agency must push each dollar further. We're going to do that. Doing that involves making hard choices that will not be popular with everyone or perhaps anyone, but they are the right ones to see us through these very difficult economic times.

WIAN: Nationwide, home prices are down, cutting property tax revenue. Layoffs are up, so income tax revenue is falling. And consumers aren't spending as much, slashing sales taxes.

The National League of Cities says, "For the first time in recent history, local government finance officers are reporting that all three primary sources of revenue for local communities, property, sales and income taxes, are in distress."

The National Association of Counties reports that 87 percent of counties with at least half a million people expect revenue shortfalls this year. That squeezing services from law enforcement to healthcare.

LARRY NAAKE, NATIONAL ASSN. OF COUNTIES: At the very time when public services are needed the most, when we have unemployment and we have people who are really struggling economically, that's when they need the most services and when we have the fewest revenue sources to provide those services.

WIAN: Ten states have already implemented across-the-board spending cuts according to the National Council of State Legislatures. Fifteen are raising taxes or cutting fees.

President-elect Obama, in his first post-election news conference, says helping local governments is a top priority.

OBAMA: I think it's very important for us to provide the kind of assistance to state and local governments to make sure that they don't compound some of the problems that are already out there by having to initiate major layoffs or initiate tax increases.

WIAN: But that's already happening, a fact likely underscored by Michigan governor Jennifer Granholm and Los Angeles mayor Antonio Villaraigosa, two members of Obama's economic advisory board.


WIAN: Many local governments, including the National Association of Counties are pushing federal lawmakers and the Bush administration to act before Obama takes office. They want a second economic stimulus package with at least $100 billion targeted at local government programs including infrastructure, Medicaid and extended unemployment insurance -- Lou.

DOBBS: And of course one budget not included in your survey of what's happening at the state and local level, and that is the federal budget deficit, which is expected by many to reach $1.2 trillion this fiscal year.

Casey, thank you very much. Casey Wian.

In our poll tonight, we'd like to ask you a question to reflect what you think is the best way for taxpayers to help their city and state governments address this economic crisis.

Would you prefer higher taxes or government cutbacks of services? Cast your vote at We'll have your results later.

And up next, President-elect Obama today promising to create jobs to rescue our struggling middle class. Nobel Prize-winning economist Paul Krugman joins me. We'll be talking about the president-elect's agenda.

And communist China hacking into the White House computers. Computer of the Obama and McCain campaigns as well. We'll have a special report here next. Stay with us. We're coming right back.


DOBBS: Disturbing new evidence of communist China's determined efforts to hack in to U.S. computer networks. White House computers, the latest target of the communist Chinese, along with the computers of the Obama and McCain presidential campaigns.

Louise Schiavone with our report.


LOUISE SCHIAVONE, CNN CORRESPONDENT (voice over): A government intelligence source tells CNN that Chinese hackers were probably behind an attack on White House computer systems, another episode in a string of Chinese cyber attacks that have so far infiltrated information systems at the Pentagon, the Commerce Department and Congress.

JOHN TKACIK, FMR. STATE DEPT. CHINA ANALYST: It must be up to about 50,000 attacks in 2008 alone. Now, when we pick up rocks, we find hundreds of little Chinese worms crawling out from underneath them and we put them back down and we don't know what to do about it.

SCHIAVONE: It's not clear when the latest cyber hack of the White House computer network occurred in which official communications reportedly were stolen. The "Financial Times" quotes officials as saying, "the secure classified network was not compromised."

The reported cyber attack on White House systems came to light as news broke that foreign entities hacked into the systems of the presidential campaigns of Barack Obama and John McCain.

There could be several suspects.

RICHARD FISHER, "CHINA'S MILITARY MODERNIZATION": Israel, Russia, Venezuela and North Korea, and other countries.

SCHIAVONE: But for many, China's aggressive high-tech espionage makes it a prime suspect yet again.

FISHER: A government is employing a range of sophisticated computer warfare capabilities ranging from gangs of hackers who work as mercenaries for money to specific military units and when the order comes they will be charged to go out and destroy.

