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Lou Dobbs Tonight
Help for Homeowners; Obama Backlash; The Best Government that Money can buy; Tax This
Aired March 04, 2009 - 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 Obama trying to convince Americans his economic policies might actually work. Americans increasingly concerned about bigger government, globalization and the president's tax, borrow and spend policies. One of the country's best economic thinkers joins us to give us his perspective.
Also tonight, startling new evidence of Wall Street's efforts to buy influence in Washington and it worked, spending $5 billion on lobbying in Washington.
And tonight, the Obama administration and left-wing groups launching a concerted campaign that targets radio talk show host Rush Limbaugh. Two leading political analysts join us to tell us whether that campaign will backfire. We'll have all of that, all the day's news and a lot more, straight ahead, right here.
ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Wednesday, March 4th. Live from New York, Lou Dobbs.
DOBBS: Good evening, everybody. President Obama's honeymoon with Americans on the economy appears to be at an end, the president failing to win broad support for his economic policies, despite his personal popularity. The latest "Wall Street Journal"/NBC poll showing only 54 percent of Americans say the president has the right goals and policies for this country.
The stock market is also demonstrating a lack of confidence and the president's big government agenda. The Dow Jones industrials this year have lost more than 2000 points. And, today, the Dow ended what had been five days of losses, today gaining 150 points on optimism about communist China's economy, for crying out loud, and the possibility of higher U.S. exports.
Meanwhile, the Obama administration tried to convince Americans that it does have an effective plan to tackle our housing crisis. The Treasury Department giving details of a new program the administration says will help nine million homeowners. Ed Henry reports now from the White House. Ed.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Lou, the housing crisis clearly one of the key pieces of this entire financial mess. What the president is trying to do is to help people who are in trouble right now struggling with their housing payments and try and to prevent them from slipping in -- among the thousands of people across the country every day who are falling into foreclosures. Specifically, he's aiming to help people who are under water basically home equity has evaporated for them so the value of the mortgage is higher than the value of the property. So he's trying to reduce their monthly payments in two ways. First of all, if you're struggling to make the payments, the government is encouraging lenders to try and modify the loan down to approximately 31 percent of your gross monthly income. Some of these new guidelines out today explain to lenders how they can reach out to individual homeowners and how homeowners can try and call their lenders to deal with that.
Secondly if your loan is backed by Fannie Mae or Freddie Mac the White House says that's about 40 percent of the market. This plan is trying to encourage lenders to refinance loans. Right now, there are a lot of homeowners struggling to make payments. They want to try to benefit from historically low interest rates but again they don't have enough equity in their homes to actually get the paperwork through to refinance, so this aims to try and help them. Here's how Treasury Secretary Timothy Geithner explained it.
(BEGIN VIDEO CLIP)
TIMOTHY GEITHNER, U.S. TREASURY SECRETARY: This plan will help homeowners meet their mortgage obligations and enable them to refinance to take advantage of lower interest rates. Just this morning, we took the important step of releasing the details of our loan modification plan and Treasury guidelines for servicers and this will help struggling borrowers begin to see more lower payments, more affordable payments right away.
(END VIDEO CLIP)
HENRY: The big question moving forward of course, will this actually work? Some critics on Capitol Hill are saying that people who are in this kind of danger zone, having trouble making their housing payment, even if the housing payment is lowered, they're likely to have other problems. Maybe credit card debt. Maybe auto -- having trouble making their auto loan, college student loans, et cetera.
And that this may delay the inevitable and they may just foreclose six months, a year down the road. But what White House officials are saying is they want to try. They think that every little bit can help these struggling homeowners and they want to get them help as soon as they can -- Lou.
DOBBS: And, of course, there's been no help on interest rates themselves. In fact, the 30-year mortgage rate is now risen of late up to 5.25 percent, any sign that the White House is going to do something for all homeowners, rather than deal with a distributive solution, if you will? Why not a broader solution that would affect and help all homeowners?
HENRY: There have been people looking for a more global solution, but to be honest with you, we're not seeing any signs that they're going to go there. Instead, a very narrow focus here. This is a plan that cost about $75 billion. And so it's not going to help all homeowners, to be frank. Instead, they are aiming to help about nine million that they've identified that they think are sort of on the bubble that could slip into foreclosure -- Lou.
DOBBS: Ed, thank you very much. One out of every five homes right now under water with their mortgages -- thank you very much, Ed Henry, from the White House.
Many Americans are highly skeptical of the Obama plan to help struggling homeowners. Polls show nearly two-thirds of all Americans believe the plan is not fair to homeowners who pay their mortgages on time. Bill Schneider has our report.
(BEGIN VIDEOTAPE)
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): The Obama administration has announced the $75 billion mortgage assistance plan for struggling homeowners.
