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Lou Dobbs Tonight
Obama's Choice for Attorney General Announced; Bailout Backlash; Automakers Appeal for Help; Pirates on a Rampage; Who Will Receive Pardons?
Aired November 18, 2008 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KITTY PILGRIM, GUEST ANCHOR: Thanks, Wolf. Tonight Treasury Secretary Hank Paulson faces blistering criticism from lawmakers on Capitol Hill. One of those lawmakers, Senator Jim Inhofe is my guest.
Also tonight President-elect Obama wants a former Clinton administration official, Eric Holder, to be attorney general. We'll have a live report from Chicago.
Also tonight congressional Democrats push proposals for sweeping health care reforms. Those proposals could tell us what President- elect Obama is planning on this critical issue. We'll have all that, all the day's news, much more straight ahead here tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Tuesday, November 18th. Live from New York, sitting in for Lou Dobbs, Kitty Pilgrim.
PILGRIM: Good evening, everybody. President-elect Obama tonight has chosen Eric Holder to be attorney general. Now Holder is still being vetted, but he's indicated he will accept the position if he is offered it.
Meanwhile, speculation continues that Senator Hillary Clinton could become secretary of state. Officials are still checking whether she or her husband has any potential conflicts of interest. Jessica Yellin reports from Chicago. Jessica, what is the latest on Eric Holder and his possible appointment to the Obama cabinet?
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Hi, Kitty. Well Eric Holder is a man Barack Obama has come to be very close with over the last year. He helped oversee the vice presidential selection process. And we are told by top Obama aides that he gained Obama's total trust during that process.
He will become if he passes through confirmation, the first African-American attorney general in U.S. history. But he's a man who has been in the Justice Department before. He was the deputy under Janet Reno during the Clinton years.
During that time he earned a reputation for being a law and order fellow. He has a history as a federal prosecutor, prosecuting public integrity issues. It is perceived that he would try to restore the Justice Department's reputation for pure political independence from the White House and also try to balance any focus with the war on terror also with an effort to fight crime here in the U.S., help local communities with their policing efforts.
There is some controversy around him. Eric Holder was a man who helped sign off on the pardons that Bill Clinton approved when he was leaving office, among them, the pardon of Marc Rich, the fugitive financier who took up quite some controversy when he won that pardon.
But that's seen as a small blip. Folks we have spoken to in the Senate think he will pass confirmation hearings there quite easily. He was very well liked by Democrats when he was at the Justice Department -- Kitty.
PILGRIM: Jessica, there are new questions tonight about Hillary Clinton as a possible secretary of state. What are you hearing about that?
YELLIN: Well as the vetting process continues there are a number of issues that have to be addressed. One of them, we have all been reporting on Hillary Clinton, Senator Clinton's debt. She has an outstanding debt from her presidential bid of $7.6 million.
Her spokesperson Philippe Ryania (ph) says that she is committed to paying that down and paying off her vendors. But the question is as secretary of state can she raise money to do that? We are told by lawyers she legally there is nothing barring a secretary of state from raising money.
But it could be a tricky situation. So far the Obama team has raised about $800,000. It's only a small dent in a $7.6 million debt. So that remains an outstanding question if Clinton takes that role -- Kitty.
PILGRIM: All right, thanks very much. Jessica Yellin, thank you Jessica.
Well our worsening economy remains the top issue for President- elect Obama and the Congress. Lawmakers today blasted Treasury Secretary Hank Paulson for his handling of the Wall Street bailout, members of Congress accusing Paulson of making up strategy and failing to help homeowners. Christine Romans reports.
(BEGIN VIDEOTAPE)
CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): The architects of the historic bailout of the financial system defended their work to a hearing room sick with skepticism from Democrats.
REP. GARY ACKERMAN (D), NEW YORK: You seem to be flying a $700 billion plane by the seat of your pants. It seems to be the second largest bait-and-switch scheme that history has ever seen second only to the reasons given us to vote for the invasion of Iraq.
ROMANS: Criticism that the initial focus of buying of toxic assets off the banks books has shifted now to capitalizing the banks.
REP. MAXINE WATERS (D), CALIFORNIA: I spent considerable time selling this program to those who were suspicious and did not want to do it.
ROMANS: She and others said not enough is being done to help homeowners with the bailout money. But the Treasury secretary said the bailout is working.
HENRY PAULSON, TREASURY SECRETARY: The actions of the Treasury, the Fed and the FDIC have stabilized our financial system.
ROMANS: The Treasury officials abandoned the idea it originally sold Congress buying up toxic assets. So just how is the government spending your money? Well have the bailout money $350 billion is now available for the next administration to spend.
