ANNOUNCER: From the nation's capital, the McLaughlin Group, an unrehearsed program presenting inside opinions and forecasts on major issues of the day. "GE is proud to support the McLaughlin Group. From aircraft engines to appliances, GE: We bring good things to life."

MR. MCLAUGHLIN: Issue one: Beijing calling.

PRESIDENT BILL CLINTON: (From videotape.) As all of you know, I will go to China in two weeks' time. I'm going because I think it's the right thing to do for our country.

MR. MCLAUGHLIN: The president tells us why he thinks the China journey is the right thing to do. China, he says, plays a key role on vital world issues: weapons of mass destruction, international crime, international drug trafficking, the environment, trade barriers, human rights, Asia's danger zones -- India and Pakistan, South Korea and North Korea.

PRESIDENT CLINTON: (From videotape.) The role China chooses to play in preventing the spread of weapons of mass destruction, or encouraging it, in combatting or ignoring international crime and drug trafficking, in protecting or degrading the environment, in tearing down or building up trade barriers, in respecting or abusing human rights, in resolving difficult situations in Asia, from the Indian subcontinent to the Korean Peninsula, or aggravating them -- the role China chooses to play will powerfully shape the next century.

MR. MCLAUGHLIN: Question, sir: Visiting China is one thing; visiting Tiananmen Square is another. Will you honor with your presence the plaza where peaceful warriors of freedom were crushed beneath communist tanks?

PRESIDENT CLINTON: (From videotape.) I will do so because that is where the Chinese government receives visiting heads of state and government. And protocol and honoring a nation's traditional practices should not be confused with principle. But in the end, if the choice is between making a symbolic point and making a real difference, I choose to make the difference.

MR. MCLAUGHLIN: Question: Of Clinton's stated reasons for going to China, which is the strongest, Pat Buchanan?

MR. BUCHANAN: ®MDNM¯None, John. The only reason for going to China is that if he cancelled it, it would be a total disaster.

Look, the president should never have scheduled this. Quite frankly, if he had not, he would not be scheduling it. The communist Chinese have really spat in our face on issues like giving ballistic missile technology to Pakistan, nuclear technology, selling missiles to Iran, violations of human rights, corrupting our politics. Clinton is giving basically a benediction here to a regime, China, which realizes America is a paper tiger that's interested only in trade.


MS. CLIFT: Well, whether Pat Buchanan likes it or not, China is an emerging superpower. And in the new world order of the next century, there will be two superpowers in the world, and China's going to be one of them. And the national security reasons for going to China are very powerful.

MR. MCLAUGHLIN: Are they dominant?

MS. CLIFT: Well, yes, I think they are dominant.

MR. MCLAUGHLIN: Certainly not U.S. business. He's not Ron Brown, right?

MS. CLIFT: No, but U.S. business has enormous stake in that market over there.

MR. MCLAUGHLIN: But number one is not the -- I'm supporting your point.

MS. CLIFT: Right, number one is national security. And in terms of furthering democracy, the people of China are welcoming him to Tiananmen because they feel it shows solidarity with their cause. Even the Dalai Lama wants him to go to China.

MR. MCLAUGHLIN: Have I got to give the strongest reason, or can you give it to me? She touched upon it.

MR. PAGE: The strongest reason --

MR. MCLAUGHLIN: Engagement to prevent China from becoming an adversary in the 21st century, cooperation not confrontation.

MR. PAGE: Spoken just like Richard Nixon, Pat's former employer. It's interesting to see you turn against the policy upheld by Ford, Reagan, Bush. Ford and Bush have spoken out very much in support of this trip, for very good reasons, national security, trade, and also to have the leverage to be able to get the human rights reforms that we want to see. China is far from perfect, but they are on the improvement track, and isolationism that we tried for many years didn't work.

MR. MCLAUGHLIN: I don't know whether they're on the improvement track. What do you think, Larry Kudlow? And by the way, welcome to the Group.

MR. KUDLOW: Thank you, John.

MR. MCLAUGHLIN: You're looking very well, very suave. (Laughter.)