GEITHNER: And we took the important step of releasing the details of our loan modification plan and Treasury guidelines for servicers.
SCHNEIDER: The public's initial response -- supportive. But the program gets much more support from renters who are more likely to be lower income and Democrats, than it does from homeowners, who support it by a slight majority. Why? Listen to the critics.
REP. JOHN BOEHNER (R-OH), HOUSE MINORITY LEADER: They even want to pay your irresponsible neighbors mortgage off for them.
SCHNEIDER: Sixty-four percent of Americans feel the plan is not fair to mortgage holders who make payments on time. The government says the plan will help not just homeowners who can't make their mortgage payments, but also homeowners who are making their payments but seeing their home values collapse. It will help them refinance.
What about homeowners who are not in trouble? What will they get for their tax money? The Treasury Department says, quote, "The average homeowner could see his or her home values stabilized against declines in price by as much as $6,000." Does the public buy that? Yes, by a small majority. The prevailing view among 39 percent is that the plan is not fair but they still support it because they believe it's necessary.
(END VIDEOTAPE)
SCHNEIDER: Two-thirds of Americans say the plan is not fair. But two-thirds of Americans still support it. The public seems to be willing to go along with the plan, but they reserve the right to complain -- Lou.
DOBBS: All right, Bill, thank you very much. Bill Schneider.
The president has been in office for six weeks now, but he's still blaming the Bush administration for our economic crisis and ignoring the deep skepticism about many of his economic policies. Let's listen to what the president had to say over the past two days.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: My administration inherited a fiscal disaster. When we walked in the door, we found a budget deficit of $1.3 trillion, the largest in American history.
There were a lot of bad decisions that were made. We are cleaning up that mess. It's going to be sort of full of fits and starts in terms of getting the mess cleaned up. But it's going to get cleaned up.
Having inherited a $1 trillion deficit that we're working to cut in half, we also need to ensure that tax dollars aren't wasted on projects that don't deliver results.
(END VIDEO CLIP)
DOBBS: Getting the feeling that he inherited this. Critics say it is now time for the president to take responsibility for what is happening now and to stop blaming the previous administration.
Up next, President Obama says his policies will lead to lower taxes for most Americans. Oh, really? We'll set the record straight here next.
And you won't believe how much money Wall Street has been spending to buy influence in Washington. You will believe how it's paid off for them. We'll have that special report next.
(COMMERCIAL BREAK)
DOBBS: There's further evidence tonight that our lawmakers are literally selling out, specifically in this case, selling out to the financial industry. Wall Street spent billions of dollars over the past decade to successfully influence our lawmakers and regulators. A report from the Wall Street watchdog group shows the financial sector hired thousands of lobbyists to push for deregulation and policy decisions that favor the financial industry. And they got what they paid for. Ines Ferre has our report.
(BEGIN VIDEOTAPE)
INES FERRE, CNN CORRESPONDENT (voice-over): As Wall Street firms were wheeling and dealing over the past decade, they also were spending buckets of money to influence Washington policymakers and regulators who could have spoiled the party. A new report out by a nonpartisan consumer activist group called Wall Street Watch says the financial industry and its executives spent $5 billion over the past 10 years on lobbying activities and political campaign contributions to both Republicans and Democrats.
ROBERT WEISSMAN, WALL STREET WATCH: Over the last three decades, the Wall Street and big financial firms have paid Washington to take the regulatory cops off the beat. The consequences were dire, both for Wall Street, but as we all now know, for the rest of us as well. FERRE: The report highlights a dozen deregulatory steps taken over the last 30 years that contributed to the financial meltdown, ranging from the failure to regulate derivative investing to turning a blind eye to reckless predatory lending. Over the last decade, the financial industry spent $3.3 billion on lobbying. And its executives' employees doled out 1.7 billion in political contributions.
SHEILA KRUMHOLZ, CENTER FOR RESPONSIVE POLITICS: What this is intended to do is to make sure that lobbyists and CEOs of these firms have access to the policymakers in Washington.
FERRE: According to the report, the same firms that last year received billions of dollars in TARP funds spent millions to spread their political influence, including Merrill Lynch, Citigroup, Bank of America, and Goldman Sachs, banks that have been so tight with Washington that some of their former execs also have held key government positions like former Treasury secretaries Robert Rubin (ph) and Henry Paulson, both of whom had served as chairman of Goldman Sachs.
(END VIDEOTAPE)
FERRE: And we contacted reps from the financial services industry to get their response to the report, but they didn't response to our calls and e-mails and one final point, the co-author of the study says there was plenty of advance warning that we were headed for a financial disaster, but the warnings drowned in the waves of money funneled into Washington -- Lou.
DOBBS: Thank you very much, Ines. Ines Ferre.
