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Lou Dobbs Tonight

President Obama Fires GM CEO; Dot-Commies; Missile Menace; Toxic Imports; Double Standards

Aired March 30, 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: Thanks, Wolf. Tonight it's been a day in which President Obama fired the CEO of what was once this country's greatest corporation. Ordering an alliance between what is left of Chrysler and Italian carmaker Fiat. Three of the country's leading economic thinkers join us to explain what in the world is going on in Washington and corporate America. Is this the end of free enterprise?

And tonight, U.S. intelligence agencies say North Korea is now prepared to launch a missile that could reach Alaska or Hawaii. They don't know, however, if it will be carrying a warhead or a satellite. You may not be encouraged tonight to learn that the Obama administration now says there's nothing that can be done to protect us.

Also tonight, we'll tell you why you apparently don't need to know anything about the products you make in this country, but if you are running Toyota, BMW, or Honda it does seem you have to have some experience to be the boss. Could that be part of the reason American car companies are getting their bumpers kicked by foreign competition?

Well, first tonight, President Obama firing GM CEO Rick Wagoner. He spent almost nine years as CEO of GM. Wagoner apparently fired as President Obama was hosting 15 CEOs at the White House. And the president has decided to force a marriage between Chrysler and Italian carmaker Fiat. There was no similar move, however, to fire Wagoner's counterpart at Chrysler which is doing every bit as poorly.

That, of course, is CEO Bob Nardelli, nor the head of the United Autoworkers Union, investors today expressing considerable displeasure at the president's intervention in the automobile industry. The Dow Jones industrial average lost more than 250 points. Dan Lothian has our report from the White House.

(BEGIN VIDEOTAPE)

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT (voice-over): Rick Wagoner spent decades climbing up the ladder at GM. But he was ousted in a swift and decisive move by the White House. To unions and creditors and suppliers, the alarm clock just went off.

CSABA CSERE, FORMER EDITOR-IN-CHIEF, CAR & DRIVER: Well, I think it focuses everyone's attention. If you can take the longtime CEO of the country's largest company -- car company and basically push him out of there, it shows everybody that the administration and the automotive task force is very, very serious.

LOTHIAN: Serious pressure to make concessions over the next 60 days.

CSERE: It's holding everyone's feet to the fire. And I think that's probably the most important outcome of this move.

LOTHIAN: The White House says Wagoner's ouster is less about sending a message and more about saving a company.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It's a recognition that will take new vision and new direction to create the GM of the future.

LOTHIAN: Tough talk from the president. But the administration was hesitant to say who pulled the trigger and when.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I'm not going to get into a tick tock.

UNIDENTIFIED REPORTER: Why not?

GIBBS: Because I'm not.

LOTHIAN: In a move that made just further anger taxpayers, filings with the Securities and Exchange Commission show Wagoner is eligible to receive more than $20 million from GM. In leaving he thanked all who supported him and added, "ignore the doubters, because I know it is also a company with a great future."

(on camera): As for Chrysler, the White House hopes that it can lock up a deal with Fiat, and if not that company, perhaps another one will step up, because the president says Chrysler is in no shape to go it alone.

Dan Lothian, CNN, the White House.

(END VIDEOTAPE)

DOBBS: Chrysler reacting quickly to the president's demand for action on forming an alliance with Fiat. Chrysler today said it has reached agreement on what it called a framework for a partnership with Fiat. No details were given, however. President Obama gave Chrysler 30 days to complete work on such an alliance with Fiat or face losing as much as $6 billion in additional money from the federal government.

Several leading Republicans immediately criticized the president's plan, and blasted his decision to fire GM CEO Rick Wagoner. Senator John McCain said Wagoner's dismissal is a remarkable and unprecedented act. Another leading Republican, Senator Bob Corker, said, quote, "firing Rick Wagoner is a side show to distract us from the fact that the administration has no progress to announce today."

Senator Corker added, "With sweeping new power, the White House will be deciding which plants will survive and which won't, so in essence, this administration has decided they know better than our courts and our free-market process how to deal with these companies." A big majority of Americans, nearly two-thirds, strongly oppose any government intervention or assistance for automobile companies.

That's according to a recent CNN/Opinion Research Corporation poll. Americans also have very little confidence in automobile executives themselves to make the right economic decisions. So, only a quarter of Americans actually trust those car executives. Now, fewer than half of Americans now approve of the way the president has been handling the crisis in the car industry. That according to a poll conducted before today's GM announcements.

With the departure of Rick Wagoner as CEO of General Motors, we were wondering whether there were any car guys really left in the automobile industry, someone like former GM Vice Chairman Bob Lutz, for example. But wait, he's already retiring, so just who is in charge of our car industry?

