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Lou Dobbs Tonight
Obama's Hard Sell; Geithner under Fire; Populist Revolt; Higher Taxes; Never-ending Campaign
Aired March 23, 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: Wolf, thank you.
Tonight, President Obama turning to the hard sell, he's pushing his new bank bailout, billions upon billions of tax dollars aimed at busting open the nation's frozen credit markets.
Stocks today soaring 500 points on the Dow Jones industrials, that bailout news thrilling some investors, but Treasury Secretary Geithner is still facing rising criticism for his handling of both the bailout and his role in the AIG bonus scandal.
Also tonight, the property tax squeeze, local governments desperate for your money, raising your tax rates, even while your home's value plunges. We'll have all of that, all of the day's news and much more straight ahead right here.
ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Monday, March 23rd. Live from New York, Lou Dobbs.
DOBBS: Good evening, everybody.
President Obama's new bank bailout thrilling Wall Street today -- the Dow Jones industrials gaining almost 500 points, and why wouldn't it? The so-called pubic/private partnership would lay the bulk of the risk on you, the taxpayer, and me, also the taxpayer and private investors, well they're chipping in a fraction of the money and they stand to gain billions of dollars.
President Obama is pushing hard to win public support for this new plan. But Treasury Secretary Geithner, he is still the target of severe criticism. He even made the announcement of this new plan today behind closed doors. The idea is to buy up to $1 trillion of bad assets from banks, freeing the banks then to make more loans to consumers and businesses. Dan Lothian has our report.
(BEGIN VIDEOTAPE)
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT (voice-over): Call it detox for bad assets, a big day for the Obama administration. But Treasury point man Timothy Geithner didn't make a big splash. Instead, he made a back room announcement off camera in a pen and pad briefing with reporters.
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I guess he's worried a little bit less about what the packaging is on the president and more importantly what is inside of the box. You know, I suppose we could have rigged out some flags and printed up some plaquers (ph) and cued up some old campaign music.
LOTHIAN: Geithner has been criticized for a low-key style that doesn't inspire confidence and taking hits for his handling of the AIG bonus scandal. So it was President Obama touting the private/public effort to rid banks of their toxic mortgage loans.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is one more element that is going to be absolutely critical in getting credit flowing again. It's not going to happen overnight. There's still great fragility in the financial systems.
LOTHIAN: The plan calls for an initial assessment of 75 to $100 billion by the federal government. Bad assets will be sold to private investors at auction. The government will subsidize half of the cost to minimize the risk. Already two companies have indicated they want in. Global investment management firms PIMCO and BlackRock. But the administration admits this is all trial and error with no guarantees.
CHRISTINA ROMER, COUNCIL OF ECONOMIC ADVISORS: It's like any policy. You take your best shot. If it doesn't work, you adapt, you innovate, and you come up with something that does.
(END VIDEOTAPE)
LOTHIAN: Now, clearly there are a lot of people who support this plan and you saw wall street today really applauding the plan as well, but there are critics, even on Democrats who really feel, as you pointed out, Lou that Wall street really will end up being the big winner here and that the taxpayer will end up bearing the brunt of the pain when some of these toxic assets are sold at a loss.
DOBBS: It's very difficult to judge. There wasn't even a discussion in any of the remarks today by the White House as to how the profits would be split were there to be profits. I assume that we're going to have those details. I have to ask this question. Was the president today using teleprompter or was that entirely off the cuff?
LOTHIAN: You know that's a good question. In most days he does use his teleprompter. When he was making the comments sitting there in the room, I don't believe there was a teleprompter present here today, but typically he does use it. And then they lower that -- you know they have this remote control. They can lower that teleprompter and move it out of the way when he does the Q and A.
DOBBS: Well maybe they -- whatever he did today, they should repeat because it's worth 500 points on the Dow Jones industrials.
LOTHIAN: That's right.
DOBBS: Dan, thank you so much -- Dan Lothian.
Well, maybe we shouldn't be surprised that the Treasury secretary announced the new bailout off camera. For his part, he's being hammered from all sides for his handling of the crisis and it shows. Jessica Yellin joins me now. Jessica, you were in that briefing this morning. What can you tell us about it?
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Well clearly Wall Street liked this bailout plan, Lou, but the folks in the room were rather skeptical at the time. Timothy Geithner, Treasury secretary, walked into a room full of financial reporters and he sat down alone in a chair and took questions for about 36 minutes after presenting his plan. I can only describe him -- he looked like a prep school student who was going to be grilled by a disciplinary board.
He did not look thrilled to be there. He was calm. He was steady. He seemed confident in his plan, but he also showed absolutely no emotion. At one point he said that Americans should feel reassured that they will get a fair shake in all of this because these funds will be managed by trained professionals who were experts at investment and I could hear a reporter behind me sigh, oh, great. There were some exchanges with the press. Lou understood -- after I left that I understood why they did this behind closed doors. He's not an in-front-of-the-camera kind of guy.
