MR. MCLAUGHLIN: Issue one: Carnage on Wall Street.

In 12 out of 14 weeks the Dow Jones industrial has plummeted,
hemorrhaging over 1,000 points, from 10,000-plus in March to nearly
9,000 in late June. Investors are dumping stocks, shifting their
funds to low-interest and low-risk money market accounts. Two-point-
three trillion dollars now sits in those accounts.

Also, the U.S. Treasury is now the haven for $7.6 billion in
newly bought U.S. savings bonds for the eight months ending May 2002,
compared to 4 billion in the entire year 2000.

The investor optimism index plunged from 90 in May to 72 in June,
its second lowest level in history.

Investors are scared, some in panic. Can you blame them? Every
day headlines have brought news of another tax cheat CEO, an evidence-

tampering executive, a crooked CFO, a scofflaw accountant, a loose-
lipped insider, a double-talking analyst -- first Enron, Arthur
Andersen; then Adelphia, Global Crossing, Tyco; now ImClone, under
investigation for insider trading and obstruction of justice, with the
sainted Martha Stewart getting nasty ink; finally, the whopper that
could top them all: WorldCom, facing federal fraud charges and the
largest bankruptcy in U.S. history, after having overstated profits by
almost -- get this -- $4 billion in 2001 and 2002.

This WorldCom scandal has moved the volume of corruption into
critical mass and triggered the president's own wrath, calling the
WorldCom debacle, quote, unquote, "outrageous," followed by this

PRESIDENT GEORGE W. BUSH: (From videotape.) We will fully
investigate and hold people accountable for misleading not only
shareholders but employees as well.

There is a need for renewed corporate responsibility in America.
Those entrusted with shareholders' money must -- must -- strive for
the highest of high standards.

MR. MCLAUGHLIN: Question: Why is President Bush so outspoken
about WorldCom, when at a comparable stage in the Enron bankruptcy he
was virtually mute, Pat Buchanan?

MR. BUCHANAN: Well, first, WorldCom is not run by "Kenny Boy,"
his buddy, who ran Enron. (Laughter.) He doesn't know these fellows.

Secondly, John, these things have been piling one on the other,
and the president's got to get ahead of the curve, because the country
is getting disgusted by this.

The president's got worse problems, John. The dollar is sinking
like a stone. The budget is out of balance, increasingly so. He's
got a world trade deficit of about $480 billion. The economies of
Latin America are in deep trouble. I don't think the president knows
exactly what to do, and this is simply -- you know, basically a
political statement. It's going to have no impact whatsoever on the
markets or on these companies.

MR. MCLAUGHLIN: Critical mass played a role here, Eleanor. And
the president was not mute during Enron. He spoke about his mother-
in-law investing $8,000 in Enron, and lamented and was somewhat angry
at what Enron did. So he wasn't mute, was he?

MS. CLIFT: Yeah, but he did nothing. The White House did
nothing to propel government regulations that might have headed off
some of this or at least begin --

MR. MCLAUGHLIN: Well, it was new.

It was all new.

MS. CLIFT: Well, he hasn't offered any concrete proposals. And
now he's responding because even though his approval ratings are high,
a third of the people don't think he's doing enough to help the
economy. And Pat's right: The economy is now where he's really
hurting. And so a lot of people who thought this -- George Bush
didn't have the experience to be president would say, "Well, look at
the people around him. Look at the experienced people that he's
bringing to government." That may be true in foreign policy, but he
has a very weak economic team. Where is Paul O'Neill? We need
somebody with a steady, sobering voice to speak out on the economy.

MR. MCLAUGHLIN: The president spoke out on this again on Friday.
Are the scandals that are wracking the country wracking you, Tony?

MR. BLANKLEY: Well, I said on this show, I think five or six
months ago, that there's a danger of a double-dip recession. We're
not there yet, but if the stock market is a leading indicator of where
the actual economy is going, then there's some possibility there.
Yeah, I was concerned because a lot of reasons, including the fact
that the price-earning ration of stocks is still historically very
high, which means that either the earnings have to go up, or the
prices have to come down. Well, earnings are not going up for
corporate America, which means the prices are going to have to come
down more. And with over half of Americans owning shares, the impact
-- the political impact of a continuing downturn in the stock market
is going to be great and could be greater now than it was in the past,
when only 10 or 15 percent owned stocks.

