MR. MCLAUGHLIN: Issue one: Mid-term report card.

PRESIDENT GEORGE W. BUSH: (From videotape.) I will live and lead by these principles: to advance my convictions with civility, to pursue the public interest with courage, to speak for greater justice and compassion, to call for responsibility, and try to live it, as well.

MR. MCLAUGHLIN: This week marks the end of the first half of George W. Bush's current term as president. He got off to an inauspicious start two years ago. After Democratic charges of a stolen election, Mr. Bush's presidential legitimacy was in question.

Before the end of his first six months in office, he showed his presidential prowess by winning passage for his top domestic policy priority, a 10-year, $1.35 trillion tax-cut program. But in May, he also lost the Senate, when Republican James Jeffords, angered by heavy-handed White House treatment of him, switched parties and became an independent, voting with Democrats.

By the end of Bush's first summer, his presidency was dipping in the polls, with an approval rating barely above 50 percent. Then came September 11. Bush's appearance a few days later at Ground Zero standing with New York's firefighters; and later, his masterful rhetoric at the United Nations and before a joint session of the Congress; and his forceful response in Afghanistan -- all won widespread support and sent his polls skyrocketing.

The following year, November 2002, Bush used this political power to engineer a spectacular reversal of midterm elections, when the party in the White House traditionally loses seats. Instead, Bush recaptured the Senate and boosted Republican numbers in the House.

But the failure to capture Osama bin Laden, plus a series of corporate scandals, plus a lackluster economy, plus steep stock-market losses, plus war jitters over Iraq, have taken their toll.

Arguably the most ominous current indicator for Mr. Bush is the right-track/wrong-track poll showing that 36 percent of Americans believe that the country is on the right track, whereas 47 percent believe it is on the wrong track. And Bush's once-stratospheric foreign policy approval rating has fallen back to earth, at 51 percent, with 42 percent disapproval. And the economy is worse; 49 percent disapprove, 44 percent approve.

Other bad news for the nation. Oil levels today have plunged to the lowest level since the mid-'70s. Senators are telling the president to open up the Strategic Petroleum Reserve. Homeowners in the Northeast are paying 25 percent more than last year. Natural gas prices are up almost 50 percent at the pump. All right in the middle of a frigid winter.

Question: The first duty of a president is to form a government. How do you rate Bush on that score; namely, his appointments?

Let's start with the president's principal spokesman, Ari Fleischer, and the general spokesmanship of this administration, particularly his Cabinet, in terms of how they are communicating with and through the press.

I ask you.

MR. KUDLOW: Well, I think Ari Fleischer's been an excellent press secretary, very clear --

MR. MCLAUGHLIN: Do you think he's helpful?

MR. KUDLOW: -- very serious, very sober. Yes, I do. I think he's reflecting what President Bush is saying.

MR. MCLAUGHLIN: Why are you laughing?

MR. KUDLOW: He's not --

MR. BLANKLEY: I'll explain in a moment. (Laughs.)

MR. KUDLOW: Fleischer is not a guy who tries to make himself the issue. He just communicates and transmits the --

MR. MCLAUGHLIN: By the book. By the book.

MR. KUDLOW: By the book. And I think that's exactly how it ought to be played. And I also --

MR. MCLAUGHLIN: You mean hold the press at bay.

MR. KUDLOW: Yeah. I mean, he's not a guy -- he doesn't throw tantrums. He doesn't think he's Jay Leno at night. He just plays it straight down the middle. That's just what the doctor ordered.

MR. MCLAUGHLIN: Any other appointment you want to pick out?

MR. KUDLOW: I think, you know, his spectacular appointments on the foreign policy side. On the domestic side --

MR. MCLAUGHLIN: You mean Condoleezza Rice and you mean Colin Powell.


MR. KUDLOW: Rice, Powell, Mr. Rumsfeld -- spectacular, Wolfowitz --

MR. MCLAUGHLIN: You like Rumsfeld? Hold off on that till later.


MR. KUDLOW: But can I just say a word about the domestic side, just a quick one? (Inaudible) -- domestic side.

MS. CLIFT: Ari -- Ari Fleischer --

MR. MCLAUGHLIN: Okay. Hold on for one minute. Quickly.