DOBBS: Yes, but he's got one of those in front of the camera kind of jobs and I can understand, if you will, perhaps the skepticism with (INAUDIBLE) remarks trained professionals given that trained professionals are the ones who brought this economy to the point where we're all in now. Geithner, as you know, Jessica, has been criticized for lack of specifics and various points in these plans. We're I think in the third stage of his -- these plans. Any relief in today's meeting -- any details?
YELLIN: Well, there is certainly much more details than we got initially and he did hand out two extensive packets with examples of how certain negotiations would work. But there were a couple of times, one instance in particular, where a reporter from a financial institute -- a financial organization asked repeatedly how would you work out the terms of these loans?
Again, sir, but you're not explaining -- again, sir, three times with follow up and the reporter sort of sighed and said, I guess it would be developed over time or on a case-by-case basis. So there wasn't full satisfaction there, but at least more detail than we've seen today.
DOBBS: And regrettably again, 75 billion, 100 billion, the number is somewhat amorphous and certainly greater, if you will, ambiguity here than anyone would have preferred, but one thing we can't argue with, Jessica Yellin, and that is the market loved it to the tune of 500 points on the Dow.
YELLIN: They liked it. They like a plan. At least we have marching orders now, right?
DOBBS: Or at least a positive moratorium.
YELLIN: Right.
DOBBS: Jessica thanks very much -- Jessica Yellin. Billions for banks, millions for bonuses, President Obama running a tremendous risk of seeming absolutely tone deaf to popular outrage, the same kind of outrage, by the way, that helped elect him could also punish Democrats this year as well -- Bill Schneider with our report.
(BEGIN VIDEOTAPE)
UNIDENTIFIED GROUP: (INAUDIBLE)
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): When nearly 60 percent of Americans claim to be outraged, you've got an issue. That's how the public feels about the AIG bonuses. It's populism pure and simple, us versus them. The issue is showing up in this year's campaigns. Three Democrats are vying to become governor of Virginia.
In the span of one hour, all three Democrats released online petitions demanding that AIG executives give back the money. The issue also is front and center in this month's special election in New York, to fill the House seat vacated by Hillary Clinton's successor. In New York, the Republican candidate is making an issue of the AIG bonuses.
UNIDENTIFIED FEMALE: He supported a loop hole; letting AIG executives keep their bonuses with our money. AIG and Murphy (ph), he's one of them.
SCHNEIDER: Us versus them. President Obama insists he's with us, not with them.
OBAMA: I'm outraged, too.
SCHNEIDER: Republicans charge that the loophole allowing the bonuses is in his economic stimulus bill.
REP. JOHN BOEHNER (R-OH), MINORITY LEADER: Had President Obama not signed the bill, AIG executives wouldn't be getting $165 million in bonuses funded by American taxpayers.
SCHNEIDER: On CBS's "60 Minutes" Sunday, Mr. Obama expressed some reservations about a House bill that taxes the bonuses.
OBAMA: I think you certainly don't want to use the tax code to punish people.
SCHNEIDER: The White House is proposing a partnership with private investors to rescue the banks but it got a skeptical reception from a Democrat on the House floor.
REP. BRAD SHERMAN (D), CALIFORNIA: It involves a thousand times as much money as AIG executives received in bonuses and it would make the American people a thousand times as angry.
SCHNEIDER: A partnership with Wall Street, that could lead people to wonder, is the president with us or with them?
(END VIDEOTAPE)
SCHNEIDER: Populism is neither liberal nor conservative. It's anti-elitist. Democrats attack Wall Street, Republicans attack Washington. But this wave of public anger is real and both parties are trying to exploit it. Lou?
DOBBS: And Bill, as you described, populism as being anti- elitist -- elitism is the antonym of populism...
SCHNEIDER: Yes.
DOBBS: ... but populism is also described in positive terms with a positive connotation, not pejorative. It's about the people and the people here are the taxpayers and they are being royally screwed and they understand that.
SCHNEIDER: Thank you.
DOBBS: What strikes me is a misdirection of that populist fervor that is toward AIG when in fact it is President Obama, his Treasury secretary, Timothy Geithner, Nancy Pelosi, the speaker of the House, Harry Reid, the majority leader of the Senate and the various leaders of financial committees at both the House and the Senate. They are the ones responsible for what is revealing itself these days.
SCHNEIDER: Washington and Wall Street, people see both of them as them, the outsiders, the establishment, the elite. And when the administration starts talking about a partnership between the federal government and Wall Street, that's when people become very suspicious.
DOBBS: Well I don't know why they would when by some reckoning the taxpayer is only putting up $14 out of every 15 at play here. Why would the people who are so often described as you know the great in Washington economics be skeptical of such an apportionment of risk and return?
SCHNEIDER: I can answer that because they're not saps.