MR. KUDLOW: I appreciate that. But I'm not happy with Clinton on this issue. I agree there should be engagement and I agree there should be some trade-opening initiatives, but I think people like China are not going to treat us with respect as long as we completely decimate and hollow-out the U.S. military defense budget. Around the world, people are filling the vacuum that the United States is moving out of. We have lost $120 billion from our defense budget.

MR. MCLAUGHLIN: In how long a period?

MR. KUDLOW: This is since the Persian Gulf War, principally. Weapons --

MR. MCLAUGHLIN: And more than that since '85. It's about half the budget it was.

MR. KUDLOW: Weapons, ships, tanks, missiles, down 50 to 80 percent.

MR. MCLAUGHLIN: How about personnel?

MR. KUDLOW: A thousand short in Air Force pilots. We can't fight two medium-sized wars. We can't operate on the three oceans as we used to.

MR. BUCHANAN: John, this is very --

MS. CLIFT: Yeah, but let's remember.

MR. MCLAUGHLIN: Okay, hold on. Let him finish.

MR. KUDLOW: This is the key point: Republicans haven't done any better, and we need a missile defense system, John.

MR. MCLAUGHLIN: All right. Yeah. Now, let me give you a kicker.

MR. KUDLOW: We need a missile defense system to defend against -- some of these -- (inaudible due to cross talk).

MR. MCLAUGHLIN: Larry, you're right on the money, but let me give you a kicker. Guess what 40 percent of our troops in Bosnia is currently made of? National Guardsmen and Reservists! Forty percent! This is not a --

MR. PAGE: But that's in the Balkans --

MR. BUCHANAN: John, it is not -- let's go to a chart. Look, China is determined -- you're right -- it wants to be the great hegemonic power of Asia and the West Pacific. It's got a plan to basically establish hegemony there and force the United States back across. The idea that Bill Clinton going to China and sitting there in Tiananmen Square and talking and chatting is puerile.

MS. CLIFT: Yeah. I don't know --

MR. BUCHANAN: To think that this is going to change --

MR. MCLAUGHLIN: Hey, Pat. Pat. Pat!

MS. CLIFT: Pat --

(Cross talk.)

MR. MCLAUGHLIN: Pat, the one thing that you've got to get straight. We can hurt China, but we can't hurt China enough to make it change. You got it?

MR. BUCHANAN: John, you could pull a string and China will devalue tomorrow. Ask Larry that.

MR. MCLAUGHLIN: Is that true?

MR. KUDLOW: China, I --

MR. MCLAUGHLIN: You know that everybody else would rush in to fill the vacuum. (Laughter.)

MR. KUDLOW: China's not going to devalue; that's a separate issue. But, lookit -- you can't have nuclear nonproliferation treaties given the weakness of the American defense situation, and we --

MS. CLIFT: Yeah, but that's a totally different subject. That's a totally different subject.

MR. KUDLOW: It's a related subject, because the Chinese are hardball players, and they are not going to respect us unless we respect ourselves.

MS. CLIFT: The cutbacks -- the cutbacks --

MR. MCLAUGHLIN: Let Eleanor --

MS. CLIFT: The cutbacks in military spending were begun under the Bush administration after the Bush administration successfully fought the Gulf War, and the Democratic Congress signed off on it. And if we want to make some changes, fine, but it has nothing to do with whether Clinton should go to China or not.

(Cross talk.)

MR. MCLAUGHLIN: Okay, okay. The titillating book! The title of the book is "Clinton: A President of Strong Drives," published last May in Beijing. The first five chapters deal with Mr. Clinton's reported encounters with Gennifer Flowers, Monica Lewinsky and Paula Jones. Chinese readers get 30 pages of color photographs; 30,000 copies of the book were printed, and it had almost sold out when Chinese authorities ordered it off the shelves. This comic photo shows the Chinese A) have a sense of humor, and B) they see Clinton as impenetrable, and C) they want to spare Clinton embarrassment, so they pulled it off the shelves.

