DOBBS: Well, my next guest takes a decidedly different view. James Glassman wrote an article this week that begins by asking, "What Has Gotten Into Lou Dobbs?" In it, he takes issue with our extensive reporting here on "Exporting America," our conclusions and positions.

Glassman says our list of companies sending American jobs overseas, which we update here every night and post on our Web site, include some of America's most innovative companies. James Glassman is a resident fellow with the American Enterprise Institute and joins me here in New York.

Jim, that was quite a little article.

JAMES GLASSMAN, RESIDENT FELLOW, AMERICAN ENTERPRISE INSTITUTE: Well, I think it was quite accurate.

DOBBS: OK, let's start with the accuracy.

The fact is that we are seeing hundreds of thousands of jobs being outsourced on the basis purely of a corporation's interest in achieving the lowest possible price for labor. Does that make sense to you?

GLASSMAN: Lou, that is called trade.

And we have been doing it for hundreds of years.

(CROSSTALK)

GLASSMAN: You majored in economics at Harvard. You understand that Adam Smith, David Ricardo showed that trade is good for both parties.

DOBBS: Absolutely.

GLASSMAN: So outsourcing, offshoring, whatever you call it, it is always called by something different during different generations -- those are the words right now. But it's trade. And it's good for the Indians and it's good for Americans.

DOBBS: OK. Let's assume that trade is good, because here no one has argued otherwise.

But what we have argued is that trade that is not mutual, mutually beneficial, doesn't make a lot of sense. We're looking here -- since you brought up trade, we'll go back to outsourcing those American jobs. We are looking at a half-trillion a year current account deficit.

GLASSMAN: Right.

DOBBS: How good is that?

GLASSMAN: It's not good. It's not bad.

We have, for the last 20 years, run a trade deficit. And by coincidence, for the past 20 years, we have had by far the greatest economy in the world. We've got an $11 trillion economy. We're bigger than the next five countries combined. We've got a 5.6 percent unemployment rate, compared to 10 percent in Germany. I think we're doing fairly well.

The reason we have such a large trade deficit is, we're doing a lot of importing, while the rest of the world, which has a worse economy, is not able to buy. That's the problem.

(CROSSTALK)

GLASSMAN: If you want to have a trade surplus, Lou, the best way to do it is to plunge the United States into a recession. If we don't buy anything, hey, we don't have a trade deficit anymore.

DOBBS: What is it with you people?

GLASSMAN: You people? What do you mean?

DOBBS: You people who seem to think there's only way for trade to work. Why in the world are you so opposed to the idea --

(CROSSTALK)

DOBBS: Please, Jim, I let you finish.

GLASSMAN: Yes. Well, go ahead.

DOBBS: Thank you.

You could not conceive of the idea of restoring a manufacturing base to this country to actually manufacture products and export them?

GLASSMAN: Lou, over the last 10 years, we have manufactured 40 percent more than we did 10 years ago. Manufacturing is doing well. Jobs change. This is a dynamic society.

Now, the thing I'd like to -- the thing I would like to say is, free trade is much better than the alternative, which is no trade or obstructed trade.

(CROSSTALK)

DOBBS: Wait, Jim, you are far too smart to do something like that. There is not simply a Hobson's choice between free trade and no trade. I just offered you one, a mutuality of interest, mutual trade.

GLASSMAN: That's the idea of the World Trade Organization.

DOBBS: It may be the idea of some in the World Trade Organization. It is not the practice.

We have got 11 years experience with NAFTA. We have 10 years experience under WTO. It isn't working, Jim? What part of that don't you get?

GLASSMAN: It's not working?

DOBBS: It's not working.

GLASSMAN: Then why is the American economy as robust as it is?

DOBBS: Tell people it's robust.