SCHIAVONE: Making the computer firewall so porous even at government agencies is the fact that most of the software in these systems is made in China.


SCHIAVONE: The White House source was unable to tell us whether the White House cyber attack was the work of the Chinese government per se or another entity in China. Chinese government has persistently denied its involvement in hacking U.S. systems but has not responded to these latest allegations.

Analysts say there's a fine line between computer hacking and cyber warfare but China's activities are testing that line -- Lou?

DOBBS: Thank you very much, Louise.

Louise Schiavone reporting from Washington.

DOBBS: Communist China is behind many other attacks against this country's computer networks. Security experts now believe China has created an army of hackers to gain access to American military government and private sector computer networks.

The Pentagon reports 3 million cyber attacks on Defense Department networks each and every day. Let's take a look now at some of your thoughts. Many of you continue to write in about seeking justice for former Border Patrol agents Ramos and Compean, including Steve in Ohio who said: "President-elect Obama stressed change during the campaign. I believe he could start by changing an injustice and pardoning Ramos and Compean."

Baron in Arizona said that: "Now that Obama is the new president- elect, I hope he can enforce the illegal immigration laws and secure our borders and ports. Otherwise, he's no different than the Bush administration and their broken promises."

Nile in Washington: "Until the United States gets serious about cheap labor coming into America or outsourcing to other countries, all our important middle class -- our all-important middle class will continue to worsen."

We'll have more of your thoughts here later.

Each of you whose e-mail is read here receives a copy of my new book, "Independents Day: Awakening the American Spirit," available now in paperback.

President-elect Obama's aunt says she will fight a deportation order and remain in the United States. The aunt, who is the half- sister of Obama's father, was ordered to leave the country in 2004 when a judge rejected her request for asylum from her native Kenya. She is living with relatives in Cleveland now. Obama said he didn't know about his aunt's status and she should be deported if she broke the law.

Up next, President-elect Obama holds his first news conference. Three top political analysts join me to assess the president-elect's performance.

And the economic crisis worsening, unemployment soaring, one of the world's best economist, Nobel Prize-winning economists, now we say, Paul Krugman. He'll be here to talk about the obstacle, the challenges, facing the nation and this president-elect over the next four years.

We'll be right back.


ANNOUNCER: This is LOU DOBBS TONIGHT. News, debate and opinion. Here again, Mr. Independent, Lou Dobbs.

DOBBS: President-elect Obama today told the American people at his first news conference as president-elect that his top priority is to create jobs and to help our struggling middle class when he does take office.

My guest tonight writes in his column in "The New York Times" that the president-elect should work quickly and aggressively to achieve his goals. Joining me now is Nobel Prize-winning economist and "New York Times" columnist Paul Krugman.

Paul, good to have you.


DOBBS: And again, congratulations on your Nobel Prize. That's wonderful.

KRUGMAN: It's pretty nice, thank you.


DOBBS: Got it.

Well, as we listened to, you know, not even the first press conference today, but to watch Barack Obama as president-elect on Tuesday night, I mean, it's a sobering set of challenges that he faces. He's obviously keenly aware of them.

The idea of more stimulus, though, in this economy, as he called for upon taking office, I mean, we've got over $2 trillion in stimulus, when you look at what the Fed has done with the banking system and what will be spent as the result of the bailout.

How much more stimulus do we need?

KRUGMAN: Lots, unfortunately. And this is -- this is like you've got some kind of infection and you tried all the usual antibiotics and they haven't worked and so now you go for the really heavy stuff.

I'm sorry, but this is -- this is bad. This is clearly the worst thing in 25 years and it's probably the worst in 70 years. This is, this is bad.

DOBBS: The worst in 70 years, I mean, that covers some pretty profound area, when we're talking about the depression, a banking system that came to a halt, capital -- capital markets that were effectively defunct.

KRUGMAN: Well, you know, the thing is, we -- the modern banking system is mostly not banks. It's stuff that functions like banks but it isn't treated like banks, the shadow banking system. And that has really collapsed. I mean when you think about -- auction rate securities.

