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Lou Dobbs Tonight
New ACORN Outrage; Brutal Gang Rape; Money for Terrorists
Aired October 28, 2009 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, HOST: Wolf, thank you.
ACORN and the Democrats -- despite national corruption scandals Democrats steadfast in their support of the left-wing activist group -- now they want ACORN to have the right to service financial regulators. What are these Democrats thinking?
And five suspects have now been arrested in the horrific gang rape of a 15-year-old girl in California. Police say many more watched and did absolutely nothing to help, nor did they turn anyone into the police. All of this happening on school grounds. Should there be prosecution of the witnesses as well?
Also, hard hits and concussions commonplace in professional football in football at all levels -- what are the long-term effects of the sport? Congress today took up that issue with the head of the NFL. How dangerous is football? Should you let your children play? We'll be talking with a former New York Giant Hall of Famer Harry Carson and three of the nation's leading experts in the field of concussions and impact on players and children as well.
ANNOUNCER: This is LOU DOBBS TONIGHT; news, debate and analysis for Wednesday, October 28th. Live from New York, Mr. Independent Lou Dobbs.
DOBBS: Good evening, everybody. A new battle over ACORN -- despite multiple corruption scandals, Congress voting to cut off funding to the left-wing group, the Senate voting to cut off funding to the left-wing group. Democrats apparently remain committed to ACORN.
An amendment sponsored by Congresswoman Maxine Waters passed the House Committee and could actually give ACORN federal powers of oversight in the regulation of financial institutions, the same financial institutions that ACORN pushed into giving out sub prime mortgages. We all know how that turned out -- Ines Ferre with our report.
INES FERRE, CNN CORRESPONDENT (voice-over): When the House Financial Services Committee voted to create a new consumer protection agency, it also approved an amendment that could allow activist groups to serve on the agency's oversight board.
REP. MAXINE WATERS (D), CALIFORNIA: I am very concerned about the lack of a consumer voice on this board. I'm also concerned about the lack of diversity among the board's members. Given the important responsibilities of the board I believe that it should be expanded to include those who will be directly impacted by its policies.
FERRE: The amendment passed with only Democratic support. Republicans saying the proposal could help groups allied with the Democratic Party like the conversational organization ACORN.
REP. SHELLEY CAPITO (R), WEST VIRGINIA: We believe as Republican that it specifically could open the door for ACORN to have a seat at the table and we absolutely reject that as Congress has rejected involvement by ACORN in a lot of different other areas as well.
FERRE: The amendment requires Senate approval of five experts appointed by the president from the fields of consumer protection, fair lending and civil rights, representatives of depository institutions that primarily serve the under-served communities. Republicans say advocacy groups on the panel would create a conflict of interest since groups like ACORN could potentially advise on regulating the very financial institutions from which they receive donations.
An ACORN spokesman dismissed those claims saying "While Republicans obsess about finding ACORN members around every corner, our membership is focused on solving the very real foreclosure crisis that might have been prevented had a strong CFPA been in place."
Congress recently voted to stop funding ACORN, but the funding restrictions expire October 31st. Republicans vow that future legislation will include similar language restricting ACORN.
FERRE: And the Republicans were outmaneuvered when it came to the bill. They tried to block the Democrats with their own amendment which passed that prohibits ACORN from the new agency's advisory board. But there was no language in there of the more powerful oversight board. Now Republicans say they'll offer another amendment before the bill goes to the full house, making it clear they don't want ACORN on any board -- Lou?
DOBBS: All right. Thank you very much, Ines.
Well why would Democrats support ACORN despite all of the corruption, scandal and the House of Representatives and Senate both voting to defund ACORN. What's going on? Joining us tonight Errol Louis -- "New York Daily News" columnist, CNN contributor -- and Mark Tapscott, editorial page editor of "The Washington Examiner" -- gentlemen, thank you for being here. Why do you think Congresswoman Waters, Errol, wanted to add community groups to that oversight committee rather than keeping them on the advisory committee where they had traditionally been.
ERROL LOUIS, NEW YORK DAILY NEWS: Well, I think committee groups belong in an oversight position when it comes to this. They're the people who have been worse affected by this. There are a number of panels. In fact there's a...
DOBBS: Who is worst affected by it?
LOUIS: The people who have been subjected to foreclosures. I mean this crisis began...
DOBBS: Are you saying it's -- are you saying community -- are you talking about an ethnic or racial community?
LOUIS: No, no, low-income communities, which is defining the...
DOBBS: Oh, low income communities...
LOUIS: Yeah, (INAUDIBLE) you look at the Home Mortgage Disclosure Act. The Federal Reserve has a consumer advisory committee. I served on it in the 1990's, sitting side by side with Fed governors and we talked about things and it was a serious commitment.