MR. MCLAUGHLIN: Lawrence, do you think investors are losing
confidence, particularly out there in Beverly Hills, where you spend
of your time? (Laughter.)

MR. O'DONNELL: Well, this investor has no confidence.

MR. MCLAUGHLIN: No confidence.

MR. O'DONNELL: My trillion is in money markets, too.
(Laughter.) Listen, the president as of the end of the week has a 70-
percent approval rating. It's holding solidly. He's got a 53
approval rating on handling the economy.

MR. MCLAUGHLIN: Big difference.

MR. O'DONNELL: Now the stock market --

MR. MCLAUGHLIN: (Inaudible) -- right?

MR. O'DONNELL: Yeah. The stock market is not the economy, but
it is frequently blurred into appearing so in the public mind. The
other big thing that's at stake here is pension funds. There's a
tremendous loss, gigantic loss in pension funds because of Enron,
because of WorldCom, because of all of these collapses. And he has to
appear sensitive to what's going to happen to people's pocketbooks as
a result of this.

MR. BUCHANAN: John, look: As Tony points out -- look: The
stock market is a lead indicator. If it is a lead indicator, we're
headed down. Look: NASDAQ's lost 70 percent of its value in two
years, and it's selling still at 70 percent earnings. And you've had
about five or $6 trillion wiped out. This affects people's will to go
out and start buying a lot of things.


MR. BUCHANAN: And Greenspan's got a problem, too.

MR. MCLAUGHLIN: Before we continue to hemorrhage this negativity
on the set, shall we point out -- you point out that the GD -- growth
rate for the first quarter was 6.1 percent, correct?

MR. BUCHANAN: And the second quarter -- I'll bet it will not be
half that.

MR. MCLAUGHLIN: Well, that's your projection. But in point of
fact, investors have not lost confidence; they are investing. They're
investing in houses like you, Pat, who own several houses -- many
houses, I might say.

MR. BUCHANAN: Who is dis-investing --

MR. MCLAUGHLIN: Number two, they're investing in gold stocks
that are solid. Number three, they're investing in bonds. So let's
not get hysterical.

MR. BUCHANAN: But look at the Europeans, John. Because the
market has gone down, the value of the dollar has gone down. The
value of the earnings has gone down. They've got an enormous amount
of America more than they've ever had. They're dumping it all in.

(Cross talk.)


MS. CLIFT: We've got confidence in corporations taking a nose-
dive, and you've got the Democrats salivating on tying the Republican
scandals to the Republican members --

MR. BLANKLEY: That's (the projection ?) of all Democrats will --

MS. CLIFT: Well, it may be enough, Tony. It may be enough.

MR. MCLAUGHLIN: Can we move to reform, or do you want to make
another negative point? (Laughter.)

MR. BLANKLEY: No, I was going to make, actually, a positive

MR. MCLAUGHLIN: Please continue.

MR. BLANKLEY: Thank you. This is all relative, all these

The American economy --

MR. MCLAUGHLIN: Everything is relative.

MR. BLANKLEY: The American economy is still the pride of the
planet when it comes to our productive capacity, the size of our
market. The whole world still relates to the American economy. What
we're seeing is the end part of the busting of the bubble. Most of
the companies that have had scandals have been new-technology
companies, just as we had railroad scandals when railroad was a new
technology. This is a historic process. There's not much the federal
government can do.

MS. CLIFT: Yeah, the Republican line is it's a few bad apples
out there.

MR. BLANKLEY: No, I didn't say that.

MS. CLIFT: And we have to clean that up. Or your line that this
is just a wave in history --

MR. MCLAUGHLIN: What do you think will improve the situation?
Reforms or stiff jail time?

MR. O'DONNELL: Both. Stiff jail time is the best reform. You
have to make -- these corporations are never going to be transparent.
The accounting principles involved will never be transparent. They
will always be incomprehensible externally. You have to have the
accounting firms and the executives fearful of jail in order to get
them to do the right thing.

MR. MCLAUGHLIN: Right. Send the white collar crooks to jail.
And stiff sentencing.

MR. BUCHANAN: But, but --

MR. MCLAUGHLIN: We've got to get out of here, Pat.

MR. BUCHANAN: -- you don't know how -- you don't know how many
landmines are already out there.

MR. O'DONNELL: That's right.

MR. MCLAUGHLIN: Exit: Will the Dow fall below 8,000?

MR. BUCHANAN: I don't think so. If it does, the Republicans are
in big trouble.

