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MR. MCLAUGHLIN: Issue one: GOP on Defense.


REP. DICK ARMEY (R-TX, House majority leader): (From videotape.) We are facing another great election cycle. How will it turn out?


MR. MCLAUGHLIN: That's the question House Republicans are agonizing over. How will the 2000 election turn out? Will the GOP lose control of the House of Representatives? They well may. Here's why:


On August 5th the U.S. Senate approved a $792 billion tax cut bill. The House also passed the measure, 221 to 206, earlier that same day. This was the powerful opening GOP salvo in a budget offensive.


Seven weeks later, after the August recess, President Clinton vetoed the tax cut, and the Republican offensive collapsed. The Democrats picked up the ball and are still running with it -- education initiatives, a hike in the minimum wage, more gun control, campaign finance reform.


The biggest Democratic win came this week: passage of a Patients Bill of Rights, favored by the White House, that gives patients power to sue their HMOs if they are wrongfully denied health care.


The Republicans are harrumphing, but they are going along because the issues are so popular and so populist, and the Democrats, including Clinton, are playing their cards so well that Republicans are scared to cross them.


Question: In that sterling video setup, I describe the HMO Democratic win as their biggest win -- the Democrats'. Was it really that big a win for the Democrats, Lawrence Kudlow?


MR. KUDLOW: I don't think it was that big a win because I don't think there's as much HMO dissatisfaction out there as some people do. The polls don't indicate that. But it is part of an overall pattern.


MR. MCLAUGHLIN: What is that?


MR. KUDLOW: There's no question the Republicans have made a complete hash of everything since they came back from the summer, and I think the root of this started with their giving up on Bill Archer's tax cut bill. They should have taken that veto and come right back and listed the individual, specific tax cuts -- the estate tax cut, the capital gains tax cut, the health-care tax cuts, the alternative minimum tax cut. Republicans were put on this Earth to cut taxes. (Soft laughter.) When they give up on that issue, they have nothing else.




MR. KUDLOW: They've never had a spending strategy --




MR. KUDLOW: -- never, never, never, and now they're just on the defensive, and they're in deep trouble.


MR. MCLAUGHLIN: And oddly, polls do support what you're saying. Sixty-eight percent of the American people want a tax cut, notwithstanding the liberal reading of what the public mind is.




MS. CLIFT: There's no clamor for huge tax cuts in the country, and the health care win is a huge win for Democrats and for Democrats running for office. It's a repudiation of the Republican leadership, and it was genuine democracy bubbling up from state legislatures, where the demand was created. Congress is coming in in the rear guard after a lot of state capitals have already reacted. And if you're a Republican who voted against this bill, you're going to have that vote wrapped around your neck in November of 2000. Going to cost them some seats.


MR. MCLAUGHLIN: There you are, Tony, irrepressible democracy at work. Bubbling to the surface.


MS. CLIFT: That's right.


MR. BLANKLEY: Well, look, she's got it half-right, as she often does.



MS. CLIFT: Which half, Tony?


MR. BLANKLEY: This is a win for the Democrats, no question about it.




MR. BLANKLEY: Yeah, a pretty substantial win. But the point is that every Republican who needed for their district purposes to vote with the Democrats voted. That's why there were 60, roughly, Republicans voting that way. So I don't think it's going to have a big effect on the congressional elections next year, because the members who needed to do it covered themselves by the vote with the D's.


MR. MCLAUGHLIN: Aren't you taking note of the fact -- Joe, perhaps you could speak this. I know that you're a learned man, living in New York there and watching everything in Washington.


MR. CONASON: I even come down once in a while, John.


MR. MCLAUGHLIN: We're glad to have you; and don't think we don't appreciate your coming.


This has to go to conference.




MR. MCLAUGHLIN: The Senate will bleed it. It won't castrate it, but it will bleed a lot out of it. So why is this such a big win?


MR. CONASON: Well, it's just a big win because it's the biggest win on the floor for the Democratic minority that they've had since the demise of Newt Gingrich, at the very least. And I think it's also a big win because if the Republican senators -- if Trent Lott, who is already not very popular in the country, tries to eviscerate this bill, that's just going to become a problem for the Republicans keeping the Senate as well as the House.