MR. KUDLOW: I don't think O'Neill worked out as Treasury. He was --

MR. MCLAUGHLIN: You really don't? Because he's gone?

MS. CLIFT: Oh, really? My goodness. (Laughs.)

MR. MCLAUGHLIN: Because they ousted him?

MS. CLIFT: Yeah. (Laughter.)

MR. KUDLOW: And I'm sorry to see him go. But I will say --

MR. MCLAUGHLIN: What about Larry Lindsey?

MR. KUDLOW: But I will say this: Larry Lindsey is a brilliant thinker, and Glenn Hubbard, the chairman of the --

MR. MCLAUGHLIN: But Larry's gone.

MR. KUDLOW: -- the chairman of the Council of Economic -- Glenn Hubbard is the best CEA chair I've seen in 20 years.

MR. MCLAUGHLIN: He's still there; he's still there. He gave us dividend --

MR. KUDLOW: Dividend tax cuts, he's given us accelerated income tax cuts, which is just what the doctor ordered.

MR. MCLAUGHLIN: I'll bet he's still there -- and he'll probably be there until the summer, beyond the spring, contrary to what they're saying.

MS. CLIFT: Okay.


MS. CLIFT: Old economic team was a disaster. New economic team is selling the same stupid policy; they'll be a disaster, too.

MR. MCLAUGHLIN: But do you think --

MS. CLIFT: Ari Fleischer is a mouthpiece; he gives away nothing. The press can't stand him. The president loves him because this is the most secretive and arrogant administration we have seen probably since the days of Richard Nixon. But the responsibility --

MR. MCLAUGHLIN: I'd be careful, Eleanor.

MS. CLIFT: -- (laughs.) Right. I'd like to have Richard Nixon back, actually. I think he'd be a huge improvement.

MR. MCLAUGHLIN: Well, he had --

MR. BLANKLEY: Ziegler.

MR. MCLAUGHLIN: -- he had Ziegler.

MS. CLIFT: Right, yeah. (Laughter.)

MR. MCLAUGHLIN: What about if you compare this fellow to, let's see, what was his name? McCurry. Mike McCurry.

MS. CLIFT: Mike McCurry enjoyed much better relations with the press, and Mike McCurry also was not -- (sighs) -- he didn't think -- he wasn't part of a cult around President Clinton. The people who serve in this White House --

MR. MCLAUGHLIN: Okay. We don't want to make this --

MS. CLIFT: -- worship every day at the feet of George Bush, and that comes across.

MR. MCLAUGHLIN: You know, I'm kind of sorry I mentioned Fleischer, because we're off onto him, and I think there's almost unanimous agreement that he's unhelpful to the press.

MS. CLIFT: Right. (Laughs.)

MR. KUDLOW: I think he's extremely helpful to the press.

MS. CLIFT: Well --

(Cross talk.)

MR. MCLAUGHLIN: Well, you do, because you want the press to -- (inaudible) -- held in their cage! That's what you want!

MR. BLANKLEY: I think -- can I --

MR. MCLAUGHLIN: Meanwhile, the American public want to know things!


MR. BLANKLEY: Look, your analysis of Ari is right; he does what the president wants, is to repeat the message.

MR. MCLAUGHLIN: Well, wait a minute. Now first, does he know what the president wants? How much is he in the loop?

MR. BLANKLEY: No, I mean the general belief is -- none of us know -- is that he's not as much in the loop as some press secretaries have been.

MR. MCLAUGHLIN: You think he should go?

MR. BLANKLEY: No, he's doing what his boss wants him to do. But --

MR. MCLAUGHLIN: (Inaudible) -- suppose he's bad? Because --

MR. BLANKLEY: -- but more importantly, when you talk about the spokesmen, I think you want to look at how the agency secretaries perform. I think generally, they have not done well, with the exception of Rumsfeld, who had been a star particularly during the Afghan war period.

MR. MCLAUGHLIN: You're talking about Mineta, in transportation? Do you think he --

MR. BLANKLEY: When was the last time you saw him on the news?

MR. MCLAUGHLIN: Do you think he booted it by not taking charge of the airport situation instead of the ridiculous thing we have going now, where everybody is treated as equal risk?

MS. CLIFT: (Laughs.)