New evidence tonight of the staggering bonuses that Merrill Lynch paid its top executives just before the company's merger with Bank of America. Those bonuses handed out as Merrill Lynch's annual losses soared to almost $30 billion. And Merrill was about to receive $10 billion in federal bailout money.
"The Wall Street Journal" reporting that Merrill's 11 top executives each received more than $10 million in cash and stock, the highest paid executive earning almost $34 million last year. Another 150 executives at Merrill received at least $3 million each. The New York attorney general is investigating whether Merrill broke any laws by not disclosing details of those bonuses.
We've reported here on Wall Street executives taking expensive junkets at luxury resorts, now it's organized labor's turn. AFL-CIO is holding its executive council winter meetings at a Miami hot spot, the Fontainebleau (ph) Hotel. Room rates at the newly renovated ocean side resort start at $400 a night, run to 1,500 for a suite. The hotel has 11 restaurants, nightclubs including one where Frank Sinatra and Elvis Presley once performed.
President Obama addressing the gathering over a video link yesterday, Vice President Biden is expected to talk to the group in person tomorrow. The White House of course very critical of the junkets taken by the financial industry and well, financial junkets of any kind by any industry, but no word yet on their views about AFL- CIO's spending money at the Fontainebleau (ph).
Well I'm sure we'll hear from them. I'm going to -- my guess is it's going to be just nasty what we hear from the White House on that. Well, we've heard the rhetoric. President Obama says all but the richest Americans will see their taxes cut. But in reality the middle class will be taxed more. Louise Schiavone has our report on how and where those tax hikes have been hidden.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): A perfect storm is brewing for taxpayers. As seemingly anyone who can raise taxes in this recession needs to do just that. Listen to Scott Hodge, who heads a nonpartisan tax research group.
SCOTT HODGE, TAX FOUNDATION: We are seeing taxes raised at every conceivable level from every particular direction. But we have to say that this makes as much sense to raise taxes in this climate, as it makes sense for General Motors to raise prices to be more competitive.
SCHIAVONE: Across the nation Americans with and without jobs are looking at a wide range of higher costs. Massachusetts drivers could pay 19 cents a gallon more at the pump; Maryland drivers, 10 cents more per gallon. Arizona is looking at an extra penny sales tax and taxing products that are now exempt.
Homeowners throughout the U.S. are facing higher property taxes, like the citizens of Hoboken, New Jersey, where property taxes have been raised by 47 percent; California just ordered $12.5 billion in new taxes. And with the Obama administration setting the pace, with a higher tax rate on those making more than $250,000, steeper capital gains taxes, and a cut in the mortgage interest deduction, the toughest of the new taxes will fall on upper-income Americans, according to the National Taxpayers Union, a group that campaigns for lower taxes and smaller government.
PETE SEPP, NATIONAL TAXPAYERS UNION: It's been said that no poor man has ever created a job for another poor man and that's pretty much true. Businesses and small employers are the ones who create jobs and many of them are going to be in the six-figure brackets.
SCHIAVONE: Consumers may also be hard hit by a plan to increase energy regulatory costs, making electricity and fuel cleaner, but much more expensive, on Capitol Hill, a strong defense from the administration.
PETER ORSZAG, DIR., OFFICE OF MGMT. & BUDGET: As the country music singer Montgomery Gentry (ph) put it, it ain't about easy, it's about tough. We need to make the tough choices that will put this country back on the right course.
(END VIDEOTAPE)
SCHIAVONE: Lou, President Obama has promised they'll be no new federal taxes for two years. But analysts say in many respects, from businesses calculating expenses and options, those taxes are already taking effect -- Lou.
DOBBS: That's sort of interesting, here; the budget director quoting Toby Keith isn't it?
SCHIAVONE: No, it was Montgomery Gentry (ph) he said.
DOBBS: Well it wasn't Montgomery -- well let me quote then Toby Keith. "There ain't no right way to do the wrong thing." How's that? Maybe we can pass that along to Mr. Orszag. I knew there was a reason I was bringing up Toby Keith. Thanks very much, Louise -- Louise Schiavone with the straight-forward facts about what's going on.
This administration bears watching, just as seemingly does every other administration. This is starting to look a lot like politics as usual to me. But maybe that's just me.
The state of Florida has also promised not to raise any taxes. Instead, the state there is raising traffic fines. Florida lawmakers have decided to add at least $10 to every violation from driving with expired tags to running a stop sign. The state said the money from the fines will pay for budget shortages in the court system. Motorists argue that some fees are outrageously high, such as nearly $300 for speeding, and that the punishment doesn't fit the crime. Well, it just fits the budget I guess.