Question: Are the Chinese to be commended for A), B), and C)? Humor, Clinton as impenetrable, and saving him embarrassment, I ask you, Larry?

MR. KUDLOW: Well, I don't think they -- I mean they leaked it, so the whole world knows it's out there, and then at the last minute they pull it off.

MR. MCLAUGHLIN: Hey, let me get one thing straight. You do want him to go to China, don't you?

MR. KUDLOW: I do want him to go to China.

MR. MCLAUGHLIN: Okay. Do you want him to go to Tiananmen Square? You don't want him to go. But do you know that he's committed to go?

MR. KUDLOW: He's going to do what he's going to do. He should engage them. I'm not opposed to that.

MR. MCLAUGHLIN: He should -- well, it didn't sound like that all throughout --

MR. KUDLOW: The principal point I'm going to make is peace through strength. And the U.S. must not lose sight of the importance of national security -- (inaudible due to cross talk).

MR. PAGE: (That's not what's important ?) --

MR. MCLAUGHLIN: Okay, okay. You know --

MR. PAGE: -- he appears in Tiananmen Square, but what's important is, what does he say in Tiananmen Square? That's what we've got to wait to see.

MR. MCLAUGHLIN: He lays the wreath, and he says a prayer out loud for the dead. That's what he does. And he reserves Beijing University appearance to scold the Chinese on human rights. Got it?

MR. PAGE: Is that your prediction? Is that your prediction, John? (Laughter.)

MR. MCLAUGHLIN: That's what I think he should do.

MR. PAGE: What he should he do? What he should do?

MR. MCLAUGHLIN: Well, there was a little inside information there for you. You want to use it in your column? (Laughter.)

MR. PAGE: Well, I'm -- no -- (laughs) --

MR. MCLAUGHLIN: Exit question: On a human rights betterment scale of zero to 10, zero meaning zero betterment, 10 meaning metaphysical betterment, how much betterment will Clinton produce in China, Pat Buchanan?

MR. BUCHANAN: He's going to get a few tokens, and the president should not be in Tiananmen Square.

MR. MCLAUGHLIN: I call that zero -- show dissidents.

MR. BUCHANAN: No, he's going to get some token gifts later.


MR. BUCHANAN: One, a one.


What do you think, Eleanor?

MS. CLIFT: Private diplomacy works a lot better than public hand-wringing. They released the two leading dissidents. And Wang Dan, the most recent one, wants the president to go to Tiananmen Square, wants him to bring a little international sunshine. This is all positive.

MR. MCLAUGHLIN: What's the score?

MS. CLIFT: Oh, I'm going to give it a seven.

MR. MCLAUGHLIN: (To Mr. Page.) What do you think? Seven in human rights! Dream on!

MS. CLIFT: (Chuckles.)

MR. PAGE: The idea is to continue the track that we're on. And over time, in the long run, China has made some improvements in human rights. It isn't saying much, but that's not the primary function of this trip. I think it's a seven.

MR. MCLAUGHLIN: (To Mr. Kudlow.) What do you think?

MR. KUDLOW: Yeah, I'd give it about a three or a four. And I think if anything good comes out of this trip, it's going to be economic cooperation; it's not going to be human rights.

MR. PAGE: (Which isn't a minor thing ?). (Laughter.)

MR. MCLAUGHLIN: On human rights betterment, Clinton will get a zero. He might get a few -- one or two, perhaps -- show dissidents, but that's the Potemkin village approach to human rights. You know what I mean by that, Pat?

MR. BUCHANAN: Yes, you do --

MR. MCLAUGHLIN: You might as well accept the fact that China is an Asian autocracy.

When we come back, Monica in Vanity Fair: Smart or dumb?


MR. MCLAUGHLIN: Issue two: Monica!

Monica Lewinsky came more sharply into focus this week in a new set of provocative photos. Last month William Ginsburg, Lewinsky's then-attorney, arranged a Malibu photo shoot with the famed photographer Herb Ritts. Ginsburg said he wanted to boost Monica's self-worth and libido. All parties signed off on the shoot -- mother, father, and stepmother.

