MR. MCLAUGHLIN: Issue one: Vladimir Putin, International Man of Mystery.

(Begin videotape segment.)

MICHAEL MCFAUL (Russian Studies expert): He could be a person that brings Russia out of its decline and restores Russia as a great nation, or he could be the leader that makes Russia into a totalitarian regime again.

DIMITRI SIMES (Russian Studies expert): But we do not know very much about him beyond his facade of a former KGB officer who is not afraid to spill blood.

(End videotape segment.)

MR. MCLAUGHLIN: Russia-watchers are in a guessing game. They don't know what to make of the new president of the Russian Federation; his name, Vladimir Putin, hand-picked by Boris Yeltsin as premier last August, and hand-picked again as president, when Yeltsin startled the world with his own resignation on New Year's Eve. Within hours, Putin was on air, at the helm.

ACTING PRESIDENT PUTIN: (From videotape, through translator.) There is, and will not be, any power vacuum in the country.

MR. MCLAUGHLIN: The 47-year-old Putin is a shoo-in as Russia's next elected president when voters go to the polls, in two and a half months, on March 26th. One big reason: The popular war in Chechnya that Putin is managing.

That war, plus Putin's 16 years with the KGB, the now-defunct spy agency, has some Western critics fretting. These alarmists, especially in the United States, see Putin bringing back a centralized authoritarian state hostile to a free market and to the West, generally. Those who would impale Vlad Putin overlook the support that Putin has gained with true reformers in Russia, such as Yegor Gaidar, Anatoly Chubais and Boris Nemtsov.

The pulverized Putin-now faction also overlooks his extraordinary declaration of belief, published last December, wherein Putin refuses to blame the West for Russia's current sad state of affairs. Rather, quote, "Our own mistake, miscalculation and lack of experience" -- unquote -- are the cause of Russia's agony, says Putin.

And Putin condemns Russia's former ideology, quote: "Communism and the power of the Soviets did not make Russia a prosperous country with a dynamically developing society and free people. It was a road to a blind alley. Russia needs a strong state power and must have it. I am not calling for totalitarianism. History proves all dictatorships, all authoritarian forms of government are transient. Only democratic systems are enduring. Democracy may have its shortcomings, but mankind has not devised anything superior."

Question: Should we not reject the unreflective alarmists, like, well, even some highly trumpeted columnists, who are condemning Putin even before his flight begins, Lawrence Kudlow?

MR. KUDLOW: Yeah, I think that view should be rejected. I think Putin is not well known. He's a bit of a shadowy figure. But he's given openings to some of the old Yegor Gaidar free-market reform group. And I think -- outside of the Chechnya war, which no one likes, but which the United States is powerless over, I think this guy should be given an absolute fair shot. He wants democracy, he wants free elections, and it may turn out that he can move them towards a sort of German and social democratic market economy.

MR. MCLAUGHLIN: You know that Gaidar and Chubais and Nemtsov, the three reformers, are all strongly supportive of Putin, correct?

MR. KUDLOW: Mm-hmm. (Affirmative.)

MR. MCLAUGHLIN: Now you worked with Gaidar, and Gaidar's people, did you not?

MR. KUDLOW: Yes. Yes.

MR. MCLAUGHLIN: I mean, they turned to you for your superior services in the area of economics and elsewhere, correct?

MR. KUDLOW: Yeah, I worked on the original Yeltsin economic reform plan.

But the point here is, it's not so clear-cut, John, because Putin has allowed the reformers into their camp, he's the number-one guy, but it's still not clear what kind of economic reform product they're going to have.

MR. MCLAUGHLIN: Well, don't you think, because of the widespread corruption -- I'm going right to you, Eleanor --

MS. CLIFT: (Off mike.)

MR. MCLAUGHLIN: -- the widespread corruption, he has to have a highly regulatory regime, and you're doubtless hearing backstairs talk now from these very people you worked for, who are saying he's going to tighten the screws on us, but he has to in order to get control of that corrupt society, does he not?

MR. KUDLOW: Well, he's got to tighten the screws on the kleptocrats who made off with their Russian prime assets.

