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The McLaughlin Group

Issues: Democratic Trade Wars; The Camp David Discord; Island Showdown

Participants:
John McLaughlin, Host
Pat Buchanan, Author and Columnist
Eleanor Clift, The Daily Beast
Tom Rogan, National Review/Daily Telegraph
Mort Zuckerman, U.S. News and World Report

Taped: Friday, May 15, 2015
Broadcast: Weekend of May 15-17, 2015


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ANNOUNCER: From Washington, THE MCLAUGHLIN GROUP, the American original. For over three decades, the sharpest minds, best sources, hardest talk.

JOHN MCLAUGHLIN, HOST: The Amtrak tragedy raises grave issues about how this derailment could have occurred. We at the group deal in information and opinion, both of which are still surfacing in the derailment.

Next week’s program, we will have the data in hand to responsibly contribute to the public discussion, especially in any of its political dimensions.

Issue One: Democratic Trade Wars.

(BEGIN VIDEOTAPE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: On this issue, on trade, I actually some of my dearest friends are wrong.

MCLAUGHLIN (voice-over): A trade war broke out this week between Democrats. In the crosshairs: Trade Promotion Authority, a bill before Congress to give President Obama a fast track to congressional approval for the trade deal he is negotiating with 11 Pacific Rim countries. President Obama considers the Trans Pacific Agreement a cornerstone of his second-term agenda and presidential legacy.

Ironically, Mr. Obama’s main opposition includes progressive Democratic Senators Sherrod Brown and Elizabeth Warren, whom Mr. Obama singled out for individual criticism this weekend.

Quote, "She’s absolutely wrong. The truth of the matter is that Elizabeth is, you know, a politician like everybody else. And, you know, she’s got a voice that she wants to get out there. On most issues, she and I deeply agree. On this one, though, her arguments don’t stand the test of fact and scrutiny," unquote.

On Tuesday, 42 Senate Democrats and two Senate independents disagreed and voted with Elizabeth Warren to halt a vote on Trade Promotion Authority until the White House first conceded to a vote on fair trade measures targeting China’s currency manipulation and preferential treatment for African import.

Next week, the Senate is expected to take up Trade Promotion Authority. If the president can’t persuade enough Democrats to support TPA, it would then go to the House where liberal Democrats appear even more determined to stop Obama’s Pacific trade agreement.

(END VIDEOTAPE)

MCLAUGHLIN: Question: Why can’t President Obama get fellow Democrats to back his trade negotiations?

Pat?

PAT BUCHANAN, AUTHOR & COLUMNIST: Because working America and middle America and the unions and folks on the left have seen the extraordinary damage that’s been done to the American economy. And since 1980, about, John, free trade has caused us 40 percent of all our manufacturing jobs. We’re running trade deficits now of $600 billion and $700 billion a year in goods. And it’s hallowing out the American economy and it’s responsible for inequality and the failure of wages to go up. At least this is the belief of American workers.

And the only reason these trade deals go through is not because this country loves them or believes them. It is the enormous power of the transnational corporations in America who need these deals to move their factories and plants over to where they can produce more cheaply, get rid of their American workers, get rid of the American regulations and bring their goods back here. This is a battle that’s going to go on and on and on. Frankly, it consumed us in the 19th century more than any issue except for slavery.

MCLAUGHLIN: You’re directing your remarks also for NAFTA, North American Free Trade Agreement?

BUCHANAN: Well, just take a look at -- take a look at what China is doing. It’s mighty military power now. We’re running a $350 billion trade deficit --

MCLAUGHLIN: Billion?

BUCHANAN: Billion this year with China, which is twice their defense budget.

MCLAUGHLIN: Eleanor?

ELEANOR CLIFT, THE DAILY BEAST: I think Pat makes the case to the American workers and American workers have lost a lot, and NAFTA was way oversold and there’s a bad taste after NAFTA.