But when the photos were released this week by Vanity Fair, others took a different view. (Quoting from a column by Maureen Dowd of the New York Times.) "It appears that there's one thing Monica has immunity from: brains. She was so eager to get her scandal trophy that she didn't stop to consider that these photographs shriek, 'I'm not a serious person,' and brag, 'I was the president's sex kitten.'"

Well, Ms. Dowd, thank you very much, but we'll be the judge of that.

Photo one: Here's Monica forsaking the bangs for the kiss curl -- (quoting Ms. Dowd) -- "posing like a fan dancer, with bare shoulders, fuchsia feathers, a huge diamond rock, and scarlet lipstick and nail polish."

"Couldn't somebody have asked for a nice navy blue Armani pantsuit?"

"The weird thing about the shot is that it's not sultry; it's saddening. Stubby and white, her hand looks disturbingly childlike. Her short nails are painted red like a little girl who has put on her mother's polish. Shades of JonBenet Ramsey. And when you see it, you wonder all over again what the president of the United States could have been thinking when, focusing only on himself, he decided to overload all the circuits in the brain of a 21-year-old White House intern who idolized him and is still, according to Newsweek, infatuated."

So says Ms. Dowd.

Question: Fair or unfair? Pat Buchanan?

MR. BUCHANAN: I think it's somewhat unfair. It's a little over the top.

MR. MCLAUGHLIN: A little over the top.


MS. CLIFT: I think the column is harsh, but it does make the point that Monica Lewinsky has undermined her defense, if you will, that she was totally taken advantage of. I mean, she now looks like an all-too-willing participant. And the fact that she seems to be, with these photographs, to be laying the groundwork for a future career -- maybe as a silent film actress, I don't know what, but she seems to be taking advantage of her situation. I just don't think it helps her credibility.

MR. MCLAUGHLIN: Do you see it that way? Don't you think she looks like the "girl next door" with a little bit of self-parody?

MR. PAGE: I thought Maureen Dowd's column kind of reminded me of a runner-up critiquing the homecoming queen. I mean, this is all really small potatoes, John.

MR. MCLAUGHLIN: What's small potatoes?

MR. PAGE: This whole Vanity Fair photo layout deal. This week's story --

MR. MCLAUGHLIN: It's our first glimpse of this woman when she doesn't look --

MR. PAGE: -- will be forgotten next week.

MR. MCLAUGHLIN: -- hunted.

MR. PAGE: Outside the Beltway, nobody cares. It's not going to have any impact on her trial. It is small potatoes.

MR. MCLAUGHLIN: Do you agree with that?

MR. KUDLOW: I basically do. I think Clarence is right. It's not going to change anything. It certainly has no legal impact. And as far as PR, promo and politics, I don't know, I mean, look --

MR. MCLAUGHLIN: Well, you might as well get used to this, both of you, because she's got two more photos to go.

MR. PAGE (?): Oh, really?

MS. CLIFT: Oh, no. (Laughter.)

MR. KUDLOW: I'm delighted to hear that.

Monica Lewinsky is obviously very confused, very troubled. She's got to somehow save her skin and her soul. I hope she gets honest with the prosecutor. She's finally got some decent attorneys.

You know, one thing she could do is read the other good story in Vanity Fair, about the Reagans 46-year successful marriage.

MR. MCLAUGHLIN: I think you could argue that this is shrewd and calculating and probably quite effective.

MR. BUCHANAN: I think it helps her.

MR. MCLAUGHLIN: It humanizes her. It gives her --

MS. CLIFT: Effective at what?

MR. MCLAUGHLIN: -- a little bit of celebrity status. And it blunts the potential smear attacks of the White House.

MR. BUCHANAN: It helps --

MR. MCLAUGHLIN: It worked to some extent with Fawn Hall. You remember that.

MR. BUCHANAN: It helps her, and it helps Clinton because it makes this all look like a big farce; everybody's laughing about it; it's a soap opera, and therefore it's not a serious --

MR. MCLAUGHLIN: You could argue it the other way, and I'll show you how in just a minute.

