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Can Bush Bring Homeland Security Agencies Together?; What Will it Take to Soothe a Savage Market?; Are New Alcoholic Drinks Aimed at Kids?

Aired July 16, 2002 - 19:00   ET


ANNOUNCER: CROSSFIRE. On the left, James Carville and Paul Begala. On the right, Robert Novak and Tucker Carlson.

In the CROSSFIRE tonight: from our driver's licenses to our borders, he's got us covered.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Today I'm sending to Congress our new national strategy for homeland security.


ANNOUNCER: Is anybody feeling safer?

Finally, a voice to soothe the savage markets.


ALAN GREENSPAN, FED CHAIRMAN: The fundamentals are in place for a return to sustained, healthy growth.


ANNOUNCER: We'll take stock with our own man of the markets.

And it's soda pop with a kick. Just who is the liquor industry trying to target?


From the George Washington University, James Carville and Robert Novak.


Tonight, the latest quest on BYOB: soda pop that brings its own booze.

We also talked Lou Dobbs into sticking around to explain the mess with money in the markets.

So let's get down to business with CROSSFIRE's "Political Alert."

Today Federal Reserve Chairman Alan Greenspan did something that George W. Bush has been unable to manage for a week. In testimony before Congress, Greenspan sounded upbeat about the economy. At the same time, he sounded credible about the need for business and accounting reform.

We're watching you, Mr. President. Were you taking notes?

Wall Street investors still seem to know who's boss. In spite of Greenspan's reassurances, the Dow Industrials closed down another 166 points.

ROBERT NOVAK, CO-HOST: Well, I tell you what, it takes more than Alan saying a few kind words to get the market up again.

CARVILLE: Better call for (ph) either an increase in corporate profits or something else going on here.

NOVAK: Defense Secretary Donald Rumsfeld is fighting a losing battle, but he's still fighting.

In a July 12 memo he reminded the Defense Departments, military and civilian staff, that leaking classified information is not only against the law, it damages, he says, the country's ability to fight terrorism, and is actually putting American lives at risk.

This memo was written just after the "New York Times" published a detailed story about Pentagon planning for an invasion of Iraq. It was also an internal memo that turned up in the "Los Angeles Times."

Now the Pentagon is the leakiest building in Washington in war or peace. And Mr. Secretary, memos won't plug the leaks.

CARVILLE: Is that the story that they were going to use Jordan as the basis to invade Iraq? One of the really dumb things. I don't think Jordan liked that too much.

Never mind that the markets are tanking, the dollar is dropping, and your 401(k) is going to retire before you do, Treasury Secretary Paul O'Neill has more important things on his mind.

Heck, he isn't even in the country. O'Neill has going to some of the unpronounceable republics of the former Soviet Union. And not that long ago he was doing a publicity safari through Africa with rock star Bono.

Can you imagine Bob Rubin or Larry Summers leaving the country during the same kind of economy? Mr. Secretary, if you want to visit Georgia, I have a nice spot for you to visit: Atlanta.

What is this guy doing, man?

NOVAK: Well, listen, you've got to give him credit, he didn't take Bono with him on this trip, so he's improving.

CARVILLE: I mean, it's unbelievable.

NOVAK: California Democrats thought they had survived their worst nightmare: The Terminator as Republican candidate for governor. Yes, Arnold Schwarzenegger; he decided against opposing California's Democratic Governor Gray Davis this year.

But Arnold met Republican governors at the National Governors Conference in Boise, Idaho this week, and talking with reporters said he still harbors political ambitions; that he imagines himself as governor of California.

Said the actor who's now filming "Terminator 3: Rise of the Machines," what a great feeling to go to bed every night and say look, how many people I helped today.

Well Arnold, what a bad feeling that would be for Democrats.

CARVILLE: Well, look, he's married to a Democrat, so what can I say?

President Harry Truman said "If you can't stand the heat, get out of the kitchen." He didn't say "If you can't stand the heat, suspend the chef for a week without any pay."

The second-best show on cable television is on ESPN, it's called "Pardon the Interruption." It's hosted by two of my dear friends -- one of my particularly good friends -- Tony Kornheiser and Michael Wilbon.

Tony was suspended by the jerks that run ESPN for making remarks about them that they didn't think complimentary when he was off- camera.

You know, I tell you, I've got to say this about the people at CNN, the first night on here I attacked the head of AOL-Time Warner, Bob Parsons, who's my boss. Nobody ever called me or did anything else.

Mr. Parsons, I don't like what you did on the Social Security Commission, but you're a man of integrity. You let people on this network a lot of freedom.

The jackasses that run ESPN are nothing but a pack of pompous asses. Tony, take your suspension and go back and (UNINTELLIGIBLE) you do a good show.

NOVAK: I think I'm suspending ESPN for a week.

CARVILLE: And I agree with you. Boycott them, thank you.

NOVAK: Janet Reno is an absolutely terrible Democratic candidate for governor of Florida. Now it turns out she doesn't even have enough money to run against Republican Governor Jeb Bush.