DOBBS: There you go and one of my very favorite expressions when it comes to this great Democratic Republic, not one of us is as smart as all of us. Thanks very much, Bill Schneider -- an interesting report as always -- Bill Schneider.
Well AIG tonight says 15 of its top 20 executives have returned their bonuses. That's more than 30 million bucks (INAUDIBLE) back so far. After handing out those bonuses and taking $180 billion in the federal bailout AIG is now running away from its own name, like that will help.
In downtown Manhattan, workers were taking down the AIG sign in front of the company's property casualty division. The plan is, are you ready to replace it with a sign showing the division's new name? Now, this, I hope they didn't pay a lot of money for this. The new name is AIU Holdings -- get it -- AIU Holdings -- amazing what the executives at AIG keep coming up with. I'm sorry -- AIU Holdings. Coming up tonight, next year, the outrage, how local governments are putting a property tax squeeze on homeowners. Also ahead here some good news about the economy and home sales -- I repeat -- good news. No depression -- recovery this year. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: Well as I said, put away the blues. We've got good news tonight. Let's begin with the housing market -- home sales up five percent in February. That is the largest increase in nearly six years. The median price of an existing home $165,000 in February, down from nearly 196,000 a year ago. The stock market welcomed that news on home sales and the Obama administration's bank plan.
The Dow Jones industrials today gained almost 500 points finishing at 7,775. And that brings us to the poll tonight. Our question is very simply, do you agree with me that our economy will be in recovery by the fall of this year? We'd like to hear from you on this because I'm getting tired of the weak-kneed whimpering saps in Washington, D.C. who can't seem to find anything positive to think about. Yes or no. Cast your vote at loudobbs.com. We'll bring you the results here later in the broadcast.
Cities and towns all across the country are turning to already struggling homeowners for help in balancing their budgets. Property taxes are soaring now to record levels in many communities, sometimes without taxpayers even knowing that the tax hikes are on the way. Kitty Pilgrim has our report.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Philadelphia has raised property taxes by 19 percent next year. The mayor says after looking at the potential effect of raising taxes on wages, businesses, sales taxes, and a variety of other options, temporarily raising taxes on homeowners was the way to go.
MAYOR MICHAEL NUTTER (D), PHILADELPHIA: Nobody likes taxes, but everyone loves services. You know nothing in life is free and so if citizens want that level of service, they are clearly going to have to pay a little more because we can't afford the level of service that people want.
PILGRIM: Mayor Nutter says that by raising property taxes, Philadelphia will generate $272 million in income. The city has a massive budget gap of more than $1 billion over the next five years. But he is trying not to cut jobs or services. Property owners are outraged.
JOANNE TUPPER, HOMEOWNER: It's going to make it tough, real tough because I work two jobs now so -- and my husband works a six-day job. Guess we'll struggle it out.
WILLIAM AHERN, THE TAX FOUNDATION: At the local level, setting property taxes is an administrative matter, not a legislative matter, although many county or city councils will have a vote on the budget, of course. But that new property tax rate will be buried in that budget and unless property taxpayers really mobilize, that will just sail through.
PILGRIM: Philadelphia is not the only locality raising property taxes on its residents. Hoboken (ph), New Jersey recently raised property taxes 23 percent. In Prince William County, Virginia, outside of Washington, D.C., property taxes are proposed to go up 25 percent as well. Honolulu's mayor has proposed a nine percent increase on property taxes and residents have little to say about it once the measure is approved.
(END VIDEOTAPE)
PILGRIM: Now, Philadelphia had 7,000 foreclosures last year, which was up from the year before. They have a mortgage foreclosure prevention plan in place to help people having problems with their mortgage, but people we talked to today say with property taxes going up, they may have to seek help in meeting their increased housing costs. Lou?
DOBBS: This is outrageous, a 23 percent increase in property taxes and the city of Philadelphia is not laying off any of its employee, not reducing services...
PILGRIM: Yes.
DOBBS: ... and putting the full burden on the taxpayer.
PILGRIM: We talked to the mayor today. He said you know they're trying no layoffs, no closures. They're keeping all the recreation centers open. They're trying very hard to not have this affect anything...
DOBBS: Well bless his little heart, but the fact of the matter is he's got a deficit and they've got to pay their way through it. And you can't leave that on the backs of the property owner.
PILGRIM: Yes, they basically are -- they're doing 16 million cuts in efficiencies and 25 million in health care for employees. But it's really not -- they are not cutting basic services. They are not laying off like police, fire or any of that.
DOBBS: Well the people in Philadelphia put up with that. You know there's an old saying in the nation's founding. Don't tread on me. And if people let their governments tread on them, they are getting exactly what they deserve. Kitty, thank you very much -- Kitty Pilgrim.