DOBBS: So why would ACORN be included in that?
LOUIS: It says -- it doesn't say ACORN anywhere in the bill.
LOUIS: It says organizations that serve the underserved and civil rights groups. Look, the problem, Lou, with any witch hunt like the one currently going on against ACORN is it never...
DOBBS: It's a witch hunt?
LOUIS: It never stops with one witch.
LOUIS: You go from the central witch -- and I know everyone's supposed to twitch and sort of all on the floor and foam at the mouth whenever ACORN is mentioned but then it goes beyond that and now what they're trying to do is circumvent legislation that would include...
LOUIS: ... civil rights organizations, low income credit unions that provide low income loans to the poor and haven't been involved in any scandals at all. It's a very broad brush and again it's a problem with the witch hunt.
DOBBS: Errol Louis says it's a witch hunt. He's accusing apparently the Congress and the Senate of going on a witch hunt, even though those were overwhelming votes, all but seven votes in the United States Senate voting for defunding based on the corruption of ACORN and its leadership. What's your reaction? MARK TAPSCOTT, WASHINGTON EXAMINER: I am absolutely in agreement with Errol that community groups do have a place in these kinds of situations. The problem is criminal groups do not. And ACORN is a criminal group. They have nearly two dozen investigations being conducted by state authorities all over the country on accusations of registration and voter fraud. We have separate investigations in the state of Louisiana about voting or financial fraud. One of their own founder's brother embezzled $1 million and covered it up. This is a criminal group.
LOUIS: So are all 400,000 dues paying members of the organization criminals?
TAPSCOTT: That's an interesting way to approach it. That's exactly the point, there are 400,000 member's of ACORN and just enough bad apples at ACORN to take advantage of those people and misuse their otherwise sincere enthusiasm.
LOUIS: So what I would want to know is where can we get a full and comprehensive list of all of the organizations that for whatever political criteria you're using, because you're talking about investigations, not convictions, right?
UNIDENTIFIED MALE: Yeah. Right.
LOUIS: Let's have a list...
LOUIS: ... of all of the politically, unacceptable groups that are not supposed to participate in cleaning up this financial mess.
UNIDENTIFIED MALE: OK.
TAPSCOTT: Errol and...
LOUIS: That's a witch hunt.
DOBBS: The most recent conviction in Nevada as you well know.
TAPSCOTT: Yeah -- absolutely.
DOBBS: And we've got now years of history with this organization. I find it stunning that there is a discussion in -- frankly, in the Congress that has chosen to defund them about putting them then into a role of oversight.
TAPSCOTT: Well, this is Congress we're talking about.
(CROSSTALK) DOBBS: ... congressional standards, this is a little -- this is a little rough.
TAPSCOTT: This is -- this is vintage Barney Frank, friends of Angelo applied to ACORN. ACORN poses as being an outside group. This brings them to the inside with regulatory authority over the very people that they have intimidated and extorted millions of dollars from over the years.
DOBBS: And the congressional resolution to funding ACORN expires Saturday. Is it a coincidence?
LOUIS: I think it -- frankly, I think it was probably unconstitutional in the first place. You know there's a prohibition on bills of attainder, in which without any judicial process Congress decides you're guilty, you're going to be guilty. We'll penalize you without any kind of investigation or process. That's what that defunding bill was. And I don't know if it would have stood up to court scrutiny in the first place.
TAPSCOTT: You never hear folks like Errol worrying about bills of attainder when it's owing (ph) that has been banned from federal contracting after being convicted of various criminal acts.
DOBBS: Mark, Errol, thank you both very much.
Well coming up next, the head of the NFL refusing to say whether football causes long-term damage. Some studies say otherwise. Should you let your kids be playing football? I'll be talking with a panel of medical experts and Hall of Fame football player.
And questions about the Obama administration's plan to pay off Taliban terrorists if they agree to switch sides -- well, multiple arrests in the gang rape of a 15-year-old girl in California -- police are looking for more suspects. They say many more watched that attack as it took place and failed to report it. Should they be charged as well? We're coming right back.
DOBBS: Three more people are under arrest tonight in connection with a gang rape, the brutal beating of a 15-year-old girl in northern California. She was attacked outside her high school homecoming dance on school grounds in Richmond, California Saturday. Police say as many as 20 people watched or took part in the attack on her. Five people, including two adults have been arrested. Dan Simon has the latest for us from Richmond, California.
DAN SIMON, CNN CORRESPONDENT (voice-over): For two and a half hours, police say she was repeatedly raped and beaten, two and a half hours. And it happened right under the noses of police officers, teachers, school administrators and other adults hired to make sure Richmond High School's homecoming dance went off without incident.