The former attorney general of the United States raised only $369,000 during the three months ending June 30. That means she just has $224,000 left in her war chest, not enough to even run campaign ads.

The polls show her way ahead of the Democratic nomination against lawyer Bill McBride, but he has over $3 million -- $3 million -- actual and potential.

Could he beat Janet Reno? The Republicans are praying that she survives the primary.

CARVILLE: Let me tell you, McBride is a serious guy, and he's got a lot of the money in the bank. And I think he's...

NOVAK: You don't love Janet...


CARVILLE: I like them both.


CARVILLE: I'm just saying the man is a serious guy, and they've got them coming down the stretch here.

NOVAK: OK, the Bush team revealed its secret recipe for improved homeland security today. First, you make a what?

CARVILLE: A rue (ph).

NOVAK: A rue (ph).

CARVILLE: That's a Louisiana thing.

NOVAK: Yes. Add about two dozen scrambled government agencies, throw in a stockpile of new vaccines, sprinkle with laws on secrecy and extradition, season with red teams and serve it up on a brand-new Cabinet-level department.

If it doesn't make you hungry, will it make you feel safer?

In the CROSSFIRE tonight, Texas Democratic Congressman Martin Frost and Ohio Republican Congressman Rob Portman.


CARVILLE: I think the last time I saw you was in Columbus.

REP. MARTIN FROST (D), TEXAS: You weren't wearing those glasses, though. I hardly recognize you.

CARVILLE: But Congressman Portman, we have been assured time and time again by the Republicans in Congress and the president that this new thing here is not going to cost us any more money, right?


CARVILLE: Would you be willing to lead a petition to be signed by all the Republicans in Congress, an oath to the American people, that this won't cost them an additional dime so they can sort of post it on their refrigerator or something like that?

PORTMAN: We ought to save money.


CARVILLE: Would you just pledge to the American people by the Republicans in Congress and President Bush: We promise you this will cost you no more money when we do this than it did before?

PORTMAN: If we can keep the Democrats in Congress from adding new things to...


CARVILLE: You've got a majority in the House, what are you talking about? Of course you can keep them. You've got more votes than they've got.

PORTMAN: Not in the Senate.


CARVILLE: But would you sign a petition?

PORTMAN: Here's the whole concept: You've got now over 100 different agencies and departments in the federal government that are involved with homeland security. The left hand doesn't know what the right hand is doing. You've got 100 people in charge, and nobody in charge.

You need to bring it all together. And you can consolidate those functions, you can get increased efficiencies.

If you don't, you've done something wrong, because if you do it right with some management flexibility, with some ability to move appropriations around a little, which we've had a hard time getting through Congress.

If you can manage it, you should be able to get...

NOVAK: Congressman Martin Frost, I want you to listen to something that Governor Ridge, the head of Homeland Security, adviser to the president said today.

And let's take a look at it.


TOM RIDGE, HOMELAND SECURITY DIRECTOR: This is not about moving managerial boxes around on an organizational chart. It is about ensuring that we have the resources and the people in place to address the ever-changing threat of terrorism.


NOVAK: Now, you members of Congress -- and I think this applies to both Democrats and Republicans -- I try to be bipartisan.

This is -- you don't agree with that. You think this is about moving things around -- boxes. We want to make sure we don't put some boxes -- put FEMA in the agency. We don't want to put the Secret Service in.

You're interested in turf wars rather than the safety of the American people. Is that right?

FROST: Well Bob, actually that's not true. We have a bipartisan committee, we want to work together, we want this to be successful.

You know, James raised a very good point a minute ago. The Congressional Budget Office said this is going to cost $3 billion more in startup costs.

Why don't we just be honest with the American public? If it's going to cost more money -- the Congressional Budget Office says it is, the General Accounting Office says it is -- be honest with the public and say, look, this is very important, this is a top priority for the country, it's going to cost some money to do it, and let's do it right.

NOVAK: So you just bypassed my question, Congressman.

FROST: I'd be happy to respond.

NOVAK: You say, well, this is bipartisan. I said it was bipartisan.

But you people on both parties up there, you're interested in these turf wars. And that really upsets the American people.

FROST: Bob, we're not interested in turf wars. I mean, we've been appointed -- there are nine of us, five Republicans and four Democrats. We are taking this very seriously.

Now, some of the committees, on a bipartisan basis, Democrats and Republicans, on some of the committees of jurisdiction, have said, We don't like the president's proposal, we think you should make some changes in it.

We're going to listen to those. We may adopt some of those changes, we may not. If we don't adopt them then we'll let the whole House vote on them. That's a fair procedure. That's what we ought to do. But we're not into turf wars. We want this thing to be successful.

CARVILLE: Congressman...


CARVILLE: Congressman, first of all, we just saw Governor Ridge testify.

PORTMAN: Yes, he did a great job. CARVILLE: He did a great job. Knows his stuff -- knows this stuff cold, doesn't he? Let me show you something that the Brookings Institute -- I want to read something that they said about this.

