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Lou Dobbs Tonight
Obama's A-Team; The Money pit; Bailout Free-for-all; Read my Lips; Groups Claim rise in Hate Crimes
Aired November 24, 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: Tonight President-elect Obama unveils his new economic team and says the economy is likely to get worse before it gets better. Senator Obama pushing his own stimulus package as new estimates now put the cost of this bailout at more than $7.25 trillion.
Also tonight the Bush administration bailing out Citigroup, again and President Bush saying there could be more bailouts in the future.
Tonight, ethnocentric special interest groups pushing their agenda, making false accusations, we'll have that special report.
And tonight an outrageous move from the White House, President Bush pardoning 14 people, including drug dealers. But not former border patrol agents Ramos and Compean, all of that, all the day's news and much more from an independent perspective straight ahead here tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Monday, November 24th. Live from New York, Lou Dobbs.
DOBBS: Good evening everybody. President-elect Obama today named his economic team and at the same time, issued a stern warning. We don't have a minute to waste, he said.
The president-elect then called on Congress to pass, yet, another stimulus package. The president-elect's action comes as the Bush administration has pumped an additional $20 billion of taxpayer money into Citigroup. Just last month, the Treasury gave Citigroup $25 billion. Ed Henry has our report tonight from Chicago.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): President- elect Barack Obama is trying to have the best of both worlds. First, using his bully pulpit to suggest he's all over the financial crisis.
SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT OF THE UNITED STATES: That work starts today because the truth is, we don't have a minute to waste. Right now, our economy is trapped in a vicious cycle.
HENRY: But when pressed on the details of his stimulus plan he falls back on the notion that there's only one president at a time.
OBAMA: I don't want to get into numbers right now. Part of the task of this economic team behind me is to help to shape the details of that plan.
HENRY: The president-elect is also hedging on how quickly to honor a campaign promise to raise taxes on the wealthy. He can push a law to overturn the Bush tax cuts in January or let them expire at the end of 2010.
OBAMA: Whether that's done through repeal or whether that's done because the Bush tax cuts are not renewed, is something that my economic team will be providing me a recommendation on.
HENRY: He's leaving the details to his new money team. Tim Geithner, head of the New York Fed, who's now in line for Treasury secretary, Larry Summers who gets policy-making power inside the White House as head of the National Economic Council, Christina Romer, who will handle research and analysis at the separate White House Council of Economic Advisers, and Melody Barnes, director of the Domestic Policy Council.
OBAMA: And in the coming weeks I will provide the American people and the incoming Congress, with an overview of their initial recommendations.
HENRY: While team Obama fine-tunes its plan, the president-elect is lashing out at the big three automakers for not having one of their own before seeking a bailout.
OBAMA: I was surprised that they didn't have a better thought- out proposal when they arrived in Congress.
HENRY: Now, the president-elect said he still wants to help the automakers but they can't, in his words, get a blank check. Some Republicans on Capitol Hill are starting to say the same about Mr. Obama's stimulus plan. The price tag could reach a staggering $700 billion. Lou?
DOBBS: That's extraordinary and it's also, it seems to me, worthy of note that the president-elect and others, particularly on Capitol Hill, have been very critical of the big three in Detroit for not having a plan. But they're talking about $25 billion and while the federal government is putting trillions of dollars into Wall Street, in our financial institutions, who, as far as I know at this late date, have still not come forward with a plan of their own. That seems a little inconsistent, doesn't it?
HENRY: It's interesting because the president-elect and the Democratic congressional leaders, as you say, are both scrutinizing the big three big-time for $25 billion and saying they need a plan of reform to show they're still viable. What's interesting is the president-elect's team is putting together a stimulus plan that may be 600, $700 billion and they are not giving us any details of what's actually in that plan and also they're not talking about how they may actually pay for all that.
Obviously they're going to have to use a lot of debt, frankly, and it's going to add to the debt to pay for it because there's no money in the Treasury to actually pay for a stimulus plan like that. You'll remember on the campaign trail there was a lot of talk about fiscal discipline, Lou.
DOBBS: Well there is no fiscal discipline left in this country, in any quarter, whether -- and for that matter, monetary policy either. We're talking $7.5 trillion, the most recent estimate of what this bailout will cost. And this Treasury secretary has reversed himself for a second time in short order on exactly how the money will be spent. We'll be, of course, carrying complete coverage of every development. Thank you very much, Ed Henry.
Well the federal government's latest bailout of Citigroup puts hundreds of billions of dollars more of taxpayer dollars at risk. Under the plan, the Treasury and the FDIC, the Federal Deposit Insurance Corporation, guarantee possible losses of more than $300 billion in troubled assets at Citigroup.
The Treasury will also be making a new $20 billion investment in the bank, this, on top of the $25 billion that it put in the bank just last month. In return, the government receives an equity stake in the company. As part of the deal, Citigroup is expected to adjust mortgages for some borrowers who are in trouble and the bank will face limits on executive compensation, we are assured, but not a single detail of that has emerged.