UNIDENTIFIED REPORTER: As far as you know, nobody walked around outside of the school to see if anything was happening?
CHARLES RAMSEY, SCHOOL BOARD MEMBER: Well, obviously, didn't because the student was gang raped for two and a half hours from 9:30 to midnight. And so I'm certain of that, that there was no surveillance done.
SIMON (on camera): Here's what we know. The dance took place inside the high school gym and the victim left around 9:00 p.m. to be picked up by her father. Instead, a friend asked her to walk with him towards the back alley on the other side of school. And that's apparently where they were greeted by others with alcohol.
You can still see the remnants of some crime scene tape. This is where the people involved would have gained access to this area. Normally, this fence right here is closed. We are told that everybody would have had to jump over this fence. And this is where the alleged rape took place back in this area where you see those picnic tables.
(voice-over): The area has no lights, no surveillance cameras either. They've been ordered but not installed yet. Another reason why Ramsey says it should have been searched, not to mention the high school has a history of violence on campus. And Richmond itself is considered one of the most dangerous cities in California.
UNIDENTIFIED MALE: As the duly elected official, I'm going to share in the responsibility and say that well we probably could have done better.
SIMON: And if what happened here couldn't get any more troubling, listen to this.
LT. MARK GAGAN, RICHMOND POLICE: What we also know is that during the two and a half hours that this crime was going on several people came, saw what was going on, and either left and didn't report it to the police or stayed and observed, and in some cases participated in her getting raped.
SIMON: Police arrested the 15-year-old boy who led the victim to the alley. His name withheld because he's a minor.
SIMON: Lou, as you mentioned, five people now in custody, three minors, two adults. And the investigation is still far from over. As for the young victim, she is still in the hospital but is expected to recover at least physically -- Lou?
DOBBS: I have to say, this is striking in that school officials said, amongst other things that they could have done better -- is what one official said. Another official speaking for the school district said they're looking at this as a learning incident. Are people in Richmond just simply out of their minds? I mean how can they talk like that about a brutal, tragic crime like this?
SIMON: Well, Lou, I can tell you that this crime has absolutely paralyzed this community. Just a short time ago, we heard from teachers and students talking about how saddened they are by what's taken place. I can also tell you that the school board expected to get an earful from parents and others in the community tonight. There's a meeting at 6:00 p.m., a public forum, for people to address their concerns -- Lou?
DOBBS: All right. Thank you very much. Appreciate it.
Well, coming up next, the Obama administration agrees to pay off terrorists, hoping they'll switch sides, maybe fight for the good guys and more complications for the president's war strategists -- terrorist bombings and attacks killing more than 100 people in Pakistan and Afghanistan.
DOBBS: A massive car bomb explosion in Peshawar, Pakistan, killing at least 100 people today, many of the dead women and children. That bomb exploded in the center of a crowded marketplace. More than 200 people were wounded in the attack. Officials say the vehicle was packed with more than 300 pounds of explosives and the blast left a 10-foot wide crater. No group has yet claimed responsibility for the bombing.
That explosion occurred just hours after Secretary of State Clinton arrived in Pakistan's capital; she condemned the bombing as cowardly. In Afghanistan, Taliban terrorists stormed a U.N. residence and killed eight people, including five U.N. workers. One of those killed was an American working for the United Nations. Three extremists were killed in the two-hour long gun battle. Taliban extremists have threatened to disrupt Afghanistan's upcoming presidential runoff election.
In Washington today, President Obama signed a defense bill that would pay Taliban terrorists to stop fighting American forces in Afghanistan. The offer would be extended to terrorists who promise to renounce the insurgency and fight for the U.S.-backed Afghan government -- Louise Schiavone with the report.
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Signed into law, a billion dollar program to change the hearts and minds of Taliban fighters for local projects and jobs. The goal, says the bill's author, is to get pro-Taliban fighters.
SEN. CARL LEVIN (D-MI), ARMED SERVICES CHAIRMAN: Instead of fighting us, to join with us, by putting them on a payroll to give those few dollars to tens of thousands of lower-level local Taliban people who are not there because of their religious fanaticism.
SCHIAVONE: It's modeled after the Sons of Iraq program where coalition forces and the Iraqi government hired 100,000 Iraqis to forsake the insurgency there and join with the forces of stability. But this scholar, an experienced Afghanistan elections observer, says Afghanistan is a different proposition. In Iraq, Karin von Hippel says Sunni insurgents were motivated by their rejection of al Qaeda brutality.
KARIN VON HIPPEL, SR. FELLOW, CTR. FOR STRATEGIC & INTL. STUDIES: It's actually very different in Afghanistan. The Taliban are inspired by an extreme form of Islam. And they interpret it in a very violent way. So that wasn't necessarily the case in Iraq.