Well, Bob Nardelli, he's CEO of Chrysler, but, of course, Nardelli is really a home improvement guy, a former CEO of Home Depot. He left the company with a severance package of $210 million after he ran the company's stock price into, well, not the ground, but into the bottom part of the market. And then there's Allen Mulally, he is the CEO of Ford the only company, by the way, not to be receiving government bailout money.

But he's not really a car guy either. He's, in fact, an airplane guy. He worked at Boeing for decades. So, how about the administration's top adviser in the car industry? That would be a guy by the name of Steve Rattner. You might think he knows something about Detroit? Huh-uh. He's an investment banker. In some quarters people say investment bankers don't know anything about anything.

And there's the man Steve Rattner works for, that would be treasury secretary Timothy Geithner. He knows even less about the car industry than about taxes. He's been a government bureaucrat for almost his entire career. So, that leaves us with the president. President Obama, of course, a former community organizer, a job which some think -- some think doesn't really qualify him to run the entire automobile industry in this country, so all of this in complete contrast to car companies competing with the United States from BMW to Nissan. They're led by executives who have been in the automobile industry for literally decades.

Well, the president tomorrow leaves for London to take part in the G-20 summit meeting on the global economic crisis. President Obama wants other world leaders to send a strong message of unity. But President Obama is likely to face blunt criticism and dissension from other world leaders. They blame the United States for causing much of this crisis, if not all of it -- Candy Crowley with our report.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT (voice-over): As a candidate, Barack Obama drew a huge, adoring crowd in Berlin. That was before the global recession. And popularity will only go so far when President Obama debuts on the international stage at a 20-nation economic summit. CHRYSTIA FREELAND, FINANCIAL TIMES: You might even go so far as to call an ideology rift between the Europeans and the Americans.

CROWLEY: Simply put, the U.S. wants more countries to put more money into their ailing economies. Reaction has been cool to hostile. The outgoing Czech prime minister blistered the idea and the Obama administration's response to the U.S. economic crisis.

MIREK TOPOLANEK, CZECH PRIME MINISTER: All of these steps that combination and the permanency is a way to hell.

CROWLEY: Rather than putting more money into ailing economies, many countries want greater financial regulation. As French President Nicolas Sarkozy put it, "we consider that in Europe we have already invested a lot for the recovery and that the problem is not about spending more, but putting in place a system of regulation so that the economic and financial catastrophe that the world is seeing does not reproduce itself."

Making matters worse, many countries blame the U.S. for the global recession. Arguing the failing American banking system was the first domino to fall. Include Brazil in that.

LUIZ INACIO LULA DA SILVA, BRAZILIAN PRESIDENT (through translator): This crisis was not created by blacks nor Indians nor poor people. It was a crisis that was created and spread throughout the world due to the irresponsible behavior of white people, blue-eyed people that thought they knew everything.

CROWLEY: Others have made the point without the racial implications. Bottom line, the shine has come off capitalism, open markets, and deregulation.

UNIDENTIFIED FEMALE: This economic crisis has definitely made America's bully pulpit in the world less effective. And you're hearing a lot of people from around the world saying, well, actually, maybe the Americans don't have any -- don't have everything right.

CROWLEY: There is risk in this for President Obama. A failure to reach even a bland agreement or a head-of-state popping off at the U.S. would mar the maiden voyage.

(on camera): Signals from the White House suggest the president does not believe it has to be stimulus or tighter regulation. Spokesman Robert Gibbs says the G-20 nations will find in the U.S. a partner willing to move the economy forward, which is code for a stimulus plan, as well as a country willing to institute stricter regulation.

Candy Crowley, CNN, Washington.

(END VIDEOTAPE)

DOBBS: Chancellor Angela Merkel of Germany tonight saying no to British calls and American calls for a global new deal to tackle the economic crisis. The chancellor has flatly rejected demands by British Prime Minister Gordon Brown and suggestions from the Obama administration that worldwide tax cuts, and new stimulus spending be coordinated and implemented. The German leader said, quote, "I will not let anyone tell me that we must spend more money", end quote.

Up next here, compelling new evidence that communist China has launched a global spy network to hack into computers all around the world with a mission of simply stealing sensitive information from governments and businesses.

And a stunning statement by the Obama administration on its response to a North Korean missile test, a test that may be imminent.

(COMMERCIAL BREAK)

DOBBS: A worldwide cyber espionage effort by communist China has been discovered, researchers finding that government computers in more than 100 countries have been hacked, the researchers finding this elaborate spy system originating from computers in communist China. John Vause has our report.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN SENIOR INT'L CORRESPONDENT (voice-over): What began as an investigation into possible hacking of computers at the office of the Dalai Lama may have uncovered a vast network of cyber- espionage, possibly originating from China and infiltrating so-called high-value targets, a computer at NATO, foreign ministries and embassies in more than 100 countries. His Holiness says he doesn't know the Chinese government is responsible, and while he called for an investigation, told CNN there's no need for anyone to spy on his office.