Treasury just dolled out 33 billion to 21 banks, 125 billion has already been pumped into JPMorgan Chase, Goldman Sachs, Bank of America, Citigroup and others. That leaves 91 billion more earmarked specifically for banks.
Meanwhile, 40 billion went to AIG, an insurance company; 60 billion is left over. But is it really working? Bernanke and Paulson say so. It has stabilized the financial system, but not the markets and the economy remains quite weak. Both say more work needs to be done.
Christine Romans, CNN, New York.
(END VIDEOTAPE)
PILGRIM: Well there is new evidence today that the housing crisis is far from over. Home prices declined in four out of every five cities in the third quarter as foreclosed homes flooded the market. Median home prices fell nine percent compared with the year before.
The national median price now $200,000. Sales of homes with mortgages in default accounted for more than a third of all transactions. Treasury Secretary Hank Paulson today said Wall Street bailout money should not be used to help homeowners in foreclosure or the struggling auto industry.
Now Paulson's hard line coming on the same day the big three automakers begged Congress for $25 billion in additional assistance. They said the entire economy will suffer if they don't get it. Dana Bash reports from Capitol Hill.
(BEGIN VIDEOTAPE)
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): One after another, the chief executives of Detroit's big three automakers pleaded for 25 billion taxpayer dollars to rescue them.
RICHARD WAGONER, GENERAL MOTORS CEO: This is all about a lot more than just Detroit. It is about saving the U.S. economy from a catastrophic collapse.
ALAN MULALLY, FORD MOTOR CEO: We must join our competitors today in asking for your support to gain access to an industry bridge loan that would help us navigate through these difficult economic crises.
ROBERT NARDELLI, CHRYSLER CEO: We are asking for assistance for one reason, to address the devastating automotive industry recession caused by our nation's financial meltdown.
BASH: But before these auto executives even got to speak, senators on the committee spent an hour and a half expressing heavy skepticism about helping the ailing industry.
SEN. CHRISTOPHER DODD (D), CONNECTICUT: Their discomfort in coming to the Congress with hat in hand is only exceeded by the fact they are seeking treatment for wounds that I believe to a large extent were self-inflicted. No one can say that they didn't see this coming. Their companies have been struggling for years.
BASH: Democrats and Republicans alike suggested that the collapsing economy is not the only source of their woes. It's mismanagement.
SEN. MIKE ENZI (R), WYOMING: Labor costs, enormous legacy liabilities and inefficient production have also contributed to the current crisis in the auto industry. Isn't it prudent for us to consider how the taxpayers' 25 billion will go to addressing these issues before we authorize the spending?
SEN CHUCK SCHUMER (D), NEW YORK: We must be assured that whatever aid we give you is accompanied by a real plan that shows you recognize the direction that this industry must take in order not to survive but to thrive.
BASH: The CEOs answered the criticism by insisting saying they are restructuring and modernizing. Still they faced a heavy dose of political reality.
UNIDENTIFIED MALE: My sense is that probably nothing is going to happen this week. And that this is sort of the beginning of a loan application, if you will.
(END VIDEOTAPE)
BASH: And the prospects for passage of that $25 billion auto bailout do still seem quite slim because Democratic leaders are still insisting that that money must come from the $700 billion already approved for Wall Street. Republicans say no go. There will be a test vote we believe now on Thursday, Kitty. But at this point nobody on either side really has much hope that that is actually going to pass -- Kitty.
PILGRIM: All right, thanks very much, Dana Bash. Thank you Dana.
Well the big three car makers say the collapse in auto sales proves that the industry needs an urgent bailout. Now GM sales in October plummeted 45 percent compared with the previous year, Chrysler sales plunged 35 percent, Ford sales fell 30 percent. This was the 12th straight month of declining auto sales. This is the largest slide in 17 years.
Crude oil prices today fell to their lowest level in nearly two years, ending the day at just over $54 a barrel. Crude oil prices are down nearly $100 a barrel since July.
Pirates tonight still in control of a huge oil tanker they hijacked off the coast of East Africa. Now those pirates seized the tanker despite naval patrols by the United States, Great Britain and other countries. The tanker is now anchored off the coast of Somalia, 250 miles north of the capital of Mogadishu. David McKenzie reports from Kenya.
(BEGIN VIDEOTAPE)
DAVID MCKENZIE, CNN CORRESPONDENT (voice-over): A super tanker, dipping the scales at more than 300,000 metric tons. That's three times the size of an aircraft carrier and this a typical pirate skiff that weighs less than one ton and is usually operated by a rag tag group of armed pirates and yet Somalia pirates on just such a vessel were able to capture and dock this giant, the "Sirius Star". It's their biggest prize yet loaded up with two million barrels of Saudi oil valued at more than $100 million.
UNIDENTIFIED MALE: What strikes me about this particular super tanker is how far away from Africa it was. As I understand it, it was about 450 miles southeast of Kenya.