SCHIAVONE: President Obama signed the $680 billion defense measure with this promise.
BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: I will always do whatever it takes to keep the American people safe.
UNIDENTIFIED MALE: (INAUDIBLE)
SCHIAVONE: But Americans more and more question the president's Afghanistan strategy, even as Mr. Obama ponders the domestic politics and military impact of expanding the U.S. troop presence there and as his administration is challenged about a "New York Times" report alleging that the brother of Afghan President Hamid Karzai has been on the CIA's payroll for years despite suspicions that he's a major opium dealer. For the record the CIA declined comment. And Ahmed Wali Karzai has repeatedly denied the charge.
SCHIAVONE: Well as long as Taliban fighters continue to score military successes in Afghanistan says CSIS scholar Karin von Hippel, it will be a tough sell to sign them up to join the other side. And that's where a U.S. troop surge may have to come into play -- Lou?
DOBBS: Louise, thank you very much -- Louise Schiavone.
And I'll have a few thoughts on these issues -- for example, why is Karzai's brother being revealed as a paid CIA informant right now? Join me on the radio Monday through Friday for "The Lou Dobbs Show" 2:00 to 4:00 p.m. each afternoon on WROR 710 radio in New York. And go to loudobbs.com to get the local listings in your city for "The Lou Dobbs Show" and to subscribe to our daily podcast on loudobbs.com and you can follow me on loudobbsnews on Twitter.com.
Up next, the NFL telling Congress today there's no evidence of a link between football and brain injury. Is the sport safe for your children? I'll be joined by sports medicine experts and former NFL star Harry Carson here next.
Also, a not so hidden message in Governor Schwarzenegger's veto letter to a state legislator and U.N. promises of action on climate change could be just hot air. What happened to global warming? Some say there will be no agreement on this issue at all, this year or otherwise. We'll be right back.
ANNOUNCER: Here again, Mr. Independent Lou Dobbs.
DOBBS: Welcome back. U.N. Officials saying not to expect any breakthroughs at a December conference on climate change. It's a change in tone from September when U.N. Secretary -- the U.N. secretary-general said a climate change treaty is a top priority. The secretary-general today said other nations are waiting for the United States to act first before they make commitments to cutting global emissions. Kitty Pilgrim makes sense of all of this.
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): The director of climate change at the U.N. says there will be no treaty at the Copenhagen Summit and he blames that on the U.S.
JANOS PASZTOR, DIR., U.N. CLIMATE CHANGE SUPPORT TEAM: There are reports of a new poll in the United States that indicates that interest and support for action on climate change may actually be declining.
PILGRIM: So now U.N. Secretary-General Ban Ki-Moon wants the United States to go first by passing legislation in Congress saying "many developing countries such as China and India are ready to make some political compromises only if and only when the United States is ready to do that." The United States never ratified the last international agreement on climate change. The 1997 Kyoto protocol, partly because large polluters like China were exempted. Countries that did implement the Kyoto protocol ended up with high economic costs, according to Ben Lieberman, a policy analyst for Environmental Affairs at the conservative Heritage Foundation.
BEN LIEBERMAN, HERITAGE FOUNDATION: Nations that have signed on to it, mostly western European nations have not reduced their emissions. It's caused economic dislocations at the same time but it hasn't reduced emissions. It's clearly been a failure. We don't want to extend that Kyoto process in Copenhagen.
PILGRIM: A 2004 GAO report states that a congressional hearing found that "implementing the Kyoto protocol would reduce U.S. economic output by up to $400 billion 2010." This estimate is similar to a $397 billion estimate that appeared in a 1998 report by the Energy Information Administration. Even those who favor the U.S. signing a new international treaty say it will be difficult without public support or U.S. legislation.
JAKE SCHMIDT, NATURAL RESOURCES DEFENSE COUNCIL: I don't think the Copenhagen will result in a final treaty with all the detail fleshed out and partly because the U.S. Congress is working its way through the system.
PILGRIM: One estimate also by the conservative Heritage Foundation of the House Climate Change Bill estimates it would cost $393 billion in GDP and cost the average household of four $3,000 a year.
PILGRIM: Now, as people in Colorado are witnessing right now, it is a much colder fall. We have early snow falling in Colorado and Oregon, much, much earlier than usual. Now, it may not be one of those years that will add to fears about global warming. In fact, with one year left in the decade, some scientists have suggested it's a decidedly cooler decade. In fact, a recent Gallup poll points to growing skepticism about global warming. More than 40 percent of respondents said they think global warming is exaggerated, Lou.
DOBBS: And now the United Nations wanting the U.S. to go first on this -- that's remarkable?