Well JPMorgan Chase under fire tonight for standing by its $138 million plan to buy two new Gulfstream jets and a planned major renovation at its West Chester (ph), New York airport hanger. Chase -- JPMorgan Chase spokesman tells CNN the company has not yet spent a dime for the planes or the hangar and will not do so until its 25 billion in TARP funding is repaid.
Now JPMorgan plans to purchase two new Gulfstream 650 jets. They'll will be paying about $120 million for the two aircraft. The hangar work doesn't start until 2010. Now, here's the thing and I want to be really clear about where I stand. I wasn't so thrilled about a Citigroup deal because they were bailed out with taxpayer money and those folks were wanting to buy a Falcon jet made in France.
Now, we're talking about an American company and American jobs when you're talking about Gulfstream -- Gulfstream employees 9,000 American workers in this country. It's entire worldwide workforce, some 10,000 people, all of Gulfstream's large cabin aircraft are made in American facilities. There are 11 U.S. service centers for the maintenance of those aircraft.
The economy, the bad press surrounding the business aircraft industry is taking its toll. So far this year, Gulfstream has announced it will lay off 800 of its part-time workers, 1,500 employees to be furloughed for a five-week period this summer. The industry as a whole has announced 10,000 layoffs so far this year.
So if you hear someone reflexably (ph) call themselves a populist and say you know we can't have these companies flying private aircraft, remind them, there are a few things to consider. Like economics, the well being of the nation and the fact that despite everything that's being attempted in Washington, D.C., it's still a free enterprise democracy. Well, Democratic Republic, at least a good part of our country is still a Democratic Republic, so I fully support JPMorgan Chase.
It's also the best-run bank in the country and they took the TARP money as an accommodation to the Treasury Department not because they needed the money for capitalization. That's all I've got to say on that. Enjoy the two new aircraft, everybody, at JPMorgan Chase and everybody who wants to argue with it, think again pretty please.
Well it's the campaign that never ends. Yes, I'm talking about the Obama campaign. The Obama administration is still using campaign tactics to rally support for the president. Why? Because he's pushing a very unpopular idea -- oh, man a tough sell this hope stuff.
And a dramatic deadly crash of a cargo jet trying to land at a Tokyo airport. We'll have that tragic story and a great deal more news straight ahead. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: Investigators in Montana are trying to find out whether a single engine plane was overloaded when it crashed killing all 14 people aboard. The Pilatus PC 12 (ph) crashed into a cemetery in Butte (ph), Montana, just short of the airport, seven children among the victims. The National Traffic Safety Board says the aircraft was designed to carry only 11 passengers. Investigators also say the turbo prop plane did not have a cockpit voice recorder nor a flight data recorder and was not certified to fly commercial.
Investigators in Japan say weather may have played a major role in the deadly crash at a Tokyo airport. The American pilot and co- pilot of the Federal Express cargo plane were killed when the plane crashed and burst into flames upon landing. Airport officials say wind gusts at the time were between 30 and 50 miles an hour. All of the -- those cross winds at the time of the crash.
In Alaska, the volcano Mount Redoubt (ph) has erupted for the first time in two decades. Mount Redoubt (ph) erupted five times overnight. Plumes of ash were sent some 60,000 feet into the air. Officials say several communities west of Anchorage reported falling ash. Geologists say that the Mount Redoubt (ph) volcano's explosive activity could last a few weeks, perhaps even months.
Well, let's take a quick look at some of your thoughts. Arthur in New York said: "Lou, no surprise the stock market soared after hearing about the Treasury's latest plan. Wouldn't you be feeling buoyant if the Treasury offered to pay off virtually all of your debts?"
And Ray in Nevada: "After extending the too big to fail policy beyond AIG to the federal budget, what's next? Is this going to be Obama's 2012 campaign slogan?"
And Roger in Pennsylvania: "Tim Geithner's job looks pretty secure. I guess he's too big to fail."
We love hearing from you. Send us your thoughts to loudobbs.com. And a reminder to join me on the radio Monday though Friday's for "The Lou Dobbs Show" 2:00 to 4:00 p.m. each afternoon on WOR 710 (ph) Radio in New York City and across the country go to loudobbsradio.com to get the local listings in your area.
Up next, why one of our guests says President Obama is stuck with Treasury Secretary Geithner. Three of the best minds in the country join us here next to access the political economy.
And the president launching a massive campaign to win voter support for his budget -- I'll be talking with one of the skeptical Democrats whose vote he desperately needs.
(COMMERCIAL BREAK)
DOBBS: The Obama administration is driving its now seemingly perpetual campaign. Tonight rallying support for that $3.6 trillion federal budget, but resistance to the Obama approach is growing and the politics of hope has become an increasingly difficult sell. Louise Schiavone has our report.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: I'm trying to get people to sign pledge cards.
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): It's the campaign that never ends.
UNIDENTIFIED MALE: Keep up the good work, Obama.
UNIDENTIFIED MALE: We need to ask our neighbors to sign a pledge that they're going to support the president and his initiatives... SCHIAVONE: From the president who entered Chicago politics as a community organizer comes organizing for America, supporters going door to door getting addresses and names.