Elizabeth Warren did basically gather enough Democratic support to defeat a procedural vote on Trade Promotion Authority. The next day, the president and the White House came back and 13 Democrats did support the deal along, I think, with all the Republicans. And I -- so the Senate now looks like it’s going to support this free trade agreement. The House is going to be tougher, but I think it’s still doable.

Elizabeth Warren has an unparalleled ability in today’s Democratic Party to elevate issues. But the president has a case to make as well. And this is a healthy debate within the Democratic Party. I happen to think this deal has been made better. And I think it’s very difficult to argue against opening up markets in Asia, the biggest market in the world, and letting basically having China write the rules or having no rules at all.

MCLAUGHLIN: Uh-hmm.

CLIFT: So, I mean, I think this is going to work. But it’s a difficult issue in the Democratic Party because of the all the facts that Pat just stated.

MCLAUGHLIN: Hold on. What’s been the experience with the U.S./South Korea trade agreement? Has it been beneficial to us, as to Korea itself? Can you speak to that?

TOM ROGAN, NATIONAL REVIEW/DAILY TELEGRAPH: Yes. But here’s the thing. In the short term, these deals have difficulties because there is an -- it does -- Pat is right, that some jobs are lost. But in the longer term, how is America going to succeed? In a globalized economy, as I see it, it’s a fundamental fact we have to accept that. What we should be doing is using our comparative advantage, producing jobs that only we can do, in a sense of producing high-technology products, taking opportunity of that ownership, with very large growing economies in Asia.

And the secondary point as well is that yes, although some people are hurt by this, the American consumer benefits by being able to buy things more affordably, buy whatever they wanted. People simply think about what cars do people have. What -- you know, around this set, there’d be things that were bought from places abroad because that benefits us, and that reduces cost for American families.

MCLAUGHLIN: Did you ever hear of a man by the name of Sherrod Brown?

ROGAN: I did.

MCLAUGHLIN: Senator Sherrod Brown wrote in "USA Today" this week the Democrats were promised the same things with the U.S./Korea trade pact as Obama is promising now. But the trade deal with Korea has generated $12 billion in new imports from Korea, with only $1 billion in new exports from America.

What does suggest to you, Mort?

MORT ZUCKERMAN, U.S. NEWS & WORLD REPORT: It suggests to me that whatever they are producing in that country, we have a huge disadvantage, and this is going to wipe out a lot of activity, economic activity here.

And while I do believe in getting the best goods, you cannot do it at a cost where hundreds and thousands of people are going to lose their jobs. You’ve got to do it in a much different and controlled pace, because it’s not fair for the people in this country to lose their jobs because of that kind of an issue.

(CROSSTALK)

CLIFT: This agreement actually --

MCLAUGHLIN: Let Eleanor in.

CLIFT: This agreement actually has enforceable standards for labor and the environment, which other agreements have not had. And Secretary of State Hillary Clinton helped start this agreement. She called it the gold standard. So, it’s not perfect. But I think it’s a far better deal than we’ve gotten in the past.

And Third Way, which is a group of moderate Democrats, did a survey of 17 trade deals completed since NAFTA. And 13 of them have been winners for this country, four not. South Korea is one of the losers.

BUCHANAN: Let me tell you what the problem is here. Tom talks about the globalization that’s here to stay. Countries like China are -- Japan are economic nationalists to the core. They manipulate currencies. They keep things. They’re cutting deals with us. And South Koreans, too. South Koreans are saying, we want to get the American’s market on cars. What do we have to do to get it? And they give us little things.

The idea that we’re going to set up a worldwide system, everybody plays by the rules, is naive and utopian in extreme.

ROGAN: No, see, but we have (INAUDIBLE) that Japan if we get his deal -- I’m basing my support on that, that the Japanese are actually -- that Abe is going to take on the industries.

BUCHANAN: They’ve cleaned our clock for 50 years!

ROGAN: Well, but here’s -- but also, again, look, you know, you talk up --

MCLAUGHLIN: Little louder, little louder, I can’t quite hear.

CLIFT: That’s right.

