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LOU DOBBS THIS WEEK

Roundup of the Week's Reporting; Campaigns Down to Two Days

Aired November 2, 2008 - 19:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


LOU DOBBS, HOST: Tonight, the last weekend of the presidential campaign. A final offensive by the candidates. As many as one in seven voters remain undecided or could change their minds. What will be their impact? We'll have complete coverage here. And tonight, seething anger over the federal government's huge bailout of banks and financial institutions, a bailout funded by taxpayers who are being ignored by political and corporate elites, special interests and, of course, Washington lobbyists. We'll have all of that and a great deal more straight ahead tonight.
Good evening, everybody. The presidential campaign is in its final days and hours. National opinion polls show Senator Obama with a lead, but one poll by the Associated Press and Yahoo shows one in seven voters remain undecided or could change their minds. Those voters could play a decisive role in key swing states, states that will determine the outcome of this election. In a moment, I'll be joined by three of the best political analysts in the country. But first to tell us what's going on in the battleground states, we go to our John King. John?

JOHN KING, CNN CORRESPONDENT: Lou, heading into the final hours of the campaign, the map shows a very significant advantage for Senator Obama. Let's take a peek at it. It takes 270 electoral college votes to win. We now have Obama, the Democrat leading in states with 291. You see Senator McCain, the Republican, running significantly behind.

Worth noting, because if you look at the gold states, those are the top states on our map, even if McCain wins them all, and Obama has narrow leads in some of them, but let's assume for the sake of this hypothetical that Senator McCain wins them all, 27 electoral votes in Florida, 15 in North Carolina, 20 here in Ohio, Indiana, you pick up 11 more, state of Missouri, a very important bellwether, 11 there, and also up here in North Dakota, three electoral votes, that's a toss-up, even if Senator McCain runs the board of toss-up states, look at the math here. He still runs behind Senator Obama.

So he needs to take something that's blue on this map and turn it red. Significantly, the McCain campaign has targeted Pennsylvania. Again, for the hypothetical, let's turn that one red. John McCain still's short. Barack Obama would win in this scenario. So Senator McCain has to find something else that is blue and turn it over.

One potential target, the state of Nevada. That would do it if they could turn that state. That would be enough for Senator McCain. Most Republicans, though, think that will stay blue. So where else on the map? Maybe it's the state of New Hampshire. That's where John McCain revived his campaign in the primary. He could do it there as well. But as I go back to where we stand, heading into the final days, I say could, because the map shows the significance of the challenge. And let's underscore that by just going to three of these key battleground states.

Let's look at the state of Ohio. Sure, you're looking for undecided voters. But when you go into the battlegrounds where so many ads have run over all these months, look at this. 51 percent in our latest poll for Obama. 47 percent for McCain. A narrow lead, but quite significant in that you have only 2 percent of voters in Ohio that say they are still undecided. So McCain needs not only to win the undecided vote, but he has to peel some support away from Barack Obama as well.

An even steeper challenge over here in Pennsylvania. Not only does Obama have a significant lead, double-digits, 12 points, again, 98 percent of the people of Pennsylvania say they've made up their minds. So there's a very small pool of undecideds. McCain has to win them and peel off support from Senator Obama.

And lastly, let's go down and look at the key battleground state of Florida. Again, you see the challenge here. McCain is in play, certainly, 51/47 is a close race, but that adds up to 98 percent, meaning a very small pool of undecided voters heading into the final hours, especially in these states where so many millions have been spent on television ads. And the candidates have been there so many times. So again, as you head into the final hours, let's just underscore the key point. A significant edge for Barack Obama. And Lou, a very significant challenge for John McCain.

DOBBS: Thank you, John. John King reporting.

Joining me now, three of the best political analysts in the country, all CNN contributors. From Washington, Diana West, syndicated columnist. Here in the studio with me, Errol Louis, columnist, "New York Daily News", host of WWRL, its morning show. And Hank Sheinkopf, Democratic strategist. Good to have you all here.

Well, Diana, let's turn to you. These polls show a significant lead for Barack Obama. Is irretrievable for Senator McCain?

DIANA WEST, CNN CONTRIBUTOR: Strangely enough, I don't think it's irretrievable for Senator McCain. And the reason is that this was supposed to be for the Obama campaign, a campaign about President Bush and the economy. And in these final days, it's become a campaign of an election about the economy and Barack Obama. Namely who he is. Is he going to take the country in a Socialist direction?

DOBBS: And do you think that's resonating, Hank Sheinkopf?

HANK SHEINKOPF, CNN CONTRIBUTOR: Red baiting went out a long time ago. Frankly, that's not working. It's nonsense. People are very concerned about the economy. And the problem for John McCain is he's got 300 pounds on your back. That's George Bush. And it's hard to win a race when you got that kind of load.

DOBBS: Errol?

