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THE MCLAUGHLIN GROUP

HOST:
JOHN MCLAUGHLIN

PANELISTS:
ELEANOR CLIFT, NEWSWEEK
TONY BLANKLEY, THE WASHINGTON TIMES
JOHN FUND, THE WALL STREET JOURNAL
LAWRENCE O'DONNELL, MSNBC

DATE: SATURDAY, JANUARY 12, 2002

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THIS IS A RUSH TRANSCRIPT.
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MR. MCLAUGHLIN: Issue One: Party Animal.

PRESIDENT BUSH: (From videotape.) First, it's good to be at the old family reunion. (Laughter.) I want to thank Marv and Doro for hosting this reception for our brother, my big little brother. And there's no doubt in my mind that he is not only one of the great governors of Florida's history, he's one of the great governors of our nation, and he deserves a second term. (Applause.)

MR. MCLAUGHLIN: President Bush strode back into party politics this week, raising money for the re-election of his brother, Jeb, Republican Florida governor. This was a line in the sand. For four months George Bush has been a war president. That status kept him well above the fray of party politics. He wanted it that way. It brought him almost unconditional bipartisan support.

But this self-imposed hiatus from politics also brought confusion, disappointment and worry to his Republican brothers on Capitol Hill. Now Bush has crossed back to become not only the war president, but now the party president -- his party, the Republican Party. It was on display not only at Jeb's fundraiser, but also in the return of raw-boned politics, as shown in his rebuke this week to Democratic Senate Majority Leader Tom Daschle, a shiv-wielding street fighter in his own right, who last year denied any action by the Senate to 48 pieces of House-passed legislation.

SENATE MAJORITY LEADER TOM DASCHLE (D-SD): (From videotape.) But September 11th and the war aren't the only reasons the surplus is nearly gone. They're not even the biggest reason. The biggest reason is the tax cut.

PRESIDENT BUSH: (From videotape.) There's going to be people who say we can't have the tax cut go through anymore. That's a tax raise, and I challenge their economics when they say a raise in taxes will help the country recover. Not over my dead body will they raise your taxes. (Applause.)

MR. MCLAUGHLIN: Question: Was it a mistake for Bush to descend to Daschle's partisan level? Did Daschle successfully bait Bush? John Fund.

MR. FUND: No. Daschle's speech appealed to the Democratic base. I think he's easily a very popular candidate for president now in 2004 among the party faithful.

MR. MCLAUGHLIN: Really?

MR. FUND: But Daschle made a fatal mistake. He criticized the tax cut but didn't call for its roll-back, and he called for tax cuts of his own, which implied goes along with Bush's message that tax cuts are the way you cure the recession.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: I love the Republican message machine. It's everywhere. I didn't hear Senator Daschle call for tax increases. He is saying that the president's tax cuts, if they are accelerated like the president wants, that that will tie the government's hand in dealing with the war on terrorism and critical needs and that the tax cuts that have already gone into effect are responsible for more than half of the surplus over the next 10 years vanishing. It's a little complicated to understand, I know.

MR. MCLAUGHLIN: What about the question?

MS. CLIFT: The Democrats have no --

MR. MCLAUGHLIN: What about the question?

MS. CLIFT: The Democrats have no responsibility to come up with a solution here. This is the president's problem. Let him --

MR. MCLAUGHLIN: Was --

MS. CLIFT: -- figure out how he's going to get out of the financial mess --

MR. FUND: Well, there goes bipartisanship.

MS. CLIFT: -- that he's gotten the country in. It's up to him --

MR. MCLAUGHLIN: Was Bush mouse-trapped? Was he mouse-trapped? Did he rise to the bait, and was it a mistake? Was it a clumsy start to his return into politics?

MS. CLIFT: He can't just sit on his 84 percent approval rating. It's an election year this year and he's got to try to see if he can translate some of this into the agenda on Capitol Hill, whether he can get some fellow Republicans. I think it's -- (inaudible). I think it's a risk on his part but one that he had to take.

MR. MCLAUGHLIN: Should Bush have waited until after the State of the Union, which presumably will be in early February? Do you know the date?

MR. BLANKLEY: January 29th.

MR. MCLAUGHLIN: The 29th. Is that now fixed? The White House will not actually confirm that. But should he not have waited? Because the public is interested in not what you're doing for the economy last year. What are you doing for it now? And that message didn't get out this week with this thunder.

