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Lou Dobbs This Week
Recession Possibilities; Home Foreclosure Numbers; Possible Voter Fraud
Aired October 26, 2008 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LISA SYLVESTER, GUEST HOST: Tonight: Rising concerns about a deep and long-lasting global recession. Staggering new numbers on home foreclosures in this country. We'll have complete coverage.
And tonight: New concerns about possible fraud and voting irregularities on Election Day. Is the integrity of our voting system at risk? We'll have a special report.
All that and much more -- straight ahead tonight.
ANNOUNCER: This is LOU DOBBS THIS WEEK: News, debate, and opinion. Sitting in for Lou Dobbs: Lisa Sylvester.
SYLVESTER: Good evening, everyone.
Global stock markets are in turmoil, amid fears the world is headed toward a severe recession. Those fears leading to concerns unemployment in this country could soar, and the standard of living of many families could collapse. Policymakers around the world are struggling to respond to the increasingly grim economic news.
In this country, lawmakers are now considering a second stimulus package to kickstart the economy. The weakening economy is also putting pressure on the presidential candidates to come up with new ideas. Senator Obama says he'll cut taxes for 95 percent of American families. Senator McCain says Obama's plan is a "spread the wealth" socialist agenda. McCain is using the image of Joe the Plumber to sell his tax cutting message to voters.
Joining me now for more on this collision of economics and politics: Christine Romans, who's following the turmoil in the markets, and Bill Schneider, who is covering the final sprint in the presidential campaign.
Well. it's clear that the economic crisis is certainly a theme that is playing on the campaign trail. Senator Obama is speaking about it this week, saying and highlighting the urgency at a campaign rally.
We have some sound that we want to listen to first. Let's get to it.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA, (D-IL) PRESIDENTIAL CANDIDATE: Just this week, after nine straight months of job loss, when our Federal Reserve chairman supports another stimulus to get our economy moving, Senator McCain said, he still doesn't think we need to pass the stimulus immediately.
Well, the working families who have been hit hard by this economic crisis, folks who can't pay their mortgages or can't pay their medical bills or can't send their kids to college, they can't afford to go to the back of the line, behind CEOs and banks on Wall Street who are getting help. They need help right now.
(END VIDEO CLIP)
SYLVESTER: Christine, let me start with you. First off, your thoughts. I mean, obviously we're talking pocketbook issues here, right?
CHRISTINE ROMANS, CNN CORRESPONDENT: We absolutely are. And when people go to the polls, in just less than two weeks, in many of these toss-up states, there are big layoffs. There are big foreclosures.
You know, foreclosures in the month of September -- 2,710 homes were lost to foreclosure, that's not counting defaults or people who are just in the process of foreclosure. Those are actual homes being seized by the bank.
And so, a lot of these issues for people, when they make this selection, are going to be issues about their financial future.
Now, the whole stimulus brouhaha, who supports it and who doesn't support it, McCain's people have said all along, look, we're open to it but we're not really there throwing out $150 billion or $300 billion again quickly if it's not going to work. We've done so much already.
There's a lack of patience, too, I think overall in all of the different things that have already happened between the Fed, and the federal government, the Treasury Department. We've already seen rate cuts. We've seen so much already. The first stimulus -- we don't even talking about the fact the first stimulus gave us a little bit of a blip.
So, I think that there is an unease among voters as they head into the voting booth about what's happening in the economy, and I don't think they're convinced that either of these guys is going to be able to fix it right now. It's a question of leadership, who do you think is going to lead out of this problem next year because, no doubt, whoever is the president is going to be given the hardest economic problem, probably in our lifetime to try to solve, and the agenda has already been set by this administration, the treasury secretary and the Fed chairman for what we're going to do next.
SYLVESTER: Bill, let me have you jump in. Would you agree with that, that, essentially, voters are not confident that either of these guys, that they have a plan or a real idea of how to fix this economy?
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, yes, I think that is true, because McCain has said he doesn't have a lot of background on economics. And Obama, of course, is relatively new and inexperienced in Washington and in economics. So, voters aren't certain yet they see or understand what either candidate's plan is. But one thing is very clear, they want change. They're looking for something new, something different. They want the president -- the new president to do something, and to do it as quickly as possible. They'll let the president know if it's working or not.
And right now, that's a big burden for John McCain, because confidence in the Republicans has really collapsed -- under President Bush that the economy has deteriorated, and they're clearly holding that against McCain.
SYLVESTER: Well, John McCain is saying that Senator Obama certainly doesn't have the answer. He's portraying the senator as a tax-and- spend liberal of many, of much of the same that we have seen.
Let's take a listen to what he had to say.
(BEGIN VIDEO CLIP, THURSDAY)
SEN. JOHN MCCAIN, (R-AZ) PRESIDENTIAL CANDIDATE: You know, my friends, you got Nancy Pelosi, Harry Reid, and Barack Obama.
(CROWD BOOING)
MCCAIN: You've got -- you've got a recipe for tax and spend, tax and spend, tax and spend. What should concern the American people is that the Democratic budget plan they've passed just this year with Senator Obama's help, called for raising taxes on people, making just $42,000 per year.