(LAUGHTER)

ROGAN: This is about the long term, right, with massive growing economies in Asia, companies -- it is a sort of anecdotal one. But we have to have trust in the American entrepreneurial spirit to take advantage.

(CROSSTALK)

MCLAUGHLIN: Mort?

ZUCKERMAN: In the long term, we’ll all be dead. In the short term, we’ve got to earn a living. So, you’ve got to find some way to balance this out. It’s very easy to say that --

BUCHANAN: You mentioned the entrepreneurial spirit. The entrepreneurs are taking their factories to China.

ROGAN: But if we have those markets, then we can produce things here.

(CROSSTALK)

CLIFT: The point is now that they’re beginning to come back. Manufacturing has had somewhat of a renaissance under this president, and he’s working hard at it.

BUCHANAN: Twelve million manufacturing workers, we had 18 million in the beginning in the century.

CLIFT: Yes, but the whole job world has changed, and you’ve got to recognize that. You can’t fight battles that have already been lost.

BUCHANAN: Mort and I are doing fine.

MCLAUGHLIN: Hold on, Pat. Let’s put aside the question of whether or not the Pacific Trade Agreement is good for the average American. What does the president’s inability to get Democrats onboard tell you about his leadership? I ask you.

BUCHANAN: I don’t think it’s a problem about his leadership. These Democrats are responding to their constituencies. They’re responding to facts. They’re responding to the failure of past treaties and past promises. And they’re being told, look, if you’re not going to defend us, who do you represent?

CLIFT: An honest disagreement. The Democrats took a 2x4 to his signature policy for his second term, and he responded. And I think it’s a good fight, and the president did rebound. Thirteen Democrats did join the Republicans in the Senate. It looks like this deal is going to go through the Senate --

MCLAUGHLIN: Yes.

CLIFT: -- and we’re going to be talking about the House in the couple of weeks.

MCLAUGHLIN: Eleanor, the president, in your book, always rebounds, right?

CLIFT: No, I’m not saying he’s always right. He’s right on this one, though.

MCLAUGHLIN: Question: Are Capitol Hill Democrats more worried about their 2016 reelection prospects than they are about Obama’s presidential legacy?

I ask you.

ROGAN: Well, obviously, but I don’t but I think -- I mean, Pat genuinely articulates the point of view. We fundamentally disagree, but I think a lot of Democrats share that. They disagree because they believe in that economic theory.

I just don't think -- and look the example is China losing jobs now to for example in Vietnam and the Philippines. We cannot race to the bottom. You have to respond.

CLIFT: Well, Elizabeth Warren has genuine differences with the president and with the other bills that went through last week. They did try to fix some of those.

MCLAUGHLIN: Let’s look at that --

CLIFT: There some compromises that can be made here.

MCLAUGHLIN: Let’s look at that a little bit more closely. Let’s focus on style, not substance. Senator Warren’s colleague, Sherrod Brown, thinks Mr. Obama's criticism of Elizabeth Warren crossed a line. Watch.

(BEGIN VIDEO CLIP)

MCLAUGHLIN (voice-over): Senator Warren’s colleague, Sherrod Brown, thinks Mr. Obama’s criticism of Elizabeth Warren crossed the line. Quote, "I think the president was disrespectful to her the way he did that, by just calling her another politician, by referring to her as her first name when he might not have done that for a male senator. Perhaps I’ve said enough."

(END VIDEO CLIP)

MCLAUGHLIN: Question: Is Brown right? Was Obama sexist?

Mort?

ZUCKERMAN: Well, this is not my field of expertise, John, so I can't really give you an informed judgment. But he's got to be careful obviously in the language that he uses because if the megaphone that he has as the president for goodness’ sake. So, I can understand the reaction to it.

CLIFT: I think, you know, a lot of -- a lot of Democrats think Elizabeth Warren walks on water. And I think he was trying to point out that she has some political impulses as well. He didn't say it in the best way --

BUCHANAN: I give him a pass on this one.

CLIFT: Yes, I don't think it's sexist.