But the question is, will he create a strong Russian ruble, will he have tax reform that provides incentives and broadens the base, and will he allow private property rights? And we don't know the answer to any of that yet.


MS. CLIFT: Well, it's time to haul out the old Reagan chestnut: Trust, but verify. So far, Putin has said all the right things; he's going to protect the civil liberties, the right to own private property.

He's got a sinister background, but a lot of his life in intelligence has been spent on gathering economic intelligence. And he knows what a basket case the Russian economy is. I suspect he's more of a capitalist than he is a small-d Democrat.

MR. BLANKLEY: Yeah, and --

MR. MCLAUGHLIN: Don't you know that the KGB is a secretive organization, just as is our CIA? What do you know about George Bush, Sr., and the way he conducted himself when he was the head of the CIA? Answer: Nothing, because the records are sealed. (Laughter.) Why this alarmist view about Putin?

MS. CLIFT: Because he comes out of a career in spying --

MR. MCLAUGHLIN: He was in East Germany! He was near Dresden.

MS. CLIFT: -- and the question is, when he participated in the reformist government in St. Petersburg, a lot of people think he was just infiltrating.

MR. MCLAUGHLIN: But that ended a decade ago.

MS. CLIFT: John, there is --

MR. MCLAUGHLIN: We know quite a bit about him since 1991.

MS. CLIFT: He is a colorless authoritarian, and if there is something good here, the administration will not romanticize him the way they did Yeltsin and Gorbachev. He may be a man to do business with.

MR. MCLAUGHLIN: Look. You will allow that he looks ruthless, does he not?

MR. BLANKLEY: No. Look, let me tell you something. When I actually talked to someone who knew him back then before the fall of the Soviet Union --

MR. MCLAUGHLIN: That's before 1990?

MR. BLANKLEY: Yes. This was Dr. Carl Cutler (sp) He's the president of St. Petersburg College in Florida. He was there working with Putin when Putin was working in the University of Leningrad and then when he was deputy mayor of Leningrad and then St. Petersburg. He spent weeks -- in fact, months with him. His judgment is he's a very focused man, very effective, but interestingly, also very interested in trying to bring community college education to Russians.

So here's a man who has some very strong interests and experience in some of the social infrastructure that Russia's going to need. He's not just an old spook, he's a lot more than that. He was involved with sort of social welfare work before the fall, as well as --

MR. MCLAUGHLIN: Well, hold on for one minute. Do you remember Anwar Sadat and what was said about Anwar Sadat before he became leader of Egypt?

MR. BLANKLEY: I remember precisely. He was called a faceless bureaucrat and a lackey to the great man Nasser. It turned out he was the great statesman of the Mid-East.

MR. WARREN: Before we lionize him and characterize him as sort of Abe Lincoln -- (laughter) -- from --

(Cross talk.)

MR. MCLAUGHLIN: Who, Anwar Sadat?

MR. WARREN: Outside St. Petersburg --

MR. MCLAUGHLIN: Anwar Sadat?

MR. WARREN: -- he is a shadowy character.

MS. CLIFT: Putin.

MR. WARREN: Yes, he did work for along time in East Germany. We do have a lot of evidence about what the East German secret police was done. Nevertheless, it seems to me the bottom line here is whatever he actually is, I think his alternatives here are very, very few. He can make a few grand rhetorical gestures, bash the U.S., maybe get involved in a little bit of mischief-making overseas, but ultimately, his problems are economic and, regardless of what his impulse is as an Abe Lincoln or a repressive ex-KGB guy, he's going to have to come begging to the likes of the U.S. and the International Monetary Fund for money.

MR. MCLAUGHLIN: How much does success in Chechnya in this war determine the future of Vladimir Putin, do you think?

I ask you, Lawrence?

MR. KUDLOW: I think the Chechnya thing, if it goes bad for Russia, it's going to devastate Putin and cause absolute chaos. I mean, not only is he betting on this thing, but everyone is coalescing around him politically on this issue. So that's a big wild card.

MR. MCLAUGHLIN: Exit question: Back in 1986, Margaret Thatcher said of Mikhail Gorbachev, "He's a man we can do business with." Can the same be said of Vladimir Putin today?