(CROWD BOOING)
(END VIDEO CLIP)
SYLVESTER: Bill, will this message work for Senator McCain or is it a little too late?
SCHNEIDER: Well, it rallies Republican certainly to the old tax-and- spend idea, but voters really want to do something, and when McCain talks about making the tax cut permanent, you know, tax cuts cost money, too. That's a form of spending that it all comes out of the deficit. So, they have different takes and different emphases. But in both candidates' cases, they're talking about doing things that are going to cost a lot of money that we really don't have.
SYLVESTER: Yes. Christine, I want to take a look, because I think it's so important to take a snapshot and to take a look at exactly the shape of the economy, as it stands right now, and we have seen the S&P decline dramatically over the last year.
We've got a screen here that we want to share with our viewers. It shows a chart of the S&P plummeting over the last year, October 15th, 2007, you can see it there, 1,515.88. October 23rd, 2008, this year, 908.11. What does that show us? ROMANS: That shows us that people's retirement has dwindled. You know, people who are investing in the stock market have lost money. That's your retirement. That's your 401(k), and the closer people are to retirement, the worse it is.
Now, hopefully -- hopefully, they were taking all of the financial advice that's out there and they had, you know, a well-balanced portfolio, but still, the stock portion, that is down some 41 percent. That is painful for a lot of people.
And what this means, and I think that a lot of voters realize this -- this means there are people who are going to work long longer before they can retire. There are people who retired who are now going to have to go back to work. If they can find a job, they're certainly not going to find it in retail, or manufacturing, or factory jobs.
I mean, it gives you a sense of just what has been happening for over the last year. Some people say, well, this crisis just happened. Anybody who's been watching that knows this has been happening, it's not just (ph) a crisis, it's the condition at this point.
SYLVESTER: OK, Christine Romans, thank you very much. Christine Romans and Bill Schneider, thank you very much for your insight.
As the economy worsens, new evidence this week that the housing crisis is far from over. The foreclosure rate soared to staggering 71 percent in the last year. In the last month alone, more than 81,000 people lost their homes to foreclosure. And as Bill Tucker reports, there may finally be help on the way but only for some homeowners.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): The sentiment of the Senate Banking Committee was clear, what's good for Wall Street is good for Main Street. The head of the Federal Deposit Insurance Corporation, the FDIC, told the committee, she agrees.
SHEILA BAIR, CHAIR, FDIC: The FDIC is working closely and creatively with treasury on ways to use the recent financial rescue law to create a clear framework and economic incentives for systematically modifying loans. The aim is for loan services to offer homeowners more affordable and sustainable mortgages.
TUCKER: The FDIC has seized new authority granted in the Emergency Economic Stabilization Act, allowing it to provide loan guarantees to banks that renegotiate mortgages on the brink of foreclosure. Blair's message was echoed by the treasury official who is in charge of the $700 billion bailout plan. Neel Kashkari told the committee members that the plan to revise mortgages should be announced soon.
NEEL KASHKARI, BAILOUT CZAR: We are passionate about doing everything we can to avoid preventable foreclosures.
TUCKER: The urgency of the housing crisis was underscored by a new report which revealed: the foreclosure rate rose 71 percent in the third quarter of this year over last year to 765,558 homes. The report from Realty Track which markets foreclosed homes shows California, Florida, Nevada, Arizona, Michigan and Ohio are the states hardest hit, with California accounting for 1/4 of all foreclosures last quarter.
The pain is far from done. The report also noted that 266,000 received notices of foreclosure filings last month.
(END VIDEOTAPE)
TUCKER: Through the first week in September, there have been 2,315,750 homes lost to foreclosure this year, according to Realty Track, Lisa.
SYLVESTER: Bill, if you're one of those homeowners and you're worried about losing your home, of course, you want to know when. I mean, there's all of this talk out of Washington but when are they going to do something?
TUCKER: Well, you know, they say the devil is in the details. That's one of the details that didn't get released yesterday. Bair, when she testified before the committee, talked about this new authority, she'd got no argument from treasury, in fact, she got backing. But nobody pushed her for a timetable. So, we don't know when this might go into effect.
SYLVESTER: All right. Bill, thank you for that great report.
While working men and women and their families struggle, the culture of greed continues on Wall Street. Wall Street firms now propped up by your tax dollars have set aside more than $20 billion for, you guessed it, executive bonuses. Louise Schiavone has our report.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Wall Street may be in the tank, personal investments may have crashed, but in lots of corner offices, life is still good. The expectation is: recession or not, this year, the bonuses will flow.
BILL COLEMAN, SALARY.COM: Bonuses are where all of the money is made in Wall Street. But, you have a lot of people who will take home $2 million, $3 million, $4 million, $5 million a year but their annual salary is $500,000 to $250,000 a year.
SCHIAVONE: And while the 2008 aggregate will be less than last year's, there's an expectation that Wall Street has roughly $20 billion in bonus money ready to fly.
SARAH ANDERSON, INST. FOR POLICY STUDIES: We looked at the pay packages handed out to the CEOs of the nine major banks that are getting the equity capital infusion from the Treasury Department, and last year, those nine CEOs received $289 million combined.