MR. BLANKLEY: I think that there are very few Cabinet secretaries who effectively communicated the president's message. Powell, who may be a very effective player behind the scenes, has by and large not been -- until now, now he's beginning to get out a little bit -- I think most of the domestic secretaries have not done a good job of --

MR. MCLAUGHLIN: How about Labor? Or, how about HHS, Tommy Thompson?

MR. BLANKLEY: Tommy Thompson got off to a bad start during the anthrax mess. Since then, I think he's sort of doing a better job on small pox and some of the issues --

MR. MCLAUGHLIN: Are they generally unheard from?

MS. CLIFT: (Laughs.) Yes.

MR. BLANKLEY: Yeah, that's the problem. The problem is that they should be media-accessed, and they're not.

MR. MCLAUGHLIN: The big question here is, what kind of a government has he formed over the first two years, and what kind of grades does he get?

MR. BAKER: Like everything about the Bush --

MR. MCLAUGHLIN: How about inside the White House? How about Andy Card as his chief of staff?

MR. BAKER: Well, like everything about the Bush administration, it's been a mixed record. There was a famous British prime minister who fired half his Cabinet in the 1960s, and the leader of the opposition noted that he fired half of the Cabinet. He said, "Oh, yeah, I see he's fired half the Cabinet. Unfortunately, it's the wrong half." (Laughter.) The situation with this president is that last -- actually, at the end of last November after the elections, he fired the weakest spots in his Cabinet. There's no question Paul O'Neill was, you know, nice guy though he is, an absolutely disastrous Treasury secretary.

MR. MCLAUGHLIN: How about the SEC? Do you want to speak to that, being from Financial Times?

MR. BAKER: Harvey Pitt was an absolutely -- I mean, everything Harvey Pitt touched was a disaster.

MR. MCLAUGHLIN: Was he grotesque? (Laughter.)

MR. BAKER: He was -- he was -- I mean, again, it was a political problem. He was just no good at handling the --

MR. MCLAUGHLIN: And how about the appointments of the -- how about the appointment to the Over Board of Bill Webster? Was that misguided?

MR. BAKER: That was extremely misguided, too. I mean, all of -- I mean, any --

MR. MCLAUGHLIN: Was he unvetted by the chief of staff?

MR. BAKER: First of all, every single economic appointment, with the possible exception of Glenn Hubbard, who I think has been rather good --

MR. KUDLOW: Thank you. Thank you. That was a concession.

MR. BAKER: -- with every single economic appointment that this presidency --

MR. MCLAUGHLIN: Well, wait a minute. Are you --

(Cross talk.)

You were saying --

MR. BAKER: But to be clear, he's recognized that and come back. Now -- or, and come back and replaced them -- now, we don't know yet whether the next team is going to be a significant improvement, but it could hardly be any worse.

(Cross talk.)

On the foreign policy side, Colin Powell has been an extraordinarily good secretary of State, and he -- and very interestingly, we looked at the president's approval ratings; the president's approval ratings gone down from 91 percent --

MR. MCLAUGHLIN: Have you noticed a switch in Powell?

MR. BAKER: The president's approval ratings have gone down from 90 percent after September the 11th to the 50s today. Colin Powell's approval ratings were at 90 percent after September the 11th; I think they're at 89 percent this week. But there seems to be a --

MR. MCLAUGHLIN: Have you noticed a reversal in him, a somersault in him on the Iraq question?

MR. BAKER: He has got to the point where he's simply frustrated with the --

MR. KUDLOW: I think he's very hawkish now.

MR. BAKER: -- with the hand-wringing and the opposition of allies and so-called allies, and he's got to the point where he, too, has seen the -- you know, and he's gone the right route, because he tried -- he went the last mile to get a diplomatic solution, and the other countries, I'm afraid, many of them just don't seem to be prepared to do it, and so he, too, has now signed up to the proposition that war may be inevitable.

MS. CLIFT: The face of -- (sighs) --

MR. MCLAUGHLIN: You mean he's emotionally and psychologically -- he's telling the truth, in other words; that is, what he says is what he believes in his mind?

MR. BAKER: Oh, I have no question about that. No question at all.


MR. BAKER: He didn't want war. He was the one that -- I mean, he -- I believe him more than anybody else, because I think when all the others said that war really was a last resort, and we really, really wanted a peaceful solution, I think that was very doubtful. There's no question Powell really believed that a peaceful solution was possible.