MR. MCLAUGHLIN: You're saying no?

MR. BUCHANAN: No. It's got to go 1,000 more.

MR. MCLAUGHLIN: Well, how do you explain this lurch into

MR. BUCHANAN: Look, it's lost 20 percent. I don't think it's
going to lose 30. (Laughter.)

MS. CLIFT: I think it's probably going to stop short, and I hope
it does for all our sakes. But --

MR. MCLAUGHLIN: That's a -- that's a no, it will not?

MS. CLIFT: But look for some legislation finally to pass on
Capitol Hill.

MR. BLANKLEY: If the historic ratios of price to earnings are
recognized, it will probably get below 8,000. My guess is that it
won't. It will be in the low 82s-83s.

MR. MCLAUGHLIN: Will it dip below 7(000)?


MR. MCLAUGHLIN: Will you tell us what's really going to happen?

MR. O'DONNELL: If there's a collapse in a historically highly
trusted company, like, for example, Xerox, that had a little bit of
bookkeeping trouble this past week, if there's a collapse of WorldCom
proportions in a highly trusted company, then, yes, we will fall below

MR. MCLAUGHLIN: Do you think that's going to happen?

MR. O'DONNELL: I do not think that's going to happen.

MR. MCLAUGHLIN: You do not? So, no dip below 8,000.

MR. O'DONNELL: I guess not.

MR. MCLAUGHLIN: Yes, a short -- short-term and meager dip below

MR. BUCHANAN: Sell. (Laughter.)

MR. MCLAUGHLIN: Okay. Another McLaughlin Y20 moment to
celebrate our 20th anniversary year.

The date: June, 1988, 14 years ago this weekend. The place:
Moscow. The event: a three-and-a-half hour televised address to the
Soviet Communist Party in which Mikhail Gorbachev announces
perestroika and glasnost.

(Begin videotape segment.)

ROBERT NOVAK: When you begin economic reforms, when you move
toward economic freedom, whether it's in Korea or Chile or any other
place, there is an immediate demand for political freedom, for
political reform. And that is something the communist system cannot

RICHARD COHEN: I disagree with Bob in the sense that we don't
know, he doesn't know, no one knows how this is going to turn out.
You could have a mixture of communism and a certain amount of economic

MR. NOVAK: Where? Where's it ever been done?

MR. COHEN: Well, you have variations --

MR. NOVAK: Tell me where.

MR. BUCHANAN: The myth and legitimacy of the Soviet state are
under assault. Now, Gorbachev's using this tactically to go after the
old guard, but what Gorbachev -- either he doesn't realize it, but the
whole country's watching this thing, is seeing communism damaged,
injured irreparably. And they're not going to stop with these --

MR. MCLAUGHLIN: You mean that the genie is out of the bottle?

MR. BUCHANAN: John, listen what's going to -- these people are
going to say, look, if Stalin was a fool and Brezhnev and Khrushchev
and Chernenko and everybody, maybe the whole system ought to go, which
means maybe eventually Gorbachev.

(End videotape segment.)

MR. MCLAUGHLIN: Hey, pretty good stuff, Buchanan.

MR. BUCHANAN: I was ahead of the CIA anyhow. (Laughter.)

MR. MCLAUGHLIN: You redeemed yourself.

MR. BUCHANAN: (Laughs.) Thank you for getting one of my good
clips, John.

MR. MCLAUGHLIN: Yeah, congratulations! What do you think?

MR. O'DONNELL: Absolutely. He --

MR. MCLAUGHLIN: Did you see how the gentleman from The
Washington Post, Cohen, was getting close to you, but you really went
over the edge into truth and projection and depression.

MR. BUCHANAN: Then I jumped over the edge and ran. (Laughter.)

MS. CLIFT: Maybe you're a candidate in the wrong country.

MR. MCLAUGHLIN: When we come back, does separation of church and
state in our Constitution prohibit any reference in public life to


MR. MCLAUGHLIN: Issue two: Bush's Mideast gamble.

PRESIDENT GEORGE W. BUSH: (From videotape.) I meant what I
said, that there needs to be change. If people are interested in
peace, something else has got to happen.

MR. MCLAUGHLIN: At this week's G-8 summit in Canada, world
leaders generally praised President Bush's Middle East peace plan but
stopped short of endorsing his position on ousting Yasser Arafat.
French Prime Minister Jacques Chirac was extremely pointed on this
Arafat ousting matter: "It is obvious that the Palestinian people
alone choose their representatives."

