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Lou Dobbs Tonight
Jobless in America; Geithner Under Fire; Campaign 2009; Dismal job Numbers
Aired March 06, 2009 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KITTY PILGRIM, CNN CORRESPONDENT: Thanks, Wolf.
Tonight, the worst unemployment rate in a quarter century as employers cut jobs at the fastest pace in six decades. President Obama says he is astounded. We'll have complete coverage of that.
And, tonight, workers in the private sector are bearing the brunt of the job cuts and we'll tell you where it's still possible to find jobs with good wages and benefits.
Also, tonight, rising criticism of Treasury Secretary Timothy Geithner and his policies, four of this country's top economic thinkers will tell us whether Geithner should keep his job, all of that, all of the day's news and much more straight ahead here tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT; news, debate, and opinion for Friday, March 6th. Live from New York, sitting in for Lou Dobbs, Kitty Pilgrim.
PILGRIM: Good evening, everybody.
President Obama today declared that the new unemployment figures are astounding. The president reacting to the latest grim economic report as he tried to highlight some positive news taking credit for saving 25 police jobs in Columbus, Ohio. Nationally, employers slashed more than 650,000 jobs in the month of February and those job cuts took the unemployment rate to a 25-year high of 8.1 percent. Americans are suffering from the impact of soaring job losses as the value of their homes and investments continue to plunge. White House correspondent Ed Henry reports. Ed?
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well Kitty, as you noted, the president going to the very hard-hit state of Ohio to tout the fact that his economic stimulus plan in his words saved the jobs of those 25 police cadets who otherwise would have lost those jobs, but obviously those 25 jobs while important to each one of those police officers and their families, certainly looks like a drop in the bucket when you compare it to the vast number of people across the country losing their jobs.
Look at those awful figures, what's happened just from last February until now, unemployment soaring from 4.8 percent to 8.1 percent, as you noted the worst in a quarter century. The president's response was that America has never run away from a challenge before and it's time to respond with some bold action.
(BEGIN VIDEO CLIP)
BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: Now just this morning we learned that we lost another 651,000 jobs throughout the country in the month of February alone, which brings the total number of jobs lost in this recession to an astounding 4.4 million, 4.4 million jobs. I don't need to tell the people of this state what statistics like this mean. Because so many of you have been watching jobs disappear long before this recession hit.
(END VIDEO CLIP)
HENRY: The president adding that this essentially bolsters his case that dramatic government action is needed to end this cycle downward in terms of jobs being lost but House Republican Leader John Boehner basically saying he's concerned about an overreach by this administration in terms of government intervention. Boehner saying that Democrats quote, "seem more determined than ever to continue pursuing tax hikes and pork barrel spending increases that he believes will make matters worse"
And that's the philosophical divide we're going to see in the months ahead as the president's budget is debated, a completely different philosophy in terms of their approaches to how to deal with this economic downturn -- Kitty?
PILGRIM: Ed, the president today also reversed one of President Bush's most controversial executive orders. Tell us a little about that, Ed.
HENRY: That's right. We're learning that this evening, but he's going to officially going to sign an executive order on Monday here at the White House to overturn the Bush era policy that limited federal funding for research, stem cell research. Advocates of this research say that it could lead to all kinds of medical breakthroughs, maybe even find cures for diseases like Alzheimer's, Parkinson's disease, Diabetes, but critics, mostly conservatives already lashing out.
Tony Perkins (ph) of the Family Research Council saying that you know destroying human embryos is essentially destroying human life. Tony Perkins (ph) tonight accusing this White House of leaking this information out on Friday night so it will get very little attention -- Kitty.
PILGRIM: All right, thanks very much. Ed Henry -- thanks, Ed.
Today's unemployment report shows there's been a sharp increase in the number of people out of work for more than six months. Now, that total is almost three million. And at the same time, the number of workers with part-time jobs has risen to more than eight and a half million. If those part-time workers and people who are no longer looking for jobs are included, the rate of unemployed and under- employed workers rose to almost 15 percent in February.
That is a new record. Now overall, more than four million jobs have been lost since the recession began. In December alone, employers cut 681,000 jobs. That's the highest in six decades. And last month, seven percent of whites were unemployed; 13 percent of blacks; 11 percent of Hispanics; and seven percent of Asians.
Well, those new unemployment figures added to the gloom in the stock market, but today the Dow industrials ended 33 points higher after a day of triple digit swings. Citigroup was among the gainers. It rose a penny, stayed above $1 a share but General Motors continued to sink dropping another 41 cents.
The Dow industrials have plunged more than 2000 points since the beginning of this year. The market increasingly concerned about the ability of Treasury Secretary Timothy Geithner to tackle this financial and economic crisis. And investors are also worried about Geithner's difficulties in filling top positions at the Treasury Department. Jessica Yellin reports from Washington.
(BEGIN VIDEOTAPE)
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT (voice-over): As layoffs mount and the market gyrates, President Obama's Treasury secretary says he's on the case.