Okay, photo two. Here's Monica rolling in the grass, as in "Leaves of Grass," the Walt Whitman book of poetry Bill gave to Monica, "aping Marilyn Monroe in a snug gingham shirt and jeans," Dowd tells us.

Question: Is it possible that this photo actually helps Clinton? Some say it suggests Monica as Lolita, and, implicitly, Bill as Humbert Humbert, the aging obsessive suitor. (Laughter.) So, they are co-seducers and co-victims, so Clinton is no predator. Is that too complicated for you?

MR. BUCHANAN: Clinton is helped by the fact that this is all a big joke, we're laughing about it, it's not serious.

But the whole issue of Monica, et cetera, goes to his integrity, it goes to whether he's going to remain as president, so in the PR game, it looks like, look, another episode in a soap opera and his PR team is (hooked ?).


MS. CLIFT: I agree with Pat, but it makes the whole thing seem like a farce, and it also does bolster the notion that this is a woman who lives a lot of her life in fantasy. She wants to be Marilyn Monroe, she wants to be Elizabeth Taylor, Jane Russell, I mean all these pictures sort of ape, you know, Hollywood personalities. It's -- it's quite sad.

MR. PAGE: I want to hear you say you agree with Pat again. I never thought I'd live this long. (Laughter.)

MS. CLIFT: (Laughing) Okay!

MR. MCLAUGHLIN: Maybe they present a portrait of a woman who could easily be lusted after by Mr. Clinton. If so --

MS. CLIFT: Well, but so what?

MR. : So what?

(Cross talk.)

MR. MCLAUGHLIN: The so what is this: What the White House is depending upon is "he said" and "she said." If she looks more seductive, more lustable, then that helps her.

MR. KUDLOW: Yeah, I mean, look -- the Maureen Dowd link, the sex kitten link, is inescapable. That's one of the things that you get out of this, so obviously that casts Clinton in a very poor light. I don't see why you think it's going help him. I mean, why do we think Monica --

MR. MCLAUGHLIN: I said it might help her.

MR. KUDLOW: Why this is going to help him, I don't see --

MR. PAGE: -- with this particular, you know --

MR. KUDLOW: What do you think Monica Lewinsky was doing in there, 30, 40 --

MR. MCLAUGHLIN: Okay, photo three. Monica, barefoot, bare-backed and vagrantly coquettish in a black chiffon cocktail dress. (Changes slide) And here, same attire, vamping with an American flag -- "mocking her role as the center of a case that could bring down a president," says Dowd. This is the one photo that caused Dr. Lewinsky, Monica's father, to, quote, "freak out." Question: does this photo make you freak out, Eleanor?


MS. CLIFT: No, but I suspect Pat Buchanan and all his friends --

MR. BUCHANAN: All right.

MS. CLIFT: -- who have been the people who've been portraying her as this innocent little girl are probably very disturbed by the fact that she is denigrating the American flag, so I don't think that was a wise pose in terms of her constituency in America who've been siding with her.

(Cross talk.)


MR. BUCHANAN: Overall, John -- look, the girl is in single digits --

MR. MCLAUGHLIN: What do you find? I'll go to Clarence.

MR. PAGE: I don't think she was denigrating the flag; she was using it as a backdrop like Patton, that's --

(Groans, cross talk.)

MR. MCLAUGHLIN: Well, it was little bit of an Andy Warhol self -- you know, it was a little bit of Andy Warhol mockery, but you know, all of this could be designed, as Ginsburg says, to enhance her self-esteem, because she's going to need all the psychological supporters she can get if she's going to cut herself away from the man that she has been standing by and become a hostile witness.

In its own curious way, what this may do -- the magic of Vanity Fair exposure -- what it may do is give her the psychological energy to go forward to do that. Don't you see that?

MR. BUCHANAN: John, are you --

MS. CLIFT: John --

MR. MCLAUGHLIN: You're judging this only inside the Beltway? There are 268 other Americans out there -- million Americans -- who see it differently --

MR. KUDLOW: I understand that. I -- but --

MR. MCLAUGHLIN: She's playing to the masses. This goes over wonderfully in LA and New York.