SCHIAVONE: But New York's attorney general is putting the brakes on executive compensation at mammoth insurer AIG, the company conceding that more than half a billion dollars in bonuses will not go out this year. Andrew Cuomo telling AIG, quote, "Rebuilding trust in our capital markets requires executive compensation packages that are rational, fair, and based on bona fide performance measures that are disclosed to the public," end quote.
Corporate watch dogs say executives who presided over debacles like Richard Fuld at Lehman Brothers should return their past bonus millions.
NELL MINOW, THE CORPORATE LIBRARY: People like Fuld at Lehman, who said, well, my performance was great for a long time until it wasn't. They want to keep all that money. That's just ridiculous.
SCHIAVONE: A spokesman for Lehman tells CNN, quote, "Mr. Fuld did not have an employment contract and received no golden parachute or severance. Most of his compensation over the years was in Lehman stock which he didn't see and is now worthless," end quote.
Fuld is still CEO of Lehman, earning a $750,000 salary. He got a $4.25 million cash bonus in March.
(on camera): Of concern, where do Wall Street's habits of extravagant pay and bonuses stand in light of the billions now flowing from the treasury to the banks? There's nothing in the $700 billion bailout legislation defining excessive compensation. And taxpayers won't know the size and shape of bonuses across the board until those checks have been written.
Louise Schiavone for CNN, Washington.
(END VIDEOTAPE)
SYLVESTER: Still to come, Homeland Security Secretary Michael Chertoff says we are winning the struggle against illegal immigration. Oh, really? We'll have a special report.
Also: New concerns about the reliability and security of E-voting machines and one of the most critical swing states in this election.
And we'll have a special report from another state, that's already facing problems with E-voting machines in early voting.
(COMMERCIAL BREAK)
SYLVESTER: New concerns tonight about the security of electronic voting machines. The results of court-ordered tests of New Jersey's E-voting machines are disturbing and raised critical questions. The tests found the machines are highly vulnerable to hackers. In fact, the machines can be successfully altered in just minutes.
Kitty Pilgrim has our report.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Here is the video of Princeton computer scientists hacking a New Jersey voting machine, the exact Sequoia model to be used in the election in two weeks. This video is a record of the official test. The lock is picked in seconds. A protective panel for the computer's circuit board is unscrewed. The computer chip is pried away with a screwdriver in a little more than three minutes. The fraudulent computer chip is put in to fix the election in less than four minutes. And the machine reassembled in seven minutes total.
PROF. ANDREW APPEL, PRINCETON UNIVERSITY: From the outside of the voting machine, neither the voters nor the election officials can tell from the outside whether the voting machine has been hacked. There's no paper ballots to recount.
PILGRIM: Could a hacker do it? Yes. These photos in the report show unattended voting machines at four different polling places in Princeton, New Jersey, on June 1st and June 2nd, 2008, before the June 3rd primary election.
In this official hack, New Jersey state officials and representatives from Sequoia, the manufacturer, were present to witness the entire process, but tried to block the release of the report to the public. It was finally ordered released by a New Jersey court.
PROF. PENNY VENETIS, RUTGERS SCHOOL OF LAW: The state has used tax dollars to fight us, instead of sitting down at a table, and trying to -- with us and with our experts to try and figure out what is the best way to safeguard the votes of the citizens of New Jersey.
PILGRIM: The Sequoia machines are used in most polling places in New Jersey and other key battleground states. In New Jersey, it's too late to switch to another system.
Kitty Pilgrim, CNN.
(END VIDEOTAPE)
SYLVESTER: One critical swing state Ohio, also faces major problems with E-voting machines. Those problems could affect election results. Ohio has also been at the center of a bitter partisan fight about voter registration fraud.
Mary Snow reports.
(BEGIN VIDEOTAPE)
MARY SNOW, CNN CORRESPONDENT (voice-over): Ohio is hoping its early voting will prevent a repeat of this, lines that lasted for more than five hours in places like Franklin County, which includes Columbus. Engineering professor Ted Allen was hired by the county to look at what went wrong.
TED ALLEN, OHIO STATE UNIVERSITY: We estimate that between 20,000 and 30,000 people were deterred from voting.
SNOW: Twenty thousand to 30,000 people who couldn't vote, and that's just in one county. Allen says lines were longest in urban areas and as a result, African-Americans on average had to wait half an hour longer than everyone else to vote. One big problem? Not enough machines. The state has doubled the number from 2004.
STAN WAYNE, FRANKLIN CTY. BOARD OF ELECTIONS: The first thing the voter would do would be to vote on this page.
SNOW: Touch screen machines like these will be used in Franklin County for the first time in a presidential election. Ohio Secretary of State Jennifer Brunner, who inherited the machines, was so skeptical of them, she ordered backup paper ballots at polling places.
JENNIFER BRUNNER, (D) OHIO SECRETARY OF STATE: We have very poorly engineered systems that I know that there are some on the horizon that would be an improvement, but we're waiting on a very slow federal certification and testing process.
SNOW: There's more emphasis on better training for poll workers.