TIMOTHY GEITHNER, TREASURY SECRETARY: We need to make sure that our banks have the resources necessary to provide credit and we need to act to get the credit markets flowing again directly.
YELLIN: But there's no patience on Wall Street. Online frustrated day traders are betting on the chance Geithner will leave his job by the end of the year and the gurus of stock spin at CNBC are increasingly blaming Geithner and the administration for the market's troubles.
UNIDENTIFIED MALE: Tim Geithner, he's mulling things over you know I'm confident by the time that Bank of America goes to one and Wells Fargo is at two, that he will have a plan.
UNIDENTIFIED MALE: Since the inauguration, stocks are down 20 percent on the broad S&P.
YELLIN: Geithner is an extremely tight spot. Business leaders are calling on him to release detailed plans to rescue the banks after his initial outline with PAND (ph) and because of the tough betting rules for nominees he's working without a full staff in place. Click on the Treasury Department Web site and the only confirmed official the Treasury secretary himself.
PAUL VOLCKER, W.H. ECON. RECOVERY BOARD CHMN.: Shameful is the word that comes to mind. The secretary of the Treasury is sitting there without a deputy, without any under secretaries.
YELLIN: Some say the problem has more to do with political reality. That to stop the market slide, the administration needs to commit more money to saving the banks and it just isn't prepared to do that.
VINCENT REINHART, FORMER FEDERAL RESERVE OFFICIAL: Wall Street is holding the greater economy hostage. As long as financial institutions need funds, they won't make loans, they won't support market activity. So what we have to do is pay them to get past this.
(END VIDEOTAPE)
YELLIN: Now, Kitty, Treasury officials are absolutely adamant that the secretary does have the support he needs. They say there are 50 political appointees working in the department already as they wait to be confirmed. They point out the secretary has gotten a housing plan up and running and released information about the first steps of the rescue plan, bottom line, they say Geithner won't be rushed by Wall Street's short term thinking -- Kitty?
PILGRIM: Thanks very much, Jessica Yellin.
Well we would like to know what you think. Here's tonight's poll. Do you have any faith in Treasury Secretary Timothy Geithner to handle our nation's economic crisis? Yes or no? Cast your vote at loudobbs.com. We'll bring you the results a little bit later in the broadcast.
Left wing Venezuelan President Hugo Chavez tonight offering President Obama some advice on how to fix our economy. Now Chavez is saying socialism is the only way forward for the United States. This outburst from Chavez coming as he faces new criticism of his own economic policies and his failure to stop skyrocketing food prices in Venezuela.
Secretary of State Hillary Clinton today announced a fresh start in relations between the United States and Russia. This is the latest sign of the Obama administration's efforts to improve relations with this country's adversaries. Clinton met with Russian Foreign Minister Sergio Lavrof (ph) in Geneva, Switzerland and she predicted both countries will reach a new agreement to cut long range nuclear weapons.
(BEGIN VIDEO CLIP)
HILLARY CLINTON, SECRETARY OF STATE: There is a lot of work to be done. We think that this is a fresh start, not only to improve our bilateral relationship but to lead the world in important areas, particularly with respect to nuclear weapons and nuclear security.
(END VIDEO CLIP)
PILGRIM: Clinton also wants Russia to stop Iran's nuclear program and Russia is helping Iran build a nuclear reactor and Moscow is also selling missiles to Iran.
Well, another country posing a nuclear menace is North Korea and tonight it's making new threats against South Korea and other countries. North Korea says it cannot guarantee the safety of flights near its airspace. South Korea says the threat is inhumane. Now there is speculation North Korea is planning a ballistic missile test. International airlines tonight are rerouting their flights away from North Korean airspace.
Still to come, a daring jewelry heist caught on camera by CNN. We'll have exclusive video.
Also, rising speculation that accused swindler Bernard Madoff may be close to a plea deal. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: New video just in to CNN, a mobile home park in Florida is in smoldering ash tonight after a home built airplane crashed into it. Now the pilot of an experimental single engine aircraft was killed when he crashed into the Wild Frontier RV Park. Two mobile homes were gutted by flames. No one was inside either of the homes at the time and the cause of the crash has not been determined.
A plea bargain may be in the works for disgraced financier Bernard Madoff. Madoff today waived his right to a grand jury indictment and this could be an indication that both sides in the case are close to a plea deal. Madoff is accused of defrauding thousands of investors in a $50 billion Ponzi scheme. He is currently under house arrest in his Manhattan penthouse.
A former top NASA official was indicted today on conflict of interest violations. Courtney Stead (ph) allegedly steered more than $9 million into agency funds to one of his consulting clients. Now Stead (ph) was NASA's chief of staff from 2001 to 2003. He returned in 2005 when the alleged crime occurred. He faces 15 years in prison if convicted on all of those charges.