ERROL LOUIS, CNN CONTRIBUTOR: I think that's right. The problems that McCain has, the beginning of the general election campaign have not gone away. He's got the Bush legacy to deal with. He's got a running mate who's good at energizing the base, but Sarah Palin also turns off a lot of the Independents. The numbers seem to suggest that. So he's in a tricky kind of a place. He's got a couple of days to fight his way out of it. I wouldn't count anybody out.

I mean, I remember going into election day four years ago. And I think John Kerry was up by about six points. You know, they were measuring drapes and chilling the champagne. And it came out differently in the end.

DOBBS: Absolutely. And then it turned, of course, with Bush with a two-point lead, then finishing with a three-point lead. Going back to 2000, Diana West, you know, people forget, George Bush in 2000 at this point had a five point lead. And as we vividly recall, that ended up being a 48/48 tie. What do you think? Are there any similarities, any reason that Senator McCain should hope for a similar result here?

WEST: Well, I do. I think that there is tremendous uneasiness in this failure for Senator Obama to close the deal. And I'd like to get back to Hank. Are you saying that I am red baiting?

SHEINKOPF: I didn't call it...

WEST: That seems a bit extreme.

SHEINKOPF: That's not extreme. I think - you've done it before.

WEST: No, no, excuse me. Excuse me just a moment. There are many reasons, many factual reasons to discuss whether Senator Obama wants to take this country into a Socialist direction, namely, his membership in a Socialist-leaning party ten years ago or so.

SHEINKOPF: Leaning?

WEST: Or Socialist. You can split hairs if you like. And his very many statements that we are seeing, talking about redistributive change, talking about the failures of the civil rights movement to redistribute, you know, economic justice. We are seeing all kinds of reasons to discuss this, and including we're no longer seeing William Ayers as a sore thumb in his background, but part of panoply of radicals and subversives dating back to his days in Hawaii.

LOUIS: Diana, can I...

WEST: Just let me get this - yes, but let me finish this sentence, because what we're seeing...

SHEINKOPF: It's a long sentence, isn't it?

WEST: I understand that. But this is a very serious issue for Americans. And what we're seeing is that there are reasons to consider this a stealth candidate, who is trying to advocate Socialism.

LOUIS: I got to ask you something.

WEST: Yes, ask me.

LOUIS: Diana, this last week, the governor of New York, David Paterson testified in Washington that year after year, New York state sends about $86 billion more to Washington every single year in taxes than it gets back from Washington. Is that redistributionist? Is that Socialist?

WEST: We have a taxation system, yes, that confiscates people's money. What we are seeing from Senator Obama...

LOUIS: OK, so the existing system is Socialist.

WEST: ...is...

LOUIS: So the existing system is Socialist?

WEST: Yes, Error, the existing system is socialist, no. Well, the point is Senator Obama believes that the central control of the government...

LOUIS: Right.

WEST: ...should determine who should have wealth and who should have not. And that is a very key difference...

DOBBS: I will postulate, if I may here...

WEST: ...by looking at - yes.

DOBBS: ...as we wrap up and move on that after the federal bailout of Wall Street, we're all tinged a little, I believe...

WEST: Yes, I would agree with you.

DOBBS: ...with some Socialism, like it or not.

We'll be back with our panel. We'll be focusing, obviously, on the election throughout this hour. And early voting taking place across much of the country. New concerns about voter registration fraud and much of it by left wing activist group Acorn. We'll have complete coverage. And you won't hear too much about this on the campaign trail, but both candidates support the importation of even more cheap labor to compete with working men and women in our middle class. We'll have that special report and a great deal more. Stay with us. We're coming right back.

(COMMERCIAL BREAK)

DOBBS: The left wing group Acorn this week still claiming to be a nonpartisan organization, in spite of the fact that Acorn has launched a new advertising campaign that accuses McCain and other Republicans of voter suppression. In point of fact, Acorn is now under investigation in at least 13 states for widespread voter registration fraud. Lisa Sylvester has our report.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The group Acorn prides itself on helping build a better community, affordable housing, better schools, rebuilding the Gulf Coast. But it's currently under investigation in about a dozen states for alleged voter registration fraud, bogus names, bogus addresses or the same name registered multiple times. And critics like the conservative National and Legal Policy Center say Acorn has a history of bending the rules.

CARL HOROWITZ, NATIONAL LEGAL AND POLICY CENTER: Going back as far as 2004 and again in 2006 and again this year, they have been involved in what is overwhelmingly points to voter registration fraud.

SYLVESTER: The group was founded by union organizer Wade Rathky. Rathky was forced to step down in June after it was revealed his brother had allegedly embezzled nearly $1 million of the group's money eight years ago.

Acorn's highest officials allowed him to quietly pay back some of the money before the story broke. Acorn has also been under fire for its policies. The group fights for workers' rights, but when its own workers tried to form a union, Acorn's leader's blocked it.

According to records obtained by CNN in 2003, the National Labor Relations Board ruled the group violated the law by threatening employees and interrogating them about union activities. In 1995, Acorn tried to sue the state of California to avoid paying its own workers the minimum wage, saying it couldn't afford it. That suit was tossed out. The Employment Policies Institute is a pro-business group.