MR. BLANKLEY: No, I think it was inevitable that Daschle, as the opposition leader, was going to take a run on the economic issue. And it was inevitable that the president was going to defend on that. What I found interesting was that Daschle was unable to get all of his Democratic ducks in a row before he did the attack.

MR. MCLAUGHLIN: What do you mean by that?

MR. BLANKLEY: Well, after he made the critique, he then had a number of senior Democrats, including Senator Feinstein, Gephardt and Tim Johnson from South Dakota, saying, "No, I don't agree with Daschle on this. I voted" -- not in Gephardt's case, but the Democratic senators said, "I voted for the tax cut. I think it's a good idea. I don't think we should roll it back."

And so what happened is that Daschle's attack, which makes sense from a political point of view, was poorly executed.

MR. MCLAUGHLIN: Did they repudiate the notion that the surplus was destroyed by Bush's tax cut, as alleged by Daschle?

MR. BLANKLEY: Most of them just distanced themselves as quickly as they could from the general Daschle attack.

MR. MCLAUGHLIN: So they equivalently were supporting the Bush position.

MR. BLANKLEY: Yes, that's --

MR. FUND: That's faulty logic, because the tax cut took place after the recession began.

MR. MCLAUGHLIN: What do you think of whether or not it was good politics for Bush to what I think was rising to Daschle's bait? Daschle knew that by taunting him, he could set Bush loose. Should not Bush have waited for the State of the Union to get his message out? Did he lose Democrats who are now with him by this partisan response to Daschle? Did he lose independents for the same reason?

MR. O'DONNELL: This is the new younger Bush, John. You have to remember that. What you're talking about is exactly what his father would have done. His father would have been busy in the conduct of a war and had what he thought dignity to not respond to this kind of stuff until after the State of the Union. This is a very different Bush White House. They are not going to let Tom Daschle take a lead off the bag for one second on the economy, and that's what Bush was up there fighting about.

MR. MCLAUGHLIN: Do you think that Eleanor's point is correct, that he cannot sit at an 80 percent positive rating in the polls because he's a good war president? Or don't you think that that staying power has indefinite shelf life, no matter how he conducts himself --

MR. O'DONNELL: Well, the president obviously, obviously, by his responses, believes that he cannot retain his 84 percent approval rating by just winning a war.

MR. MCLAUGHLIN: On that issue, by the way, before we advance further down the political path, this kind of raw politics path, you will note that there was a terrible accident this week whereby we lost seven Marines. You will also note that Osama is still unaccounted for. Do you think that it is more good or more bad by Realpolitik for Osama not to be accounted for at this time?

MR. O'DONNELL: Well, the mission is to get Osama in this war.

MR. MCLAUGHLIN: Well, what happens when we've gotten him? What happens to Bush?

MR. O'DONNELL: Well, his numbers will go up in a very big way.

MR. MCLAUGHLIN: But what happens to the momentum behind the war?

MR. O'DONNELL: The momentum behind the war will dissipate fairly quickly once you get bin Laden.

MR. BLANKLEY: No.

MR. MCLAUGHLIN: Aha! Aha!

MR. O'DONNELL: But I think Bush has to be aware --

MR. MCLAUGHLIN: I want to go back to my question here on Osama. Is it more good or more bad, particularly from the point of view of the war president, the commander-in-chief, if Osama is, in fact, accounted for, whether he's dead already and in some cave somewhere, or whether he's in Kashmir or whether he's in Pakistan?

MR. BLANKLEY: Look, this is going to be a war that's going to go on for six, 10, 15 years. But regarding Osama, we thought that he'd met his Waterloo in Afghanistan, and it appears that he's met his Dunkirk. He and his leadership have apparently largely escaped is the best guess right now. I think that's bad news for the United States and it's bad news politically for the president.

MR. MCLAUGHLIN: Okay.

MS. CLIFT: Yeah, the administration is answering your question by their rhetoric. They're not talking about Osama bin Laden anymore. The only reason he would be a positive if they could keep us all engaged in the hunt for bin Laden. But now there's a possibility they may never account for him or find him.

MR. MCLAUGHLIN: Do you think there's a sense of satiety around the nation at this time?

MS. CLIFT: I think --

MR. BLANKLEY: No, absolutely not.