UNIDENTIFIED MALE: She (INAUDIBLE) called me Archie, but my name is not Archie. (INAUDIBLE)
SCHIAVONE: This against a backdrop of a public that's profoundly skeptical of bailouts for financial giants and a stiff head wind from centrist Democrats in the House and Senate on the dimensions of the president's massive budget.
UNIDENTIFIED MALE: (INAUDIBLE) former governors we know that it's not sustainable to go forward and run deficits that exceed $1 trillion. We have to begin reigning in the growth of the spending and grow the revenue.
JIM KESSLER, THIRD WAY: Guys like Evan Bayh, Tom Carper and Blanche Lincoln, they want to -- they want to get big things done. There is a joint belief that something -- a series of big things need to happen. If we don't achieve transformational change, this moment is passed, this presidency will not be a success, and neither will this Congress.
SCHIAVONE: And as Obama's strategists are hoping to draw political strength from what is left from the campaign's energy, analysts say that time is of the essence.
PROF. JULIAN ZELIZER, PRINCETON UNIVERSITY: If he puts through a very bold agenda and it gets stuck, very quickly he'll be seen as a weak president. That's how the media works. That's how the politics works.
(END VIDEOTAPE)
SCHIAVONE (on camera): Lou, in a general sense, the public rally to Obama's politics of hopes, say analysts, but there's no special mandate for the program that the president is seeking now and that is the void that this new grassroots campaign seeks to fill -- Lou?
DOBBS: I wonder if it's a winning energy as the ability to still raise a fair amount of cash to push this agenda. Louise, thank you very. Louise Schiavone from Washington.
Joining me now to talk about the president's increasingly difficult hard sell is Congressman Walt Minnick, he is a Blue Dog Democrat, a fiscal conservative. And good evening, congressman. Good to have you with us.
REP. WALT MINNICK, (D) IDAHO: My pleasure, Lou.
DOBBS: Let's start with this campaign. There is something to me that seems at least unseemly about a political campaign across the country pushing at this level for the passage of a $3.6 trillion budget. What's your reaction? MINNICK: I don't know about the popular side of it. I do think the budget has got to be trimmed down a bit. We can't afford this kind of -- this big of an increase in spending on top of the bailout money if we're ever going to get back to the situation of living within our means.
DOBBS: Let's talk about the popular part of it. What is Congressman Walt Minnick doing to get that word out that perhaps $3.6 trillion and about a $2 trillion deficit in this fiscal year are perhaps a bit much.
MINNICK: I am of the view and I've only been a congressman for three months. I've been a businessman all my life. And my message to my constituents is that as soon as we get an economic recovery, we've got to start living within our means and paying for what we spend. And I want to get to that point as soon as possible so we don't have to continue to borrow these trillions of dollars from the Chinese and lay that debt burden on our kids and grandkids.
DOBBS: But Congressman, we haven't got anybody in Washington, DC, apparently in your party or certainly in the Republican Party without a doubt who has the guts to stand up and say, unless we can create products in this country, build a manufacturing base and end these idiotic trade policies that suck capital out of this country like -- well, I mean, how in the world can you reverse that with simply these stimulative spending packages?
MINNICK: I think you can't just with stimulus. I'm one of 52 Blue Dog Democrats and we're interested in working across the aisle with our Republican colleagues to come up with as small a budget deficit as we can and getting back to living within our means at the earliest possible time. And I think as this debate goes forward, the public is increasingly going to gravitate towards that because that's the most sensible situation.
DOBBS: Sensible - as a matter of fact Senator Judd Gregg has said the Obama budget will bankrupt the nation. But whether you're working on a bipartisan matter across the aisle or whatever, we can't even put a hard number together, anything that anyone has any confidence in in the size of the federal budget deficit for this year, can we?
MINNICK: We are having difficulty doing that in part because we don't know the details of the proposals but the thing we do know is that we cannot continue to borrow trillions of dollars from the Chinese, from the Arab oil states. People who don't exactly have our self interest as their first concern and lay this debt burden on the kids and grandkids. We've got to get the country moving again. We've got to spend some money on that but we've got to cut out the waste, we've got to reduce our spending and realize we can't do everything at once and get back to living within our means. I'm hopeful within not more than four or five years.
DOBBS: Four or five years. So people are thinking right now, boy, I would just love to get to four or five years out. I don't care what it takes to get there. We've reached a point in this country, it seems to me, congressman, where there's no sense of responsibility for the budget. There is no sense of responsibility for the next generation. And you're talking about those that do not have our interest. We don't even have our own self-interest four square and front and center in our own goals and our own public policy missions. It's really a remarkable time.