MR. MCLAUGHLIN: Do you have any insight into why the Republicans have not used their majority more aggressively?


MR. CONASON: Well, because they're divided. I mean, the Republican Party is disintegrating.


MR. MCLAUGHLIN: Are they a spent force?


MR. CONASON: They're getting close to that point, because they're disintegrating. They are flying apart, while the Democrats are coalescing.


MR. MCLAUGHLIN: What do they need, a new election to reinvigorate themselves?


MR. BLANKLEY: They need a bigger majority. They've got a five-seat majority. If it were a parliamentary government, it would fold because there's not a working majority. Therefore, the leadership tries to find something they can get through on a --


MR. MCLAUGHLIN: Well, this is true. This is true.


MR. CONASON: They cannot get a majority because -- Larry's actually right about one thing. Republicans do feel they were put on this earth to do one thing, cut taxes, and people just aren't that interested in that anymore.


MR. MCLAUGHLIN: Do you want to finish your thought?


MR. BLANKLEY: Yeah. But the key is that the Republican Party in the House has not been able to keep their moderates and liberals with them. They've turned them into the catbird-seat players, and they're going with the Democrats on this, they'll go with Democrats on other issues --


MR. MCLAUGHLIN: Okay. Our question: Can the Democrats run on a do-nothing Congress platform?


MR. KUDLOW: Well, they're going to try to. And at the moment, they've got something there.


MR. MCLAUGHLIN: Will it succeed?


MR. KUDLOW: I don't know, because --


MR. MCLAUGHLIN: Will it be eclipsed by coattails?


MR. KUDLOW: Yeah, I think the presidential race is going to determine the outcome of the House. But the problem with the Republicans in the House is they don't know who their constituency is. They're ignoring the investor class. They're ignoring the Internet class. They're ignoring asset holders. They're ignoring the prosperity.


MS. CLIFT: They're playing up, though, to --


MR. KUDLOW: They're going through a huge identity crisis, and they won't stick to their guns.


MS. CLIFT: No, they're playing up to the Larry Kudlows of the world. But they're aren't enough of you, Larry, I'm sorry to say. (Laughs.)


MR. KUDLOW: No, the trouble is, they give up too soon.


MS. CLIFT: Right.


MR. CONASON: The problem you're going to have is your presidential candidate snatching his coattails away from them. So, you know, they're going to have trouble riding them.


MR. KUDLOW: But I think that's the issue -- is the outcome of the presidential race is going to determine the outcome of the House.


MR. MCLAUGHLIN: Exit question: Will Republicans lose control of the House of Representatives in the year 2000, yes or no, Lawrence Kudlow?


MR. KUDLOW: Well, since I think George W. Bush is going to be the next president, he's the House Republicans' higher power, he's their savior, and I think they're going to win a narrow one because he's going to be the next president.


MS. CLIFT: Well, he's trying to lead them. He's like Moses trying to lead them to the promised land. But they're not going. I think the Democrats take the House, even if they lose the White House.


MR. MCLAUGHLIN: What did Reagan's coattails in the '80s pick up for the Republicans?


MR. BLANKLEY: Not too much. But look --


MR. MCLAUGHLIN: I beg your pardon, sir.


MR. KUDLOW: No, no, no, huge --


MR. MCLAUGHLIN: In the '80s, it picked up the Senate, and it picked up around 20 House seats.


MR. BLANKLEY: That was in '80, but in '84 --


MS. CLIFT: Not '82.


MR. BLANKLEY: Not in '82, not in '84, not in '86, and so --


MR. KUDLOW: But in the presidential --


MR. MCLAUGHLIN: Presidential races?


MR. BLANKLEY: No, in '84 we didn't pick up much. Eighty was a good --




MR. KUDLOW: Eighty was a huge turnaround.


MR. BLANKLEY: Eighty was when -- '80, when we took the Senate back, but did not take the House -- picked up some seats.


Look --


MR. MCLAUGHLIN: Which is where we are now, in terms of this shift in government.


MR. BLANKLEY: Now look --




MR. BLANKLEY: Look, assuming Bush wins, which is a big assumption -- but assuming he wins, in modern times, no party has won the White House and lost a house of Congress. My sense is that it's a toss-up right now for the House. They've got some pretty good candidates.