Up next, bizarre new details about the murder of Chandra Levy. We'll tell you what the suspect is saying. And we'll tell you why some people are afraid to say who the suspect is, something to do with political correctness, high-bound orthodoxy. Cowards, I tell you.
And man versus truck and train. We'll tell you who won. The answer will surprise you.
(COMMERCIAL BREAK)
DOBBS: New details are emerging tonight in the disappearance of those two NFL players and their friend off the coast of Florida. The only survivor now says the NFL players allowed themselves to drift out to sea after their boat overturned. The Coast Guard last night called off the three-day search for those players, Marquis Cooper and Corey Smith.
Cooper, the owner of the boat, along with former University of South Florida football player William Bleakley. A fourth man, Nick Schuyler (ph) was rescued by the Coast Guard Monday. He was found clinging to that overturned boat and rescued. Schuyler (ph) said that Bleakley took off his life jacket and then swam off to try to get help early Monday morning, the day that Schuyler (ph) was rescued.
Disturbing new details tonight about the criminal illegal alien charged in the killing of Washington intern Chandra Levy eight years ago. According to court documents, Ingmar Guandique told at least two people that he killed Levy. Guandique, who is in prison for assaulting two women, also kept a picture of Levy in his cell. The suspect allegedly told witnesses he was known as "Chucky", the name of a doll in a series of horror movies, because of his reputation for, quote, "killing and chopping up people". Chandra Levy's murder gained national attention after former Congressman Gary Condit admitted to having an affair with the young woman.
Turning now to a miracle escape. You're going to see video that you -- well you're going to have to see it to believe it and even then you may not believe it. A man in Turkey tonight says life is really beautiful. He survived a collision between a truck and a train. It happened in Mersin (ph), in South Turkey -- there he is.
The 32-year-old man is seen standing near train tracks as a flatbed truck is rammed right over the top of him. The security cameras show the train slamming into the truck, throwing the man to the ground. I mean this is just incredible that this man, as you see lying there on the ground, as the -- as he is rescued, as first responders come to his aid they found a man who had suffered only minor injuries. He escaped with a broken arm if you can believe that. No one else was injured in the collision. I told you, you might not believe it.
Well, let's take a look now at some your thoughts. Sharon in Michigan, "Why are citizens who don't pay taxes prosecuted, but cabinet nominees that don't pay taxes just have bad memories?"
Mitchell in California said, "Lou, California has more than a drought of water. We have a drought of leadership." Well, no, not now that you've got your mayor re-elected in Los Angeles.
And Jack in New Jersey, "I live in the great state of New Jersey. The only thing we do not pay for or are taxed on is air. Perhaps you should not report this or Governor Corzine might get an idea." Too late.
We'll both be paying together on that one. We love hearing from you. Send us your thoughts to loudobbs.com.
Up next, we're waiting for President Obama tonight. He's scheduled to speak just any moment. We'll be going to Washington for that -- for you. And also ahead, the Obama White House, well, it seems to be hell bent on demonizing the country's best-known radio talk show host. And a startling prediction that this country's on the verge of collapse. One of the country's best economic thinkers and historians joins me here next.
(COMMERCIAL BREAK)
DOBBS: President Obama facing a barrage of criticism for talking down our economy and using the rhetoric of fear and talking about our economy and markets. So yesterday the president tried to adopt a more positive tone on the economy and the stock market. He even offered investors some advice, actually boosted the -- well, the market, if you will. There was just one little problem. President Obama misspoke, talking about profit and earnings ratios when he actually meant to say price to earnings ratios, somewhat diluting the confidence inspiring part.
(BEGIN VIDEO CLIP)
OBAMA: What you're now seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal, if you've got a long-term perspective on it.
(END VIDEO CLIP)
DOBBS: You know, you're probably thinking where is -- where are all the national liberal media that jumped all over George W. Bush when he misspoke? I don't know. It seems that our colleagues in the national media completely ignored the mistake by the president. Make you wonder about the very same liberal media organizations and what they might have said had President Bush said precisely the same thing doesn't it?
Well President Obama may be trying to set a more positive tone now when talking about the economy. And if so, thank you for doing so Mr. President, but many say the president's free-spending approach can actually prolong our economic crisis. Joining me now from Boston is Professor Niall Ferguson. He's professor of history at Harvard. He is the author of the book "The Ascent of Money: A Financial History of the World". And Professor, it's great to have you with us.
PROF. NIALL FERGUSON, HARVARD UNIVERSITY: A pleasure to be on the show, Lou.
DOBBS: Well a month ago when you were on this broadcast you were somewhat skeptical about the size of the stimulus package that was being discussed at that point. What say you now?
FERGUSON: Well, I'm still gathering my breath actually after the budget numbers that came out. It's really rather startling to think that we're going to see a doubling of the federal debt over the next 10-year period according to the forecasts, taking it up to 100 percent of U.S. gross domestic product. That's a pretty spectacular increase.
