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MR. MCLAUGHLIN: Issue one. Now it's Microsoft versus the European Union. The American judicial system handed the Microsoft Corporation a major victory this week. A federal appeals court ruled seven to zero that the software giant does not have to split up now, as had been previously ordered by a lower court.

On this side of the Atlantic, Microsoft may be making headway, but there is an ominous wind blowing from the other side; namely, the European Union's Competition Commission and its head, Mario Monti, the 58-year-old Italian and former academic, who has already filed two charges against Microsoft, citing anticompetitive tendencies, with potential penalties of $2.3 billion in fines or a forced breakup of the corporation.

If either happens, Microsoft won't be the first victim of Monti's ax. In two years of office, Monti's commission has blocked many U.S. mergers and/or imposed crippling actions. Here's a sample. Time Warner and EMI, a mega-music merger, killed. MCI WorldCom and Sprint, killed. Scania and Volvo's Ford-owned car business, killed. Most recently, GE and Honeywell, the $42 billion merger, currently blocked.

The European Union's Competition Commission's unchecked power has become an issue on Capitol Hill. Criticism is coming from both sides of the aisle. Republican Senator Phil Gramm interjected this at a Banking Committee hearing last week in the middle of the testimony of Fed Chairman Alan Greenspan.

SEN. PHIL GRAMM (R-TX): (From videotape.) My concern is that we don't end up having bad policies imposed on us as Europeans try to protect themselves against competition when they've lost competitive edge based on their policies that they've implemented through either their supernational government or at the national level. And I think this is something that we're going to have to look at very, very closely.

MR. MCLAUGHLIN: Democratic Senator Jay Rockefeller takes exactly the same position as Gramm. The powerful Democratic Senator Ernest Hollings, chairman of the Commerce Committee, is equally direct in his criticism of the EU commission. Democratic Senator Herb Kohl, chairman of the Senate panel on Antitrust, Business Rights and Competition, and Republican Senator Mike DeWine, ranking minority member on the same committee, declare this: Quote: "We have a strong interest in assuring a stable and clear legal environment in which businesses can pursue their activities. We intend to make further inquiries into whether the divergence between American and EU opinion is evidence of a rift in coordination and legal standards."

This last quote points to what sticks in the throat of the U.S. business community more than anything else; namely, the EU process. There is no appeal option. Monti and his team have absolute power. No juridical component to the process. No court of law, as in the instance of Microsoft, to afford due process. The EU rules by fiat and ukase. No second set of eyes to review the proclamations of this omnipotent commission.

A disclosure note: GE sponsors this program, as have other enlightened corporations over the years. GE has no ownership interest.

Question: If you were lawyering for Microsoft, how would you approach the European Union, Lawrence Kudlow?

MR. KUDLOW: Well, I mean, unfortunately, because of the unfairness of this process, and because of the values and culture of the European Union government, which are antithetical to our free- enterprise, entrepreneurial system, unfortunately, Microsoft and other companies are going to have to go hat in hand and negotiate and discuss as much as possible, though, as we've learned with the GE- Honeywell situation, that doesn't necessarily ensure any particular success. There's a lot of Euro-whining right now against America's economic growth miracle, our technology and productivity miracle, while they continue to overtax and overregulate.

I would also -- last point, to the Microsoft lawyers and anyone else -- go to Congress and go to the White House. I'd like to see President Bush be much more forceful in defense of American business.

MR. MCLAUGHLIN: Are you saying essentially that the economic ideology of Mario Monti and the other commissioners, who are all drawn from European Union members, is not capitalistic; it's more on the socialistic? How would you describe them?

MR. KUDLOW: I'd describe it as the sort of democratic socialism we've seen running through Europe, at a moment when that art -- that economic form has been diminished in places like Latin America and Asia --

MR. MCLAUGHLIN: And you noted the euro has dropped to 84 cents.

MR. KUDLOW: The euro is a symbol of the decline of Europe. The euro right now -- the euro currency -- I think of it more as the euro peso. You know, pesos don't float; they sink, John. And the euro doesn't float, it sinks.

