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Lou Dobbs This Week
Detailing the Week's Evening Coverage
Aired October 11, 2008 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, HOST: Tonight: A complete vacuum of leadership in Washington, D.C. as our crisis worsens. President Bush insisting the government's bailout of Wall Street will work -- at some point. But critics say the bailout is selling out working men and women and their families.
Tonight: The left-wing activist group ACORN charged with widespread election fraud. The Obama campaign denies ACORN has any significant relationship with Senator Obama but the Obama campaign nonetheless financing an ACORN affiliate for country-wide voter registration.
We'll have all of that, the best political and economic analysis anywhere, and a great deal more -- straight ahead here tonight.
ANNOUNCER: This is LOU DOBBS THIS WEEK: News, debate, and opinion. Here now: Lou Dobbs.
DOBBS: Good evening, everyone.
The financial crisis devastating the finances of working men and women and their families tonight seems to have worsened. The stock market suffering trillions of dollars in losses, working men and women are concerned that this crisis will lead to a severe recession. But there appears to be a complete absence of political leadership and economic leadership emanating from Washington.
President Bush simply calling upon Americans to be patient until the government bailout of Wall Street can work, if it can work.
We have extensive coverage tonight. Elaine Quijano at the White House; Christine Romans is here with me in the studio.
Let's begin with you, Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, there's an utter lack of confidence in the markets right now and a surplus of fear.
And, one week ago, just over one week ago, we had Congress and then president signed the $700 billion bailout bill. And in those days, it has been a record decline for U.S. stocks. In fact, you have seen the Dow Jones industrials average lose about 2,500 points from that close after that bailout bill was signed to the lowest point on Friday.
And look at the Dow over the past year, Lou. It hit a record high almost a year ago exactly, and the president last December said there might be storm clouds on the horizon and the administration very carefully pointed out that the fundamentals of the financial system were strong almost all the way through this year.
And in the last few weeks -- the last month, really -- this thing has come off of the rails, really. The credit market is still frozen here, despite the actions from the Fed, which include all kinds of things, including, you know, backing up the commercial paper market, which include that big bailout, injecting hundreds of billions of dollars of funds into the system, an international-coordinated rate cut, guaranteeing bank buyouts, buying up short-term debt, and now even talking --
DOBBS: And direct -- direct lending to corporations.
ROMANS: That's right.
DOBBS: And we might point out that this administration and -- as a matter of fact, the number of people in Wall Street, were talking rather confidently two weeks before the crisis broke upon us, as early as the first week of September -- a remarkable denial. And some really, really terrible judgments on the part of the Federal Reserve, the Treasury Department throughout.
ROMANS: Well, I'm wondering what the people who vote in the House, who changed their vote and passed that bill, what kind of feedback they're getting from their constituents at home right now? Because, over the past week, we have seen a great deal of wealth wiped away out of retirement accounts and out of the stock market after that bailout bill was passed.
And we're being told that there's more that has to be done, that we need to be patient, that there's a lot of moving parts in a comprehensive strategy to attack this, but there's a real question about just where will the confidence come from in the markets?
DOBBS: I worry less about those people who changed their mind in the House. I think everyone who voted for that bailout of Wall Street should lose their jobs at the polls come November, every single person. The unfortunate part is the Senate, where a $150 billion in pork was added to that emergency legislation to bailout Wall Street, but they had to add $150 billion in pork. I think everyone who voted for that Senate legislation to be defeated as well.
ROMANS: Well, everyone is looking at the stock market reaction too, Lou.
And I think something that's interesting here is that, you know, half of the people in this country aren't exposed to the stock market through their own finances, but they are through their job or their neighborhood or what's happening with their -- the finances of the town that they live in. I'm a little more concerned about what kind of economic problems are going to -- no matter what happens to the stock market at a very near term, we do know that working men and women are facing some tough challenges ahead.
DOBBS: Not a single piece of this legislation, the $700 billion bailout, plus the $150 billion in pork, goes to the issue of the strength and the help of our real economy. And it is an oversight on the part of our good friends in Congress and then the Senate now if that would be the case, and, of course, this president, because we're talking about the financial economy.
And as I've said here from the beginning of this, this is about Hank Paulson bailing out his friends on Wall Street. This is not about straightening out an economy, straightening out a market. It is an absolute disaster. And the good news is, within that bailout legislation, there is the ability to do a course correction. Let's hope that course is corrected.
We should also point out, as you put up that interesting and amazing chart of the Dow, if we go back to 1999 and the Dow Jones industrials would be just exactly where it is today. That index, I mean, what that basically says is, the last nine years didn't happen, folks, in terms of equity wealth in this country.
ROMANS: In mirage, I guess.
DOBBS: All right. Indeed it has, or maybe just a con game. Thank you very much. Appreciate it, Christine Romans.
President Bush, this week, is trying to assure Americans that the White House has a plan that will solve the crisis. The president is saying the massive Wall Street bailout is aggressive enough and big enough to work.
Elaine Quijano with a report from the White House -- Elaine.
ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Lou, against the backdrop of falling markets, President Bush said the government's massive plan will take some time to work. And the president noted the plan is flexible, saying that one of the tools the government has to help address the crisis is the power to buy shares of banks.
Now, the president also acknowledged Americans continued concerns about the economy, saying anxiety can feed anxiety and can make it hard, he said, to see what's being done to solve the problem.
(BEGIN VIDEO CLIP, FRIDAY)
PRES. GEORGE W. BUSH, UNITED STATES OF AMERICA: This is an anxious time. But the American people can be confident in our economic future. We know what the problems are. We have the tools to fix them. And we're working swiftly to do so.
(END VIDEO CLIP)
QUIJANO: Meantime, President Bush's point man on the crisis, Treasury Secretary Henry Paulson steered clear of making any kind of forecast about when the economy might start improving.
(BEGIN VIDEO CLIP, WEDNESDAY)
HENRY PAULSON, U.S. TREASURY SECRETARY: I'm not going to make predictions on the time it's going to take the economy to recover. What I'm looking to do is to take all of the steps that we need to take to stabilize the financial system in order to mitigate the negative impact that a weakened financial system is having on our economy.
(END VIDEO CLIP)
QUIJANO: Now, as for the continued market volatility, a senior administration official here says it would be wrong to view that volatility as some kind of grade on the rescue plan. This official noting that the Treasury Department has yet to buy a single troubled asset under the Treasury Department's new authority to do so.
But, clearly, the White House is so concerned about public anxiety, President Bush even holding a weekend meeting here with G-7 finance ministers to address this issue, clearly the president is trying to signal that the U.S. government is actively working to contain the fallout of this crisis -- Lou.
DOBBS: Thank you, Elaine. Elaine Quijano reporting from the White House.
The White House has confirmed what we reported first nearly a week ago, that the Treasury Department may buy stakes in the nation's ailing banks. The White House says the idea is now under active consideration. Officials apparently acknowledging, for the first time, that the government's efforts to this point have not been adequate to say the least.
Louise Schiavone with our report.
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): As world credit markets sink rapidly, the pressure is on. Knowledgeable sources are telling CNN, the goal is to move quickly, with impact and within the law. Among the most effective actions possible -- using part of the $700 billion rescue money to directly buy preferred bank stocks steadying shaky financial institutions.
PAULSON: We will use all the tools we've been given to maximum effectiveness, including strengthening the capitalization of financial institutions of every size.
SCHIAVONE: Sources familiar with the strategy say there's been an evolution of thought, and in a world where time is of the essence, it will take too long to start with a broadly-discussed U.S. purchase of poorly-valued securities.
Treasury Secretary Paulson said, just this week, it would likely take weeks to move on the purchase of acutely weakened or so-called "toxic bank assets."
Sources tell CNN, the White House and the treasury secretary have come to believe that's just too long. The belief is broadly held.
MICHAEL GREENBERGER, UNIVERSITY OF MARYLAND: It's very, very important that the treasury get a very quick start on this and, at least appear, to be on top of it and starting to get the money moving out.
SCHIAVONE: The notion of the government as bank investor is controversial, but the broad expectation is -- it could work.
JD FOSTER, HERITAGE FOUNDATION: From the taxpayer's perspective, it is almost certain that these will end up being good investments. That shouldn't really be the question. The real concern that we ought to have is the general proposition of the government taking large equity stakes.
SCHIAVONE: Sources say the move to use bailout money to buy bank stocks could begin as early as sometime next week.
(on camera): Also possible, as early as next week, the appointment of asset managers to begin treasury's process of weeding through bad securities. But sources say, treasury lawyers are working feverishly on how to make sure there's no conflict of interests for these experts on distressed stocks, assuring they work for the taxpayer, not the banks they hail from.
Louise Schiavone, for CNN, Washington.
DOBBS: The presidential candidates trying to convince skeptical voters that they have the credentials, the policies, and the intelligence to deal with this crisis, but neither candidate seems to be able to offer any significant new ideas.
Instead, they intensify their personal attacks. Senator Obama calling Senator McCain "erratic." Senator Obama saying McCain is trying to "stoke anger and division," as he put it.
For his part, Senator McCain is trying to raise new doubts about Obama's character, his judgment, his relationships. McCain joining attacks on Obama for his links to the 1960s radical Bill Ayers, a founder of the Weather Underground terrorist group.
Up next: The financial crisis sending shockwaves through state and local governments as well. We'll tell you who could be in line for the next big bailout.
And: A left-wing radical activist group linked to Senator Obama is trying to steal the election? Is that right? We'll have a special report on the now-widening investigation into the organization called ACORN.
DOBBS: New evidence tonight that the so-called community left-wing activist group, ACORN, is involved in widespread voter registration fraud. And point of fact, ACORN is a left-wing special interest group that's been under investigation for literally years in various parts of the country for voter fraud and embezzlement.
Tonight, the Lake County, Indiana Board of Elections says ACORN submitted, literally, thousands of fraudulent voter registration cards over the past few days alone.
Drew Griffin has been investigating ACORN. He's joining us now from our Chicago bureau with the very latest for us -- Drew.
DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT: Lou, let me just set this up a little bit. Lake County is a very Democratic county in a Republican state of Indiana. Barack Obama wants to turn Indiana this election, and if it turns his way, it will be largely because of the voters in Lake County, who, turn out, again, heavily Democratic.
ACORN, who supports Barack Obama in his presidential campaign, went out and try to register as many new voters in Lake County as they possibly could. The deadline was October 6th. They came in with 5,000 new applications, and when the registrations office began going through them, they found a pattern. Every single one of them was fraudulent.
(BEGIN VIDEO CLIP)
GRIFFIN: A lot of them?
RUTHANN HOAGLAND, (R) LAKE COUNTY ELECTIONS BOARD: Fifty percent. We had close to 5,000 total from ACORN, and so far, we have identified about 2,100.
GRIFFIN: So, roughly half of them are bad?
HOAGLAND: Roughly half -- correct.
GRIFFIN: Registered to a dead person, registered as a person who lives at a fast food shop --
GRIFFIN: Or just all of them amazingly in the same hand.
HOAGLAND: Yes. Yes. All the signatures look exactly the same. Everything on the card filled out looks just the same.
GRIFFIN: Ruthann, fraud?
HOAGLAND: We have no idea what the motive behind it is. It's just overwhelming to us.
(END VIDEO CLIP)
GRIFFIN: Lou, I took a look at these registration forms, and indeed, they're all in the same hand. You can tell. They're all written by the same person.
They showed us the death certificates of some of these people who are registered there. The workers have been diligently trying to go through all these new ones, but finally, they had to just put them aside. Two thousand one hundred of these applications are fraudulent. The other 2,900 have been placed to the side. They haven't even looked at them yet. They want to take care of the actual good applications of real new voters who really want to vote in this election, but they're scared. They scared. They don't know what's out there and who or what is going to show up at the polls when voting actually begins in those ballot boxes.
DOBBS: Drew, the woman with whom you were speaking, terrific public servant, you know, and we have got wonderful people like her all over the country. She seemed very sweet, she would not commit to the fact that somebody that writing in the same handwriting for thousands of times to register dead people would be committing fraud.
But this, you've been looking into this story for days and days now. We're seeing it from Vegas to Ohio, to Pennsylvania, and to Indiana, all over the country, and these investigations are opening up. How can there be any doubt about what's at work here?
GRIFFIN: You know, each individual county, Lou, and that's what's happening there -- and let me tell you, Lake County, they are so afraid of anybody calling them partisan, for every worker, every job (AUDIO BREAK), one person is a Republican, one is a Democrat. Both Republicans and Democrats are coming to me and saying, "Look, this is fraud. This is registration fraud."
But each county has to look at it, and usually what happens is, after the fact, after the election, the boards look at it, they file criminal charges. People are charged with these, but it takes years to get these charges filed and for any kind of actual conviction to come through at that's (INAUDIBLE).
DOBBS: Where is the Justice Department and why is this being permitted to go on?
GRIFFIN: I think that's a very good question, that I will ask the Justice Department. But, again, it's the jurisdiction of the local county --
GRIFFIN: -- that as we go through the legal process, you know? So that's what this board will recommend, a decision to the county attorney.
DOBBS: All right. Drew, thank you very much, as always. Outstanding reporting.
Well, new evidence tonight that the Obama campaign is substantially connected to ACORN, despite disavows from both ACORN and the Obama campaign. And new questions tonight as well, about just how much money ACORN receives from the federal government?
As Bill Tucker reports, some members of Congress are now calling for all federal funding of any part of ACORN to be halted.
(BEGIN VIDEOTAPE) BILL TUCKER, CNN CORRESPONDENT (voice-over): House Republican leader, John Boehner, wants all federal funding to the Association of Community Organizations for Reform Now, or ACORN, to end now. He's joining a course of Republican members who are furious over repeated charges of voter registration fraud against ACORN.
Last month, 39 members of the House sent a letter to the Department of Justice asking the attorney general to investigate ACORN.
REP. TOM FEENEY, (R) FLORIDA: We shouldn't be funding any political activity with taxpayer dollars. Jefferson said "It was the essence of tyranny to force a man to contribute to a cause he doesn't believe in."
TUCKER: But when it comes to cutting off funding, there's a problem. Nobody has a handle on how much money ACORN receives from federal government sources.
REP. STEVE GARRETT, (R) NEW JERSEY: I would absolutely say no, we do not have a handle on that. And the reason is, as I said a moment ago, is because ACORN is an umbrella organization of 75 different organizations, as I understand it. And so, they have, if you want to use the word tentacles, out into all of these. And in any piece of legislation, you will probably not see the word ACORN in it.
TUCKER: Representative Garrett says that within the federal rescue of Fannie Mae and Freddie Mac there's a $500 million set aside for community organizations like the groups that make up ACORN. Financial Services Committee Chairman Barney Frank says no money goes to ACORN.
And a spokesman for ACORN says, it receives no money from federal sources, calling it self a, quote, "nonprofit, nonpartisan social justice organization" which refuses to accept federal moneys, saying funding comes from donations and membership fees.