RICK BERMAN, EMPLOYMENT POLICIES INSTITUTE: There's embezzlement from Acorn. There is voter registration fraud under investigation by the FBI all across the country. There's an organization that won't pay minimum wage to its own employees. They've been guilty of that.

SYLVESTER: Acorn says the criticism is being generated by business groups on the right and the GOP trying to stop Acorn's community voter registration drives.

HUGH ALLEYNE, DELAWARE ACORN BOARD MEMBER: These are the folks, these Republican campaign surrogates, these are the folks who are tampering with the fabric of our democracy. Not Acorn in its efforts to get people to register to vote.

SYLVESTER (on camera): Acorn acknowledges some of its canvassers submitted false registrations, but says it's confident that any investigation will clear it of wrongdoing. And in this statement to CNN, Acorn's chief organizer said accusations against it were blatantly partisan attacks on the hundreds of thousands of working families that Acorn represents across the United States. "We are proud of the work we have done on behalf of America's working families to increase the minimum wage, to fight for better access to health care, to improve public education, and to empower millions of voters to take part in the electoral process."

Lisa Sylvester, CNN, Washington.

(END VIDEOTAPE)

DOBBS: We're back with Diana West, Errol Louis, and Hank Sheinkopf.

Hank, Acorn, year after year and community after community, state after state involved in voter registration fraud charges. What in the world? Why is this conduct being tolerated by them?

SHEINKOPF: It should not be. The Justice Department and local agencies should be involved. And frankly, if there are those kinds of activities, those people ought to be arrested, indicted, or sanctioned in the appropriate fashion. The fact that the federal government hasn't done it 'til now is what the scandal is, Lou. And that's where we should be.

DOBBS: Is there any scandal in the fact that Obama's campaign spent over $800,000 through the primaries for voter registration drives by Acorn, and that has a long-standing relationship with them?

SHEINKOPF: It is scandalous that local Democratic parties are not capable of doing what they're supposed to be doing, and you have to frankly outsource jobs to private vendors when citizens ought to be doing the work on behalf of the parties.

DOBBS: Errol?

LOUIS: I think there's a problem here in that a group like Acorn, or any other group that wants to do voter registration, is put into an impossible place. It's against the law to go out and start destroying registrations. So you go out, you register some people. You have a clearly fraudulent or fictional or inaccurate or spoiled ballot, and you still have to turn it in.

If you do enough of that, you end up getting exactly what Acorn's got, which is a lot of attention and even prosecution. So it leaves us with the question, who's supposed to go out and sign up people to register to vote? If they're not going to do it themselves, then, you know, you expose yourself to a lot of danger by going out there and trying to do what should be a great civic exercise.

DOBBS: Well, is this an example of what has become the so called nanny society, Diana West? I mean, when people don't even have the initiative to go out and register to vote. Yet we're spending -- 40 percent of Acorn's financing comes from the federal government. They're raising money from candidates like Barack Obama in this instance. And there are other obvious organizations. What have we come to here?

WEST: Well, I think that when citizens are interested and motivated to register to vote, it is very easy to do so. I think that the - you know, you see a lot of the activism and organizing on behalf of the groups like Acorn is almost a form of demagoguery in terms of trying to register. We know that they're trying to register voters who will vote their way. And we see a very symbiotic relationship between Senator Obama and Acorn in terms of the case right now in Pennsylvania, where an Acorn official is talking about getting Obama lists of "maxed-out contributors" to target for Acorn fund-raising.

So this is sort of a hand-in-glove operation here that I think is more than just a failure of citizens to do the right thing.

DOBBS: Well, certainly, it's not Acorn alone. It's organization after organization, activists organizations, if you will. Again, we call them activist organizations. It's the last thing they are, because they're really trying to help people be inactive. There's no assertion affirmative statement of civic involvement here. I mean, what's your thought on that?

SHEINKOPF: First of all, they're not going to go out and register people that aren't going to vote the way they want them to. I mean, no political party would do that either. The fact is...

DOBBS: Then why are federal dollars being spent with...

WEST: Good question.

SHEINKOPF: There's something wrong with that, no question about it. And political parties ought to be doing this job. But it tells you what kind of shape the political parties are in this country that all of them use entrepreneurial outfits like this to do registration.

How about getting volunteers and other people to do the work? Buy them lunch and dinner. Get to work and build a party structure. Don't vend it out.

DOBBS: Errol, you get the last word on it?

LOUIS: Sure, I mean look, I was as surprised as anybody to see that they're paying bounties. I mean, there was a Republican group that was doing this, where they're paying $3 to $10 for every person that they would register. I mean, that's crazy. I mean, what if you did that for how you selected juries? You know, I mean, it doesn't make any sense.

DOBBS: Don't give anybody an idea.