Lawrence Kudlow?

MR. KUDLOW: I think it can and it should be said. We've got to do business with him. And I think it's going to turn out that Putin is going to be like a bomb trader; he's going to buy the issues that are hot and sell the issues that are cold. He's looking for ideas that can work, especially on the economy, because ultimately that's going to determine his survival.

MR. MCLAUGHLIN: Eleanor Clift?

MS. CLIFT: He can't afford adventurism. He has said publicly it will take 15 years of a growth rate of 8 percent to get the Russian economy to the standard of living that the Portuguese have. I don't know why he choose the Portuguese. But he understands that restoring the economy is his huge challenge and he can't be an ideologue about that.

MR. BLANKLEY: He's a very effective man, and he's going to do whatever it takes to accomplish his objective. If Americans treat him equally, they're likely to do some good business with him. If they try to get overbearing, then he may find it in his political domestic interests to not be so cooperative.

MR. WARREN: You have to turn the burden around: He has to deal with us. He has precious few allies anywhere in the world, he's got an economy in shambles, a health care system that's not very good, a depleted military. And again, he's going to have to come to us and people like the IMF for money.

MR. KUDLOW: One thing's for sure; if he listens to Jim Warren and he listens to the IMF, he's going to go down because their brand of austerity will be disastrous for Russia.

MS. CLIFT: Of course Yeltsin listened to you and your fellows back then, that shock therapy didn't work very well either, Larry! (Laughs.)

MR. KUDLOW: No, but that's because his government folded too fast before he could put it into place.

MS. CLIFT: Oh! (Laughs.)

MR. MCLAUGHLIN: I think the answer is yes, we can do business with this man, and we should approach him as being a Russian patriot -- a Russian patriot, not a communist and not a kleptocrat. That's our going-in position, we hope.

When we come back, political primaries ahead. The two de facto nominees will survive. Will it be Gore or will it be Bradley? Will it be Bush or will it be McCain?


MR. MCLAUGHLIN: Issue two: Greenspan, you the man~!

ALAN GREENSPAN (Chairman, Federal Reserve Board): (From videotape.) Mr. President, I first wish to express my deep appreciation to you for the confidence that you've shown in me over the years. I look forward to Senate consideration.

PRESIDENT BILL CLINTON: (From videotape.) His wise and steady leadership has inspired confidence not only here in America, but all around the world.

MR. MCLAUGHLIN: Even world confidence in Alan Greenspan, renominated by President Clinton as Federal Reserve chairman Tuesday, could not stop the steep stock market plunge this week on Wall Street. The drop has many bear traders forecasting a correction -- a correction, they say, that could possibly hit 20 percent. That's a 2,200-point plunge for the Dow.

Question: Is the current market volatility owing to the reappointment of Alan Greenspan in any respect? I ask you, Lawrence Kudlow.

MR. KUDLOW: Well, I think part of it is. You know, I think Greenspan has a great record, John. But lately the problem is, we don't know what he's aiming at. Does he want to stop the economy from growing, or is he going to target inflation, like the Europeans and the Canadians do?

And the market is somewhat baffled by Greenspan's Jekyll-and-Hyde attitude. Some days he believes in the new economy. Other days he goes back to the old Phillips curve trade-off between inflation and unemployment.

MS. CLIFT: Well --

MR. KUDLOW: So the market is baffled by this.

MR. MCLAUGHLIN: Well, why does Greenspan fear inflation? The CPI doesn't indicate it, nor does anything else, notably declining commodity prices worldwide.

MR. KUDLOW: Well, I'm with you on this. The CPI does not show inflation. Commodity prices are dropping, oil prices are dropping, and the dollar is strong. So the question is, why on earth would you want to tighten interest rates and stop this fabulous prosperity?

MR. MCLAUGHLIN: I'll tell you why: because the excess liquidity is still present, and it has found its way into overvaluated stocks --

MR. KUDLOW: But John --

MR. MCLAUGHLIN: -- that bubble could burst, and that's an inflationary phenomenon.