The Palestinian Authority announced that new elections will be
held in January and that Arafat will likely be on the ballot.

NABIL SHAATH (Arafat adviser): (From videotape.) My information
is that he will run for elections again.

MR. MCLAUGHLIN: If Arafat is reelected, Bush has threatened to
withhold $100 million in aid to Palestine.

PRESIDENT GEORGE W. BUSH: (From videotape.) I can assure you we
won't be putting money into a society which is not transparent, and
corrupt. And I suspect other countries won't either.

MR. MCLAUGHLIN: Will you grade Bush's initiative in this on a
boldness scale, A to F? And I want you all to do this, so start with
you, Pat, then with you, Eleanor.

MR. BUCHANAN: I'm going to give him an F. I think the president
could have been a Sadat or a Rabin. I think he did not raise -- rise
to the occasion. He has really sublet U.S. foreign policy out to
Ariel Sharon. It was a foolish thing to say we won't deal with Arafat
and people shouldn't elect him. He just reelected him. He's going to
have to deal with him. He's going to have to deal with him. You know

MR. MCLAUGHLIN: Do you think the Palestinians are going to turn
off $100 million in aid from us?

MR. BUCHANAN: Well, if they told us what we ought to do, the
Americans would defy them. They're going to defy Mr. Bush. And
frankly, they ought to. We should not be telling people whom to


MS. CLIFT: I agree with Pat, it's an F. I think the president
is really underestimating the extent to which the Palestinian people
are being radicalized by his policy and by the policies of the
Israelis. And to call for the removal of a leader and to say you
support democracy but you're only going to support the outcome that
you like; you can't be for both democracy and predetermined outcomes.
It's a speech that is totally incoherent.

MR. MCLAUGHLIN: What do you think, Tony?

MR. BLANKLEY: Well, on the question of boldness scale, I give it
about an A-minus because it's a complete reversal of the whole
approach to the Oslo peace process. Now, as to whether it's going to
be effective, I wrote a column this week in which I had my doubts as
to whether three years from now we'll have divided government,
democracy, in Palestine. And I think that he faces what he has to do
with the ultimatum which he laid there. I don't know what his answer
will be then. But as far as boldness, this is a huge diplomatic break
from the status quo and you have to give him a high grade for

MR. MCLAUGHLIN: He broke the gridlock, did he not?

MR. O'DONNELL: I -- this couldn't be a weirder position. I
agree with everyone. I agree with Tony. (Laughter.) Then on the
boldness scale, it is an A. He ripped up his April 4th speech, which
was a well-reasoned, careful speech. He joined the Likud Party. And
on a policy grade, I have to give him an F; I agree with Pat and

MR. MCLAUGHLIN: Well, he ran right by the Oslo incrementalists.
He broke the gridlock.

MR. BUCHANAN: He sank --

MR. O'DONNELL: He broke nothing.

MR. MCLAUGHLIN: He did break the gridlock.

MR. O'DONNELL: He's locked into the gridlock now.

MR. MCLAUGHLIN: He left Arafat --

MR. O'DONNELL: He set up a condition that cannot be met. That
means you have gridlock.

MS. CLIFT: Right.

MR. MCLAUGHLIN: He's locked Sharon into a position of support
for a Palestinian state.


MR. BUCHANAN: Bush is running on --

MR. MCLAUGHLIN: If Arafat decides that he'll take a position
above president of Palestine

MR. BUCHANAN: He'd probably get --

MR. MCLAUGHLIN: -- a la others in history, who could do that --

MR. BUCHANAN: Why? Why should he?

MR. MCLAUGHLIN: Why should he not?

MR. BUCHANAN: Why should he? Look: His whole life -- to be
president --

MR. MCLAUGHLIN: He wants a Palestinian state!

MR. BUCHANAN: Well, look. Bush -- what does he mean? He will
not give in --

MR. MCLAUGHLIN: He can have it both ways, and then Sharon has to
pull out, to give that new person a start.

MR. BUCHANAN: Oh, cut it out.

MS. CLIFT: And how is the president going to make this happen?
This is a bunch of words with no -- no plan, no one --

MR. MCLAUGHLIN: He has to move reaction, and he's succeeded in
doing it.

MS. CLIFT: No, he didn't.

MR. MCLAUGHLIN: On a boldness scale, it was at least an A, if
not an A-plus.