MR. MCLAUGHLIN: With the war. With the war.

MR. BLANKLEY: No. Absolutely not.

MS. CLIFT: I think interest in the --

MR. MCLAUGHLIN: Just a moment. I'm asking her.

MS. CLIFT: I think interest in the war has slowed and that people are going to start returning to the recession and how that's affecting their lives, and domestic issues are going to become more and more important as this year unfolds.

MR. MCLAUGHLIN: Do you want to speculate?

MR. BLANKLEY: Look, I agree that domestic issues are going to become more important, but my sense is this country is still remarkably focused on what happened and is intent on following -- that's why his numbers are high. That's why three-quarters of the country wants us to go into Iraq, because the public understands what's happened. And they're going to have two things. They're going to be more interested in the economy. They're going to be more interested in domestic affairs. They're also going to be extremely focused on the war.

MR. MCLAUGHLIN: Okay.

MS. CLIFT: They're not going into Iraq, though.

MR. MCLAUGHLIN: Okay. The perfect storm.

PRESIDENT BUSH: (From videotape.) I do know that Mr. Lay came to the White House early in my administration, along with, I think, 20 other business leaders to discuss the state of the economy. It was just kind of a general discussion. I have not met with him personally.

MR. MCLAUGHLIN: Question: Enron erupted this week. What is Enron? What happened? Where is the story leading? John Fund.

MR. FUND: It is a big business story full of malarkey and chicanery. It is a very good legal story because I think people are going to go to prison eventually. As for whether it's a big political story, I'm not sure. I think the initial impetus for this being a political story is to get campaign finance reform back on the front burner. It's only three signatures short of getting a House vote. This will try to create an atmosphere. We have to have campaign finance reform.

As for whether or not the Bush administration was involved, Enron asked for help. The Bush administration said no. There's no smoking gun. I don't even think there's a loaded chamber.

MR. MCLAUGHLIN: Lawrence.

MR. O'DONNELL: It is a business scandal story. There is absolutely not even a whiff of political scandal in this thing so far. And it's really funny to watch the Washington Post try to manufacture it.

MR. MCLAUGHLIN: I cannot believe what you are saying.

MR. O'DONNELL: Let's get it straight. The big, big contributor to the Bush campaign goes to the Bush administration and says, "Please help us." And the Bush administration says, "No." The scandal is going to have to be explained to me.

MS. CLIFT: Yeah. Maybe there's no --

MR. MCLAUGHLIN: Are you talking about Evans, the Commerce secretary, who got a call from Lay?

MR. O'DONNELL: And O'Neill --

MR. MCLAUGHLIN: And O'Neill.

MR. O'DONNELL: -- and the untold story, what Democrats in the Congress, what high-ranking Senate Democrats got calls from Enron for help, too.

MR. MCLAUGHLIN: Oh. You're going to make news on this program.

MR. O'DONNELL: I think we're going to see that story unfold in the next couple of weeks.

MR. MCLAUGHLIN: You're not saying everything you know.

MR. O'DONNELL: I'm not saying everything I know.

MR. MCLAUGHLIN: Can you hint?

MR. O'DONNELL: No. Democrats.

MR. MCLAUGHLIN: Senator Schumer from New York?

MS. CLIFT: On behalf of the Washington press corps, I'd like to explain to you that this is a political scandal when you have a major corporation going under and you have its top executives all buddy-buddy with the administration, many administration officials themselves holding Enron stock. They all managed to get out while the stockholders lose their life savings.

MR. O'DONNELL: And President Bush --

MS. CLIFT: Excuse me. Excuse me.

MR. O'DONNELL: President Bush -- (inaudible) --

MS. CLIFT: Lawrence, I get to finish.

MR. O'DONNELL: -- and helped them get -- (inaudible).

MS. CLIFT: Lawrence, I get to finish. You get Ken Lay, the CEO, calling the Treasury secretary and the Commerce secretary, and they don't pass that information along to anyone when, if they had advised someone, maybe --

MR. O'DONNELL: They should go out and destroy --

MS. CLIFT: Maybe a lot of people could have saved their holdings. And so this story has tentacles in lots of places, and let's see how it unfolds.

MR. MCLAUGHLIN: A couple of things with regard to the political impact on the current administration. What about the vice president's withholding of data connected with the presence of Enron personnel? Lay himself, in fact, at the development of the energy report.