And the thing that really alarmed me about it was the forecasts for growth. According to the budget, the president, that is, advisers expect the economy to bounce back, to grow at three percent, then four percent, then 4.5 percent in the next few years and these just seem to me like completely fantastic figures given the magnitude of the financial crisis we find ourselves in.
DOBBS: Yes, given the fact that the economy contracted in the last quarter at a rate greater than at any time since 1982, greater than six percent contraction. The title of your book is "The Ascent of Money." Sounds like there might be a sequel, the decent of money. Anything to that?
FERGUSON: Well actually Lou that's the final sequence in the book. As I was revising that for the paper book edition, I was impressed to which the book anticipated the scale of this crisis. Looking back to the 1980s won't really get us very far. We have to recognize this is a crisis much more comparable with that of the early 1930s or indeed the great financial crisis that swept the world in the 1870s. This is a really huge one. It's now becoming more than just an American financial crisis, Lou. It's now a crisis of globalization. The entire world economy is really teetering on the edge here. Both things feel very bad in the United States. I have to tell you, they're worse elsewhere. They're worse in Europe and certainly worse in Asia.
DOBBS: Professor with Prime Minister -- British Prime Minister Gordon Brown before a joint session of Congress today, sounded terrific to have that British accent going. He was talking about a global new deal. You know, good stuff, good, good theater. There's just one problem. I just had a feeling the man didn't have a clue what he was talking about.
FERGUSON: It's hard to know what a global new deal would look like. In one respect, I agree with my countrymen. The United States and United Kingdom are doing an awful lot more to tackle this crisis. If doing -- running large deficits is the answer and cutting interest rates is the answer. Other countries are singularly behind the curve here. The same day he made this announcement, the Chinese government was shaping up to announce its stimulus package. And I couldn't help but be impressed by the fact that the stock market rallied more on that news, news of Chinese action, than on anything Mr. Brown had to say in Congress.
DOBBS: Well, I think the Chinese understand, as they do so many things, better than do we, that any stimulus package in this country will be used, a large measure of it, to buy Chinese products, as has been the case for the past decade. It seems entirely rational on their part.
FERGUSON: They're feeling a little uneasy, too, that Secretary of State Clinton paid a visit the other day that they were willing to finance our stimulus package. After all, more than half the federal debt is in foreign hands and a large chunk is in the Peoples Bank of China.
DOBBS: One has the feeling China's going to do very well with these stimulus packages. Give us your best forecast. I have said categorically there will nobody depression. And I know that that flies in the face of what -- a number of authorities are saying and some of the gloomy rhetoric being used by this administration now. What do you believe will be the course events over the next 12 months?
FERGUSON: Well, Lou, don't think it's going to be as deep a contraction as the U.S. suffered in the early 1930s, but it might be quite protracted. Think this might certainly last longer than any recession the U.S. has experienced since World War II. In a way, we should probably think of it as the great recession, something not as bad as the early '30s, but probably worse than the early '80s. What worries me more is the prospect a lost decade for the entire world economy. When you look at the forecast for this year, they're pretty depressing reading, particularly for Asia, for Eastern Europe, which is disappearing down the plug hole at the moment, and I think it's that great breakdown of globalization that's probably the most troubling thing now. World trade is disappearing and that's the alarming thing.
DOBBS: And in that case, it does -- this period does have a great similarity to the great depression, when international trade, which was not as significant a portion of global GDP as it is now, actually disappeared, as countries moved off the gold standard. I'm always amused that people focus on smooth holly as the reason for that and ignore the number of countries that moved off the gold standard and created great uncertainty in the international payment system.
That's for another discussion another time. Professor, it's always good to talk with you. We appreciate you being here. We look forward to the paperback version of your terrific book "The Ascent of Money." Niall Ferguson, a terrific read. I can't recommend it too highly.
FERGUSON: Thank you.
DOBBS: The poll tonight, our question is straight forward -- are we headed toward a system of European socialism? Yes or no? Cast your vote at loudobbs.com. We'll have the results later.
Up next, our troops in Afghanistan at risk from possible faulty electrical work at U.S. bases again. We'll have that exclusive story. And it appears it is a same culprit.
The usual characters from the left blasting Rush Limbaugh. Coincidence? Or Democratic strategy? Why that strategy? Is it smart? Perhaps not. We'll be talking about that with our panel of political analysts. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Joining me now, two of the best political analysts in the country. Democratic strategy, CNN contributor, Robert Zimmerman. Robert, good to see you. Ron Christie, former adviser to President George W. Bush and Vice President Dick Cheney. Ron is president of Christie Strategies. Great to have you with us.