MR. MCLAUGHLIN: What about the brain drain? Is that also due to --

MR. KUDLOW: Look, there's capital flight. There's brain drain to the United States. Just scan the business pages of our newspapers, of our great American newspapers, any day you want, and you will see Europeans coming to New York, coming to the Midwest, coming to the South, not only investing their money here and building business, but coming to live here, and it's no wonder why.

MR. MCLAUGHLIN: Mortimer Zuckerman, welcome to -- back to the show.

MR. ZUCKERMAN: Thank you, John.

MR. MCLAUGHLIN: Good to see you. Sorry we don't have a blond wig for you.

MR. ZUCKERMAN: Well, I appreciate that. (Laughter.)

MR. MCLAUGHLIN: You're still a handsome-looking guy.

MR. ZUCKERMAN: And any time you have one, call me. (Laughter.)


What do you think -- what would you do if you were a lawyer for Microsoft facing the European Commission, headed up by what some people describe as a principled academic and other people described as an invincible control freak?

MR. ZUCKERMAN: Well, the one thing that I would be very, very sure of, if I were Microsoft, was to get the right kind of lawyer. You're going to have to get somebody there who knows how to deal with those people, as a practical matter, and does not set up a confrontational environment with them, which is, you know, always possible with lawyers.

So I think I'd be very, very careful as to who you have representing -- because you've got to get there early with that bureaucracy, and you've got to treat them in the right way, as being that kind of a bureaucracy, if you're going to get your deal approved.

MR. MCLAUGHLIN: Michelle Malkin, are you versed in this issue?

MS. MALKIN: Yeah. I think more than a legal campaign, what's really needed is a PR campaign by Microsoft, an aggressive, full- frontal assault, and an education campaign, not just in Europe, but also here in America, because I don't think that it's become clear to most Americans what is really going on here. We've got Brussels bureaucrats in our backyard, telling American companies, you know, when they can merge and when they can't merge, even though U.S. regulatory officials themselves have approved some of these things.

And I think that Mario Monti --

MR. MCLAUGHLIN: And Canadian.

MS. MALKIN: And Canadian!

And Mario Monti in particular, I think, is a character straight out of the villains' list of the Ayn Rand novel. And, you know, these protectionist trustbusters are getting away with things they can get away with, and there's no appeals process here. I think that really has to be made clear to the American people.

MR. MCLAUGHLIN: What do you think of this situation?

MR. O'DONNELL: I think Mort is right that Microsoft has to approach it very carefully, very much from the inside, people who know it, know how it works. They've got a really big strike against them as a company; their own government here in the United States took them to court on an antitrust case --

MR. KUDLOW: The former government. Former government.

MR. O'DONNELL: This current government, and this current government is going to continue with this antitrust case, in one form or another --

MR. KUDLOW: Oh, I don't know about that.

MR. O'DONNELL: -- even with the partial reversal. It's not a complete reversal. The Appeals Court did find serious predatory monopolistic practices by Microsoft. So remember, they come from our own judicial forum, where they've lost a lot, going to Europe, saying, "We have clean hands." That's a difficult case.

MR. MCLAUGHLIN: Let me advance this. There has to be coordination between Monti and his 20-member commission and the United States, and he liaises with the Department of Justice Division on Antitrust, formerly headed up by Joel Klein; today it's headed up by Charles James. And he also liaises with the -- liaises may be too strong a verb, but there's some coordination with the Federal Trade Commission, formerly Pitofsky, and he's been replaced by Timothy Muris.

Now, he came over in the middle of March, and I don't think either of those men were there; rather, we had -- the new member there. We had Pitofsky and we had Klein, who were far more hospitable to his economic philosophy, as we've seen, than the new installees of President Bush.

MR. O'DONNELL: John, I don't think you can say that. The European attitude is protectionist toward their businesses. The American antitrust attitude is trying to be protective of the consumer. These are two totally different views --

MR. KUDLOW: Look --

MR. MCLAUGHLIN: Well, there's that, but there's also --

(Cross talk.)