ROGAN: I think it shows a personal relationship, saying Elizabeth.

MCLAUGHLIN: Excuse me, why is Hillary straddling the fence on trade?

Pat?

BUCHANAN: For some reasons I’ve given you, John.

CLIFT: Right.

BUCHANAN: The base and the heart and soul of the Democratic Party, unions and blue collar workers in this, folks that have put them in power for years, they abhor these deals because they’ve seen what’s happened to them and their fathers.

CLIFT: The energy in the Democratic Party is with the progressive wing. She doesn’t want to offend them, but her past remarks suggest she's going to be for this deal. And if it does go through the House in the next couple of weeks, she can probably avoid making any strong statements.

MCLAUGHLIN: Exit question: Will Trade Promotion Authority hitherto fore known as "fast track" pass the Senate next week, yes or no?

Pat?

BUCHANAN: It’s going to have its problem in the House. It will pass the Senate.

CLIFT: It will pass the Senate. They need to get 30 votes in the House. It’s doable.

ROGAN: Yes, I think it will pass.

MCLAUGHLIN: Do you?

ROGAN: Yes.

MCLAUGHLIN: What do you think?

ZUCKERMAN: Yes, I think it will pass comfortably in the Senate.

MCLAUGHLIN: You do?

ZUCKERMAN: Yes.

MCLAUGHLIN: Don't forget, the MCLAUGHLIN GROUP has its own Web site, and you can watch this program or earlier programs on the Web at any time from anywhere at McLauglin.com.

Issue Two: The Camp David Discord.

(BEGIN VIDEO CLIP)

PRINCE MUHAMMED BIN NAYEF: Mr. President, you spoke about the situation in the region, and we look forward to, God willing, to working with you to overcome the challenges and bring about calm and stability in the region.

MCLAUGHLIN: Camp David was busy this week as the GCC, the Gulf Cooperation Council, met there with President Obama. The GCC was established in 1981 and is formed by the Middle Eastern nations of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

But this summit was no social call. Concealed in the Maryland mountain, tensions between the GCC and America are, nevertheless, obvious. Indeed, King Salman of Saudi Arabia turned down President Obama's invitation to the summit and sent Crown Prince Bin Nayef in his place.

Why the rancor? Because the Gulf Cooperation Council worries that President Obama is allowing Iran to become a nuclear superpower, and GCC nations doubt the president's commitment to their security.

They’ve issued stern requests: First, the GCC wants Mr. Obama to allow them to import high-technology U.S. military equipment. Until now, that provision has been limited to ensure Israel's military superiority in the region.

But the GCC also wants America to establish a ballistic missile defense system that would protect them from potential Iranian missile attack.

And as indicated by ongoing GCC military operations in Yemen, these U.S. allies are warning that without American support, they will take aggressive destabilizing action alone.

(END VIDEOTAPE)

MCLAUGHLIN: President Obama at Camp David:

(BEGIN VIDEO CLIP)

OBAMA: The United States is prepared work jointly with GCC member states to deter and confront an external threat to any GCC state’s territorial integrity that is inconsistent with the U.N. charter.

(END VIDEO CLIP)

MCLAUGHLIN: Question: Should President Obama give the GCC what it wants?

Tom Rogan?

ROGAN: He should give it some of what it wants, which is a good consolidation. Look, if he's going to pursue his nuclear strategy with Iran at the moment and he wants to have influence in terms of restraining some of politicization of sectarianism and fear in the Middle East, he has to yield to the GCC in terms of military technology, if he doesn’t want to do the ballistic shield.

The problem with the statement you just saw is its typical Obama foreign policy in the sense that it hedges. He says, we’ll consider what we'll do. But you know the GCC -- again, it's about paranoia -- you have to be confident, you have to build confidence there, if you want to restrain them from doing some of the crazy things that they tend to do.