President Bush and Treasury Secretary Paulson today defended their latest bailout of Citigroup. President Bush saying the move was necessary and at the same time, warned that more bailouts could follow. Elaine Quijano has the report from the White House.
ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT (voice-over): With just eight weeks left in office, the outgoing president stood with his outgoing Treasury secretary to defend government financial rescues like the just announced multibillion dollar package for Citigroup.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We have made these kinds of decisions in the past. We made one last night. And if need be, we're going to make these kinds of decisions to safeguard our financial system in the future.
QUIJANO: The president made it a point to say he spoke with President-elect Obama about the Citigroup decision but Mr. Bush also made clear, right now he is the sole decider.
BUSH: And I told the president-elect when I first met him that any time we were to make a big decision during this transition, he will be informed, as will his team.
QUIJANO: Analysts say the Bush administration's actions right now on the financial front are critical, given the shakiness of the world's financial market.
PROF. PETER MORICI, UNIVERSITY OF MARYLAND: There's plenty of time for more crises and for things to get worse and this president remains relevant. Henry Paulson remains relevant.
QUIJANO: For President-elect Obama who announced his economic team in Chicago, that means making good on the financial promises his predecessor makes.
OBAMA: And my administration will honor the public commitments made by the current administration to address this crisis.
QUIJANO: Amid fears of a global recession, analysts say continuity will be essential in calming jittery markets.
UNIDENTIFIED MALE: Obama's essentially going to have to honor any deals that Bush makes with the banks between now and then if the financial community is going to have confidence.
QUIJANO: And with President Bush saying more government bailouts are possible before he leaves office, President-elect Obama appeared to agree, saying the Treasury and Federal Reserve should use authority under the $700 billion bailout plan forcefully in the coming weeks in order to stabilize the current situation. Lou?
DOBBS: Thank you very much, Elaine Quijano reporting from the White House.
News of the Citibank bailout had a positive effect at least on Wall Street. The Dow rose almost 400 points closing at 8443, the price of crude oil also rising, crude oil up $4.57 closing at $54.50 a barrel.
Treasury Secretary Paulson has already spent more than 350 billion of that $700 billion bailout fund. Just last week, Secretary Paulson urged restraint in spending the taxpayer money but tonight he's reversed himself again, as our Lisa Sylvester reports.
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Treasury Secretary Henry Paulson warned Congress not to rush in to setting up new banking regulations.
HENRY PAULSON, TREASURY SECRETARY: If we do not correctly diagnose the causes and, instead, act in haste and implement more rather than better regulations we can do long-term harm.
SYLVESTER: But Paulson, himself, has acted with lightning speed handing out trillions to banks and other financial institutions. Three hundred ten billion of the congressional bailout has already been distributed in addition to $200 billion for Fannie Mae and Freddie Mac; 152 billion for AIG; 29 billion for Bear Stearns; and then there's $900 billion in loans from the Federal Reserve, on top of billions in new federal guarantees.
SEN. BERNIE SANDERS (I), VERMONT: The sums are just unbelievable, three, for, $5 trillion that goes where? What impact is it having? Why do we have to spend that money? Meanwhile, middle class families are worrying, how do I stay warm this winter. How do I send my kids to college?
SYLVESTER: Nearly half of the $700 billion earmarked for banks have already been spent. Paulson told Congress last week that the remaining $350 billion he would leave for the Obama administration. But today, the White House reversed course, saying they may tap those additional funds before January after all.
STEPHEN MOORE, WALL STREET JOURNAL: You have a situation now where if you have one more major bank or one major financial institution that gets into financial trouble between now and then I think they are going to have to tap into this money.
SYLVESTER: As Washington continues to spend to save Wall Street, there are new calls for transparency and accountability.
DEAN BAKER, CTR. FOR ECON. & POLICY RESEARCH: We really should be able to say what's going where. I don't think we can. In addition, there is over $1 trillion of loans out from the Federal Reserve Board and again, we don't who's got those exactly, what they've put up as collateral.
SYLVESTER: Billions of taxpayer dollars are being spent with very little debate coming from Congress.
SYLVESTER: And Lou, we are talking huge sums of money here. To put it into context, $2 trillion is larger than the entire gross domestic product of Mexico or Canada and some estimates put the overall bailout price tag at $5 trillion or perhaps even more. Lou?
DOBBS: All right, thank you very much, Lisa.
The amount of taxpayer money that the government is giving to Wall Street is staggering as Lisa Sylvester reports. But frankly no one in government or on Wall Street or anywhere else can figure out exactly what the problem is apparently or tell us where that money is going, or how or when it would fix our economy.
The latest estimate of the total cost of the great bailout is now projected to hit $7.5 trillion, that's half the entire U.S. economy for one year. Our leaders in Washington and the business elites on Wall Street have bet half of our economy as no one seems to realize what form a recession could take, how long it would last or what will be required to avoid it.