MCKENZIE: In fact, these are now the most dangerous waters on the planet with the International Maritime Board reporting more than 80 attempted attacks this year and more than 30 successful hijackings, this despite a sophisticated flotilla of ships patrolling the coast in search of pirates. Leadership in the region is livid but promises action.
SAUD AL-FAISAL, SAUDI FOREIGN MINISTER: This outrageous act by the pirates I think will only reinforce (INAUDIBLE) of the country (INAUDIBLE) and internationally to fight piracy. (INAUDIBLE) piracy is against everybody. Like terrorism, it is a disease that has to be eradicated.
MCKENZIE: Though everyone agrees they must be stopped pirates hold these waters hostage with their automatic weapons and RPGs. Once a boat is hijacked, the coalition forces say they (INAUDIBLE) attacked because they fear for the hostages. But the man in charge of Somalia's transitional government disagrees.
NUR HASSAN HUSSEIN, TRANSITIONAL FED. GOVT. OF SOMALIA: When pirates are using force to hijack the boats and the ships, I think the only way to prevent or at least to save the hijacked ships and the crew is to use the force.
MCKENZIE: There have been some successes against the pirates with British forces successfully avoiding one attack and extraditing Somali pirates to Kenya. But until these dangerous waters can be properly policed the Somali pirates are sure to rule the waves.
(END VIDEOTAPE)
MCKENZIE: Well Kitty, these ransoms that the companies are paying to get these ships released are running from the hundreds of thousands to the millions of dollars. The prime minister of Somalia told me that this is just not helpful because it means that the pirates are being encouraged to just go out and hijack more vessels -- Kitty.
PILGRIM: David, as you point out, this is a scourge to shipping. What more can be done by western and other navies to stop the piracy and end this problem? Is there a solution?
MCKENZIE: Well it is a very difficult situation because they have set up a security (INAUDIBLE) in the Gulf of Aden between Somalia and Yemen. That stopped a lot of the attacks, but now as we see from this latest brazen attack that the pirates are going way out of their usual operating area and taking vessels near Kenya. So the difficulty is this is a 1.1 million square mile stretch of ocean and they can't be all places at all times -- Kitty.
PILGRIM: That's certainly true. Thanks very much, David McKenzie.
Coming up, Senator Jim Inhofe says Congress completely abdicated its responsibility by agreeing to a blank check for Wall Street. Senator Inhofe is my guest here.
Also President-elect Obama says health care reform is a top priority. We'll tell you about the president-elect's strategy to push health care reform through the Congress next.
(COMMERCIAL BREAK)
PILGRIM: President-elect Obama has repeatedly pledged to make affordable health care a top priority in his administration. Democrats in Congress are already pushing ahead with their own plans for health care reform. And tonight Congress and the president-elect are trying to come together to pass health care legislation to help millions of uninsured Americans.
(BEGIN VIDEOTAPE)
PILGRIM (voice-over): President-elect Obama has always said affordable health care and the economy are linked.
SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: In order to fix our economic crisis and rebuild our middle class, we need to fix our health care system, too.
PILGRIM: Now on Capitol Hill high level discussions have started. Senate Finance Committee Chairman Max Baucus spoke to President-elect Obama and has issued a so-called white paper to map out key reforms. Today Senator Baucus met with Senator Kennedy for a strategy meeting.
RON POLLACK, FAMILIES USA: Here you've got Senators Baucus and Kennedy already prepared to move this process along. So I think come January day one I think we are going be prepared to move this process forward.
PILGRIM: Kennedy returned to Capitol Hill yesterday after his own health problems.
SEN. EDWARD KENNEDY (D), MASSACHUSETTS: We have got a lot of work to do and looking forward particularly to working with Barack Obama on health care.
PILGRIM: Obama's plan proposed to expand Medicaid to more people, require coverage for all children, create a national exchange so the uninsured can purchase insurance from a private insurer or a public government program, provide subsidies to lower income individuals and small businesses to help them purchase insurance. But some say the most important issue is cutting administrative costs.
BRADFORD DELONG, ECONOMIST, UC BERKELEY: In health care administration we spend six times as much as Germany does, almost all of it in this game of hot potato by which insurance companies try to pass responsibility for actually paying for the sick-off (ph) to somebody else.
PILGRIM: Adding to the inefficiencies, some say unnecessary procedures over tests and over medicate the insured while those without insurance get sub standard care.
(END VIDEOTAPE)
PILGRIM: Now many of the people we spoke to say because the reforms are being initiated in Congress there is a much better chance of success. Back in 1993, reform was centered in the White House without much congressional interest or ownership. And now key congressional leaders are already committed.