KAREN PRINCE, FRANKLIN CTY. BOARD OF ELECTIONS: If David's address or what he provides me with does not match, what I have in here, that's not going to work.
SNOW: We did a walk-through of the early voting process, using a paper ballot. State and local ballot measures make it lengthy.
MICHAEL STINZIANO, DIR., FRANKLIN CTY. BD. OF ELECTIONS: In the time wait study we did, it takes about seven to nine minutes for the average person.
SNOW (on camera): OK.
STINZIANO: Obviously, we've seen anywhere from maybe three minutes to an hour.
SNOW (voice-over): Crunching the numbers into simulations, Ted Allen says long ballots coupled with high turnout could be problematic.
ALLEN: Amazingly, it takes so much longer to vote with the new machines, we're predicting that there might be lines and depending on the turnout, it might actually be worse than 2004.
SNOW: Worse than 2004?
ALLEN: Possibly.
SNOW (on camera): In some precincts here, voters are being asked to weigh in on as many as 24 races and ballot initiatives. Election officials are trying to encourage people to look at sample ballots on the Web and they're also hoping that early voting will reduce the lines on November 4th. Still, there's expected to be record turnout.
Mary Snow, CNN, Columbus, Ohio.
(END VIDEOTAPE)
SYLVESTER: In early voting in West Virginia, voters say electronic voting machines are changing their votes from Senator Obama to Senator McCain. The machines are the very same devices that had problems in Ohio in the 2004 election. Brian Todd has our report.
(BEGIN VIDEOTAPE)
BRIAN TODD, CNN CORRESPONDENT (voice-over): Calvin Thomas has voted in West Virginia since Truman beat Dewey. He's 81 years old now and his eyesight is deteriorating. But when he tried to vote early in his town of Ripley and brought his daughter Micki Clendenin into the booth to help him, Thomas' vision wasn't the problem.
CALVIN THOMAS, JACKSON CO., WEST VA. VOTER: I went in there and pushed the Democrat ticket, and it jumped to the Republican ticket on the president of the United States.
TODD: Micki helped her dad touch the screen a couple of times but his vote for Barack Obama still clicked on John McCain. Then it happened to Micki. Each time, poll workers had them repeat the process.
MICKI CLENDENIN, JACKSON CO., WEST VA. VOTER: The lady came in and she was -- she very nicely, she just said oh -- she said it's just been doing that and so just hit it again. So we hit it again, and this time, it did go to Obama.
TODD: Same thing happened to Bobby Oates in neighboring Putnam County.
UNIDENTIFIED FEMALE: I went to my U.S. senators, I touched Jay Rockefeller, and it put a checkmark beside Jay Wolfe. And I'm saying, no, I didn't do this.
TODD: At least five voters reported the same problem in two West Virginia counties.
State and local officials tell us these were isolated cases, that each time poll workers fixed the problem and the correct vote was cast. The machines manufactured by a company called ES&S will be used in several states this year and were among those that had problems in Ohio in 2004.
Company officials tell us they've inspected the machines in West Virginia, and nobody has cast an inaccurate vote.
In Ripley, West Virginia, we weren't allowed to film the actual machines that had problems but Jackson County Clerk Jeff Waybright took us through the process with an identical machine and zero in on what he thinks happened.
VOICE OF JEFF WAYBRIGHT, JACKSON CO., WEST VA. CLERK: They touched on Barack Obama but they thought they were touching by their finger might possibly rolled up. Now, if I roll my finger down, you can see that it looks like my finger is definitely on Barack Obama's box.
TODD: We asked Waybright about insinuations in local news reports of political manipulation since he and the neighboring county clerk are Republican, and in most cases, Democratic votes clicked to a GOP candidate.
WAYBRIGHT: If I was going to, you know, try to manipulate the machine I wouldn't know how to do it to begin with.
TODD: The West Virginia secretary of state's office told us it thinks the problems could stem from the machines not being calibrated properly when they were being set up. That means essentially that the electronic boxes weren't aligned right.
(on camera): Jeff Waybright disputes that, saying all of his machines here in Jackson County were calibrated perfectly. He believes most of these problems were due to voter error.
Brian Todd, CNN, Ripley, West Virginia.
(END VIDEOTAPE)
SYLVESTER: Up next: Congress presses for another massive stimulus package and growing fears of a worldwide recession. We'll hear from three of the sharpest economic minds in the nation.
And the Bush administration claims border security is improving, but our borders are still far from secure. We'll have that special report.
(COMMERCIAL BREAK)
SYLVESTER: Homeland Security Secretary Michael Chertoff declared our southern border is now more secure due to increased law enforcement efforts. Chertoff said illegal immigration has stalled or may even be decreasing. But as Casey Wian now reports, our border security crisis is far from over.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): Apprehensions of illegal aliens by the Border Patrol are down 17 percent this year, and 40 percent since 2005, according to the Department of Homeland Security. It's one piece of evidence that improved border security measures are deterring illegal border-crossers.
MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: We have put our country on a path moving in the right direction with respect to illegal migration and reversed the trend of increasing illegal immigration into our country which, I think, is something that would not have been thought possible just a few years ago.
