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LOU DOBBS TONIGHT
Plutonium Discovered in Libya; Companies Exporting Private Information Overseas?
Aired February 20, 2004 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
LOU DOBBS, CNN ANCHOR (voice-over): Tonight: plutonium discovered in Libya, Colonel Gadhafi closer to having a nuclear bomb than anyone thought, a trail of deception that leads to China.
Jobs on the line, Democrats on the offensive. Senator John Edwards says the export of American jobs to cheap overseas labor markets is a moral issue. Unions are trying to help the American worker. I'll be joined tonight by the AFL-CIO's Richard Trumka.
What you are looking at may be the American factory of the future. The same White House economists who said outsourcing makes sense believe fast-food restaurants could be called factories and fast-food employees may soon be called manufacturing workers.
UNIDENTIFIED MALE: If they were creating value, much more value, they would be much better paying jobs.
DOBBS: And "Broken Borders." Illegal aliens are being caught now in record numbers on the Mexican border.
UNIDENTIFIED MALE: When they are making arrests, the aliens are asking our officers, what about the amnesty?
DOBBS: Tonight, we'll have a special report.
(END VIDEOTAPE)
ANNOUNCER: This is LOU DOBBS TONIGHT for Friday, February 20. Here now, Lou Dobbs.
DOBBS: Good evening.
Plutonium has been discovered in Libya. The International Atomic Energy Agency says Libya was actively trying to produce a nuclear weapon. That announcement is the clearest evidence yet that Colonel Gadhafi's nuclear program was far more advanced than originally thought when he agreed to disarm last December.
Gadhafi's nuclear program continued even as American troops advanced into Iraq last year on a mission to find and destroy Iraqi weapons of mass destruction. Those weapons have not been found, but the U.S. presence in Iraq apparently led to the surrender of Gadhafi's weapon program. Libya's program would not have been possible without the assistance of Abdul Qadeer Khan. He is the scientist who built Pakistan's first nuclear bomb and who has linked as well to the sale of nuclear technology to both Iran and North Korea. But the designs for Libya's proposed nuclear weapons originated from China. Those designs were transferred from China to Pakistan in the 1980s and then resold to Libya.
Tonight, the precise nature of Pakistan and China's involvement in Libya's nuclear weapons program in unclear. China is, of course, the beneficiary of a $130 billion trade surplus with this country. And hundreds of thousands of American jobs are being shipped to cheap overseas labor markets, including China.
The controversy has become a huge issue for Democratic presidential candidates. Today, Senator John Edwards talked with Americans who have lost their jobs to foreign workers. Senator Edwards says the export of jobs is a moral issue.
Dan Lothian, with the Edwards campaign, reports from Largo, Maryland.
(BEGIN VIDEOTAPE)
DAN LOTHIAN, CNN BOSTON BUREAU CHIEF (voice-over): While some have been critical of the Edwards' campaign strategy to focus narrowly on areas impacted by the loss of manufacturing jobs, Senator Edwards believes that is the strategy to win. That is why he took his message of the economy, jobs and trade to the first stop in Savannah, Georgia, then here to Prince George's Community College in Maryland, a state he says that's lost some 21,000 jobs in recent years.
EDWARDS: We also need to do everything we can to keep jobs here in this country. We've seen what's happened. Loss of millions of jobs during the time that George Bush has been president. That's why I'll support small manufacturers and offer a 10 percent tax credit for manufacturers that keep jobs right here in America, where we need these jobs.
LOTHIAN: In other developments, Senator Edwards picked up the endorsement of the mayor of Albany. That is an area in upstate New York where the campaign will be focusing heavily.
The campaign also opened its headquarters in Minnesota. That is another state where they will be focusing, as well.
And in a final piece of news today, Senator Edwards sent a letter to Senator Kerry, where he's calling for four debates over the next two weeks. Part of that letter reads that, While we are all Democrats, there are very real differences among us. And the American people deserve to know who we are, and where we're from, and where we stand on the issues. No word yet on any response from the Kerry campaign.
Dan Lothian, CNN, Largo, Maryland.
(END VIDEOTAPE)
DOBBS: Federal Reserve Chairman Alan Greenspan today jumped into the controversy over exporting American jobs to cheap overseas labor markets.
The Fed chairman said the practice is not as big a threat to this country as some believe. Chairman Greenspan said the greatest threat to the future of American prosperity is the lack of adequate educational training. Greenspan said what he called protectionist cures would only make matters worse for American workers.
Interestingly, CEOs in this country have never raised education or skill levels as a reason for exporting American jobs. Whatever the Fed chairman says or believes, American companies continue to ship American jobs overseas. In Syracuse, New York, Carrier is closing two of its most productive and profitable factories and laying off 1,200 workers. Most of those jobs are headed to Singapore and Malaysia.
Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): Come April, 1,200 workers at this Carrier facility in Syracuse, New York, will walk out of these gates for the last time.