MR. KUDLOW: John, you've been saying this for the last 5,000 points on the Dow, and your view has not been substantiated. If there was excess liquidity, we would have seen the inflation two, three, four years ago. It's not there.

MR. MCLAUGHLIN: Is there any way -- is there any way that Greenspan can get a soft landing, meaning that he can deflate the market bubble without a hard landing? I ask you.

MR. WARREN: I doubt it, although this seems, given your pessimism, to be building to your disclosure that you're going invest your millions in T-bills. Is that it? Are you getting a little nervous?

MR. MCLAUGHLIN: (Chuckles.) You'll be the first to know. (Soft laughter.)

MR. WARREN: The fact is, Greenspan -- it's been a bravura performance, Larry. I mean, I don't think, other than perhaps his slightly misjudging the banking crisis in the early 1990s -- and thus, you know, which presumably inspired the mild recession, may have cost George Bush, the president, his job -- he has done pretty well. I don't think anybody could have predicted; although he saw that link between technology and computers on the one hand --

MR. KUDLOW: Right.

(Cross talk.)

MR. WARREN: -- and increasing productivity.

MR. KUDLOW: I agree. I agree.

MR. MCLAUGHLIN: Do you think he is like an aging general who is fighting the last war; he does not realize what the Internet economics dynamic is producing?

MR. BLANKLEY: No, I don't think so. My sense is that, even if people like I can notice that, I am sure that Mr. Greenspan has, and that he is showing astute merging of the modern perceptions with the traditional perceptions.

MS. CLIFT: Well, Greenspan is a man at war with himself: On the one hand, he is the patron saint of the new economy; on the other hand, he reacts like -- a Pavlovian reaction to the first hint of inflation.

President Clinton better watch out, now that he has given him another four-year imprimatur. George Bush has never forgiven Alan Greenspan for tightening money in 1988. He thinks he lost the presidential election for him.

MR. MCLAUGHLIN: Why didn't Greenspan say no and retire from the scene in a blaze of glory? Now, he has exposed himself to incredible risk. And why did Clinton reappoint him?

MR. KUDLOW: It's sort of like Andrew Mellon left in 1929 before the crash.

MR. WARREN (?): (Laughs.) Right.

MR. MCLAUGHLIN: Why did he get reappointed, especially getting way ahead of Gore?

MR. KUDLOW: The answer is not political; the answer is personal and governmental bureaucratic. He loves the job, he likes the power, he is a very influential guy. So he is going to have a fourth term. He is 74 years old.

MS. CLIFT: And he has done a good job. (Laughs.)

MR. WARREN: "If it ain't broke, don't fix it."

MS. CLIFT: Right.

MR. WARREN: Why would you want to change?

MR. MCLAUGHLIN: Exit. Time-warp forward, April 15th, three months from now; what will the Dow average be, Lawrence Kudlow?

MR. KUDLOW: It will be moving past 12,000 --

MR. MCLAUGHLIN: It's now at about 11(000).

MR. KUDLOW: -- on its way to --


MR. KUDLOW: It's now about 11,000. By the end of the decade, John -- I hate to tell you this -- it's going to be 50,000 because the Internet, which is increasing the economy's capacity to grow and lowering its inflationary potential, is more important than the Fed.


MS. CLIFT: Well, I am going to mark in my diary "Check 10 years out," and make sure you are right.


MS. CLIFT: Hovering around the 10(000) mark.

MR. MCLAUGHLIN: Oh, a sell-off.

MR. : Eleanor's right.

MR. MCLAUGHLIN: What do you think?

(Cross talk.)

MR. BLANKLEY: It's going to be vastly different from anything I would believe. I don't know the stock market; I won't make a guess.


MR. : Here.

MR. : That's fine.

MR. MCLAUGHLIN: Hey, this is not the place for humility -- (laughter) -- (inaudible). You know, we can lead you over to St. Matthew's Cathedral for that. (Laughter.)

MR. WARREN: But, yes, despite your obvious sleepless nights, your tendency to be stashing silver under your mattress, it will continue rising until it's nearly 12,000.