Senator Joe Lieberman will keep his chairmanship of the Senate Homeland Security Committee. That's despite his support for John McCain in the presidential campaign. Senators in the Democratic caucus voted instead to strip Lieberman of a post on the Environment and Public Works Panel. Now Lieberman says it is time to let bygones be bygones.
(BEGIN VIDEO CLIP)
SEN. JOSEPH LIEBERMAN (I), CONNECTICUT: Some of the things that people have said I said about Senator Obama are simply not true. There are other statements that I made that I wish I had made more clearly. And there are some that I made that I wish I had not made at all. And obviously, in the heat of campaigns that happens to all of us but I regret that and now it is time to move on.
(END VIDEO CLIP)
PILGRIM: Well the former Democrat won a fourth term as an Independent in 2006. Lieberman votes with the Democrats on most issues. Coming up, some members of Congress have had enough and they want to stop payment on the blank check they signed for the Wall Street bailout. Senator Jim Inhofe will join me here to tell us why Congress should have the final say.
Also are former border patrol agents Ramos and Compean closer to a presidential pardon? We'll have a special report. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: President Bush has issued only 157 pardons and commuted six prison sentences during his time in office. And the president still has 63 days left to consider remaining clemency requests and two of those requests are from Ignacio Ramos and Jose Compean. In a gross miscarriage of justice the two former border patrol agents were convicted of shooting and wounding an illegal alien drug dealer they were pursuing. And now they are serving lengthy prison terms. Hundreds of thousands of Americans have called for Ramos and Compean to be released from prison, but so far the White House has not been listening. Casey Wian has our report.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): Junk bond king Michael Milken, American Taliban John Walker Lindh, tax cheat and ex- Congressman Duke Cunningham, steroid abusing sprinter Marion Jones and former border patrol agents Ignacio Ramos and Jose Compean, just some of those waiting for President Bush to decide if they will receive a pardon or commutation of their prison sentences. President Bush has granted fewer requests for pardons and commutations, 163, than any other in modern history except for his father. Now the Justice Department has a record backlog of requests, more than 2,000.
PROF. DAN KOBIL, CAPITAL UNIV. SCHOOL OF LAW: There are simply too few people, too little interest in granting clemency on the part of members of the Justice Department and the current administration. I think that there is an inherent tension in giving the advisory function to a department that's devoted primarily to prosecuting crimes.
WIAN: Ramos and Compean have served nearly two years of 11 and 12 year sentences for the nonfatal 2005 shooting of a Mexican drug smuggler who was an illegal alien. Supporters who say the agents were wrongly prosecuted and unfairly punished now pin their hopes on the same administration that decided to charge the agents with an illegal use of a weapons charge carrying a 10-year mandatory minimum sentence.
DAVID BOTSFORD, ATTORNEY FOR IGNACIO RAMOS: A commutation application has been filed with the Office of Pardon attorney in Washington. That will be processed and ultimately submitted hopefully to President Bush before he exits office. Otherwise it will be processed and submitted to our incoming President-elect Obama. And I'm hopeful that one of those two will see the light and do the right thing.
WIAN: Johnny Sutton, a U.S. attorney in Texas who oversaw the case and is a close friend of President Bush has since agreed their sentences were too harsh.
EDGAR MASON, ATTORNEY FOR JOSE COMPEAN: I would never be surprised at what happens. I'm a Democrat and it is Republican politics. But I'd never be surprised about anything.
WIAN: Ramos and Compean supporters are organizing an effort to purchase American flags and have them flown over the U.S. Capitol on January 17. Two years to the day after Ramos and Compean reported to prison.
(on camera): They have also gathered nearly 300,000 signatures and they're calling the White House every day to demand that President Bush free the agents.
Casey Wian, CNN, Los Angeles.
(END VIDEOTAPE)
PILGRIM: Well this is also the subject of our poll tonight. Do you think President Bush will finally offer justice to agents Ramos and Compean and commute their sentences? Cast your vote at loudobbs.com. We'll bring you the results a little bit later in this broadcast.
A Wal-Mart employee is charged with smuggling illegal aliens across the border in a Wal-Mart truck. And the truck and driver and two accomplishes were arrested at a border patrol checkpoint near McAllen, Texas. The four illegal aliens found in the truck were also detained. Now Wal-Mart says it helped U.S. Immigration and Customs Enforcement agents identify the truck and investigators say the Wal- Mart employee may have smuggled illegal aliens across the border at least half a dozen times.
We have time now for some of your thoughts on the bailout for the U.S. auto industry. Jerry in Tennessee wrote: "Why should the auto industry be punished for bad management? It was bad management at AIG and Wall Street and they have been rewarded with much more than the auto industry is asking for."