And tonight there is word that former Democratic Party Chairman Howard Dean is being considered for surgeon general. This after CNN's chief medical correspondent, Sanjay Gupta, withdrew his name from the running. Now Howard Dean is a medical doctor and an ardent supporter of health care reform. He had wanted to be President Obama's Health and Human Services secretary, but was not seriously considered for that position. White House officials tell CNN that an official list of candidates has not been made, but that it is possible Dean would be offered the job.
As President Obama travels the country attempting a positive spin on a failing economy, the choice of states that he visits is telling and many are saying that his next campaign has already begun. But as our Bill Schneider reports, his last campaign never really ended.
(BEGIN VIDEOTAPE)
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): February 9th, President Obama goes to Indiana, February 10th, Florida.
OBAMA: It is good to be in Florida, especially in February.
SCHNEIDER: February 11th, Virginia; February 12th, Illinois; well, that's where he lives; February 17th, Colorado where he was nominated last summer.
OBAMA: It is great to be back in Denver.
SCHNEIDER: February 18th, Arizona where the mortgage crisis has hit hard.
OBAMA: I'm here today to talk about a crisis unlike we've ever known but one that you know very well here in Mesa and throughout the valley.
SCHNEIDER: February 27th, North Carolina; March 6th, back on the trail to Columbus, Ohio where he addresses critics who doubt the wisdom of his recovery plan.
OBAMA: I asked them to come to Ohio and meet the 25 men and women who will soon be protecting the streets of Columbus because we passed this plan.
SCHNEIDER: Wait a minute, back on the trail? What trail? He already won the election.
STUART ROTHENBERG, EDITOR AND PUBLISHER, "THE ROTHENBERG POLITICAL REPORT": Politics never goes away. Even though we just had a presidential election a few months ago, politics defines everything.
SCHNEIDER: Take a look at the eight states President Obama has visited since he took office. In 2004, seven of those states, all but Illinois, voted Republican. And last year, seven voted Democratic for Obama. Six switched from red to blue. The holdout, John McCain's home state of Arizona; with its fast-growing Latino vote, Democrats believe Arizona may be the next battleground state. President Obama has been in office less than two months. Is he already running for re-election?
UNIDENTIFIED MALE: The White House doesn't make decisions on presidential visits by chance.
(END VIDEOTAPE)
SCHNEIDER: Now, remember, midterm elections are coming up. As it happens, seven of the eight states the president has visited either have a competitive Senate race or a highly competitive race for governor, like Virginia. That's a new Democratic state that's having an election for governor this year -- Kitty.
PILGRIM: Bill, on another point, what about the timing of this announcement on stem cell research?
SCHNEIDER: Very interesting. We've known for a while the president has promised to reverse the rule that George Bush gave out that he made in 2001, banning federal support for embryonic stem cell research, but we've been waiting to see when he does that. It's been six weeks now. He chose to do it or to announce it today. He'll sign the executive order on Monday, but he chose to announce it today, the very day that those very bad economic figures came out -- very interesting.
PILGRIM: All right. Thanks very much. Bill Schneider.
Coming up, the search for a suspect in a family massacre, that search is over tonight. We'll have the latest details and also ahead...
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: You shut your (EXPLETIVE DELETED) mouth, sir.
UNIDENTIFIED MALE: I'm not going to shut my mouth.
UNIDENTIFIED MALE: Next time I'm going to have you gagged.
(END VIDEO CLIP)
PILGRIM: Well, we'll be back with more of that courtroom drama and how it ended next.
(COMMERCIAL BREAK)
PILGRIM: Police in Ohio tonight say a man suspected of killing his new wife and four other family members has committed suicide. Police say 33-year-old Davon Crawford was hiding in a Cleveland house. He reportedly shot himself when SWAT teams entered the home. Investigators say Crawford killed his wife along with her sister and the sister's three young children. The suspect was convicted of manslaughter in 1995 but served less than six years in prison. A fourth child, a 12-year-old boy, was also shot and police say he is in very critical condition.
Well, today a jewelry heist on London's busiest shopping street, it happened right in front of a CNN news crew. CNN reporter Sasha Herriman was shooting a story outside a bookstore as a motorcycle gang made their escape and it was all caught on tape.
(BEGIN VIDEO CLIP)
UNIDENTIFIED REPORTER: The cameraman keeps rolling; two motor bikes rev loud, covering the sound of the jeweler's window being smashed, but amazingly no one on the street realizes what's happening, though many are actually watching.
(END VIDEO CLIP)
PILGRIM: The motorcycle bandits took a sledgehammer to a jewelry store window and grabbed a fistful of watches. The robbers have not been caught.
Well police in Waukegan (ph), Illinois say a clerk at a gun store shot a man who tried to rob the store. Investigators say the robber got into a fist fight with the clerk and that's when the clerk shot the suspect three times. The suspect is in serious condition. The clerk accidentally shot himself in the hand during the struggle and his injuries are not considered serious.