MR. MCLAUGHLIN: What about Condoleezza Rice?

MR. BAKER: He -- (inaudible).

MR. MCLAUGHLIN: Your newspaper treats her as an untouchable.

MR. BAKER: Condi Rice?


MR. BAKER: She's an exception -- yeah, I think she's been rather effective -- I think she's been a very effective national security adviser. But I don't think she has the clout with the rest of the world and the effectiveness with the rest of the world that Colin Powell has had.

MR. MCLAUGHLIN: You don't think she's a doctrinaire, a typical academic who has never been in the field for any length of time?

MR. BAKER: I may be getting the impression that you do think that.

MR. MCLAUGHLIN: Well, I didn't say that; there are those who believe that!

(Cross talk.)

MR. BAKER: Was that a leading question?

MS. CLIFT: You know, to sum this up --

MR. MCLAUGHLIN: (Laughs.) You think I'm leading the witness!

MS. CLIFT: -- to sum this up, the face of this administration is the president and the war Cabinet, and the presidency is about nothing but war.

MR. MCLAUGHLIN: Let's grade --

MS. CLIFT: Let's grade him in some other areas.

MR. MCLAUGHLIN: All right, let's grade -- we've got to move --

MR. KUDLOW: The other point worth making, though, is when you talk about Colin Powell's policy and different Cabinet secretary policy, the one thing we have learned, through various books as well as news accounts, is that George Bush is the policymaker. He is making foreign, military and economic policy. And he is so much more hands-on and activist than people give him credit for.

MR. MCLAUGHLIN: All right, quickly -- quickly -- quickly!

MS. CLIFT: Right. And by any -- Right.

(Cross talk.)

MR. MCLAUGHLIN: All right, let's move on! I have a question for you before we grade the president. Has the president changed since the beginning of his administration, and indeed, from his campaign? Has he changed?

MS. CLIFT: Well, presumably, he was sobered by 9/11, along with the rest of the country. But by any objective measure, his presidency is a failure, from --

MR. BLANKLEY: (Groans.)

MR. MCLAUGHLIN: Let her finish!

MS. CLIFT: -- from being unable to change the partisan tone in Washington to not tracking down the evildoers, to dismal management of --

(Cross talk.)

MR. BLANKLEY: Eleanor, Eleanor!

MS. CLIFT: Excuse me! Hey, hey, hey, hey!

MR. MCLAUGHLIN: Let her finish! Let her finish!

MS. CLIFT: And the point is that he is operating within the context of 9/11 and the psychological --

MR. BLANKLEY: (Sighs.) I'm sorry, okay --

(Cross talk.)

MS. CLIFT: Excuse me! Tony, come on!

MR. MCLAUGHLIN: Let her finish! Let her finish!

MR. BLANKLEY: (Inaudible) -- half hour show!

MS. CLIFT: And sociological profound changes in this country. His aura is fading, but it's not fading as fast as the reality.

(Cross talk.)

MR. MCLAUGHLIN: Or is it deserved, in your view?

MS. CLIFT: Right. No, it's reality.

MR. MCLAUGHLIN: Let me ask you a question. All right? Do you think he's changed? For example --

MR. BLANKLEY: Yes. Let me say yes. I think he changed fundamentally after September 11th. And I think he --

MR. MCLAUGHLIN: Do you think he's changed in the presentation of self?

MR. BLANKLEY: Of course he has. He -- I agree with --

MR. MCLAUGHLIN: Do you think he's -- there are those who believe that his tone has become cocky.

MR. BLANKLEY: No, no. It's the absolute opposite. I think --

MR. MCLAUGHLIN: He's talking about "I'm sick and tired" and --

MR. BLANKLEY: I think -- no, I don't --

MR. MCLAUGHLIN: You don't sense any of that?

MR. BLANKLEY: No, I think it's quite the opposite. I think he has sobered and had a sense of mission that he didn't have before September 11th and that --


MR. BLANKLEY: And as a result, he has defined history for the time since September 11th. Before that, he was drifting around. History was pulling him.

MR. MCLAUGHLIN: Do you think he's changed as far as temperament, as far as demeanor, as far as language, as far as communication? Do you sense any of that?