MINNICK: Well, we've all got kids and grandkids and if we are going to do what is best for them, we have to put ourselves in a situation where we get our own fiscal house in order. And if we can do that in a couple of years, that would be better. But we can't put ourselves -- be held hostage by the Chinese. They will stop buying this debt and my concern is that when the foreign lenders stop lending, the dollar is going to collapse, our living standard is going to collapse and our power as a nation is going to go into eclipse. And I don't want to be part of a nation that does that to our kids and grandkids.
DOBBS: I think it's too late. I personally believe we're being held hostage by our own irresponsibility and frankly our own lack of intelligence. But we appreciate yours and your efforts as always. Thanks. Good to see you again. Congressman Walt Minnick.
Up next here, soaring outrage over those bonuses and Secretary Geithner's apparent role in it all. Three of the nation's best thinkers join me here. We'll assess the political economy.
Tension is rising as Mexico is blaming the United States for a rising wave of deadly drug cartel villains and they want to put tariff on our goods and the government hasn't got a clue in Mexico City. We'll tell you why and what's next.
(COMMERCIAL BREAK)
DOBBS: Well, Mexico today put out a $2 million bounty on some of the country's deadliest cartel leaders. The move comes as the Obama administration is preparing to help Mexico fight those deadly drug wars. These new plans by the Mexican government involve redeploying federal agents to the U.S. border by the U.S. government I should say. But no military. Casey Wian tonight reporting from the U.S.-Mexico border near San Diego.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): The Mexican government says it has captured the man suspected of orchestrating a grenade attack on a U.S. consulate last fall. He is an alleged drug cartel hit man known as the Big Marble.
GEN. LUIS ARTURO BOLIVAR, MEXICAN ARMY SPOKESMAN: He was also the mastermind behind the torture and killing of nine soldiers, part of the Seventh Army Regional Command in Monterrey, Nuevo Leone. That took place October 22nd, 2008.
WIAN: As Mexican President Felipe Calderon praised his army for catching the suspect, the Mexican Navy helped the U.S. Coast Guard seize eight tons of marijuana in the waters off the Baja California. Despite those signs of cooperation, tensions are rising between the United States and Mexico. Some American lawmakers and the governor of Texas want President Obama to deploy the military border to stop drug cartel violence from spreading across.
REP. BRIAN BILBRAY, (R) CA: I think the situation is becoming so chronic that the administration doesn't have time to try to play it safe and this argument of we want time to look at it. Look, the people in Mexico are fighting for their sovereignty right now and sometimes doing the safe thing is not the right thing to do with Mexico. Calderon's brave enough to do the right thing. I call on both the secretary of homeland security and especially the president to step forward and do the right thing even if it looks politically risky.
WIAN: The Mexican government is opposed to the United States moving troops to the border. It continues to accuse its northern neighbor of helping to fuel the drug war by not doing more to stop drug use and weapons trafficking, it's a view the Obama administration echoes.
JANET NAPOLITANO, HOMELAND SECURITY SECRETARY: Number one is to support President Calderon. One of the ways that we can do that is to recognize that a lot of this violence is fueled by guns and cash that is coming from the United States.
WIAN: Mexico has also retaliated against a U.S. decision to halt a cross border trucking program, by imposing tariffs on more than $2 billion in U.S. exports.
Against this backdrop, Secretary of State Hillary Clinton this week will visit Monterrey, Mexico, the site of last year's consulate attack, in an effort to ease those tensions.
(END VIDEOTAPE)
WIAN (on camera): She will be followed by Attorney General Eric Holder, Homeland Security Secretary Janet Napolitano, and then next month by President Barack Obama. Meanwhile, Napolitano has sent one of her senior aids for a tour of various cities along the U.S.-Mexico border. A spokeswoman says the reason for that tour, Lou, is to get a better understanding of what is happening at the border.
DOBBS: Well, she was, for crying out loud, governor of Arizona. Maybe she could just send out a memo. What do you think?
WIAN: It's hard to see what kind of information they would glean from this tour that is not already public and that our broadcast has not reported on dozens of dozens of times. The situation is very violent just across the border, the violence continues to spread to the United States, to more cities. The Mexican government does not have control of large portions of the country ...
DOBBS: We could just catalog our reporting here over the last several years and help them out. I mean, this is lamentable and silly particularly on the part of Janet Napolitano, the secretary of homeland security. Thank you very much, appreciate it, Casey, as always, Casey Wian from the border.
Well, Mexico is not only blaming for the drug violence but now it is also punishing us on trade. Mexico has decided to retaliate for the cancellation of the cross border trucking pilot program which allowed some Mexican trucks unlimited access across our roads. Mexico saying we violated the terms of the North American Free Trade Agreement. Let's put this into context because this is something that you don't hear anywhere but here. The United States represents exactly 84 percent of the total production of NAFTA. That's right. We are just about 90 percent of that. Mexico is seven percent. Canada, about nine percent. And the fact is, that we are treating Canada and Mexico as equal partners in an enterprise in which we have nine tenths ownership.