THE DALAI LAMA, EXILED TIBETAN LEADER: If you are open, transparent, there's no need to do spying these things. If you want to know, ask directly. That's much better.

VAUSE: Researchers at two universities, Toronto and Cambridge, discovered the global spy web and called it Ghostnet and say for almost two years, it's been devastatingly effective.

RONALD DEIBERT, AUTHOR, "TRACKING GHOSTNET": It can extract any document they wanted. They could turn on Web cameras; turn on audio devices so that they can in effect use the computers as a listening device in the offices.

VAUSE: Ghostnet spread initially by e-mail and its control service were traced to three provinces in China -- Hainan Island, Guangdong and Sichuan, a fourth in southern California. Researchers in Canada have stopped short of blaming the Chinese government of outright involvement. "It is not inconceivable that this network of infected computers could have been targeted by a state other than China but operated physically within China."

Another possibility they raise, Chinese hackers freelancing their skills. Recently one of the country's most infamous alleged hackers known as Top Fox (ph) was arrested in Beijing. Police say his Trojan program was made freely available on the Internet and at one point was used to hack more than 30,000 computers a day, emptying bank accounts, accessing stock details and e-mails.

(on camera): As for the Chinese government and Ghostnet there's been no official comment from Beijing. Diplomats in Chinese embassies in London and Washington have played down the investigation, while the foreign ministry here tells CNN there will be a formal response, quote, "when the time comes."

John Vause, CNN, Beijing.

(END VIDEOTAPE)

DOBBS: Well, all of this, of course, comes to no surprise to viewers of this broadcast. We've reported extensively here on communist China's espionage campaign against the United States in our series, "Red Storm Rising". We've reported that hackers from communist China have been responsible for cyber attacks on the White House, Pentagon, Congress, the Commerce Department, and in fact, the Pentagon reports three million cyber attacks on its computer networks each and every day.

Criminal activity on the Internet is soaring, as you might guess, Internet crime jumped by 33 percent last year, losses for those crimes amounting to more than $265 million. The most common Internet crimes are so-called auction fraud and confidence fraud such as Ponzi schemes.

North Korea tonight is on the verge of testing a missile that could reach Alaska or Hawaii. But Defense Secretary Robert Gates is saying there's not much the United States can do about it now. This is a startling acknowledgement by Defense Secretary Gates, a statement that apparently contradicts remarks by the commander of U.S. forces in the Pacific. Chris Lawrence has the report from the Pentagon.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT (voice-over): New satellite images of the launch pad show a North Korean missile being prepped for launch. North Korea says it's launching a communications satellite. U.S. officials believe them, but still think it's a cover for a ballistic missile test. Here's why.

If the missile can put a satellite into orbit, North Korea will have proven guidance, control, reliable fuel, some of the same technology needed to one day launch a nuclear missile. Experts say once fired, the missile would cross over Japan in seven to eight minutes. Meaning, it would take a quick decision to stop it. But the secretary of defense told FOX News, the U.S. is not prepared to stop the launch. It would only try to shoot the missile down if it somehow headed towards the U.S.

ROBERT GATES, DEFENSE SECRETARY: If we had an aberrant missile, one that was headed for Hawaii -- that looked like it was headed for Hawaii or something like that, we might consider it, but I don't think we have any plans to do anything like that. LAWRENCE: A missile carrying a satellite will likely shoot straight up into earth orbit. A launch meant to simulate a nuclear warhead would travel on a lower arc, out over the Pacific. Navy warships are in those waters and could fire if necessary. A successful launch raises questions about whether other countries have been helping North Korea since a failed launch three years ago and could test President Obama.

DAVID MOSHER, RAND CORPORATION: Are we going to see the new administration making more direct accusations of where they're getting help?

LAWRENCE: Analyst David Mosher says even a successful launch doesn't make North Korea a long-range threat to the U.S.

MOSHER: Remember, it's taken them a number of weeks to get this missile ready to launch on a test pad. To have something that's militarily useful, it would have to be able to launch quickly from someplace that's hidden.

LAWRENCE (on camera): North Korea says it will launch by this weekend or early next week. They'll likely wait for a clearer day so they can monitor the missile's progress. North Korea has limited test range facilities so those visual observations are even more important.

Chris Lawrence, CNN, the Pentagon.