MR. KUDLOW: No, but because, John's point, though -- this is the change in philosophy with the new Bush administration people.

MR. MCLAUGHLIN: You know these gentlemen?

MR. KUDLOW: I do. Well, I know Tim Muris very well.

MR. MCLAUGHLIN: Did you work with him?

MR. KUDLOW: I did; I worked with him in the Reagan administration. Muris is a brilliant guy.

MR. MCLAUGHLIN: He's at the FTC.

MR. KUDLOW: He runs the FTC. I don't James, but he gets great reviews.

MR. MCLAUGHLIN: James, I believe, taught at George Mason and he's experienced in this area.

MR. KUDLOW: You see, Lawrence's point about American antitrust looks to protect consumers from coercive action is correct. The Clinton administration, however, departed from that in the Microsoft case and chose to protect Microsoft's competitors instead.

The problem with the European story is they are in fact protecting competitors. Those competitors are European businesses and, John, European governments. European governments are heavily involved as owners and operators in businesses in a way that we aren't here.

(Cross talk.)

MR. MCLAUGHLIN: Well, on the case of -- to be fair to Monti and to be fair to his commission, I'm not so sure that they are being protectionist as they are -- they have this exaggerated notion of how bad a megacompany is, almost in concept, and that leads them in this direction. But the point -- the other point is that fundamentally they are far less capitalistic than they are socialistic, and that seems to be what's playing here, don't you think that way?

MR. ZUCKERMAN: No, I don't agree with that. Where they attack the practices of business in Europe, they attack the involvement of governments in business. They want to move businesses out of government into the private sector, but in the private sector that they protect, it's the European private sector that they protect. That's the difference. Monti is known for his unhappiness with governments being involved in business directly, but now he's protecting the private sector, but it's the European private sector.

MR. MCLAUGHLIN: Do you feel that there should be another component introduced to this, and that is some kind of a court of appeal that permits -- that permits the --

MR. ZUCKERMAN: I have a basic problem with that in that I think we have become a totally litigious society in the United States. Everything gets bumped into the courts, and I frankly think that's a huge mistake. I don't know what --

MR. MCLAUGHLIN: On the international level, though, don't you see the fundamental unfairness of an American company not being able to go to a court of appeals to have the matter --

MR. KUDLOW: Eventually -- eventually, John, eventually, these matters could come before the World Trade Organization, the WTO. That is part of the process, but there's a more important organization, and it meets in a week or two, and that is the so-called "Group of Seven," now, with Russia, the Group of Eight. And here's the point I want to make:

President Bush, who said all along with the Microsoft suit that he believes in innovation, not litigation, has to make the same point when he goes to Europe to talk to the G-7 and the G-8. Bush, it's not just about defending American businesses, which he should do anyway. He also has to defend free market economic activities, and he has to push the theory that antitrust is designed to protect consumers, not weak competitors.

MR. MCLAUGHLIN: Do you remember when Boeing tried to merge with McDonnell-Douglas? This was a $14 billion merger, in 1997.

MR. KUDLOW: Yes. Yes.

MR. MCLAUGHLIN: And it was effectively blocked by the commission.

MR. KUDLOW: And Clinton --

MR. MCLAUGHLIN: And Clinton got on the phone and he talked with several heads of state --

MR. KUDLOW: Yes. Yes. Yes.

MR. MCLAUGHLIN: -- and he turned that around.

MR. KUDLOW: I agree, and I'd like to see President Bush himself move to center stage on this. This is about long-term economic growth, not just the health of the U.S. economy, frankly. It's about the health of the world --

(Cross talk.)

MR. MCLAUGHLIN: We've got to move on.

MR. ZUCKERMAN: We have to just mark this moment that you spoke up on behalf of Bill Clinton's support for the business world, John. (Laughter.) It should not pass without it being noticed, and I just wanted to commemorate that moment.