And one last point: They've had a terrible year, and their generic ballot is even now -- actually up two points for the Republicans.


MR. : That's true, yeah.




MR. CONASON: Oh, I think the Democrats will win, and I think they could win even if Bush wins, because --


MR. MCLAUGHLIN: Well, it works that way, too; with a Democratic win of the White House, then it'll be a sweep for them in the House, too.


MR. KUDLOW: They won't win the Senate. The Democrats won't win the Senate.


MR. MCLAUGHLIN: So what we're really saying here, those of us who believe in the kind of coattails we're talking about, massive and long, that it'll be a Bush win, and the House will be retained by the Republicans, which is my view.


MS. CLIFT: That's -- (off mike).


MR. MCLAUGHLIN: When we come back: George W.'s friendly fire at Republicans and Clinton's clever counter.




MR. MCLAUGHLIN: Issue two: Triangulation spelled with a W.


GOV. GEORGE W. BUSH (R-TX): (From videotape.) God bless you all. (Cheers, applause.)


MR. MCLAUGHLIN: In New York this week, George W. Bush shocked and dismayed Republican members of Congress with his hard-hitting and sustained criticism. (Quoting Governor Bush.) "I don't think they ought to balance their budget on the backs of the poor. Delaying the Earned Income Tax Credit payment is more than a gimmick; it is an effective tax increase on the most hard-pressed working Americans."


And if that wasn't clear enough, five days later, on Tuesday of this week, Bush struck again.


GOV. BUSH: (From videotape.) Too often on social issues my party has painted an image of America slouching toward Gomorrah. Too often my party has focused on the national economy, to the exclusion of all else, speaking a sterile language of rates and numbers. Too often my party has confused the need of limited government with a disdain for government itself.


MR. MCLAUGHLIN: On Wednesday, for a third time, W. knocked the Republicans, this time for their pessimism, their negativism.


GOV. BUSH: (From videotape.) Oftentimes we say what we're against. I'm going talk about what we're for. And I'm going to reject all this negative politics that oftentimes has dominated the landscape.


MR. MCLAUGHLIN: Question: Is "W" speaking from the heart, Joe Conason?


MR. CONASON: Well, I think a lot of people probably think he is. I know people in Texas, some Democrats, who have gone over to work for him, one guy in particular a consultant, who really believes, knows him well, much better than I do, who believes he is.


MR. MCLAUGHLIN: You don't think it's a calculated effort at triangulation? If you do, tell me how it triangulates?


MR. CONASON: Why can't it be both, actually? He could believe this is both smart and right.


MR. MCLAUGHLIN: Well, okay. You have got a triangle, and he is at the apex of the triangle. And you have got a left angle and a right angle. Who is on his left, and who is on his right that he is triangulating, meaning he is keeping separate so he can --


MR. CONASON: Well, on his left is the bulk of the country -- okay? -- most voters and, in fact, you know -- (laughter) -- the great majority of people. On his right are --


MR. MCLAUGHLIN: -- the Larry Kudlows?


MR. KUDLOW: Right.


MR. CONASON: -- on his right -- no, on his right are the members of Congress, who he has to worry about because, after all, you don't want to seem like you are running away from your own party, as Gore said he was the other day.


MR. MCLAUGHLIN: And he is creating a hole for himself --


MR. CONASON: So he is triangulating between America and the Congress.


MS. CLIFT: Well, yeah. He is running as an independent. And frankly, I don't have a window into his soul, so I don't know what is going on there. But he is doing exactly what he should be doing. And he is open to the charge of raw opportunism, such as Bill Clinton was 10 years ago. I mean, he is modeling himself after Bill Clinton of 1991 and 1992. And it's the only way he gets exposed as a liar is if his record contradicts it.


MR. MCLAUGHLIN: Larry -- I mean, Tony, don't you think it would have been more appropriate for him to save this "kinder, gentler nation" talk, similar to his father's, for his inaugural address, rather than prematurely now?


MR. BLANKLEY: No, no, no. I think, whether it's from his heart of not -- it may well be -- it's also clearly calculated to reposition, to rebrand if you will, the Republican Party in an image that a lot of experts think will fail with the American public. I think he is positioning himself and the party just about right.