RON CHRISTIE, PRESIDENT CHRISTIE STRATEGIES: Thanks, Lou.
DOBBS: I have to start with you, Robert. What in the world are your friends James Carville, Paul Begala, my gosh, a cabal at the Obama White House going after Rush Limbaugh. That's an enemy's list -- you put him right at the top. If this were the Nixon era, would you not be blushing with shame?
ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: Actually, as much as I admire and respect James and Paul, they're just not that good.
DOBBS: Oh. We have a lead.
ZIMMERMAN: This conspiracy is being led by Republican national chair Michael Steele who apologized to Rush Limbaugh and also praised him for his vision in leadership. Congressman from Georgia who said he had foot and mouth disease for criticizing Limbaugh. Absolutely backing off -- DOBBS: You don't think James and Paul did very well then?
ZIMMERMAN: I think the Republicans -- I think this whole --
DOBBS: James and Paul are Democrat, sort of like you.
ZIMMERMAN: Exactly. This is not a conspiracy --
DOBBS: It sounds like a conspiracy.
ZIMMERMAN: This is a reflection of just how narrow and divisive the Republican Party has come.
DOBBS: This was a conspiracy by the Republicans. Why would you say such things? Are you trying to defend James and Paul and the rest of the members of the cabal?
ZIMMERMAN: Proudly, because ultimately this is how the Republican Party has become isolated from the mainstream of America by really following Rush Limbaugh's intellectual leadership.
DOBBS: What say you, Ron?
CHRISTIE: I think Robert and the Democrats are stepping on a land mine here. Rush Limbaugh for the millionth time is not the leader of the Republican Party. He's not elected leader of the party. He doesn't want to be an elected leader to the party. This is all about politics, Lou. Carville, Begala, those guys polled late last fall and it came back very strong. They didn't have Dick Cheney to kick around. They didn't have Karl Rove to kick around. They thought, let's kick around Rush and say Rush is the head of the party.
ZIMMERMAN: Ron, you ought to be telling this to your Republican Party because every Republican presidential candidate is desperate to pass the Rush Limbaugh primary. And with the support --
CHRISTIE: Again, it's not the --
ZIMMERMAN: -- you see the Republican members of Congress seek his support as well.
DOBBS: I have to say to everybody, I don't often do this, but I would urge everyone to go to politico.com. The story behind this is extraordinary. It was the reporting of I believe Jonathan Martin. It is remarkable reporting on the conspiracy that was created in the White House with Carville and Begala, who are nice fellows, and sit here as contributors to CNN. I can't believe that men who look so innocent could be so guilty of such a -- such perfidy.
ZIMMERMAN: They couldn't pull it off without the leadership of the Republican Party being complicit in this process.
CHRISTIE: Let me just say this, these are some very serious times. You have the White House press secretary making jabs at Rush Limbaugh. For goodness sakes, we just had the beige book come out by the Federal Reserve today. The contraction of the economy is much worse than people expected. We need the White House focused on the economy. We don't need the White House and the president taking jabs at Rush Limbaugh. They were elected.
ZIMMERMAN: So Rush Limbaugh's divisive and hateful rhetoric should be ignored?
DOBBS: Divisive and hateful?
ZIMMERMAN: Absolutely. Let's get down to the bottom line here.
DOBBS: I would just raise my hand, if I may.
ZIMMERMAN: Please.
DOBBS: Aren't there some other Republicans you have to do business with? Why are you going after --
ZIMMERMAN: Because he's the intellectual power that's driving --
DOBBS: He's the intellectual power?
ZIMMERMAN: Absolutely.
DOBBS: Well, who's the intellectual -- he's a pretty good intellect, but who's the intellectual power of the --
ZIMMERMAN: I think Barack Obama --
DOBBS: So you would call him the intellectual power?
ZIMMERMAN: Absolutely.
DOBBS: All right. I can't even understand how you and Gibbs and Begala and Carville -- listen to this. And Rahm Emanuel. You have decided to put this on him. I'm just try to understand the secret reason for this decision to focus on Rush Limbaugh. It seems like a bizarre, bizarre strategy.
ZIMMERMAN: Well, you know, I think when you saw the conservative political action group give him one ovation after another Saturday evening as he was the keynote speaker, and as you saw the Republican leadership apologize for offending him, think that made the point.
DOBBS: OK -- Ron?
CHRISTIE: Lou, again, this is so bizarre --
DOBBS: We have to interrupt you. President Obama and the first lady tonight hosting a White House dinner. He has stepped up to the podium with Congressional committee chairs. He's speaking now. Let's listen in.
OBAMA: So glad all of you could join us. Obviously, the country's going through an extraordinarily difficult time. And we are going to have some monumental debates taking place over the next several months and years. We also know that we're not always going to agree on everything.