A Washington State judge said he's sorry tonight for an incredible shouting match that erupted in his courtroom. Judge John Wulle was handing down a sentence to Matthew Hastings (ph) convicted of attempted murder. Hastings (ph) became aggressive and the judge let him have it. (BEGIN VIDEO CLIP)
JUDGE JOHN WULLE, CLARK CO. SUPERIOR COURT: Mr. Hastings (ph), don't press your luck with me, son.
UNIDENTIFIED MALE: Or what?
WULLE: Don't press your luck with me.
UNIDENTIFIED MALE: Or what? You're going to sentence me? Is that what you're going to do?
WULLE: You know what Mr. Hastings (ph)? I am.
UNIDENTIFIED MALE: OK.
WULLE: Let me tell you why...
UNIDENTIFIED MALE: I don't really want to care why. Just get on...
WULLE: Just shut your (EXPLETIVE DELETED) mouth, sir.
UNIDENTIFIED MALE: I'm not going to shut my mouth.
WULLE: Next time I'm going to have you gagged.
UNIDENTIFIED MALE: You're going to have me gagged, huh?
WULLE: You're right I am.
UNIDENTIFIED MALE: OK, have me gagged then.
(END VIDEO CLIP)
PILGRIM: Now later the judge apologized for the outburst. He told reporters that after 12 years on the bench this caught him off guard.
(BEGIN VIDEO CLIP)
WULLE: It's the worst I've ever had in a courtroom with someone being mouthy. It's -- maybe it's a generational thing but I grew up in a world where if someone has a badge or someone is in the authority of law or a judge or -- and can put me in jail is probably the easiest way to describe it, we were taught that it was yes, sir, no, sir, yes, ma'am, no, ma'am.
(END VIDEO CLIP)
PILGRIM: Now Judge Wulle sentenced Matthew Hastings (ph) to the full amount possible, 120 years.
A promising athlete at a Cincinnati college faced a judge today and she is charged with arson. Freshman student Jordan Collin (ph) is accused of setting five fires. The small fires broke out yesterday at the College of Mount St. Joseph. All 2,300 students were safely evacuated from the campus and there was little damage. Nonetheless, if Jordan Collin (ph) is convicted, she could spend decades behind bars.
Now we have time for some of your thoughts and Jim in Ohio wrote to us "If you want to stimulate the economy, give the money to the taxpayers instead of those who have broken -- who have proven they are incapable of using it wisely."
And Dennis in South Dakota wrote "In my world you get a bonus when you do a good job and your company makes money. Not the opposite."
We love hearing from you. Send us your thoughts, go to loudobbs.com.
And coming up, employers are slashing jobs at the fastest pace in six decades. We'll tell you about one of the most vulnerable groups of workers in the nation and we'll find out how long these job cuts will continue from four of the country's top leading economic thinkers next.
(COMMERCIAL BREAK)
PILGRIM: The dismal jobless numbers tonight have the Obama administration countering with the forceful optimism. The president clearly trying to turn the tide of waning support for his economic plan -- Candy Crowley reports.
(BEGIN VIDEOTAPE)
CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT (voice-over): The president traveled to Columbus, Ohio, to taut his economic plan in action. Twenty-five newly hired police cadets, courtesy of 1.2 million in stimulus money.
OBAMA: I look into their eyes and I see their badges today and I know that we did the right thing.
CROWLEY: It was an upbeat photo op designed as a "help is on the way" message, under cut by fresh evidence of the enormity of the problem.
OBAMA: Just this morning we learned that we lost another 651,000 jobs throughout the country in the month of February alone, which brings the total number of jobs lost in this recession to an astounding 4.4 million.
CROWLEY: The picture is as broad as it is deep. Jobs lost in February included 168,000 factory workers, 180,000 professional and business service jobs, 104,000 construction jobs. Financial companies took 44,000 people off their payrolls and the retail industry cut 40,000 jobs.
OBAMA: Well, that is not a future I accept for the United States of America. That is why I signed the American Recovery and Reinvestment Act into law.
CROWLEY: The president is noticeably more upbeat now in an effort to help restore consumer confidence, key to a recovering economy. So far, Wall Street is not buying. This week alone the Dow Jones industrial average fell more than 300 points. On Capitol Hill, Democrats greeted the jobless news with hope that the president's plan will set things right, while most Republicans remain skeptical.
SEN. KIT BOND (R), MISSOURI: Our financial system has become cloud with toxic assets and until they are removed, fear and uncertainty will continue to dominate markets and our economy.
CROWLEY: The president has promised his economic plan will save or create three million jobs over the next two years. It may be that his own job rides on it.
(END VIDEOTAPE)
CROWLEY: Polls indicate Americans are willing to give him time to fix things, but even for a president with enormous public support time is finite and so is money. The federal funds used to hire those 25 Columbus police officers runs out at the end of the year. The question then will be what now -- Kitty?
PILGRIM: That's exactly the question. Thanks very much. Candy Crowley.