NAFTA has a system to resolve disputes with all three countries, of course, being treated equally. But 90 percent should give the United States some at least leverage, one would think, but we don't use it when it comes to cross-border issues. Mexico has placed tariffs on 89 American-made products. To tell you how dumb the government of Mexico is. This country buys 85 percent of all of Mexico's exports. If the Mexican government doesn't wise up and isn't smart enough to figure this out, can they be smart enough to defeat their flourishing drug cartels?
Up next, Treasury Secretary Geithner under fire. New calls for his resignation. What is means for the Obama administration. Three of the country's best political and economic thinkers join me, next. We'll be right back. Stay with us.
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DOBBS: Joining me now are three of the best political and economic thinkers, Republican strategist, CNN contributor Ed Rollins, Ed also a former White House political director under President Reagan, chair of the Huckabee for President campaign, Democratic strategist, CNN contributor Hank Sheinkopf, Hank, good to see you, and Michael Holland, chairman of Holland and Company, also president and founder Holland Ballast Fund. Michael, good to have you with us.
Let's start out with, oh, with economics. With the market moving up 500 points. On the same day that Nobel Prize winning economist by the name of Paul Krugman and "New York Times" columnist says, if we may show this with everybody, "This is more than disappointing and in fact it fills with me with sense of despair. It was if the president were determined to confirm the growing perception that he and his economic team are out of touch. By my count, this is the third time the Obama administrations have floated a scheme that is essentially a rehash of the Paulson plan. Each time adding a new set of bells and whistles claiming they are doing something completely different. This is starting to look obsessive." You could have written that, Michael.
MICHAEL HOLLAND, HOLLAND AND COMPANY: It's just another Obama partisan. He actually says later in that, he didn't use the phrase "voodoo economics", he used the phrase hokum.
DOBBS: Hokum. It's an elevated form of voodoo. HOLLAND: It's Princeton. But "The New York Times" is turning on the administration. It isn't just Krugman. You know, they've raised questions.
DOBBS: They are going to call for secure borders next.
HOLLAND: OK.
DOBBS: Well, we've all got the houses hocked on this country. We're betting on Geithner and this hokum, this third iteration of a plan that is more bells and whistles and taxpayer money than anything else. What do you say?
HANK SHEINKOPF, DEMOCRATIC STRATEGIST: I say that you're correct and that the president will survive this very well. Tim Geithner, not so well. And the Congress, someone is going to pay for this next year and it won't be the president. It will be the Congress and it won't be partisan picking, it will be cherry picking. Folks are going to remember this. They are very smart, don't like what they see and they are not happy.
ED ROLLINS, REPUBLICAN STRATEGIST: This may have calmed the market a little bit and obviously it was a good sign there.
At the end of the day, it's not going calm people out there that are very concerned about this. And there is a populist movement starting across the country and people are blaming it on Wall Street and blaming on the people who run our government.
DOBBS: I wonder where they ever got that idea.
ROLLINS: Couldn't have come from here. The president has not had a good couple of weeks here. And I think to a certain extent, there's a serious question that doomed Bush ultimately when people didn't think he was competent and people are starting to question at a very early age, is this a competent president. Gives good speeches and good campaign, but is he competent?
DOBBS: Let's turn to the nonpartisan reading in the market, 500 points on the Dow. To watch what happened on Wall Street, whether you're a Democrat or a Republican, you had to cheer in your heart, right?
HOLLAND: Nonpartisan market. The market as we talked about ad nauseam, it's not Republican, it's not Democrat, it's not libertarian. It just - it's libertarian. It wants things that work. It voted today right at the get-go and heard the plan and started getting leaked out Friday night. It voted in foreign markets and in here that this thing had a chance at working. And that was a huge surprise because this is the gang that couldn't shoot straight with respect to Treasury so far. So this looks like ...
DOBBS: As opposed to the geniuses that preceded them.
HOLLAND: Oh yes. They were bad too? That's correct. SHEINKOPF: The administration gets an A for P.R., great for press handling, great for leaking the story out. And great for handling it. The president great last night on CBS. You know what? Let's see what happens next month when the unemployment figures come in. That is what Main Street is looking to see. And Main Street right now would like to take Wall Street and K Street and smack them around pretty hard.
ROLLINS: The problem too is - is we still don't know what the problem is. We don't know the depth -- don't know whether this is going to work or not. Obviously it's more taxpayers' money being thrown out there. But we still don't know what the problem is. That's what causes a lot of problems.
DOBBS: When we come back I am going to make an assertion and I want each of you to just slap me around on it because I really believe we're looking at contrivance right now. And it's time for us to look straightforwardly in what's happening to our economy and the society in the nonsense that we're seeing emanating both from this administration, this congress and the national media is pitiful. We'll be right back with our guests. Stay with us.