Can you put it up there please, CROSSFIRE staff?

"President Bush announced his reorganization initiative before Tom Ridge and his staff and the Office of Homeland Security were able to complete work on a national homeland security strategy. As a result, the relationship between the administration strategy and its reorganization proposal is not all that clear."

You mean to tell me that this thing was rushed out before he -- before Ridge had a chance to look at it and make his recommendations?

PORTMAN: Brookings is going to be delighted because the president has now officially unveiled his strategy, and guess what? His strategy fits right into the reorganization of the federal government that was set forth in the Homeland Security Department.

Look, Governor Ridge has been working on this, as he told us today in testimony, since last fall. He's set forth the strategy now officially, and the strategy fits perfectly with the Homeland Security Department, number one, to prevent terrorism from occurring...

CARVILLE: We're all for that.

PORTMAN: Number two, to harden our vulnerabilities, protect this country, protect us from terrorism, and number three, to be able to respond if something happens to minimize loss of life.

CARVILLE: So, so, so...

PORTMAN: All three of those things are what the department is set up to do.

CARVILLE: So Congressman, so far we've found out, as the Republicans refuse to sign a pledge that it won't cost more money, and Republicans acknowledge that the director of homeland security was not part of putting this plan together.

PORTMAN: I will tell my constituents that we can save money if we do it right, because we can. I think we can do it.


CARVILLE: You have a good relationship with your constituents.

PORTMAN: I do, I do, and I think we can do it.

FROST: Here's the problem. If we play games with this, if we pretend like, well, it's never going to cost any more money, then we're going to take money away from the Coast Guard, we're going to take money away from FEMA for their non-emergency, non-security functions, simply to make the numbers work. We shouldn't be involved in phony math. We've learned that from what's happening with all these corporations. To be really bipartisan, to get the support of the American people, we ought to be honest with them, we shouldn't cut back what the Coast Guard does for search and rescue...

NOVAK: Oh, no more.

FROST: ...we shouldn't cut back what FEMA does for hurricanes and tornadoes.

NOVAK: Congressman Frost, you are one of the most skilled politicians in the Democratic party...

FROST: Look out, here it comes. Here it comes!


NOVAK: You're playing this chess game three moves ahead of everybody. What you have to do in this process is appear to be patriotic while at the same time...

FROST: There's no appearance, Bob.

NOVAK: Can I finish?


While at the same time tearing down the president, because you know this is his hole card for the (UNINTELLIGIBLE) election. You've got to discredit him just like you started doing here tonight.

FROST: Oh, come on. Oh, come on, Bob. Nobody's trying to discredit the president, we're trying to work with him.

CARVILLE: Actually, I do it every now and then...

FROST: He invited us all over to the White House today. Rob was there, I was there. We all want to work with him. The only advice we gave to the president was let's make sure this is an open process, that if there's some Republican committee chairs who want to offer amendments on the floor, they don't like your bill, let them do it so that we can then, at the end of the day, maximize the number of votes.


PORTMAN: Martin has been great in terms of promoting this idea of an agency and the specifics we're working out. but we've got to be able to get some savings...


NOVAK: We've got to take a break.

(CROSSTALK) And when we come back we're going to show you something you thought you'd never see in Congress. You're going to see high drama and a Congress -- and a senator referring to a cabinet member as Little Caesar.


NOVAK: Welcome back to CROSSFIRE. We're talking about the president's homeland security proposals, with Democratic congressman Martin Frost of Texas and Republican Congressman Rob Portman of Ohio -- James.

CARVILLE: When I think of homeland security and I think of being protected, I think of the FBI, frankly, and I think most Americans do. Why is not the FBI in this deal?

PORTMAN: Because the important thing is that you get the information from the FBI, the information from the CIA, the information from some of the entities that are going to be within the Department of Homeland Security, you compile that information, and you provide it to match it against whatever our vulnerabilities are or infrastructure.

You don't need the FBI to be part of it. They have a different law enforcement function, and that function ought to continue. You don't need them -- your need is their information.

CARVILLE: Their information, but they've got agents that kind of stop people, they arrest people, they can stop crime. I mean, it doesn't seem to the average person...

PORTMAN: And they report to the top law enforcement official of the country, the attorney general, as they should, but the important thing, James, is that they provide the information. That's what's not happening now, including information from departments that are going to be part of this, all to come together in one place so we know what's going on.

NOVAK: Congressman Frost, I've been in this town for 45 years, watching Congress for 45 years. I saw something happen last Friday in the Senate I think -- I didn't think I'd ever see, I've never seen before. That was the senior member of the U.S. Senate -- he's only been there 43 years, Bob Byrd of West Virginia attacking the director of the Office of Mobilization of Budget, a member of the president's cabinet, Mitch Daniels. And let's take a look at it.