Opponents call that laughable, claiming that, at least, 40 percent of ACORN's funding is supplied by federal sources.
TUCKER: And ACORN has been paid $800,000 by the Obama campaign to register voters. And there's another connection between ACORN and Democratic presidential candidate Obama, Obama along with the Department of Justice represented the group in a lawsuit to force the state of Illinois to comply with motor-voter legislation law, Lou.
DOBBS: So, again, to be clear, there is no question that the Obama campaign is paying ACORN for voter registration.
TUCKER: That's correct.
DOBBS: And that now -- now that ACORN is being charged with fraudulent registration, voter fraud, in effect, across a number of states all across the country.
TUCKER: That is absolutely correct. DOBBS: And there is no federal investigation at this point. This is absolutely obscene and outrageous. Bill, thank you very much -- Bill Tucker.
DOBBS: Well, ACORN is under investigation for embezzlement and voter fraud, among other things, in at least eight states. Authorities are investigating ACORN's voter registration drives. And ACORN employees, some of them, have been convicted of voter fraud.
Former Ohio secretary of state, Ken Blackwell, is calling for closer scrutiny of Senator Obama's connections to ACORN.
The Obama campaign Web site, by the way, Fight the Smears, responded by attacking Blackwell, saying, quote, "Blackwell's attacks against ACORN and community organizers constitute a vile Republican pattern of mockery and viciousness against this noble profession. Community organizers are the very individuals Republicans should be celebrating for helping people help themselves rather than depending on the government."
That gets a little complicated since ACORN is depending on, obviously, the government and political organizations. And after disavowing a relationship with ACORN, despite all of those investigations across eight states right now into ACORN and voter fraud, the Obama campaign, obviously, supporting ACORN.
Up next: More on ACORN and the Obama campaign's ties to the radical left-wing group. Three of the best political analysts join me.
And ahead: A dramatic sell-off on Wall Street wiping out trillions of dollars. We'll talk with three of the best economic thinkers in the country.
And: State and local governments maybe next to receive a taxpayer- funded bailout. That special report is next.
DOBBS: State and local governments all across the country facing severe budget crises. California and other states, for years, have been spending money that they didn't have, don't have, and never will. Now, those state governments -- well, they're begging for massive taxpayer-funded bailouts of their own.
Kitty Pilgrim has our report.
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): According to the National League of Cities, 79 percent of cities predict budget deficits in 2009. And the National Conference of State Legislators is talking about spending gaps of $40 billion next year. But Citizens Against Government Waste says government has been on a spending binge.
TOM SCHATZ, CITIZENS AGAINST GOV'T WASTE: The idea by most legislators is -- oh, let's create a new program. When times are good, we can go out and spend more money. When times are not so good, well, we also have to spend money to help people. There's never a time that legislators sit back and evaluate the effectiveness of the programs that they already have.
PILGRIM: According to the Goldwater Institute, actual growth in state and local government spending ran 6 percent a year over the last six years. But based on population and inflation, that spending should have been 3.7 percent a year.
Most states have so-called "rainy day funds" for when times get tough, but 31 states limit the amount of money that can be put into the fund -- at 2 percent to 10 percent of appropriations or revenues. And five states don't have "rainy day funds" at all.
SCOTT PATTISON, NATL. ASSN. OF STATE BUDGET OFCS.: There's a lot of argument about how much of a rainy day fund states should have. And our view is that getting them up to about 10 percent's been pretty significant. If they get too high, you have elected officials on the right who want to give tax cuts, and you have elected officials on the left who want to spend more on programs. So, you have a hard time keeping the savings account in the bank.
PILGRIM: State and local governments have also continued their hiring binge, even as private sector unemployment rates have been climbing. Local governments added 47,000 jobs and states 16,000 in the first quarter of this year.
PILGRIM: And almost all states have balanced budget requirements but they usually spend as much money as they take in in revenues and very few have the discipline or the incentives to cut programs in boon times -- Lou.
DOBBS: Kitty, thank you very much.
The legendary aircraft carrier, Intrepid -- a symbol of the nation's commitment to our wounded warriors as well. I'll be joined by the president of the Fallen Heroes. Up next.
Also: Scathing attacks on the campaign trail. This campaign has turned nasty and it's just about over. I'll be talking with three top political analysts.
And, the financial crisis worsening, rising concerns that tens of millions of Americans won't be able to afford to retire. That story is next.
DON LEMON, CNN ANCHOR: Hello, everyone. Don Lemon here at the CNN world headquarters. We'll get back to our programming in just a moment. But first, we want to give you some of the headlines.
Tonight, President Bush has made an unannounced visit to the G-20 meeting, a gathering of finance ministers from industrialized nations. With just 100 days left in office, Mr. Bush is trying to stem the growing global financial crisis. Earlier, Mr. Bush met with finance ministers from the G-7, the world's economic superpowers.
The United States drops North Korea from its list of state sponsors of terrorism. A state department spokesperson says it comes after North Korea agreed to a number of U.S. nuclear inspection demands. Some republicans, including GOP presidential nominee John McCain, are criticizing the Bush administration for the move.