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DOBBS: We're back with Ed Rollins, Hank Sheinkopf and Michael Holland. I said contrivance and contrivance I mean referring to this economy by this administration, the previous, in an effort to push forward an economic stimulus package, emergency measures, Wall Street bailout. In the last two weeks we've seen a change in tone. I think we saw a change in reality about two months ago. What's your take?
ROLLINS: Well, I think it was such great hope for Obama. I think we have no heroes in America today. And people thought he would be different. And people are discovering the political process is such that ...
DOBBS: He still has time.
ROLLINS: He's got plenty of time. He's got a four-year term. But the initial steps have been pretty slow and pretty ineffective.
SHEINKOPF: I think we need to give it some time he's been there for less than two months. Not fair. A little more than two months.
DOBBS: What is not fair?
SHEINKOPF: Not fair to beat him up in this way. I think the Congress is the problem ...
DOBBS: Who is beating him up? I just asked a questions.
SHEINKOPF: I'm not talking about you. I'm talking about media in general. Everyone's expectations are ridiculous.
DOBBS: The media -- they're doing everything but planting their lips squarely on his rear end. Are you kidding me? SHEINKOPF: Every foot of his body is now under examination. Give him a break. Get the job done. You want to beat up Geithner, good idea. You want to beat up the Congresss, perfect idea. But this guy? He's got more on his plate than any president in modern times since probably Roosevelt has had. It's not insignificant. Two wars and ...
DOBBS: Maybe the previous president?
SHEINKOPF: Not the same? Sorry.
DOBBS: Not the same?
SHEINKOPF: Not the same. Because the disaster hasn't occurred yet.
DOBBS: Which disaster hadn't occurred?
SHEINKOPF: The economic disaster?
DOBBS: Hadn't occurred ...
SHEINKOPF: You saw it unfolding but it came to the head at the end of the Bush administration. That's the difference. And government only responds to crises. Not anything else.
DOBBS: Michael, I turn to you for an assessment of reality.
HOLLAND: OK, let me just go to the numbers, go to the videotape. When the current administration got in having been in the White House before the due date, the stock market, which is the everyday voting machine which has no political party was down 20 percent, that's an official bull market in a very short period of time. This market and the world markets were voting that the U.S. as the leader was not doing something right. So I actually believe despite the protest to the contrary, they did pay attention to the markets in the White House. And they did say maybe they should be doing something a little bit different, like get out with our Treasury plan, something like that? I think they got the message as Ed said.
DOBBS: You think -- you think it's sufficient to change some attitudes? We saw yesterday on CBS Steve Kroft on "60 Minutes" for the president, what, are you punch drunk? I assume it was nervous laughter. He called it gallows humor. But we've seen a decided change in the tone of this administration in the course of the last two weeks. I, for one, welcome it. I'm so sick of people talking down the economies in this country, I can't stand it. But what are the implications for the budget? That's the next battle.
ROLLINS: The budget is going to be a very severe battle. There are not sufficient even on the Budget Committee right now. And certainly not on the Senate to pass the president's budget bill. It will be toned down dramatically. It may pass in the House. But there's conservative, not just Republicans, Democrats who are going to fight a lot of these issues. There's too much debt. SHEINKOPF: The president is on the road doing what they can to calm the American people, to give them some hope, to get them to look up as opposed to look down. He'll take on the battle directly. Win, lose or draw he comes out of this looking like a hero. The Congress, not so sure.
DOBBS: Michael, you get the last word here.
HOLLAND: What's interesting, Hank just said, Congress is really getting all of the body blows here. Treasury Geithner as well, Barack Obama with respect to the markets, that's what I'm talking about. But the markets still are OK with him so far. It's all of the other guys who are getting in -- today, the first thing Geithner did today that was positive, the markets responded positively. They've got a reservoir that they have been dissipating but they've got a shot.
ROLLINS: Jimmy Carter was at 75 percent in the polls at this point in time.
SHEINKOPF: How do you compare the two? Geez.
DOBBS: The Democrats aren't they?
SHEINKOPF: That's about it.
DOBBS: Gentlemen as always, great to have you with us.
Ed Rollins, Hank Sheinkopf, Michael Holland.
Tonight's poll results, 60 percent of you do not agree that our economy will be in recovery by the fall of this year. Sixty percent. They're going to -- they're going to have an opportunity to reassess as we go along over the next several months here. Time now for some of your thoughts.
Jerry in Kansas said, "Lou, I would like to thank J.P. Morgan Chase for ordering two business jets. It helps the economy by saving or creating jobs in the aircraft industry. Remember, automotive is not the only industry with quality jobs left."
I couldn't agree more. We love hearing from you send us your thoughts. Send those thoughts to loudobbs.com. We thank you for being with us tonight. As a matter of fact, we thank you for being with us each night. Join us here tomorrow. For all of us, thanks for watching. Good night from New York. CAMPBELL BROWN, NO BIAS, NO BULL starts right now. Campbell?