MR. PAGE: (Off mike) -- that many copies.

MR. BUCHANAN: Look, John, more people will see this show than read Vanity Fair. A, are you on their payroll? (Laughter.)

MS. CLIFT: (Off mike.)

MR. BUCHANAN: B, she should not have been fooling with that flag? But C, her reputation's in single digits; she can't be hurt. I think she's going to be helped by this.

MR. MCLAUGHLIN: Oh, fooling with the flag! Fooling with the flag!

MS. CLIFT: Listen -- yeah, I know when Monica --

MR. MCLAUGHLIN: She's involved with the potential impeachment of the president of the United States --

MS. CLIFT: Yeah, when --

MR. MCLAUGHLIN: -- and she's saying, "Here" --

MR. BUCHANAN: She's making that unserious with this flag --

MS. CLIFT: Right. That's right.

(Cross talk, laughter.)

MR. MCLAUGHLIN: Well, unserious! What is she supposed to do?

MS. CLIFT: Well --

MR. PAGE: Well, the real issue is impeachment --

MR. MCLAUGHLIN: She's a young kid, Pat! (Cross talk.) She's in her mid-twenties. (To Mr. Buchanan.) My God, you were being arrested by the police for bruising people in Georgetown when you were in your mid-twenties. (Laughter.)

MR. BUCHANAN: They were not -- besides, he's not trying to boost her libido; he said he was liberating it, John. (Laughter, cross talk.)

MR. MCLAUGHLIN: Come on! She looks like she's open, she's friendly, she's got a good personality. You'd like to have a little party -- what's wrong with that? (Laughter, cross talk.)

MR. BUCHANAN: (Inaudible due to cross talk) -- party. (Laughter.)

MS. CLIFT: (To Mr. McLaughlin.) When Monica is ready to make her confession, I suspect you should go back to your former profession and hear it, because you've got lots of good advice here. (Laughter.)


MR. MCLAUGHLIN: Eleanor, did you get that phone call outside from Herb Ritts for you? He says the Malibu shoot with you is on! (Laughter.) Bring your thong!

MR. BUCHANAN: You leave that flag alone, Eleanor! (Laughter.)

MS. CLIFT: I'm trusting --

MR. MCLAUGHLIN: On the Web, by the way, we asked, "Will Monica Lewinsky cooperate fully with Ken Starr?" Get this: 68 percent say yes.

Now, the multiple exit questions. There are two. Multiple choice: How smart or dumb was this photo shoot? A, very smart. B, smart. C, dumb. D, very dumb. Pat Buchanan?

MR. BUCHANAN: I think it was very smart for Monica.

MR. MCLAUGHLIN: Very smart?

MR. BUCHANAN: Yes. And let me tell you, you know, a lot of stories are breaking in the LA Times this weekend, that there's a lot of stuff she's going to come out with, and it's going to be very, very rough.


MS. CLIFT: It's as dumb as it could get to do this.

MR. MCLAUGHLIN: Very dumb, D.

MS. CLIFT: Right. (Chuckles.)

MR. MCLAUGHLIN: (To Mr. Page.) What do you say?

MR. PAGE: You have no category for "It's a wash," which is where I put it. (Laughter.)

(Laughing.) You know, I think it's dumb and it's smart at the same time.

MR. MCLAUGHLIN: You know, I'm going to give you some lessons on playing the game. When the panelists told me that you were not here for practice --

MR. PAGE: Well, sorry about that --

MR. MCLAUGHLIN: -- was Dennis Rodman getting to you? Da Bulls!

MR. PAGE: Oh, boy, you know, he got a me a long time ago. This is Michael's year --

MR. MCLAUGHLIN: Larry, what do you think?

MR. KUDLOW: Very dumb. Very dumb.

MR. MCLAUGHLIN: Very dumb.