BUCHANAN: Now, they are terrified -- the GCC, of Iran. And basically what they want is a NATO type agreement where the United States is automatically committed to go to war if one of them is attacked by Iran because they're terrified of Iran. But we can't give that to these states there. And Barack Obama, the principal foreign policy goal of his second term is basically this deal with Iran and a detente of some kind with the Islamic Republic of Iran, and that is hemlock to these folks because they're more terrified of Iran than they are of ISIS or al Qaeda.

CLIFT: Well, if Iran invaded Saudi Arabia, I think there's no question that the U.S. would come to Saudi Arabia's aid. But they're not going to put that in writing.

This is about a shifting of the power of balance in that region, and these other countries who, the Sunni countries there, because they sit on all the oil, they've been king not only in their countries, but king of the world for some time.

If this agreement works with Iran, and there's kind of a detente between Iran and the U.S., and Iran has gained a lot more power in the region since the unfortunate invasion of Iraq, we don't need these countries as much as we used to. And that -- they're feeling very uncomfortable about that.

So, this -- you know, you may say Obama hedges a lot. This calls for a lot of deft diplomacy because you got to reassure them without pumping more armaments into those countries and encouraging some sort of an arms race.

MCLAUGHLIN: Well, there’s a different view on that, Eleanor. On recent days, Obama administration officials have spoken on the talk, says the prelude to bring Iran fully into the world community and encouraging the emergence of a new Iranian leadership and maybe even the end up the historic Sunni-Shiite rivalry.

The Saudis see these as naively dangerous objectives.

So, what does that leave your assertions of a moment ago?

CLIFT: President Obama has said, Iran does lots of terrible things. A nuclear-armed Iran would be even more dangerous. He wants to get the nuclear agreement and maybe at some point in the future, their behavior will change, but that's -- those are two independent things and he's not counting on a new Iran to burst forward.

MCLAUGHLIN: You think Obama's negotiations with Iran has driven a wedge in the U.S.-Saudi relationship?

CLIFT: It's made them nervous --

ZUCKERMAN: A wedge? A wedge? That doesn’t even come close to describing it, when you have the king of Saudi Arabia and his sons coming basically not willing to deal with the United States after all these years, and all of the allies that we had in that part of the country are basically looking away from us because they don't think we're an ally any longer.

It's the most serious breach of our relationship with those countries that we've had since the end of World War II.

MCLAUGHLIN: Wait a minute.

BUCHANAN: What should we do?

MCLAUGHLIN: Wait a minute. This was a snub, yes or no?

ZUCKERMAN: A snub?

MCLAUGHLIN: A snub. They knew what they were doing.

ZUCKERMAN: Snub, of course they did. It’s not just a snub. It tells something very, very serious when they make this very clear that they don't want to deal.

(CROSSTALK)

ROGAN: And that political culture, it is a very great -- I actually thought it was a mistake.

CLIFT: They're waging war on their neighborhood. I think understandable --

(CROSSTALK)

BUCHANAN: But this is where the world has gone. Look, this is where the world has gone. And the point you’re making earlier is, look, in terms of power, in the Persian Gulf, if there's peace in the Persian Gulf, 80 million people in Iran and 30 million south of Baghdad in Iraq, Shia are going to dominate the Persian Gulf, whether the Saudis like it or not in the long run.

MCLAUGHLIN: Question: why did Bahrain's King Hamad bin Isa Al Khalifa choose to attend a horse show with Queen Elizabeth instead of a Camp David summit? Saudi Arabia's new monarch, King Salman, declined.

(CROSSTALK)

ZUCKERMAN: Right, that was a major step.

BUCHANAN: He’s bombing Yemen. Let me tell you, he’s bombing Yemen.

I think they’ve gotten themselves into their own Saudi Vietnam by bombing the Houthi rebels in Yemen.

ROGAN: The Saudis will get a nuclear weapon, right, if they're concerned. You have to stop them from doing that because you want to insulate away from the tensions in the region. But our credibility again, Assad is still using chemical weapons, and John Kerry this week said that that relate -- that deal that Putin brokered with Assad proves that the relationship works.

MCLAUGHLIN: Be careful with that chair, the way you hit it.