Now to a very tense campaign trail, we're asking your question today from John McCain. Is that political campaign creating an environment of hate? That's what we want to know. Join us, twitter.com/donlemoncnn and we'll see you here with your answers at 12:00 Eastern midnight.
ANNOUNCER: This is "Lou Dobbs This Week," news, debate and opinion. Here again, Mr. Independent, Lou Dobbs.
LOU DOBBS, CNN HOST: Joining me now to discuss possible solutions to our financial crisis and the stock market selloff, Peter Morici, professor at the Robert H. Smith School of Business at the University of Maryland, David Cay Johnson, Pulitzer prize-winning journalist, best selling author of most recently "Free Lunch, how the wealthiest Americans enrich themselves at government expense," and Allen Sinai, chief global economist, president of Decision Economics. Good to have you all with us.
Let me turn first to you, Allen. The president on Friday coming out and saying more of the same, which is, you know, be basically confident, no matter what the facts tell you. What is your impression of all of these public appearances by the president who, when all is said and done, has said very little, and not much has been done?
ALLEN SINAI, DECISION ECONOMICS: That's exactly what you just said, Lou, it's of no use whatsoever, and he perhaps is better off not saying anything. The markets are getting no help in a confidence sense from words of the president. You're looking for actions that will directly unfreeze LIBOR, That's the inner bank borrowing that goes on, in the LIBOR market. And the Paulson plan, while it has some positives, it's going to take so long to take effect, that we're not sure those financial institutions will still be there to buy those toxic assets from.
DOBBS: Your take, David?
DAVID CAY JOHNSTON, AUTHOR "FREE LUNCH": Well, I think Allen is exactly right. I don't think the president's contributed at all, and I don't think the scatter gun approach and the lack of a plan, even though the administration has known for 14 months when Countrywide got into trouble -
JOHNSTON: That a meltdown could occur has spook the markets. There's clearly an effort to raise cash. You're seeing an imbalance in the markets of selling versus buyers. And by the way, you're starting to also see among company that's are going to be around and very profitable like distribution-only utilities, some incredibly high dividends at high prices, six percent, seven percent.
DOBBS: And, Peter, the idea that this government has still not begun executing this "bailout," is it because there's been - as best you can define it, a change in circumstance or because there apparently has been a change in strategy and approach to resolving the crisis?
PROF. PETER MORICI, UNIVERSITY OF MARYLAND: Well, it takes time to execute the bailout, to get the auctions going is going to take several weeks perhaps four or five. In the meantime, there are things the government could do. For example, it could guarantee the deposits of the banks and the liabilities and condition access to the Federal Reserve window on renewed lending by the banks. That is setting some conditions for them to free up credit to businesses and so forth. I think that it's important to remember, we don't have a run on the banks. People aren't pulling their money out. We have a run on investors on the banks. So we need to reassure them the banks will be solvent in guaranteeing their liabilities, maybe what we need in an emergency situation.
DOBBS: Well, one of the dumbest things, if I may speak, and frankly that I've seen in all of this is the government's decision to guarantee money market accounts, but not extend and broaden the FDIC guarantees to commercial banks. That just seems to me, Allen, to be absolutely ignorant. What is your take?
SINAI: I have to say, I have to agree with you. Look, the program did nothing to help out floor housing prices. It's going to take a long, long time, too long, to deal with buying those assets off the balance sheet, and in the meantime, the short sellers are having their day, and the mark-to-market and one by one they're going after our financial institutions. It's a very very troubled situation. On top of it, we've got a full-fledged recession in process now in the United States and a global recession and fundamentally that says stock prices should be lower. You put all that together and you have what we see. We really do need a time-out. We need a time-out so people can start to think about and not come to quick decisions of any kind by shotgun by the force of the markets moving so fast.
DOBBS: When you say a timeout, Allen, what do you mean?
SINAI: I think they should shut the markets down as other countries have done -
DOBBS: That's right.
SINAI: And sit back, take some time to figure out, get a lot of heads in there just like we do with our kids when they're getting a little wild, you know? We say, timeout. But for me now, Lou, it's for the grandchildren. That's the way we've been doing it.
DOBBS: Well, you know, the timeout, there's still - you know, I'm still locked up I guess in some part in perceptions that permitting markets to shut down is so un-American, but we're so beyond what is - what I consider the American way when it comes to our financial system right now and our economy that perhaps you're right, and I can - I could exceed to that. It seems to me the timeout that I think that would be most helpful though is a timeout for President Bush or - and Hank Paulson and Nancy Pelosi and - and Harry Reid. They have been without exception talking the markets down, talking the economy down, trying - unreservedly to instill fear in the American people.
And I've never seen the likes of it. I can't imagine what in the world gives them or any of their advisers the idea or the comfort of the idea that it's OK to do that. Can you agree, David?
JOHNSTON: No. And it's not just them. A lot of the news coverage, particularly the big three networks' news coverage that I've been watching very carefully is hyping the problem and making it sound much worse. Let's remember that back in '73, '74 which all of us are old enough to remember, the market fell by half. We haven't fallen yet by half. The world came back.