CHRISTOPHER FIACCHI, SHOP STEWARD: People are scared. People are running scared, people with me, with young families, people with established families that are getting ready to kind of ease into retirement. People are scared.
TUCKER: Chris is 32, but the average worker at the plant is 49. New York state and the plant's union tried to stop Carrier from exporting the jobs to Singapore, Malaysia and China with a $42 million incentive package.
FIACCHI: I'm very proud of my country. I'm very ashamed of its trade policies.
PETER KOVEOS, SYRACUSE SCHOOL OF MANAGEMENT: How did this happen? Well, we know how it happened. It happened because we didn't pay attention to it. It happened because we refused, as a nation, to pay attention to it.
TUCKER: As a result, central New York state alone has lost 10,000 jobs since 1990.
(on camera): What's happening in Syracuse, New York is no different than what is happening in many communities across America. Good paying manufacturing jobs are being exported out of the country, leaving behind workers and communities struggling with how to recover.
Syracuse is fortunate. It's home to Syracuse University. And efforts to diversify it's economy after GM, GE, and Allied Signal all closed plants have helped. DAVID CORDEAU, SYRACUSE CHAMBER OF COMMERCE: The effort to a diversification was what really led the way to the changes here and the ability to work our way through an industrial economy into a post- industrial or a changed economy that is serving us well.
TUCKER: But, as manufacturing jobs have left, wage growth has fallen below the national average.
SEN. HILLARY CLINTON (D), NEW YORK: Manufacturing is not a luxury. It's not an old-fashioned economic activity. It truly is core to much of what we need to do to maintain a strong economy and, I would argue, a strong national defense.
TUCKER: The union is not going quietly. It's filed charges of unfair labor practices against Carrier and is awaiting a hearing before the National Labor Relations Board.
Bill Tucker, CNN, Syracuse, New York.
(END VIDEOTAPE)
DOBBS: Even though Carrier is cutting hundreds of jobs, it turns out we may have more factory workers in this country than we perhaps thought.
The same White House economists who said outsourcing makes sense and predicted 2.6 million new jobs this year are at least considering counting fast-food workers as manufacturing workers.
Peter Viles has the story.
(BEGIN VIDEOTAPE)
PETER VILES, CNN CORRESPONDENT (voice-over): What if you could solve the manufacturing crisis with the stroke of a pen, instantly create millions of new manufacturing jobs?
Well, behold, the future of American manufacturing. Now, the idea that flipping burgers is manufacturing would be funny if we weren't serious about it. White House economic adviser Greg Mankiw actually raised the idea in his report to Congress.
GREGORY MANKIW, CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: The definition of what constitutes manufacturing is far from clear. For example, when a fast-food restaurant sells a hamburger, is it providing a service or combining inputs to manufacture a product?
VILES: At the core of manufacturing is the idea of added value. And fast-food jobs don't add much value. If they did, they would pay better. So critics are suspicious of the administration's timing and motives in raising the issue during an election year, when its record on manufacturing jobs is so dismal.
ALAN TONELSON, U.S. BUSINESS & INDUSTRY COUNCIL: McDonald's is not something that just sprung up last week. It's been around for most of the post-World War II period. And to bring up the possibility that now we should start thinking about reclassifying fast-food preparation as manufacturing, it's just plain fishy.
VILES: Mankiw said it's important to have an accurate definition of manufacturing, in case the government decides to base policies on the definition, for example, tax cuts targeted to help manufacturers.
Now, oddly enough, the White House does not support the policy, but that's exactly what Democrats John Edwards and John Kerry are proposing.
(END VIDEOTAPE)
VILES: Now, none of this is to demean fast-food jobs. For many young Americans, they are a terrific first job or a part-time job, but nobody would argue they are equal to the manufacturing job that have helped build the American middle class -- Lou.
DOBBS: It almost makes one want to ask, are they really serious?
VILES: What exactly were they thinking?
DOBBS: Well, that's not the first time that question has been posed in the last week or two.
Peter Viles, thank you very much.
Well, still ahead here, "Exporting America" one of the biggest issues now facing this country. I'll be joined by the AFL-CIO's Richard Trumka and as well Tom Peters, who is, without question, the most influential management guru in the past decades. We'll have his thoughts on "Exporting America."
And in "Broken Borders" tonight, a sudden rise in the number of illegal aliens entering this country. Jim Oberweis, a candidate for the U.S. Senate, says the president's immigration reform plan is blanket amnesty and a mistake. He's our guest tonight.
And not only American jobs are being exported overseas. A huge volume of your personal information is headed out of the country or perhaps it's already arrived. We'll have a special report.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: The AFL-CIO endorsed Senator John Kerry for president this week. And trade loomed large in their consideration. The union has focused on the loss of American jobs to cheap overseas labor markets and the forces that are buffeting American working families.
Joining me now from Washington tonight is the secretary treasurer of the AFL-CIO, Richard Trumka.
Good to have you with us.