MR. KUDLOW: He did a few good things.

MR. MCLAUGHLIN: Well, yes, and it was also a corrective, I suspect, to Joel Klein.


MR. MCLAUGHLIN: And Pitofsky. But I want to make the point that on Capitol Hill there have been rumblings about this having long-range effects because of the bundling issue.

MR. KUDLOW: Yes. Yes.

MR. MCLAUGHLIN: Now that, very briefly stated, is what?

MR. KUDLOW: Well, the bundling issue with Microsoft is to bundle the operating systems, really, of all their products now. I mean, the software and the operating system are being --

MR. MCLAUGHLIN: And cutting other people out.

MR. KUDLOW: Well, that's the charge.

MR. MCLAUGHLIN: That's the charge.

MR. KUDLOW: That's a marketing (inaudible) -- not proven.

MR. MCLAUGHLIN: Okay. Now, we know that both James and Muris come from the Chicago school of thinking on this, and they deplore the position taken by the commission with regard to bundling. However, there's going to be long-range effects of this downstream, is what is being said on Capitol Hill, or hinted at.

So my exit question to this learned group is the following: Are the U.S. and Europe heading towards a trade war over mergers?

MR. KUDLOW: Oh, I think, regrettably, the answer is yes.

MR. MCLAUGHLIN: What do you say?

MR. ZUCKERMAN: I don't think so. I think there'll be an accommodation on this and other issues, and it will be done in the usual way, through some serious heart-to-heart talks, but I don't think it's going to be a trade war.

MR. MCLAUGHLIN: And no structural changes?

MR. ZUCKERMAN: I don't think there's going to be structural changes. You know, we have a lot of sort of administrative tribunals or commissions that make decisions virtually unilaterally as well. It's in the nature of this process. You can't have everything decided by boards.

MR. MCLAUGHLIN: But we don't do that with international participants.

MR. ZUCKERMAN: No, we don't do it with international participants. But we make the same decisions here about our own domestic activities.

MR. MCLAUGHLIN: Well, the European Union is doing it with an international principal.

MR. ZUCKERMAN: Yes, but it is the European operations of those companies.

MR. MCLAUGHLIN: Two principals.

MR. KUDLOW: This is not about juridical processes, John. This is about a battleground of ideas and philosophies. And the American --

MR. MCLAUGHLIN: Well, isn't it also about the appeal option? There's nothing -- there's nowhere to go!

MR. KUDLOW: Only tangentially at the bottom of the curve. It is up to the American president, who now -- Bush believes in free enterprise. He must make the case that the American system of economic organization is superior to a socialist system.

MR. MCLAUGHLIN: Michelle, do you think that this is law by proclamation?

MS. MALKIN: It is. These are edicts like -- you know, Mario Monti is pretty much like an anti-competition czar.

To answer the question, it's not just a war between the U.S. and EU over mergers, but even about how one single business conducts its own business. Windows XP is going to be rolled out in the fall, and Mario Monti and the EU have already made noises about challenging the tying and bundling issues there.

MR. O'DONNELL: John, the appeal notion is largely academic. Vibrant companies like GE and Honeywell, if they make a decision that they want to merge, they want to merge today --

MR. MCLAUGHLIN: Is there going to be a trade war?

MR. O'DONNELL: -- they don't want to merge 11 years from now after some complicated legal appeal process that they got stuck in.

MR. KUDLOW: Exactly.

MR. O'DONNELL: And they would not actually engage in it if you offered it to them. So --

MR. MCLAUGHLIN: Any trade war?

MR. O'DONNELL: There will always be, in certain tense situations, the appearance of movement toward a trade war, which is all you need to avert one because Europe and the United States will never have one, but every once in a while you have to threaten that you're going to.

MR. MCLAUGHLIN: And then the heads of state will crack heads?

MR. O'DONNELL: It won't even get to that level.

MR. MCLAUGHLIN: Will there be a trade war, in your view?