But given how hard so many of you are working, on both sides of the aisle, day in, day out, we thought it was important for us to be able to step back for a moment, remind ourselves that we have things in common, family, friends, laughter, and hopefully we'll have a chance to appreciate each other a little bit, take a time-out, before we dive back into the game. So we hope you have a wonderful evening.
Not to mention the fact that this is a pretty big house so we get lonely. So -- it's hard for me to move around out there sometimes so I got to bring the world to me.
But any way, I'm grateful for all of you coming. Michelle is thrilled that you're here. And we hope you have a wonderful evening. Thank you.
DOBBS: The president and first lady hosting several of these Wednesday night dinners. As they say, they're going to keep their White House open because it is the people's house.
The White House, by the way, not telling us what's being served in the people's house tonight because of so much attention to what has been served over the last week or so. Including, we're told, rather expensive beef and -- some pretty fancy stuff for the people's house. But we have learned that celery soup, steelhead salmon and milk chocolate velvet cake, all on the menu tonight. Previous dinners were reportedly very fancy indeed. Menus included wagyu steak hors d'oeuvres. That's a Kobe style steak that retails for about 100 bucks a serving. I guess this is -- a lot of the -- the people's house, it's a rich people's house now. Nantucket scallops and Maryland crab have also been served. And I'm sure we're going to be divining what these menus are as these Wednesday night affairs continue.
Timothy Geithner is still the Treasury secretary, by the way, may be just a bit distressed when he sees his place card. We noticed his last name is missing an "h." We're -- I can't make this stuff up. It's no reflection I'm sure on his standing at the White House. He's doing a buffo job. There it is.
Up next, because we've done just about all I can do with one meal at the White House, we'll continue with our panel in just a moment. Stay with us. We're going to get some fresh opinions about the menus at the White House and the prospects for the economy. We'll be right back.
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DOBBS: Breaking news. Former White House political adviser Karl Rove and White House counsel Harriet Miers have agreed to face questioning from Congress on allegations they fired and had roles in firing those U.S. attorneys, committee chair John Conyers saying it's a vindication for the search for truth.
Let me turn to Ron Christie real quickly.
Ron, are you surprised first, they have lifted the executive privilege and agreed to appear before the Conyers committee?
CHRISTIE: I'm not surprised, Lou. I think the issue at hand was making sure not to have two of the president's most senior advisers being hauled up to Congress while they still served the president of the United States. One of the most important things the president needs is counsel from his closest advisers and not meddling from the other branches of government.
ZIMMERMAN: This controversy's been going on long after Miers and Rove left the administration. This some about the fact they've run out of options and they finally have to have their day of reckoning with the truth.
CHRISTIE: For being a former commissioner to the president of the United States and one who has actually worked in the White House and had to deal with similar situations, I can tell you the most important thing, as said from the outset, is the president needs that unfettered advice. He needs to make sure his advisers are in the position --
ZIMMERMAN: And the American people need the truth about corruption in government. It's long overdue.
CHRISTIE: This has nothing to do with corruption. I would finally say that the two individuals have agreed to testify. They have agreed to sit for a deposition behind closed doors. I think the American people are being well served. They're participating. Democracy still flourishes here in America.
ZIMMERMAN: It's one of many testimonies we should be expected from the former Bush administration which should be held accountable for their criminal negligence in Iraq and for their corruption, both their conduct in the department of justice and the use of our tax dollars.
DOBBS: Ron Christie, you get the last word.
CHRISTIE: Criminal negligence is a pretty serious loaded term. I hope the Obama administration recognizes the severity of the crisis we face in this country and they do the bidding of the American people and put strong economic policies on the table, rather than playing politics.
DOBBS: Ron Christie, thank you very much. Robert Zimmerman, thank you very much.
Up next, the lessons the Pentagon may not have learned in Iraq could now threaten the lives of our troops in Afghanistan. We'll have that exclusive story here next.
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DOBBS: We've been reporting here for much of this past year on the dangerous electrical condition on U.S. bases in Iraq. As many as 18 of our troops have been electrocuted there. Now, similar dangers are facing our troops in Afghanistan. CNN has learned that dangerous electrical wiring, similar to what has been found in Iraq, now exists on U.S. bases in Afghanistan according to several electricians and soldiers assigned there. CNN special investigations unit correspondent Abbie Boudreau has our report.
(BEGIN VIDEOTAPE)
ABBIE BOUDREAU, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT: Noris Rogers could not believe what he saw when he worked as an electrician on a U.S. base in Afghanistan.
NORIS ROGERS, FORMER KBR ELECTRICIAN: There was a complete whole, the electrical work at the camp was very dangerous. I don't think it was -- it would be an exaggeration to say that I don't believe any of it was done safely. By far, this was the worst conditions that I'd ever seen. And I believe that they were very dangerous.