WIAN: Chertoff says there are now 17,628 U.S. Border Patrol agents, up from about 9,000, when President Bush took office, and ahead of the president's hiring goal set two years ago. Other accomplishments include a record number of deportations: 350,000 in 2008, and the apprehension of 34,000 illegal alien fugitives this year, double the number in 2006. Arrests during work site raids have jumped 28 percent in 2008.
Chertoff cited a recent Pew Hispanic Center study which found the flow of illegal aliens into the United States began declining for the first time in recent memory last year, and evidence that remittances, money sent home to Latin America, are down. CHERTOFF: I think we've actually upheld our end of the bargain. The American people didn't trust government, the federal government, to withstand the pressures of various interest groups, and to enforce the law. I think we have withstood that pressure.
WIAN: But huge challenges remain. Chertoff acknowledged his department will not complete the 670 miles of border fencing mandated by Congress by the end of this year, nor even by the time the next president takes office. And he cited rampant violence by drug and alien smugglers on both sides of the southern border as an unfortunate consequence of improvements in border security.
(on camera): Many skeptics say the only reason illegal immigration has declined is because the U.S. economy has slowed, eliminating the job magnet. Chertoff rejects that, saying the U.S. economy continues to attract legal immigrants, and in fact, he says legal immigrants entering the United States now outnumber illegal aliens.
Casey Wian, CNN, Los Angeles.
(END VIDEOTAPE)
SYLVESTER: Coming up, a bold, new effort to crackdown on the employers of illegal aliens. We'll talk with Governor Matt Blunt of Missouri.
Also ahead, the final countdown to the election and the polls are all over the place. Are they an accurate prediction of what's to come on November 4th? Three of the best political analysts in the country will join us.
And the big bailout may become even bigger, if Congress has its way. Three top economic minds will share their perspective, next.
(COMMERCIAL BREAK)
ANNOUNCER: This is "Lou Dobbs This Week." News, debate and opinion and independent view. Here again, Lisa Sylvester.
LISA SYLVESTER, CNN HOST: More bad news for the economy this week as foreclosure rates soar and the market continues its wild swings. Lou spoke with three of the brightest economic minds in the country Professor Peter Morici of the University of Maryland, Pulitzer Prize winning journalist David K. Johnson and David Smick, author of "The World is Curved." Lou asked them about the possibility of an additional $300 billion economic stimulus package.
(BEGIN VIDEO CLIP)
DAVID SMICK, AUTHOR "THE WORLD IS CURVED": You know, it's funny, if they come up with a stimulus package like they did recently with that $150 billion and you know of tax credits for Hollywood and the rest of the taxpayers ought to be with pitchforks marching on Washington. I think the only argument in favor of any stimulus right now is if it went directly to help people borrow and to help small businesses borrow. Other than that, the pork and all the other public works stuff they wouldn't arrive in time and it would just be an expansion of the deficit.
LOU DOBBS, CNN HOST: David K. Johnson?
DAVID CAY JOHNSTON, PULITZER PRIZE WINNER: Well I am beginning to wonder if our parents lied to us when they told us there was no money tree in the back yard. If we're going to have another stimulus and I certainly dislike this idea of the government doing it, the worst thing we could do is just write people $300 checks again. There are parts of the infrastructure there are pinch points that are damaging the economy and we need to fix those but that's sort of not the first order of business we need to focus on.
DOBBS: What is the first order?
JOHNSTON: Well, wages and incomes in this country. That's the fundamental problem.
DOBBS: And Professor Morici, what can we do about it?
PROF. PETER MORICI, UNIVERSITY OF MARYLAND: Well, if we want to do something about wages and income, I could see a stimulus package that's a down payment on a larger infrastructure program if we're really going to get it in the business of building out new energy sources, both conventional and alternative. We need both, rejuvenating the automobile industry, strengthening our schools, a lot of schools are in very bad shape and a stimulus package was a down payment on that, while the new president gets engaged in a comprehensive program. You know that would make some sense to me. The last stimulus package gave us a couple of months of quick consumption. People bought a few more restaurant meals and then it's gone. I mean, if we're going to something, let's do something with a legacy that creates employment.
DOBBS: All right. let's talk about that. We've got a president running around for eight years, telling us that we've got to have an illegal alien population of 20 million in this country because Americans don't want to do those kinds of jobs. We've got a Congress telling us they're going to start an infrastructure package and a number of economists as well talking about infrastructure spending, which I don't think people can argue with much, at least in terms of the merits until you think well who is going to be filling those jobs? Will it be American citizens or will it be illegal aliens? What's going on here and how are we going to resolve all of this? David Smick, why don't you take the first crack at it.
SMICK: Yes. I got to tell you. If you do a back of the envelope assessment of what's going on, if you add the bank bailout, the Wall Street bailout and you take this first stimulus package and you take other $300 billion stimulus package, then you factor in a bailout for the auto industry and then with the recession likely next year you're going to have less revenue, you can see easily a deficit of $1.5 trillion. Now, how that's not going to affect interest rates, long- term interest rates I don't know. I think long-term interest rates will go up and I tell you the danger for the United States is that we repeat the Japan scenario of the '90s where the banks, instead of lending they basically buy. They borrow money from the Fed for next to nothing on the short end and the long rates stay high, and they buy government debt, and they take that spread as their profit and they don't lend to the private sector. It happened to Japan and it's dangerous when you're talking $1.5 trillion, maybe even $2 trillion deficits in one year.