MR. KUDLOW: Tony -- (inaudible) --


MR. MCLAUGHLIN: So it was not a cheap shot at his own party?


MR. BLANKLEY: Well, it was an expensive shot because he has got a lot of the members upset, but it was probably tactically the right thing to do.


MR. MCLAUGHLIN: What about "balance the budget on the backs of the poor"? Was that not a cheap shot?




MR. BLANKLEY: That was a cheap shot, and it's not a statement of correct policy. Whatever you --




MR. BLANKLEY: -- (inaudible) -- it was bad politics to change that program, but on the other hand --


MR. KUDLOW: It was bad --


MR. BLANKLEY: -- it had nothing to do with the budget because he wasn't thinking the budget --


MR. KUDLOW: No, it was bad. No, it was terrible.


MR. BLANKLEY: -- so he wasn't balancing the budget on the backs --


MR. KUDLOW: It was terrible.




MR. KUDLOW: Let me do it. It was terrible politics for the House to do that. You know, I was in the government when David Stockman argued before Congress that ketchup was a nutrient. And he was right technically, but it was a disaster politically. (Laughter.) And that's what they were --


MR. BLANKLEY: Yeah, but look --


MR. MCLAUGHLIN: Let him finish.


MR. KUDLOW: -- planning to do on the Earned Income Tax Credit.


George W. Bush has learned some very important lessons his dad never learned: Number one, optimism wins; pessimism loses. Number two, the application of conservative principles -- namely, limited government, personal responsibility and free-market choice and competition --


MS. CLIFT: Wasn't George Bush --


MR. MCLAUGHLIN: Let him finish.


MR. KUDLOW: -- can be used to solve Democratic problems, if you will; education and health care and Social Security. Bush is portraying a very conservative message that is much better packaged --


MS. CLIFT: That's all worth --


MR. KUDLOW: -- than what --


MS. CLIFT: -- that's all --


MR. MCLAUGHLIN: So he should have refrained from this type of ridicule of his fellow Republicans?


MS. CLIFT: Listen, those -- (laughs) --


MR. KUDLOW: I think he has to do what he has to do.


MR. MCLAUGHLIN: All right, Eleanor. Quickly?


MS. CLIFT: George W. --


MR. KUDLOW: Getting the party --


MR. MCLAUGHLIN: Hold on, Larry.


MS. CLIFT: George W. Bush just wrote the ad for Dick Gephardt and the Democrats for next year. I mean, that statement about "balancing the budget on the backs of the poor" is specific.


MR. MCLAUGHLIN: All right. Now, let's hear from the wizard of triangulation himself.


PRESIDENT BILL CLINTON: (From videotape.) First of all, I think the Republican right's being too hard on Governor Bush. I mean, you know, I don't understand why they're being so mean to him about this. He has stuck with them on -- he was for that tax cut that they wanted. He -- his main health care adviser sponsored that breakfast for the House leadership yesterday designed to help kill the Patients Bill of Rights. He stuck with them and the NRA on the gun issue. You know, he's for privatizing Social Security. I don't see why they're so hard on him.


MR. MCLAUGHLIN: Question: Is the Clinton strategy here clever and correct -- meaning productive, effective -- or is it too clever by half, and will it backfire? Tony?


MR. BLANKLEY: Oh, look. I mean, this --


MR. MCLAUGHLIN: What is he doing?


MR. BLANKLEY: He's lying, which is what he does for --


MS. CLIFT: Oh, come on.


MR. MCLAUGHLIN: No, no, well, what is he doing?


MR. BLANKLEY: He's trying to say --


(Cross talk.)


MR. BLANKLEY: Let me finish. He's trying to say that Bush is no less conservative than the Republicans he's attacking for being too conservative.


MR. MCLAUGHLIN: And this is a phony repositioning of himself; right?


MR. BLANKLEY: And this is, I think -- there's nothing in (what ?) Clinton said that is true, but he's doing that just because he wants to take and try to defeat Bush's position in repositioning himself.