MR. BAKER: Yeah, I think he has changed. I think there was a sense in which the criticism that this was an accidental president, someone who didn't really have a powerful motivation for really wanting to be president -- and sure, you know, he had sort of a sense of public service, which had been around a long time, but he -- you know, he didn't have a particularly strong sense of where he wanted to be. I think after September the 11th, to be fair, that changed radically. And I think he, you know --

MR. MCLAUGHLIN: But do you think he --

MR. BAKER: -- and everybody who knows him thinks he took on a sense of mission, of purpose, after September to the 11th --

MR. MCLAUGHLIN: No, I'm going to play --

MR. BAKER: -- which I think, to be fair, he's managed to -- so far he's --

MR. MCLAUGHLIN: I'm going to play to your strength now. Okay? Do you feel comfortable when you see him on the world stage, or do you think that the American people do, of late? Or do you think they feel a little nervous, that maybe he's walking on eggshells?

MR. KUDLOW: Oh, for heaven's sake! He gets such high marks --

MR. MCLAUGHLIN: Do you sense any of that?

MR. BAKER: No, I don't think so. I think he continues to --

MR. KUDLOW: John, that is so bad --

MR. BAKER: I mean, obviously, there is no -- you know, there is a sense of this in the rest of the world --

MR. MCLAUGHLIN: Do you think he looks seasoned?

MR. BAKER: I think increasingly he does --

MR. KUDLOW: John, John --

MR. MCLAUGHLIN: Does he look statesmanlike?

MR. BAKER: I think he can look --

MS. CLIFT: He controls all the levers of power in this -- he controls --

MR. KUDLOW: John, can I just --

MR. MCLAUGHLIN: We're trying to evaluate the president. Excuse me.

MR. KUDLOW: Okay. Let --

MS. CLIFT: Excuse me. He controls all the levers of power in this country --

MR. KUDLOW: As he should.

MS. CLIFT: -- and he thinks he can control them all around the world.

MR. BAKER: I don't think he looks as impressive --

MS. CLIFT: And his treatment of our allies is reprehensible, and he's going to get us in a lot of trouble --

MR. KUDLOW: Look --

(Cross talk.)

MR. MCLAUGHLIN: Well, we're going to get into that in a minute. Quickly!

MR. BAKER: I don't think he looks as impressive as Tony Blair. I'll say that.

MR. MCLAUGHLIN: You do not?

MR. BAKER: No, I don't --

MR. KUDLOW: On this point -- but on this point -- the first --

MR. MCLAUGHLIN: All right. Here we go. I want you to grade him. We got to get out. We got to get out.

MR. KUDLOW: No, darn it! First point: His faith-based character has served him well throughout. Second point is, don't forget the brilliant speeches that he has made at the United Nations, at the State of the Union and elsewhere. He completely drives and dominates the policy. He is growing into a bold president, as evidenced by his new economic program --

MR. MCLAUGHLIN: Why is -- yeah --

MR. KUDLOW: -- and what's just in front of us on foreign policy.

MS. CLIFT: Larry, is there anything --

MR. MCLAUGHLIN: All give him a grade. We got to get out. Give him a grade. Quickly!

MR. KUDLOW: Oh, I'd give him an A.

MS. CLIFT: Larry, is there anything you don't like about this president?


MS. CLIFT: I give him an F.

MR. MCLAUGHLIN: You give him an F?

MS. CLIFT: Easy.

MR. BLANKLEY: It's an incomplete, but I give him a B plus, A minus.

MR. MCLAUGHLIN: B plus, A minus?

MR. BLANKLEY: In that zone.

MR. MCLAUGHLIN: Yeah. A little cozy there.


MR. BAKER: I give him a -- what we used to call a B to minus.


MR. BAKER: Well, B or B to minus, yeah. B to -- was -- they used to -- what we -- you know, that's a more English academic grading.

MR. MCLAUGHLIN: Gerry, I'll go along with the Brits on that one.

When we come back: Rumsfeld's map of the world.


MR. MCLAUGHLIN: Issue two: Out with the old.

SECRETARY OF DEFENSE DONALD RUMSFELD: (From videotape.) Germany has been a problem, and France has been a problem.

But you look at vast numbers of other countries in Europe. They're not with France and Germany on this, they're with the United States.

