Transcripts from CNN:

The real story today is that illegal immigration has been so prevalent for so long that we can`t even recognize its consequences any longer. We all have focused on the people not learning English or the millions of dollars we`re paying in family aid for their children. But what about the less obvious effects?

In Los Angeles, I was there this weekend, I pick up a magazine, and I`m reading this story. Los Angeles is a city that is influenced by illegal immigration perhaps more than any other. The middle class, according to this article, has all but vanished. A recent report determined that over 71 percent of neighborhoods in Los Angeles are now considered to be either upper or lower class.

The middle class, which for so long has been the majority and the meat of America, is now relegated to a distant third place. Almost 500,000 households in L.A. earn less than $15,000 a year. Imagine earning $15,000 in a year where the average home costs more than $500,000.

Meanwhile, over 250,000 households have a net worth over $1 million. That is the greatest concentration of millionaires anywhere in the country, and the divide is only getting bigger. I read a report — in fact, I read report after report after report, and nobody even dares to mention that illegal immigration might be a contributing factor. Gee, do you think so?

And that`s a shame, considering that it is not just Los Angeles that is being impacted. Of the top 10 cities with the smallest percentage of middle-class neighborhoods, seven of them are places where illegal immigration has been a huge problem, cities like Bakersfield, California, Houston, Dallas, El Paso, Tucson, Arizona. Gee, what do they have in common? Is this really a coincidence?

I`ve been telling you for months that this situation with our borders is just one piece of the perfect storm that is forming against us. And if you don`t think that immigration or a declining middle class is a big deal, just consider that there has never been a great society that has ever prospered with just rich and just poor. And neither will we.

So how do we turn this around? CNN`s Lou Dobbs has covered both the threat of illegal immigration and the declining middle class extensively, and I sat down with him earlier today.

(BEGIN VIDEOTAPE)

BECK: Am I wrong? Can a society live without a middle class?

LOU DOBBS, CNN ANCHOR: Sure. There are societies all over the world living without a middle class. But this is America, and the middle class is the foundation of everything this country stands for: a land of opportunity; a quality of economic opportunity; a quality of educational opportunity.

And towns, communities, cities without a middle class, you know, have turned their back on the heritage of the nation and, in my opinion, have assured a failure of our future.

BECK: Was Carroll Quigley right on the shadow government, on the companies taking over and really controlling everything? Because it`s really the only thing that I can put my finger on to say, “Why aren`t we doing anything about illegal immigration?” We`re run by companies now, aren`t we?

DOBBS: Well, both political parties are run by the very same people, corporate America, $2.4 billion in lobbying each year. No other special interest comes that close.

The power of corporate America — and I`m talking about big business. I`m not talking about small business. There`s even a fiction in this country now that small business, medium-size business, and corporate America are all the same. They`re not.

Corporate America is working against the interest of the medium- and small-size businesses, are working against the middle class, destroying jobs, not creating them. Small business continues to create jobs in this country, more than 80 percent of them. But the truth is that corporate America is dominating our legislative and our electoral system.

BECK: Wouldn`t you go further than that? It`s not just corporate America. I mean, it`s global corporations. I think we`re being turned into MexAmeriCanada.

DOBBS: Well, there are some obviously who would like to do that through the North American Union. And I think the Bush administration should be held to account for what they`ve tried to do with the so-called Security and Prosperity Partnership. It`s absolutely disgusting, by any standard, what these elites have tried to do in this country.

And, frankly, I can`t wait. We`ve been examining this problem for some time, this story, this issue. I find these people so repugnant I can`t even express my disgust on a family broadcast like yours.

BECK: But I have to tell you, you know, you say this, and the way I hear you phrase that right now, it`s the Bush administration. And I feel the same way. I`m a conservative. I voted for Bush. I can`t even begin to explain what they`re doing. But it`s — you know, I feel as if…

DOBBS: By the way, they can`t either.

BECK: I know they can`t. The Democrats and the Republicans are taking us to the same frickin` destination. One`s just taking us in a train, and the other is taking us in a plane.

DOBBS: Well, it`s about time people woke up to one thing, though: They`re taking us. But the fact that we`re rolling over and allowing people to claim they`re Democrats and claim they`re Republicans, and not a single — you just described yourself as a conservative.

BECK: Right.

DOBBS: What the heck does that mean? The difference between a conservative and a liberal today, a Democrat and a Republican?

BECK: There`s a difference between a liberal and conservative, not Republican…

DOBBS: Let me tell you. You may in your mind have a fixed understanding of that. But as a political force and any way in which to express your political will, it means nothing.

BECK: Yes, you`re exactly right. You are exactly right.

DOBBS: Because if this country does not awaken to what we`re doing to our middle class and the fact that traditional American values — independence, equality, self-reliance, the common good, the national interest — are the values that we all should be working toward, whatever label you want to aside in partisanship, fine. But those are the values we`ve got to turn to, and we`ve got to become an aspirational society again.

BECK: What is going to finally wake us up?

DOBBS: Leadership. Leadership.

BECK: Where are they?

DOBBS: Well, I`ll tell you what: They`re out there. The fact is there`s so much noise and silliness over all of these wedge issues — gay marriage, gun control, abortion, whether we have “under God” in the pledge of allegiance. For God`s sake, it`s America. If you want to say “under God,” say “under God.” If you don`t, don`t. It`s individual liberty, individual responsibility.

Why do we even allow the airwaves, the national dialogue to be polluted with this nonsense?

BECK: I`d just ask you though: Where are the leaders? I don`t see them.

DOBBS: The leaders…

BECK: The leaders, do you know who the leaders are?

DOBBS: Well, I certainly…

BECK: I mean, I don`t mean us as TV people. I mean the people. We, the people, are the only leaders, and that`s trouble, man.

DOBBS: Actually, I think it`s the only salvation. Daniel Patrick Moynihan wrote a very important book almost 40 years ago called “Participatory Democracy.” And it was a time in which people were engaged in great issues, civil rights, Vietnam, talking about the future of the country. When`s the last time, Glenn, you heard somebody say, “I`ve got this five-year outlook on the nation. This is what I think we should be doing. I think this is how we should be committing ourselves”…

BECK: Right.

DOBBS: … “as a nation”?

(CROSSTALK)

DOBBS: We have fools on both the left and the right, Democrat and Republican, talking about their fears, their anxieties, their political correctness, their high-bound orthodoxies, whether it be in the media, whether it be their partnership, or whether it be academic, instead of independent thinking about who you are as an American and what we owe one another to assure that equality.

BECK: Lou, thank you very much.

DOBBS: Great to be with you.

(END VIDEOTAPE)