MR. BLANKLEY: Very bold.

MR. O'DONNELL: It was very bold.

MR. MCLAUGHLIN: Issue three: God be gone!

MR. BUCHANAN: (Chuckles.)

MR. MCLAUGHLIN: Millions of U.S. school children every day, with
their hands placed over their hearts faces upturned towards the flag,
recite the Pledge of Allegiance. Since 1954, the Eisenhower
administration, that pledge has included by federal law the phrase
"one nation under God." But a federal appeals court in San Francisco
ruled this week that the words "under God" must be stricken. The
phrase violates the establishment clause in the Constitution require a
separation of church from state, the three-judge panel declared in a
2-1 decision.

The case was brought by a Sacramento atheist, Michael Newdow, who
objects to the words "under God" because his daughter, a second-
grader, has been put in an awkward if not intolerable situation. If
the ruling stands, children in nine Western states, under the 9th
Circuit's jurisdiction, will be prohibited by law from pledging
allegiance to their country in words time-honored for half a century.
The ruling has ignited a firestorm in Washington and across the

This decision is just nuts.

SENATOR ROBERT BYRD (D-WV): I've recited the pledge, and so has
every other member of this body, time and time again. Come, Judge,
put us in jail.

SENATOR TRENT LOTT (R-MS): The people not going to stand for

PRESIDENT BUSH: (From videotape.) -- declaration of God in the
Pledge of Allegiance doesn't violate rights. As a matter of fact,
it's a confirmation of the fact that we received our rights from God,
as proclaimed in our Declaration of Independence.

MR. MCLAUGHLIN: To show their horror and disgust at the
decision, members of Congress, on the day the decision was announced,
gathered on the Capitol steps to recite the Pledge of Allegiance.

(To Mr. Buchanan.) Do you know the Pledge of Allegiance?

MR. BUCHANAN: I certainly do.

MR. MCLAUGHLIN: You can recite it perfectly accurately?

MR. BUCHANAN: I could recite it perfectly accurately -- it may
be "indivisible" or "under God" -- which comes first? (Laughter.)

MR. MCLAUGHLIN: I'm not sure O'Donnell can, but let me ask you
this one, O'Donnell --

MR. BUCHANAN: (Laughs.) He won't -- (he's liable to ?) drop two

MR. MCLAUGHLIN: You've got a daughter, right?

MR. O'DONNELL: I have a daughter who's in the second grade in a
California public school subject to this ruling.

MR. MCLAUGHLIN: Do you know the position taken by the claimant
in this case, about her daughter -- his daughter being put in an
awkward if not intolerable situation when this phrase is used in the
Pledge? Can you understand that?

MR. O'DONNELL: Absolutely, I can understand that.

MR. MCLAUGHLIN: Can you sympathize with the father?

MR. O'DONNELL: I can sympathize totally with the father --


MR. O'DONNELL: And I can sympathize with anyone who
uncomfortable with the phrase "under Allah" or "under Jesus" or any
other --

MR. MCLAUGHLIN: "Under Zeus"?

MR. O'DONNELL: -- "under Zeus" -- any one of those things, just
as the court pointed out.

And it's funny to see this country getting all hopped up over a
hundred-year-old poem written by a socialist, who would -- and when
you look at the Declaration of Independence, written by Thomas
Jefferson, you can tell not one of those signatories would want to
believe that we now have a loyalty oath in this country that we must
recite, by law, in public schools.

(Cross talk.)

MR. MCLAUGHLIN: All right. Let me ask --

MR. BUCHANAN: You do not have to recite it. That's the point.

MR. BLANKLEY: Yeah. Yeah, it's quite voluntary --

MR. MCLAUGHLIN: Let Pat talk.

MR. BUCHANAN: You do not have to say "under God." You don't
have -- you can be silent or you can say it. Now the idea that,
simply because this girl might be embarrassed, no child in any
classroom in America can say the Pledge of Allegiance to the flag of
the United States is judicial tyranny.


MS. CLIFT: Well, the phrase --

MR. O'DONNELL: They could say it to the flags, not to God. You
simply take out "under God" and then you have a perfectly legitimate

MR. BUCHANAN: Well, look, let them say it to -- why should you
dictate to the majority when you're the minority?

MR. MCLAUGHLIN: Okay, Pat. Hold on. Let me put this in the
form of a question. The Pledge of Allegiance dates to 1892, but the
words "one nation, under God" were not added until 1954.