We'll be right back with our panel. Three of the best economic thinkers in the country also joining us here. And corporate elites doing their very best to put profits ahead of people. Again, planning to bring more foreign workers into this country, putting our middle class into direct competition with the cheapest labor in the world. That story and a great deal more coming up next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: New evidence tonight that corporate America continues to abuse this country's visa program. The Department of Labor reporting that a New Jersey computer company cheated foreign guest workers out of their wages, the very same cheap foreign labor that it hired to replace middle class American workers. The news comes just weeks after a government report found more than 20 percent of all applications for the visa program are fraudulent. Bill Tucker has our report.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): The economy slows, unemployment rises, and the number of layoffs increase. A website logging the layoffs in the tech industry run by CNET shows more than 45,000 layoffs announced in the tech industry alone during October. Yet both presidential candidates remain supportive of expanding the H- 1B visa program for hiring skilled foreign workers. They support the program, even though a recently published investigation by the U.S. Citizenship and Immigration Service, which oversees it, found a fraud rate exceeding 20 percent, with violations ranging from nonexistent businesses being granted visas, to phony job descriptions.

One group representing American computer programmers says the H-1B system is bankrupt.

JOHN MIANO, LAWYER, PROGRAMMERS GUILD: Since 1996, there have been scathing government reports about the H-1B program. And yet 14 years later, Congress has refused to do absolutely anything. Basically H- 1B is the best legislation money can buy.

TUCKER: Ironically, the first report in 1996 was from the Department of Labor. It was titled, "The System's Broken and Needs to be Fixed." One critic of outsourcing says it hasn't been fixed, it's been exploited by employers.

RON HIRA, ROCHESTER INST. OF TECHNOLOGY: It's perfectly legal, for example, to pay below market wages to undercut American workers. It's perfectly legal never to recruit or look for American workers before hiring an H-1B. And it's perfectly legal to replace American workers with H-1B workers, often times forcing U.S. workers to dig their own grave, forcing U.S. workers to train their foreign replacements.

TUCKER: So those critics say it should be no surprise that Bill Gates, when asked last year by Congress what the limit on the program should be had this to say.

BILL GATES: Even though it may not be realistic, I don't think there should be any limit.

TUCKER: Bill Gates' answer is there is a worker shortage. And if he doesn't get more visas, he will move his businesses overseas.

(on camera): And Gates underscored that point last summer when he announced the opening of a software development center in Canada, saying he couldn't find enough skilled foreign workers in the United States.

Wages for computer programmers, by the way, fell 5 1/2 percent from August of last year to August of this year, according to the Bureau of Labor Statistics. I don't know, Lou, does that sound like a labor shortage to you?

DOBBS: Well, no. And it sounds like more nonsense from Bill Gates. An obviously intelligent fellow, also extremely wealthy. But also, frankly, lying straight through his teeth when he talks about H-1B visas and his reasons for moving plants.

Bill Gates should be embarrassed. He should be ashamed of his conduct. If he wants to move his whole company out of the United States, so be it. But it's a time for respect of American labor. It's not a time to continue this all out assault against working men and women in this country.

And I invite Bill Gates to sit here and have a full and frank exchange of views on it. I really believe that he ought to be extraordinarily ashamed of himself. This is just unconscionable. And to stand there in that committee hall and say that back in March of this year, you know, disgusting.

Bill Tucker, thank you very much. I appreciate it.

Well, Microsoft is just one of several corporations that have pushed for an increase in the number of these so-called temporary visas, trying to bring in more cheap foreign labor into the United States.

Now, there's a cap of $65,000 a year on this H-1B visas. Another 20,000 of these visas are set aside for high technology workers with advanced degrees. But the $85,000 total figure is really an artificial cap, because there are so many subcategories of H-1B visas that have no limits at all, which include visas for nonprofits and research institutions. And this past April, the Citizenship and Immigration and Services Agency received 163,000 applications for the 2009 H-1B visas. Those H-1Bs are issued on a three-year basis, but can be extended to six years. No government agency -- I repeat, no government agency now monitors those workers to make certain they actually leave the United States when those visas expire.

Up next, this is the final weekend of the presidential campaign. We'll have a special report on the election upcoming and the risk to our democracy from voter registration fraud and the activities of the left-wing activist group Acorn. I'll be joined by Michigan's Attorney General Mike Cox next.

And the government bailing out banks and financial institutions. Taxpayers, you're paying for it. Don't look for a bailout yourself. I'll be talking with three top economic thinkers here next. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Joining me now, three of the country's best economic thinkers. Peter Morici, professor at the Robert H. Smith School of Business at the University of Maryland; Pat Choate, director of the Manufactured Policy Project, author of the book - bestselling book "Dangerous Business" and Charles Calomoris, who is professor of finance and economics at the Columbia Business School. Good to have you all here. This has been quite a remarkable week in one respect certainly. And that is, a stock market that has gained just about 9 percent on a week in which we learned that the economy was contracting, that there were all sorts of problems with the recapitalization of banks.

I mean, Charles, what's going on?

CHARLES CALOMIRIS, COLUMBIA BUSINESS SCHOOL: Well, the stock market is always ahead of economic events forecasting them. So while we found out GDP is falling, we knew that. We knew that in advance. What we found out actually was it wasn't falling as much as we thought it was. So that was good news.

