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Suicide Bomber Kills Six in Middle East; Venezuelan President Ousted

Aired April 12, 2002 - 18:00   ET


LOU DOBBS, CNN ANCHOR: More violence today. A suicide bomber kills six people. The Israelis now confirm hundreds of Palestinian casualties in the Jenin refugee camp.

Secretary of State Colin Powell has called off his meeting with leader Yasser Arafat. We'll have the latest for you from Jerusalem and Washington.

Another flash-point: the bloody turmoil in Venezuela. President Hugo Chavez has been forced out. The military has taken over. We'll take a look at why Washington has taken a hands-off policy with this oil rich yet poverty stricken nation.

Also tonight, a constitutional fight over, of all things, wine. We'll tell you how an upcoming court battle could effect wine and beer drinkers from the Napa Valley to Manhattan, Seattle to Miami.

And if you have a problem, he has the cause. A no-holds barred look at the state of the nation with best selling author Michael Moore.

ANNOUNCER: This is LOU DOBBS MONEYLINE, for Friday, April 12.

Here now, Lou Dobbs.

DOBBS: Good evening. Tonight, Sect. of State Powell's Mideast peace mission appears to be headed toward failure.

A suicide bomber blew herself up next to a bus in a crowded marketplace in Jerusalem. And word late this evening that Sect. of State Powell has postponed a meeting with Palestinian leader Yasser Arafat. His decision appears to be a concession to the Israelis, who have also refused to withdraw from the West Bank as demanded by President Bush.

And the Israeli offensive tonight is continuing. Israel's defense force now admits hundreds of Palestinians have been killed in Jenin and Nablus. The Palestinians say at least 500 people have died.

And today, U.N. Sect. Gen. Kofi Annan proposed for the first time that multinational peacekeepers should be sent to the region immediately to stop the conflict.

For more on the day's violence, I'm joined now by Bill Hemmer in Jerusalem -- Bill.


From the very beginning, this was said to be a very difficult mission and already it has turned that way.

Earlier today, a suicide bombing in central Jerusalem setting off a string of events right now.

Yasser Arafat and that meeting with Colin Powell will not take place tomorrow in Ramallah. It's been postponed about 24 hours. It will take place, instead, on Sunday.

All this coming after Colin Powell got together with Israel's prime minister in a four-hour meeting. After that, they met with reporters, but said no timetable has been set for Israeli military withdrawal from its action right now and its incursions in the West Bank.

That was about 1:00 local time earlier on Friday.

Three hours and 15 minutes later, the scene on the streets of Jaffa Road were devastating. A Palestinian woman, linked to the Al Aqsa Martyr Brigade, walking her way toward a market, seeing a number of security officials an a crowd inside, turned away toward a bus stop.

At that point she blew herself up, killing six, and wounding at least 65.

It was a scene of devastation. Just about two hours before the sabbath began here in Israel.

Afterwards, Colin Powell indicated that he condemned the terrorist attack under no uncertain terms. He came out publicly and said that, and a short time later on his way up to the northern border of Israel and Lebanon, he got a firsthand bird's-eye view from the helicopter of the scene below on Jaffa Road.

That was in Jerusalem, Lou.

Meanwhile, in the West Bank in the town of Jenin, in the northern part of the West Bank, there are serious and strong allegations once again today. The Palestinians are saying nothing short of a massacre took place there. They say hundreds are dead.

Other allegations accuse the Israelis of digging mass graves on the scene.

The Israelis deny that, vehemently deny that. They say the number of dead is much closer to 150. But we've been getting reports throughout the day inside Jenin. However, the Israeli military will not allow our reporters into the refugee camp. They say it's still a live military zone, and it is not safe.

Late last night, Lou, the Israeli government said they would let our reporters in on the scene. That did not happen today, on Friday. Possibly, independent verification may come from our team in the area on Saturday.

Once again, the Colin Powell meeting with Yasser Arafat, postponed 24 hours. It will not take place until at least Sunday morning in Ramallah -- Lou.

DOBBS: Bill, thanks. Bill Hemmer reporting from Jerusalem.

President Bush today condemned the attack in Jerusalem. He vowed that it would not derail United States efforts to broker a cease-fire.

For more on this, I'm joined now by Kelly Wallace at the White House -- Kelly.

KELLY WALLACE, CNN CORRESPONDENT: Lou, President Bush was in the middle of his daily national security council briefing this morning when an aide handed him a note, alerting him to the latest suicide attack.

The president will be monitoring developments from the presidential retreat at Camp David this weekend.

He left the White House early this afternoon, ignoring reporters' questions and not speaking out there.

As you see the president, talking to some White House interns.

United States officials continue to say the president believes Yasser Arafat, the Palestinian leader, should come out publicly and denounce this latest suicide attack.

United States officials are also saying that President Bush has given Sect. Powell "maximum flexibility," meaning that ultimately the decision whether or not to meet with Arafat rests with the secretary of state.

And, Lou, one other thing we noticed on this day, a shift in language.

The president and his aides now calling these homicide bombings as opposed to suicide bombings. When Ari Fleischer, the president's spokesman, was asked about that, asked about the shift, Fleischer saying the president believes this is the best way to describe what is going on on the ground.


ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: These are not suicide bombings. These are not people who just kill themselves. These are people who deliberately go to murder others, with no regard to the values of their own life.

These are murderers. The president has said that in the Rose Garden, and i think that it's just a more accurate description of what these people are doing. It's not suicide. It's murder.