President Obama has a high estimation of his transformative power. But is ending the Sunni-Shiite rivalry truly within his grasp, or is it evidence of delusions of grandeur?

BUCHANAN: It’s 1,500 years old, this split, John, and I don't think Barack Obama's going to close it.

MCLAUGHLIN: Exit question: Will President Obama agree to give the Gulf Cooperation Council the security guarantees and military equipment it wants? Yes or no?

Pat Buchanan?

BUCHANAN: He’ll give them some – if you’re going to give them -- obviously, they've got security guarantees. He’s going to them some weapons. No NATO treaty for the Gulf Cooperation Council.

MCLAUGHLIN: Eleanor, quickly?

CLIFT: Variable assurances, joint military exercises, there are things you can do short of committing a U.S. umbrella on these countries.

ZUCKERMAN: If you think those countries are going to accept, you know, sort of little graffiti and things like that, as a way of dealing with their security --

CLIFT: What would you give them?

ZUCKERMAN: -- they are not going to do it. I would not have done what the president has done.

BUCHANAN: What are they going to do?

CLIFT: What would give them?

BUCHANAN: What are they going to do?

CLIFT: Seriously.

ZUCKERMAN: I would not have -- all this comes into one thing, the president almost --

ROGAN: Ramadi today.

ZUCKERMAN: It's almost -- one thing, OK? His commitment --

ROGAN: Anbar, John.

(CROSSTALK)

BUCHANAN: What are the Gulf Arabs going to do if we don’t give them a NATO --

(CROSSTALK)

ZUCKERMAN: You asked me the question. Let me get -- the one thing that we didn’t have to do was to try and make a deal with a country like Iran, which is the most radical --

BUCHANAN: Mort, I’m asking you. What the Gulf Arabs are going to do if we don't give them their NATO?

MCLAUGHLIN: We can live with that.

Issue Three: Island Showdown.

(BEGIN VIDEOTAPE)

HONG LEI, CHINESE FOREIGN MINISTRY (through translator): The relevant construction work is conducted within Chinese sovereign territory. It’s reasonable, understandable and legal, and it's not targeting or affecting any other country. We hope relevant countries and relevant sides can put it into perspective.

MCLAUGHLIN (voice-over): China is making islands. In recent months, China has significantly ramped up construction programs, notably in the Spratly Islands chain of the South China Sea. And that’s fueling a growing crisis because the Spratly chain is not recognized as Chinese territory. Nations including Malaysia, the Philippines, Taiwan and Vietnam also claim sovereignty over some of these islands. But by dumping sand as photos from Jane Defense prove, China has been able to build airfields and new military facilities.

America and its allies are not a little concerned. Consequently, the Pentagon wants to conduct U.S. Navy patrols within the 12-mile traditional sovereignty limit of China's artificial island. It fears that without American resolve, China will steal the South China Sea.

But here's what Admiral Locklear, head of the U.S. Pacific Forces, says defense cuts are doing his power.

ADM. SAM LOCKLEAR, COMMANDER, U.S. PACIFIC COMMAND: It reduced my ability to manage crisis pace and to provide options to the president and the Congress, and diminishes United States’ prestige and credibility in the region.

MCLAUGHLIN: And there's more. China also claims other island chains, like the Japanese-claimed Senkaku Islands of the East China Sea.

But President Obama insists the U.S. military will defend these islands if China uses force to try and seize them.

OBAMA: And let me reiterate that our treaty commitment to Japan security is absolute. And Article 5 covers all territories under Japan's administration, including the Senkaku Islands.

(END VIDEOTAPE)

MCLAUGHLIN: Question: why is China constructing artificial islands in the South China Sea?

I ask you, Tom.

ROGAN: Because they want to displace American power, because they want to take ownership of the potential energy supplies there, the fishing roots. But again, essentially is trying to prevent -- to provide themselves as the regional hegemon. And that's why we can't allow it, because it would destroy the rule of law. China is trying to become an imperial power. We have to stand for the rule of law. They cannot just simply build islands hundreds of miles from where they are.