We found out that the Fed cut interest rates by a half percentage point this week. And even more, we found out that the Fed set up credit lines for four large emerging market countries that's keeping global -- the global trade flows and access to dollar reserves going.

DOBBS: So you're saying that the stock market moving up this week and not in any small measure is a leading indicator of better times to come?

CALOMIRIS: Well, that's a hopeful way to look at it.

DOBBS: Well, I'm a hopeful kind of guy.

CALOMIRIS: I am, too. I think you can tell two stories, Lou. You can tell a story where the right combinations of policies and some good luck produces are coming out of this recession as early as June of '09.

DOBBS: Yes.

CALOMIRIS: You can also tell...

DOBBS: I don't want to hear any more.

CALOMIRIS: Yes. But I think that, you know, we also had some good news. and last time you and I were together talking about home sales ticking up. So there's some positives. You can tell a story about finding the bottom in this housing market if we get a few more good pieces of luck and a little bit of good policy.

DOBBS: Well, and that's to the middle of '09, all right. I will listen as you tell us what the bad story is. Will it go much beyond that, do you think?

CALOMIRIS: No, the problem is, we need to have -- to get a grip on exactly who's holding the hot potato in the financial system. Exactly where are these losses? The aggregate size of them is not so big really. But who's got them? And you can't really imagine a credit process starting up with full tilt until we have a clear sense of where they are. And that's something that we've been waiting to be resolved for months.

DOBBS: Well, Professor Morici, resolve that for us.

PETER MORICI, PROF., UNIVERSITY OF MARYLAND: Well, I think that the banks themselves are in sadder shape than they admit. It's much more than the subprime loans. I mean, the fact that they're going to pay dividends as if nothing is going on. And they're going to pay their executives these very large bonuses indicates they need a good -- a good bucket of cold water over their heads to be honest.

DOBBS: You termed that very well, professor.

MORICI: Just a good bucket of cold water. I don't believe we're going to get this economy going again until we do two things at least. And one is unlock the credit markets, get these guys lending again, which means cleaning up the banks.

But the second thing is also the trade deficit. You can talk about a stimulus package early next year, but that's just going to run up the trade deficit and cause us to borrow a lot more from abroad and start the cycle again. We finally have to deal with trade. If we don't deal with trade, we will not have a sustained recovery. We're just bleeding too many jobs every time we try to pump up the economy. Are we going to have a trillion dollar trade deficit? That's where we're heading. If we only had a stimulus package, fix the banks and don't get back to the fundamentals that got us into this mess.

DOBBS: Now we all here talked about recapitalization of the banks with federal money as one of the -- one of the primary and essential parts of any resolution of this crisis, Pat Choate. And here we are, we find out that half of the money to this point would be spent as dividends to shareholders of these banks over the course of the next three years. Is Hank Paulson, is he just demonstrating that he's every bit as incompetent as I have been charging for some time?

PAT CHOATE, AUTHOR, "DANGEROUS BUSINESS": You may have been understating the case, Lou.

DOBBS: I'm often accused of that.

CHOATE: The reality is when you cut these agreements, he should have put in the requirement for no dividends. He should have extended the whole question of bonuses, not to the top four, five guys to include everyone. We should just simply have a rule here. There will be no dividends paid until these banks are able to pay back the loans that are being made, or until the federal government decides it's going to cash out these warrants.

What is happening, I think, is the banks think it's business as usual. They had a crisis. They had their lobbyists all over Washington six weeks ago demanding this money. Now that they've got the money, they just want to go back to business as usual.

What they don't understand is the American people are not going to tolerate this. When Congress comes back, they should grab them hard on this and they should do one other thing. In that deal, they had a provision that's called a reverse veto to release that other $350 billion. DOBBS: Right.

CHOATE: They should change that. They should in effect say that it requires a positive vote of Congress before it can be released, not a positive vote to kill it and the president being able to vote it. If we don't do this, Hank Paulson will pull down that other $350 billion in the ten weeks before -- between the election and January 20th.

DOBBS: Do you agree, Charlie?

CALOMIRIS: I agree with a lot of what was just said. I agree and said so in September, we shouldn't be allowing dividends to be paid. It's ridiculous. And it's contrary to every principle.

DOBBS: But it's also contrary to just simple decency.

CALOMIRIS: Well, and to common sense.

DOBBS: Yes.

CALOMIRIS: But I don't agree that on the compensation packages, it's -- as much as you want to hold your nose when you read about it, legally, some of these funds were sequestered as salary -- basically salary and bonus payments, sort of like holding the waitress' tip back.

DOBBS: Right.

CALOMIRIS: From - you know, you pay them at the end of the year. So I think it's a tougher issue when you talk about people down in the weeds of the organization.

CHOATE: Let me just interrupt. The sequestering deals were done badly and shouldn't have been done. The institution itself were going down. They were losing money. That's why they were coming to us as the taxpayers are saying.