BOUDREAU: Jeff Bliss says he saw the same thing in Afghanistan when he worked there as an electrician. Last year, he testified to Congress that the largest U.S. contractor in Afghanistan, KBR, was not doing safe electrical work.
JEFF BLISS, FORMER KBR ELECTRICIAN: The carelessness and disregard for quality work at KBR was pervasive. I saw firsthand how KBR's carelessness unnecessarily put people in danger.
BOUDREAU: Jeff Bliss and Noris Rogers who each have more than 20 years' electrical experience, are just 2 of the 5 electricians who tell CNN they personally witnessed dangerous electrical conditions.
These photos, taken in Afghanistan, they say, show dangerous wiring, overloaded or badly wired circuit panels, and improper wiring that caused fires.
The electricians we spoke to worked there for KBR in 2005 and 2006. All five said they felt their warnings to KBR management about electrical dangers were ignored.
KBR has been criticized for much of the electrical problems on bases in Iraq and is being sued for the deaths of two soldiers electrocuted there, including Sergeant Ryan Mason, a Green Beret soldier from Pittsburgh who in early 2008 was electrocuted while taking a shower. The army's lead investigator examining that case recently wrote that there's credible information that KBR's negligence led to the death. And she would recommend his caution of death be changed to negligent homicide. The army has yet to make a final ruling.
Army inspectors in Iraq recently found KBR failed to do proper electrical wiring on bases there and said electric shock incidents were occurring on average every three days for nearly two years. And that the company was in serious violation of its contract.
Noris Rogers was so disturbed by what he saw in Afghanistan he wrote this letter in 2005 to KBR officials about a U.S. base in Kabul. In general, he wrote, the electrical power systems in the camp can be described as a disaster waiting to happen. And, there are extreme dangers of shock hazards and fire hazards. He says he left Afghanistan shortly after that. KBR would not comment on specific criticisms about the company's work in Afghanistan. But the company has consistently denied any improper electrical work or responsibility for deaths or injuries. Adding in an e-mail to CNN, the electrical standards in Iraq are nowhere near those of western standards so we are adapting to an environment that existed long before KBR got on the ground in Iraq and Afghanistan.
SEN. BYRON DORGAN (D), NORTH DAKOTA: I mean, there's something horribly wrong here.
BOUDREAU: Senator Byron Dorgan held hearings last year on base wiring dangers. Would you trust your child would be safe, knowing what you know?
DORGAN: I don't think the problem has been fixed. I don't think at this point the Pentagon has bitten the bullet, to say, we're going to fix these problems in a very significant way and we're going to cause contractors to be accountable for their work. Think as awe result of it not being fixed, think there are risks.
BOUDREAU: Not just in Iraq?
DORGAN: I think it appeared to me, base on testimony I've received from people who work for Kellogg Brown and Root, the contractor, both in Iraq and Afghanistan, think some of the same problems exist in both war theaters.
BOUDREAU: The Pentagon told CNN it considers electrical dangers to be a serious issue. And that widespread inspections are under way in Afghanistan, as well as Iraq, to be sure that unsafe electrical conditions do not exist. And to ensure that all future installations comply with U.S. electrical code.
(END VIDEOTAPE)
BOUDREAU: Lou, we have also spoken to several soldiers who where stationed in Afghanistan. At least two say they were shocked in showers. Now, since 2003, at least 18 soldiers are known to have died in Iraq by electrocution. Many while on U.S. bases being managed by various U.S. contractors, including KBR -- Lou?
DOBBS: Thank you very much, Abbie Boudreau.
Our poll results tonight, 83 percent of your believing we are headed toward a system of European socialism. That is an overwhelming number.
Time to look at a few of your thoughts. D.D. in Texas says: "For years, you've said we need to secure our boarders. Now, however, I'm changed my opinion. I lost my job to NAFTA. Think I'm going to have to sneak into Mexico to be able to support my family."
We love hearing from you. Send us your thoughts to loudobbs.com.
Thanks for being with us tonight. We thank you for watching. Good night from New York.
Campbell Brown, "NO BIAS, NO BULL," starts right now -- Campbell?
CAMPBELL BROWN, CNN ANCHOR: Thanks Lou. Hey there everybody.
Moments ago, we heard from President Obama as he welcomed friends and rivals to the White House. We're going to have that for you in a moment.
We begin with something we've not been able to show you for sometime. It is good news. Take a look. The Dow closed up today. It broke its five-day losing streak, soaring throughout the day, ending nearly 150 points higher. No, it didn't quite get back to the 7,000 mark. Still, nice to see things looking up a bit.