And Jim from Michigan wrote: "Lou, whatever happened to the free enterprise system? The one that says you sink or swim based on business decisions you make? I hear some congressional leaders saying the automakers should be held to that standard. However, I noticed the banking industry and AIG appear not to be part of the free enterprise system, since it was OK to bail them out. Double standard?"
And Craig in Indiana wrote: "I am an ordinary American, a veteran of these United States. The country I also helped defend is so off course. We are using taxpayer money to bail out banks, businesses and insurance all the while letting American people fall flat on their faces. What are we allowing to happen?"
We will have more of your e-mails a little bit later in this broadcast. Each of you whose e-mail is read here receives a copy of Lou's new book, "Independents Day: Awakening the American Spirit" now available in paperback.
And coming up, President-elect Obama wants Eric Holder to be the nation's first black attorney general. We'll have more on that.
Also some members of Congress are trying to block any more bailout funds for banks. We'll have a special report on that.
And Senator Jim Inhofe says Congress gave the government a blank check to bail out Wall Street. Senator Inhofe will join me next.
(COMMERCIAL BREAK)
PILGRIM: Angry lawmakers showed just how fed up they are with the Bush administration's handling of the federal bailout. They are trying to take control of the program. Many Democrats and Republicans say the bailout has been shrouded in secrecy and no one is being held accountable. Lisa Sylvester has our report.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT: Some lawmakers are calling it like they see it saying Secretary Henry Paulson doesn't have a clue how to staunch the financial crisis.
REP. GARY ACKERMAN (D), NEW YORK: It appears you seem to be flying a $700 billion plane by the seat of your pants.
SYLVESTER: Lawmakers say banks are not lending like they are supposed to, help to homeowners as promised is not being delivered and the Paulson plan has morphed into something completely different sold to congress. Congress gave Paulson the purse strings to half of the $700 billion approved for the financial bailout. Paulson says it will hold the remains $350 billion for the Obama administration. Senator Bernie Sanders wants to cut off future bailout funds. He has introduced legislation to freeze spending of the second $350 billion traunch.
SEN. BERNIE SANDERS (I), VERMONT: I think the American people are outraged at the greed and recklessness of Wall Street and the fact we had to have the middle class bail out these masters of the universe.
SYLVESTER: You might expect that from the senate's only self- proclaimed socialist, but conservative Republican James Inhofe has introduced a similar bill.
STEPHEN MOORE, WALL STREET JOURNAL: Among the members of congress that I've been talking to, the more conservative ones, they're having buyer's remorse right now.
SYLVESTER: Paulson defending his decisions say economic conditions on Wall Street required him to move quickly and change course when necessary.
(END VIDEOTAPE) SYLVESTER: Senator Sanders is hopeful his bill will be taken up. Congress has a lame duck session this week and leaves for the holiday break. We called senator majority leader Harry Reid's staff to see if these bills will be taken up. Their answer, very unlikely.
PILGRIM: Thanks very much Lisa Sylvester.
As Lisa reported congress is demanding oversight. Senator Jim Inhofe says congress signed a blank check to the Treasury Department, and now he is working to correct that. Senator Inhofe today introduced legislation that will require congressional approval for spending the remaining bailout funds. And he joins me now.
Senator Inhofe, you voted twice against this. Now you want action. Why are you so convinced that this is the way to go?
SEN. JIM INHOFE (R), OKLAHOMA: Well, first of all, Kitty, when it first came up, I opposed it. And I opposed it because if you read the bill that we passed, it didn't say -- even though the secretary of the Treasury was talking about using it to buy up damaged assets -- that is not what it said. It said $700 billion, and as it turns out for anything that he wants.
Now, I am very critical of him because of that. And now we don't know for sure what -- I only found out today, and here I am a senior member of the United States Senate, how much money is left of that $350 billion. It is about $60 billion.
So I have introduced a bill, and it's called Senate bill 3683, and it would freeze any further spending. And if you look at just what's left now in the $350 billion that would come up, I'm very much disturbed because there is a process to enter into that, to access that $350 billion. That means that if we are not here in session, then it would be done unilaterally by the Treasury Department.
When in the history of America has one unelected person had the control of a massive amount of money like this? Total control to do with whatever he wishes?
PILGRIM: You make a fair point, sir. And -- but they say special circumstances call for special measures.
Let me just bring up what Secretary Paulson said. He testified before the House Financial Services Committee today. And let's listen to what he said.
(BEGIN VIDEO CLIP)
HENRY PAULSON, TREASURY SECRETARY: The Treasury, the Fed and the FDIC have stabilized our financial system. The authorities in the TARP have been used to strengthen our financial system and to prevent the harm to our economy and financial system from the failure of a systemically important institution.
(END VIDEO CLIP)
PILGRIM: He says this is working. Is it not dangerous to slam on the brakes suddenly?