Over the past four recessions, our economy shrank between half a percent and just over three percent. During the great depression the economy shrank by 27 percent. This recession is nowhere near that and still, we're betting half our economy on an ill defined, indescribable and uncertain federal bailout.
Well even as our banks are collecting trillions of dollars of your tax money in the form of federal bailouts the banks are also raising their customer service fees and penalties. Now remember, they are supposed to be lending more, making it easier to have a banking system that works.
Instead, ATM surcharges, bounced bank check fees and monthly service fees all jumping in one year, from September 2007 to September of this year. And those fees are expected to continue to increase. The average ATM fee, by the way, rose about 11 percent this year. Monthly service fees and interest bearing accounts now averaging almost $12 and the minimum account balance needed to avoid those service fees has risen to close to $3,500, four percent higher than a year ago.
President Bush today granted 14 pardons and he commuted two prison sentences. Five of those given clemency were convicted of serious drug charges. In what is an outrageous miscarriage of justice, former border patrols Ignacio Ramos and Jose Compean serving lengthy prison sentences were not included on the president's list.
They are serving those sentences for shooting and wounding an illegal alien drug dealer who they were pursuing and who was given immunity by the prosecutor to testify against those two border patrol agents. Hundreds of thousands of Americans have called for them to be released from prison. So far the White House has ignored those pleas and has done so again today.
Up next, ethnocentric special interest groups accusing some of hate speech, but are they really paying attention to the facts or are they distorting them? We'll have that report.
And there is strong opposition to the government bailout of the auto industry. Congressman Thaddeus McCotter is not among those critics. He'll be joining me here next.
DOBBS: President-elect Obama has pledged to give middle class Americans a tax cut, but many working men and women in this country will still have to pay higher taxes. As Kitty Pilgrim reports now, struggling states are searching for new ways to raise more revenue.
OBAMA: Good morning everybody.
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Today, President- elect Obama clung to the promise of tax cuts with no clear indication when they will become real.
OBAMA: We are going to provide tax cuts to the vast majority of Americans, the middle class that have been struggling over the last eight years.
PILGRIM: How can the country afford federal tax cuts at a time when revenues from property taxes, sales taxes, business taxes and income taxes are falling off a cliff? State and local governments are already slashing budgets and are starting to scrape around looking for any tax revenues they can find.
GERALD PRANTE, THE TAX FOUNDATION: Politicians want to raise revenue in a way that harms few people at first, so they'll go after like various selected groups, say, they'll want to raise revenue from gambling, they'll want to raise revenue from smokers or drinkers.
PILGRIM: Governor Arnold Schwarzenegger of California wants to increase sales taxes and tax services such as appliance repairs and even veterinary services. Florida's in terrible shape facing a big drop in tourism and has already cut property taxes. With no income tax, experts say a sales tax hike is their only option.
Also facing the tourism slump, Nevada, Governor Jim Gibbons long opposed to tax increases now says nothing is off the table including tax hikes. Oregon now wants a gas tax to fund infrastructure improvement. Wisconsin's Governor Doyle says taxes should be hiked on oil companies and hospital services.
In Illinois the legislature voted for a plan to raise the sales tax in Chicago and the suburbs for transportation. And New York State now forces Internet retailers to collect sales tax.
PILGRIM: Now these stealth tax hikes sometimes draw the anger of voting public. Maine had a beverage tax. It was overturned. Oregon and California had cigarette tax increases. They were voted down last year, but at this point, many states simply have no choice but to raise revenues any way they can. Lou?
DOBBS: Or as it will suddenly dawn on them to cut services because this will not go on. We're reaching -- if this economic crisis is near the proportions that the president-elect is intimating that this President Bush is intimating the option is not tax increases. It's going to be straight forward like with withdrawing services.
PILGRIM: It's pretty clear there's no give in the public to pay more taxes so they will have to cut services clearly.
DOBBS: All right, thank you very much, Kitty -- Kitty Pilgrim.
Well more bad news in the housing market, home prices plunging over the past year as we already knew. The National Association of Realtors reporting the average home price dropping to $180,000 in October, down 11 percent from a year ago. That is the lowest average home price since March of 2004.
Gasoline prices, however, also falling around the country. The national average price of gasoline now below $2 a gallon, $1.91, more than just over half what a gallon of gasoline costs just in July. Thirty-six states now have gasoline prices below $2 a gallon. The lowest gasoline prices in the country are in Oklahoma, you win, $1.70 a gallon.
Up next, the future of the automobile industry, I'll be joined by Congressman Thaddeus McCotter. He tells us why a government bailout is necessary and he'll explain what the money should be used for.
Special interest groups at it again, they're making accusations about -- it's -- well, we'll tell you about it -- man oh man, when will they learn that honesty does pay? We'll have that report next.