PILGRIM: Yeah, I mean they really are saying, you go ahead and make your commitments and then we'll see what we can do. And with that kind of a dynamic going into the summit, it really is very clear that you're not going to make much progress.
DOBBS: And with -- I think it's interesting, those estimates on costs, 10 years apart, having signed up to Kyoto would well suppress the U.S. economy by $400 billion.
PILGRIM: Billion dollars, yeah.
DOBBS: That's a significant amount.
PILGRIM: It is. And of course all of these...
DOBBS: Particularly in economic weakness.
PILGRIM: These emission controls do cost a lot of money (INAUDIBLE).
DOBBS: And as we've seen in Western Europe, no emissions reduction. Thanks very much. Appreciate it.
California and Governor Schwarzenegger is well-known for his tough talk. Now, it seems Schwarzenegger has come up with some choice words for one of his chief critics, a Democratic lawmaker in Sacramento. He sent a special, but not particularly sweet message hidden in a veto letter. It begins this word with the letter "F". It ends with the -- well it's actually the word ends with a different letter. But the next word is "you." That's all I'm giving tonight. Casey Wian has our report.
CASEY WIAN, CNN CORRESPONDENT: California Governor Arnold Schwarzenegger likes to deliver sharp messages. He's brandished a knife to warn of budget cuts and showed Conan the barbarian sword to bitterly divided state lawmakers. Now, his pen appears sharper than that sword. If you read the first letter of each line of this recent veto statement, the governor seems to be saying a little extra to someone, possibly the veto bill sponsor, Democratic State Assemblyman Tom Ammiano. This dispute began earlier this month when the Republican governor unexpectedly dropped in at a Democratic fundraiser at the invitation of a former state assembly speaker. Schwarzenegger was loudly booed then Ammiano shouted and we'll paraphrase, kiss my -- slur for a gay man -- behind. [ bleep ] Ammiano later said he was angry about what he called Schwarzenegger's lack of support for gay rights and gay marriage and he refused to apologize.
TOM AMMIANO (D), CALIFORNIA STATE ASSEMBLY: I know what was not appropriate was him coming in thinking that all the pernicious acts that he's done, particularly with people with AIDS in San Francisco was going to be okay.
WIAN: But Schwarzenegger appears to have the last word. When an Ammiano-sponsored bill to expand financing port the port of San Francisco crossed the governor's desk his veto message was created creatively. The first line clearly spells f blank blank k you. Earlier this year Schwarzenegger defending his propensity for unorthodox messages.
GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: You send a governor to Sacramento, not el spifo, maybe who is having more fun with the whole thing.
WIAN: The governor's spokesman says it's nothing more than a coincidence, something that was bound to happen when a large number of bills are vetoed.
WIAN: Ammiano called Schwarzenegger's message a creative use of the veto. Adding, quote, we'll call it even and start with a clean slate with the governor from here on out. End quote. We'll have to see about that. Schwarzenegger has vetoed five of the assemblyman's bills since he heckled the governor earlier this month, Lou.
DOBBS: Has anyone gone back to read those veto letters to see what messages were in there?
WIAN: I actually read all of the messages. All of them were very specific to the legislation. This one was not. It was a clear message despite what the governor's office said.
DOBBS: Pointed and direct. Certainly. All right. Thanks very much as the governor said. No el stifo (ph) there. Thanks very much.
Still ahead, the NFL on the defensive between the link between football and dementia. Is football safe your children? We'll be joined by experts on brain injury and one of the NFL's greatest linebackers, Harry Carson.
And President's Obama's economic policies, are they working? Where are the jobs? Why isn't anyone talking about jobs? 30 million Americans are unemployed. That and much more coming up next.
DOBBS: Well, the Obama administration's economic policies are they speeding or slowing this country's position from recession. Joining me now, Amity Shlaes, senior fellow at the Council on Foreign Relations, author of "The Forgotten Man, a New History of the Great Depression." And Brian Domitrovic, he's assistant professor of history at Sam Houston University, the author of "Econoclasts." And Jeffrey Miron, economics professor at Harvard University.
Ken Feinberg testified at the house oversight committee about executive competition. And had this to say about the seven companies he has targeted.
(BEGIN VIDEO CLIP)
REP. DAN BURTON (R), INDIANA: You don't have top talent running these companies. The American taxpayer who's a majority stockholder has inferior people running the country. Doesn't that concern you?
KENNETH FEINBERG, SPECIAL MASTER FOR TART EXECUTIVE COMPENSATION: It sure does.
BURTON: How do you deal with that?
FEINBERG: I think if you look at the levels of total compensation that we established in our determination, we think that, I made this recommendation, on my conclusion, they won't jump ship.
(END VIDEO CLIP
DOBBS: Are you satisfied, Amity?