MR. BLANKLEY: It's unrelated directly to Enron. That was part of --

MR. MCLAUGHLIN: Why withhold it?

MR. BLANKLEY: Well, because they have a right, in the absence of the fact that -- in the absence of there being a commission in which the person being questioned, the Enron official, was a member of that commission, then you have to make it public. That was the problem with Hillary's health thing. In this case, it was simply an individual. The White House brings in hundreds, thousands of people in to question and talk to, and there's no legal requirement.

Now, I think Cheney is politically mistaken in asserting that right, because there's nothing nefarious about it. He talked with him. He talked to a lot of people.

MR. MCLAUGHLIN: How about that $5.8 million that has been spread around since 1989 by Enron, 72 percent of which has gone to the Republicans, which is about, what, out of $6 million, it's about $4 million, and the rest to the Democrats?

MR. FUND: I'm sure some of that money got them access. But it clearly didn't get results. In fact, the closest thing that Enron ever got to getting results was when it gave a bunch of money to the Democrats and they got some business in India, some government acceleration of business in India in 1996. That was in Time Magazine, John. So I don't think this is going anyway.

MS. CLIFT: This is reminiscent of --

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: What this is reminiscent of is the savings-and-loan scandal, and you have a pattern of --

MR. FUND: That was bipartisan.

MS. CLIFT: Of course. And this may be bipartisan as well. You have a pattern of contributions and you have a returning of favors to Enron and a lightening and a lifting of government regulation. And I think now we're going to go back into revisiting a lot of that regulation.

MR. BLANKLEY: Let me make one quick point before we finish this. The Washington press corps is very good at reporting political scandals. It's very bad at reporting policy scandals. And the question is, what policies are going to be changed or not changed because of this? I think there's a danger that we're going to re-regulate and a danger we're not going to focus on what may have caused the criminal activity, which is (the deflation?), which --

MR. MCLAUGHLIN: Is this a GOP scandal? Is it a Democrat scandal? You have to absent yourself from this, O'Donnell. Or is it a bipartisan scandal? I'd like to know, John.

MR. FUND: It's a minnow of a scandal politically. It is a big-business scandal.

MR. MCLAUGHLIN: Is it a GOP scandal? After all, didn't Clinton play golf a lot or somewhat with Lay?

MR. FUND: Remember, Bush was president --

MR. BLANKLEY: Lay stayed overnight at the Clinton White House.

MR. MCLAUGHLIN: Did Linda Robertson work at the Treasury Department as a senior official and then go out and counsel the executives on a paid-for --

MR. BLANKLEY: Look --

MR. MCLAUGHLIN: -- (basis?) by Enron?

MS. CLIFT: Enron lavished money on politicians in both parties.

MR. MCLAUGHLIN: Ah! So it's a bipartisan scandal.

MS. CLIFT: Ken Lay is --

MR. O'DONNELL: John --

MS. CLIFT: Wait a second. Ken Lay is Kenny Boy to George W. Bush. And what this does is revive the Bush administration's biggest vulnerability, and that is that they care more about corporations and wealthy people than they do ordinary people. That's the political damage.

MR. MCLAUGHLIN: I want to ask you a question. The Commodity Futures -- commodity, singular; futures, plural -- Modernization Act. Do you know anything about it?

MR. FUND: Yes.

MR. MCLAUGHLIN: What do you know about it?

MR. FUND: It was passed in December of last year.

MR. MCLAUGHLIN: What does it provide for?

MR. FUND: It lessens some of the regulations, but Enron didn't take advantage of those.

MR. MCLAUGHLIN: They did not?

MR. FUND: They did not.

MR. MCLAUGHLIN: They did not.

MR. FUND: They did not.

MR. MCLAUGHLIN: Who's going to go to jail at Enron? (Laughter.) Will there be indictments, and will they stick?

MR. FUND: There will be indictments. Arthur Andersen, the accounting firm, is in real trouble of going under.

MR. MCLAUGHLIN: Forget Arthur Andersen. That's a decoy. What about Enron executives dumping out of -- did you know that Lay himself cashed in $101 million worth of Enron stock before it began its declension? Do you know that $67 million was cashed in by Skilling (sp) while 401(k) stockholders were --

MR. FUND: John, they will have explaining to do; I agree. But remember, when you move this to a political story, it becomes much less interesting, because Clinton was president for eight years during Enron's run-up. Bush was president for only eight months.