DOBBS: Advocates of open borders and amnesty accusing border security advocates of fostering a wave of hate, but as usual, those groups led by La Raza and MALDEF were long on rhetoric and absolutely, absolutely devoid of facts or respect for them. Bill Tucker has our report.
BILL TUCKER, CNN CORRESPONDENT (voice-over): Being tough on illegal immigration is a bad thing in the eyes of La Raza, a Hispanic special interest group which says it represents the civil rights of all Latino immigrants. The group blames the murder of Marcello Lucero, an Ecuadorian immigrant on Long Island, New York, on a wave of immigrant hate sparked by local politicians who have called for enforcement of immigration law.
JANET MURGUIA, NATIONAL COUNCIL OF LA RAZA: Steve Levy has taken a notably hard line against immigrants in his county and has been lauded by cable hosts like Lou Dobbs as a folk hero.
TUCKER: The community has shown no tolerance for the crime. Seven teenagers were quickly arrested and charged with hate crimes ranging from assault to manslaughter in connection with that murder, the leader of the gang being held without bail. Lucero's murder though is being used by special interest groups like La Raza and MALDEF to call attention to what they call "a wave of hate crime in America."
However, just last month the FBI reported a slight decline in hate crimes nationally last year. The FBI saying there were just over 7,600 hate crimes versus just over 7,700 the year before. Groups calling for the enforcement of immigration law are furious that La Raza and MALDEF and others equate their position with hate.
DAN STEIN, F.A.I.R.: Their true agenda is to try to stop public discussion about the need to control the borders. And they are using isolated incidents, tragic incidents, to be sure, but isolated ones, and distorting statistics to try to muzzle important free-speech rights in this country.
TUCKER: Not once in the news conference was the phrase "illegal immigration" used or heard, instead the phrase "immigrant bashing" and "anti-immigrant" were the word choices of the day.
TUCKER: And today's news conference was not without irony. While trying to make the argument that a new wave of hate is rising in America, the participants had to admit and acknowledge that the president-elect is a black man who was elected by a majority of Americans, Lou.
DOBBS: Well the other part of this is that in point of fact there's far greater incidents of hate crimes against gays and lesbians in this country. This is an absurd -- I mean it's just ridiculous on its face. They don't look at the FBI figures. They don't look at the fact that -- as Steve Levy himself pointed out. Hate crimes in Suffolk County have declined during his administration. I mean this is crazy what they are doing.
TUCKER: They did not seem to -- they did not seem to want to deal with facts at all, Lou. They had a case they wanted to present.
DOBBS: What in the world has happened to Janet Murguia? She has become...
DOBBS: ... some sort of radicalized -- I mean she has no -- Saul Alinsky, she looks like she's gone to a Saul Alinsky retraining school.
TUCKER: I don't know. She used to be a regular guest on this program, Lou.
DOBBS: Well she could come back any time if she wanted to make a little sense and maybe just stick to the truth for a change.
DOBBS: But, I mean, everybody better understand, this is a racially-charged issue in large measure because these ethnocentric interest groups have taken on the issue simply because of the race of the people that they seek to represent.
DOBBS: And anti-immigrant and immigrant bashing, I'm the guy, by the way, who here says, every time, I'd much rather see enforcement against the illegal employers of illegal aliens.
DOBBS: I've said often that illegal aliens are the only rational actors in this entire mess. But why -- the only way you can not be a racist in the eyes of these absurd groups is to support illegal immigration and open borders.
DOBBS: Then you wouldn't be a racist.
TUCKER: And not talk about it.
DOBBS: Oh absolutely. All right, Bill Tucker, thank you sir.
Up next, Treasury Secretary Paulson urging restraint and not urging restraint, reversing himself again, this is a guy pushing the federal bailout of his buddies on Wall Street.
Also tonight the president-elect unveils his team to tackle this economic crisis. Four of the nation's top political thinkers join me to discuss that.
And bailing out Detroit, Congressman Thaddeus McCotter, he joins me. We'll be talking about why they don't have a plan there in Detroit quite yet, but why they don't need a plan on Wall Street. Go figure -- oh don't go figure. Figure with us. We'll be right back.
ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion. Here again, Mr. Independent, Lou Dobbs.
Welcome back, tonight U.S. automakers are pushing for a multi- billion bailout. Congressman Thaddeus McCotter of Michigan is defending Detroit. He is supporting the bailout saying automakers are doing their best to save the industry saying, quote, "The automotive companies and the United Auto Workers union are doing everything they believe they possibly can."
Congressman McCotter joins me now. Good to have you with us. Congressman?
REP. THADDEUS MCCOTTER, (R) MI: Thank you very having me, Lou.
DOBBS: I pointed out earlier in the broadcast, congressman, that I can't quite figure the deal out. Everybody wants a plan and some sort of written statement, a homework assignment, Congress does, from Detroit, about what they're going to do with the money, the 25, we can say it, can't we, 25 lousy billion dollars, as opposed to $5 trillion for Wall Street. No Required homework for Wall Street. You think there's a double standard here?