JOHNSTON: The idea that Allen puts forward I think by the way is a very good idea. We have already circuit breakers and I don't know why they haven't been put in use by the stock exchanges. But technically they may not have met the requirements. But we don't need a bank holiday but having a stock market holiday might be a good idea, certainly one that should be seriously discussed.
DOBBS: All right. What do you think, Peter?
MORICI: I absolutely agree. That's the idea I came with today that we basically, and during the depression, we had a bank holiday because there was a run on the banks. Right now we've got an irrational run on the stock market, especially on the financial stocks. And so shutting down the markets for a couple of days but during that couple of days, the President has to do something. And I would suggest that's the time to put equity in the banks and to force changes in their lending practices and to unjar the overnight market in the process. Basically bring the players together and say, we've got to get this done, get the securitization process again and so forth.
DOBBS: All right. We will do the following, following your counsel, gentlemen. We will have a market holiday, for what period?
MORICI: Three days.
DOBBS: All right.
JOHNSTON: Yes. Less than a week, for sure.
DOBBS: Yes. And we will, we will continue with the auctions of those "toxic assets" or will we put that in advance until we come together with a wise counsel and determine whether or not it would be superior to - to recapitalize banks, raise capital so that they would have a greater amount of lending power, or what? What would you say to that?
(CROSSTALK) SINAI: You know, there's no choice. The banks have to be recapitalized one way or the other.
Second of all, LIBOR has to be unfrozen and the banks aren't going to lend to each other. It may be that a government entity has to enter into the LIBOR market and provide the funding so somebody will lend to somebody in that LIBOR market. That rate will not come down. Nothing they've done so far is directed to, will really unfreeze that rate. And the government in one way or the other, the central bank of the government is going to have to get into that market.
MORICI: Lou, the government is going to have to come in with the capital because there's no time for the auctions. There's no time for them to sell shares, not at these prices, so the government's going to have to buy equity and unjar LIBOR that way and unjar the lending market that way. There's provision for that in the bailout bill, and that's essentially what needs to be done during the two or three-day holiday so to speak in the markets. Then we reopen the markets with the banks somewhat functioning.
DOBBS: All right. David, you get the last word.
JOHNSTON: Well, I agree with all of those comments. The computer models we have about the economy are not working well in this environment but I think we need to keep - I think we need to keep in mind that the bailout, the auctions haven't started yet. That would be way in the future. We've got to inject capital into the banks, and one of the things we could do is say to banks, new loans will settle different standard on you're tier one capital so that you'll make these loans and make that a condition of getting help. And we've got to shut down those banks that are going to fail. Either get that process done, because that's what people are afraid of. Is my bank safe? Is this institution safe? We need to shut them down and stay with the strong ones.
DOBBS: All right. Gentlemen, we thank you for your thoughts, and let's hope that we'll see more action from Washington and far less of their talk, if you will. All right. David, thank you very much. Allen, thank you. And Peter, thank you.
Up next, honoring our men and women in uniform, "The Intrepid " is back, and it's berth in New York. The president of the legendary World War II aircraft carrier and the Wounded Warriors Fund joins me.
A new evidence that the left-wing activist A.C.O.R.N. is involved in widespread election fraud. We'll have that story, and three top political analysts join me here next to discuss what in the world is going on with these presidential campaigns. Stay with us.
DOBBS: Joining me now, three of the best political analysts in the country, all CNN contributors, democratic strategist Hank Sheinkopf; "New York Daily News" columnist Errol Louis. Errol also hosts of the New York morning show WWRL and then our Washington studio, syndicated columnist Diana West. It's good to have you all here. Hank, let's start with this sudden focus on the part of the McCain campaign on Bill Ayers, a terrorist. I like to think some of people are calling him a militant. He's actually gone out bombing things. That's a little more than a little militant. I don't know what's going on there, but what's your reaction to this late attention on Bill Ayers?
HANK SHEINKOPF, DEMOCRATIC STRATEGIST: Well, it's an attempt to get the base. If they don't have the base sold up for now, they're crazy. They're in trouble. Any way and by the way, that is not what people are worried about. They're worried about, as we have noted on this program for the last - more than the last year, the economy. That's where they ought to be and not talking about William Ayers. No one cares.
DOBBS: No one cares. Do you believe that?
ERROL LOUIS, "NEW YORK DAILY NEWS": Well, I think the base of the party cares quite passionately in part because of a lot of right-wing talk show hosts, there's been a lot of discussion out there. They've been very frothy. They've been talking about it for a year and to see it finally break into the mainstream it's releasing a pressure valve for some people who feel that this should have been an issue dealt with months ago, which is arguably true, before the economic crisis.
DOBBS: Which is a pattern here, the national media has created a buffer, if you will, a (inaudible) between Barack Obama and all of these charges, whether it's Jeremiah Wright, whether it's Bill Ayers. I mean, you go through the list. It's true. It's remarkable.
LOUIS: Let's give McCain some hand of responsibility here. He told his surrogates -
DOBBS: We give him a lot of responsibility.