A. It happens to be very smart. (Laughter.)

And you ought to bear in the mind the Westmoreland trial, when John Scanlon (sp) turned things around as far as public relations is concerned. The conservative approach to public relations is gone. She didn't utter a word; she got all this from photographs. What you do --


MS. CLIFT: Why did they fire Ginsburg? (Laughs.)

MR. MCLAUGHLIN: Just a minute. What you do is you try to work on the press and the crowd, and they're working on the crowd with this.

Exit two: Upon viewing the photos, do you find Monica is more likable or less likable? Hurry up.

MR. BUCHANAN: Frankly, more.


MS. CLIFT: Less sympathetic, but it still doesn't make me want Ken Starr to indict her.

MR. MCLAUGHLIN: Eleanor, the word was "likable."

MS. CLIFT: I don't think likable is relevant here.

MR. MCLAUGHLIN: You don't?

MS. CLIFT: No, I don't. I deliberately chose the word.

MR. MCLAUGHLIN: Well, if you think that she's less sympathetic, you mean she's really less likable, reductively.

MS. CLIFT: No, less sympathetic.

MR. MCLAUGHLIN: What do you say?

MR. PAGE: I'll say more likable. And I, too, am agreeing with Pat Buchanan entirely too much.

(Cross talk.)

MR. BUCHANAN: You're coming around, Clarence. (Laughter.) You're coming around. You're moving --

MR. MCLAUGHLIN: You think it was very smart?

MR. PAGE: Well, I didn't say it's very smart. I said it's a wash. You know.

MR. MCLAUGHLIN: Well, now you seem to be drifting, Clarence.

(Cross talk.)

MR. PAGE: It wasn't that dumb, no. It's a unique category.

MR. MCLAUGHLIN: What do you say?

MR. KUDLOW: Less likable. She comes off as a grandiose, arrogant, self-absorbed woman. And I think with the flag and other aspects, the sex-kitten aspects, people are going to be real unhappy with this and it's going to hurt Clinton's position, too. It's lose-lose, John.

MR. MCLAUGHLIN: Wrong. The answer is, clearly, more likable.

Issue three: What, me worry?

ALAN GREENSPAN (Federal Reserve Chairman): (From videotape.) Current economic performance, with its combination of strong growth and low inflation, is as impressive as any I have witnessed in my mere half-century of daily observation of the American economy.

MR. MCLAUGHLIN: Well, what a shock this was. In the most widely anticipated and feared testimony of the year, Alan Greenspan's message to the Joint Economic Committee of Congress last Wednesday was remarkably upbeat. Economists, financial market analysts and even policy-makers were on pins and needles, not only in this country but worldwide, wondering what the Federal Reserve Bank would do. Wouldn't Greenspan raise interest rates in light of an economy that experts believe is gravely overheating?

Well, the answer is no. Greenspan sees no requirement to do so, not only on June 30th but, reading between the lines, indefinitely. Let the "go-go" go on.

Question: Isn't Greenspan being recklessly optimistic? Pat Buchanan.

MR. BUCHANAN: He's going to come to regret those words. He said them to try to keep confidence in this economy. But John, Asia right now is in 1930.

MS. CLIFT: I have said on this show endless times, nobody gives Clinton any credit for the economy. It's all Greenspan. It's like it comes straight from God to your ears that Greenspan is so wonderful. And now he's wrong? Uh-uh. (Laughter.)

MR. MCLAUGHLIN: He's right?

MS. CLIFT: He's right.

MR. PAGE: Greenspan's right.

MR. MCLAUGHLIN: Greenspan's right?

MR. KUDLOW: Greenspan is totally right. (Laughter.) It's the best statement of the new paradigm. It's part of a long wave of prosperity. You two guys are the pessimists and the declinists on this show. (Laughter.)

MR. PAGE: Doomsayers.


MR. KUDLOW: Eleanor and I are the only optimists on the show. (Laughter.) We're going to be right, John.

And here's another bulletin. The next --

MR. MCLAUGHLIN: Hey, you've got the wrong guy. I'm with you. I think he was right. (Laughter.)

We'll be right back with predictions.