That was a $300 billion effectively banking system that's -- disappeared. Asset backed commercial paper was $1.2 trillion. It's now $600 billion. $600 billion of banking disappeared.

This is big stuff and it takes...

DOBBS: By the way that's worth the support of now the Federal Reserve in the -- in the commercial paper. KRUGMAN: That's the only thing that's kept it from going down further, that's right. So we're doing -- there's nothing -- Ben Bernanke has done everything he can, but we need, now -- we need, now, Uncle Sam.

DOBBS: We need Uncle Sam. We've got Uncle Sam to this degree. We've got a $700 billion bailout. We've got just approaching what will be about $900 billion of capital injection into the Federal Reserve. We've got another $500 billion in Fannie Mae, Freddie Mac. I mean, the list goes on ...

KRUGMAN: But all of that is financial.

DOBBS: I understand.

KRUGMAN: Right? And what's happened is, really, until the last two months is now the epicenter of the earthquake has shifted from the financial system -- from Wall Street to Main Street. And now comes the time when you really have to do -- we now need to talk about jobs. We need to talk about stuff that's really going to support Main Street.

DOBBS: Is it possible, is it conceivable, Paul, that the mistake was focusing on the financial economy rather than the real economy to begin with?

KRUGMAN: You need to do both. I mean, it's like -- the financial system, you can't have a working economy if that falls apart. You've got to rescue the banking system.

But for whatever reason, we didn't do it soon enough or just too much accumulated, trouble, now we've got to rescue the rest. It's awesome. I mean, I don't like the prospect of, you know, more than $1 trillion deficit but I don't see how we avoid it.

DOBBS: It looks like we're on the path of $1 trillion to $1.2 trillion - estimates make great sense. But even with that deficit, which should be stimulative (ph) beyond belief, we still have a president-elect talking about trying to encourage job creation, which is a short-term approach, but one can't clearly see a path to a short- term approach to job creation.

We've watched manufacturing today is now down to a level of 1942 in this country. We haven't got the way -- I can't find a way in which there is a direct correlation between the money the federal government can spend and the jobs that can be created for our middle class.

KRUGMAN: Well, a lot of what we can do is, for starters, construction. There's a lot of infrastructure that needs to be built or repaired. A lot of things you can do there. You just had earlier in the program all about the state and local governments cutting. That's slashing -- give them some money so they don't have to do that. It's actually destructive -- it's doubly destructive now.

Not only cutting services but we're also destroying jobs by doing that. So there's a lot that Uncle Sam can do. Now, manufacturing is a concern. You know, exports has been one of the good things for our economy. But now the rest of the world is in trouble so that's a problem. But you do, you know, lots of stuff. There's no single answer.

DOBBS: If we continue, then, we do spend -- what do you think will be spent, another trillion dollars?

KRUGMAN: I'm guessing four to five percent of GDP, which is basically saying $600 billion to $700 billion of stimulus.

DOBBS: I'm going to round it up to $1 trillion.

KRUGMAN: Well, there's other stuff. We're going to be ...

DOBBS: So now we're talking about that level of stimulus. Matching the size of the entire federal budget in one year in stimulus.

And when we talk about those jobs, infrastructure, we have a president who, for eight years, has been talking about we have jobs that Americans won't do. One of those jobs is construction. We have a situation which Wal-Mart, when we drive purchase of goods in the consumer market, we're talking about Chinese goods. We're not getting the multiplier effect back because we don't have that production. It's a very difficult formula, isn't it?

KRUGMAN: There's parts of it. I mean, think you're exaggerating. Even buying stuff from Wal-Mart, most of the price of what you buy from Wal-Mart is not Chinese. Most of it is U.S. value- added. It's true, some of this will spill over, but, you know ...

DOBBS: I don't want to argue with a noble prize winner, but point of fact, Wal-Mart is the third largest exporter from China and most of those goods are from China.

KRUGMAN: But, in fact, there's a lot of -- we can argue the number but it's -- but, you know, you can see the fact that the multiplier still works you can see by the fact that we're in such big trouble right now. If it was all from China, then the collapse of our housing bubble wouldn't have done so much to our economy.