You're thinking of Europe as Germany and France. I don't. I think that's old Europe.

If you look at the entire NATO Europe today, the center of gravity is shifting to the east.

MR. MCLAUGHLIN: "Old Europe" is Defense Secretary Rumsfeld's geopolitical wonder-world. It's how he dismisses Germany and France's resisting any U.S. military intervention in Iraq without the U.N.

Besides "Old Europe," there's resistance from "Old Asia."

"We have always stood for a diplomatic and political resolution of the Iraqi issue. Our stance is close to that of the French government," says China.

And there's "Old Russia." There is no evidence that would justify a war in Iraq says Russia.

And there's "Old Arabia." Egypt, Jordan, Syria and Saudi Arabia.

And there's "Old Democrats."

SENATOR TED KENNEDY (D-MA): (From videotape.) Surely we can have effective relationships with other countries without adopting a chip-on-the-shoulder foreign policy, a my-way-or-the-highway policy that makes all our goals in the world more difficult to achieve.

Let the inspections proceed in Iraq. We ought to use reason and try everything before resorting to war.

I continue to be convinced that this is the wrong war at the wrong time. (Applause.)

SENATOR JOHN KERRY (D-MA): (From videotape.) I say to the president, show respect for the process of international diplomacy because it is not only right, it can make America stronger. And show the world some appropriate patience to building a genuine coalition. Mr. President, do not rush to war.

MR. MCLAUGHLIN: And there's "Old protestors."

(Videotape of war protestors in Washington, D.C. and San Francisco are shown.)

MR. MCLAUGHLIN: Question: This country is a democracy. It's not -- contrary to your thinking -- an imperium.

MR. KUDLOW: I never said it was an imperium. It is a democracy.

MR. MCLAUGHLIN: Should Bush heed the vox populi -- the voices of protest at home and abroad -- slow down the war wagon, and give the U.N. inspectors time?

I ask you, Eleanor.

MS. CLIFT: Well, support for the war is falling off. And yes, as long as the inspectors are there, Saddam isn't going to be waging any kind of aggressive action outside his borders. Why not just leave the inspectors in there and practice containment?

But I want to go back to what Rumsfeld said -- this business of "Old Europe" and "New Europe." Just because he's got several old Soviet bloc countries on his side, whose GDP combined doesn't equal France or Germany, he cannot afford to dismiss those two countries.

MR. BLANKLEY: Britain --


MS. CLIFT: More reprehensible --


MR. MCLAUGHLIN: Wait a minute!

MS. CLIFT: More reprehensible the way he --

MR. BLANKLEY: Can we get in here?

MR. MCLAUGHLIN: Will you wait a minute?!

MS. CLIFT: More reprehensible to demonstrate how he is out of touch --


MS. CLIFT: -- is the way he dissed the draftees in the Vietnam War.

MR. MCLAUGHLIN: I want to get a few stats in here. Here's the Eastern Europe NATO countries that Rumsfeld was talking about: the Czech Republic, Hungary, Poland, Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovenia and Slovakia. Those will come in in 2004, the second group. Here's their combined GDP that Eleanor was talking about. France and Germany, 3 trillion, almost 3.7 trillion dollars. Eastern Europe -- all of those countries you just saw on the screen -- 962 billion. Which means it's four to one favoring --

MR. KUDLOW: So what? That's the wrong measurement!

MR. MCLAUGHLIN: Well, just a moment. Military -- military troops. This is the axis of power that he's talking about --

MR. KUDLOW: No! You are wrong because --

MR. MCLAUGHLIN: -- shifting from Old Europe into the Eastern --

MR. KUDLOW: Old Europe isn't growing. Rumsfeld got this story exactly right. But the truth hurts. The truth hurts.

MR. MCLAUGHLIN: Well, let me -- let's talk about the speed of growth.

MR. KUDLOW: The truth hurts.

MR. MCLAUGHLIN: Let's talk about the speed of growth.

MR. KUDLOW: Even in old Europe, Italy and Spain are with the United States.

MR. BLANKLEY: Italy, Spain and Britain.

MR. KUDLOW: And Britain, of course.

MS. CLIFT: Spain hasn't been called a world power for a long time.

MR. KUDLOW: Poland and Slovakia.