SEN. ROBERT BYRD (D), WEST VIRGINIA: Upon what meat doth this, our little Caesar, feed? I'm talking about Mitch Daniels, the Office of the Director of OMB. He's always meddling, always meddling in the Congress.


NOVAK: Now what the senator is saying, how dare the Office of Management and Budget director meddle in what the appropriators are going to do with the people's money. Do you agree with that?

FROST: Well, Bob, the problem is the OMB has been urging the president to veto the supplemental appropriations bill that we need for our troops over in Afghanistan and we need to fight terrorism. Sometimes the OMB director is wrong. He's not always right. I wouldn't necessarily use that characterization. I wouldn't call him little Caesar, but there have been people in...

CARVILLE: That's an insult to Caesar. Caesar could count. This clown can't even count.


FROST: But seriously, Bob, we've had to suspend training by our troops because we haven't passed that supplemental, and one of the reasons we haven't passed it is that OMB is taking such a hard lime, got to have it their way...


Oh, absolutely. They announced it last week.

NOVAK: Let me just say this -- go ahead.

PORTMAN: The reason that the OMB director is taking a hard line is because he's representing the views of the president. The president says look, I need this spending for homeland security, I need it for our defense forces. We're in a time of war, and instead the United States Senate puts a million dollars in for a Smithsonian worms project, a million-and-a-half in to study coral reefs in Hawaii in the supplemental bill, and the president says no, I'm not going to sign a bill with that pork in there.

NOVAK: Who wants to take this bill and make it into a pork bill with fire trucks for all the little cities around the country -- you know that -- you know how the world works.

FROST: I know how the world works but I also know that this is a real emergency, Bob. We've got people over there on the line, men and women in our armed services, who potentially can be killed, and we're not providing the resources for them and we ought to get beyond this.

CARVILLE: This is critical.


NOVAK: He's an appropriator. No, he's an appropriator.

CARVILLE: You're not a Republican, thank you. It's all news to us.

NOVAK: Thank you very much, Martin Frost. Thank you very much, Rob Portman.

PORTMAN: Bob, Good to see you.

FROST: As always, good to be on.

NOVAK: Still to come, we'll ask CNN's Lou Dobbs why even Alan Greenspan couldn't get the job done today.

And later, liquor ads aimed at 20-somethings. Are teenagers also getting that message?

And next, an encore performance earns our "Quote of the Day." You won't believe what he said this time.


CARVILLE: Ohio representative James Traficant is trying to convince the House Ethics Committee to ignore all of his felony convictions and to not knock him out of Congress. And in his effort to win friends and to influence people, he showed up late to today's committee hearing. Better late than never. Traficant and the witness he brought to testify on his behalf get our "Quote of the Day" for a whole lot of things.


REP. JAMES TRAFICANT (D), OHIO: Had I known that I would be here, I was on other media broadcasts trying to demean you. And I was railroaded once, and I don't believe the Congress of the United States has that intent. He said this welder (ph) will not go to Washington and you didn't see it leave.


TRAFICANT: I wasn't talking to you. I was responding to the chairman.

I don't believe it's out of order. And I object.

LINDA KOVACHIK, TRAFICANT WITNESS: He said he would buy me a spaghetti dinner anytime and that was a bunch of bull (EXPLETIVE DELETED).

UNIDENTIFIED FEMALE: And I called and told her it wasn't true.

TRAFICANT: You and I sex partners?




NOVAK: I'll tell you something, James, there's been dozens and dozens of congressmen who have been convicted of crimes. Only one has ever been kicked out of Congress because those crooks all stick together. They're going to kick Traficant out because they don't like him. He's unpopular. That's not right. That's hypocritical.

CARVILLE: Maybe they could kick him out and just let him when come testify around here so we can get spaghetti dinners. I'm still mad about (UNINTELLIGIBLE) and I'm still mad at the jerks who run ESPN, and I'll never get over it.

NOVAK: OK. Coming up, CNN's Connie Chung has details of a new tragedy involving a mother and children in Texas.

And later, we'll ask Lou Dobbs, sweet Lou, why Wall Street didn't seem very soothed by Alan Greenspan's reassurances.

Also, alcohol in drinks that are so sweet, even someone under 21 might be tempted. Do you believe that, James? Is that the idea?



NOVAK: This is starting to sound like a broken record. Remember those? Stock prices fell again today with the Dow Industrials posting a triple-digit loss. It happened despite reassurances that the inflation is low, the economy is fundamentally sound and business reforms are underway. This time, the message was conveyed by none other than the master of the universe, Federal Reserve Chairman Alan Greenspan.

Maybe our own Lou Dobbs can explain it. He joins us from the anchor desk of CNN's "MONEYLINE" in New York, a historic first for CROSSFIRE.

CARVILLE: There he is!

LOU DOBBS, HOST, "MONEYLINE": Good to be with you, Bob, James, everybody.

CARVILLE: I remember a couple of months ago you would walk into our restaurant at noon, and you would start looking if you saw a red arrow down and 50 points, you pretty much knew what was going to happen at the end of the day. If it was up 50 points, you pretty much knew.