MCCOTTER: I think there's a double standard the way the Congress jumped into the Paulson bailout plan which I opposed twice. We argued for free market solutions and we were told no and we've seen the consequences of those. One of those consequence is the seizure of the credit market and retardation of it by the Paulson plan has led the short term commercial paper, the Big Three to dry up. It has led auto loan financing to dry up.
And forced the Big Three to go into cash they've had and burn it up at a rapid rate. In terms of restructuring, Lou, you're right. Many of the questions being asked of the Big Three are appropriate for the use of taxpayer dollars.
DOBBS: They are absolutely appropriate, but it seems like there should be a consistent standard.
MCCOTTER: Absolutely. We would have no trouble applying the standard and overseeing Mr. Paulson and what he is doing on Wall Street. But from our perspective, we've seen restructuring in the auto industry and its painful human cost. And I'm sorry that the oblivious members of Congress have yet to see that. And the continued restructuring that will have to go on and we know has to go on in the future but again this is a company that never came, the auto industry did not come to Washington while they were painfully restructuring until the unfunded mandates and the CAFE standards were imposed upon them and the failure of Wall Street.
DOBBS: I can't let you say that, honestly. I agree with you about that. I think Detroit, particularly Ford and General Motors deserve, and absolutely, a bailout here. I reserve Chrysler because it's a private company. I have some serious issues about some of its business practices. But to say the automobile industry should get a pass on CAFE standards that they were onerous or in some way attainable. Thoughts the can-do attitude that makes me think Detroit can dig its way out there. I can listen to a lot of issues in support of a bailout for the automobile industry. But not to meet CAFE standards and have been at the table for those negotiated standards. That doesn't seem correct to me, congressman.
MCCOTTER: Lou they were offered death and had to accept torture. Remember, the Big Three, this is unfunded mandate on a business. A crippling restructuring business as it is. As a Republican, to sit and watch the federal government slap arbitrary standards on an entity, a private entity and then ask the entity to fund it itself is an unfunded mandate and we've seen what government has done to other businesses. So when the Big Three came to the table ...
DOBBS: Congressman, before you go too far down that, I've watched Republicans for eight years screw up the very precept of free enterprise democracy and so have you. We have a republican treasury secretary right now who has decided he's the money czar and he's going to rewrite and redefine American economic policy as well as theory. This is a period of utter madness on the part of the Republicans. And to suggest that otherwise, to me, congressman, it's an impossibility?
MCCOTTER: I'm certainly not going to suggest otherwise. It was a Republican administration that supported the CAFE standards and a Republican administration that supported the Wall Street bailout and empowering Mr. Paulson with no plan to go forward and spend up to $700 billion of taxpayer's money. Much of it unhealthy banks that don't even want the money.
So Lou, you and I are in agreement on that. We didn't open Pandora's box ...
DOBBS: Can you pick up the phone and call this president? And I'll say of viewers, he's a Republican, he's with us for seven more weeks. Can't anybody talk sense to this man? That's all I've heard from your party for eight years how a single elected official in the Congress of the United States or U.S. Senate, can talk sense to this man.
MCCOTTER: Well, I can call the president, don't know that he'd take my call at the present time but we continue to push forward with it because at the final, you're right. This will be what with us a long time hopefully the members of Congress are watching and when the second $350 billion comes up for our negative vote, our rejection of it, I would hope that we would do so because this is something that in the free market history of the United States is unconscionable and worse than that, I suppose, it's totally unproductive and there's no semblance of a plan here.
DOBBS: Do you have the sense that the CEOs of, certainly, at least Ford and General motors, will have the ability to come back with an intelligent plan that foregoes the offshoring of American jobs -- because it makes no sense to save the jobs and getting export out the back door to cheap foreign labor markets. Or the offshoring of production.
MCCOTTER: You're absolutely right about that. In many ways that's a political consequence that the Big Three faced when they came out to Washington. When you outsourced the buyer's job yourself lost the inherent constituency that understands the need for an American manufacturing base and the role of the auto companies in it.
DOBBS: One would hope, too, that perhaps at some point people could recall vividly now, that what made this economy, this free market economy of ours work, is the system of government and our political system. Not the other way around. You think we're going to see the bailout for Detroit?
MCCOTTER: Whether there's a bridge loan or not remains to be seen. We have many people in Congress who will oppose it on purely economic libertarian grounds. People who like outsourcing and think the world is a one global economy. We have the greens on the left of the spectrum that want to see the auto industry and the industrial base of the United States go away. And we'll try to push forward from the same center to find a moment of lucidity amongst the insanity, Lou.
DOBBS: Thaddeus McCotter, a man with a lot of challenges before him, just as so many in Congress do have. We thank you very much. We appreciate it.
MCCOTTER: Thank you, Lou.