AMITY SHLAES, SR. FELLOW, COUNCIL ON FOREIGN RELATIONS: Well, Lou, perhaps the companies that took the government money should have pay constraints on them. But it's also through that those men and ladies could leave and go to Europe, and there doesn't seem to be concern on the part of the administration, go to Dubai or somewhere in Asia. There's this idea that we can judge or devaluate what they're worth.
DOBBS: What do you think?
PROF. BRIAN DOMITROVIC, SAM HOUSTON STATE UNIVERSITY: Take for example, Goldman Sachs, Goldman Sachs doesn't have any rank and file employees. What are they supposed to do with their profits, other than pay their executives that have to dish it out to share shareholders? But the shareholders are the executives who run the company. If this goes through any extension tiff scale, then companies will outsource it and keep it for their executives.
DOBBS: So your thoughts, professor?
PROF. JEFFREY MIRON, HARVARD UNIVERSITY: I basically agree. I think there will be no long-term effect on the compensation, they will come up with innumerable ways of getting themselves paid money. With deferred compensation and with certain types of consulting arrangements and other things. So this just doesn't have any effect.
DOBBS: Since there seems to be, generally, at least, unanimity on the issue. Let's go to America, corporate America, Wall Street. We saw people making a lot of money that became wealthy. But the ratio between, for example, CEO pay in this country was something in the order of 1 to 70 over that of an average employee in that company. Today that number rises anywhere on average, 1 to 360. That is, a CEO makes so much money that they earn an entire year's pay for one of their average employees every day. Why can't we get back to the pre- 1993 levels and should we? Let me ask you that question.
MIRON: I don't really know whether we should or not. But the way to go back there is not to try to cap executive pay or decide what the compensation package should look like, but to let companies that make mistakes fail. And the crucial change we did wrong, we're stuck now about the executive compensation. On the one hand, these guys got all of our money. On the other hand, they wanted to pay themselves a lot. That seems like a horrible thing. We just should have let them fail. They would have been out of jobs. They would have lost the bonuses and all that. That's the way to discipline executive pay, not to have the bailouts that we had a year ago.
DOBBS: Professor Domitrovic, do you agree with that? That there should be nothing so big that you can't fail?
DOMITROVIC: Well, there's a lot -- something happened after 1993, namely, there's a techno -- if you go back to 1980, the fortune 500 has been replaced by 80 percent. And what happens is, if you give people the opportunity to make a lot of money, they're going to drive a lot of companies out of business. What happened was, because pay was uncapped a lot of the entrepreneurial startups hit it big. That's why they replaced 4 out of 5 companies in the fortune 500 companies.
DOBBS: In year 1993, that is the advent of the aligning shareholder interests with management's interest. Management which was once hired help became suddenly owners and very big-time owners through stock options. And we have to find some way, do we not, to align shareholder interests, the public interest, along with the company's interest?
SHLAES: Well the market can do that, Lou, if we let companies fail. Instead of letting companies fail, we're saying too big to fail, and therefore, we must regulate, but that's working backwards. Actually, we should say, as Professor Miron said, let's them fail, and then the market will do their work of increasing their pay or what they deserve. Remember, we're also in the international context. In the international economy, maybe those executives are worth a lot. That's a factor, too.
DOBBS: This is a curious point, Amity. Because the first piece of legislation passed by the United States congress had to do with international trade. And we hear -- there's grown up an orthodoxy, frankly, in corporate America and academia talking about globalism. International trade has been part of this country's dynamic economically forever. What is different are the lowered absolute levels of access to this economy without any quid pro quo. This is the most bizarre period in our history. We have never granted full access to the world's richest consumer market before, put this country's labor into direct competition with the word's cheapest labor before. These are structural issues that aren't even being discussed right now in academia, are they?
MIRON: I think the issue of trade and how open we are in the rest of the world is certainly discussed. There's a very strong view from academic economics that any impediments to flows of capital, flows of people, flows of goods are horrible for any economy.
DOBBS: Are any empiricists in academia because we have 33 consecutive years of trade deficits. We have $7 trillion in external trade debt. We have 30 million people unemployed, folks, we have corporate America outsourcing jobs at an incredible rate. Our manufacturing sector is dissipating and what could only be called an alarming rate for anyone concerned about this country's future. And you tell me academia is in agreement that the mindless policies that have led to this condition are appropriate? Hello. What does that mean?
DOMITROVIC: Very strong in the United States, in the American south, but if you start telling Toyota we're not going to provide access to U.S. capital by devaluing the dollar, then you could really kiss American manufacturing good-bye.
DOBBS: I wouldn't want to do that, I would turn to bright economists and scholars and say to you, our nation is being hollowed out. We have a manufacturing sector not in distress, but almost in rigor mortis. And we need answers about public policy in economics that will lead us to strong dynamics in our manufacturing sector, that will reduce our dependency, and lead to balanced, mutual and reciprocal trade which is the balance followed by all the trading partners.