Now, a noon ticker tape reading has the same significance as a first quarter score in an Arena Football game. I mean, what's going on? Why is all this stuff changing by the hour? I've never seen anything like that, or have I seen something and just didn't know I was looking at it?

DOBBS: You've seen something like it, it would have been in 1987, James. And it's a representation of the volatility. And volatility in markets are representative of fear. And there's a great deal of fear in these markets right now. That's why we're seeing yesterday a 400-point swing in the Dow Jones Industrials. Today, at one point, the Dow down almost 240 points, swinging back and then losing at the end 166 points.

So, this kind of volatility represents fear. There's fear in the market. There's mistrust of corporate America. There is considerable doubt about the integrity of these markets still. And there's great concern about the ability of corporate America to create real earnings.

CARVILLE: As an observer of the market and a market historian, does this kind of volatility, does this portend good things or bad things down the line for us?

DOBBS: Well, the markets, there are those who believe adamantly James, as you know, that markets are predictors and forecasters of future economic conditions. That is not often the case. It does occur, but it's not often the case. What this is suggesting is a clear and present danger. And that is a lack of confidence in the markets, that the president is trying to deal with, that the Senate yesterday, in passing the Senator Sarbanes legislation is dealing with, and the House today extending penalties to its corporate fraud legislation, is trying to deal with.

But again, Congress as usual, the White House as usual, Washington as usual, moving much too slowly in the face of a very serious economic crisis.

NOVAK: Lou, the man I call the master of the universe, Alan Greenspan, testified today. And let's listen to something he said today.


ALAN GREENSPAN, FEDERAL RESERVE CHAIRMAN: The effects of the recent difficulties will linger for a bit longer. But as they wear off, and absent significant further adverse shocks, the U.S. economy is poised to resume a pattern of sustainable growth.


NOVAK: You know, there used to be a time, not long ago, when the Federal Reserve chairman, this Federal Reserve chairman, would say something like that and the buyers would be swarming. Does that mean that he has lost some of his influence over markets, that maybe they don't think he has any cards to play?

DOBBS: I don't know that I agree with you, Bob, entirely on your observation. You remember it was in December of 1996 that this very same Fed chairman said there was irrational exuberance in the economy and we watched in the markets -- and we watched the markets soar, gaining 85 percent on the Nasdaq in 1999. This Fed chairman does not have the capacity now to lower interest rates. Interest rates are at 40-year lows. He doesn't have any levers.

And the fact that he utters reassuring words is not going to overcome that mistrust and that doubt on the part of investors. And I think if there's one other thing here if I may, Bob and James. The fact is the Fed chairman was uncharacteristically clear in his statements today. Often, he obfuscates as much as he tries to clarify. This was a straightforward statement of an economy that is improving in the Fed chairman's view.

NOVAK: Yes, that was my -- you anticipated my next question. Is he getting senile that he's being so clear that you can really understand him and figure out what he's doing? Why was he so clear? Was he worried that if he was his usual obfuscating self, that it might really hurt the market even more?

DOBBS: I suspect the Fed chairman wanted to avoid the prospect of further analysis by either Robert Novak or Lou Dobbs or our colleagues in the media, Bob, as to what he meant. And today, he went on to say what he meant. And it's pretty clear he means what he said.

CARVILLE: Lou, I tried to -- I talked to my guy at Morgan Stanley yesterday. And I tried to get the word buy out of my mouth and I just couldn't do it. How can I -- tell me how I say buy to Morgan Stanley the next time I talk to him because I just can't get it out of my mouth. I tried, but I went b-b-b.

DOBBS: Well, as you can tell, a lot of other people are having some difficulty saying that word and certainly pulling the trigger on a buy order. The fact of the matter is, James, here if you have a stock that represents a company and whom you have great faith in the integrity of its management, its products, its services and its future prospects and the value of its price, there's no reason not to say buy, now or at any other time because I'm sure, James, that you're not looking for a short-term return, looking for just a simple instant gratification in terms of short-term profit. You want a longer term, committed view. And I'm sure when that happens, James, you'll be ready to do it.

CARVILLE: Lou, let's talk to some of my, like, family and friends who say we had Coca-Cola and the Washington Post Company decided -- announced today that they were going to expense stock options. Is this is a good thing, bad thing or insignificant thing?

DOBBS: It's a great thing and it's extraordinarily significant because it puts the Washington Post and Coca-Cola at the forefront of leading from the standpoint of business reform, creating transparency, creating fairness in the way in which companies are dealing with their options rather than simply diluting their shareholders without taking real notice of it.

CARVILLE: The significant thing is the Washington Post did something I agreed with.

NOVAK: Well, I love the Washington Post. You know that.

CARVILLE: I know that. You're a moral guy.

DOBBS: I'm trying to assess your respective viewpoints on the Post there, gentlemen.

CARVILLE: There we go.

NOVAK: They run my column. That's why.