DOBBS: We're already, it looks to me by my, as you would put it, back of the envelope calculation, we're already at over $2 trillion right now in new spending. David Cay Johnson, you did an analysis of new wage data and finding a third of workers make in this country make $15,000 or less. 76 percent of workers in the United States make less than $50,000. I mean, what in the world are we doing with middle class jobs in this country?
JOHNSON: Well, you hit upon, Lou, this core problem. It turns out this data set, and none of us who studied this knew was around, shows how concentrated the gains have all been at the top and the reason that a lot of Americans won't do various jobs in various kinds of factories is the wages are so low. There are all sorts of employers out there that aren't even paying the minimum wage because they have this pool of labor. We need to have a strategy that's designed to pay high wages and reward people based on the value they add to the enterprise, but you know think about that. One-half of American workers basically make less than $500 a week.
DOBBS: Yes, it's incredible. Professor Morici you get the last view here. The Fed putting up another half a trillion dollars to shore up our credit markets. Will it work this time? I mean, where in the world is this going to end?
MORICI: Well, it's not going to work until they do something to make the banks responsible and start making loans again so that the New York banks make it possible for the regional banks to access credit but if we're going to have a stimulus package, then we need to emphasize those industries that create those high quality jobs that I don't care what anyone says that Americans want to do. If we did things to rejuvenate the energy sector, we'd be creating the kinds of jobs that auto workers are losing right now. We did things in the auto sector, gee people want to do those jobs because they pay pretty well, even in the Nissan factories they pay pretty well.
DOBBS: All right. Gentlemen, thank you very much. David Smick, David Cay Johnston, Peter Morici. Thank you, gentlemen.
SYLVESTER: Coming up, increasing reports of fraud and voting machine breakdowns. Will your vote be counted? We'll discuss that and more with three of the country's top political analysts and one governor takes a tough stance against illegal immigration. Missouri's Governor Matt Blunt tells Lou how his state is dealing with the crisis. Stay with us.
(COMMERCIAL BREAK)
SYLVESTER: Missouri's governor, Matt Blunt is leading a successful effort to crack down on illegal immigration. Last year, Governor Blunt directed law enforcement to verify the immigration status of criminal suspects. Now, Governor Blunt is launching a joint task force with immigration and customs enforcement to crack down on illegal aliens in the workplace. The governor told Lou he believes the joint effort is critical to stop employers from hiring illegal aliens.
GOV. MATT BLUNT (R), MISSOURI: Lou, you have to turn off the magnets. And Missourians understand that, we have to turn off the magnets that attract illegal immigrants. One of the primary magnets is employers that hire illegal immigrants and you have to crack down on that. And that's why we entered into these task forces, these joint task forces with the federal immigrations and custom enforcement, in Springfield and in St. Louis, and in Kansas City to work together and to go after these bad actors.
Most employers play by the rules but clearly there are some that do not, and it needs to be dealt with and dealt with, you know, very strictly. We've taken good steps in Missouri to do things like that, as well as cracking down on sanctuary cities. We very specifically in a lot of signs that says that you cannot be a sanctuary city and made it illegal to refuse to cooperate with federal authorities.
DOBBS: And turning to another issue, English has been known as the common language in Missouri. Now a ballot measure would change that. The ballot measure reads in part that "English shall be the language of all governmental meetings of which any public business is discussed, decided or public policy is formulated." Obviously you support that amendment, it's effectively making English the official language, is it not?
BLUNT: Absolutely. I do support it. And it really is a step forward. We have had reports in Missouri of council meetings being conducted in a foreign language. There are opponents and those opponents I think try and spread some misinformation about it. They'll suggest, for example, that it would ban translation. It clearly doesn't do that. If somebody needs a translator, they'll have a translator, but the public discussion and public votes, those will be in English and that's the language that Americans use to follow democracy.
DOBBS: Well, for our friends at the "St. Louis Post Dispatch" in a recent editorial, the paper urged Missourians to vote no on the constitutional amendment to make English the language of all government meetings quote, in part it said "the xenophobes should chill their Lou-Dobbsian rants and steer clear of the state constitution." I mean, aside from the fact that -
BLUNT: On this, Lou, on this issue and others the "Post Dispatch" is out of touch with, you know, the sentiments of the people of our state. Missourians don't agree with "The Post Dispatch" very often and they certainly don't agree with the "Post Dispatch" when it comes to ensuring that English is our official language and that public meetings of their democracy are conducted in English.
DOBBS: Yes. I would love to know from "The Post Dispatch" what language they'd like to have those public meetings to be conducted in. I'd like to hear them have the guts at least, play it the intellectual, honestly which would be absent just about every editors. I'd love to hear them say what language they would like those meetings held in. Since English is of course a requisite for citizenship and involvement in public business.