DOBBS: Good luck, congressman.
MCCOTTER: Up next the federal government bailing out Citigroup, again. Billions of dollars of more taxpayer money being pumped into Citigroup. Citigroup, you remember was fine just a few weeks ago.
President-Elect Obama unveiling the team to tackle this economic crisis. We'll have those stories and a lot more as we talk with four of the best political analysts as well next. We're coming right back.
DOBBS: Joining me now, the nation's best political minds, four of them. Ed Rollins served as White House political director in the Reagan White House and chairman of Mike Huckabee's presidential campaign.
Pulitzer Prize winning columnist, "New York Daily News", Michael Goodwin, Democratic strategist and national committeeman, Robert Zimmerman, and from Washington politico.com senior editor Beth Frerking, good to have you with us. Beth, we'll start with you. You remember when the big story was going to be the election of a president and now we've got, by some estimates, about 7.5 trillion in the financial bailout. What do you think?
BETH FRERKING, SENIOR EDITOR, POLITICO: Well, you know, I think we saw with the press conference today where Obama introduced his team of economic advisors and I think if you listened close lie to what he talked about, if you want to put it in Politico terms we're talking about lowering expectations. He kept saying, this is bad. This is historic low. We've not seen the economy so bad in a long time. I think he's preparing people for some hard times ahead.
DOBBS: Did you -- it is me or did you see a different man standing there? That president-elect looked a little bit more somber than the previous president-elect?
FRERKING: That's right. I think what we saw was the, you know, the rhetoric of the campaign facing the reality, the hard ground that he's landed on. And it's going to be tough times.
DOBBS: At various points, Robert Zimmerman, he looked like he would prefer to be back on the campaign trail and he sounded like it, too.
ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: I think what's refreshing is to see a president-elect up there who's pragmatic, who is being rational about this. We've had eight years of ideology.
DOBBS: It looks like Barack Obama is not the only one that's not left the come trail.
ZIMMERMAN: We've had eight years of very, just, philosophy of a our present president, George Bush, who never let the facts get in the way of his philosophy or his ideology.
DOBBS: George Bush is about to leave office. That parts done.
ZIMMERMAN: I'm focusing on the change and I think it's a refreshing change to see a person up there be realistic ...
DOBBS: Who's not George Bush.
ZIMMERMAN: ... be realistic with the American people. Talk realistically about the fact that some of these issues have to be delayed and deferred including the tax.
DOBBS: I'm all better. Now I've got a president telling me things are bad. And as opposed to one who said they were not, at various points. I guess that's an improvement but I'm still down, by some estimates, $7.5 trillion.
We have got credit markets that are still seized and an economy is weakening almost daily, it seems, as we look at these economic reports, what are we to take from this? MICHAEL GOODWIN, "NEW YORK DAILY NEWS": One thing that's interesting is it -- it like just happened over the weekend, is this recognition by everybody in both the Bush White House and the Obama people, nobody was in charge. There was a real vacuum. I think a lot of what he today was insert himself in a big way and basically, begin to own this problem.
DOBBS: I think that's the big story here. Obama, seemingly, in one day, he realized he had to step up. Because when you look at Paulson standing there on the steps with the president, my God, the man looked like -- I have called for his resignation or fired him in the last year. That is a man who looks whipped. The president has talked about, we've done it before and we'll do it again, he's talking macho, bellicose nonsense and he doesn't even understand the economic issues.
ED ROLLINS, REPUBLICAN STRATEGIST: Embarrassing thing to me was watching this president come back from a conference, the Asian conference which was totally irrelevant, in which his press secretary said he didn't know anything about the Citi. He had not been involved in the process and obviously, Paulson was ready to go home and hide under the bed and I think to a certain extent, Obama's people are going of the to step up. The danger is we still have this two-month period before they get to take charge.
DOBBS: We're down to seven weeks, that sounds better if you say seven weeks.
ROLLINS: And maybe what needs to happen, I don't mean to be facetious, maybe Paulson needs to resign and let the new treasury -- let Obama's guy be appointed on the interim. Let him get in and start running the show on behalf of Bush and behalf of the country.
DOBBS: Being at the Fed in New York, he is at the center of this to begin with, that part is happening anyway. Larry Summers is there. Bob Rubin, obviously, these people are already providing considerable analysis for the president-elect. Beth, could you imagine it would be this bad in the final seven weeks of this administration?
FRERKING: I don't think any of us thought this. This it seems to be happening at an escalating pace. And I agree with ed and the others. I think that in the beginning you remember just, literally a few weeks ago, Obama said, I'm not the president. The president is still in charge. And tall sudden what we seem to be hearing is, OK, I don't know what happened to the president so I'm going to go and step up. And I think the markets are responding. If you saw what happened with the naming of Geithner late last week, the markets went up. I think what they're looking for, at least on Wall Street is some stability and the sense that somebody is taking charge.