MS. CLIFT: Tony, your conservative brethren all believe that he is going to be more conservative and that he's doing this to reposition himself. And it's all nice, warm, soft rhetoric, but --


MR. BLANKLEY: Oh, that's --


MR. CONASON: Everybody is supposed --


MR. MCLAUGHLIN: Hold on. Joe. I want to hear from Joe.


MR. CONASON: Everybody is supposed to believe what they want to believe. They're supposed to look at him and see what they want to see.


MS. CLIFT: Right.


MR. CONASON: That's the trick. And, you know, the president has pulled it off many a time, and this guy's imitating him. And I think Clinton has paid him the compliment of saying, "Hey, I'm not going to let you do that."


MR. MCLAUGHLIN: Okay. Let me complicate this still further. Do you think that Clinton is doing him a service because he's also saying that George is really a conservative to the core; he's with you guys on the right; therefore --


MR. CONASON: John, I --


MR. MCLAUGHLIN: Let me finish; therefore, the triangulation is complete? He's helping him out, to reidentify his credentials?


MR. CONASON: Look, what he's doing -- I'll tell you what he's doing.


MR. MCLAUGHLIN: And so this really backfires on Clinton?


MR. CONASON: No, what he's doing is he's doing what's called heightening the contradiction between Bush and his own party. By saying they shouldn't be so hard on him, he's calling attention to the differences that they have.


MR. KUDLOW: Right.


MR. CONASON: He's saying, "Don't pick on George Bush, you mean House members." And it raises the heat on both of them.


MR. MCLAUGHLIN: But he's also saying, "He is just like you." And that helps to hype the conservatism.


MS. CLIFT: Well, what --


MR. CONASON: Do you really think that the conservatives are going to take Clinton's word for it?


MR. MCLAUGHLIN: That makes no difference. It's the public at large.




MR. KUDLOW: The issue for George W. right now is to show that compassionate, caring conservatism can work. And one issue that I didn't like that he mentioned was the --


MR. MCLAUGHLIN: Who, the president, or George?


MR. KUDLOW: No, George W. on this, is -- I don't want him to push aside the economy. The economy is meat and potatoes for the Republican Party.


MR. MCLAUGHLIN: How did he push it aside?


MR. KUDLOW: He's saying we spend too much time on the economy and not enough on these other issues; we have to do it equally, the compassion issues and the economic issues. Now, lookit. So far, he's talked a good game about marginal tax rates, but he has no economic plan. Steve Forbes is going to set the standard when he unveils his flat tax and his privatizing of Social Security.


MR. MCLAUGHLIN: You think that will sweep the country, Larry? (Laughter.)


MR. KUDLOW: We haven't yet heard from George W. Bush, and we need to hear from him on that issue.


MR. MCLAUGHLIN: Exit question, multiple choice: How much damage has G.W. done to the House Republicans? A, major; B, minor; C, nugatory.




MR. KUDLOW: Nugatory, I think, if I know what that means. (Laughter.) He's actually -- at the end of the day, he is going to help the House Republicans. He is only hope he's (sic) got.


MR. MCLAUGHLIN: Well, Larry, nugatory means "overwhelming."


MR. KUDLOW: Well, look --


MR. MCLAUGHLIN: No, I'm joking..


MR. KUDLOW: He's got to smash their current image, which is a disaster, and remake them in his own image, and that's the way they're going to carry the House next year.


MS. CLIFT: He's made the case for the Democrats to regain control of the Congress. Between B and A.




MR. BLANKLEY: It's a split, because if he wins the president, he is good for the House. If he's helping himself in that regard, it's good for the House. If looked at alone, he's disparaging the House.




MR. BLANKLEY: Somewhere between minor and major. I'd -- halfway in between. (Laughter.)


MR. CONASON: Major. Major. What Eleanor said before was right; he made an ad for them, and it's going to hurt them a lot.


MR. MCLAUGHLIN: I think close to nugatory. I think he's fleet-footed enough to be able to recover whatever he has lost, but it is principally a gain.


Issue three: Brooklyn Museum, continued.


ARNOLD LEHMAN (director, Brooklyn Museum of Art): (From videotape.) We're not protecting one painting. We're not protecting a museum. We're doing this to protect your rights, my rights to look at things that we want to look at.


