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THE MCLAUGHLIN GROUP

HOST: JOHN MCLAUGHLIN

JOINED BY: TONY BLANKLEY, PATRICK BUCHANAN,
ELEANOR CLIFT & JAMES HARDING

TAPED: FRIDAY, AUGUST 6, 2004
BROADCAST: WEEKEND OF AUGUST 8/9, 2004

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THIS IS A RUSH TRANSCRIPT.
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MR. MCLAUGHLIN: Issue one: Color Me Orange.

TOM RIDGE (HOMELAND SECURITY SECRETARY): (From videotape.) Today the United States government is raising the threat level to Code Orange for the financial-services sector in New York City, northern New Jersey and Washington D.C.

MR. MCLAUGHLIN: Orange alert -- that's what Homeland Security Secretary Tom Ridge put some of the country on this week, and he gave reasons for doing so.

SEC. RIDGE: (From videotape.) We do have new and unusually specific information about where al Qaeda would like to attack.

MR. MCLAUGHLIN: Despite the specific threat, the orange alert has reraised a widely-held suspicion, particularly on the American left, that the Bush administration uses terror alerts for political advantage. Howard Dean lit the fuse.

HOWARD DEAN (FORMER DEMOCRATIC PRESIDENTIAL CANDIDATE): (From videotape.) None of us outside the administration have access to the intelligence which led to this determination. I am concerned that every time something happens that's not good for President Bush, he plays this trump card, which is terrorism.

His whole campaign is based on the notion that "I can keep you safe; therefore, in times of difficulty for America, stick with me." And then out comes Tom Ridge. It's just impossible to know how much of this is real and how much of this is politics.

MR. MCLAUGHLIN: On Tuesday, Dean's Sunday message gained credibility when it emerged that most of the intelligence that prompted the government to install military defenses around the nation's most important financial institutions, that that intelligence was several years old. The government held its ground.

SEC. RIDGE: (From videotape.) I don't want anyone to disabuse themselves of the seriousness of this information simply because there are some reports that much of it is dated. It might be two or three years old. We don't do politics in the Department of Homeland Security.

MR. MCLAUGHLIN: Question: Who's crying wolf, Dean or Ridge?

Pat Buchanan.

MR. BUCHANAN: Howard Dean is dead wrong on this, John. Tom Ridge and those folks at Homeland Security, I think, are very nervous, I think rightly so. The planning for those bombings in the African embassies took six years; 9/11 took several years of planning.

They got this information. They figured, "Look, we're going to put it out and issue the warning. We're going to be called names." But it is far better for the people of this country to be alerted if nothing happens than not to be alerted and have something happen. I think they did the right thing.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: For the secretary of Homeland Security to come out on a Sunday afternoon, praise the president's leadership on the war on terrorism, not reveal that this information is more than three years old, he's the one who's politicizing this.

Howard Dean is exactly right. This administration has cried wolf so many times, it's hard to know what's real and what is fake. And you don't need computer drawings or fresh intelligence to tell us that our financial centers are at risk. You don't need an orange alert with -- what do we do with an orange alert? Nothing. We need to quietly protect these buildings instead of using them for political advantage.

MR. MCLAUGHLIN: Tony.

MR. BLANKLEY: Well, look, the story got a boost when The Washington Post and The New York Times ran front-page stories that implied that perhaps there was some politics behind this. I happened to have been on a TV show with the reporter who wrote the front-page Washington Post story.

MR. MCLAUGHLIN: Who was that?

MR. BLANKLEY: Dana Priest. And after we went around and discussed it, she said from all of her reporting -- and this was a couple of days after -- she had no evidence but that the president had acted properly in putting out the report and he should have put it out. But by then, Howard Dean had jumped out to play his little game. And given the natural paranoia and conspiracy theories that are floating around, it played to it.

Now, I agree with you on one point, Eleanor. I think that Ridge made a mistake when he used the phrase -- complimented the president. Normally secretaries routinely do that. Because of the sensitivity of this issue, he shouldn't have made that one statement. But the presentation itself, the evidence itself -- and then, of course, a couple of days later the government came out with more and more recent information to further corroborate it. Although the information was three years old --

MR. MCLAUGHLIN: We've got to get out.

MR. BLANKLEY: -- the government had only got it three weeks ago.

MR. MCLAUGHLIN: James.

MR. HARDING: I assert Howard Dean did everyone a service. He articulated a suspicion, a misgiving that is widely held here. I think Tom Ridge -- you're right -- made a mistake; he shouldn't have complimented the president in those circumstances. But when you stand back from it, there is something curious, that a week after the convention we have been submerged by news about terrorism. And the conversation has moved away from politics and squarely onto terrorism. That works well for the president.

MR. BUCHANAN: Why did Kerry divorce himself from Dean's statement? I think he knows very well that politically it was not wise for Dean to put out there and suggest this is all politics. If something happens, let me tell you, Dean will look horrible. And Kerry is right to separate himself -

MR. MCLAUGHLIN: I think Kerry divorced himself from it because he doesn't believe Dean. I think he feels that these processes take time. Also, on April the 26th of this year, bin Laden released a tape and he said, "I'll give you four months. And after four months, if you haven't removed your troops from Iraq, and if your allies haven't removed their troops, then there's going to be serious consequences." Now, four months is up on August the 15th.