CARVILLE: (UNINTELLIGIBLE). The star let them off the hook and they've got no integrity over there on the editorial page, a bunch of twirps. NOVAK: Lou Dobbs -- oh, I think they're excellent. Lou Dobbs, I'm very rarely shocked by anything in a poll. But a CNN/"Time" poll, and we'll put it up on the screen, shows this version, this reaction to the current accounting scandals; 72 percent indicate a pattern of deception. Only 20 percent think these are isolated incidents. Are the American people got it right or they got it wrong? Is this -- are most of the American businessmen and corporate leaders crooks today?

DOBBS: I don't think you can say that most are crooks. Certainly not. Most are well-meaning and well-behaved, if you will, corporate leaders. But across corporate America, I think those polled, those results that you just showed there, Bob, represent a truth. And that is that there has been, as the Fed chairman alluded to today, a culture of infectious greed in corporate America. It does not mean that people have been necessarily criminal in their behavior or necessarily unethical in their behavior. But their behavior has certainly not been of the highest standards, which we expect from our business leaders and our government leaders, our political leaders.

And I don't frankly -- there's an expression on Wall Street, never, ever fight a trend. And never, ever assume that the small investor or the so-called average investor in this country is dumb because he or she is not. They finally figured it out. This culture of greed in corporate America has to be dealt with. Stock options are a cause and they are a symptom. This excessive corporate compensation under which we are all living, it is adjusting but only slowly, is horrible.

The average CEO in in country makes 500 times what the average employee in his or her company makes. That's horrible. A chairman of the joint chiefs of staff in the military, for example, earns almost five times what the average enlisted person makes. We have some serious adjustments to go through here and that is part what was Alan Greenspan was...

NOVAK: But, Lou, you know what? I've been watching Congress for a long time. They seldom ever get it right. They usually overreact. They usually do the wrong thing. Aren't they in a mood right now where they're going to -- they're in danger of putting in rules and regulations? If there's an accounting error, the businessman is in danger of going to prison. This is not going to be a place where you can run businesses in an effective way if you're afraid of being criminalized.

DOBBS: Well, Bob, I think that you and I share a lot of philosophy. I'm as anti-regulation, as pro free enterprise in democracy a person as there is in the country. But I'm also very much a realist and also, just like you, very much on the side of truth, justice and the American way. Business the way it's being conducted in this country right now is not working for the people who make America work, wage earners, the working men and women of this country. And that has to be fixed.

Corporate America has not exerted the leadership and therefore we're reliant upon this president and this Congress to bring about regulation and laws and to create the energy and the vitality in the regulation and the oversight of those laws and our markets and corporate America for their protection. We will probably make great mistakes here. But those mistakes are the price of redressing a system that has gotten out of balance.

NOVAK: Lou Dobbs, thank you very much. We really appreciate your time.

CARVILLE: Appreciate it. Thank you very much.

DOBBS: Good to be with you guys, thanks.

CARVILLE: All right.

NOVAK: Now -- now we have heard from Alan Greenspan and Lou Dobbs. Coming up on "Fireback," the economic consensus from a Sun City bowling alley.

But first, advertising liquor to well, just how young are these boys and girls?


CARVILLE: Welcome back to CROSSFIRE. We're coming to you live from the George Washington University in beautiful Foggy Bottom in downtown Washington, D.C.

You know, college kids have it easy these days. Back when I was in school we actually had to open the bottle and pour rum into our glass of Coca-cola. Nowadays alcohol and sweet drinks, even malt- based concoctions are coming already premixed.

These so-called alcopops have drawn the wrath of watchdog groups. They've accused of liquor industry of deliberating targeting underage drinkers, both with the stuff they're selling and the way they're advertising.

Bellying up to the CROSSFIRE board is George Hacker, director of the Alcohol Policy Project, run by the Center for Science and the Public Interest.


NOVAK: Mr. Hacker, I have in my hand a letter. I'll bet you know what that letter is, don't you?

Yes, it's not worth much.

NOVAK: Well, it's from the Federal Trade Commission of the United States of America, Bureau of Consumer Protection, J. Howard Beales III director, and let's put on the screen what he said. He said to you, to Mr. Hacker, "We do not believe that the available information supports the conclusion that the new flavored malt beverages, which you letter -- which your letter refers to as 'alcopops,' are targeted to minors.

Our review of the internal company documents did not find evidence that the products and their advertising are targeted to consumers under 21."

Man, you're out of business. That's the federal government says you haven't got a leg to stand on.

GEORGE HACKER, CENTER FOR SCIENCE IN THE PUBLIC INTEREST: Now, first of all, that response was to a complaint that was entirely different. We complained last year that these products appealed dramatically to young tastes. I mean, they're sweet, they taste like soda pop, they're just easy to drink because they don't taste like alcohol.

They're just -- it's just easy to get kids from drinking soda pop to drinking alcoholic beverages. And many people in the industry actually call them bridge drinks just for that reason. Now they say that they're intended for entry level drinkers. Well, the sad fact in this country is that entry level doesn't mean age 21, it means age 13.