RICHARD TRUMKA, SECRETARY TREASURER, AFL-CIO: Thanks, Lou. Thanks for having me on. DOBBS: Let's start with the endorsement for Senator Kerry. As quickly as you can, trade, obviously, what are the other reasons that you felt it was important to give your endorsement to him?
TRUMKA: Well, first of all, he understands that there's a job crisis in America. And he understands that the failed old policies, trade policies, aren't working, that trade has to work for all of America.
He also believes that health care is a matter of right for every American. He believes that every kid ought to go to a school that isn't crumbling. He also believes that our wages ought to be increasing. He believes in the American worker and we think he'll make a great, great president.
DOBBS: At the same time, Senator John Kerry has supported free trade agreements. He has been at the forefront, in fact. How do you square it up?
TRUMKA: Well, first of all, if you look backwards, you are absolutely right. He looked at those and he bought on to the notion that that trade agreements were going to be good.
But you know what happened? We got outnegotiated. Our government negotiated bad trade agreements and then didn't enforce the trade agreements that we have. He understands now that there's a crisis. He understands that those policies have failed. He's agreed to review all the trade policies the first 120 days of his office and, in addition to that, put workers representatives on those reviews.
For the first time, American workers are going to have a chance to have something to say about policies that export their jobs overseas.
DOBBS: Rich, obviously, those are positives. At the same time, as frustrated as we all are with watching the results of what has been, whether one styles it free trade or whatever, it has not been productive and balanced trade. This sounds a lot like process. Is there in your judgment a short-term solution to this very complex issue?
TRUMKA: Well, it is a complex issue. And I think it takes several things. There's no silver bullet. First and foremost, it takes somebody in the White House that stands up and says, I want you to manufacture here. I want you to export our products, not our jobs. That's No. 1.
Two, we need somebody who endorsed -- or who will enforce existing trade laws. Three, I think we have to have the tax code overhauled and begin to reward people who stay here at home, rather than reward those that go overseas. And then there are four or five other things.
DOBBS: And the tax code, we should point out does, without question, without question, reward the outsourcing of jobs, the exporting of America, and the investment as well in plant and equipment overseas.
You realize that unions are just a part of the problem. As we look back over the issue of wages, we hear from those who support -- quote, unquote -- "free trade" if unions hadn't driven up wages, if we didn't have a legal system that had a tort system that was out of control, that there wouldn't be this drive toward jobs overseas. How do you respond?
TRUMKA: Well, first of all, labor -- the labor unions of this country help build the middle class. And I have to tell you, I'm proud of that fact. I'm proud of the fact that the labor unions brought pensions and health care to all of our -- all Americans, that they helped us send our kids to school, that they helped us build a strong middle class that was the envy of the world. We're proud of that fact.
We think it's a red herring to say that it's unions that are to blame at this. These are bad policies, Lou. They got outnegotiated. They should have done a better job at negotiating. They should have done a better job in enforcing the laws. Together, working with management, I know something. I know the American worker can compete with anybody in the world. And that's what we want to do, just compete, beat them at their own game.
DOBBS: Rich, the AFL-CIO, organized labor in this country, has been strongly both diminished and marginalized in its influence, as compared to 20, 30 years ago.
To the degree that you could share it with us, is there any strategy by which you can offer in organized labor some sort of countervailing influence to these policies and these strategies on the part of U.S. multinationals that are -- I can say this a number of ways -- that are squeezing the working man and woman in this country?
TRUMKA: Well, there's several things.
First, I would note that, in the last election, we were about 25 percent of the vote that was out there. That's a considerable amount. Second of all, we have been the voice of conscience for the American worker. Over 75 percent of the American public agrees with our position on trade, has encouraged us to go forward.
What we also need to do is change the laws right now that are geared toward the denying people the right to have a voice at work and a union, rather than encouraging it. We need to do that. With a new president, we think we can get that done. Putting those things together, we think we can turn this around, form a partnership with corporate America and start exporting products, not exporting jobs.
DOBBS: Rich Trumka, AFL-CIO, thanks for being with us.
TRUMKA: Thanks for having me, Lou. I appreciate it very much.
Coming up next, the most influential management consultant of the past two decades says anyone who isn't in favor of free trade is an idiot. Tom Peters will be my guest. And exporting your privacy, the growing practice of shipping your most personal information to foreign countries. We'll talk to him about that as well. We have a special report tonight on your privacy and its exportation.
Please stay with us.
(COMMERCIAL BREAK)
DOBBS: Exporting work overseas is not only costing Americans jobs. It's also threatening our privacy. A rising amount of personal information is being shipped out of this country, including credit reports, home appraisals, tax returns.
Lisa Sylvester reports.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Steve Delahunty stamps made in the USA on all the tax returns prepared by his office. He wants his clients to know he's guarding their salary, Social Security numbers and property information and will not send their tax returns to be processed in another country.
STEPHEN DELAHUNTY, ACCOUNTANT: I don't want that kind of information going out of this office, much less going overseas.