MR. MCLAUGHLIN: That's Arnold Lehman, director of the Brooklyn Museum of Art. Lehman is defending the museum's decision to exhibit "Sensation," the main feature of which being a painting called "The Holy Virgin Mary." In it the Virgin Mary, whom Christians venerate as the mother of Jesus Christ, is splattered with elephant dung and surrounded by anuses and vaginas, with the Virgin's own mouth a twisted vulva.


New York Mayor Rudy Giuliani has cut funding to the museum.


MAYOR RUDY GIULIANI (R-New York City): (From videotape.) Why you want to have an exhibit of the Virgin Mary have feces thrown at her, have the private parts of women displayed all over it? I don't know; you should explain someplace else, not on public taxpayer dollars.


MR. MCLAUGHLIN: Lehman has counter-sued, arguing freedom of expression. But Lehman is finding it harder to hide behind the First Amendment. This isn't the first time Lehman has attacked Christians, notably Catholics, writes columnist Rod Drayer (sp). Three years ago Lehman was director of the Baltimore Museum of Art. There he co-sponsored and screened a film in which Mother Teresa, the saintly and world-revered Calcutta nun who died in 1997, was labeled a, quote, "ghoul" and a, quote, "reactionary." Drayer (sp) described the film's portrayal of Mother Teresa as being a, quote, "whore for publicity," unquote, who cozied up to disreputable figures to fund her humanitarian projects. That portrayal drew picket lines from Catholics in Baltimore. The museum, a publicly funded institution run by Lehman, was forced to move the so-called documentary out of the museum.


Now Lehman has repeated himself, provoking sharp criticism. "I'm just as sick of Catholic-bashing as Giuliani himself.


"I may be an atheist, but I was raised in Italian Catholicism and it remains my native culture. I resent the double standard that protects Jewish and African American symbols and icons but allows Catholicism to be routinely trashed by supercilious liberals and ranting gay activists. That a Jewish collector and a Jewish museum director had no compunction about selecting a parodic image of the Madonna shows either stupidity or malice.


"The Brooklyn show has fomented hatred in this country, as witnessed by the placard of a defaced Star of David carried, according to the New York Post, by a demonstrator outside the museum on opening day. Is this the destructive train of thought that the contemporary arts want to foster?" So says art professor and author Camille Paglia.


This week George W. Bush took Rudy's side in the argument, thus nationalizing the Brooklyn Museum issue.


GEORGE W. BUSH (Republican presidential candidate): (From videotape.) It denigrates someone's religion. I don't think -- I don't think we ought to be using public monies to denigrate religion.


MR. MCLAUGHLIN: Question: Is this painting the artistic equivalent of a hate crime, like spray-painting a synagogue with swastikas?


I ask you, Larry?


MR. KUDLOW: Yes, I think it is. And I completely agree with Paglia and George Bush and Rudy Giuliani on this issue. This guy Lehman's got a real problem.


But in general, to raise this even more behind the hate issue, I don't understand why these avant-garde young artists don't paint art for beauty and entertainment and helping people with a spirit of --




MR. CONASON: You can't really agree with the mayor and Camille Paglia because Camille's column said very clearly she doesn't agree with the mayor's decision to take money away from the museum. She regards that as censorship. She hates --


MR. MCLAUGHLIN: She did agree with him in what respect?


MR. CONASON: She agreed with him that this was Catholic-bashing art. But she didn't agree that censorship was the appropriate response. You cut that part out, but that's in her column as well.


MR. MCLAUGHLIN: Well, I didn't cut it out. It was unusually long column that appeared in --


MR. CONASON: Well, we didn't get that far. But that's an important point, John.


MR. MCLAUGHLIN: -- in that dilettante magazine that you write for.


MR. CONASON: Yes, for which I also write. But --


MR. MCLAUGHLIN: We've got to get out. Very fast. Eleanor, quickly.


MS. CLIFT: Lehman is more a P.T. Barnum than any kind of a Catholic-basher. He increased attendance. This was a record-breaking show. Kids with spiked hair, ladies with blue hair -- everybody is going to see it. The artist is Catholic, and elephant dung is a symbol of regeneration in Africa --


MR. MCLAUGHLIN: Oh, here we go again! Eleanor!


MS. CLIFT: -- like Viagra in this country, John! It's like Viagra! (Laughs.)