MR. MCLAUGHLIN: I would say a major sell-off, and the Dow will be in the 9,000 range.

MR. KUDLOW: Oh, John.

MR. MCLAUGHLIN: You heard it here first.

Issue --

MR. KUDLOW: John, this --

MR. MCLAUGHLIN: -- It will not be a soft landing.

MR. KUDLOW: -- John, this is a broken record.

MR. MCLAUGHLIN: Issue three: The mean season.

GOV. GEORGE W. BUSH (R-Texas) : (From videotape.) Well, thank you all very much.

MR. MCLAUGHLIN: Presidential candidates were back on the stump this week, steeling themselves for a fierce primary stretch -- a cycle so swift, so intense, most Americans won't even see it pass -- a frenzied rush of 50 days, January 24 to March 14. That nine-week run will tell which of two men will lead America in the 21st century.

The mean season begins January 24th, two weeks from this Monday, with the Iowa Caucus. Then, eight days later, the first-in-the-nation primary, February 1, New Hampshire. Then a succession of Republican primaries: Feb. 8, Delaware; Feb. 19, South Carolina; Feb. 22, Arizona and Michigan; Feb. 27th, Puerto Rico; Feb. 29, North Dakota and Virginia.

Then Mega Tuesday, March 7, 12 Democratic and Republican primaries: California, Connecticut, Georgia, Maine, Maryland, Massachusetts, Missouri, New York, Ohio, Rhode Island, Vermont, Washington.

One week later, March 14, Super Tuesday -- six Southern states sealing the victory for one Republican and one Democrat, and nailing the coffins of all others: Florida, Louisiana, Mississippi, Oklahoma, Tennessee, Texas.

Question: Why are the primaries so compressed on this calendar?


MR. BLANKLEY: I think two reasons. One, each state has been wanting to get earlier -- earlier their vote in. California resented the fact -- they used to have a June vote and the decision was over before then.

The other factor is that political scientists have been thinking that sort of regional primaries, grouping them together, would be useful, whether they are or not. So that supported the instincts of the states to try to move their primaries up.

MR. MCLAUGHLIN: Yeah, well those are good points, but they are not the key reasons. The two key reasons are that the resources of the candidates are being depleted in prolonged primaries. Therefore, the gray beards and the fat cats have decided that they're going to compress the field and squeeze out the water and just get their candidate so that they don't spend too much and they don't tear each other apart in horrendous in-fighting. Now this, of course, defeats the democratic system and --

MR. WARREN: A veritable "Front-runner Protection Act" per se.

MR. MCLAUGHLIN: Exactly. It's exactly what it is. Do you share my view or are you being ironic in that cute way of yours?

MR. WARREN: Well, let's wait till after Iowa and New Hampshire. For instance, if Al Gore loses in Iowa and New Hampshire, then so much for a front-runner protection act. If John McCain pulls an upset, perhaps, in New Hampshire and then in South Carolina, so much for front-runner protection act.

MR. MCLAUGHLIN: What happens is that only the best-heeled candidates can survive this 50 days, because they have to spend so much, you understand? And yet have so much in reserve.

MS. CLIFT: Right. Yeah, it --

MR. MCLAUGHLIN: Does that mean McCain is definitely hurt by this --


MR. MCLAUGHLIN: Do you share my view that this is an undemocratic proceeding?

MR. KUDLOW: I'm afraid I do not, because I think they have more than ample time to raise money, as Bill Bradley has shown in his race against Al Gore and, frankly, I think most Americans would probably like to see this thing done in three weeks instead of eight or ten weeks, because it gets to be boring --

MS. CLIFT: Yeah, but the point --


MS. CLIFT: Yeah, but the point is if you score big in an early primary, there's not enough time to raise money for the television advertising you're going to need a week or three weeks later.

MR. MCLAUGHLIN: Exactly. Exactly.

MS. CLIFT: It's -- John, you're right. It's a scheme by the party insiders to re-create the smoke-filled room and propel their candidates forward and have them ratified in quick order.

MR. MCLAUGHLIN: Yes. Yes. And here is another way that they are narrowing the field undemocratically. Watch this.