INHOFE: Well, no, he has actually said that the markets have stabilized. And if they stabilized, why do we need to leave $350 -- well, actually, more than $350 billion out there for someone to spend, without any oversight? Let's keep in mind -- this has never been done before. There has always been some type of oversight, congressional oversight or otherwise. Now there is none whatsoever.
And so, one of two things can happen. When we peel out of here on Friday or whenever Harry Reid lets us go, we are going to be adjourned. That means that we are not going to be there to stop him if he wants to access another $350 billion.
Now, the other possibility is, it will go off to the next administration. That is a scary thought, to think that the Obama administration is going have $350 billion sitting out there to do whatever they want to do with. I'm very much concerned about it.
I think our only chance to stop this thing is my legislation. And I doubt seriously that Harry Reid will allow it to get on the floor.
PILGRIM: Why are you concerned about the next administration having some weapons to fight whatever they need to fight in the financial crisis?
INHOFE: Because I think, judging from the rhetoric that we got during the Obama campaign, it will just go off to meet some of the obligations -- some of things that he said he was going to do, having nothing to do with the economy. It's just a blank check that is sitting out there, $350 billion.
PILGRIM: Well, certainly a blank check was the cause of concern right from the beginning on this. You know, we should point out that there was a very dramatic reversal by Secretary Paulson last week, where he just said that toxic assets -- buying up toxic assets wasn't necessary, a complete reversal. Are you worried about the direction that this money is being spent in, or do you feel that there is no direction?
INHOFE: Well, I'm just saying this -- in the two weeks prior to the October 1st vote, all we heard from Secretary Paulson was, it has to be assets, we've got to buy up the assets, it has to be done. That is what the money is going to be used for.
Everyone believed it, and that is the reason that so many of the people voted for it.
Then it wasn't that at all. It is just whatever he wants to do.
And again, this has never happened before. And I think it has to have some oversight. Right now, all they are talking about in Congress is, well, what will be -- what are we going to do about having a new inspector being -- watching what is going on? It is too late to talk about that, because my belief is, by -- another month from now, the money will be gone. PILGRIM: You know, I really have to get your thoughts on the big three automakers. They are appealing for $25 billion. What do you think of that?
INHOFE: Well, that's what I said -- back when I opposed this bill, I said, you wait. There are going to be other people in line. They are going to be watching. Yes, we are going to bail out the banks. So let's get in line there, and the next is the auto industry. And I even said this, and said, what about the aviation industry and everyone else? Is that government's responsibility to bail everyone out? And I think not. I think that would be a very bad thing to do. I think if we bailed out the auto industry, it wouldn't change the management, it wouldn't change the union contracts, the ones that really created the problem. So I think they are going to have to take some other route, at least with my vote.
PILGRIM: Thank you very much, Senator Jim Inhofe. Thank you, sir.
INHOFE: Thank you.
PILGRIM: Coming up, will she or won't she? Will Hillary Clinton be the next secretary of state? We'll have the latest on that.
Also consequences of the bailout is local banks swallowed up by larger lenders. How will it effect your ability to obtain a loan. We'll have a special report on that. That's next. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: Small regional banks the latest victims of the credit squeeze. They are being swallowed up by larger banks flush with federal bailout funds. And potential borrowers are concerned that the loss of their local banks will make it harder for them to obtain a loan or a mortgage. Bill Tucker has our report.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT: America's banks now on a lifeline with the national treasury are consolidating at a rapid pace. This is happening as the banks doing the buying are getting more than $158 billion in taxpayer bailout money so far. But wait a second. Banks need this money to start lending again not buy other banks. Lending will resume as banks move forward to shift away from consumer banking to focus more on businesses.
JIM ECKENRODE, TOWER GROUP: In the previous decade and a half or so it was retail banking that drove profitability. Now it is much more on the commercial lending side. On the services that banks provide to large and middle market corporates as well as small businesses.
TUCKER: It is not as though the consolidation is destroying banks. There are 8,000 community banks and credit unions vying for your business. The number of national banks goes from Bank of America and Citi to include Chase and Wells Fargo. It worries small business owners like Shannon Mills who owns a small security business.
SHANNON MILLS, VIPER PROTECTION SERVICES: My biggest fear is they will start freezing up the line of credit available to businesses in order for us to do business.
TUCKER: She got the loan she need for expansion, a company that received $2.5 billion from the treasury's program.
(END VIDEOTAPE)
TUCKER: Bank analysts say the biggest problem is not bank consolidation but the tightening of spending by consumers. In that spending slowdown they say is long overdue.
PILGRIM: There is a real dramatic shift in the lending climate in this country, isn't there?
TUCKER: A huge shift. You are not going to see that easy credit we saw for a decade and a half. They are tightening their standards and consumers have to learn to live on less credit.