WALLACE: And in another development, the United Nations Sect. Gen. Kofi Annan saying that the situation in the Middle East has gotten so bad that an international force should be sent in to patrol and monitor the Palestinian territories.

Asked about that, United States officials continue to say that they would support sending in monitoring if the Israelis and the Palestinians agreed to such a thing.

Monitors would be sent in to patrol, and basically adhere to any agreement, if one was decided on between the two sides.

Asked if the United States would support sending in armed peacekeepers or armed monitors, the word from the White House, Lou, is the United States is not considering such a thing -- Lou?

DOBBS: Kelly, thank you very much. Kelly Wallace from the White House.

Venezuela's military forced its president to resign today. That after riots, killed at least 14 people in Venezuela yesterday and overnight.

The military tapped Pedro Carmona. He is a well respected business man, to replace Hugo Chavez. Carmona promises to end the nationwide strikes that have severely reduced Venezuela's oil production.

Hundreds of thousands of people protested in Caracas yesterday.

The Bush administration blames Chavez for the unrest and the deaths. The former president is now being held at an army base and could face charges for the deaths of those protesters.

Chavez's forced resignation pushed oil prices sharply lower today, and extended yesterday's decline.

Chavez had led efforts by OPEC to reduce supply and raise prices.

Expectations that Venezuela will now increase its production sent prices sharply lower.

Light sweet crude oil, in fact, fell more than $1.50 a barrel. That is the biggest one-day drop in oil prices in five months.

It settled at $23.47 a barrel on the New York Mercantile Exchange.

The economic revolt in Venezuela means more than just a change in government. It also means a sea change for the United States in the region. The Chavez government, with its strong support of Cuba and Iraq, and its hard-line policies on oil, had been a concern for both the United States government and the world oil markets.

Now all of that is changed, as Kitty Pilgrim reports.


KITTY PILGRIM, CNN CORRESPONDENT (voice-over): A relief celebration. By the time Hugo Chavez was forced out of office, the streets were filled with jubilation.

Just 24 hours before, a demonstration of more than 150,000 in Caracas had turned deadly. 12 people killed, scores wounded.

The demonstration over the economy and problems at the state- owned oil company.

The blame for loss of life, clearly on Chavez, the military ruler who had openly supported Fidel Castro and Saddam Hussein.

FLEISCHER: The Chavez government suppressed peaceful demonstrations. Government supporters on orders from the Chavez government fired on unarmed peaceful protesters.

PILGRIM: The new interim president of Venezuela is all business. A trained economist and head of the country's largest business association. He has promised elections within a year.

Many see him as a plus for an economy that was in shambles after the regime of Hugo Chavez.

Another plus for world oil markets, Venezuela is likely to relax its strictly held OPEC production quotas and state-owned oil company employees will go back to work.

A sigh of relief in the oil pits in a particularly volatile week, in which crude spiked up with fears over the Iraqi embargo.

JIM BARRINEAU, ALLIANCE CAPITAL: We certainly don't have to be as nervous over the Middle East. Oil will begin flowing from Venezuela, probably as early as next week, when PDVSA (ph) gets back to work. And it will provide a pretty significant cushion in terms of any potential cutoff from the Middle East.

PHILIP VERLEGER, JR., COUNCIL ON FOREIGN RELATIONS: Venezuela was not Muslim, and so was listened to by many other countries, which might not have, listened to Saudi Arabia, which might not have listened to other countries.

So Venezuela is important. Real important.


PILGRIM (on camera): No one is predicting a complete return to normalcy in the oil markets. Venezuela looks like a plus for the markets, but the turmoil in the Middle East will likely continue to keep trading nervous and the prices volatile -- Lou.

DOBBS: Volatile prices as you say, but we're watching these oil prices decline far from well before Hugo Chavez was replaced as president of Venezuela.

PILGRIM: There's been some optimism in the markets, that the Iraqi embargo was a bit overblown in terms of price. And so, you've seen a retrenchment in the trading. And this Venezuelan development just...

DOBBS: A retrenchment, in point of fact six months back.

In terms of Venezuela, the United States government has been remarkably quiet and one could say, taking a hands-off policy here.

Even as Hugo Chavez was guarded by Cubans in his presidential palace, even as he is meeting with Libya and condemning the war against terrorism.

PILGRIM: He is a democratically elected leader, and as such they must respect the wishes of the people of the country.

But now it seems very clear that the tide has turned.

DOBBS: OK -- Kitty Pilgrim, thank you.

Still ahead here, the Marine Corps general who represents a new generation of military thinkers. General David Grange will be here to tell us about radical changes that lie ahead for the Pentagon and the military.

The main markets was about a percent on the week.

John Manley, Lakshman Achuthan, Jan Hopkins, Peter Viles, all will be here to tell us what to expect next week.

And the rules that stop drinkers from shipping their very favorite wines back home. The wine growers are fighting back. It could be a constitutional battle over wine, believe it or not. Stay with us.


DOBBS: President Bush is backing plans for a radical overhaul of the Pentagon's top ranks.

The most significant change will be the appointment of Marine Corps Commandant Gen. James Jones to be commander of United States and NATO forces in Europe.

This is the first time a marine has been chosen for that job. He's expected to be officially nominated this summer.

The shake-up marks an attempt by the president and Defense Secretary Rumsfeld to speed up the pace of change in the armed forces.

Joining me now to talk about this overhaul is Gen. David Grange.

Good to have you with us, General.