MIRON: I don't think we need a strong manufacturing sector. I don't think we should deliberately try to have a weak one. We should let the manufacturing sector be as weak or as strong as competition determines and balanced trade doesn't require us to be selling manufactured goods. It just requires that we're producing things such as services that other countries want to buy and we've been very successful at that. If you want to talk about empiricism, there's no evidence that trade barriers help a country grow.
DOBBS: Let me remind you, Professor, what I said was mutual reciprocal trade that leads to balanced accounts which is what is being pursued by China, Germany, France, the United Kingdom, the European Union. We're the only fools in the world going and blabbering about free trade and watching our capital flows going all one direction.
MIRON: What should we do differently?
DOBBS: This is television journalism.
SHLAES: I'd like to make a suggestion. There's a terrible form of protectionism in the United States, that is the protectionism of education, below K through 12, in the teachers' unions. Our people are not well educated enough. We're not educated enough at university or technical college. And when you take that into account, we don't have trouble creating jobs or making good jobs for people. Even "c" students, there's a new study that pew has --
DOBBS: We take great solace in the fact that we're not only getting our butts whipped across the board in international trade, we should then say, oh, good, but the reason is, we're stupid because we can't support a public education system?
SHLAES: No, Lou. On the contrary, we should look for education and spend more on education and help the workers to rise up and this bigger problem will become smaller.
DOBBS: Professor, you get the last word?
DOMITROVIC: It's a piece of cake. Tighten money and gut taxes. It brings in a massive amount of foreign capital.
DOBBS: With that solution, I say thank you very much. Until the next time -- I want to kind of work that, with a few more detail, with that solution, if I may, professor. Thank you all. I appreciate it.
Coming up next, a successful test of what could become the country's next moon rocket.
And there is a link between football and brain injury. I'll be joined by one of the NFL's greatest linebackers ever.
DOBBS: The commissioner of the NFL today would not acknowledge a connection between game-related head injuries and brain damage and former players testifying before congress. Roger Goodell defended the league's position before a house judiciary committee hearing on the issue. Joining me now with more is Dr. Robert Cantu. He's co-founder and chairman of the medical advisory board at the Sports Legacy Institute. Good to have you. And Dr. Ira Casson who is co-chairman of mild traumatic injury. And Harry Carson, linebacker. Good to have you with us. One team owner was critical of the NFL's intention saying Mr. Goodell works at the pleasure of the owners saying what they wanted, he would be replaced. What would be your reaction?
HARRY CARSON, FORMER NY GIANTS LINEBACKER: I know Roger Goodell, I think this is an issue that he has taken on, and I think he is beginning to work toward bringing about a resolution as to whether there's a connection or not. He's going to listen to all of the experts with their opinions.
CARSON: I sort of wish I was the commissioner because I already have my mind made up but that's another story.
DOBBS: Well, we'll get to that story in just a moment. Dr. Casson, this is a tough one for the NFL, everyone acknowledges that. The studies that you have been -- well, that have been conducted for you that you've looked at. What's going to be required to say, yes, as Harry does, there is a connection here. And we have to be very, very respectful of those athletes and the possibility of injury.
DR. IRA CASSON, NFL CMTE. ON MILD TRAUMATIC BRAIN INJURY: Yes, first of all, it's a pleasure to be here with Harry Carson and Dr. Cantu, I admire and respect both of them very much. The NFL has been working with our committee for at least 15 years now to try to improve the health and safety of NFL players. We've done a number of studies to advance the science of concussions in the NFL for a number of years. And we have other studies ongoing at the present time. And I believe that in order to make a determination of whether or not there is such a connection, we need further evidence from further clinical studies and evaluations of retired players, clinically.
DOBBS: How many more years?
CASSON: The study that's under way will take another two or three years. Now, that does not mean, meanwhile, that we shouldn't be doing things to make the game safer. And the league it doing many things to make the game safer.
DOBBS: Dr. Cantu, your thoughts?
DR. ROBERT CANTU, CHMN., SPORTS LEGACY INSTITUTE: I was there testifying this morning and I think Gay was just passionate in what she said and feels it very, very deeply. I also believe that Commissioner Goodell is trying to make changes, changes to make football safer. And I believe it's probably not his role to make the comments and perhaps defer them, quote/unquote to the experts as he did this morning. He didn't say there wasn't a connection. He said he would defer that to experts. There's no question that chronic brain trauma leads to chronic and tragic encephalopathy. It's been known for 80 years in boxers. We have cases of it now, approximately 20 of them 10 of them by the Center of Traumatic Encephalopathy. Actually 11, counting the most recent, all 11 of those players played after the age of 25 have CTE in their brains.