MS. CLIFT: Right.

MR. MCLAUGHLIN: Are they really essential to fulfill the main
and original purpose of the Pledge, which you must know --


MR. MCLAUGHLIN: -- (to Mr. Blankley) -- and I presume you know

MR. BLANKLEY: I know -- (off mike).

MR. MCLAUGHLIN: It was unity. It was a call for unity at a time
of great immigration.


MR. MCLAUGHLIN: And it was a call to federal unity, not regional
unity. Correct?


MR. MCLAUGHLIN: Now is that met without the phrase "under God"?

MR. BLANKLEY: Yeah, look, of course it is. But the fundamental
purpose of the pledge has evolved over the last half-century, and at
this point, the word "under God" in a nation where 93 percent self-
identify as believing in God is a key unifying component at. A time
when we're at war, I think that it's so obviously --

MR. MCLAUGHLIN: You know what you're really saying?

MR. BLANKLEY: -- it's so obviously terrible judgment --

MR. MCLAUGHLIN: You're really saying what the New York Times
said in an editorial, namely, that sometimes, when a foreign body gets
into, say, the liver, you do more damage by trying to take it out,
even though it's a foreign body, than by leaving it in.

MR. BLANKLEY: Yeah, but look --

MR. MCLAUGHLIN: So it is equivalently -- just a minute -- the
lesser of two evils --

MS. CLIFT: Right. There was incredible --

(Cross talk.)

MR. MCLAUGHLIN: Now that is a very cynical point of view, but --

(Cross talk.)

MR. O'DONNELL: I actually think the best decision was the

MS. CLIFT: The Democrats who --

MR. MCLAUGHLIN: I want to --

MS. CLIFT: -- Democrats who remember how Michael Dukakis gave
his political life on this issue because he wouldn't sign a bill
making the Pledge of Allegiance mandatory -- you had all of these
Democrats up there -- and Republicans -- pandering like crazy.

But this was a Nixon-appointed judge.


MS. CLIFT: And I think this was the ghost of Nixon coming back
to help Republicans. It's a great issue for Republicans.

MR. MCLAUGHLIN: All right. All right. We've got to get out. I
got one more question. Before we leave this, which way is the Supreme
Court going to go on this matter? Will it uphold the San Francisco
court, or will it overturn? One word.

MR. BUCHANAN: Ninth Circuit will overturn it before the Supreme
Court gets it.

MR. MCLAUGHLIN: On appeal, it will be overturned.

MS. CLIFT: It'll -- the 9th Circuit is going to undo this.

MR. MCLAUGHLIN: Will it overturn?

MS. CLIFT: It's --

MR. BLANKLEY: I assume --

MR. MCLAUGHLIN: Remember the decision made in the Georgia --
what --

MR. BLANKLEY: Yes, yes.

MR. MCLAUGHLIN: -- football matter?

MR. BLANKLEY: Yeah, I think probably the unbanked 9th Circuit
will. But they're pretty -- I used to litigate out there. They're a
pretty left-wing court. I'm not completely convinced it won't get to
the Supreme Court.

MR. MCLAUGHLIN: What do you think?

MR. O'DONNELL: You know, as sympathetic as I am to the case, in
the stupid insertion of this phrase in the '50s, I think the best
opinion was written by Judge Fernandez, which is the dissent, where he
says this is, in effect, harmless. And that -- and there's a lot of
legal language he brings to that, but that's where I think the appeal
will end up. And it will be restored.

MS. CLIFT: Well, the --

MR. MCLAUGHLIN: It will be restored?


MR. MCLAUGHLIN: The answer is, it's too close to call.

We'll be right back with predictions.


MR. MCLAUGHLIN: The House passed a prescription drug bill last
night. Will the entire Congress pass one before the end of the year,
yes or no?

MR. BUCHANAN: Close, but no.


MS. CLIFT: No. And the House bill is nothing but a subsidy to
insurance companies.

MR. MCLAUGHLIN: Okay. Yes or no?

MR. BLANKLEY: No. The Senate won't --




MR. O'DONNELL: No. The Senate will get stuck.

MR. MCLAUGHLIN: The answer is yes. Bye-bye.



MR. MCLAUGHLIN: Issue four: Death as a deterrent?