PILGRIM: Thanks very much, Bill Tucker.
Please join Lou on the radio Monday through Friday for the Lou Dobbs Show, tomorrow, Mark Korean for the center of immigration studies. Go to loudobbsradio.com to find the local listings for the Lou Dobbs Show on the radio.
And still ahead, a catholic cardinal says President-Elect Obama is apocalyptic. We'll tell you what the religious leader is so upset about.
Also what role will Hillary Clinton have in the Obama white house? We'll discuss those stories and more with three of the country's best radio talk show hosts. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: Joining me now are three of the best radio talk show hosts in the country, in Kansas City we have Chris Stigall of KCMO, Tom Marr in our D.C. bureau of WBCM in Baltimore and here in New York WWRL's Errol Louis, and Errol is also a CNN contributor and columnist for "New York Daily News."
Let's begin with the first cabinet pick, Eric Holder, first African-American to hold the position. He was deputy attorney under Bill Clinton. Thoughts on this Errol?
ERROL LOUIS, WWRL IN NEW YORK: I think it is a great choice. He is a former judge. Integrity is unquestioned. He ran 125,000 employees under Janet Reno. His management skills are not in request. It's a pick that will keep people happy.
PILGRIM: The Clinton pardons, what do you think, Tom?
TOM MARR, WCBM IN BALTIMORE: First of all let me say Eric Holder is a terrible pick. He is a Clinton retread and has a lot to answer not just on the pardon of Marc Rich, but he has to talk about his role in the pardon of the FALN terrorists. There were 16 of them. He played a key role in getting them pardoned. It ceases like Barack Obama can't avoid people who have connections with terrorists. He played a role in connection with getting out of jail and giving a pardon to two members of the weather underground.
LOUIS: We are clear it is the president who does the pardons, not the number two man in the justice department?
MARR: The number two man facilitated it, Eric Holder. Linda Sue Evans and Rosenberg are evil people and got a pardon from Holder and Clinton.
PILGRIM: Let's let Chris in on this. What are your thoughts?
CHRIS STIGALL, KCMO IN KANSAS CITY: For Mr. Hope and change so far I'm hearing nothing but Clinton folks being appointed all around him. Even with the Hillary appointment looming in the wings, I don't get it. This is a guy who wanted to put best foot forward and a new face on Washington and he is bringing everybody back from the Clinton administration.
LOUIS: There was a phrase popular four years ago called elections have consequences. If the point of the election was, to, what, appoint a bunch of Bush appointees? What is he supposed to do?
STIGALL: I thought he was Mr. Outside of Washington.
PILGRIM: Let's talk about Hillary Clinton as secretary of state. We have a politico report that Senator Clinton might turn the position down and focus on a domestic agenda. What do you think Errol?
LOUIS: I think the secretary of state choice is attractive to Hillary Clinton. It is logical. She seems to want it. Some of the conflicts being brought up, look, it seems clear the Republicans are going to try to fight a last-ditch effort and hamper and hinder anything that the new administration does even before it forms. That, of course, is their choice. I don't think any conflicts are going to be found that wouldn't have made a difference when Hillary Clinton is a member of the armed services committee was still married to the same Bill Clinton. Whatever conflicts presumably were known. If they mattered then they should matter now, if they didn't matter then they shouldn't matter now.
PILGRIM: Some of the vetting is the global charitable foundation and where there are conflicts. Tom what do you think of that?
MARR: First of all, Errol doesn't get it. Hillary Clinton has to undergo questioning like Eric Holder. There is a mine field for the Clinton family and rather dubious moneys that Bill Clinton has made from foreign sources.
LOUIS: That is not a question, that is a statement.
MARR: Time-out. Hold on. That is a statement. She has a lot to answer for the she is put under senate hearings just like Mr. Should play rollover?
LOUIS: No, no. On the other hand, if these were such urgent issues, presumably they would have been made up -- would have come up while she was a member of the Armed Services Committee, candidate for president of the United States.
MARR: You don't get it.
STIGALL: I have to tell you we are in stay number two of the "New York Times" of -- looking into Bill Clinton's history and charitable foundation giving -- this is not right-wing spin, my man. Fact of the matter as Maureen Dowd questioned the integrity of the Clintons withholder's help. "The New York Times" when they are -- this ain't right-wing spin, you know what I'm saying?
MARR: Not at all. It is sounding like this is just total Clinton operation here. And that Barack Obama -- when is he going to name someone not connected with the Clinton administration?
LOUIS: Presumably when Alberto Gonzalez was disgracing the justice department, surely you gentlemen were complaining about that.
MARR: Yes, yes.
STIGALL: Let me tell you something.
LOUIS: As long as we have one standard, we will be fine.