Governor, the idea that we're having these discussions in 200, is mind-boggling that there should be any division at all over this issue. We're the most welcoming society on the planet, yet we are going through a presidential election, which the issue of illegal immigration has not even been treated as a glancing matter. It has been the failure, in my opinion, of the national media, to even insist that these candidates deal honestly and straightforwardly with the issue. What is your reaction?
BLUNT: Well, the failure of Washington to address this issue and our presidential candidates, and national media, to address this critical issue means that states have to do more and that's what we're doing. In Missouri we're taking action. I've urged other states to do the same, to take action to combat illegal immigration. It undermines the rule of law, which is a central pillar of our democracy and our form of government. We are the most welcoming country in the world. We welcome more legal immigrants than any nation on earth and illegal immigration undermines the rule of law.
DOBBS: All right. Governor Matt Blunt, thanks for being here. Appreciate it.
BLUNT: Pleased to, thank you.
SYLVESTER: Coming up next, is Senator Obama changing his policies to suit public opinion? I'll ask three of the sharpest political minds next. Stay with us.
(COMMERCIAL BREAK)
SYLVESTER: Joining me now are three of the sharpest political minds in the country, democratic strategist and CNN contributor Hank Sheinkopf, syndicated columnist and CNN contributor, Miguel Perez, and in our Washington studios, Washington bureau chief for the "New York Daily News" Tom Defrank. Good to have you all with us. Well, it's now coming down to the final stretch, days until the election. McCain has been essentially portrayed as a corporate capitalist. On the other hand, Obama has been portrayed as a socialist. What message, is this the right message in the final stretch? Will have you Hank take the first question?
HANK SHEINKOPF, DEMOCRATIC STRATEGIST: Neither one is the right message for either of those candidates. They may not be accurate. It's an attempt by either side to do the other one in. The facts are that people care about the economy and what they're looking for is anybody who has a coaching argument about that and about getting America working again and the problem is for McCain Obama has been a lot more coached and a lot more consistent with it.
SYLVESTER: And Miguel, your thoughts because you have very different strategies. I mean one is top to the bottom, the other is bottom to the top. What are your thoughts? MIGUEL PEREZ, SYNDICATED COLUMNIST: The facts are basically pointing out the extremes and most of the American people realize that it's not true. Everything that the extremists, statements by the McCain camp about Obama or the extremist statements by Obama against McCain. Nobody is believing that. Most people realize that look this is a campaign. They're playing dirty but you know most of the American people still want to hear them talk about the issues more than the personal attacks and all these other stuff. We're tired of it actually.
SYLVESTER: Well, let's hear some sound from Senator McCain, in which he essentially portrays Obama as a tax and spend liberal and we have some sound from him on the campaign trail. Let's take a listen.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: We've already seen a preview of their plan and it's pretty simple. Tax and spend. Now the chairman of a powerful committee in the House of representatives said this week that they "are going to focus on an immediate increase in spending."
(END VIDEO CLIP)
SYLVESTER: Tom, let's have you jump into the conversation here. You just heard that sound bite and you also heard our other guest say that voters are tired of the attacks, that they want specifics on the economy. What do you think?
TOM DEFRANK, "NEW YORK DAILY NEWS": Well, I think they are tired of the attacks on both sides. They're scared to death of their 401(k)s and scared to death of how they'll pay the next tuition payment for their children, and they're not paying attention to stuff like this. I heard a radio spot this morning, where Obama was allied with congressional liberals, congressional liberals, congressional liberals and I don't think most people at this point are caring about that kind of rhetoric from either one of them. They want to know -- they want to feel better about the direction of their country and the direction of their future and I think that's an argument at the moment. It seems to help Obama more than it does McCain.
SYLVESTER: Hank, would you agree with that that at this point the way the economic forces are aligning that this is clearly going to benefit Obama?
SHEINKOPF: No question. But I'd like to go back to something that Tom said which is rather important that he has had a lot of experience covering this and he might agree. They are running a campaign with that kind of rhetoric, the McCain people are that harks back to the early 90s and 80s where the tag liberal with the tax and spend have merit. That's not what people are interested in. And then the other side that Obama is running a campaign that is very directed out front. One is looking back. One is looking front and all that is doing is making this worse for McCain.
SYLVESTER: But you know what, Obama is doing it. It's not like McCain is the only one on the attack here. We have some sound here from Obama in which he is criticizing McCain's policies where he says he's going to give tax cuts to more companies that move offshore. Let's take listen to what Senator Obama had to say.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: That's what Senator McCain proposed as his answer to outsourcing. He said that's "simple fundamental economics." Well, Indiana, my opponent may call that fundamental economics, but we know that's another name for Wall Street first, Main Street last. That's the kind of economic philosophy we had for the past eight years and that's fundamentally wrong.
(END VIDEO CLIP)
SYLVESTER: OK. So Miguel, here we see a little, it's a back and forth clearly between McCain and Obama. Is this the right message? I mean, you know, as people have said what really matters is 401(k)s. What are you going to help me? What are you doing to help me keep me in my home? And you see more of this mud slinging going on.