MS. MALKIN: (Forms quotation marks in the air with her fingers.) "War," yes. Conflict, yes.

MR. O'DONNELL: Impossible. Totally impossible. Never --

MR. ZUCKERMAN: Impossible --

MR. KUDLOW: The best news on the heads of state, Berlusconi, Silvio Berlusconi, who is a free-enterprise new head of Italy, and he's a strong guy, and he could make some great free market noises to bring Europe into the 21st century.

MR. MCLAUGHLIN: I think that unless there are structural changes, or the equivalent thereof, there will be a trade war.

When we come back: Is the honeymoon over? Has the Bush presidency lost its political traction?


MR. MCLAUGHLIN: Issue two: Damaging intersections. This month marks the midpoint of George W. Bush's first year in the White House, and a number of intersecting trends suggests that the fledging Bush presidency may have reached a crucial juncture.

Item: The Jeffords factor. The past three weeks of Democratic domination of the U.S. Senate agenda illustrate more forcefully than anything else the high price Bush stands to pay for Jeffords' defection from the Republican Party. That move prematurely cost the GOP control of the Senate a full 17 months in advance of the 2002 midterm elections.

Item: The poll factor. New polls show Bush's presidential approval rating is dropping. Last week's New York Times poll put Bush at 53 percent, but that may have been too high. This week's Wall Street Journal/NBC poll puts Bush at 50 percent, the lowest presidential approval rating in five years.

Item: The party factor. Bush isn't the only one in trouble in the polls. The public now trusts Democrats more than the Republicans on issues ranging from energy policy and the economy to the environment and health care. Bush and the Republicans have the advantage in tax policy, defense, and moral values.

Item: The sleaze factor. Democrats says it's payback time for eight years of probes and investigations during the Clinton administration. In the cross hairs: White House senior adviser Karl Rove, who presided over a White House meeting with top executives of Intel Corporation, a company in which Rove at the time held $100,000 of stock, to discuss a proposed merger, subsequently approved by federal regulators.

Question: What factors are in play that are more powerful than any of the above, causing Bush's current slump, Mort Zuckerman?

MR. ZUCKERMAN: Well, it's the factor that influences elections more than anything else, and it's the economy. The economy is sinking. It is continuing to sink. It's much worse than people think. It's worse than it looks. And I think we're in a situation where the Republicans and the Bush administration is bound to get blamed for it. He's gotten no credit for the tax cut. There is a sense in the country that the economy is going south across the board, and I think that's going to have a huge political cost. And if it continues until next year, it's going to have a huge impact on the congressional election.

MR. MCLAUGHLIN: As proof of that, we saw how Bill Clinton was able to manage his wicked turbulence with the staying power that he got from the economy. Right?

MR. ZUCKERMAN: Absolutely. It's always --

MR. MCLAUGHLIN: Yes, very good that you hit one of the two powerful factors that I deliberately left out to see whether this panel could produce them. The economy is one. What's the other?

MR. O'DONNELL: The other one is --

MR. MCLAUGHLIN: Can you speak to that, Michelle?

MS. MALKIN: Well, it's related to the environment, I think. Obviously --

MR. MCLAUGHLIN: The environment?

MS. MALKIN: Yeah. Hold on. (Laughs.) Let me explain! (Laughs.) You know, Bush has done a lot of bumbling, and not just to the dismay of conservatives, but I think that it plays to the hands of Democrats, too, whether we're talking about arsenic or global warming, or his support of wetlands regulations, et cetera, et cetera, et cetera.

If he had made the case -- a strong, principled case for free- market environmental problems -- free-market environmental solutions, it would have strengthened his ability to argue for his energy solutions. It's energy --

MR. MCLAUGHLIN: Yeah. Well, you're in the right church, but you're in the wrong pew. Okay?

MS. MALKIN: (Laughs.) (Inaudible.)

MR. MCLAUGHLIN: Now go to another pew. What is related to the environment where he has a very serious problem that is troubling the White House more than the economy?

