CNN
SHOW: LOU DOBBS TONIGHT 18:00
February 19, 2004 Thursday
HEADLINE: Can President Bush Recover?; Former Enron CEO Indicted
GUESTS: David Dreier, Rick Davis, Avid Dreieradam Smith
BYLINE: Casey Wian, Eric Philips, Mary Snow, Peter Viles, Dana Bash, Lou Dobbs, Jeffrey Toobin, Christine Romans, David Grange
DOBBS: My guest now supports President Bush in every respect. Congressman David Dreier of California is a member of the House Republican leadership, instrumental in the passage of NAFTA, permanent normal trade relations with China, fast track trade authority for the president, also one of the co-founders of the U.S.-Mexico Congressional Caucus.
Congressman Dreier joins us from Los Angeles tonight.
Good to have you with us.
REP. DAVID DREIER ®, CALIFORNIA: Nice to be back, Lou.
All those things that you seem to love-I love your question for the audience just before you went to the break. And I will tell you that you're allowed to change your position if you move to the right position. And my concern about you is, is that I have sense you might have been a free trader in the past, Lou, but you are dead wrong in moving to the wrong position.
I've been reading the transcripts of your programs over the last few weeks. And it's almost as if you're sort of a 21st century Pat Buchanan. Pat Buchanan used to be a free trader when he was working for Ronald Reagan. And now here you are, having moved to this position, which, to me, is counter to the whole cause of freedom and the free flow of goods and services and ideas.
DOBBS: You know what I like about you, Congressman? I didn't even have to ask a question.
(LAUGHTER)
DREIER: Yes, well...
DOBBS: Let's start out with a couple things.
In the question of free trade, in point of fact, I have never been a free trader. I did support NAFTA, under the theory that it would be better to enrich our neighbors than those in distant lands.
(CROSSTALK)
DREIER: That made you a free trader. By virtue of that, you were a free trader, Lou.
DOBBS: Oh, did it? OK. In that case, I plead guilty on that basis, but certainly no supporter of WTO, certainly no supporter of free trade in other areas.
So let's go to the issue here. And that is, with the president now under attack on so many areas, both in terms of the outsourcing of jobs, the WMD intelligence before the war-we can talk about the 2.6 million job forecasts on the part of his Council of Economic Advisers, Chairman Greg Mankiw.
What in the world is the president going to do here?
REP. DAVID DREIER (R-CA), CO-CHAIR, U.S. MEXICO CAUCUS: Well, the fact of the matter is we are on the right track. You were just talking to Rick Davis a few minutes ago about the struggle, and you mentioned that Kerry and Edwards are really going against the president. They are fighting to become protectionist. To me that is a policy that is dead wrong.
All you need to do, Lou, is to go back 20 years to the 1984 presidential campaign when Walter Mondale was running against Ronald Reagan and at that time he said, all of our jobs are going overseas, they are going to Japan and Germany and at that point Japan and Germany were our great models for the future. Since that period of time, he was obviously wrong, he wanted to increase taxes and all, but since that time, Lou, what we have seen is the creation of 40 million new jobs and many good jobs in this country. And so that's why I think we need to recognize that I don't know how many jobs are going to be created in the next 11 months.
DOBBS: Sure you do.
DREIER: 2.6 million. Yes.
DOBBS: Sure you do. Wait a minute. The Council of Economic Advisers and your president with a signature on it has said 2.6 million. So you know how many.
DREIER: I hope that that is right. But no one knows with certainty. I know this, 112,000 were created last month. We saw a drop of 24,000 of the jobless claims last week. It's clear that whatever that number is it's going to be better in 11 months than it is today. And I believe that we clearly are on a path, if we proceed towards greater trade and these-the idea of these guys...
DOBBS: Congressman, I appreciate your faith. Let's review the facts.
DREIER: It's more than faith.
DOBBS: Well, your statement require some support then empirically because what we do know for a fact is we have a half trillion dollar current account deficit. What we do know since the implementation of NAFTA, that we have moved to almost $100 billion in negative trade. We have seen a half million jobs lost in this country as a result. We have seen GDP growth in Mexico, and I'm only focusing right now on Mexico, out of consideration to your proximity, to your district. The fact is those are not happy numbers by any definition. And that has to concern even a quote unquote "free trader" such as yourself.