MR. MCLAUGHLIN: Let's look at the comparative military troops. On the screen. France and Germany, 582,000, more than all of those countries, which is 538(,000). Military spending, $85.3 billion for France and Germany; Eastern Europe, $8.4 billion. That's a factor of 10 times more for the --

MR. KUDLOW: What good is it if they can't use it?

MR. MCLAUGHLIN: -- for the disrespected-by-Bush-and-Kudlow France and Germany.

MR. KUDLOW: What good is it? What good is it if they don't know how to exercise leadership?

MR. BAKER: It was a classic "Rumsfeldian" remark. It was offensive, it was undiplomatic, it was blunt, it had large --

MR. MCLAUGHLIN: Was it wrong?

MR. BAKER: It had large elements of truth in it.

MR. MCLAUGHLIN: And it was dumb.

MR. KUDLOW: And it was right on target.

MR. BAKER: No, it wasn't dumb.

MR. MCLAUGHLIN: Where is the truth in it?

MR. KUDLOW: It was right on target.

MR. BAKER: As Larry and Tony are saying, it's not just Eastern Europe; it's Britain, it's Italy, it's Spain --

MR. KUDLOW: Right. It's Australia.

MR. BAKER: It will be Denmark.

MR. MCLAUGHLIN: (Inaudible) -- be France and Germany in relation to these other Eastern European countries.

MR. BLANKLEY: Can I get -- can I get a little --

MR. MCLAUGHLIN: We're not talking about the whole --

MR. BAKER: Germany has no influence militarily or politically in the world.


MR. BLANKLEY: Let me get into this a little.

MR. MCLAUGHLIN: Well, I believe it has more troops than even France does.

MR. BAKER: Yeah, but it has no power.

MR. BLANKLEY: John, let me get a point in.

MR. MCLAUGHLIN: So what? So what?

MR. BAKER: It doesn't have a permanent seat on the U.N. Security Council. France matters. I agree with --

MR. MCLAUGHLIN: We know that in the European Union it is the number-one force in the European Union. Let's not kid ourselves.


MR. BLANKLEY: Let me make a quick point.

MR. MCLAUGHLIN: Quickly. Let him make a quick point.

MR. BLANKLEY: Let me make a quick point. France and Germany were posturing in their statements. Rumsfeld was calling them on it. Schroeder made his tough statement when he was campaigning in Lower Saxony to try to save his miserable party, it's going to be defeated and lose control. In fact, when it comes to it in the U.N., France and Germany and Russia and China are going to go along, and this is all going to be -- (inaudible).

MR. MCLAUGHLIN: Exit question: Is Donald Rumsfeld --

MR. KUDLOW: And you know what, John? This little --

MR. MCLAUGHLIN: Excuse me!

MR. KUDLOW: This little German-French "axis of appeasement" has a lot to do with commercial interests. German companies --

MR. MCLAUGHLIN: Oh, here we go. Here we go.

MR. KUDLOW: Eighty German companies have been selling defense- related weapons to Iraq.

MR. MCLAUGHLIN: Oh, please. You are so over-facile. Really.

Is Donald Rumsfeld -- this is an exit question -- more of an asset or a liability to George Bush? I ask you, Lawrence.

MR. KUDLOW: Oh, I think Mr. Rumsfeld is --

MR. MCLAUGHLIN: Quickly! Quickly. Eleanor?

MR. KUDLOW: -- a fantastic asset, fantastic leader.

MS. CLIFT: Oh, I put him about in the middle. But if they start exposing sales to Iraq, the U.S. would be at the top of it. We helped arm Iraq.


MR. KUDLOW: You're wrong!


MR. MCLAUGHLIN: Lawrence, I have to admonish you now.

MR. KUDLOW: I'm sorry.

MR. MCLAUGHLIN: We've got to get out of this show.


MR. BLANKLEY: Yeah. He's an asset both in communicating to Americans and in leading -- transforming the Pentagon, and he's going to be a great war leader.

MR. MCLAUGHLIN: What is he, an asset or a liability?

MR. BAKER: He says things that he shouldn't say, but on the whole -- and he hasn't particularly run the Pentagon all that well, according to those people inside the Pentagon.

MR. MCLAUGHLIN: What about his hawkish views on Iraq?