MS. MALKIN: Like I said, energy.

MR. MCLAUGHLIN: Energy! Now what do you have to say about energy?

MS. MALKIN: Well, like I said, if he had had more credibility in arguing for free-market solutions, he wouldn't be getting so much flak for resisting price caps in California and resisting an expansive federal role in finding solutions -- finding laissez-faire solutions to the problems of California.

MR. MCLAUGHLIN: You know that ANWR is going nowhere, nuclear energy is going nowhere, two of the principal pivots of his energy reform. Correct?

MR. KUDLOW: Well, yes. But don't forget, energy costs have been plummeting. And I do think that the Bush administration dropped the ball. I see no reason why they needed to endorse these FERC energy caps, which is a non-starter.

MR. MCLAUGHLIN: Quickly. How can Bush regain traction?

MR. O'DONNELL: He just has to stay on the job. There's no big legislative achievement coming his way for the rest of the year, and so he's going to be very much subject to the public view of the economy, as Mort's put it. That's what's defined it more than anything else.

There's also a sleaze factor, and that is the disappearance of the Clinton sleaze factor. You have to remember how much of a bump he was getting just out of that pardon scandal for the first 60 days.

MR. MCLAUGHLIN: Do you think -- that's a good point, and I'm surprised you lurched into it. (Laughter.)

Do you think that Bush peaked too soon, in this sense: his coup de grace, or his principal coup, was that tax cut? Now that's gone. As you point out, what's the policy, what's the single issue that is his that can drive the Congress and drive the public?

MR. O'DONNELL: From here to reelection, there's nothing. There isn't anything that big for the rest of --

MR. MCLAUGHLIN: We'll be right back.


MR. MCLAUGHLIN: A forced prediction. Six months hence, New Year's Day 2002, what will Bush's poll be on the approval side?

MR. KUDLOW: He'll be close to 60 percent as the stock market rallies, anticipating growth in the economy next year.

MR. MCLAUGHLIN: You may be dreaming. Fourth-quarter rally?

MR. ZUCKERMAN: I think it will sink along with the economy. So I think it will be less than 50 percent.

MS. MALKIN: High; 56, 57. Maybe people will be anticipating getting their rebates back.


MR. O'DONNELL: I don't expect the economy to sink as much as Mort thinks. I think he can hold at 50.

MR. MCLAUGHLIN: The answer is 54.




MR. MCLAUGHLIN: Issue three: What's this all about? (Pronouncing "about" with a Canadian accent.) Move over, Leno; move over, Letterman. Here comes Mercer, Rick Mercer, a host on Canada's mega-popular satirical TV show titled, "This Hour Has 22 Minutes." Mercer comes to the U.S. He interviews Americans to find out what they know about Canada, or don't know, or what they think they do know. Here's Mercer interviewing Americans in Miami.

(Begin videotape segment.)

CANADIAN TV HOST RICK MERCER: Do you think there's any point in Canada having a Navy if we don't have any access to oceans?

AMERICAN MAN: I don't know. I really don't know. I'd stick to the air, then, if you don't have water.

AMERICAN MAN: You don't need a Navy. Just use the Americans. We'll help support you.

(End videotape segment.)

MR. MCLAUGHLIN: Here's Mercer in New York.

(Begin videotape segment.)

CANADIAN TV HOST RICK MERCER: Do you think that America should be bombing Saskatchewan?

AMERICAN MAN: Absolutely.

RICK MERCER: Absolutely?


RICK MERCER: What about ground forces? Do you think ground forces should be sent into Saskatchewan; that might be safer?

AMERICAN MAN: That's what they're going to have to do. That's what they're going to have to do.

(End videotape segment.)

MR. MCLAUGHLIN: Americans believe preposterous things about Canada. Even Columbia University professors. Here's a professor deploring Canada's harsh treatment of senior citizens from a question put to him by Mercer.

AMERICAN PROFESSOR: (From videotape.) We demand that the government of Canada discourage the Canadian tradition of placing senior citizens on northern ice floes and leaving them to perish.