(END VIDEOTAPE)

DOBBS: Those remarks by Defense Secretary Gates show the Obama administration taking a very different approach to North Korea than the government of Japan. Japan has sent anti-missile warships to the Sea of Japan and the Pacific Ocean, deploying Patriot Missile interceptors around Tokyo. Japan's government says it will shoot down any North Korean missile threatening to fall in Japanese territory or in Japanese territorial waters.

Meanwhile, the Obama administration appears to be retreating from promises to build anti-missile defenses in Europe. There are also reports that the White House is considering reducing spending on missile defense in the United States.

Up next, President Obama fires General Motors CEO. Why the president is treating Detroit differently than Wall Street and a new threat to your homes and our families from communist China. Those stories are next.

(COMMERCIAL BREAK)

DOBBS: We have an update tonight on the North Dakota flooding. A spring storm is now threatening a new round of flooding that could breach the levees of Fargo, North Dakota. The National Weather Service is reporting that storm could drop more than a foot of snow in already flooded areas, a full-blown blizzard on the way.

And another snowstorm is expected later in the week. The Red River hit a record, cresting at more than 41 feet Saturday. That is still far better than what had been feared. Two deaths, however, and 50 injuries have been blamed on the flooding.

There's a dangerous new threat tonight to our homes and health from communist China. Drywall imported from China was used on homes in Florida, California, Louisiana, and a number of other states. But now there's rising concern that building materials contain toxic chemicals. Lisa Sylvester has our report.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Danie Beck thought she was moving into her dream home, a $345,000 Florida townhouse, but then the air-conditioning kept conking out, appliances started not working, and she and her husband noticed a smell of rotting eggs.

DANIE BECK, FLORIDA HOMEOWNER: I said to him I think something crawled in the wall and died while they were building the house. That's exactly what it smelled like to me.

SYLVESTER: The walls in Danie's home were literally corroding the rest of the house. Tests done by the State of Florida found that drywall imported from China was releasing volatile sulfur particles and she wasn't the only one. Lawsuits have been filed against the various builders who used the drywall and the company that manufactured it, the Knauf Plasterboard Tianjin. As many as 100,000 homes in 12 states may be affected.

DAVID DURKEE, ATTY., ROBERTS & DURKEE: They're simply devastated by a situation that their number one investment, their place where they raise their children and their family is toxic and defective.

SYLVESTER: The drywall manufacturer Knauf says it still stands by its products. Company officials hired a pulmonologist and toxicologist to conduct studies for them.

KEN HALDRIN, KNAUF SPOKESMAN: There's no health risk associated with anything that might be occurring in those spaces and that's really not me saying that, that's independent experts who've said that.

SYLVESTER: Part of the problem -- the Consumer Product Safety Commission says there are no federal nor industry standards for drywall. Several other Chinese imports have been found unsafe in the past, including toothpaste, pet food and toys.

KERRI TOLOCZKO, ALLIANCE FOR AMERICAN MANUF.: Every time we turn around there's another toxic product coming over. This one, unfortunately, has an enormous economic problem for the people who've used it.

SYLVESTER (on camera): Knauf says there are no health risks but some of the homeowners have complained of nosebleeds and headaches and rashes and the families worry that especially in this down market that they will be stuck with these homes forever. Lisa Sylvester, CNN, Washington.

(END VIDEOTAPE)

DOBBS: Let's take a quick look at some of your thoughts before proceeding. Stephen in Vermont said: "Do we get to fire the president for his performance the last few weeks?"

And Robert in Tennessee: "I once said that Bush squandered America. In about two years, I figure Obama will have plundered anything Bush missed."

Autumn in Connecticut said: "Lou Dobbs, I'm an 11-year-old girl named Autumn and I like to watch Lou Dobbs with my mommy and my grandparents. I like your show a lot." And I thank you very much for that.

We love hearing from you. Send us your thoughts to loudobbs.com. And please join me on the radio Monday through Fridays for "The Lou Dobbs Show" 2:00 to 4:00 p.m. each afternoon on WOR 710 in New York and go to loudobbsradio.com to get the local listings in your area for the show.

Up next here, even Democrats are resisting Obama administration efforts trying to link Mexican drug cartel violence with efforts to erode our Second Amendment rights.

And President Obama imposing harsh conditions on Detroit as he courts Wall Street. Three of the nation's leading economic thinkers join us next.

(COMMERCIAL BREAK)

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion. Here again Mr. Independent, Lou Dobbs.

DOBBS: As we reported earlier, President Obama has fired the CEO of General Motors. President Obama insists that his tough approach to Detroit is necessary to bring the auto industry back from the brink of collapse. But while the Obama administration has blasted carmakers, it has been courting Wall Street executives -- Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): The CEO of GM, Rick Wagoner, was fired or asked to step aside by President Obama. But at that very same time, 15 Wall Street and banking CEOs were courting the press at the White House after meeting privately with the president -- double standard?