DOBBS: What can we do for that housing bubble?

KRUGMAN: Housing was overbuilt, overpriced ...

DOBBS: I wish it were a bubble. I misspoke. For the collapse of the housing bubble?

KRUGMAN: There's a line economists sometimes use. You don't have to fill a flat tire through the hole. We don't have to reflate the things that were over-inflated and collapsed. But we do need -- we can do a lot. Again, infrastructure, we can do a lot of spending -- it's not easy. But -- and nobody says we're going to bring prosperity. We're really just talking about trying to minimize the damage. DOBBS: All right. Well, I wish we could end on a happier note. But, Paul, thank you very much, as always, we appreciate your insightful analysis and, again our congratulations to you. Paul is the author as well of the book -- I don't even like to use the title. But the book is "The Return of Depression Economics and the Crisis of 2008." Paul, thanks a lot for being here.

KRUGMAN: Thanks a lot.

DOBBS: Up next, President-Elect Obama holds his first knew conference calling for swift action to help our struggling middle class. Democratic leaders in Congress calling for a lame duck session and a second stimulus package. What will they do and will it work? Three of the best political analysts join us here next. We'll be right back.


DOBBS: Ed Rollins, Robert Zimmerman, Gabriel Perez joining me now. Let me turn first to the press conference, the first press conference of the president-elect. He said that the first order of business is rescuing our middle class. What do you think?

ROBERT ZIMMERMAN, CNN CONTRIBUTOR: I was very, very impressed with the press -- with the way he handled himself at the press conference. He looked presidential. He was certainly very deliberative and thoughtful with his comments. And he surrounded himself with a great team.

And I think at this stage, especially as we do already have a sitting president, he was respectful of the role he has now at a sensitive time, especially now when the world is hanging on every word he says. I think he handled it extremely well and with great sensitivity.

ED ROLLINS, CNN CONTRIBUTOR: It's the first priority and four years from now it will be the last priority. My sense is, we talked about Bush's legacy being Iraq which obviously got damaged. I think this president's legacy is going to be this economy and can he and his team get it moving?

And as you said, wrong steps here can make it worse. I mean, I think the key thing here is how do you tackle this thing, not get all kinds of pet programs involved here and how do you really responsibly move this thing forward and create jobs?

DOBBS: One of the things I've said is I hope this president- elect doesn't follow the -- sort of the template of language just to create this sort of perception of rushing and just a manic response to a crisis, whatever it may be, as in the bailout. But, Miguel, he said deliberate haste today. And half of those words were music to my ears. What do you think?

MIGUEL PEREZ, CNN CONTRIBUTOR: I think that, look, the one thing is, talking point, and that's what he used today. What I heard today was the same talking points that we heard during the campaign. I heard nothing new in this press conference, frankly. You know, it's great that he sat down with 17 people who advise him on the economy but it would have been nice for him to reassure the country that somehow we're going to be all right and I didn't hear those reassuring words. It's one thing to use the talking points and another thing to turn those talking points into policy. And that's the hard part. Turning it into policy.

DOBBS: You just heard a liberal economist, Paul Krugman, Nobel Prize-winning economist now, basically -- his book is "The Return of Depression Economics, the Crisis of 2008."

I think it might have been somewhat disingenuous on his part to be reassuring as if, you know, you can hand out pieces of candy to children here on this issue. The pain is profound. We've got 10 million people right now unemployed. Unemployment rate of 6.5 percent. Personal bankruptcies are skyrocketing.

We've got -- we've got 4 million folks facing foreclosure here. The list goes on. We've got an automobile industry that is being devastated. They're going to have -- stimulus packages may be tempting it seems to me, and it may be the order of the day because of Nancy Pelosi and president-elect, but, my God, we've got to have a policy respond to all these issues that is structural and long term, right?

PEREZ: Absolutely, absolutely.