DOBBS: What is CTE?
CANTU: Chronic traumatic encephalopathy. That starts with cognitive impairment, may go on with frank dementia, being unable to take care of yourself, depression and usually erratic emotional behavior.
DOBBS: We hear Dr. Cantu say that in clinical terms, CTE, I mean, as a layman, as one who loves to watch the sport at, frankly, all levels, it doesn't take a genius, a medical doctor to see that a terrific speed and the size and the athletic ability of these players, particularly in the NFL, diving at each other, that's going to hurt. And it's going to have an impact of some kind. Harry, how do you react when you hear the clinical descriptions?
CARSON: Well you know, when I hear it, I don't really have to hear it because I know it.
CARSON: Because I played the game. And I was the one who was out there delivering the hits so I know the damage that's been done. I was interviewing Gary Reasons, one of my old teammates the other day, he said when he came in, he looked at the way I took on the offensive linemen using a forearm to stun them and get them off of me. We talked about that earlier with Mike Webster. So it's not really news to me. But all of the licks that I was handing out as I may have indicated before in my previous visit, those licks were coming back at me.
CARSON: And when you play the game of football, and you look at, it's not just those quarterbacks who get hit from the blind side like Tim Tebow. It's when you, you know, someone kicks you in the head or you come down with the ball and you hit the back of your head on the turf. You know, just the very nature. And I'm stuck in this mode, the very nature of the sport is one which concussions are going to occur. Even without hits, concussions are going to occur.
DOBBS: And with that, you talked about the changes that have been made in the sport, and we can go -- for the NFL, that's breaking up the three-man wedge. And avoiding any kind of contact with the helmet where a player is defenseless, or trying to, anyway. Those are great. What needs more to be done, I think we would all agree, I think Roger Goodell would agree, like you said, we've got to protect players at the NFL player, where you have the maximum velocity and power, in college, all the way down to peewees. What can we do to protect kids who are passionate about the sport, they got to play the sport?
CASSON: Well, there's been a number of great advances in helmet design. And newer helmets and newer protective gear that are being evaluated and that have already shown a decrease by 10 percent in the number of factor forces hitting on the brain after concussions. There are newer helmets now. There are better psychological testing of players to assess their ability to recover from a concussion.
DOBBS: Dr. Cantu?
CANTU: Well, I think all of those are good and I would support every single one of them. But realities are that the way football is played today is not the way football was designed to be played. When you put -- and I'm the vice president of moxie, and I'm not suggesting we take the face masks off and the helmets off. Helmets are better. That's all good. But the sport changed in the '70s when that helmet and face mask went on.
DOBBS: Well, I think you all being here to give us some continuing insight into this. I hope you'll come back and help us out.
CANTU: Will do.
CARSON: Thank you.
CASSON: Thank you.
DOBBS: There's a lot of issues to be dealt with. Thank you all for being involved in coming up with those answers. Appreciate it.
Coming up at the top of the hour, Campbell Brown, Campbell?
CAMPBELL BROWN, CNN ANCHOR: Hey, there, Lou. We got new developments from Capitol Hill to tell you about. Maybe a deal on health care reform, but will it hold? A lot of powerful single senators right now who are kind of holding all of this in the palm of their hand.
Plus, the white house versus Fox News. Valerie Jarrett came on last night, she says she believes Fox is biased but there say lot more to the story. And we're going to have that for you tonight as well, Lou.
DOBBS: And I'm going to say to everybody, when you hear Campbell Brown also ask Valerie Jarrett the question if they thinks Fox News biased, is MSNBC biased. I thought that was great question. Good for you, Campbell. Can't wait to seat answer one more time. Thanks a lot.
BROWN: All right. We'll see you in a few.
DOBBS: The financial report tonight, the senate one step closer to improving an extension of jobless benefits. The legislation would expand unemployment payments for a maximum of 99 weeks. Sales of new homes dropping in September, after rising for five straight months, sales down almost 4 percent. Luxury auto maker, Fisker Automotive will build hybrid cars add an idle GM plant in Delaware. The key says it will create or support about 5,000 jobs by 2014.
And NASA today successfully launching its new Aries rocket with the first step to return astronauts to manned space travel to the moon. We'll be right back.
DOBBS: A special programming note. Please join us here tomorrow for our special report, the real state of health care here in America. We'll have a panel and some of the most esteemed medical minds in this country. What are the biggest problems with the health care system? What would a government plan do the quality of care? Dr. Benjamin Carson will be leading the conversation. We're devoting more than half of the broadcast tomorrow night.
Thanks for being with us tonight. Coming up next, Campbell Brown.