REP. THADDEUS MCCOTTER (R), MICHIGAN: They have the government come in, and ask Mr. Wagoner to resign, which he did honorably. At the same time they're fetting the Wall Street CEOs and pledging to work with them and cooperate while hundreds of billions of dollars are still going to go to them strikes us in Michigan as quite unfair. PILGRIM: In terms of bailout money, GM received $13.4 billion, well short of the astronomical sums given to the financial industry. Citigroup, led by Vikram Pandit, received $50 billion in TARP funds, Bank of America led by Ken Lewis also received 45 billion in TARP funds, AIG, the biggest chunk of all, $182 billion. Today, the White House press office was asked why President Obama was dictating the management of a public company.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I don't think in any way is the federal government running -- running these companies or this industry. I think that's not fair.

PILGRIM: Some say GM's Rick Wagoner was fired to apiece the public fed up with taxpayer bailouts of companies.

REBECCA LINDLAND, HIS GLOBAL INSIGHT: I think it was very much of a political move, and unfortunately somebody had to -- had to be the scapegoat, and in this case it was Rick Wagoner.

PILGRIM: What remains to be seen is the financial restructuring GM must do to qualify for further government assistance. Banks have received astronomical sums. Citibank alone has received two bailout packages. While the unprecedented move of the government agreeing to guarantee more than $300 billion in troubled assets.

Kitty Pilgrim, CNN.

(END VIDEOTAPE)

LOU DOBBS, CNN ANCHOR: And our poll question tonight is -- do you believe the Obama administration should be focusing on the real economy rather than the so-called financial economy? We'd like to hear from you, yes or no. Cast your vote at loudobbs.com. Results upcoming.

Joining me now, three of the country's best thinkers on the economy and Washington. Pat Choate, Pat ran for vice president with Ross Perot in 1996. He is also the author of the book "Dangerous Business." From Boston, Allen Sinai, president of decision economics and professor of economics at Harvard University, Jeffrey Miron. Gentlemen, thank you for being with us.

Your reaction Professor Miron to President Obama firing the CEO of General Motors?

PROF. JEFFREY MIRON, HARVARD UNIVERSITY: I think the whole situation is totally outrageous. I don't know whether Mr. Wagoner was doing a good job or not, but it's absolutely horrible for the future of American capitalism that the president of the United States or a car task force is making that decision. I think he's a scapegoat to cover up the fact that the administration doesn't know how to handle the current situation.

DOBBS: I'd like to -- each of you, if you would, this is President Obama, and he's sounding to me, at least, for all the world like, well, a car salesman. OBAMA: If you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired just like always. Your warranty will be safe. In fact, it will be safer than it's ever been, because starting today, the United States government will stand behind your warranty.

DOBBS: Well, Allen Sinai, that's pretty close to being one of the commercials for a car lot, isn't it?

ALLEN SINAI, DECISION ECONOMICS, INC: Look, the government on the advice of the task force, the auto task force, did what the board of GM should have done a long time ago, they asked the head of the failing company to step aside, after that company had failed to produce viable restructuring plans again and again and again. And the president and the government has drawn the line on taxpayer money in the auto industry. That's a good thing.

DOBBS: Allen, let me raise my hand, then, why isn't Bob Nardelli fired, then, too? He's done an even worse job there.

SINAI: Chrysler is going to be joined with fiat and they'll work it out that way and GM is different. The government is going to make a stand and hope that GM can come out of this as a standalone company in a reduced auto industry, two companies, smaller America. GM is the icon and they have perhaps subjectively chosen GM as the survivor. But not without a lot more taxpayer money.

DOBBS: Then why not fire the head of the United Autoworkers Union, too?

SINAI: I think the plan is for the autoworkers to make more concessions, and if not only to make more conceptions. It's really surprising, this is a democratic president doing republican stuff. This is tough business. It's tough love.

DOBBS: Well, republican stuff, Allen, would be to fire the head of the union, I believe.

SINAI: Well, that's too hard to do for a democratic president. How much can we expect? I think this is -- I think this is actually in the long run a very good thing. I'm glad to see the government take a stand.

DOBBS: Pat Choate, Allen Sinai's thrilled with the stand they've taken with Detroit. How about the stand they've taken with, well, say the commercial banks, the investment banks, AIG, Fannie Mae, Freddie Mac and a few others?

PAT CHOATE, AUTHOR, "DANGEROUS BUSINESS": Totally different, double standard is being applied here. It's sort of snarky elitism. They're going to ask the UAW autoworkers, the blue-collar workers, to make concessions. I haven't heard this administration or the prior one ask the 200,000 workers in the banking industry to give up a single thing. It's -- why -- I think we should have an expectation. If he's going to demand the resignation to the head of GM, demand that Chrysler merge itself in, he should apply exactly the same standards to the bank and insurance companies that have destroyed the world economy.