LOUIS: Well, he told his surrogates hands off with the Jeremiah Wright issue. They didn't want this campaign to be about that. And so rightly or wrongly, it's not on the table.
DOBBS: Do you think that's sort of nonsense, a sanctimonious nonsense and should be the basis to disqualify him for a vote?
LOUIS: You know what, I don't know where that judgment came from. I don't know if he was looking for pockets of votes or he just didn't want to do it or he has just something else he wanted to focus on. But for better or worse he said it was off the table and you can't get it back now.
DOBBS: Could you imagine Barack Obama, Diana, saying well I don't think we got to talk about the Keating Five scandal or you know a number of other things.
DIANA WEST, SYNDICATED COLUMNIST: Yes. No, I can't, and I think that the sanctimoniousness is exactly what took these issues off the table and the reason that they're emerging now is they have not gone away on the Internet, in talk radio, and the press of course has acted as a buffer, preventing them from surfacing. And now, you know, three weeks out, all of a sudden a lot of people are starting to get extremely worried when they notice that Barack Obama has spent his formative years and beyond in an incubator peopled by anti-American extremists, and William Ayers is the poster child. And the more we find out about him, I think people are concerned. I think they're concerned about the economy, but this is the man -
SHEINKOPF: Listen - they're concerned about eating.
DOBBS: I want to talk about that. I want to know about that incubator.
SHEINKOPF: They're concerned about eating, Lou.
WEST: Wait, he wants to know about the incubator.
SHEINKOPF: Please, incubator. I don't think anybody's thinking about anything but other than what's going on in the economy. And the fact that just this past Friday, Lou, the president gets on the air and the market drops 500 points. So much for -
DOBBS: You see, you exaggerate it. It only dropped 300.
SHEINKOPF: Oh, forgive me.
DOBBS: From the time that he started until the time he finished, it was a lousy 300.
SHEINKOPF: Forgive me. Forgive me.
DOBBS: And every time Paulson talks, we're seeing the same thing. This is the administration that will not learn it's time to shut up. They think - I have to assume they think they're doing well, either that or they've got short positions, or they could haven't done that because that just returned to the market. I mean, it's mind boggling what we're witnessing in the way of governance here. But let go to this thing with A.C.O.R.N. These charges against A.C.O.R.N. are coming - they're coming up all over the country. This organization, doing work, registration work, for Barack Obama. And again, the McCain campaign has no concept of what they're talking about when it comes to this issue. Why in the world isn't the national media on this?
LOUIS: Well, I think there's a lot to answer for here. I mean, first of all, I think the national media doesn't understand a lot of this stuff. They haven't really sort of gone -
DOBBS: And they don't want to.
LOUIS: It's not that hard. I mean, you're right about that, to get caught up, but they haven't bothered to get caught up. I mean, A.C.O.R.N. has been around for a quarter of a century at least actively doing this stuff. Anybody could have figured this out that there's this danger, that there's this probability, this possibility of either sloppiness or nefarious intent in putting of you know damage -
DOBBS: Well, the indictments now and the federal and state investigations make it pretty clear, some of it is pretty - nefarious.
LOUIS: Sure, sure, look, it's a great story. I think a lot of people are going to get a hold of it. You know, it doesn't discredit every organization but I think there's a larger question out here, which is like how come the campaign itself or god forbid the county organizations, the mighty democratic party aren't out there doing the registration? Why are you getting the hechons, these hired guns to go out and do this?
DOBBS: Because they're getting up through their organizations federal funding to do the work that would require the money of the candidate or the democratic party. This is an assault by left wing activist organizations and there's no doubt about it. And people don't want to confront that, that's fine. But that's the reality. And why people are not discussing it, reporting on it, and trying to understand what has transpired here over the course of 25 years to the point that nonprofits, not for profits have become a shadow government in this country and are mighty powerful political engines at work very quietly in communities and cities all across the country. Do you agree?
SHEINKOPF: I agree with you. I think nonprofits are out of control and they've been funded by government. Here's a clear example of government funding things that it ought not to be involved with and they're being used for political purposes, no question about it.
WEST: And a clear example Barack Obama's campaign, an ACORN affiliate to the tune of $800,000. I mean this is not just government, it's perhaps government to be.
DOBBS: We're talking about it.
SHEINKOPF: It tells you also the shape of the political parties in this country, they're in terrible shape. That is not good for democracy, by the way.
DOBBS: That's why I'm awfully proud to be an independent, gentlemen, and Diana. We're going to be back with our panel just a moment. Also, honoring our heroes, the president of the "Intrepid." Fallen Heroes Fund and the (inaudible) Sea, Air and Space Museum joins me next. We'll be right back.
DOBBS: We are back with Hank Sheinkopf, Errol Louis, and Diana West. Diana, let me turn to you. Well, it looks like this is the end of capitalism as we knew it and I guess if you are Barack Obama, somebody is going to knock on your door soon and say you are the president- elect. How happy do you think he will be and is do you think that's the scenario that's most likely? WEST: Well, I think you'll be very happy with that. I think that's what he is all about. I think it definitely is the scenario most likely if we trust our polls at all. I don't necessarily think that the race is over or the deal is done. I think that the radicalism that we are seeing emerging, almost as a third candidate here may over take Barack Obama to the benefit of John McCain really despite John McCain in many ways.