Well joining me now, four of the country's best economic thinkers, Susan Wachter, professor at the Wharton School at the University of Pennsylvania. We're joined also by David Smick, author of the new book, "The World Is Curved: Hidden Dangers to the Global Economy", Peter Morici, professor at the Robert A. Smith (ph) School (INAUDIBLE) at the University of Maryland and Amity Shlaes, author of the book, "The Forgotten Man: A new History of the Great Depression".
And with this kind of firepower I think we can sort it out, no problem. Let's start with President Obama saying it's a good thing we have that stimulus plan path. We need it desperately. What is your opinion of how effective that will be to address some of the (INAUDIBLE) we're seeing, Amity?
AMITY SHLAES, AUTHOR, "THE FORGOTTEN MAN": Well the market is telling us how effective it is going to be, which is not very. You may get a little bump, but what the market is waiting for is a sign that the rules of the game are clear, that it can have not just consumer confidence of which we so often speak, but also investor confidence that the government won't take too much. This is a war also between the public sector and the private sector and the public sector is gaining too much ground.
PILGRIM: Susan, do you agree with that?
PROF. SUSAN WACHTER, THE WHARTON SCHOOL: Well, for now the public sector is the only game in town in terms of the financial system working and that battle we have to win. Right now we have substantial fiscal stimulus coming on board, but without the financial system working we are not going to get out of this recession.
PILGRIM: Yeah. David, tell us what you think. Are we headed deeper? I mean some suggest that we may go -- we're not out of the woods on unemployment. We may go to nine percent. What are your thoughts on that?
DAVID SMICK, AUTHOR, THE WORLD IS CURVED: Oh, I think in 1982 we had a recession similar to this. Maybe this is worse. We went to 10- 1/2. Here's my concern. It's great to give speeches and it's great to have a stimulus plan and I want the president to succeed. I mean, it's vital that he succeeds. But I would like to see him back -- rolling up his sleeves because we have a problem that could take us all down and that's the banking problem. We've got to fix the banks.
And, frankly -- I mean, I've got to hand it to them. They aren't responsible for this problem but the Obama administration seems to be paralyzed by the whole concept of the collateralized -- I mean, the derivative exposure that seems to just be hanging over the whole question of how to deal with the banks. They don't seem to be able to do with the CDS market, how to handle that. And I think until they do, until they can come to terms with unclogging the banks, it doesn't matter what we spend. This economy is not going to recover.
PILGRIM: Well, going back to Amity (INAUDIBLE), we're seeing this in the markets with the bank shares, I mean, Citigroup has become almost a black hole, it's below a dollar a share. What do we project, Peter, for the banks, and how important is it to get our heads around this?
PROF PETER MORICI, UNIV OF MARYLAND: Well, if we don't get our hands around it, the economy simply cannot succeed without banks. And what the administration has been doing is continuing the policies of the past administration, essentially giving them cal capital, a little bit at a time by buying preferred shares, as they take more and more losses as the price of houses fall.
They really need to turn to Republicans. Sheila Bair has got the right idea. Create a bad bank, remove all of the questionable assets from the books of the bank, turn it into a resolution trust to work them out, and then let the banks at that point become (INAUDIBLE) variable assets again. They can raise new capital, pay back the TARP funds and go off on their way and start to be productive again. But Geithner's been reluctant to take those kinds of bold steps. His plan was a graduate school paper.
PILGRIM: Well, you know, I -- let me get into one portion of this, and the mortgage problem, and that's a bankruptcy judge -- actually, yesterday, Congress passed a bill that would allow bankruptcy judges -- people to slash their mortgage debt for homeowners. Not to get one more expert in on this, but Elizabeth Warren, chairwoman of the Congressional Oversight Committee, had some thoughts about that and I'd like to get your opinion about it. Let's listen.
(BEGIN VIDEO CLIP) ELIZABETH WARREN, CONGRESSIONAL OVERSIGHT COMMITTEE: So what bankruptcy offers is it offers a chance to just say, look, let's get real. We're going to bring the value of the mortgage and the value of the home into 100 percent alignment. So the homeowner has to pay 100 percent of the value of the home, but the len ger has to acknowledge, you lost this. You made a bet and you lost this amount. And that's what the bankruptcy bill is designed to do.
(END VIDEO CLIP)
PILGRIM: Now, banks really don't like this, Amity. What are your thoughts on this?
AMITY SHLAES, AUTHOR, THE FORGOTTEN MAN: Well, one thing that's distressing is that it says the contract doesn't matter too much. We're going to adjust both sides, maybe we're going to have it really discretionary, up to a judge. Markets don't like discretion, they like rules, even if they're imperfect rules.
The dispensary aspect of the whole culture of what's going on is a big part of the problem, we're all waiting, what will Geithner do? Where's the other strong character? Geithner isn't strong enough, maybe -- where are the rules? There are insufficient rules and private property and concern about what happens to your property is what is making banks, making investors, everyone, keep their money on the side waiting.
PILGRIM: Susan, what do you think about the whole securitization and then the mortgage overhang? This seems like a real problem with the banks.