DOBBS: This effectively -- is it really such a big deal to put a Marine in charge of NATO?

GRANGE: Well, it's the first time. And it's the smallest service -- well, except for the Coat Guard, it's the smallest service of the big four.

And, so it is a bit of a surprise. And this Tom Ricks (ph) article that captured it the other day was a very surprising article.

But I think it's probably for the better right now.

DOBBS: For the better. Effectively jumping over a generation of officers. Why?

GRANGE: Well, I personally believe that Gen. Jones is very capable. He's a warrior. He's well respected by not only the Marine Corps but soldiers, the United States army and other services. And I think it's probably what they need in Europe.

DOBBS: They need that in Europe, but do they at the same time need to have this large a shake-up throughout the military? That effectively will end some careers, will it not?

GRANGE: Well, there probably will be some people that will move on. But that's what happens, especially when you're a general officer.

And, you know, we generals sometimes get a bit antiquated. We get set in our ways, and sometimes it takes a big push to shake things up.

What happens is, a lot of the soldiers, the sailors, marines, they think that the senior officers are old dinosaurs. And there's a trust issue sometimes.

And so it's good to have some changes like that. And that shock improves the force.

DOBBS: There are rumors, general, as well, that there's going to be a big shake-up for the army in Europe. Do you think that's necessary? Is it needed?

GRANGE: Well, what I read, Lou, there's going to be some changes in the levels of command.

DOBBS: Right. GRANGE: There's probably extra strata there and headquarters that could be eliminated. And, you know, we really need more troops than we do headquarters. So that's probably for the better, if that happens.

DOBBS: And this idea of a northern command being created by the Pentagon, for homeland security. What do you think of that idea?

GRANGE: I believe it's a good idea. It will be interesting in how the relationship, the connectivity with the homeland defense czar, Ridge, how that works out. The relationship between that and the secretary of defense.

Of course, he'll be another commander in chief, another CINC, that will report through the secretary of defense to the president. But the relationship with Mr. Ridge will be very interesting.

DOBBS: We have, general, turning to the broader war against terrorism, we have heard markedly little from Afghanistan about United States missions and operations. We've heard very little from the Pentagon about what is going on in other quarters of the world. Why do you suppose that is?

GRANGE: Well, you know, i think we in the media have a bit of a fixation on what they call in the military 25 meter target. What's happening right now. You know, the current events that are hot.

But there's a lot going on in Afghanistan still. It's a dangerous place. Rockets being fired. There's been some engagements, and the same elsewhere. You know, the Philippines, Colombia, Republic of Georgia. There's a lot of things going on around the world where we have our armed forces in harm's way.

DOBBS: General, that's just one of the many reasons a lot of people in the media now want to be putting their correspondents with those troops, so they can get both a 25-meter and perhaps even a 1,000-meter view of what is happening.

GRANGE: Well, I think that's a good idea.

DOBBS: General Grange, good to have you with us.

GRANGE: Thank you.

DOBBS: Coming up next, the state of the union, according to best-selling author Michael Moore. He's taken aim at corporate America. Now he sets his sights on the Bush White House. He has a new book out called "Stupid White Men."

We'll find out why he would say such a thing about all of us.

Counting the cost of competition in the telecom sector tonight. How a landmark telecom act left dozens of companies in bankruptcy.

And the markets move higher, barely, today. But they're certainly down on the week. I'll be joined by John Manley, Lakshman Achuthan, Jan Hopkins and Peter Viles.

And tornadoes have struck the Midwest. We'll tell you what damage they've done and what to expect. Stay with us.


FLEISCHER: The president condemns this morning's homicide bombing in Jerusalem. There are clearly people in the region who want to disrupt Sect. Powell's peace mission, and the and the president will not be deterred from seeking peace.



DOBBS: Another bankruptcy today in the telecom industry, where it is becoming easier to list the companies that are not in Chapter 11.

Today's victim, FLAG telecom, a high speed network operator. What's ironic about the rush of Bankruptcies now is that Congress encouraged those start-ups by passing what it considered landmark legislation at the time, the Telecommunications Act of 1996.

It was intended to usher in a new age of competition in the digital age. But it hasn't worked out that way, as Peter Viles reports.


BILL CLINTON, FORMER U.S. PRESIDENT: Today, with the stroke of a pen, our laws will catch up with our future. We will help to create an open marketplace where competition and innovation can move as quick as light.

PETER VILES, CNN CORRESPONDENT (voice-over): If only competition were that simple, people in the Bronx could probably watch the Yankees on cable TV. But there is no meaningful cable competition there or elsewhere. And Cablevision doesn't carry the Yankees.

A strikeout for the telecom act of 1996. Which was supposed to foster competition in local phone and cable service to the benefit of consumers.

SCOTT CLELAND, CEO, PRECURSOR GROUP: See, that's the irony here, is that this bill had nothing to do with consumers. This was an industry fix bill.

The baby Bells wanted into long-distance, the cable industry wanted deregulation and the broadcasters wanted more freedom to merge.

That's what this bill was really about.

VILES: So cable bills are up, competition is not, the baby Bells are in no rush to offer their version of cable TV.

GREG SIMON, SIMON STRATEGIES: We've set up all the conditions for them to do that. They chose not to compete with the cable companies, because it was expensive, and the phone wire is not as good at delivering video as the cable wire.

VILES: Investors certainly backed competition, putting up billions to start new phone companies. But the baby Bells used the home field advantage remarkably well.

Result: 38 new phone companies, now in bankruptcy.