And basically we just say to them, we're really sorry that you don't get your sequestered moneys, but the whole institution lost money. You had to come to the public for money. And so you don't get it.

DOBBS: It's like...

CHOATE: Just like millions of other Americans are having trouble.

DOBBS: It's like we rescued a drowning man in the sea. You bring him aboard, and he takes over the galley of the ship and says, you know, I'll be - you know, I'll let you use it maybe next summer. I mean, it's an absurdity. You get the last word, Peter Morici.

MORICI: Well, yes, when the steel workers, when their companies went bankrupt, and they came to the government for tariff protection and so forth, they lost their pensions. These executives have bankrupted these companies.

Now they've come to the company to be recapitalized. They should lose this deferred compensation which they get when they leave the company, which is equivalent to their pensions. What's good enough for working men and women that make $20 an hour is certainly good enough for these guys who make $20 million a year. It's too bad, they lose the money.

DOBBS: All right, thank you very much. Charles Calomiris, thank you very much. Pat Choate, thank you very much. Peter Morici, thank you, sir. We appreciate you gentlemen bringing your insight to the air here.

Up next, the battle for the White House intensifies. And there's not much more intensity before the election. Independent voters may determine the winner of this contest. Our political panel returns. We'll take a look ahead to election day.

And early voting underway across the country. Will voter registration fraud undermine the integrity of this election? I'll be joined by Michigan's attorney general here next.

(COMMERCIAL BREAK)

DOBBS: As we've reported extensively on this broadcast, the left wing activist group Acorn is now under investigation in at least 13 states for widespread voter registration fraud. Michigan's Attorney General Mike Cox is investigating several cases of registration fraud in his state, including cases tied to Acorn.

Attorney General Mike Cox joins us tonight from Farmington Hills, Michigan. Mr. Attorney General, good to have you with us.

MIKE COX, MICHIGAN ATTORNEY GENERAL: It's good to be here, Lou.

DOBBS: How serious, how widespread are the cases you're now investigating of voter registration fraud?

COX: Well, Lou, that's what we are trying to get to the bottom of. We've charged three people over the past week, one with Acorn, two others with a group called the Community Voters Project, which is a similar third party group. It's not connected with local clerks. And they put pressure on their employees. There's a quota system. And employees go out. And they, with gross neglect, gross negligence, go out and get these bogus registrations.

You know, with Mickey Mouse, Donald Duck, the whole nine yards. And as you know, and as I know you reported on...

DOBBS: Right.

COX: ...even "The New York Times" indicated that over 30 percent of the Acorn registrations are bogus, bought, fraud or fake. And that should be disconcerting to anybody who cares about free and fair elections.

DOBBS: Free and fair elections and federally supported organizations like Acorn...

COX: Right. DOBBS: ...as much as 40 percent of their money coming from the federal government. I don't believe most taxpayers even understand that.

You've arrested and charged an Acorn worker in Michigan charged with six felony counts for submitting forged voter registration forms. Tell us a little bit about that, if you could.

COX: Sure, Lou. Basically, this guy went around and he felt the pressure of a quota from his Acorn supervisor. So he went around and filled out people from the neighborhood, or some dead people.

The folks we charged, again, dead relatives put on there. And it's a problem. It's against a backdrop here in Michigan. The Department of Justice tells us that in 38 counties, we have more registered voters than there are people eligible to vote.

And Lou, as you know, this is the first step for potential widespread fraud, especially in the area of absentee voting, where a person doesn't show up at the poll.

DOBBS: And it's happening -- it's happening across the country. I was talking with election officials in Mississippi. 123 percent voter registrations. That's the margin against the number of people over the age of 18.

COX: Right.

DOBBS: It's insane. I just want to go back to Antonio Johnson, who's been arrested in your state.

COX: Right.

DOBBS: Acorn had this response, saying, "Antonio Johnson was employed by us for a total of eight days. He was subsequently terminated at the time of his arrest. We immediately offered our full cooperation to both the Michigan attorney general's office as well as the United States Department of Justice." This from Scott levinson, the Acorn spokesman. Would you describe the kind of cooperation, the response that you are getting from Acorn?

COX: Well, apparently they're not talking to each other, Lou. Because the local director here in Michigan said that even if we get Mickey Mouse on the registration form, we're not going to filter it out, we're not going to stop it.

Now you, I, and everyone out there watching knows that Mickey Mouse isn't going to be a registered voter in the state of Michigan, but they're still going to try and pass that. But unfortunately, more - you know, John Smith, any other number of names that might get by local clerks and cause legitimate fraud. And it's absolute shame.

DOBBS: Mike Cox, attorney general, state of Michigan. Thank you for being here. We appreciate it.

COX: Thank you, Lou. DOBBS: Up next, Barack Obama, John McCain scrambling for votes in key battleground states. We'll have that report.

And John McCain says everybody is Joe the plumber. Is everybody also a Socialist? We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Well, in these final hours of the campaign, the fight in battleground states intensifying. Governor Palin holding a rally in Erie, Pennsylvania, despite poll numbers that show Senator Obama leading by a significant margin, double digit margin in Pennsylvania. Senator McCain's campaign says it can still win the state. Brian Todd has our report from Erie, Pennsylvania.