(From videotape.) In one fell swoop this week, the Presidential Debate Commission eliminated competition to mainstream candidates. Who debates? Anyone who can clear 15 percent, the strangulating threshold. Candidates with less than an average 15 percent, as computed in five national media polls, are barred from debate.

Reform Party? Bye-bye!

PATRICK BUCHANAN (Presidential candidate): (From videotape.) Who are these two parties to be setting standards for an event that's going to decide the next presidency of the United States and ruling us out? It seems to me amounts to basically a Beltway conspiracy by the two parties.

MR. MCLAUGHLIN: The Reform Party has made a respectable showing in two presidential elections, '92 and '96. Unlike other small parties, it has captured a major statewide office, the Minnesota governorship. Has it not earned the right to a podium on the stage in the presidential debates, I ask you, James Warren?

MR. WARREN: Yes, you're exhibiting the populism of Vladimir Putin here. (Laughter.) Very impressive that you now so revere --

The fact is, if I remember, Perot was allowed in the 1992 debate at a time when his polling showed he was only at about 7 percent. I think more germane to me, at least, is the fact the Reform Party is getting our taxpayer money, whether you like that or not.

MS. CLIFT: Well --

MR. MCLAUGHLIN: Hold on, Eleanor.

MR. WARREN: Federal matching funds, having gotten -- reached a barrier of 5 percent in the last election.

MR. MCLAUGHLIN: There's another reason why --

MR. WARREN: But John, my point is if you can get 5 percent and get federal money, why can't you -- why do you have to get 15 percent to get your voice heard in the debate?

MR. MCLAUGHLIN: Well, there's another reason, and it goes to the very point you're making, but from a different side. Taxation demands representation.

PATRICK BUCHANAN (Reform Party presidential candidate): (From videotape.) Republicans and Democrats should not decide whether I'm in the debate. We get federal matching funds for our convention, like they do; federal matching funds for the election, like they do. We all three ought to be in the debates. And the American people ought to have a chance to hear me.

MR. MCLAUGHLIN: If Buchanan wins the party title, the Reform Party, he gets $13 million, minimum, for the convention and for the matching funds from the U.S. government, and for the campaign. That's our money; it's taxpayer money. Our taxpayer money gives us a right to hear what Buchanan has to say, or anybody from the Reform Party.

MS. CLIFT: Well, I think that the state organizers are inviting trouble if they look at a system where the party nominees are selected in early March, then there's this long period; the country is going to feel cheated. And keeping him out, regardless of what you think of what he says, increases the cynicism in the country.

MR. MCLAUGHLIN: Okay. Quick question. We've got to get out; we're very late, we've got to get out.

If Jesse Ventura were leading the Reform Party, could he get the 15 percent?

MR. KUDLOW: Oh, in my judgment, absolutely, because he is governor of Minnesota and is a serious player.

MR. MCLAUGHLIN: Would you call upon him to declare, in the interests of preserving the Reform Party, which has committed itself well in 1992 and '96?

MR. KUDLOW: Well, I think he's going to have -- the Reform Party is imploding constantly. They need Jesse Ventura.

MR. MCLAUGHLIN: What do you think?

MS. CLIFT: I think a 15 percent standard is too high. It should be 10. And if Pat Buchanan is worth anything as a candidate, he ought to be able to get there by next September.

MR. BLANKLEY: No one has a right to anything. But the two major parties may be overplaying their hand and building up resentment against them by the exclusionary tactics.

MR. MCLAUGHLIN: Could Ventura get the 15?


MR. WARREN: No. But if you let Orrin Hatch in these Republican early debates, and he is statistically at zero, let's let somebody who will probably be at 6 percent --

MR. MCLAUGHLIN: The answer is Ventura could get the 15, but maybe Pat can. But anyway, it should drop -- as you say, Eleanor -- to 10. We taxpayers, who are giving him $13 million, have a right to hear what he has to say.

We'll be right back.


MR. MCLAUGHLIN: Out of time. Bye-bye.


MR. MCLAUGHLIN: Issue four: The Political Week.

First, John McCain.