MR. MCLAUGHLIN: Exit question: Will Enron become Bush's --

MS. CLIFT: You can't blame this one on Clinton, John. Nice try.

MR. MCLAUGHLIN: Will Enron become Bush's Whitewater, meaning, will it spur endless probes and be a distraction to the Bush presidency?

MR. FUND: If the cover-up is there. If there's no cover-up -- remember, the cover-up is always worse than the crime --

MR. MCLAUGHLIN: You're supposed to be gauging that and putting that into your answer.

MR. FUND: If the cover-up is there. I don't know if it's there. I don't think it is, because the Bush administration has already done more than Janet Reno ever did. Their attorney general recused himself from the investigation.

MS. CLIFT: Excuse me. The Bush administration this week only revealed contacts between Cabinet officials that were made in October. They only now have revealed half a dozen meetings with Enron officials over the creation of the energy policy.

MR. MCLAUGHLIN: Eleanor, what's the answer? Quickly.

MS. CLIFT: I think there are seven probes going on plus the criminal probe. I think this is going to be a big distraction during a political year.

MR. MCLAUGHLIN: You've got a criminal investigation at Justice.

MS. CLIFT: Yes.

MR. MCLAUGHLIN: You've got a Securities & Exchange full-blown investigation. You've got at least six committee investigations in the Senate. And what else do you have? What about Ashcroft's recusing himself? Does that suggest anything to you other than the fact that he's being extremely prudent and that he is to be congratulated?

MR. BLANKLEY: He's being careful because he received contributions from Enron, as did Daschle and a lot of other people. Look, I think the answer is --

MR. MCLAUGHLIN: How much did Daschle get?

MR. BLANKLEY: Seven thousand dollars, I think.

MR. O'DONNELL: And the Democratic Senate Campaign Committee got money from Enron.

MR. BLANKLEY: I think, to answer your question, it's not Whitewater but it is going to be a distraction. There are going to be a lot of investigative hearings. There will be plenty of administration officials who have to come up and testify. It'll be a substantial distraction. But unless there's something that we don't know about -- and I don't think there is -- it won't be a scandal politically for the White House. It'll just be an irritant.

MR. MCLAUGHLIN: So it's a double mini-Whitewater.

MR. O'DONNELL: There will be absolutely no political damage to anyone from the Enron collapse. The scandal is an accounting scandal. Arthur Andersen engaged in scandalous behavior. Enron does what business does. It mishandles other people's money. The accounting firms are supposed to prevent that. They didn't. And, by the way, Arthur Andersen has given tremendous amounts of money to Democratic senators.

MS. CLIFT: Enron --

MR. MCLAUGHLIN: Who in the Democratic Party is not returning your phone calls? That's what I want to know.

MS. CLIFT: Enron --

MR. MCLAUGHLIN: The answer is a mini-mini-scandal.

When we come back, Washington's new power couple. Sorry, Eleanor.

(Announcements.)

MR. MCLAUGHLIN: Issue two: Washington's new power couple.

(Excerpt of "Isn't It Romantic?")

PRESIDENT BUSH: I told the folks at the coffee shop in Crawford, Texas that Ted Kennedy was all right. (Laughter.) They nearly fell out. (Laughter.) But he is. I've come to admire him. He's a smart, capable senator. You want him on your side, I can tell you that.

SENATOR TED KENNEDY (D-MA): (From videotape.) And President Bush was there every step of the way, making a difference on this legislation, in support of this legislation, to make sure that it was going to become law. Mr. President, we welcome you here to Boston.

MR. MCLAUGHLIN: It was agape' time this week for the Republican George Bush and the Democrat Ted Kennedy as the president signed into law a $26.5 billion education bill, a crowning triumph for the president on one of his dominant presidential and campaign election issues.

The education measure is revolutionary, because for the first time the federal government is empowered to intrude into public education, historically the domain of local politics and management.

Okay, question: Almost simultaneously with the rebuttal to Daschle by Bush, Bush stumps the country this week with Ted Kennedy, toasting Teddy at every stop. So it's hate Daschle and it's love Kennedy. What's behind the mixed message? Eleanor.