DOBBS: Just about anything positive is going to happen here is going to happen to be almost despite him.
DOBBS: I mean he has run one of the sorriest campaigns I have ever seen.
LOUIS: Oh yes, absolutely. I mean, when they pull out of Michigan, the McCain campaign they telegraphed it which is absolutely they don't have to do. They could have just quietly folded their tents and gone elsewhere and at least put up the pretense that they are going to continue. I think one of the things that they're going to have a hard time with is keeping the morale boosted. I think that's why you have seen this wave of campaigning focusing on radicalism and past associations but his base is getting a little discouraged.
DOBBS: All right. Ed Henry reporting from the campaign last week of John McCain and Sarah Palin. I mean, Governor Palin draws these immense crowds. She is, I mean, electric on the campaign trail. And they combine John McCain with her to get a crowd.
But he also reported on the anger there.
DOBBS: These people just at those rallies saying why in the world aren't you getting - basically get off your rear end, John McCain, and get engage in this campaign and save the sanctimonious clap trap and the use of the words my friends and get it done.
LOUIS: You never know he had won a string of primaries. You know I almost wonder how this guy got to be the nominee. People seemed to be so out of sync with him but he beat a host of more conservative candidates fair and square.
DOBBS: Have you ever seen though people in a rally say to the candidate, get off your duff?
SHEINKOPF: I've never seen anything like this. But you know what, this is an unusual election. The turn out numbers may break any previous record. And here are some important facts.
DOBBS: Well if ACORN has its way.
SHEINKOPF: Well recent polling shows a couple of things. You know, Michigan - excuse me, Minnesota, North Carolina and one other state that we don't expect may be out of business here for the Republicans in the Senate races. It tells you something is going on. The electoral map may be redrawn.
DOBBS: Withdrawn or redrawn.
SHEINKOPF: Withdrawn as we know it or redrawn as we'll know it.
DOBBS: All right. We thank you very much. Diana, thank you very much. Errol, thank you. Thanks, Hank.
DOBBS: Still up, one of this nation's honored warships the Floating Museum, returning to its berth in New York harbor, a symbol of the nation's commitment to our wounded warriors. I'll be joined by the president of the Intrepid Fallen Heroes Fund here next. Stay with us.
DOBBS: The U.S.S. Intrepid became the floating museum on New York's Hudson River after it was decommissioned. Joining me now, Bill White. He is president of the Intrepid Sea, Air and Space Museum, president of the Intrepid Fallen Heroes Fund, and co-author of the new book, "Intrepid the Epic Story of America's most legendary warship." Well, great to have you with us. And congratulations on the Intrepid being returned to her berth where she belongs.
BILL WHITE, INTREPID SEA, AIR & SPACE MUSEUM: That's right. Thank you so much, Lou. She is back in New York after a $115 million extreme makeover. Brand-new aircraft collection, brand new exhibits and a beautiful new pier and going to open up to the public on November 8th for Veteran's Day weekend.
DOBBS: What a great time to reopen this wonderful museum. And it's such a great ship. It's a great museum. Tell us just quickly if you could a couple of the new exhibitions.
WHITE: Yes. We got a brand-new aircraft collection. So we got the black bird spy plane, the British Airways Concord, some marine -
DOBBS: Two of my favorites.
WHITE: There you go. We got a marine aircraft in honor of Lou Dobbs. Great aircraft to visit and all of the new exhibits inside. We got an explorium for kids to crawl up on and get hands on and really understand the service and sacrifice.
DOBBS: So there's a lot more for the kids here which kids love best.
DOBBS: You wouldn't have to do anything and they would love it.
WHITE: That's true.
DOBBS: Your new book, tell us about that. It's a great story about this great ship. WHITE: It's kind of like you got to read the book before you see the movie.
DOBBS: All right.
WHITE: So please check out the book. It's a story about five kamikaze attacks and 270 sailors gave their life on the Intrepid. That's what the lesson of the Intrepid is. It's about service and sacrifice and giving of yourself for a higher cause. And we hope that the young people in this country will understand that the intrepid is very important today in the lessons that they're are learning out there.
DOBBS: And talking about honoring service, the Fallen Heroes Fund and those who want to contribute to it, where do they go on the web?
WHITE: That's right. We are building this traumatic brain injury center for those service members who need our help. Fallenheroesfund.org. They can also see all the information about how to contribute and help out and support the troops today.
DOBBS: There you see it. Fallenheroesfund.org. We even got the number out there. It will be in our website. So, of course, we encourage you to do as much as you can for the folks we owe so much to. You are one of those folks we owe a lot to, Bill White. Thanks.
WHITE: God bless you, Lou. Thank you, sir.
DOBBS: Thanks for joining us. Please join us tomorrow and please join me on the radio Monday through Friday for the "Lou Dobbs show." Go to loudobbsradio.com to find your local listings for the "Lou Dobbs' Show." For all of us here, thanks for watching and good night from New York.