DREIER: OK, now clarify this.
DOBBS: Sure.
DREIER: You said that we have seen GDP growth in Mexico you just said, right?
DOBBS: GDP growth has-is averaging about 50 percent of its historical level, yes.
DREIER: So what was the reason you just said, Lou, that you supported NAFTA? Because you wanted to see us increase the growth in Mexico because that was a very positive thing. There's no benefit to us so you have just now said and in your statement we are seeing the benefits of NAFTA. The other premise...
DOBBS: Wait a minute. How in the world are you saying that, we're talking about the benefits of NAFTA if over the past two years it's GDP growth rate has dropped by 50 percent from its historical levels.
DREIER: My point is this, if you look at what NAFTA...
DOBBS: Wait a minute, Congressman. You said something and now I'm asking you to clarify.
DREIER: What I'm saying is that we are seeing increased growth in Mexico and I believe that NAFTA is helping the economy of Mexico. There are lots of problems there...
DOBBS: I'm going back to the empirical evidence. We have also seen this country move to a strong deficit with Mexico. We have seen...
DREIER: And you know what? And that's not bad, Lou. That is not bad. Many people-you call it negative. I happen to believe we need to recognize the importance of imports. What they do to this economy. You know, the single mother who is trying to make ends meet by going to Kmart or Wal-Mart to buy toys, clothes for her kids, is able to do it, why? Because the world has access to the U.S. consumer market. We need to realize that is a benefit.
John Kerry is out there talking about Benedict Arnold CEOs when in fact Heinz has 79 operations and 22 of them are in the United States. 57 interestingly enough are outside of the United States. So we need to realize that this is a global economy. If we don't shape the global economy we'll be shaped by it.
DOBBS: Let's talk about what is happening because we surely-we just surely are not shaping the global economy. We are, if anything, placing our destiny in the hands of others. We are right now running a half trillion dollar trade deficit.
DREIER: And you see that as a huge negative. I see that as a...
DOBBS: Yes, sir. That's why it's called a deficit. It's a negative to have a half trillion dollar budget deficit.
DREIER: One of the things we found is traditionally full employment in this country was considered to be 6 percent, today it's 5.6 percent. I saw you the other day be dismissive with Steve Forbes on the issue of the household survey. For the first time and whatever you say, whether you accept the household survey or the payroll survey you have to recognize we have the largest disconnect. That's one of the points Greg Mankiw was making ever because it showed that 1.9 million new jobs have been created since November of 2001 and that's the independent contractor, the self-employed, those in the biotech industry.
DOBBS: And, Congressman I am delighted to talk about the household survey with you or my good friend Steve Forbes, but why or suddenly-when was the last time you were talking about the household survey on employment?
DREIER: We've talked about it regularly. And I will tell you. The point is there's a disconnect and you've got to acknowledge that between the payroll and the household survey.
DOBBS: There has always been a disconnect. Every economist you talk with will tell you that going to the household survey and changing the base, the standard for analyzing job growth or job creation in this country makes no sense at all. That's beside the point. Let's forget the methodology. Let's talk about what you said. Shaping international trade. We sit here and I listen to you say protectionist is the only obvious countervailing reaction to free trader. If you are such a free trader why don't you get rid of $20 billion in agricultural support.
DREIER: I totally agree with you. I voted against the farm bill. I was opposed to the steel subsidies, I'm opposed to the tariffs on softwood lumber...
DOBBS: Why in the world then would you say we're shaping international trade when you're watching the wealth of this country being exported every day? Jobs exported every day?
DREIER: You know, it's so interesting. The semiconductor industry. 70 percent of the engineers for the semiconductor industry are right here in this country. I believe that it is pro American, it is pro American to find the best quality product at the lowest possible price whether it's a raw material or a finished product for our consumer. That's the American thing to do.
DOBBS: Congressman, you get the last word. I hope you'll come back.
DREIER: You are a great guy.
DOBBS: Give you an opportunity for some more words.
DREIER: OK. Have fun.
DOBBS: Thank you, you too.