Did the bill do anything right? Well, it did help accomplish something we now take for granted, competition in Internet service.

REED HUNDT, FMR. FCC CHAIRMAN: We saw the Internet take off in the United States as it did in no other country. We have the lowest cost for Internet access. We have the only true mass market for Internet access of any country in the world.


VILES (on camera): But the second generation of Internet access has triggered more criticism of the bill.

That fight is over the rules for broadband service and the baby Bells claim they're at a big disadvantage and that that unleveled playing field is actually delaying the rollout of broadband services -- Lou.

DOBBS: how's it delaying it?

VILES: Because they have to share their networks and they have to jump through all the regulatory hoops that a baby Bell has to jump through.

The cable companies don't. They say they'd invest more if they didn't have to face so much regulation.

DOBBS: So basically over a trillion dollars of market cap lost in the telecom industry and what we have to show for it is ubiquity and powerful ISP's. Is that right?

VILES: You have a choice in your ISP.

DOBBS: I tell you, that's worth a trillion dollars every time.

VILES: Not of my money.

DOBBS: Well, you know, I don't think it is our money actually. This one we can chalk up to the invisible hand.

Pete, thanks -- Peter Viles.

In other corporate news tonight, shares of Jet Blue soared today in its first day of trading in one of the most anticipated initial public offerings.

Shares of Jet Blue shot up from $27 to $45 at the close, gaining more than 60 percent on the day.

The IPO earned Jet Blue more than $158 million. They were trying to raise $143 million.

The airline, one of the few to turn a profit last year.

In an effort to raise money in a different way, Continental Airlines has raised many of its round trip fares by 20 bucks.

The airline industry collectively lost more than $9 billion last year. The September 11th attacks, of course, and the rising cost of oil, sending airline business plunging.

Overall, traffic in March down almost 9 percent.

New York City will receive its first new daily newspaper in two decades.

"The New York Sun" debuts next week in one of the toughest newspaper markets in the country during one of the worst slumps ever in the advertising industry.

The original "Sun" debuted back in 1833, and it's considered to be the nation's first mass daily newspaper.

Well, a modest rally on Wall Street today. Stocks recovered a bit of yesterday's steep losses. The Dow up almost 15 points. The NASDAQ up nearly 31. The S&P 500 rose just over 7 Points.

But those gains not enough, Certainly, to lift the markets for the week. The Dow closing lower for the fourth straight week, in fact. The Dow, NASDAQ, S&P, all down about 1 percent.

Joining me now to take a look at what's going on, stock strategist John Manley, economist Lakshman Achuthan and our own Jan Hopkins and Peter Viles.

John, let me turn to you. Good to have you here.


DOBBS: This market looks -- we talk about 1 percent, but it certainly looks and feels a lot worse than that.

MANLEY: It sure does. It was a long way to get to where we got to on Friday.

I think the news has been bad. It's grinding. It's the uncertainty that's driving people crazy.

DOBBS: Uncertainty bout what?

MANLEY: About everything. The Middle East, what's going on with earnings, the quality of earnings. There's all sorts of things that are weighing on people's minds right now.

DOBBS: Well, you know, you and I and everybody here, you know, we're used to hearing sort of the one response to the question, what moved the market today.

The fact is, oil prices may be a concern in the equities market, but they're obviously not in the oil market. We're looking at $23 oil here. That's the lowest it's been in six months. Why is the equity investor concerned?

MANLEY: Well, the equity investor was concerned on Thursday about that, when it looked like it could be a bit worse, number one.

Number two, there was the IBM issues. People were saying how legitimate is IBM's accounting and how legitimate were the rumors about IBM's account.

DOBBS: Which makes you wonder why in the world IBM didn't come out and say this is all ridiculous and while it took the SCC awhile to say so.

MANLEY: Well, it's nice when someone else says something good about you, I suppose.

DOBBS: When your stock is going down like that, I'm not sure that I would wait for someone else.

MANLEY: I think they made a phone call.

DOBBS: And GE. I mean, a lot of talk about GE's accounting and it turns out, by golly, there are some issues there. What are the issues, in your mind?

MANLEY: Well, to me the issues -- is it fairly stated on a mass basis? I mean, individual companies can have individual problems and there can be issues, as you said.

DOBBS: Right.

MANLEY: But if you look at overall corporate profitability, it's no higher than one would expect it, given the fundamental inputs.

So to me it's still an anecdotal problem. There may be a few more anecdotes than we thought, but it's not systemic.

DOBBS: When you say anecdote, you mean, if I may quote Dick Grasso from last night, only one percent of the companies have a problem here.

MANLEY: I don't know if that's the right number and I...

DOBBS: Well, there's the problem with the uncertainty.

MANLEY: But the point is, that goes away at some point in time. What was irrational exuberance may have become irrational pessimism. You never know until it's over. And I keep thinking, you know, how terrible things felt this week, and I keep thinking how wonderful things felt two years ago.

I know what I should have been doing two years ago. I have a feeling, two years from now, I'll know what I should have been doing today.

DOBBS: That retrospective is always the clearest.

MANLEY: 20/10.

DOBBS: Let's be prospective and see how good your eyes work on that one. What do you expect this market to look like in a year? What are the stocks that you expect to be doing well?

MANLEY: I think it's going to look better. Now, I don't think it's a straight line, but I think people are underestimating the strength of the economy and the effect that's going to have on corporate profitability. And I think that's the big play.