MR. BAKER: But he is an effective spokesman for what the administration is trying to do. He's clever, he's sharp, he gets the message across.

MR. MCLAUGHLIN: He's an asset for the Pentagon, and he's a liability for George Bush. You figure it out.

We'll be right back with predictions. We'll be right back with predictions.


MR. MCLAUGHLIN: Ten seconds each. Predictions. Lawrence.

MR. KUDLOW: Actually, Glenn Hubbard of the Council of Economic Advisers is going to stay to shepherd the great dividend tax-cut through, and that's going to revive the stock market.

MR. MCLAUGHLIN: Not beyond the summer, though.


MS. CLIFT: The so-called evidence the president will unveil about what Iraq has in his State of the Union speech will be unconvincing to anybody except: Larry. (Laughs.)

MR. KUDLOW; (Laughs.)

MR. BLANKLEY: General John Abizaid, who's going to be made deputy in theater in the war, will be seen as the leading general in the coming war.


MR. BLANKLEY: General John Abizaid. Abizaid.

MR. MCLAUGHLIN: We'll be on the lookout for him. Watch for the general.

MS. CLIFT: (Laughing) Right!


MR. BAKER: Saddam Hussein will be the ex-president of Iraq within the next three months.

(One person applauds.)

MR. MCLAUGHLIN: Yeah, well, we'll hope so, one way or the other, but not war.

I predict Haley Barbour, native Mississippian, White House official under Reagan, former chairman of the Republican National Committee, founder and CEO of a prominent, I think respected D.C. lobbying firm, will run for governor in Mississippi and he will win.

Next week: President Bush's second televised State of the Union address.




MR. MCLAUGHLIN: Issue three: "Hasta la vista, bilingual."

PRESIDENT BUSH (From videotape): Children whose parents may not speak English as a first language can learn to read. Children who may come from the toughest of all circumstances, they can read. Everybody can read.

MR. MCLAUGHLIN: Nobody understands the importance of mastering English reading and writing skills better than Jack Spatola. He is the principal at New York City's P.S. 172, a Brooklyn elementary school where three out of four students are Hispanic. Guess how Spatola's students score on standardized achievement tests? Seventy percent, almost, passed in English. By the end of kindergarten, the vast majority of P.S. 172 students know enough English to be mainstreamed into regular classes. In math, 75 percent are proficient.

The secret to Spatola's success? He dumped politically correct bilingual education programs, in which students are taught primarily in foreign languages, in favor of immersion classes to learn English.

In the past, immersion has been a term of opprobrium, opposed by bilingual education advocates who want to foster multiculturalism by maintaining a separate linguistic identity for new immigrants and minorities. They see immersion classes as a crude back door to making English an official language. But Spatola's results are so good that New York's new school chancellor, Joel Klein, has adopted Spatola's reading program throughout the city.

By the way, 10 million adults in America speak no English; 20 million more have poor English skills.

That's not you, Lawrence. You've got good English skills.

MR. KUDLOW: Well, I appreciate that.


Are good skills in English crucial for success in America today?


MR. BLANKLEY: Yeah, of course it is. And interestingly, that's what the majority of Hispanics believe. There's a Pew Charitable Trust -- a huge study of Hispanic attitudes about integrating into America, and the thing they most want to do is to learn English as quickly as possible. And the fact is they're learning it as fast now as the European immigrants of a century ago were learning English. And the immersion process that's being used in New York is only going to make that faster. It's wonderful news.

MS. CLIFT: Well, immersion works, especially when you have young children. But I want to commend Joel Klein, who is heading the school system there. He's willing to challenge all kinds of orthodoxy. He's got Jack Welch in teaching leadership to potential high school principals, which is a good idea.

MR. MCLAUGHLIN: What's your point about Klein and immersion? Klein likes immersion.

MS. CLIFT: Yeah. So he's challenging the liberal orthodoxy of bilingual and he's willing to take --

MR. MCLAUGHLIN: Oh, wait a minute. You can't say anything bad about liberals, Eleanor. Not on this program! (Laughter.) We need you!

Do you want to speak to this immersion? What do they do in England?

MR. BAKER: Yeah, it's a very good idea. My only concern will be that they speak English rather than American.

MR. KUDLOW: Yes, of course. I knew that was coming. (Laughter.) actually knew that was coming! ####