TCS Daily

Two Faces of Lou Dobbs

By James K. Glassman - March 2, 2004 12:00 AM

I wonder whether the friends of Lou Dobbs on the protectionist Left -- folks like Rich Trumka of the AFL-CIO and Rep. Sherrod Brown of Ohio -- know that, at the same time the CNN anchor is pushing for restrictions on trade practices like outsourcing and demanding that the President's top economic advisor be fired, he's also praising "George Bush [for] ushering in the greatest economic boom since Ronald Reagan in 1982."

Even more surprising, Dobbs is telling investors to buy shares of companies like Boeing and Washington Mutual -- both on his most-wanted list of firms guilty of "exporting America."

According to Dobbs's website (, Boeing and Washington Mutual are among more than 200 companies confirmed as "either sending American jobs overseas, or choosing to employ cheap overseas labor, instead of American workers."

Evildoers on the list also happen to the most innovative job-creators in America. A TCS study last week found that, over the past year, a portfolio of all 216 publicly traded stocks in what we call the Dobbs Rogue Fund increased 72 percent in value over the past 12 months, compared with 39 percent for the benchmark S&P 500.

I learned about Dobbs's comments on Bush and on the stocks last week when my spam-blocking software failed to deflect an e-mail that featured a picture of Dobbs and the headline, "Frankly, I am very concerned about you."

Uh-oh, I thought. Dobbs and I had tangled on his TV show last month on the issue of outsourcing or offshoring -- also known as trade. Now, he is worried about my health or sanity. In fact, it turned out to be a mass-mailing. He is "very concerned" about thousands of people because they aren't scoring enough profits in the stock market.

Meanwhile, Dobbs has been campaigning nightly against the practice of U.S. companies hiring the best-quality labor and capital at the lowest cost. The guy has an economics degree from Harvard, but he evidently missed the classes on Adam Smith and David Ricardo, who, 200 years ago, understood that trade benefits both parties in the transaction.

In an editorial last week, The Economist criticized demagogic presidential candidates and worried that, while trade is continually under attack, today's "bogus new proving far more potent in political terms than any of the others."

The Economist also noted: "The media are simply lapping it up. CNN's flagship business-news programme, Lou Dobbs Tonight, which you might expect to strive for economic literacy, has embarked on a rabidly anti-trade editorial agenda, with its host greeting every announcement of lost jobs as akin to a terrorist assault."

Actually, Dobbs only acts like an anti-trade zealot in public. In private, where he is appealing to subscribers to the Lou Dobbs Money Letter, a "private and confidential market report," he carries a different tune entirely.

In fact, it was the Money Letter (which "normally costs $199 a year, but "you can snap up a trial just $99.95) that was the subject of the appeal, dated Feb. 28, 2004, which found its way to my e-mail box.

Dobbs is reluctant to give away too many of his stock tips, but he rhapsodizes about Boeing, which he counts among his "big wins" of 2003. (By the way, a chart shows that Boeing was up only 23 percent, which is six points less than the S&P; hardly a big win.) For 2004, he sees Boeing, "a huge winner." Why? In part, because "Boeing is a deeply idealistic company." Why it is included among the bad actors that are exporting America, he does not say.

In the e-mail appeal, he also praises General Electric and, especially, Washington Mutual -- both on the evildoer list. He writes, "We own Washington Mutual because of its leadership, innovation, its relentless building of shareholder value.... I could go on and on." No mention here about how Washington Mutual "ships American jobs overseas," in the parlance of the Dobbs show. (Full disclosure: I myself own shares of GE and Washington Mutual.)

As for the economic policies of the Bush Administration, which Dobbs decries to the masses practically every weeknight: again, the approach is quite different in the more exclusive subscription appeal.

"Investors," writes Dobbs, "often misled by the chronically liberal media, are making a huge mistake right now. They are underestimating the good that George Bush is doing for the economy....

"Listen to me, please, because this is news you won't ever hear on any TV station." (Certainly, not on the Dobbs CNN show.)

He continues, "George Bush had bad timing. The economy he inherited was a clunker. But the boom he has created is truly one he can take credit for. And it will likely propel him into a second term with a landslide vote of confidence." (Are you listening, Rich Trumka?)

Dobbs calls the impending boom "the Bush Bonanza." Why is it happening? "President Bush's business policy for 2004-2008 can be summed up in 4 words: Let Business Do Business!"

Does that include hiring software engineers in India if it will increase profits at home? Dobbs does not say, but the clear implication is that people who can pay up for his newsletter are worthy of the kind of "economic literacy" (in The Economist's words) that's lacking on the TV show.

The subscriber appeal mentions Dobbs's personal relationships with top CEOs, but the highest praise is reserved for Jack Welch, the retired leader of GE. "Long before I counted Jack as a friend," writes Dobbs, "I counted him in that rare group of great leaders."

I agree, but I wonder what Welch thinks of Dobbs these days.

In an interview in the March 8 issue of Business Week, Welch vigorously defends outsourcing, an endeavor in which GE has long indulged -- to the great benefit of its employees and shareholders. Bangalore, India, for example, is the site of the John Welch Research Center, which employs 1,400 researchers, one-third of them with PhDs.

Why, Welch is asked by BW, is this "good for America"?

"There is enormous intellectual capital that's being poured back into the U.S. by these ties," says Welch. "These engineers [in India] are making the engineers in Schenectady [N.Y.] -- where the numbers haven't fallen off - more productive."

An editorial later in the issue carries the headline, "Outsourcing: Stop the Hysteria." It concludes, "The Democratic Presidential candidates should knock off the rhetoric of economic fear and offer plans to deal with the reality of America's economic future. Voters deserve it."

TV viewers deserve it, too, but right now, Dobbs provides the economic reality only to his newsletter readers, who, for the privilege, have to pay $199 a year ($99.95 if you act now!).


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