DOBBS: Gentlemen, let me ask you this. We've got an interesting G-20 meeting coming up, those meetings are seldom interesting. This one looks like it has the potential to border on fascinating and historic. Russia and China demanding a global currency working together. Russia even calling for a return to the gold standard. Angela Merkel, the chancellor of Germany, saying, Mr. Obama and Prime Minister Brown, stick it. We're not going to spend any money. You can take your calls for unity and put them somewhere else. We've got quite a division, Sarkozy threatening to walk out altogether. Professor Miron, what are we witnessing here?

MIRON: Well, I think we're witnessing basically a lot of grandstanding from each of these leaders. On behalf of the policies that they want to undertake. I don't think they're going to come to any great agreement. What U.S. economic advisers and the U.S. politicians seem to want is lots more spending. What the Europeans seem to want is lots more regulation so they're going to say a lot of high-sounding things and they'll go back and do what they want.

DOBBS: Is it really necessary here for the United States to be acting as though it doesn't have a principle, chief priority in taking care of its own economy? Is this a bit of a false flag, this internationalism that we're witnessing?

CHOATE: Yes. Yes, it is. Franklin Roosevelt in his inaugural address said first thing first, that deal with the depression, the first thing that we must do is bring our own house into order. Our house is far from in order. What we've seen is these ad hoc programs announced by the president one after the other. And what they reflect is the lack of a coherent strategy. And so long as we do that, we should not be entering into international agreements. First things first here.

DOBBS: You agree, Allen?

SINAI: Well, you know, I think our federal reserve and our government has done a tremendous, taken a lot, a lot of action really fast, being criticized doing too much to foot of in order to get the U.S. economy. I think they ought to put the United States first. They went to get any support there because a lot of countries are spending all the money they want to spend. And they just won't help out any more. I think they will come out with a unified front on reform and regulation of the financial system and markets and institutions that they can all agree on.

DOBBS: Paul Krugman, noble-prize-winning economist, "New York Times" columnist, Professor Miron calling -- saying the Obama administration is wrong, that's the cover of "Newsweek." his column suggesting that this administration should be doing far more, dissension in the democratic ranks, what do you make of it?

MIRON: Well, I think professor Krugman has taken stands on basically two main issues. One on how to deal with the banks. With there I agree with him. We're postponing the inevitable without forcing them through receivership and using the standard FDIC procedures. On the stimulus I part company with him quite strongly. I don't know how much needs to be done he would should say we need more, because he basically wants a huge expansion in the size of government. And I disagree whether that's a good thing or not.

DOBBS: Allen?

SINAI: I agree with Jeffrey on this one. I think Paul is worried that securitization won't risk anymore. There's a decent risk it won't work, you can't privatize the securitized markets, if you can't, the banks will end up, some of them into some sort of receivership or managed bankruptcy. Some of the banks.

DOBBS: Pat Choate, you get the last word here. And if you would, include your view on the car company deal today.

CHOATE: I think the car company deal is a rescue. The car companies mean a lot to America. It's our large machine tools that we need for the defense industrial base. Detroit holds a quarter of the nation's clean and green technologies. The big three automakers hold more clean and green patents than all of Europe together. The success in clean and green is going to come out of Michigan. We ignore all that. We are treating the auto industry as a second class citizen and we shouldn't do that.

DOBBS: All right. We thank you very much. Pat Choate, Allen Sinai, Jeffrey Miron, thank you, gentlemen.

A reminder to vote on our poll. Do you believe the Obama administration should be focusing on the real economy rather than the financial economy? Cast your vote at loudobbs.com. We'll be back in a moment with the results coming up.

And, banks finding new ways to add fees. Can you imagine that? We'll have that story.

And lawmakers going to the border with Mexico. Hearing firsthand testimony about the threat from Mexico's drug cartels and an Obama administration attempt to limit the second amendment rights of every American. We're coming right back.

(COMMERCIAL BREAK)

DOBBS: A dramatic contrast tonight in how federal authorities are applying our nation's gun laws. Wisconsin gun owner David Olafson, who is a father of three, sits in prison tonight. Olafson was convicted of, quote, transferring a machine gun, but Olafson didn't own a machine gun. He was charged when his semiautomatic rifle accidentally misfired on a rifle range. He is now serving 2 1/2 years in prison. The rapper T.I. is not in prison tonight. He is free, on bail. Ti, whose real name is Clifford Harris, tried to buy three machine guns and silencers. He faced 20 years on those charges. He pleaded guilty. His sentence? One year in prison. Prosecutors apparently impressed that T.I. is now preaching anti-violence. He speaks to young people through his show on MTV, and in personal appearances. David Olafson, charged, convicted and sentenced because his rifle accidentally misfired is in prison awaiting word on his appeal. He does not have a television show on MTV or anywhere else.