PEREZ: Look. What is see is that both candidates are catching up to the economy late. If they had either one of them had had the positions they have now when they confronted each other in the first debate, they would have taken, they would have run away with the election already. Unfortunately, they took a long, long time to decide which side they wanted to stand on and the American people saw that. So that the lack of leadership on the part of both of them. And we are still dissatisfied with what they're saying about the economy. I don't think anybody is really happy with either candidate about you know or has this confidence in either candidate that they are really going to solve their problems.
SYLVESTER: Yes, Tom, I heard from so many people, you know, the question is are these the only two choices? Because there's a lot of going back and forth. There's a lot of this criticism of the other guy but not enough of what's he going to do for our family. And how would you weigh in on that? Do you think that's true?
DEFRANK: I don't really think that's true. The Obama message is more strategic. The McCain message is more tactical but that Obama has the advantage of coming at this from a financial economic populous perspective. People are worried about the future pocket book issues, bread and butter issues, historically favor democratic candidates. Look at this race, it was dead even a week after the republican convention. McCain had the momentum and Obama didn't seem to be doing all that well. Governor Palin gave McCain a big psychological boost and what happened since then? The economy has melted down. And that is the biggest single determinant for Obama's rise. It's the economic meltdown and people are gravitating towards this message. I mean, you can say he is lucky, but I mean this is a battlefield that is tilted in his direction rather than McCain's.
SYLVESTER: OK. We have to go to break right now, but when we come, I want to hear from our panelists as far as what does McCain have to do essentially to stay in the fight. And we will have much more with our political panel right after this. Stay with us.
(COMMERCIAL BREAK)
SYLVESTER: I'm back now with Hank Sheinkopf, Miguel Perez, and Tom Defrank. OK Miguel, let's start with you. What does McCain have to do? I mean, is it all over for him? Or he certainly is in the fight here.
PEREZ: Crystal ball, maybe magic. I don't know. It's slipping away fast for John McCain. I really think he has - I don't know. In my community for example he has avoided the Hispanic community altogether. Both of them have unfortunately during the both conventions, the three debates and the Hispanic issues were considerably ignored by both candidates. Immigration, the word immigration never came out of Obama's mouth in the three debates and the democratic convention. And you wonder why since this is the guy who obviously has the majority of the Hispanic vote right now. What is he doing for these people and what has he promised to these people? I don't understand why he has so much support in the Hispanic community. At the same time McCain tried in the last debate to raise some of these Hispanic issues. He talked about the free trade agreement with Columbia. He talked about Hugo Chavez. He talked about NAFTA. He actually brought up the word immigration. He said that Obama is misrepresenting his position on immigration. It was too little, too late. I don't think he's going to get the Hispanic vote now.
SYLVESTER: You know, we have heard a lot for instance, in early voting, voters, African-Americans turning out in very large numbers in early voting, but we haven't really seen that with Hispanic voters. Why is that?
PEREZ: Turning out? Well nobody is talking to us. Nobody is addressing our issues. Immigration has been like the plague. It was very interesting. I saw the moderator of the last debate in Larry King the other day saying that the next question was going to be immigration. Well, you know, isn't that a shame that you know this major issue in America is being totally ignored. From both sides. It doesn't matter which side of the immigration debate you are on. We want to hear these guys talk about this.
SYLVESTER: Or at least to say what their policies are and what they plan to do. Now, I want to turn because we're running out of time here. I want to turn pretty quickly to the polls. And what we are seeing is and it depends on which poll you are looking at. Because you have some polls, it was an AP poll that says that it was really a narrow lead that Obama has, one percent. On the other hand, you have an ABC news poll that shows that he has a 10 percent lead. So what gives, why is there such a discrepancy, Hank, in the polls?
SHEINKOPF: It depends when they are done. It depends when they're done and frankly what the news is at the moment. But let's go this past Friday. I think the Greenburg, Rozner public opinion strategist poll, bipartisan, on NPR today said that McCain has lost the Catholic vote with no way back and Barack Obama is up 11 points. Now that tells you McCain left Michigan and it tells you how much trouble the campaign is in.
SYLVESTER: Yes. Tom, he also -- Senator Obama is ahead right now in some of these battle ground states, but if you take a look at you know the plus or minus here, it doesn't seem that he has that strong of a lead. Your thoughts?
DEFRANK: Well, I disagree and I also think that it's not some polls shows it close as one poll. The fact of the matter is the race were tightened in the next week or eight days. They always seem to tighten. But the battle ground polls show Obama with healthy leads beyond the margin of error. Even the McCain camp is saying we got to move this six points in our direction. And they think they can do that this late in the game. A six-point spread, a six-point move is fairly daunting especially since they have to move it across the board. He is behind in every battle ground state. Not just a couple.
SYLVESTER: OK. Thank you very much. We will have to end the discussion there. Thank you, gentlemen. Tom Defrank, Miguel Perez, Hank Sheinkopf, thank you very much for joining us. Gentlemen, it is always a pleasure. And thank you for joining us. And please join Lou on the radio, Monday through Friday for the "Lou Dobbs Show." Go to loudobbsradio.com to find local listing for the "Lou Dobbs Show" on the radio. For all of us here, thanks for watching. Good night from New York.