SYLVESTER: But many other accountants are offshoring tax returns this season. That's not all. Home appraisals, credit reports and medical data are also ending up in the hands of someone outside the country.
CHRIS HOOFNAGLE, ELECTRONIC PRIVACY INFORMATION CENTER: Yes, there's a fishy problem here. And that is, many of the companies that are offshoring data are not telling their customers about it.
SYLVESTER: Last year, a Pakistani medical transcriber doing a work for a University of California hospital threatened to post patient hospital records on the Internet unless she was paid more for her work.
LIZ FIGUEROA, CALIFORNIA STATE SENATE: We never what people will have with this information. It's just not the medical private information. It has Social Security numbers. It has your personal home information, telephone numbers.
SYLVESTER: Despite the security risk, the prospect of cutting costs and saving time is driving more professional services, including accounting, overseas.
ALAN ANDERSON, AMERICAN INST. OF CERTIFIED PUBLIC ACCOUNTANTS: During the real busy times of the year, a CPA firm likely doesn't -- has such a need for workers that they -- that they would then outsource this work to third-party providers, whether they be within down the street or across the ocean. SYLVESTER: Work may be easy to ship across the ocean, but legal protections do not travel as easily. That means American consumers could lose more than their privacy. They could also lose their right to sue if there is a problem.
(END VIDEOTAPE)
SYLVESTER: The Congressional Privacy Caucus is drafting a letter to send to Health and Human Services Secretaries Tommy Thompson, raising concerns about private medical records being sent offshore -- Lou.
DOBBS: Those private records, as we approach tax time, how big a problem is it with the tax returns' tax information?
SYLVESTER: Well, we have seen an increase over last year. I spoke to an association here in Washington that represents midsize accountants. And they have seen their numbers just about double. This is more of an anecdotal information in just talking to some of their accountants, but it is an increasing problem, especially this tax season -- Lou.
DOBBS: Lisa, you -- Lisa Sylvester from Washington.
Coming up next, an explosion in the number of illegal aliens crossing the border, some blaming the Bush administration's immigration proposal. Jim Oberweis joins us. He says temporary legal status means amnesty for millions of illegal aliens already here. He's a candidate for the Senate. He joins us next.
And the leading management guru of at least the past 20 years says you have to have the nerve to destroy jobs in order to create new ones. We'll find out what Tom Peters thinks about "Exporting America."
Stay with us.
(COMMERCIAL BREAK)
DOBBS: The number of illegal aliens entering this country rose dramatically in January. Some say the sudden influx is a result of President Bush's proposals to grant millions of illegal aliens guest status, which some view as a possible amnesty.
Kitty Pilgrim reports.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): The number of illegal aliens crossing the Mexican border has surged in the last six weeks, since President Bush announced his immigration proposal. The Border Patrol Union says the president's plan and proposals in Congress have created false hopes of amnesty.
RICHARD PIERCE, NATIONAL BORDER PATROL COUNCIL: Now the aliens are asking the arresting officers about amnesty. They are under the impression that there's a program going on now.
PILGRIM: In January, 92,000 illegal aliens were apprehended, far higher than the arrests for the same period over the last two years. The crossings with the most traffic, San Diego, California; Tucson, Arizona; and Brownsville, Texas.
The National Border Patrol Council says a questionnaire given to illegal aliens when they are caught also created the false impression that amnesty was being offered. Some of the questions were: Did rumors of amnesty influence your decision to enter the USA? Have you heard from your government or other person any mention of amnesty in the future by the U.S. government? Do you plan to apply for amnesty if it is offered?
U.S. Customs and Border Protection would not share the results of the survey. And the questionnaire was discontinued after three weeks because there was concern smugglers were using the questionnaire to generate misinformation about amnesty to entice or encourage immigrants to cross into the United States.
Homeland Security Secretary Tom Ridge and Mexican Interior Secretary Santiago Creel today announced new initiatives to return illegal aliens back to their hometowns when caught. Ridge defended the president's guest worker proposal.
TOM RIDGE, HOMELAND SECURITY SECRETARY: The president has said before, it's not a matter of amnesty. It's a matter of recognizing the reality that -- of their presence.
PILGRIM: But that is obviously now how many illegal aliens are interpreting the president's proposal.
(END VIDEOTAPE)
PILGRIM: U.S. Customs and Border Protection tell us, illegal aliens arrested last month were -- quote -- "voluntarily returned" back to Mexico within hours of being caught. What they don't know is how many got over the border and are still here -- Lou.
DOBBS: Kitty, thank you very much -- Kitty Pilgrim.
Well, my next guest says President Bush's plan to grant millions of illegal aliens legal status in this country is a blanket amnesty. Jim Oberweis is a candidate for the U.S. Senate from the state of Illinois, a Republican candidate, and joins us from Chicago.
Good to have you with us.
It is not often that we hear a Republican candidate criticizing a Republican president in his bid to win a primary election and go on for general election. Tell us why you made this decision.