Our constitutional rights to bear arms on the agenda today for federal lawmakers who were meeting in El Paso. Senators held a hearing there on Mexico's drug cartel violence, and many of the lawmakers among them democrats rejecting outright the Obama administration's assertion that curtailing American gun rights would cut the violence in Mexico. Casey Wian has our report from El Paso, Texas.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT: Senate Foreign Relations Committee Chairman John Kerry says if he was a drug trafficker, he would be laughing at the United States' efforts to win the war on drugs.

SEN. JOHN KERRY (D), MASSACHUSETTS: It's sort of piecemeal, a little bit here, a little bit there. But -- but if you really -- this is a war, then if it has all the implications that we say it does, it seems to me we've never stepped up. Either party, either administration.

WIAN: White house officials often repeat Mexico's claim that 90 percent of the drug cartel weapons it seizes come from the United States. But an Alcohol, Tobacco, and Firearms official testified that Mexico only submits one in four seized weapons for tracing. The ATF says Mexico must do more, including more southbound vehicle inspections. Several lawmakers, including Senator Kerry, stated they opposed suggestions that more gun control in the United States is needed to curtail illegal weapons shipments to Mexico.

SEN. JOHN BARRASSO (R), WYOMING: The United States will not surrender our second amendment rights for Mexico's border problems.

WIAN: The DEA's top man in El Paso testified that 95 percent of the government officials killed in Mexico's drug war were corrupt. He advocated patience as Mexico seeks to overhaul its law enforcement system.

JOSEPH ARABIT, SPEC. AGENT IN CHARGE, DEA: The first thing we have to do is that we have to manage our expectations with respect to Mexico. Mexico right now is in a national security crisis.

WIAN: Several lawmakers and witnesses criticized the assertion that the drug cartel wars, which have so far killed nearly 8,000 people, have turned Mexico into a failed state. The DEA official also testified the agency does not believe there will be increased violence on the U.S. side of the border. Because Mexican cartels don't want to harm their own business interests. But he called his legal of confidence in that assessment medium.

Casey Wian, CNN, El Paso, Texas.

(END VIDEOTAPE)

DOBBS: And the government of Mexico today rejecting any -- any -- possibility of joint patrols along the common border with the United States.

New efforts don't to increase the number of foreign workers allowed to work in this country, even as unemployment in this country continues to soar. And even as more than 12.5 million Americans have been unemployed. Bill Tucker has our reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT: Debates rage across Europe on the impact of foreign workers on the domestic workforce. Spain is asking foreign workers who lose their jobs to leave and go back to their home country. Australia has tightened its immigration policy, and placed new limits on a variety of immigration programs. Yet in America, there's a bill pending by Senator Barbara Mikulski to expand the H2B visa program. These are nonagricultural jobs typically seasonal in nature which require little in the way of job skills. Companies say they cannot get the job done without the foreign labor. It's a bill that some who support a stricter immigration policy considered cruelly ironic.

STEVE CAMAROTA, CENTER FOR IMMIGRATION STUDIES: One of the things that really doesn't make any sense in this economy is to argue that we're desperately short of unskilled workers to be -- to work in hotels or to be nannies, maids, bus boys. The fact is that unemployment among less educated Americans is extraordinarily high.

TUCKER: The official unemployment rate for those with less than a high school education is 12.6 percent. Overall, the unemployment rate is 8.1 percent. With 12.5 million Americans out of work. When you add in workers who have part-time work but want full-time work, the number climbs to more than 21 million. But last year, while nearly 3 million Americans lost their jobs, we granted 1.1 million green cards and allowed in another 910,000 workers on temporary visas. It was enough to earn the anger of groups lobbying for tighter immigration control.

ROY BECK, NUMBERS USA: The leaders in congress don't get it. They don't not have any feel for the -- for the 12 million unemployed Americans or the fact that immigration actually gets in the way of those unemployed Americans finding jobs.

TUCKER: Though it is not clear whether Americans are applying for those jobs. Late last week, a letter from the state department went out to employers who use j-visas. According to a spokeswoman for the state department the letter asked that the employers review the number of visas they might request, suggesting that the recession might impact their business. It does not ask that they work harder to hire Americans first. We asked for a copy of the letter, but we were denied.

Bill Tucker, CNN, New York.