DOBBS: I'll say this. For anybody thinking of investing or is talking about stability as a result of this -- of the public perception? He's put forward good names of good people. But anyone who think this is will passion for policy and for substantive improvement in the economy and the markets is, I'll tell you right now you're being a fool to perform in any way, take that action. ZIMMERMAN: That's not the issue. Right now, we have an A-team but we're waiting for the plan. I think it's smart to be deliberate ...
DOBBS: Not just plan but again, I want to say. It's performance and that's all that's going to count. All the talk in the world -- and I've got to say, we've got to give this president-elect great credit because it was understandable, he was trying to preserve, as you suggested, Michael, his political capital but when seeing the vacuum in leadership in Washington, DC, having the leadership to step in and assert himself, that, for me at least, gained great kudos.
GOODWIN: And for me, Lou, you mentioned something about him sounding like he was on the campaign. When he keeps insisting he's doing education, health care and -- he wouldn't be clear about the tax cuts, I think he's still in the transition.
DOBBS: Would you like to be clear about the tax cuts facing us?
GOODWIN: I think what he's going to have to do is make the transition faster than he would like to because it's absolutely necessary for the markets and for the economy to have some sense of clarity.
DOBBS: We'll be back with our panel. But first a reminder to join me on the radio Monday through Fridays for "The Lou Dobbs Show." Tomorrow's guests include David Smick, author of "The World is Curved," Bill Donohue, president of the Catholic League.
Go to loudobbsradio.com for your local listing for the show.
We'll be back with our panel later. When we continue, a military cover-up in Iraq. Are troops dying as a result?
We'll have details from CNN's special investigation unit. We're coming right back.
DOBBS: Coming up, CAMPBELL BROWN, NO BIAS, NO BULL. Campbell, what are you working on?
CAMPBELL BROWN, CNN HOST: Hey, Lou. In just a few minutes, Barack Obama tackles issue number one, the economy. We're cutting through the bull with our own team of economic all-stars tonight including former commerce secretary Bill Daley and the manager of "Fortune" magazine. We're asking, how many people are we going to bailout? Can we afford the price tag? Tom Foreman putting that all to our no-bull test.
And we'll get a preview of what's ahead for Malia and Sasha Obama from a former White house insider who watched Chelsea Clinton grow up in Washington. Lou?
DOBBS: All right. We're going to continue with our bull here. Thank you very much, Campbell. We're back with Ed Rollins, Michael Goodwin, Robert Zimmerman and Beth Frerking. Beth, your thoughts as we look at the bailout for Detroit, we're looking at, potentially, $7.5 trillion for this and no one can define the problem for crying out loud.
BROWN: Well, I think that's what we're going to have to start asking for. And certainly at Politico, we're doing that. That is, what are the details going to be? You're already hearing talk about it in Congress. This may set up, the automakers bailout may set up an interesting conflict between Democrats. And those are the greens which are in ascendancy, you see Dingell kicked off of the leadership committee by Henry Waxman.
DOBBS: You're defining Henry Waxman as a green in ascendancy? Is that what you're doing?
FRERKING: Well, I think if you look at that committee, what happened there, one of the old bulls of Congress ...
DOBBS: Oh, no question.
FRERKING: And so you have got that ...
DOBBS: Let me be honest, give you full disclosure. I like John Dingell, I think he served with distinction and think he was treated pretty doggone poorly. What do you think?
ZIMMERMAN: The man was one of the great giants in Congress in so many different ways. It was obviously, decision by the members which I found unfortunate the way it was handled. Although ...
DOBBS: They did that with secret ballots right?
ZIMMERMAN: They did it with secret ballots. But the point is it speaks to the activist nature. Not just about green jobs and the focus. It shows you the direction, the Congress and country are going in.
GOODWIN: I think that as bad as things are in Detroit Congress could make it worse by designing cars for -- for the automakers and saying ...
DOBBS: What's the old saying ...
GOODWIN: A camel is the horse designed by committee.
I think the missing word is congressional committee. Because that's what they seem to want to do.
And Obama has much to do. Come back with a plan means come back with the plan we like in terms of the cars we want you to build.
FRERKING: I think that's also about accountability. And I think Lou is right where he talked earlier. If you are going to have that of the auto makers though you have got to have similar things in place for the banks. Especially, regarding executive compensation and those kinds of things. I think the public is going to watch for a while and then they're going to start saying "show me what the details are of these plans."
ROLLINS: There is always a danger. The new president-elect and his team have not seen next year's budget. It's been prepared by Bush. This will be a budget with half a trillion built into it. Talked today about going line item, by line item. That's a very difficult task. He is going to have to knock out big items to have big expensive programs.
DOBBS: Especially when he does not have line-item veto.
ROLLINS: Does not have a line item veto.
DOBBS: Thank you very much, Beth. Thank you very much, Ed. Michael, Robert. Appreciate it as always.
Up next, is a military cover-up putting our troops at risk on their own bases? We'll have the special report here next.