JIM OBERWEIS (R), ILLINOIS SENATORIAL CANDIDATE: Well, Lou, I certainly support our president in most of the things that he's done. I think he has done a great job on the war on terror and a great job in homeland security. But I have to say what I believe. And this is an issue that I think is very serious. And his proposal to me looks just like a blanket amnesty in disguise. And I think that would be bad for America. So I have to say what I believe. And I believe it would be a mistake.
DOBBS: One of the things that might surprise many viewers is that this is -- that Illinois is home to an estimated half million illegal aliens, how is that problem being dealt with in Illinois? What are the solutions that are being currently offered and planned?
OBERWEIS: Well, I believe a half a million is approximately right. I believe Illinois is No. 4 in terms of illegal aliens in this country, roughly equal to the percentage of its population with most of the rest of the country. Chicago has kind of taken this idea of a sanctuary city where they are not going to enforce their laws.
I think we need to take strong action to make sure our laws are enforced. There's a bill that was floated in Congress last year called the Clear Act that I think would take some steps in the right direction. It would require cities to follow our laws and to enforce our laws. It would provide minimal funding for local law enforcement agencies to turn over people who are arrested for other crimes, murder, theft, burglary, to the INS for deportation. I think that's the minimum that we need to do.
DOBBS: And local law enforcement, many agencies, at least representatives of those agencies, have said they are concerned about being asked to effectively enforce what are national immigration laws. How do you respond to them?
OBERWEIS: Well, we ask our local law enforcement agencies to enforce many national laws. You know, laws against murder, for example are asked to be enforced as there are many other things. I think this is something that's absolutely necessary. Here we're only talking about cases where they have already arrested someone for a crime and we're asking them to then turn them over to the INS to be handled properly.
DOBBS: Jim, there is many made of the act that the border patrol has been beefed up, if you will, along the Mexican border, as well as the Canadian border. It is also in none of the proposals that I have seen a rigorous suggestion that employers of illegal aliens be penalized or punished or fined. What is your position on that?
OBERWEIS: If we are going to make this work, we have to put pressure on people who are employing them illegally. Increasing fines or at least increasing enforcement of our laws. Right now we've gone the other way. We have made it hard for companies who find out they have illegal aliens working for them to dismiss them. Because they are afraid of being sued for discrimination. That's wrong. We should have some type of opportunity so that if a company finds somebody has given them the wrong Social Security number two times or three times, so they are sure it's not a mistake, those employees should be dismissed.
DOBBS: Jim Oberweis, thank you for being with us.
Our poll question is about exporting America. It's a bit of a quiz. The University of California at Berkeley did a study estimating how many jobs would be vulnerable to outsourcing to another country over the next approximate decade. Our poll question for you tonight is, "how many jobs do you believe are vulnerable to being exported overseas for the next decade? 3.3 million, 5 million, 7 million, 14 million." Cast your vote at CNN.com/lou. We'll have the results and the right answer, of course, a little later in the broadcast.
Now, some of your thoughts about "Exporting America." Ronald Slater of Shelton, Washington wrote to say, "when you ask companies (UNINTELLIGIBLE) about their stockholders than their employees is when this country started going downhill."
Glenn (UNINTELLIGIBLE) of Oxford, Michigan. "If General Motors, Ford, and DaimlerChrysler can take supplier parts and send them to China to be mass produced at the third of the cost, then why doesn't the cost of the vehicle ever go down? Labor is cheaper, parts are cheaper, but CEO pay increases.
Walter (UNINTELLIGIBLE) of Gary, Illinois. "When did the American dream become buying goods and services as cheap as possible? It used to be to have a good job, buy an affordable home, raise our children and hope that our children will be able to do the same if not better. Listening to the freetraders, it appears the American dream has been turned upside-down.
Send us your thoughts at loudobbs@CNN.com.
On Wall Street stocks lost on concerns of rising prices. The Dow and Nasdaq were both down for the week. For the Nasdaq that's five consecutive weeks of losses and the Dow today off nearly 46 points. The Nasdaq fell 8. The S&P 500 lost 3. Christine Romans is here now -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: The price Americans pay to make things is going up. The Commodity Research Bureau index of 17 raw materials, at the highest price since 1988. Oil prices are just below $36 a barrel and, Lou, steel prices are up almost 70 percent just since June. Just like we have seen in oil and gas, China is bidding up the price of steel. Its imports have exploded. It's so desperate for steel. It bought more than 200 ships to break apart for scrap metal last year. Scrap metal CEOs report record demand and they are scrounging for as much as they can get their hands on.
High oil prices make it more expensive to make steel and the weak dollar makes it more expensive to buy foreign steel and you are competing with China which analysts say is voracious. The U.S. produces just 10 percent of the worldwide steel marker. We're a net importer of steel and a quarter of U.S. steel consumption comes from overseas. That means steel users in this country are getting hammered right now.
DOBBS: And creating the prospect which the Fed chairman suggested of the specter of inflation and the distance, at least, we hope it's the distance. Christine Romans, thank you.