ROLLINS: The thing that makes me nervous is -- once again, we've had these short-term -- last 30, 45 days. I never get the feeling anybody knows what they're doing. It's kind of like let's try this. Let's throw it out here. Let's try it.

And I would rather say sit for three months, four months, eight months, get this thing right. If we're spending trillions of dollars, which we are, then it better be right, because where it's not just us, it's my child and grandchildren that are going to basically be paying for this legacy. You say another trillion dollars, this deficit, every year and beyond, that's serious money.

ZIMMERMAN: That's what was intriguing to me about this press conference, the way he handled it. Because obviously the stimulus package is on the agenda. There is strong bipartisan support. How it should be structured, whether it be focused on infrastructure and consumer is going to have to be debated and thought out. But I was impressed and I think it's very significant that he didn't rush out with disingenuous promises about deadlines and timeframes.

Because the truth is we have to -- this has to be thought through.

DOBBS: At the same time, Nancy Pelosi is talking about lame duck sessions and stimulus packages. I disagree with Paul Krugman, frankly. The idea of just throwing more money at this right now is not the answer. Bailing out more of Hank Paulson's friends is not the answer. And acknowledgement by Krugman that this is now a serious issue for the real economy. I don't think that's going to play politically very well for the president-elect in a difficult situation. What are his choices?

ROLLINS: The other danger here is you've now got states going belly up and cities will start. Everybody now basically thinks we can't afford it so therefore -- we can't make it -- we don't want to cut programs. We don't want to cut cop, teachers, what have you. Let's go to the federal government and basically see if they'll give us a bailout.

Pretty soon, there's going to be no money. You can print it pretty fast, 24 hours a day but it's worthless after a while. That's what's scary to me is the precedent is set. There doesn't seem to be any discipline. No priorities. It's kind of like we're all in trouble, let's do whatever. That's scary to me. I'm not an economist, but it's scary to me.

PEREZ: If, again, the states and municipalities begin to get infrastructure money from the federal government, there's a lot of unemployed construction workers in this country right now. If we start building roads and bridges and getting people back to work, it may help. I think that's one of the first priorities President-Elect Obama has to deal with.

ZIMMERMAN: It comes down to the short-term fix versus long-range structural corrections that have to be made. And I think it's wise that he's just taking his time to establish clear policies on these issues. And ...

DOBBS: Oh, I couldn't agree with you more. The more deliberate he sand the more careful and thoughtful. I give him all the credit in the world. Today, it had to be a great temptation within his organization. OK, Mr. President-Elect, here we go, we're going to have this, this and this. We'll be zippy dippy do, you know.

ZIMMERMAN: Exactly right.

DOBBS: And snappy patter. He resisted and kudos to him for doing so. As we look at the other issues, I mean, within 24 hours, confronted by a relatively direct challenge from Israel on the issue of talking with Iran, Medvedev of Russia, saying we'll build missiles on the border next to Poland if you go ahead with Bush's Russian missile shield. The Afghan government protesting the use of Predator strikes. The list goes on. It was a very sobering, quick introduction to the highest office in the land, wasn't it?

PEREZ: The weight of his shoulders -- the weight of the world is now on Obama's shoulders. And I think -- I saw the press conference today. It's actually beginning to show already. The man looked a lot more serious, concerned about the responsibility he's facing now.

I mean, it's not just dealing with the state of the economy the way it is. It's all the promises that he's made. Everything that all these new expensive programs that he wants to introduce. You know, a lot of people with a lot of expectations. If you go around the country right now and ask people what do you expect from Obama, you get 1 billion responses.

ROLLINS: There's a phrase when a great college player goes into the National Football League, welcome to the NFL, when he gets his first -- you know, gets his head taken off. Barack Obama is now into the big time and the presidency is the most difficult job, and this is the most difficult time any modern president's ever had.

DOBBS: We'll be back with our panel. First, a reminder to vote in our poll. The question tonight is, we're interested to know what you think is the best way for taxpayers to confront these difficult times. The question is, would you prefer higher taxes or government cutbacks in services? Cast your vote at We'll have the results here later. Up at the top of the hour, Campbell Brown, NO BIAS, NO BULL. Campbell, what are you working on?