SEN. JOHN KERRY (D-MA): (From videotape.) Well, I believe that
America is beginning to question how we have applied the death

MR. MCLAUGHLIN: Senator John Kerry may be right. Seven to two
is how the Supreme Court ruled this week with its decision that
requires juries, not judges, to render the death sentence. This
ruling means that up to 800 prisoners now on death row could appeal
their sentences.

And that's not all. Earlier this month, the high court
determined that the execution of mentally retarded convicts is cruel
and unusual punishment, and therefore unconstitutional.

Groups working to outlaw capital punishment altogether see these
rulings as moving the U.S. closer to the elimination of the death
penalty. But the public is not ready yet to pull the switch. Quite
the opposite. Seventy-two percent of Americans favor capital

punishment. And get this. Those who feel the death sentence is not
applied enough add up to 47 percent, almost half the nation.

Question: violent crime is up in the U.S. this year, ending a
nine-year down trend. Is this due to the suspension of executions in
many states, do you think, Lawrence?

MR. O'DONNELL: Of course not. It has -- there's no deterrent
value in the death penalty whatsoever. And the number 72 percent is
inflated in terms of reality. Because when these people get on to
juries and when these people are faced with an actual life that it is
within their power to extinguish, they make different decisions.


MR. O'DONNELL: When it's a hypothetical question, it's a
different thing.

MR. MCLAUGHLIN: Yeah, we'll move back to that in a moment. But
are juries more or less lenient than judges in their sentencing?

MR. O'DONNELL: I don't know. You mean specifically on deciding
for death? I don't know the answer to that.

MR. MCLAUGHLIN: The answer is more strict. Excuse me. Yes,
more strict.

MR. BLANKLEY: I mean, the whole -- the Supreme Court has spent
the last 30 years having trouble with how to objectively make the
death decision. And they've gone back and forth, and each time they
do that, they invalidate a whole bunch of existing capital offenses --
convictions. And we're going to go through that cycle again. But the
fundamental desire of the public and the fundamental support of the
courts for capital punishment is undiminished.

MR. MCLAUGHLIN: The research on whether or not the death penalty
is a deterrent has traditionally been, it is not provably a deterrent.
But there is some new research. Can you speak to that?

MR. BUCHANAN: Yeah, well, listen, John. Why can the -- when the
godfather walks across the prison yard, why does nobody touch him?
Because the death penalty deters. This is absurd to say this doesn't

MR. MCLAUGHLIN: You mean on the basis of common sense?

MR. BUCHANAN: This is not the public. These are a bunch of
judges who have got guilt feelings all of a sudden who are trying to
impose on the country by perverting the Constitution. They're a
minority view. Right, Eleanor?

MS. CLIFT: Well, we're the only industrial country that sees
this as an appropriate form of punishment, and I think we really --

MR. BUCHANAN: A majority in Britain favor the death penalty, but
they can't -- (inaudible) -- because they're not democratic.

MS. CLIFT: Yeah, but their leaders are wise enough not
necessarily to always follow the crowd.

MR. BUCHANAN: (In a/any ?) democratic country, which is what
you're dealing with.

MS. CLIFT: And the notion of executing people who don't
understand the severity of what -- the crime they've committed seems
to me makes total (nonsense ?).

MR. BUCHANAN: Maybe they ought to be locked up before they
commit it --

MS. CLIFT: Well, they ARE locked up!

(Cross talk.)

MR. MCLAUGHLIN: It appears that felonies --

MS. CLIFT: (Inaudible) -- is locking up?

MR. MCLAUGHLIN: -- felonies attached to other crimes, like rape
or murder, that the death penalty will deter a criminal from
committing another murder to silence a witness.

MR. BUCHANAN: Kidnapping --

(Cross talk.)

MS. CLIFT: That happens in Hollywood.

MR. O'DONNELL: You actually think that the criminal mind pauses
over penalties.

MR. MCLAUGHLIN: Oh, yes! Oh, yes! A criminal who commits a
felony -- a murder --

MR. O'DONNELL: Oh, look: You don't think life imprisonment is
enough of a -- (inaudible) -- if someone wants -- is going to commit a

MR. MCLAUGHLIN: -- then says, "There is" -- "There is an
observer there; I'm going to shoot him." The thought goes through his
head, and does deter him from committing another murder. You follow

MR. O'DONNELL: No, I don't.

MR. MCLAUGHLIN: So it's a --

MR. O'DONNELL: Nothing goes through their --

MS. CLIFT: You're watching too much television, John!