Expectations are down. Stocks are down, versus bonds. It's the recovery I want to play, and I want to play secular stocks in all their various guises.

DOBBS: Give me two or three, real quickly.

MANLEY: On the secular side, take a look at Intel. I think that's a pretty good one to look at. You want to play banks, play Bank One, which is a recovering quality play. Play Alcoa, which is a great company in an industry that isn't all that great. These are good companies that can show improvement as the economy improves.

DOBBS: Intel, Bank One, and Alcoa. Do you own them?

MANLEY: No, I don't.

DOBBS: OK. Lakshman, John's got a pretty good recovery built in there. Is he on the right track?

LAKSHMAN ACHUTHAN, ECONOMIC CYCLE RESEARCH INSTITUTE: I think we are on the recovery track. There is no doubt about it in my mind.

DOBBS: Inflation?

ACHUTHAN: Not a problem in the foreseeable future. I mean, we can't see that far. We can see a few quarters.

DOBBS: OK, a few quarters. I think everybody would sign up for that. Oil prices, as you heard John talk about that, these prices are down. But there's some anxiety in the equities market. Your best read?

ACHUTHAN: Well, I think oil prices, they bottomed four months ago in November, at $17, and began rising on the heels of a cyclical recovery. So I think the fundamentals on the demand side are positive. As we see, like these oil spikes, I think those fears, the fears of how that can impact the economy, I think those are probably overblown, because I think that the window of vulnerability that this economy had while it was in recession has been slammed shut.

We are on the road to recovery. We're in a sustained cyclical recovery. So the same shocks can't hurt us.

DOBBS: So, do I also understand you to be saying that, because the recovery's under way, but it's still early in that recover, it's not going to have a strong effect on price, even if there is a slowdown in production?

ACHUTHAN: I think affirming -- exactly. But I think there's an underlying firming in the industrial sector of the world, which is starting to soak up some of that supply.

DOBBS: Jan, your thoughts on this market?

HOPKINS: I agree with what they've both been saying. I've been hearing that at the market. I've also been hearing that people are still scared about a lot of things. So that, yes, they kind of believe that things are getting better. The economy's getting better.

But we're living in a world that's very different from what we've seen before. We don't know what's going to happen in the Middle East. All of the accounting concerns. I was hearing this week that the SEC investigations into companies might amount to 50 when it's all over. So, there's a lot of uncertainty that's kind of grinding through the market.

I keep hearing the word "schizophrenic" is a good explanation for what's happening. You have big mood swings. You have rallies where everybody's convinced that it's all getting better. And then huge sell-offs because of some event or, you know, something that's going on.

Now, yes, I think -- but if you look at the year, for the Dow, we're making some progress. Not very much, but we're basically holding on. We're a little higher than we were at the beginning of the year. Nasdaq is down. Maybe the Nasdaq recovers later in the year.

DOBBS: Pete, your thoughts?

VILES: Well, if you've had four straight weeks in a row, even if the fundamentals are getting better, four straight weeks of a weak market, you have to think that that may be a drag on the recovery to some extent. Because you may not have a negative wealth effect, but you don't have a positive one, that you had for so many years during the expansion. So I don't know your thoughts on that. But you're not having a wealth effect.

DOBBS: It's always been, I've always noticed that the market is an indicator of future economic activity that's going higher, not necessarily so if it's going lower. Is there anything to that observation?

MARLEY: As usual, Lou, a keen observation. You nailed it right on the head. I think the market has to deal with a lot of things. It's not just the economy. It's the things that can happen to the economy. It's the one-off things.

DOBBS: Now, one of the things I'm hearing from a lot of viewers, they're very concerned -- and Jan suggested this. They're very concerned about the integrity of the markets, if you will. The security of these markets.

How much more do they have to look forward to in the investigation by New York's attorney general, Elliot Spitzer, who has really come down hard, first on Merrill Lynch, and moving ahead to other firms. And we have the SEC, which will investigate -- when I say investigate, I'm talking about "take a look at" -- the 500 largest companies in the country. There may be as many as 50 investigations.

I mean, what's the effect on the market? I would think that has to be chilling beyond belief.

MARLEY: I think it's been chilling us for the last four or five weeks -- for the year. I think if you look at the fundamentals and why the market hasn't mirrored those fundamentals, it's those concerns. If you think about that, America's really good at being wrong. We're really good at fixing the things that are wrong.

And while this may be an overreaction, isn't it -- I'd rather have the overreaction, over-fix it. And we go through this now. And I think it ultimately is better for the whole market system.

DOBBS: We can say that in sort of a macro view. But the heads -- the CEOs of those companies out there are sweating bullets trying to get it right.

MARLEY: It's important, though. I think it is important to be done.

DOBBS: I couldn't agree with you more. I'm sure most of us couldn't. Lakshman, your final thoughts?

ACHUTHAN: My final thoughts are that it makes sense that there's confusion right now. We are at the beginning of a turning point up. So there's cross-currents in the data. And that's why it's confusing. If you focus on the leading indicators, it's pretty clear we're in recovery.

DOBBS: OK. Well, thanks to you all. Jan, Pete, John, Lakshman, thank you.

Still ahead here, one of America's most irreverent commentators, Michael Moore. He'll be here to tell us why stupid white men are to blame for everything wrong in this country.

NASA selects a teacher for a mission into space. We'll have that story as the crew of shuttle Atlantis, aboard station Alpha, getting it done.