CAMPBELL BROWN, CNN HOST: Hey there, Lou. Barack Obama's first news conference today and he is already apologizing for something that he said.

We're going to explain what happened. Also, Governor Sarah Palin as you have never seen her before, totally accessible, totally unguarded and totally on fire about the news media's coverage of her and the anonymous McCain campaign critics who are trashing her.

Also tonight, our PDB, the political daily briefing. Includes one of the most powerful people on Capitol Hill quoting scripture and making a fateful decision. We've asked some of the best minds around to pick their "No Bull" top moment of the campaign. We'll talk about that as well. Lou?

DOBBS: All right. Thank you very much, Campbell. A reminder to join me on the radio Monday through Friday for the LOU DOBBS SHOW. My guests Monday include Republican congressman-elect Jason Chaffetz of Utah and his big win on Utah.

James Taranto, the editor of on the Obama transition to power. And go to to get your local listings. We'll be back with our panel. And later, Heroes, tonight, the story of one young soldier awarded the Silver Star for his bravery. Stay with us. We're coming right back.


DOBBS: We're back with Ed Rollins, Robert Zimmerman. And Miguel Perez. Miguel, Governor Palin back to Alaska. The McCain campaign aides, throwing out anonymous source, nonsense, viciously attacking the woman, what's your reaction?

PEREZ: I think that she's done well. I don't think that we should be pounding on her at this point. Frankly, I like her personally, I like her.

DOBBS: How about we pound on the McCain anonymous sources? PEREZ: Yeah well, the problem is, they're already talking about what is h she going to do? The woman has already told us, she hasn't even thought about it.

DOBBS: These are rather unimaginative journalists who can come up with no other question what Sarah Palin is going to do in 2012 when we are looking at the issues at are confronting this nation. What's your reaction to this?

ROLLINS: I think it's been outrageous, these guys are totally irrelevant. This is about the third lousy campaign so I hope they never get to work again.

And if they want to be brave and courageous, stand up and attack her. Here is the interesting thing ...

DOBBS: What kind of wimp -let me just say - what kind of wuss goes after a woman with anonymous sources? It just makes you want to ...

ROLLINS: Seventy percent -- First poll has come out Rasmussen Poll, who is very accurate, basically did a poll on her. Seventy percent - Republicans are all that matter from here on out as far as she is concerned, both in Alaska and - is she going to get reelected 70 percent of Republicans think that that she added a great deal to his ticket. Ninety one percent of Republicans approve with her at this time. And when they put their head to head with Romney and Huckabee, the two follow-ups this year, she's at 70 percent. They're at 10 and nine. She begins ...

DOBBS: We maybe finding out to reason she's being attacked then. Because they want to knock her down for the purpose ...

ZIMMERMAN: But this is not unique to the Republican Party. I remember how al gore was trashed by Democratic Party insiders despite his popular vote victory and John Kerry was trashed by these low staffers. This is about these punks, these cowards in both parties are nothing more than staffers trying to save their reputation. And they are thoroughly unprofessional and I feel for Sarah Palin because it is unfair to do it to her. I despised it when it was done to Kerry and Gore.

DOBBS: You know, it's unfair to her. I've got to say she's handled it. She's got some stuff. She's ...

ROLLINS: She's got some work to do back home. She's been away 10 weeks. They have the same shortfall. She's got to reelected. My sense that will be her focus. Unless she wants to throw a long ball and when Ted Stevens gets thrown out to run for that Senate seat and come to Washington and spend six years, see if four years from now is the right time or if eight years from now is the right time.

DOBBS: Miguel, she has so much fun with the national media that I can't imagine her resisting that call.

PEREZ: Look, she would have be appointed by the governor, though.

ROLLINS: No, no. They changed the law. Because the former governor appointed his daughter. So now it is a special election. She can appoint herself for 60 days until there's a special election. I don't think she would do that. I think the bottom line is she'll do a caretaker.