MR. MCLAUGHLIN: Most of all, Mercer has exposed a pitiful American ignorance of Canadian politics. Here he is at the University of California at Berkeley.

RICK MERCER: (From videotape.) Canada's new prime minister, Jean Chretien, is one of the few black leaders in the G-7. He's Canadian African. I believe that diversity is very important, especially in government. (Laughter.) Finally, you know, the industrialized nations are getting to a point where can elect a minority, and it's, you know, nice that it's happening in our own hemisphere.

MR. MCLAUGHLIN: Question: How should we feel towards Mercer's exposure of ignorant Americans? Should we feel insulted, should we feel ashamed, or should we feel honored, Mort Zuckerman?

MR. ZUCKERMAN: Well, the United States, or American citizens know an awful lot about their own country, but only up to a point. About half of them don't know who their governor is. That they know so little about Canada does not surprise me, and that Canadians are so amused by how little Americans know about Canada is also not surprising. Ninety percent of the Canadian population lives within 100 miles of the American border, and the United States knows virtually nothing about Canada.

MR. MCLAUGHLIN: Why don't Americans know more about Canada and Canadians? Are you a Canadian national?

MR. ZUCKERMAN: No. I was, of course, as you know.

MR. MCLAUGHLIN: You're a U.S. citizen.

MR. ZUCKERMAN: I was born there, and it was a great loss to Canada when I moved south. (Laughter.)

MR. MCLAUGHLIN: Yeah. I would say so.

MR. : (Laughing.) Right.

MR. MCLAUGHLIN: And since you're now a billionaire, I see you've cross that line.

MR. ZUCKERMAN: Well, I'm going to just let that one go by, actually, because I'm in the process of doing a takeover bid for Canada. (Laughter.) And I don't want to -- I'm not allowed to --

MR. MCLAUGHLIN: Well, what's the answer to my question?

MR. KUDLOW: Given the collapse of the Canadian dollar, that takeover bid will be a piece of cake for you.

MR. ZUCKERMAN: Yeah, I know. That's --

MR. KUDLOW: Where is the Canadian dollar? It's looking like the euro peso.

MR. ZUCKERMAN: Yes, now it's as soft --

MR. MCLAUGHLIN: Do you think that there's a -- there just seem to be more white people up there? It's largely a white country? And it doesn't have the interests of a multicultural society, so we really don't relate to them?


MR. O'DONNELL: You don't think that Americans know more about some other country, do you?


MR. MCLAUGHLIN: Do I think so?

MR. O'DONNELL: Yeah. I mean, where's the evidence that they know anything more about Mexico or any another country?

MR. MCLAUGHLIN: Well, I would say Mexico -- don't you think Mexico is more in our high consciousness?

Can you answer this?

MS. MALKIN: You know, I think what we should feel is pity that Canadians derive some sort of an entertainment pleasure out of watching us say that we don't really care about what's going on up there.

MR. MCLAUGHLIN: Why do you think that they enjoy this show so much?

MS. MALKIN: I think that it's a way to salve their inferiority complex.

MR. MCLAUGHLIN: Well, do you think it's insecurity on their part?

MS. MALKIN: I think -- yeah, absolutely.

MR. MCLAUGHLIN: Because we dominate their continent? (Laughter.)

Now, Conrad Black wrote extensively on this subject, and he says Canada has no identity, and he publishes all the big newspapers in Canada, or most of them. (Laughter.)

MR. ZUCKERMAN: I mean, I think that's a real issue for Canadians. I mean, you -- they are sitting right next to the dominant culture in the world. All the lines of communication run north and south, not east and west, and so all the most popular, whether it's the popular culture or high culture, comes from the States. It's only natural that it's been difficult for them to emerge from this huge shadow, and it's going to continue as a problem.

MR. KUDLOW: I mean, nothing -- I hate to say this, but nothing much ever happens up there. And the fact of the matter is, even the Canadian hockey teams aren't any good any more.