STIGALL: No. Let me tell you something. Alberto Gonzalez was incompetent. At no point did he engage in pardoning, helping pardon one of the most nefarious individuals that --
LOUIS: All they did was fire a bunch of U.S. attorneys for not running fake predicts related to voting rights.
STIGALL: There's nothing illegal about it. Nothing illegal about it.
MARR: The point is that --
PILGRIM: We have to go to break.
MARR: The point is we are talking about Eric Holder and what he did and the Republicans will have a field day with this guy and I think Hillary will step out because of embarrassments from the Clinton income from Middle Eastern sources.
PILGRIM: We will take a break from that thought and will be right back with our panel just a moment.
First, Campbell Brown with a preview of what's coming up at the top of the hour.
CAMPBELL BROWN, CNN ANCHOR: We will continue the conversation you have been having. I know you have been talking about Hillary Clinton and whether or not she will take the job as secretary of state, whether it has been offered.
We have new details about Eric Holder who you just mentioned who appears to be Obama's choice for attorney general.
We are also taking a no bull look at the big three automakers and their request for a government bailout. A little bit ago General Motors' top boss told congress if his company goes bankrupt it will ripple across this economy like a tsunami that we haven't seen.
Also tonight, we are going to hear an 8-year-old suspect tell police he shot and killed two men, including his father. But should we believe what he said? You are going to want to hear this confession on tape when we you in a few minutes.
PILGRIM: Thanks very much, Campbell. Much more with the panel. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: We're back with Chris Stigall, Tom Marr and Errol Louis.
LOUIS: I believe it was the cardinal was what they called the seamless garment pro-life person who is against war and against torture and against the death penalty. I have respect for that position. I think it is unwise to try to step into politics in that way. There is no way to say it is not political. To pick this of all things a vote is connected to your religious faith, I think it stirs up a can of worms the church probably doesn't want to if you think about it.
PILGRIM: Chris, thoughts?
STIGALL: I think that if your faith is something that's important to you, kitty, how -- how catholic -- I am not. My wife is. How Catholics can separate themselves on the issue of abortion. The bishop Finn on the Missouri side in Kansas City, both have not only refused communion. Bishop Finn said consider your eternal salvation on your show before voting for Barack Obama few days before the election. Catholic leaders are stepping up and making it known what the Catholic Church stands for. Whether that's your politics or not, that's an entirely different matter.
MARR: I find it extreme lip interesting Errol thinks the cardinal shouldn't get involved in politics but apparently he doesn't mind Reverend Jesse Jackson being involved in it and Reverend Sharpton.
LOUIS: We didn't bring any of that. Please. Give me a break on that. I haven't said a word about either of these men. Where is that coming from?
MARR: You are saying how church men should not get involved --
LOUIS: Most of the Catholics went to Barack Obama. Cardinal might want to think about that. MARR: I just thought it would be wise -- I don't care. The cardinal has a position to take and he has taken it. And you said that church people should not be getting involved in politics. Apparently that's exemption force certain ministers. I just named a couple.
LOUIS: You tell me which of those ministers, Al Sharpton, Jesse Jackson, have you an obsession with, which of them said somebody's faith -- salvation would be at stake if they cast a vote in a particular direction? When did that ever happen? Never heard it.
MARR: No, no. I was addressing your point that church men should not be involved in these moral issues politically. They absolutely should.
PILGRIM: Let's move to another issue. I know that this one is very engrossing. We do have to talk about the big three automakers in Washington. The great debate. Bailout or not. Errol, thoughts on this?
LOUIS: The bailout is going to be, I think, a nonstarter. It seems like there is a buy partisan consensus they don't want to get snookered like they did on the bank bailout. What to do about American manufacturing. We need more than one hearing and a couple of days to figure it out. Hopefully they will figure it out but, unfortunately, GM may not live to see that.
PILGRIM: Critical time. Tom, quick thoughts on this.
MARR: General Motors should file for bankruptcy. Come back stronger and they will -- if you just give them money they will waste and it the American taxpayers shouldn't object the hook for their extremely poor management at General Motors and horrifying UAW concessions they made.
PILGRIM: Chris, would you agree with that?
STIGALL: We have two plans here in Kansas City. GM and Ford making quality products Americans want. The gentlemen are right. This is the secretary that cried Wolf with Paulson. I don't trust in guy any further than I can throw him. Everything has been an out and out lie. I don't trust it. Don't do it.
PILGRIM: Cover ad lot of topics with great heat and intensity. Thank you very much for being with me. Poll results, 76 percent of you do not believe that President Bush will finally offer justice to agents Ramos and Compean and commute their sentences.
Thanks for watching. Good night from New York. "CAMPBELL BROWN: NO BIAS, NO BULL" starts right now.