MR. MCLAUGHLIN: Eleanor, we called the Zimbabwe authorities and they laugh when you ask them that question. This kid, Ofili, went to Zimbabwe in 1994 for six weeks. He's been brought up in London. He's a British citizen, correct? I mean, it's just ridiculous.


Go ahead. Quickly!


MR. BLANKLEY: Look, this would have been avant-garde a hundred years ago. Now it's just out for profit and sensation.




We'll be right back with predictions.




MR. MCLAUGHLIN: Will the HMO bill pass the Senate largely in its present form?








MS. CLIFT: No. (Laughs.)






MR. MCLAUGHLIN: The answer is no.


Happy Columbus Day. Bye-bye.







MR. MCLAUGHLIN: Issue four: Phony air phones.


(Begin video clip.)


FLIGHT ATTENDANT: You can't use your phone until we land, sir.


PASSENGER (?): We are flying on a Lockheed Eagle-series L-1011. It came off the line 20 months ago carrying the -- (inaudible) -- five transponder tracking system. Are you telling me I can still flummox this thing with something I bought at Radio Shack?


(End video clip.)


MR. MCLAUGHLIN: You know the drill. When you get on the plane, you turn off the phone, whether you are in the real world or on TV. Airlines, airplane manufacturers, and even government agencies like the FAA and the FCC, all warn against using cell phones on airplanes.


Ask a flight attendant, and she or he will tell you that cell phones can interfere with the plane's navigation equipment. But government experts investigated the problem exhaustively for five years and were unable to make any portable electronic device interfere with a plane's equipment.


So what's the real reason cell phones are banned by airlines? Answer -- you guessed it; profit for airlines and for their air phone partners -- AT&T and GTE -- over $125 million in revenue last year alone with a captive and misled audience. These companies can charge rates as much as 20 times higher than normal cell phones.


Question: Why the ban on personal cell phones in airplanes? Is it safety, or is it profit? Tony?


MR. BLANKLEY: I mean, I am not an expert. You never discount the profit motive in human activity. And as a flier, I wouldn't want to take the slightest chance. So it seems to me that people are naturally going to give the airlines the benefit of the doubt because you don't want to take a chance of crashing the plane you're on. But I suspect it's probably profit.


MR. MCLAUGHLIN: Well, cell phones have been banned at gas stations when you are having your tank filled. Did you know about that, Joe?


MR. CONASON: I didn't. I didn't.


MR. MCLAUGHLIN: Well, there you are.


MR. CONASON: But I am glad that you --


MR. MCLAUGHLIN: On this program, you can educate yourself --


MR. CONASON: -- I am glad you have become the new Ralph Nader of the airwaves and you are protecting the consumers now from the typical behavior of big corporations, which is if they can achieve a monopoly, they will.


MR. MCLAUGHLIN: And gouge.


MR. CONASON: And government is there to stop that from happening, John. So maybe the FAA should take a look at this.


MS. CLIFT: Yeah. I think they are afraid that the technology is moving so fast that the cell phones are going to work at 30,000 feet -- that's the next step -- and they are going to lose the profit.


But when that Swiss plane went down recently, I think the entertainment system shorted out, and that was implicated in the crash. So I am with Tony. You know, my life is in their hands; I am going to obey the rules. (Laughter.) (Laughs.)


MR. KUDLOW: Now that you've unveiled this with the free market communications television broadcasting and we can use cell phones on the airplanes, my only hope is that I can also smoke a cigar while I'm using my cell phone on the plane.


MR. CONASON: I'd drink to that! (Laughter.)


MR. MCLAUGHLIN: Do you know that European nations have double the personal cell phone usage that Americans have? Maybe the Europeans will be the ones to lead the army of embattled consumers and clients using airplanes; correct?


MR. CONASON: Strong regulators over there, John.


MS. CLIFT: This is something for the Republican Congress take up, I think! (Laughs.)


MR. KUDLOW: But the profit motive will eventually prevail and we will have competition on these airplanes, there's no question about that.


MR. MCLAUGHLIN: I feel reassured now, Larry. Thank you! (Chuckles.)


MR. KUDLOW: Absolutely. That's the way the system works.