DOBBS: Well Pentagon officials tonight tell CNN that KBR, the largest U.S. contractor operating in Iraq and Afghanistan failed to properly inspect U.S. bases. And now thousand of soldiers are at risk. This comes months after congressional hearings on soldiers who were electrocuted on their own bases. CNN's special investigations unit correspondent Abbie Boudreau joins me now with the latest. Abbie?
ABBIE BOUDREAU, CNN CORRESPONDENT: Lou, earlier this year we told you about Ryan Maseth, a Green Beret sergeant who was electrocuted in his shower on a U.S. base in Iraq. We now know he was one of 18 servicemen electrocuted. Most of them because of shoddy electrical work or improper grounding. Many of the soldiers were killed right on U.S. bases which are managed by U.S. contractors paid for by your tax dollars.
BOUDREAU (voice-over): At first Pentagon officials told Cheryl Harris her son, Sergeant Ryan Mason was killed by holding an electrical appliance in the shower. Though during the next several months she would learn how he really died. She would find out his electrocution was actually caused by shoddy wiring and improper grounding of his building which was maintained by a U.S. contractor. Sergeant Maseth wasn't the only one.
CHERYL HARRIS, RYAN MESETH'S MOTHER: Is was so painful to think about how he died.
BOUDREAU: The building where Sergeant Maseth died was maintained by the U.S. contractor in charge of most operations in Iraq. Houston based KBR. The Pentagon's contract agency recently cited KBR with what's called a level three corrective action request. Level three means the violations are so serious that KBR is just one step away from getting its contract terminated. Pentagon officials tell CNN KBR failed to properly inspect military bases for electrical hazards and other problems and also failed to ensure troops' safety.
(on camera): Since we first reported this story last spring, we have asked the Pentagon and its contract agency for an interview. Not once has anyone agreed to sit down for an interview to answer our questions about why soldiers are being electrocuted and why more is not being done to hold KBR or anyone else accountable.
(voice-over): KBR declined comment for this story, but earlier told CNN, it found no link between work it has been asked performed and the reported electrocutions.
DANIELLE BRIAN, PROJECT ON GOVERNMENT OVERSIGHT: The Pentagon is in a place where they say how can we suspend KBR they're sort of running the show over there. It's so big, too big to cancel that contract or suspend them for future contracts.
BOUDREAU: Danielle Brian is the director of Project on Government Oversight, a DC watchdog group and she says the action against KBR amounts to nothing more than a slap on the wrist for a company with a massive estimated $24 billion contract for its work in Iraq.
BRIAN: I think the public should demand that the government generally hold its contractors accountable and remind the government this is our money.
BOUDREAU: The death of Sergeant Maseth sparked House and Senate congressional hearings. When the number of electrocutions became public. Slowly the Pentagon revealed at least 18 troops were electrocuted since 2003.
SEN. ROBERT CASEY, (D) PA: The only way we can have justice in a case like this for the families and for the American people is to have serious accountability. That has not happened yet.
BOUDREAU: Senator Casey represents Cheryl Harris and credits her with bringing much of the issue to light.
HARRIS: I just want them to step up and take care of what they're being paid to take care of. That's put the security and safety of our troops first. I would love KBR to do that.
BOUDREAU (on camera): Cheryl Harris and at least one other family are suing KBR for the electrocutions of their sons. KBR denies any liability for the electrocutions. Now, Lou, Pentagon officials tell us KBR now needs to come up with a corrective plan that is accessible to them, and the company could receive fines or penalties.
DOBBS: Abbie, if they need to, take corrective action that -- absolutely ipso facto makes them responsible for the deaths that occurred. Why in the world is their contract not suspended by this Pentagon? BOUDREAU: That is a tough question at this point. All 18 cases have different scenarios trying to figure out the facts behind them. I mention there are two lawsuits right now trying to determine exactly what happened. That's the information that we have right now. This is obviously one of the stories that we will keep our eye on and keep, keep updating the story as we find out more information.
DOBBS: We look forward to that, Abbie. Thank you very much. We appreciate your terrific reporting. Thank you. Abbie Boudreau.
Time now for some of your thoughts. James in Michigan said -- "I keep hearing the same thing over and over. We need to create new jobs. What was wrong with the old jobs we had? We used to produce our own clothes, our own steel, our own appliances, et cetera. I keep wondering what was so wrong with these jobs that they had to be sent away? Maybe it was just greed."
And Robert in Texas -- "Lou, Mexico should prove that any money given them will be spent on what it is given for. Just like the banks, car makers or anyone else vying to receive free money from the government. Keep up the good work and keep them honest."
We will sure try. We love hearing from you. Sends us your thoughts at loudobbs.com. We thank you for being with us tonight. Please join us here tomorrow. For all of us, thank you for watching. Good night from New York. CAMPBELL BROWN, NO BIAS, NO BULL starts right now.