WACHTER: Yes. We have three crises. We have the banking crisis, we have the overall economy and we have the housing crisis which in some ways is at the heart of it all and unless we resolve the falling housing prices, which we are overshooting as we speak, we can't salvage the banks. So, there are solutions that we're going to have to see if they will work. The Obama plan may help. It's not sufficient, because it's a voluntary plan for the banks.
PILGRIM: Yeah, David, that's been one of the big criticisms, is that it is voluntary. The previous Hope for Homeowners plan was voluntary. This plan has some incentives and fees that banks can make if they participate. But still, there's no guarantee that they will bite. Do you think that they will?
SMICK: Yeah, I see this as a three-prong plan by the Obama administration: delay, delay, delay. They have no choice but to just stretch this thing out because they don't really have an answer to the situation and I go back to the question, they don't know how to handle the derivative exposure, which could -- it's like a threat that could take down the whole financial system. I mean, what we just learned is that the relationship, for instance, between the banks and AIG, if we dismantle the banks, the effect on AIG could be catastrophic and this is -- I will make a recommendation. I think we need to find a solution that's bipartisan and we need a bank workout czar. And I think we should look, and this should be bipartisan. We should look to a guy who I think was probably the most effective workout man, problem-solver in Washington that I've met in 35 years and that's James Baker, the former Treasury secretary and secretary of state. Let him end his career by bringing together a bipartisan solution to solving this banking problem. If we don't solve it, we are in deep trouble.
PILGRIM: You know, Peter, I wanted to ask you at this point, you know, the "Wall Street Journal" is reporting that the Senate Banking Committee's chairman, Christopher Dodd is moving to allow the FDIC, the Federal Deposit Insurance Company, to temporarily borrow as much as $500 billion from the Treasury Department. When people do that sort of thing, that creates real anxiety. What are your thoughts on that?
MORICI: Well, that's part of that band-aid approach that we have. Give Citibank guarantees for 300 billion, give the FDIC this money. It's the absence of a systemic solution, the absence of the czar. If you had a resolution trust, then all of the bankruptcy undertakings would be really there, because the resolution trust would have all of the questionable mortgages in one place. One standard, one cram down, and what's more, you wouldn't be cramming down the contracts of private actors because the resolution trust would have purchased the CDOs. So, it would be cramming down itself. That's the beauty of it.
PILGRIM: Amity, you get the final word in this.
SHLAES: The final word is, I want to say one thing beyond the banks, you want to look at what will make people reemploy people on the other side. In the Great Depression, in "The Forgotten Man" book, I discovered the labor price was too high. So, I would support President Obama and looking at health care, because health care costs are what are between someone hiring and not hiring. You just look at that employee and say, I want them back, but don't want that health care price. And it sounds like it's off message, but it's actually at the center of the problem of our recovery. How are we going to rehire? Let's start thinking about that, as well.
PILGRIM: That's a very positive thought on which to end this discussion. Thank you very much for all of your insight. Susan Wachter, David Smick, Amity Shlaes, and Peter Morici, thank you.
A reminder now to vote in tonight's poll: Do you have any faith in Treasury Secretary Timothy Geithner to handle our nation's economic crisis? Yes or no. Cast your vote at loudobbs.com. We'll bring you the results in just a few minutes.
Coming up, private sector jobs are disappearing in record numbers. It's very different for government jobs.
And a disturbing trend for America's older workers. We'll have that story next.
(COMMERCIAL BREAK) PILGRIM: California, like most states, is struggling with budget shortfalls and it tried closing state offices and furloughing workers to save money. Well, now it's changing that and state offices will no longer close two Fridays a months. State workers protested the forced furlough. They still, however, will have to take two unpaid days of leave. Governor Arnold Schwarzenegger began the furloughs to help narrow the state's $42 billion budget gap and the governor's office thinks it can now save more than a billion dollars over the next year without shutting down government offices.
Well, as unemployment rises, the government is one of the few areas doing any hiring. Four million jobs were lost in the last year, but almost all of those losses were in the private sector. And today unemployment -- the unemployment reports showed more than 83 percent of U.S. industries have lost workers in the past three months. Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN NEWS CORRESPONDENT (voice-over): Workers seeking job security would do well to look at the government for work. Employment is growing. People rarely lose their jobs and the pay is great. From January of last year through February of this year, the private sector lost more than four million jobs. Yet government continues to hire with government employment growing by 151,000. It's not a new trend. Over the past 10 years, growth in government payrolls has grown by more than 12.25 percent while private sector jobs have grown by only 3.5 percent.
HEIDI SHIERHOLZ, ECONOMIC POLICY INST: The difference that distinguishes private and public employment trends is private employment trends are driven by economic markets where public economic trends are driven by political markets.
TUCKER: There are other differences in well. Pay and benefits. Government workers earn more. Some economists estimate the pay difference at 48 percent more. Eight-three percent of state and local government employees and all federal employees have traditional pension plans with benefits that are defined and guaranteed, as are their health care benefits.
Workers in the private sector are looking at battered 401(k) plans and increasingly they are learning that when companies run out of money, any promised benefits are slashed or eliminated.