So that's who's drinking these beverages.


Let me get back to exactly why this is...

NOVAK: Can I ask you a personal question for a minute, please?

HACKER: You may.

NOVAK: Were you an underaged drinker?

HACKER: Well...


Normally I'd take the Fifth on that. But in my day, the drinking age in New York was 18.

NOVAK: Were you underage? A drinker?

HACKER: I might have slipped once or twice, but I never swallowed.

NOVAK: See, and you turned out OK...

HACKER: I never swallowed.

NOVAK: I hope you turn out OK. I did a lot of underage drinking.

HACKER: That's not what this is about. What happened to you?

NOVAK: I'm here, aren't I? And I'm an old man.

CARVILLE: We confessing...

HACKER: I don't think we can have perfection in society. We're not going to eliminate all underaged drinking, and certainly, although that would be our goal, we don't expect that to happen. But when you have an irresponsible bunch of corporations that are targeting kids with sweet tasting stuff that looks exactly like the liquor products that they sell, these they can't sell on network TV, but these they do, and the reason that they bring these to kids on TV is to bring those kids to these products.

CARVILLE: Well, let me have a little snort and see what it tastes like.

HACKER: Well, I didn't bring an opener. But this screws open.

CARVILLE: I remember they had this Boons Farm (ph) or something like that. It tastes like crap. It was awful.

My daddy used to drink Old Crow and Coke, of all things, you know what I mean? You think this stuff tastes worth a damn?

HACKER: Well, actually we did a taste test last year at our press conference, not of these liquor brands of alcopops but of the originals. Mike's Hard Lemonade and a couple of others, and the reports we got from people in the media, who were there tasting this stuff, was hey, this tastes good, doesn't taste like alcohol at all, tastes like lemonade, tastes like soda pop.

CARVILLE: I like the taste of beer. I don't see nothing wrong with it.

NOVAK: I love the taste of beer.

HACKER: But you know, a lot of young people don't like the taste of beer. Even a developer for product development at Anheuser-Busch says that these products are intended for people who don't like the taste of beer and it brings them to the alcoholic beverage market.

CARVILLE: But the Budweiser people don't want people to drink this. They want them to brink Budweiser.

HACKER: Well, you know, it's an interesting thing. Budweiser, Anheuser-Busch, got together with Bacardi to put together a product called Bacardi Silver. It's got Bacardi's name all over it, but it's made by Anheuser-Busch. The reason that Anheuser-Busch did that is that they're not getting enough people drinking beer. They want to capture the people who don't like the taste of beer.


CARVILLE: All I read about is all the problem with underaged drinking, and people drinking, but people -- they don't sell enough beer now?

HACKER: They're drinking -- they're drinking whatever the companies make to provide stuff for that opportunity.

NOVAK: Mr. Hacker, I know you're a serious person...

HACKER: I try to be. CARVILLE: Damn good guest, too.

NOVAK: ...and you're very dedicated to what you're doing. But let me tell you something. We've got a lot of young people in this audience. I'm not going to take a poll of how many of them have done underage drinking. But I tell you, kids are going to drink. And whether they drink this sweet stuff or they drink Budweiser or they drink wine -- I mean, why are you so excited about this?

HACKER: I said before, eliminating or reducing the advertising or disallowing the opportunity for the liquor industry to target kids on TV in the millions, which is what we found in our recent poll, is not going to eliminate underage drinking. Advertising is only one influence, but it's one we can do something about.

We could send all the parents in America for retraining about how to keep their kids off of alcohol and drugs and keep them from having premarital sex and everything else, but that would be rather inefficient.


NOVAK: ...premarital sex.


CARVILLE: ...we brought it up, you want to make some confessions here, too, Mr. Novak?

HACKER: The connection is -- the connection is that drinking this stuff sometimes leads to premarital sex and other serious problems.

CARVILLE: Oh, really?

NOVAK: Now you're really shocking me.

CARVILLE: Oh, man. You mean to tell me that some of these guys like him, this encourages...

NOVAK: But this -- aren't you -- Mr. Hacker, I don't want to insult you because you're a good guest and we're glad you came, but aren't you in the old blue nose puritan tradition, when you're worried about all this premarital sex and drinking and all that? Oh, the kids are going a rock and rolling?

HACKER: You know, I think your attitude is good to get out here. Because you have to understand that alcohol in this country is a major social, economic...

NOVAK: Part of the American tradition.

HACKER: Sure is. And we're not going to get rid of it. We're not about getting rid of it, but we have to acknowledge that alcohol causes massive economic and social harm in this country. It's the number one drug problem among young people in this country, and probably the number one drug problem amongst everyone.

NOVAK: I've got an answer.


NOVAK: Prohibition.


NOVAK: Oh, OK. They tried it once.


HACKER: We're not about prohibition.