Still ahead here, a busy week in politics. Now the Democratic presidential race down to just two candidates. We'll be talking to the race for the White House and the politics of jobs with tonight's newsmakers.
Coming up next, I'll be joined by Tom Peters, he's the leading management guru of the last 20 years. He's here to talk about his views of the exporting of America, the leadership of corporate America, and what can be done to rationalize the exporting of America. Stay with us.
(COMMERCIAL BREAK)
DOBBS: My next guest says there is no way to stop exporting American jobs to the cheap overseas labor markets and he doesn't necessarily think we should try. He also says anyone who is against free trade is an idiot. Anyone who doesn't see the downside of free trade is an even bigger idiot. I'm joined by Tom Peters, he is simply an icon in American business. He's the leading management guru in this country and has been for some time. Good to have you here.
Exporting America, we have, I think, as the saying goes, kicked over a very controversial subject. And corporate America's wrestling with it, meanwhile millions of Americans are threatened by it, hundreds of thousands have lost their jobs and the only response so far from corporate America is 54 percent of us do it. We have no choice.
TOM PETERS, BUSINESS MANAGEMENT CONSULTANT: Yes, the strongest language I saw, I think it was about a month ago, Carly Fiorina was at the Consumer Electronic Show, and she said there is no job that is an American's God-given right. This is a pretty profound thing that's going on. The real reality is we've had an unearned advantage by living here in this island and that advantage has gone away with the new technology.
DOBBS: Has it gone away or have we thrown it away? To me that's a very important distinction.
PETERS: I'm not sure I say either. The numbers that stick in my mind, because of the fact it's a political season. Everything is at the full boil. During the period of 1980 to 2000, we actually destroyed 45 million jobs in this country and offset them with 75 million new jobs. That Microsoft, Amgen and Genentech and so on. And so the issue is not destruction which is incredibly healthy and will always be healthy. The issue is the offsets. And since the pricking of the dot-com bubble we've not been creating the Suns and Microsofts and the Amgens at the rate that we have in the past.
But the entrepreneurial energy that will build new companies and high wage activities. That's the only solution. I mean the farms gone, the factories are gone, the white collar jobs are leaving.
DOBBS: Like you, I'm a fervent believer in free enterprise. There is no economic system in the world that compares. I depart from you when you say that destruction of jobs is required, particularly when I hear the same COs with whom you speak regularly and to whom you train and guide with -- in your appropriate role, say that they are creating efficiency, that they are creating higher productivity, they are innovating, when you and I both know what they are doing is they are laying a man or woman off and they are shipping that job overseas simply for lower wage cost, period.
Cheap labor. That's all it and they want to dress it up.
PETERS: I think it's productivity. I really do buy the productivity thing. But the point is...
(CROSSTALK)
DOBBS: Wait, wait, when you say it's productivity, the same services and products are being provided, but simply at a lower cost. That's not productivity.
PETERS: Yes, but look. If you go way back, there -- Forbes were on the first of the big list in 1917, the Forbes 100. Seventy years later in 1987, 60 of them were dead.
I mean the future is not more jobs as IBM, Good morning, Carrier, GE. It's more jobs and companies that you and I -- what interests me is where is that 19-year-old sophomore at Harvard or BU or the University of Illinois who's working on the next Netscape or Microsoft?
DOBBS: And what has come to interest me, because you are a big thinker, and I'm becoming somewhat more granular if I can put it you -- in management-consultant speak...
PETERS: God help you, Lou.
(LAUGHTER)
DOBBS: I'm far more concerned about what is now an almost two and a half year gap in the creation of those jobs. And concerned about the lack of innovation. And to hear CEOs talk about not new ideas, and we're watching mergers being created that are not because someone wants to have...
(CROSSTALK)
PETERS: I don't expect the Fortune 500, the Forbes 1,000, or any other list like that, to create the jobs. I don't care whether Jeff Immelt is the CEO of GE, you are the CEO of GE.
You took off for a couple years from this marvelous network and you did something incredibly exciting. And you know after that bubble was pricked, you know, we've gone through a depressed period where we're not creating as many new companies.
But I think that is the only answer in the long haul. I just don't expect the Fortune 500 or the Forbes 100 or 1,000 to do it for us. It's Comcast and Disney, it makes front page news and you have to report on it. It's just not very interesting in terms of the long haul economic performance of the country.
DOBBS: But as you see it, whether they are the large companies or mid-size companies, contending with these issues, and our policy makers ignore it, the fact that there is the state of suspended animation, if you will around innovation, around job creation, and frankly, a lack of innovation in corporate America right now. That's got to worry you.
PETERS: Yes, but all I'm saying is I don't think there ever was much innovation in giant corporations. You know I spent 35 years of my life in Silicon Valley. You know Hewlett-Packard was the only company in Silicon Valley anybody heard, of maybe Fairchild Semiconductor when I came out there in 1970.