JAMES SHERK, HERITAGE FOUNDATION: General Motors simply does not have the money to pay its retirees the lavish benefits they promised. But for state and local governments that have made similarly extravagant promises, they're simply going to raise taxes on their taxpayers. And everyone is going to be forced to foot the bill for far more lavish benefits than most Americans are receiving.
TUCKER: But the current economic environment is forcing the state to furlough workers.
(END VIDEOTAPE) Now, furlough means taking days off without pay, not at all the same as being laid off or fired. Georgia has already announced it will do furloughs. California, as we've heard, played with the idea. New Jersey is considering it, all of them trying to save some money, Kitty, but furlough is not the same as being fired or losing your job.
PILGRIM: You know, Bill, this is a disturbing trend in this government hiring. How long can it possibly be sustained?
TUCKER: Well, it can't be. They're building a beast that can't be fed, because you're putting people on government payroll, which is supported by people's taxes. And when people are losing taxes and their jobs and they are not able to pay their taxes, well, who keeps supplying the government? You're building obligations in terms of pensions and everything else that cannot be lived up to and get put back on the people who, again, don't have a job.
PILGRIM: Very disturbing, thanks very much, Bill tucker.
Well, new concerns tonight over the number of older workers being laid off. There are more than three million workers over the age of 50 being unemployed and those workers are finding it increasely difficult to find a job because of cost cutting and an apparent desire to hire younger workers. Ines Ferre reports.
(BEGIN VIDEOTAPE)
INES FERRE, CNN NEWS CORRESPONDENT (voice-over): Linda Cangemi says she's been looking for work since she was laid off as an office administrator in October of 2007. At 59 years old, she says in interview after interview, her age plays against her.
LYNDA CANGEMI, UNEMPLOYED WORKER: Are they making eye contact, are they going into tell you about what the job experiences are and how your skills fit with the experiences? No. I mean, you know right from the beginning that this job interview is going nowhere.
FERRE: Cangemi says at this point on applications she doesn't write salary requirements, ask for health insurance, or mention her 20 years of experience in office management.
CANGEMI: You're left feeling useless. It affects yourself esteem. So each time you go on an interview, you're feeling worse and worse about yourself.
FERRE: Unemployment for older workers, like Cangemi, is growing faster than younger ones. In February, there were more than 1.6 unemployed workers over the age of 55, up more than 700,000 from a year ago.
DEBORAH RUSSELL, AARP: Those perceptions continue to exist that employers view mature workers as lacking technology, perhaps being inflectionable.
ANDREW STETTNER, NATL EMPLOYMENT LAW PROJECT: They are vulnerable to cost cutting employers looking to get rid of more expensive workers.
FERRE: On average, according to AARP, job seekers over 55 stay unemployed at least six weeks longer than their younger counterparts, many using up their savings while they are out of work.
STETTNER: Just when they really need to be saving for retirement, they are going into the nest egg.
FERRE: Cangemi expects she'll have to work until she's at least 67 before thinking of retirement. She says it's hard to stay positive.
CANGEMI: After a while, I wonder if there's a place at all for me.
FERRE: A recurring thought as she keeps looking.
(END VIDEOTAPE)
And the National Employment Law Project says that older Americans are twice as likely to be unemployed than they were in the recession of the early '80s and if they were, the bottom line is that it often takes them longer to find a job.
PILGRIM: Ines, is there any legal recourse?
FERRE: Well, it's very hard to prove if a employer gets rid of you because of your age, but actually AARP is actually giving some legal counsel in some cases where it is appears that the company laid off older workers.
PILGRIM: Thanks very much, Ines Ferre.
Just ahead, Mexico's deadly drug wars a new round of violence prompts the United States government to renew its travel alerts to Mexico. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: Thousands of Mexican troops tonight are in position just south of the U.S. border. It is a desperate attempt by Mexico's government to curtail the escalating violence from deadly drug cartels. Now this war has killed more than 9,000 people in Mexico over the past two years. That is raising concern here that drug cartel violence will spread further into this country. Casey Wian reports.
(BEGIN VIDEOTAPE)
TRACY WIAN, CNN NEWS CORRESPONDENT (voice-over): The Mexican government has deployed more than 7,000 federal troops this week to from Ciudad, Juarez across the border from El Paso, Texas. They're trying to reclaim a city that's been largely controlled by violent drug cartels which have been killing local police forcing the police chiefly to quit. Earlier this week, hundreds of suspected cartel members rioted at a prison in Ciudad, Juarez, leaving 20 dead. CESAR MARTINEZ ACOSTA, STATE PRISON DIR (through translator): We know that some of the prisoners were killed with the use of blunt objects. Dorns were re-torn out, pipe, sticks and rocks were used and apparently some kind of homemade gun that I saw, as well.