CARVILLE: Daddy comes in sees his kid drinking a beer, he said, Son, you better stop there, you're going to go blind. And the kid says, well Daddy, can I do it to have to wear glasses, you know?


HACKER: You're really missing the point here. You're really missing the point, because the point is not that dealing with this is going to eliminate all drinking. The point is that in this age of corporate greed and corporate irresponsibility, you know, we have an industry here that is going after underage kids. The reason they go after underage kids is because that's where their new market is.

CARVILLE: I may make a little fun of you, but as a parent, I'm glad you and your group are out there, because they shouldn't be marketing this stuff to kids.


HACKER: Thank you.


NOVAK: You'll get your turn to "Fireback" at us in just a minute. One of our viewers has sent an e-mail explaining why my colleagues on the left have such an easy job.


NOVAK: Time for "Fireback," when the viewers "Fireback" at us.

The first e-mail tonight is from Manny of Upper Marlboro, Maryland, who says: "During Clinton's first year in office, how many times did he blame his predecessor for the economic problems of the country?"

How many drops of water are there in the ocean?

CARVILLE: You know what he did? He fixed them. These people can't do it. It was broke, he fixed it. "The consensus at the bowling alley this afternoon was the best way to get the market headed up again would be to keep W. off TV" -- Bill Wise, Sun City, Arizona.

NOVAK: A lot of senile senior citizens who are really -- all they're out for is a little more aid, and...


CARVILLE: Yes, a lot of senior citizens want more money, just like you and I do. (UNINTELLIGIBLE) looking for a quick buck -- I am. Give me a quick one...

NOVAK: Carol Raney of Cape Elizabeth, Maine says: "I rarely agree with you, Bob, but your tenacious willingness to maintain the corporate line, doffing your cap to all right-leaning legislation of the wealthy and wonderful is sexy in a perverse sort of war."

Carol, thank you much, just don't tell my wife.

CARVILLE: I think Geraldine (ph) would appreciate somebody calling her husband of 40 years sexy.

All right, what do we got up here now?

"Being the host from the left has to be the easiest job in the history of jobs" -- OK. "No matter what the segment entails, just use the same spiel bashing Bush" -- Ray Odell, Sanger, Texas

Ray it's easy, man, it's like shooting fish in a barrel. They just keep screwing up and we just keep pointing it out.


NOVAK: It gets boring.

Next question -- first question from the audience please.

UNIDENTIFIED MALE: Hi, I'd like to address both...

NOVAK: No, you give your name and where you're from.

CARVILLE: Tell us something about yourself there.

UNIDENTIFIED MALE: My name is Ed Rob (ph). I'm a law student. I'm doing an internship for AAAS, the American Association for the Advancement of Sciences.

And my question is: How does Congress intend to do anything about corporate fraud when they're receiving significant amounts of campaign contributions from major corporations? Doesn't this pose a conflict of interest?

NOVAK: You sound like you just don't like business and you don't like the American system. CARVILLE: No, you don't sound like that at all. You sound like somebody who's a young man that comes to Washington and wants clean government, wants to have reform here.

And that's one thing these old biddies can't stand, is somebody who wants to clean this mess up.

NOVAK: Next question.

UNIDENTIFIED MALE: I'm Larry Callman (ph) from Charlotte, North Carolina.

In your opinion, why didn't President Bush take a much harder line on corporate America in his recent speech?

NOVAK: I think it was probably too hard as it was. It probably tanked the market. I don't think that you stay -- investors stay in the market by saying they're all a bunch of crooks.

CARVILLE: I think this market is looking for some decisive action. This president is incapable of bringing decisive action to the market.

He has a gopher as an SEC chairman. And he's scared to death because that's all his contributors and they got to check it with everybody.


NOVAK: That's the straight Democratic line: Attack the SEC chairman.

CARVILLE: Attack, hit; attack, hit.

UNIDENTIFIED MALE: Yes, my name is William Weir (ph), and I'm a student at Duke University.

I find it ironic that the left -- and we saw Mr. Carville do it on this very program -- is criticizing Republicans for spending too much of taxpayers' money on homeland security when it's left-wing champion and socialist demagogue Tom Daschle, who has continually held up passage of the much-needed supplemental spending bill by adding millions of dollars in pork.


CARVILLE: He asked the question of me.

Did you ask the question of me, young man?

UNIDENTIFIED MALE: Both of you, but I would like to hear Mr. Carville.

NOVAK: Well, I'll answer. Let me say this: that I am thrilled to see a conservative from Duke University. I didn't know they had any. CARVILLE: (UNINTELLIGIBLE) I don't know how you passed the entrance exam. The House and the Republicans said they wouldn't spend more. I'm the Democrat. They want to spend a little more to protect me, it's fine with me. Get rid of the tax cut.

From the left, I'm James Carville. Good night for CROSSFIRE.

NOVAK: From the right, I'm Robert Novak.

Join us again next time for another edition of CROSSFIRE.

"CONNIE CHUNG TONIGHT" begins immediately after a CNN news alert.


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