And wine makers going to court to allow drinkers to ship their favorite vintages. That's important to a lot of people, important enough that it's going to cause, perhaps, a constitutional crisis. We'll tell you all about it, next. Stay with us.


DOBBS: Author, commentator Michael Moore pulls no punches. He skewered General Motors and corporate America in his famous documentary, "Roger and Me." Now he's taking aim at politics and politicians in his book, called "Stupid White Men and Other Sorry Excuses for the State of the News, Nation." One of his primary targets is President Bush.

And Michael Moore joins me now. Michael, it's been a long time since we've seen one another. Good to have you here.

MICHAEL MOORE, AUTHOR: Thanks for having me back.

DOBBS: "Stupid White Men." Why didn't you call it "Stupid Black Men," or stupid whatever?

MOORE: Well, you know what they teach you back in school. It's always best to write about what you know. You know?


MOORE: We are just a couple of dumb white guys, aren't we, Lou?

DOBBS: Well, this isn't an exercise in narcissism.

MOORE: Not exactly. But it's best to start from whence you came and then expand out.

DOBBS: I was amazed. just took you to task on this book, pointing out glaring inaccuracies, which -- what in the world...

MOORE: Some of these, I think they found some guy named Dan was named Dave, and there was another thing. But you know, look, this is a book of political humor. So, I mean, I don't respond to that sort of stuff, you know.

DOBBS: Glaring inaccuracies?

MOORE: No, I don't. Why should I? How can there be inaccuracy in comedy? You know.

DOBBS: That does give one license. I think you may have given all of us a loophole.

MOORE: When Jonathan Swift said that what the Irish do is eat their young, in other words, that's what the British were proposing during the famine, I think that, you know, you have to understand satire.

DOBBS: It was metaphorical. And when you say that president...

MOORE: Well, your point was that Salon and others are like liberals, so why would they -- actually, the only attacks on the book have come from liberals. DOBBS: Is that right?


DOBBS: Perhaps that's because, again, just dealing with what they know.

MOORE: Yes, maybe. Or maybe they're just -- some people get a little jealous. That's what you do. "How come he's on TV? He's on Lou Dobbs! What's going on?"

DOBBS: And it's selling well?

MOORE: It's been the No. 1 book in the country for the last month. How is that, at a time when supposedly there's 80 percent approval ratings for George W. Bush?

DOBBS: That's pretty good. And that's the next question I had for you. A couple things...

MOORE: That's my question for you. Why do you think it is? I don't have the answer.

DOBBS: Well, I will hardly pretend to be an expert.

MOORE: How could this be the No. 1 book? It's selling more than Grisham and Clancy right now, at a time when supposedly everybody's behind Bush. And this is nothing but a scathing attack on who he is, what he stands for and what he's done to the country.

DOBBS: Filled with glaring inaccuracies.

MOORE: Filled with glaring, comedic inaccuracies. And actually written by sweatshop workers in Honduras. Has that been pointed out yet? I think we might as well reveal all right now.

DOBBS: You know, I found it interesting. Now, his relative -- and I, for whatever reason, am blanking -- worked with you on "Roger and Me"?

MOORE: His cousin shot "Roger and Me."

DOBBS: You owe nearly everything, in one way or another, to the Bush family.

MOORE: The Bushes and I go back a long time. We're like this, I'm telling you. People are shocked to hear this.

DOBBS: Why do you call the president a "functional illiterate"?

MOORE: Well, it means he can function. I'm not so sure that he can read on an adult level. When he was asked what his favorite book was, he said "A Very Hungry Caterpillar," when he was a child. Of course that book wasn't written until he had graduated from Yale.

DOBBS: A glaring inaccuracy. MOORE: You know. Glaringly true.

DOBBS: The question I have is, why do you take on the president, though? You do. I mean, you have a number of (UNINTELLIGIBLE)...

MOORE: Well, it's a democracy. Take on the president. Take on the leader. That's what we're about. We're Americans. You question the leader. You have a free forum discussion. You have dissent. That's what freedom is, right?

DOBBS: It's exactly what it is.

MOORE: Except for the last six months, we've been told, you know watch what you say, watch what you do. You know, better -- right, Mr. Ari Fleischer, right? And I'm telling you, I think Americans don't like to hear that. I think that we actually like to speak our minds. And we think that, at a time when we're fighting for our freedom, the last thing you want to do is reduce our freedoms here at home.

DOBBS: I have no problem with that. I really think you're doing two things with that answer. Is you're answering your first question, which is about why the book is doing well, which you've now answered.

MOORE: Well, you've giving me way too much credit.


DOBBS: And the second part of it is, I didn't ask you how it's possible for you to criticize the president, the answer to which is the democracy you describe. I asked you why you were doing it. Why attack George Bush?

MOORE: This administration is bought and paid for by Enron, No. 1. There should be a special prosecutor to look into this whole thing. I mean, it stinks to the high heavens. That's No. 1.

No. 2, I have a lot of questions about September 11th and what was going on before that. Why the Taliban were visiting Texas, discussing the Unical pipeline that was supposed to be built across Afghanistan. Don't take my word for it. Go to the BBC. Go to many sources. You can read this.

DOBBS: A Taliban visiting Texas. If you'll forgive me, I won't be going to the BBC corporation.

MOORE: No, but you know what I'm saying.

DOBBS: I understand. And there were, in point of fact, discussions about various energy ventures in Afghanistan.