DOBBS: I take your point, Tom. But what I said was, mid-size companies as well. And I certainly -- the great respect of the life blood of the company is small enterprise.
But as we are watching this, the fact of the matter is these are the code words that are being used. And meanwhile, whether one wants to talk about homeostasis or the preserving the status quo, the fact is we've got millions of this people in this country hurting right now.
PETERS: Don't forget, also, there's another story that because we have been focused so much on the outsourcing, there's another story we aren't reporting on at the moment.
And that is we are losing as many jobs to the microprocessor as we are to the Chinese and the Indians. And you know I was utterly fascinated I just came back from Singapore, one of your early stories was the Carrier place in Syracuse is going to Singapore.
I was shocked by that because I was in Singapore and they are panicked. The headline in "The Singapore Straights News" said one Singaporian worker is worth three Malaysians, eight Thai, 13 Indians and 18 Chinese. They are as panicked about this stuff as we are.
DOBBS: Now that you have thrown away your entire client list of giant corporations, let me turn to this issue. One of the things Tom Peters brought to us was in search of excellence, empowering employees, values-driven corporations, reaching out to more than the stake holder as represented by the investor, but by the organism of the corporation.
Where are you on this issue now? As we look at a half trillion dollar trade deficit a year, the exporting of these jobs and corporations, frankly, just -- you can see them holding back.
PETERS: I think they are holding back. Where I am in the long haul, and since the only thing we're interested in the United States right now is from February until November, the first week there off -- in the long haul there is no issue and there never has been in my mind that enterprises that will perform best will be good citizens to their communities, to their employees, to the environment, and so on.
And the reality is with the VPs and some others we are even seeing it in the energy industry now that's going green on us. And they ain't doing it because they think the environment is an interesting thing to be involved in. They are doing it for the long haul health of the enterprise.
DOBBS: Tom Peters, I knew that we might begin at one point -- I knew that we'd end up agreeing. Tom, it's great to see you. Thanks a lot.
PETERS: Tanks.
DOBBS: Coming up next here, tonight's "News Makers." And later "Heroes," a Marine that's already served this country in Iraq preparing to return in a different role. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Joining me now tonight's "News Makers," Steve Forbes, editor and chief, "Forbes." Bill Powell, managing editor "Fortune." Jim Ellis, chief of correspondents at "BusinessWeek."
Gentlemen, good to have you here.
(CROSSTALK)
DOBBS: As we have seen the president back away from 2.6 million jobs. We have seen his economic advisers suddenly find at least room to pose the questions could a Wendy's be a factory. What in the world is going on, if I may turn to you because sometimes you seem closer to these issues than others.
STEVE FORBES, "FORBES": Well in terms of fast food, maybe he was referring to manufacturing waste because that's where that seems to go.
But that's like the ketchup thing. I don't know what the guy knew what he was stepping into and certainly provided fodder on the other side.
On the 2.6 million jobs, the Keystone Cops were running the White House last. Fact of the matter is I think they will produce over 2 million new jobs this year.
DOBBS: This year?
FORBES: This year.
DOBBS: Steve Forbes, I'm going to write that one down.
FORBES: Write down my stock market prediction, too. I made you money last year.
DOBBS: That's right. You were great. Actually, in truth he did. He had the best forecast on the stock market. We got to give you credit. I'm going to get you on this one.
FORBES: Well, I'm using the household survey.
DOBBS: Oh, for good grief sake.
(CROSSTALK)
DOBBS: The fed chairman, your ally in ideology...
FORBES: "Idiotology."
(CROSSTALK)
DOBBS: You use the Payroll Survey And -- good grief.
FORBES: The Payroll Survey ignores new businesses. It ignores proprietors.
DOBBS: And it also ignores a lot of noise that is statistically unreliable.
(CROSSTALK)
FORBES: It's been a better survey.
DOBBS: Weigh in here.
BILL POWELL, "FORTUNE": Actually economists will get it right. Although probably not until Greg Manqiw has gone back to Harvard. He's had a bad week.
I am amazed at how at sea the Bush White House seems politically. They just -- and I don't think it's just because the Democrats are still fighting each other and attacking and are still grabbing all the headlines. These guys just are having -- I mean it's more than a bad week, this is a bad couple of months here. I don't know what Steve thinks. I think Republicans are beginning to get a little nervous.
FORBES: Maybe they should bring Donald Rumsfeld to run the White House. He has done it before.
DOBBS: I think that that might be convenient to Mr. Rumsfeld's way of thinking, the way he's run the defense and state and intelligence agencies from his post. But the fact is what you are saying is exactly right, Bill. We're looking at a political set of missteps that are -- were unthinkable six months ago.
ELLIS: I think what happens happened is they have really been caught off guard by the whole change.
DOBBS: Well, are these some sort of wussy, pansy political naves, who....
ELLIS: No, I think that -- they thought this was going to be a different type of campaign. They expected, you know, right or wrong, that to go after Dean. And so this has thrown them off kilter. And the other thing is that they really did think the economy was going to come back with a much more traditional response to recovery. It hasn't happened now.