MS. CLIFT: It's clever politics. It's trying to have it both ways. Kennedy is a reliable liberal vote, but it's not defining the Democratic message and he's not going to run for president in 2004. And Daschle, with his Tom Sawyer sincerity, is crafting the Democratic message and strategy and is likely to be a candidate in 2004. So the Bush White House wants to try to, you know, cut that off before it gets off the ground.

MR. MCLAUGHLIN: How do you fit together the pieces of this week? It's really been an extraordinary news week. It started off with the education bill, sweetness and light, we just saw. It moved to a Daschle-Bush exchange; actually Daschle earlier, Bush responding this week.

Then Enron disrupts in discordance and in dissonance, and on its surface, harmful to the Republicans more than the Democrats, although it may turn out to be totally bipartisan, because there's money all over. It's a cake, and if anything, the Bush thing is the icing on the cake, a multi-tiered cake that's been built cleverly by Enron. And then you've got seven Marines dying horribly and accidentally. You've got Osama away. The war news, it seems, was totally eclipsed by weekend. How do you put it together?

MR. BLANKLEY: Well, I think, regarding the war, this is an interlude between the next round that's going to become more dramatic again. Regarding Washington politics, it's the beginnings of a lot of processes we're going to see play out over the year.

I think the Kennedy play for Bush is fascinating, because it drives the Democratic operatives crazy because it takes the edge off of the Daschle argument that everything is partisan. On the other hand, both party operatives like to have distinguishing points between the parties. So this merges it. I think it makes it harder to run hard partisan issues.

MR. MCLAUGHLIN: Do you think it's going to be more of a disharmonious than a harmonious year ahead as we face it here in January?

MR. O'DONNELL: It'll be standard. But the defining political image of the week -- you are right in using it -- was the president and Ted Kennedy at Boston Latin School, the oldest and best public school in America. That image played nationwide, front page of the LA Times, all across the country.

MR. MCLAUGHLIN: What's the political --

MR. O'DONNELL: The political message out there in the country is this president, who we know is a conservative Republican, and this senator, who we know is a very far-left Democrat --

MR. MCLAUGHLIN: What do they have in common?

MR. O'DONNELL: -- are working together. We haven't seen that in a very long time. It must be you guys who made that happen.

MR. MCLAUGHLIN: What do they have in common?

MR. O'DONNELL: President Bush is going to get a tremendous amount of credit.

MR. MCLAUGHLIN: What do they have in common?

MR. O'DONNELL: You tell me.

MR. MCLAUGHLIN: Heart. Heart.

MR. O'DONNELL: Okay.

MR. MCLAUGHLIN: Quick, I'll give you five seconds. We've got to get out.

MR. FUND: This is going to be the most gridlocked year in recent American history because the Senate is so close. Nothing will pass the Senate.

MR. MCLAUGHLIN: Has the war news been eclipsed?

MR. FUND: Until we make up our mind about Iraq, and then it will dominate everything.

MS. CLIFT: The imagery --

MR. MCLAUGHLIN: Quickly.

MS. CLIFT: -- of Kennedy and Bush together disguises a whole lot of partisan frustration on both sides, and that's going to take over in the rest of the year.

MR. MCLAUGHLIN: Well-stated. We'll be right back with predictions.

(Announcements.)

MR. MCLAUGHLIN: Forced question: Who is helped most politically by the political events of this week?

MR. FUND: I agree with Eleanor. I think that image of a friendly Bush and a friendly Kennedy, bipartisanship.

MR. MCLAUGHLIN: Quick, quick. One word.

MS. CLIFT: Democrats are helped.

MR. BLANKLEY: Bush, actually.

MR. O'DONNELL: I think Bush wins.

MR. MCLAUGHLIN: The answer is John McCain.

Next week: Secretary of State Powell visits New Delhi and Karachi to ease tensions between India and Pakistan, who may be edging towards the world's first nuclear exchange. Bye bye.

(End of regular program.)

(Begin PBS segment.)

MR. MCLAUGHLIN: Issue four: Hollywood post-9/11.

KARL ROVE (SENIOR WHITE HOUSE ADVISER): (From videotape.) I was impressed by the fact that in one room were all the studio heads and all the leaders of the guild. It was a wonderful conversation. It's clear that the leaders of the industry have ideas about how they want to contribute to the war effort, and we certainly want to encourage that.