MOORE: And who was going to build the pipeline? Halliburton. Who was the head of Halliburton? Dick Cheney. Who did the feasibility study for the Afghanistan pipeline? Enron. You know, where does it stop? I want our representatives asking these questions. DOBBS: Oh, I think that they are, in point of fact, in particular in the case of the energy tasks force, for example, stupid white guys like me are asking questions like who did advise the energy task force.

MOORE: I was not thinking of you when I came up with the title.

DOBBS: I'm a sensitive guy, Michael. And on behalf of all stupid white men, which I really resent this title. But it's great to see you. We have to break off. Let's wish you a lot of success.

MOORE: Thanks for having me on. I really appreciate it. It's an honor.

DOBBS: Thanks a lot. Good to see you.

Coming up next here, tornadoes touch down in the Midwest. Heavy rains and hail, as well. We'll have those stories for you.

And the teacher who has been selected for one of the very best jobs: satellites and a mission into space. She's no stranger to astronaut training. That story and more, still ahead. Stay with us.


DOBBS: At least two tornadoes have struck southern Kansas. Hail the size of golf balls falling there as well, overnight. One twister caught on film from a car's passenger window. The storm dropped up to four inches of hail just outside of Wichita. The massive tornado touched down in farm country, passing through open fields for the most part. No major damage has been reported as a result of the tornado.

A teacher from Idaho will be going on a miraculous field trip. Today NASA announced that Barbara Morgan will go on a mission to the international space station in the year 2004. Morgan, the backup to Christa McAuliffe. Christa McAuliffe, of course, the teacher who died aboard the Challenger in 1986. The two trained together in 1985 and 1986. After the Challenger disaster, NASA suspended the teacher in space program. Morgan has been training since 1998, when NASA reactivated the program. Congratulations.

Regular viewers of this program are well aware of the advertising slump. We don't have news of change in ad demand. But we do have a story for you tonight about an unusual twist in ad supply. It's a story about ads and dogs. And who else could bring that to us, but Jeanne Moos?


JEANNE MOOS, CNN CORRESPONDENT (voice-over): It's one of those thankless jobs, so thankless only the very polite even bother to say, "no thanks." Anyone who's ever tried handing out flyers in a big city knows the unwritten rule.

(on camera): What do you do when you see someone who's handing out leaflets? UNIDENTIFIED FEMALE: Ignore them.

MOOS (voice-over): Whether they're from odd job or Blimpy's...

UNIDENTIFIED MALE: Bite the big one.

UNIDENTIFIED FEMALE: Usually the people that pass out the flyers are not usually appealing, actually.

MOOS: But now there's a new breed of leaf litter.

UNIDENTIFIED MALE: They're awfully cute.

MOOS: Meet Ling-Ling, Amber, Play-doh and Klaxon, the first living, breathing, K-9 bill boards.

(on camera): You know, the billboard is shedding a little bit.

UNIDENTIFIED FEMALE: I would take anything from a dog because they're so cute.

MOOS (voice-over): Even an advertising brochure for an adult education outfit called the Learning Annex. One guy even bothered to read it. The doggie billboards are being launched in Times Square, the epicenter of advertising.

UNIDENTIFIED MALE: Look at all the billboards around us, and we are more effective.

MOOS: The dogs carry the leaflets, or product samples and seduce passersby with everything from kisses to...


MOOS: While the human hands out the flyers.

UNIDENTIFIED MALE: You like to have your ears rubbed, don't you?

UNIDENTIFIED FEMALE: What's up there, baby?

MOOS: Even cops aren't immune.

UNIDENTIFIED FEMALE: They're so nice, Mommy.

UNIDENTIFIED FEMALE: They're so cute. It works, doesn't it?

MOOS: It's a little too soon to tell. Mark Vinci and his two partners from Rochester, New York, cooked up K9 Billboards and are planning to launch a 17-city campaign using mostly certified therapy dogs.

MARK VINCI, K9 BILLBOARDS: They love attention. They love people. And those are the dogs that we hire.

MOOS: That's your competition. They're handing out leaflets with dogs. UNIDENTIFIED MALE: Oh, that's great.

MOOS: Advertisers can expect to pay $500 and up per dog, per day.

(on camera): Any consideration about the doggie labor laws?


MOOS (voice-over): Of course, the dogs get breaks. Off come the vests, out comes the water. They get a little massage. Maybe take 40 winks.

UNIDENTIFIED FEMALE: I'm anti-dog billboard.

MOOS (on camera): Because?

UNIDENTIFIED FEMALE: Because I really feel like it's sort of prostituting the animal.

MOOS (voice-over): A K9 billboard sure didn't seem to mind being prostituted. But if dogs could be billboards, what's next? What else do folks find irresistible?


MOOS (on camera): Oh, babies are next, huh?


MOOS: Have the billboard babies. That's an idea.

(voice-over): You call that an idea? We call it half-cocked. Jeanne Moos, CNN, New York.


DOBBS: Well, "CROSSFIRE" begins in just a few moments. Tucker Carlson, Paul Begala join us now from Washington to tell us what's ahead. Gentlemen, how are you going to top a doggie billboard advertising campaign?

TUCKER CARLSON, "CROSSFIRE": Well, you know, Lou, as you well know, there's no topping a dog segment. We're going to try our very best. We're going to start with the turmoil in the Mideast. A live update from Wolf Blitzer. Then we're going to go to Congressman Anthony Wiener of New York, and Jim Zogby here in Washington.

PAUL BEGALA, "CROSSFIRE": And then we'll have political potpourri, wrap up the week with a couple of political consultants. I also saw the piece you had on teachers in space. I have one right wing pundit I might want to launch into orbit tonight, Lou.