(BEGIN VIDEOTAPE)

SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: So, Pennsylvania, are you ready to help us carry your state to victory?

BRIAN TODD, CNN CORRESPONDENT (voice-over): A full assault on Pennsylvania, from a campaign convinced it can turn the tide where the Democrats have dominated for 20 years. Sarah Palin takes the point, starting with the critical blue collar belt in Erie.

PALIN: Only John McCain has the wisdom and experience to get our economy back on the right track, because he has a pro-private sector, pro-growth agenda to get government back on your side.

TODD: Palin's connectability with working class voters, union members, and socially conservative Democrats is a key reason she's here, why a McCain strategist says they can "move the needle in western, southern and central Pennsylvania."

Palin's appearance with Erie native and former governor and Homeland Security Chief Tom Ridge, designed to bolster the campaign's standing with Pennsylvania's veteran community.

PALIN: Let's not retreat from wars that are almost won. And let's not gut the defense budget in a time of multiple conflicts and obvious dangers.

TODD: Drawing contrasts with Barack Obama on security and taxes, part of a grander scheme to pick off a state where Obama took a pounding by Hillary Clinton in the primaries. (on camera): Officials with the McCain/Palin campaign tell us those Clinton blue collar conservative Democrats are winnable for them here. They believe the double-digit lead for Obama in many Pennsylvania polls is deceiving.

(voice-over): And local political science professor Robert Speel agrees.

ROBERT SPEEL, PENN STATE UNIVERSITY-ERIE: Pennsylvania traditionally also in recent elections, the Democrat such as John Kerry or Al Gore have had a large lead prior to election day. And then when on the actual election, they only won by a small margin. So Democrats often seem to poll better in Pennsylvania than they actually do on election day.

TODD: Speel says he'll still be surprised if McCain pulls out a victory in Pennsylvania on Tuesday, but he says if McCain wins or stays close here in this traditionally Democratic state, it means he's probably pulled closer in Florida and Virginia, those other battleground states we'll all be watching so closely.

Brian Todd, CNN, Erie, Pennsylvania.

(END VIDEOTAPE)

DOBBS: I'm back with Diana West, Errol Louis, Hank Sheinkopf.

Diana West, Palin and McCain in Pennsylvania. Every poll I have looked at this week shows a double-digit lead for Senator Obama in Pennsylvania. What do they know that the rest of us don't?

WEST: Well, you noticed how good John McCain looks? I think he loves being the underdog. And this is where...

DOBBS: Well, he's got to be happy as he can possibly be then in Pennsylvania.

WEST: I haven't seen him looking this like this, you know, for months in terms of being, you know, on fire with himself here with this election. But no, I think they're fighting for every vote. I think they're not believing the polls. I think that they're upset with the media with good reason. And so they're going to slug it out. They've got to.

DOBBS: Well, is there any hope that you see here?

SHEINKOPF: Listen, the day that John McCain ...

DOBBS: I'm asking a Democratic strategist to be honest.

SHEINKOPF: I try to be fair about it. Look, the day that he announced he was not going to campaign any longer in Michigan, and that he had given that up, John McCain did, was the day he effectively said good-bye Ohio, good-bye Missouri, and good-bye Pennsylvania. Who lives there? They're typically the same kinds of voters especially western Pennsylvania. That's the problem. and they ain't doing very well in those areas.

DOBBS: A call going out, you mentioned western Pennsylvania. John Murtha, congressman, calling the people of western Pennsylvania first racist, apologizing and then calling them effectively rednecks. Why would anyone want to vote for such a man, period? Errol?

LOUIS: Well, there's a good chance Murtha will get re-elected as he has for 20 terms now? So I think he'll do fine. And he knows something about that area that maybe the rest of us don't know. I do think though... DOBBS: Let me -- those people in western Pennsylvania have got to have the best sense of humor than just about anyone else in the country.

LOUIS: Could be. You know, look, there's some people who have redneck pride. You know, they really kind of run with it. But more seriously, the decision to pull out of Michigan, I think, it may have been based on what they think they have in the way of a turnout operation in Pennsylvania. I mean, they've been doing some very impressive stuff in Ohio. The turnout operation, which was formidable from four years ago. "The Wall Street Journal" reports it's in full motion. You know, half a million phone calls over the course of a week. And they're just charging along. And they're doing, you know, conference calls where voters pray together and that sort of thing, pray for a Republican victory.

DOBBS: Right.

LOUIS: If they've got anything like that going on in Pennsylvania, it may not be getting picked up by the polls. And this is going to be all about who gets their people out to the polls.

DOBBS: Well, and the ground operation talking with some of the election folks in Ohio this week, I have to tell you, whether they're Republican election officials or Democrat, they're all impressed by the Obama operation, Diana West, because he has 90 offices in Ohio. There are only 88 counties. That's pretty dog gone impressive, isn't it, Diana?