DOBBS: Let's take a look at a couple of thoughts, if we have them. Do we have comments from Don Evans? If we could show those to our viewers and these gentlemen very quickly? I'm told it is coming. There we go.
"My crystal ball is not clearer than anybody else's."
Let's go through a set of comments this week that I'd like you gentlemen to react to and for our viewers to study, if we could continue those, please.
Fed Chairman Greenspan, "Over the long sweep of American generations and waves of economic change, we simply have not experienced a net drain of jobs to advancing technology or to other nations."
Mr. Greenspan again, "The capacity of workers, after being displaced to find a new job that will eventually provide nearly comparable pay most often depends on the general knowledge of the worker and the ability of that individual to learn new skills and his call for greater education and skills, the American worker to avoid having his or her job shift overseas, purely for the basis of price level on those wages."
And treasury secretary John Snow, "I think we're going to create a lot of jobs. How many? I don't know. But we're going to keep working on it." Thank you Mr. Secretary.
Gentlemen, your thoughts?
FORBES: Well, it just shows they need somebody there who can crack a whip and get these guys on line. The fact of the matter is, the economy is beginning to grow again. Capital spending is growing at double digits. Personal incomes are rising, and these guys don't know how to play their good cards.
DOBBS: Bill your thought on faith based economics.
POWELL: Well, I think -- quite right. I think the issue, the broader issue, is credibility. And it's -- whether it's weapons of mass destruction or 2.6 million jobs, the administration just, you know, they say one thing and then something else seems to be true. And I just think -- deficit projection, similarly. They can't quite seem to get it right and get on the same page. They need to hurry up.
DOBBS: Is there any possibility here, Jim, in your judgment, you are going to get the last word here tonight. That this administration didn't expect this to be -- everybody is talking what a dirty campaign it is. Frankly, I'm seeing a lot of issues on the table. Is it possible the administration didn't understand that we'd be looking at substantial issues?
ELLIS: I think you're right on that. I didn't think -- they did not expect jobs to be this substantial an issue, simply because they miscalculated how fast the economy was going to pop up. Now they have to actually come up with real programs and real ways to convince the American public that this is serious.
DOBBS: Jim, thank you very much. Bill, Steve, appreciate it.
The results of our poll, "How many jobs do you believe are vulnerable to being exported overseas over the next decade." 1 percent said 3.3, 4 percent 5 million, 17 percent said 7 million, 78 percent of this bright sophisticated audience, as always, living up to its reputation, the correct answer 14 million according to the UC Berkeley study through 2015, I believe.
Coming up next, "Heroes" tonight we're telling you a story about a marine who says he wants to make a difference in the world. We'll have his remarkable story next. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Let me introduce you now to Marine Corps Sergeant Rodrigo Macias. Casey Wian with his story.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): Marine Corps Gunnery Sergeant Rodrigo Macias is a combat veteran of Somalia and Iraq.
SGT. RODRIGO MACIAS, MARINES: I don't say you get used to it, I don't say it gets easier, it's just you are able to handle yourself a little better.
WIAN: During Operation: Iraqi Freedom, he was in charge of supplying front line troops with everything from trucks to bullets. He returned to his family and Temecula, California home in August. Now he's going back with a different mission.
MACIAS: That's what I'm thinking a lot about (UNINTELLIGIBLE) it's going to be. Going around town, providing help for schools, taking equipment and stuff over to schools and hospitals and things like that.
WIAN: Still, that doesn't make the rapid redeployment any easier for his family.
JOSEPHINE MACIAS, WIFE: To be honest with you, it's really tough. I think any deployment for any spouse is hard. Him being back only for 4, 4 and a half months and then heading out again, I'm not real happy about it.
WIAN: Eight year old, Angelica's dad, has been away for a quarter of her life.
ANGELICA MACIAS, DAUGHTER: He's going to be away for my birthday again and for the father/daughter dance again. And I really want him to be here for the father/daughter dance, because last year he wasn't.
WIAN: For the Macias family, the last days before deployment have been all about spending time together.
RICKY MACIAS, SON: Before he's got to go, we're starting to play more video games, play with eachother, go out with the family, go out to the movies and do that stuff.
J. MACIAS: I know it's for a good cause that they are out there, but I do believe that we were told that we would be in and out, and I do believe that the military has already done it's job and it's time to bring our boys home.
WIAN: But Gunnery Sergeant Macias still has a job to do. He left for Iraq Wednesday.
R. MACIAS: When it's all said and done at the end of the day, I can say I made a difference in the world.
WIAN: Casey Wian, CNN, reporting.
(END VIDEOTAPE)
DOBBS: And that's our show for tonight. Thanks for being with us. Please join us Monday. We'll be in Washington. We'll be joined by the economist outsourcing advocates love to quote, Dr. Katherine Mann. We'll also be talking with former Navy secretary, James Webb.
For all of us here, have a pleasant weekend, good night from New York.
END
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