(END VIDEOTAPE)

DOBBS: Up next, you won't believe what banks are charging fees for now. It's a story you'll only see here. Stay with us. (COMMERCIAL BREAK)

DOBBS: Well, banks are trying to quietly pass fees on to customers on a host of new elements in their service. We reported here recently on stage distributing unemployment benefits using debit cards and banks adding fees on to those cards. Now it appears banks are trying to take money from people receiving child support. Drew Griffin has our report.

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DREW GRIFFIN, CNN CORRESPONDENT: Don't tell Donna Chamberlain about hard times. The 56-year-old grandmother lost her marketing job and now pumps gas in Virginia's Roanoke Valley.

DONNA WOOD CHAMBERLAIN, REJECTED DEBIT CARD: Need some help, sir?

GRIFFIN: Oh, by the way -- she and her truck-driving husband, Steve, are now custodial parents of their special needs grandson, Caden.

CHAMBERLAIN: Here we are.

GRIFFIN: Every dollar counts in this house hold. Which is why when they switched Caden's father's support payments to a debit card, this penny-pinching grandma got mad.

You didn't ask for it?

CHAMBERLAIN: No, sir, I did not. It was generated to me and had my name on it.

This thing has ten fees.

GRIFFIN: Three years ago in an effort to more efficiently move money, the state of Virginia began pushing debit cards to distribute child support payments. A CNN analysis shows 23 other states also offer the same thing. In Virginia, that mean last year, $279 million in child support fees were paid by debit card and attached to every debit card was a long list of fees.

CHAMBERLAIN: Some of the fees were 50 cents to have the card declined. 65 cents to make the withdrawal from the ATMs they justify. Much more to make a withdrawal from a foreign ATM.

GRIFFIN: Nick Young runs the child support program. He would much rather directly deposit child support payments to bank accounts. The problem is, not everyone has a bank account. It's safer, says Young. Cheaper for the state, no checks to print, and, yes, there are fees attached by the bank that runs all of Virginia's debit card programs. Wachovia -- a bank spokesman declined comment and asked us to speak to a state agency in charge.

Do you know how much Wachovia makes?

NICK YOUNG, VIRGINIA DEPT. OF SOCIAL SERVICES: I do not know how much they make. They're not in it just to help Virginia.

GRIFFIN: I understand that.

The fees can be avoided. Two free withdrawals a month and free transactions in many stores. Young says use the card unwisely and you could get burned.

YOUNG: I will admit if someone takes their $300 out $10 at a time, they will in essence defeat the purpose of the card and they will suffer.

GRIFFIN: That's why Pennsylvania divorce lawyer, Susan Murray, tells clients in her state never to accept a state debit card for child support.

SUSAN E. MURRAY, DIVORCE ATTORNEY: It's a win for the state, a win for the bank, but the kids lose.

GRIFFIN: Donna Chamberlain said she needs every nickel to play for her grandson's care. After leaving the long list of fees attached, she left the debit card right where it was, stuck to the paperwork. Instead, asking the state to send an old-fashioned check.

Drew Griffin, CNN, Troutville, Virginia.

(END VIDEOTAPE)

DOBBS: Good old-fashioned common sense works, doesn't it.

Coming up at the top of the hour, "NO BIAS NO BULL" and Roland Martin in for Campbell Brown.

Good to see you.

ROLAND MARTIN, CNN CONTRIBUTOR: Likewise Lou. Tonight we're looking at President Obama's tough love tactics with the automakers. Restructure or else. What really got our attention is the white house's move to force out GM chief executive. We're going to talk about what it all means in a few minutes.

Also ahead, growing controversy over the president's upcoming speech at a university.

Plus, Lou, a few thoughts to adopt another child out of Africa and why so many American kids are out of homes and we know you love talking about America. We have the e-mails on those topics. Nothing is off limits, Lou.

DOBBS: No bias, no bull, no limits, go get them. Roland Martin coming up. Thanks a lot.

MARTIN: Thanks.

DOBBS: The poll results, some of your thoughts. Stay with us. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Our poll results tonight -- 90 percent of you saying the Obama administration should be focusing on the real economy rather than the financial economy. Let's take a look at a few of your thoughts.

Tom in Georgia said, "Proper gun control is achieved through target practice, not through a restricting constitutional rights."

Robert in Pennsylvania said, "Lou, maybe the people of the U.S. are responsible for the lopping off of heads in Mexico too. Yes, let's ban certain types of American cutlery. It makes just as much sense as banning certain guns."

Ron in Pennsylvania says, "Amen, Lou, bringing home our troops from overseas to patrol our borders is the way to go. Why should we protect other countries' border when ours are going to hell?"

Send us your thoughts to loudobbs.com. Everybody here receives a copy of my book, "Independents Day."

NO BIAS NO BULL starts right now.