MR. MCLAUGHLIN: That was senior Bush adviser Karl Rove, who visited Hollywood two months ago to outline ways in which the entertainment industry could assist in the war effort. The White House interaction with Hollywood has since then been positive and ongoing, in the spirit of World War II, in fact, but without its mobilization, notably the '42 to '43 Office of War Information.

September 11th brought into existence a series of taboos for Hollywood producers. Studios postponed terror-portrayals like Schwarzenegger's "Collateral Damage." Another taboo is any narrative that includes an airplane crashing into a building. So, the Cessna that the deceased 15-year-old Charles Bishop piloted into the side of a building in Tampa last Sunday won't figure in any TV or film reconstruction soon.

Taboos -- exclusions, in other words -- are clear to Hollywood producers. But what is to be included, the inclusions, is an area of dispute. How, for example, does Hollywood in its offerings slake the current public thirst for patriotic displays without renewing the 9/11 trauma?

Question: Is all Hollywood on board the war wagon? I ask you, Lawrence.

MR. O'DONNELL: Oh, absolutely not. All Hollywood is on board the idea of getting a really good story and filming it in any method. And the story always begins with the writers. There were no writers in that room. It was all executives. And so there's very little to come out of that sort of meeting other than the fact that, yeah, Hollywood's always trying to pursue popular taste.

One indicator of what's going on out there in the public is that JAG, the only outright patriotic show on television, produced by Don Bellisario for CBS, which is about Navy lawyers, is doing fabulously well and just screaming up in the ratings this year like we've never seen.

MR. MCLAUGHLIN: Because of 9/11?

MR. O'DONNELL: We don't know, but it's a perfectly legitimate suspicion.

MR. MCLAUGHLIN: Is it true that the Writers Guild of, what, America -- is that the full name?

MR. O'DONNELL: Writers Guild of America.

MR. MCLAUGHLIN: All right -- at a recent meeting, some writers and directors were musing how to portray terrorists as three-dimensional characters, how to probe their motivations so that audiences would, quote/unquote, "understand" why they attack us. In short, some in Hollywood want to humanize the terrorists. Is any of that true?

MR. O'DONNELL: Well, just show me a script that doesn't. You know, if you see -- let's just wait and see what happens with scripts. I don't think there'll be any --

MR. MCLAUGHLIN: Do you think that Hollywood is going to portray Muslims as good citizens and good Americans than they will be portrayed as Secret Service agents or an FBI person?

MS. CLIFT: Well, I would hope so, since most of them are good citizens and good Americans.

MR. MCLAUGHLIN: So Hollywood will try to protect us from our failure to understand the true meaning of Islam --

MS. CLIFT: Hollywood --

MR. MCLAUGHLIN: -- and its beauty.

MS. CLIFT: Hollywood is interested in character development, and they may develop evil characters as well. But, you know, there's a confluence of interests here.

MR. MCLAUGHLIN: That was a straight question on my part.

MS. CLIFT: We're finished with the Vietnam War and all its horrors, and so we're ready for a new phase of more positive military movies. And Hollywood will cooperate.

MR. MCLAUGHLIN: What about the Muslim Secret Service -- I guess he was Arab -- Secret Service agent who was carrying a gun and he didn't have the proper credentials, so the captain kicked him off the plane? Are you familiar with the story?

MR. FUND: Yes. And a traditional Secret Service agent wouldn't have taken a class-action suit.

MR. MCLAUGHLIN: So you support the captain. I guess we all do, do we not?

MR. BLANKLEY: I do.

MR. MCLAUGHLIN: Do you?

MR. BLANKLEY: I do. Let me go back to the Hollywood question for a moment.

MR. MCLAUGHLIN: Quickly.

MR. BLANKLEY: I think it's interesting. Hollywood started talking about not doing action-adventure films, but Blockbuster has got high rentals on all those kind of films.

MR. MCLAUGHLIN: Interesting.

MR. BLANKLEY: Hollywood is going to go where the audience is, the audience of 14-year-old boys who want to see a movie four times. They're going to get action-adventure movies.

MR. MCLAUGHLIN: So it'll all be back.

MR. BLANKLEY: It'll be back, of course.

MR. MCLAUGHLIN: Jack Valenti, take note.

(End of PBS segment.)


END