CARLSON: That's a segment we call "Pol Pot," political potpourri. And with a name like that, you can't go wrong. So tune in. DOBBS: As we certainly will, gentlemen. Thank you very much. Have a great broadcast and a great weekend.

Coming up next, the "Dobbs Report." Tonight, a few thoughts on the Middle East.

Also, "In Their Words," including late night talk show host Conan O'Brien. Stay with us.


DOBBS: Wine enthusiasts going to court in New York next week. They will try to overturn a ban on shipping wine and beer across state lines. They say that ban is unconstitutional. Campaigners have already won court cases in several other states. But wholesalers say these rules should stay in place. Susan Lisovicz has the story.


SUSAN LISOVICZ, CNN CORRESPONDENT (voice-over): This is Long Island's wine country -- picturesque vineyards nestled in one of New York's premier tourist destinations. But every out-of-state visitor to these wineries is turned down when they make a simple request. Award winning wine maker Tom Drozd is frustrated.

TOM DROZD, PALMER VINEYARDS: When they're behind the bar and they say, wow, I really love this cabernet sauvignon. Tell you what, let me take a case, here's my credit card, here's my address, can you ship this to my house?

We're like, sorry, we can't.

LISOVICZ: New York, the second-largest wine market after California, prohibits wine shipments out of state.

UNIDENTIFIED FEMALE: Very light and fruity. Very crisp.

LISOVICZ: Trish Steiger can't send a bottle to her brother in New Jersey.

UNIDENTIFIED FEMALE: We could bring him a bottle of wine. But you cannot send it to him.

LISOVICZ: New York is one of 21 states that ban interstate shipping. Six states in the union consider it a felony. These laws originated with the repeal of prohibition in 1933. The 21st amendment said the states could regulate the alcoholic beverage industry.

(on camera): Small wineries say the ban on interstate shipping prevents them from growing their business. They don't have the resources to market nationally and distributors are often reluctant to buy little-known wines. Direct consumer sales allow them to get the word out.

(voice-over): Federal judges in North Carolina and Virginia recently sided with the wineries, ruling that the ban on interstate shipping violates the commerce clause of the Constitution. But wholesalers are fighting the court challenges. They say their role as middlemen is critical.

JUANITA DUGGAN, WINE AND SPIRITS WHOLESALERS: The states have a vested interest in making sure that there's an orderly marketplace. That taxes are collected. That there's accountability and responsibility for the people who are selling and distributing alcohol.

LISOVICZ: That debate over a bottle is now a wine case, with the next legal argument in New York. Susan Lisovicz, CNN Financial News, New York.


DOBBS: A few concluding thoughts tonight on Kofi Annan's historic call today for a Mideast peacekeeping force. First, I hope the principles in the Mideast conflict are inspired by the U.N. Secretary-General's call for a multinational peacekeeping force in the region. Kofi Annan is one of the few world leaders with the stature and personal capacity to not only make such a bold and constructive proposal, but to assure the principles and their allies of its fair and effective implementation.

The Secretary-General's proposal offers strong support for Secretary Powell's mission. It is also the best alternative, should the Powell mission fail. And too much is at stake for the world community to accept less than peace in the region.

The violence is escalating in Israel and the West Bank. Trade is being disrupted, and oil supplies, the oil supplies of our friends in Europe and Asia in particular, are being threatened -- all contributing to the potential for a broadening of the conflict.

Israel's founding was born more than 50 years ago in unilateralism, that of the United States. I truly believe Israel's peaceful future will be assured only in multilateralism, with the strong support of the United Nations. Kofi Annan's call should be heeded.

Those are my words. Now, "In Their Words."


COLIN POWELL, SECRETARY OF STATE: We do understand what terrorism is. And as we have responded to terrorism, we know that Israel has a right to respond to terrorism. The question is, how do we get beyond just a response? What is the next step? How do we get past that?



KOFI ANNAN, U.N. SECRETARY GENERAL: I think the proposition that a force should be sent in there to create a secure environment, and as well provide space for the diplomatic and political negotiations, can no longer be deferred.



ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: The president has always indicated, going back to last summer, that if the two parties agree for monitors to be placed in the region to help provide an environment for peace, that's something the United States will support. Secretary Powell was in the region, exactly now, trying to work with leaders to approach various ideas that could help get things back to a cease-fire, less violence and resumption of the political talks.



PEDRO CARMONA ESTANGA, VENEZUELA INTERIM PRES. (through translator): The people were calling for the resignation of the president of the Republic, Hugo Chavez. And I announced to the nation that Hugo Chavez has handed over his resignation as president of the Republic.



CONAN O'BRIEN, TALK SHOW HOST: Really, don't get me wrong. I'm very proud that I have a network special. But we still have to remember that cable is expanding, and they've got some great channels, too.

ANDY RICHTER, ENTERTAINER: Oh, yes, we should check it out.

O'BRIEN: Yes. One of my all-time favorites is the "Punch in the Face Channel."

RICHTER: Oh. Everybody loves that one. Who's on tonight?

O'BRIEN: Larry King. Larry King is on the "Punch in the Face Channel." We've got to check this out.

ANNOUNCER: 3, 2, 1...



DOBBS: That's MONEYLINE for this Friday evening. Thanks for being with us. I'm Lou Dobbs. For all of us here, have a very pleasant weekend. Good night from New York. "CROSSFIRE," up next.


President Ousted>



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