WIAN: Americans are being warned by the Bureau of Alcohol Tobacco and Firearms in Los Angeles to avoid spring break trips to Tijuana and Rosarito Beach. The U.S. State Department has renewed its travel a alert because of drug cartel violence in Mexico, yet it and the Mexican government are downplaying the danger.
GORDON DUGUID, STATE DEPT SPOKESMAN: We notice that many of the violent activities are localized in several different places. They are not general across the north of Mexico, let alone through Mexico, the entire country itself.
RUBEN BELTRAN, MEXICAN CONSUL GENERAL: We appreciate the concerns that many people are showing around things -- regrettable things happening in the city, as you mentioned. But I also -- I'm very confident. I'm making the case that Mexico is wonderful place to spend a vacation and everything is relate to the context.
WIAN: The context, according to Texas U.S. senator, John Cornyn is that Mexico's two largest drug cartels are now equivent from size to a small army, with an estimated 100,000 foot soldiers.
The government's soldiers are winning some battles. Killings are down dramatically in Ciudad, Juarez, this week. Also along the Texas border troops discovered 9-1/2 tons of marijuana and nearly $200,000 U.S. dollars in a hole at an abandoned construction site. (END VIDEOTAPE)
U.S. Defense Secretary Robert Gates and Texas governor, Rick Perry, both recently advocated more U.S. military involvement in the war against Mexican drug cartels. Mexico, for its part, has not requested military assistance - Kitty.
PILGRIM: Thanks very much, Casey Wian.
Well, still ahead "Heroes" and we honor Sergeant Scott Russki, awarded the prestigious Silver Star for his extraordinary courage while under enemy fire in Afghanistan. We'll have his story when we return.
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PILGRIM: And now "Heroes" is our tribute to the men and women who serve this country in uniform, and tonight we honor Sergeant Scott Russki (ph), a third generation soldier who risked his live to save others during an ambush in Afghanistan. Philippa Holland has his story of remarkable courage and bravery.
(BEGIN VIDEOTAPE)
PHILIPPA HOLLAND, CNN NEWS CORRESPONDENT (voice-over): On a routine patrol in Cappiesa province, Afghanistan, then-Army Reserve Specialist Gregory Russki, his platoon and two members of the Afghan national police stumbled upon a meeting of high-level Taliban warlords.
RUSSKI: We're walking by this house, the two Afghan police are in front and all of a sudden, rounds just started popping off everywhere. And like, everyone hit the ground and I bolted for the corner of this house.
HOLLAND: One hundred yards out, a policeman lays wounded, the other is presumed dead.
RUSSKI: So we're swapping rounds with these guys and I get this wild idea that maybe we should go up on the roof of this guy's house, maybe we could get a better angle on him. Take the fight to him.
HOLLAND: Russki barely noticed a bullet enter and exit his body.
RUSSKI: As one of the magazines on my side from my riffle, it actually punched through the magazine, glanced off two of the rounds, missed my body armor by like half an inch, went into my hip and out of my lower back. It hit nothing but meat. I mean, no bone.
HOLLAND: Bandaged, Russki returned to the battle and made a difficult decision.
RUSSKI: We found out that the other police officer was in fact still alive, the one we had thought was dead, and he'd been trying to crawl towards our position.
HOLLAND: The injured Russki and a platoon sergeant pulled him to safety and started medical treatment. Russki alternated fighting and reassuring the wounded Afghan until coalition forces came to the platoon's rescue.
For his act of heroism, Gregory received the Silver Star. Now back home, Russki tries to use his experience to help others as a juvenile corrections officer in Denver, Colorado.
RUSSKI: It can always be worse. So take a little pride. Get the skills you need to get out and be a benefit instead of a burden.
HOLLAND: Russki also has a different idea of what makes a hero.
RUSSKI: I consider my mom my hero. She pretty much raised me by myself and instilled in me a lot of the values that I live by and she did that by herself while going to college and I couldn't do that.
HOLLAND: Philippa Holland, CNN.
(END VIDEOTAPE)
PILGRIM: Sergeant Russki is still in the reserves and he says he would be more than happy to serve in the Army again, if needed. And we thank Sergeant Russki and all of our brave men and women for their service to this country. Well, a Texas Army wife who serves as a troop greeter at a Dallas-Fort Worth airport today had her own reason to celebrate. Alicia (ph) Young was welcoming troops home, when to her complete surprise, her own husband, Sergeant Matthew Young, entered the airport. He was not due home until the Fall, but was age to arrange the surprise visit for his wife and his two small sons. The family is now planning a trip to Sea World to spend some well-deserved time together. We wish them well.
Tonight's poll results -- 93 percent of you do not have any faith in Treasury Secretary Timothy Geithner to handle our nation's economic crisis.
A reminder to join Lou on the radio Monday through Friday for the LOU DOBBS SHOW, go to loudobbsradio.com to find the local listings for the LOU DOBBS SHOW on the radio.
Thanks for being with us, tonight. For all of us here, thanks for watching. Goodnight from New York. CAMPBELL BROWN: NO BIAS, NO BULL starts right now -- Campbell.