SEN. JOHN MCCAIN (Republican presidential candidate): (From videotape.) I told them to give them an answer. I think that's appropriate in my role as chairman of the committee that oversights (sic) this bureaucracy.

MR. MCLAUGHLIN: What's he talking about here, Tony Blankley?

MR. BLANKLEY: Well, yeah; he is getting caught cross-wise for receiving a contribution from Paxson Communications and then later on intervening with the agency to try to get a quick decision for them.



MR. MCLAUGHLIN: And in the sound bite he was saying: "I was only trying to stimulate the bureaucracy to give me an answer."


MR. MCLAUGHLIN: "I didn't tell then what the answer was"?

MR. BLANKLEY: Now, I happen to think that these are phony issues. But, nonetheless, they bite hard against McCain since he has been making, as a primary issue, campaign finance as --

MR. MCLAUGHLIN: Did Paxson, who is in question here, the broadcaster, give McCain money or anything else?

MR. WARREN: Gave McCain money. They also have let him use their corporate jet, though he is paying a sum of money for it. And they were going to hold a big Florida fund-raiser for him in the coming days, which he has now canceled.

The problem is, even though they had good reason to be frustrated with the Federal Communications, which was sitting on a decision not for two years, as reported, but four years, the fact is, if you are telling the world that you are as pure as the driven snow, as he has essentially done, and you do this, you look like --

MR. MCLAUGHLIN: A bad week for McCain?

MR. KUDLOW: Absolutely, on tax policy and on this Paxson business. McCain's stock is falling; he is in a bear market.

Meanwhile, on taxes, George Bush sounded like Ronald Reagan. His stock is rising; it's a bull market.

MR. BLANKLEY: We have to --

MR. MCLAUGHLIN: Ah, quickly.

MR. BLANKLEY: -- I have to say something quickly. McCain has never claimed that he was clean. He has claimed that he and everybody have been tainted by the process. So it's unfair in a certain sense; nonetheless, it's a political reality that he is being hurt by it.

MR. MCLAUGHLIN: Is there more coming down this road for McCain?

MR. KUDLOW: I believe Mr. McCain is, in a sense, going to be hoisted on his own petard with other campaign contributions like this one.

MS. CLIFT: Yeah.

MR. MCLAUGHLIN: Okay. The second candidate, Governor Bush.

GOV. GEORGE W. BUSH (Republican presidential candidate): (From videotape.) Come on down here, and let me show you what I have done. You talk about same-sex marriage? I am against same-sex marriage. I am the only person on this stage that has signed a parental notification law. I have got a good record, Gary. It's easy to talk. It's easy to talk.

What Republicans need to do is elect somebody who has gotten results, tangible results that people can see, that people can put their arms around, and say, "This man is a leader." And that's been my record in the state of Texas, and that will be my record as president of the United States, as well.

MR. MCLAUGHLIN: Are we agreed that George Bush was looking much better this week, much more sure-footed?

MR. BLANKLEY: Yes, because no mistakes and because he is helped by -- having this cast of thousands around him at the debates, and there is less of a focus on him. And we have focused attention in the media on John McCain.

MR. MCLAUGHLIN: Is he not far more comfortable? Was he not -- at the debate this week?

MS. CLIFT: He is always mediocre in his appearances.


MS. CLIFT: And when he said he is the only one on the stage with executive appearance (sic), it was a great moment when John McCain said, "I led a platoon."

MR. MCLAUGHLIN: A good week or bad week for Gore?

MR. KUDLOW: I think Gore has had a mediocre week because he's moving to the left.

MR. MCLAUGHLIN: Okay, good week or bad week for Bradley?

MS. CLIFT: Good week for Gore.

Bradley is beginning to look at little worn and tired --

MR. KUDLOW: He's moving further to the left.

MS. CLIFT: -- and I think he's losing -- he's losing his (momentum ?).

MR. MCLAUGHLIN: Bradley -- good week or bad week?

MR. BLANKLEY: Bradley had a mediocre week. Gore had a --

MR. MCLAUGHLIN: Good week or bad week for Bradley?

MR. WARREN: Good week, coming from behind in Iowa. Very important.