MCLAUGHLIN: Hold on. Does China have nuclear submarine?

ROGAN: China, no -- China runs on diesel submarines, I believe, which are quieter but coastal defense. But China has nuclear weapons and a strong military. But we do as well.

MCLAUGHLIN: I think they have nuclear submarines. And I think they’re parked in Hainan.

ROGAN: They’re building submarine bases all around there, but their submarine capability is not par yet.

MCLAUGHLIN: Why is all that going on?

ROGAN: Because they want to displace American -- they want to push us out.

BUCHANAN: The South China Sea, they claim is territorial water.

MCLAUGHLIN: Does it stop there?

ROGAN: They're big trade routes as well, it's a problem.

BUCHANAN: South China is, they claimed is territorial waters. However, the islands, if you build on those islands, there is a twelve-mile limit around them. And if your navy goes in the twelve-mile limit and that is land they declare as their own, that is a violation of sovereignty as if you fly over these islands.

What the Chinese are saying, go ahead and use the South China Sea for commercial and travel, and even the Navy in, but don't go into our sovereign territory. And if we go in there, if we go in there, I think you can expect a collision with the Chinese navy.

MCLAUGHLIN: Did you know that I was in Hainan?

BUCHANAN: Hainan.

MCLAUGHLIN: Did you know that I was there?

BUCHANAN: Yes, it probably during the Nixon era, John.

MCLAUGHLIN: Do you know why I went there?

BUCHANAN: To negotiate with the Chinese?

MCLAUGHLIN: No, I wanted to swim.

(LAUGHTER)

MCLAUGHLIN: In addition to that, I found a lot of good company there, and I learned a lot.

BUCHANAN: Well, good for you.

MCLAUGHLIN: But Hainan is a real -- it's a real gem.

BUCHANAN: It's a huge base in the South China Sea, but it’s much closer to the north end of the sea.

MCLAUGHLIN: Right.

CLIFT: China – China takes an expansive view of their territory and they view the South China Sea like we view the Gulf of Mexico, and -- but the U.S. is in an awkward position because we've got the Philippines, where they’re a treaty ally, and the other countries that are disputing China are our friends. So, it's difficult to just stand by and do nothing while China bullies these other nations.

But if you’re going to go in there, you have to think it through. If you provoke China, then what?

MCLAUGHLIN: Let me see if I can squeeze this in: what will be accomplished by U.S. Navy patrol in close proximity to the artificial islands? I ask you, Mort.

ZUCKERMAN: Well I think it'll obviously give us a lot more and easier access to understanding what's happening in China. And that's exactly what we -- I think would like to have --

CLIFT: To send a message to China, basically, to back off.

ROGAN: They’re major trade routes. They cannot cede them.

MCLAUGHLIN: Predictions, Pat?

BUCHANAN: Israeli-Hezbollah collision growing imminent.

MCLAUGHLIN: Eleanor?

CLIFT: Draft Joe Biden for President super PAC ramping up by the end of May, June, just in case.

MCLAUGLIN: Tom?

ROGAN: Good one from Pat, but I'm going to say that the Iranian cargo ship on its way to Yemen next week could cause a major showdown with the U.S. Navy.

MCLAUGHLIN: Mort?

ZUCKERMAN: The contraction in the economy for the most recent month, and the second time in three months, means we're going to be looking at a very, very weak economy, much weaker than most people have thought for the rest of the year.

MCLAUGHLIN: Mort, listen to this -- consumers are hanging out to their money because a damaging psychology of deflationary expectations has taken hold in the United States. The early evidence takes the form of flat consumer spending, despite a stronger employment outlook and consumer relief at the gas pumps. Deflation means consumers expect tomorrow's prices to be lower than today, and that spells a big drag on GDP growth going forward.

Do you understand all that?

ROGAN: I did understand that.

MCLAUGHLIN: You like it, don’t you?

ROGAN: Some saving is good, though.

MCLAUGHLIN: Bye-bye!

END