WEST: Yes, the scope of this, the money spent, the control issue we had this week. Also, a very strange thing with "The Washington Times ", "The New York Post" "The Dallas Morning News," being thrown off the plane. I mean, we're seeing this incredible operation -- the Obama press plane, that is. We're seeing this incredible operation of mopping up operation going. And those are the kinds of operations that don't always come out. I mean, you just don't know.

DOBBS: We're going to be back with our panel in just one moment. Stay with us.

(COMMERCIAL BREAK)

TIME STAMP: 1825:36

X: We're back with Diana West, Errol Louis, and Hank Sheinkopf. Let me begin, if I may, with you, Diana. This campaign as it winds down, do you believe that we've had an effective public debate that we're going to have as is always the desire in our presidential campaigns? A national consensus built on a strong, public discussion of the issues?

WEST: No. Shall I go on? No, this has been, I think because of our situation with the media being absolutely in the tank for Senator Obama, we have not had any sort of airing of the kinds of issues that are important for voters to make their minds up, including the character issue, including the ideology issue. And I would just add for the last segment, the...

DOBBS: Are you talking about Obama or McCain in that?

WEST: I'm talking about Senator Obama. McCain, we know about.

DOBBS: I know that. I'm just kidding, I know. But I happen to think that both - that question applies to both of these candidates. Pretty recently, frankly.

Every time I heard, Errol Louis, Senator McCain talking about who is Barack Obama, I thought who is John McCain here because he's -- he's distanced himself from his base on a host of issues. I'm not sure about his relationship with his party. I mean, it's very confounding.

LOUIS: Sure.

DOBBS: The man says he wants to be away from George Bush and then calls himself the greatest free trader on the planet.

LOUIS: Yes, you know, I feel a little cheated, to tell you the truth. I have not reported on McCain prior to this election campaign. and the one day that I spent in the press pool to follow him around, and you know, he absolutely ignored the entire press pool. You know, and maybe he decided that we were all in the tank anyway, there's no point in talking to anybody from any news organization.

DOBBS: Only 90 percent of you.

LOUIS: Well, you know, regardless, you know? Regardless it's like you're going to just leave me to draw my own conclusion then that's just what I'll do. But I think it's unfortunate because whether or not you're for or against the candidate, whatever they think about the mainstream media, I think we could have conducted a better campaign.

There's been a campaign to inform the public.

DOBBS: Right.

LOUIS: We have a few shows like yours that will just talk about an important issue, regardless of whether or not it's leading in the polls or coming out of the mouths -- on the stump speeches of the candidates, but that's the exception and not the rule. There aren't enough instances in which people in the press say you know what, I don't care if nobody talked about this today. Here's an important piece of information and an important issue we need to tackle.

DOBBS: I use 90 percent of the national liberal media being in the tank, Hank, because politico.com used 80. I thought I'd trump them by 10 percent.

SHEINKOPF: You didn't trump them. They are in the tank. And they've been in the tank since the beginning and they continue to be in the tank. But part of the problem of staying in the tank is McCain's problem. Instead of presenting him as the true American hero, along with himself being presented as the guy who took on big tobacco, who took on special interest, who supported campaign financing, who chose to stand on the other side and clean up Congress and try to get money out of the way, he didn't do that at all.

DOBBS: Right.

SHEINKOPF: He presented a mixed image that was unclear from day one.

DOBBS: Yes, you know, people forget, this guy has a lot of accomplishments to talk about. And he's talking about who is Barack Obama, but as I said n my opinion, failed to say who is John McCain and what does he really believe? And I believe, Diana West, he also missed another great opportunity when he went along with the bailout, the federal bailout of Wall Street and threw in his lot with $150 billion in pork which he's been against throughout his entire career.

WEST: Absolutely.

DOBBS: So it's quite a referendum on leadership as well.

WEST: I agree. I would agree with Hank that yes, he's presented a mixed message. You haven't really known which way his campaign was going go. I think that if he ever was going pull this out that the whole thing would turn on Joe the plumber, that remark, and the spread the wealth remark around because it gave John McCain a focus.

DOBBS: Real quickly. We got 30 seconds. Who is going win this election, Diana West?

WEST: I hope the people win.

DOBBS: I'll take that as a -- I think she just voted for president.

Errol?

LOUIS: It will either be McCain winning in a squeaker, a very close election, or it will be a blowout by Obama. I think a blowout is far more likely.

SHEINKOPF: We said in this program a long time ago -- very, close or very far. Very far. Barack Obama, seven plus would be my hunch.

DOBBS: All right, folks, thanks a lot. Errol Louis, thank you very much. (INAUDIBLE) thank you very much. Hank Sheinkopf.

Well, thank you for joining us. And join us here tomorrow. And a reminder to please join me on the radio, Monday through Friday for "The Lou Dobbs Show." Go to Loudobbsradio.com to get the local listings in your area for the broadcast.

For all of us here, we thank you for watching. Good night from New York.