ZIMMERMAN: I think what's really intriguing how many other Republicans or Democrats for that matter can draw that many people at a rally. She certainly has a following and I am sure that probably produces a lot of resentment.

ROLLINS: Iowa is a long way from Alaska, though. That's the only problem.

DOBBS: And as we're wrapping here, your reaction these turned out figures turned out to be flat like 2004, nothing like the hype.

PEREZ: I look at the specific in my community and I tell you that in my community the numbers tell you that ...

ROLLINS: I studied all numbers today.

PEREZ: Obama won by 67 ...

ROLLINS: One party turned out. One party did not turn out. One party registered new voters enthusiastically, registered 10 million new voters. We didn't. We lost -- 6 million fewer votes were for McCain than were for George Bush four years ago.

ZIMMERMAN: I love democracy.

PEREZ: But the numbers didn't grow because of Obama. I don't think the numbers grew because of Obama. I think they grew because we got more voters and got more registered people. More people interested in the presidency.

ZIMMERMAN: They were interested because of the Obama presidency.

DOBBS: We're going to have wrap this up. If you want to look at energized voters, the African American Democratic voter carried the day.

PEREZ: Absolutely. Absolutely.

DOBBS: Thank you very much. Appreciate it, gentlemen. Up next, Heroes. Tonight we introduce to Sergeant First Class Frederick Rowell, honored twice for his bravery, we'll have his story next right here.


DOBBS: And now our tribute to the brave men and women in uniform serving this nation around the world. Tonight, we want to introduce you to SFC Frederick Rowell. Sergeant Rowell served two tours of duty in Iraq and was honored twice for his bravery. Philippa Holland has his story.


SFC FREDERICK ROWELL, IRAQ WAR VETERAN: You know, when I was a kid, I always waned to be G.I. Joe.

PHILIPPA HOLLAND, CNN CORRESPONDENT (voice-over): Sergeant Rowell joined the Army when he was just 17. After six years serving his country at home, he volunteered to go overseas in 2003.

ROWELL: I jumped in, because one thing, I joined the Army, it was to deploy, to do my job. Every soldier wants to do his job.

HOLLAND: Forty eight hours after volunteering and saying good- bye to his wife and children, Rowell was on his way to Kuwait where he prepared for the U.S. invasion of Iraq.

ROWELL: I remember being with my unit, President Bush gave over the radio, 48 hours, or 24 hours something like that, to leave Iraq.

HOLLAND: April 4th, 2003, Rowell was involved in the critical fight for Baghdad International Airport. Under heavy enemy fire his team fought cover in their Bradley vehicle. But Rowell noticed another squad 300 meters away, fully exposed.

ROWELL: They were coming in everywhere.

One guy was laying on his back, didn't know what was going on. Squad leader was in my vehicle. I looked at him and like, I'm going. You know someone who is in distress, you just see it.

HOLLAND: One soldier had been shot through both legs. Rowell provided cover and provided first aid to the wounded private.

ROWELL: I had to lay on him. He was in shock, moving his legs around and the rounds were coming in everywhere. I was afraid he was going to get hit again. I so, I laid on top of him. About this time I got shot in the plates, in my Interceptor Body Armor. I got shot there.

HOLLAND: Disregarding his own safety and using his body as a shield to protect a wounded soldier earned Sergeant Rowell a Silver Star, the Army's third highest award for combat gallantry. Today, Rowell is fighting another battle, recovering from wounds sustained while on his second deployment in Iraq. But he says his recovery has not been difficult.

ROWELL: No, because my wife. My wife has been there to help me out. Been very supportive. All around I think the greatest Army wife out there ever.

HOLLAND: Philippa Holland, CNN.


DOBBS: Well, during his second deployment in Iraq, Sergeant Rowell once again risked his life saving a wounded comrade and honored with a Bronze Star with valor.

Tonight's poll tonight, 81 percent of you would prefer government cutbacks over higher taxes. We'll send that on to Governor Arnold Schwarzenegger in California right away. Thanks for being with us.

For all of us here, good night from new. Campbell Brown, NO BIAS, NO BULL starts right now. Campbell?