MR. MCLAUGHLIN: Predictions: The market is about 9,000 now. What will it be one year from now? I ask you, Pat.

MR. BUCHANAN: Seven thousand.

MR. MCLAUGHLIN: (To Ms. Clift.) What do you think?

MS. CLIFT: Ninety-eight hundred.

MR. MCLAUGHLIN: (To Mr. Page.) What do you think?

MR. PAGE: Over 10,000.

MR. MCLAUGHLIN: (To Mr. Kudlow.) What do you think?

MR. KUDLOW: Over 10,000.

MR. MCLAUGHLIN: Really? The answer is 7,000. (Laughter.)

There's such a thing as Y2K, and you better pay attention to it. (Cross talk.) Y2K. Go liquid a year from now.

MR. PAGE: (Off mike) -- stocks now, John.






MR. MCLAUGHLIN: Issue four: East Texas abomination.

REV. JESSE JACKSON: (From videotape.) This was an act of terror driven by the ideology of race supremacy.

MR. MCLAUGHLIN: Words fail to describe the heinous barbarity of this act. James Byrd Jr., of Jasper, Texas, a 49-year-old disabled black man, was kidnapped this week, beaten savagely, and, while still alive, pulled behind a pickup truck along a twisting asphalt East Texas road for two miles until he died, decapitated and dismembered.

His killers, three white men with criminal records and ties to white supremacist groups, have been charged.

The facts of the Jasper case suggest this was not an isolated act. At the trial of Timothy McVeigh for the Oklahoma City bombing, Exhibit A was a book, "The Turner Diaries," a prescription for race war. The tract has now resurfaced. One of the charged killers told his cohorts, "We're starting 'The Turner Diaries' early."

Congresswoman Maxine Waters has additional reasons for believing that this is not an isolated act.

REP. MAXINE WATERS (D-CA): (From videotape.) We have been witnessing a firestorm of hate across this country. Black churches have been burned. Discrimination claims are rising, and random killings based on racial hatred have escalated.

MR. MCLAUGHLIN: Question: Multiple choice. Who shares culpability for the Jasper horror? A, the moral decay of society at large. B, virulent hate groups. C, the three killers alone, who were charged.

Clarence Page?

MR. PAGE: Well, these fellows have been linked to a hate group, the Aryan Nation. You mentioned "The Turner Diary" (sic) quote. What we don't know is, was this organized? Was there a conspiracy behind it? But certainly we've seen more activity by such groups. I hear in recent years, at the end of the Cold War, it seems like we turn on each other, which -- we're not the first country to do that.

MR. MCLAUGHLIN: Is the black-white divide in the United States widening?

MR. PAGE: It's mostly getting better --

MR. MCLAUGHLIN: Are we living in a state of undeclared racial war?

MR. PAGE: Well, I feel the opposite of a moral decay because, you know, lynchings were hardly uncommon in the early part of this century, John, and before the '60s. The reaction, the public reaction, is very different now, and that's a big improvement. But we've still got to work on it.

MS. CLIFT: Yeah. I think the real story here is the way this community has responded. I mean, it's 60 percent white, 40 percent black. They have an elected black mayor, a white sheriff. They've all come together. They're having a memorial service. And they repeat over and over that it's these individuals; the rest of them weren't raised this way.

And now that the Feds have stepped in and you don't hear anybody crying in Texas about states rights, I mean, I think the way the community and the country have responded to this is very different.

MR. PAGE: Or all-white juries.

MS. CLIFT: Right.

MR. MCLAUGHLIN: So you think it can be said that this is not isolated, because we have, of course, the O.J. Simpson matter --

MR. BUCHANAN: Well, I think --

MR. MCLAUGHLIN: -- which was certainly a polarizing event. And bear in mind that Simpson almost decapitated Nicole Brown and he killed Ron Brown (sic), many believe -- the vast majority. So is there -- does that make it not an isolated incident?

MR. KUDLOW: It is an isolated incident. Crime rates are going down in every part of this country, in every major city, and in this economic prosperity, I would argue, we're seeing a moral upturn.