MR. BUCHANAN: Right.

MR. MCLAUGHLIN: That's a piece of this puzzle. They put the puzzle together and it emerges that something has to be done. Now, how could there be an announcement of this before the conventions? The Democrats would say, "He's trying to queer the convention."

MR. BUCHANAN: Ridge is not a game-player, in my judgment. This is a serious man --

MR. MCLAUGHLIN: This is correct.

MR. BUCHANAN: -- who does not want to have something happen and him failed to have alerted the country.

MS. CLIFT: There is a high probability that there will be an attack. But they gave this an urgency, suggesting Armageddon was at hand, three days after Kerry gets the nomination, which conveniently interrupts whatever momentum the Democrats had. And the urgency is not present. This is a threat that's going to continue. And if they haven't been protecting these buildings up until this point, I would be stunned.

MR. MCLAUGHLIN: Okay, NID Lite.

PRESIDENT BUSH: (From videotape.) Today I'm asking Congress to create the position of a national intelligence director.

MR. MCLAUGHLIN: At the urgings of the 9/11 commission, the president this week called for a national intelligence director who would oversee the nation's 14 intelligence agencies. But the president's national intelligence director is not the 9/11 commission's national intelligence director. His intelligence director would be in the worst of all worlds, cut out of the president's inner circle and lacking any real power. The post would not carry real authority or with the intelligence agencies' budgets or intelligence jobs in the Pentagon, the Justice
Department and other agencies.

The decision bore the unmistakable stamp of Defense Secretary Donald Rumsfeld, who was never going to willingly give up control of appointments or his share of the intelligence budget, $32 billion of the overall $40 billion, as trenchantly observed by the New York Times, and even more trenchantly by 9/11 commissioner Bob Kerrey.

BOB KERREY (9/11 COMMISSION MEMBER): (From videotape.) I know that Secretary Rumsfeld is going to oppose this. And if they win one more time, if DOD wins one more time, the next time there's a dust-up and there's a failure, don't call the director of Central Intelligence up here, kick the crap out of DOD.

MR. MCLAUGHLIN: Question: Why did Bush propose a vasectomized version of a national intelligence director? I ask you, James.

MR. HARDING: I think he got caught in a pincer movement, to continue your metaphor. He got caught in a pincer movement between CIA and particularly the Defense Department. I think it's a problem. I think that if you don't have an official who has budgetary authority, if you're not close to the president and you don't have authority over personnel, then you have all the responsibility and none of the power.

MR. MCLAUGHLIN: Also you have the 9/11 commission report. He's got to do something with that. So he does something with it which provides a certain amount of staying power before Porter Goss takes over the CIA, or maybe moves into that position, so that he can actually think this thing through and not be imprudent in going with a lot of changes. So he buys time and he goes with the vasectomized version.

MR. BLANKLEY: Look, this is --

MR. HARDING: My only take on it is that this is the worst of Washington politics, which is to be seen to do something rather than to do something. He got caught in this, to be fair to him, by the combination of Kerrey and --

MR. BLANKLEY: Let me --

MR. MCLAUGHLIN: Let's listen to Tony.

MR. BLANKLEY: Let me make a point. Serious people, partisan issues aside, have been debating this question. Senator Carl Levin, the ranking Democrat on Armed Services, expressed his strong skepticism. A lot of people --

MR. MCLAUGHLIN: About what? About the NID.

MR. BLANKLEY: About that exactly. One of the problems, of course, is that most of the intelligence is at Defense because it relates to military activity. If the secretary of Defense doesn't control the military intelligence budget, then our military --

MR. MCLAUGHLIN: Thirty-two billion out of $40 billion? Excuse me.

MS. CLIFT: The 9/11 --

MR. BLANKLEY: I'm just saying that what precipitated this was Senator Kerrey coming out an hour or two after the report and saying -- (word inaudible) -- the entire thing immediately.

MS. CLIFT: The 9/11 --

MR. MCLAUGHLIN: Eleanor, listen to John Kerry stumping on Bush.

SEN. JOHN KERRY (DEMOCRATIC PRESIDENTIAL NOMINEE): (From videotape.) September 11th, 2002 came and went. September 11th, 2003 came and went. September 11th, 2004 is almost here and only finally are we doing some of the things that some of us have been calling for all that period of time. We need leadership.

MR. MCLAUGHLIN: Question: How effective is this Kerry line of attack? I ask you, Eleanor.

MS. CLIFT: It's especially effective because he has the 9/11 families on his side, and they're the ones who prodded the White House into accepting the 9/11 commission's report to begin with.

But to go back to the NID or the NDI or whatever they're going to call it, if you create another post and you don't give them budget authority in Washington, hiring and firing, it's meaningless. It's like our drug czar or energy czar.

MR. MCLAUGHLIN: I put the best interpretation on it. It's a staying action.

MR. BUCHANAN: Is it a good idea to have somebody in charge of all these agencies, department agencies, sitting right there in the White House? I don't know that the idea itself is that good. I think it ought to be questioned and ought to be challenged, John. I mean, you're going to have somebody running the CIA --

MR. MCLAUGHLIN: I think there's universal agreement on this set that it ought to be examined very closely and proceed with great caution. We came to that conclusion last week.

Exit: On a terrorist threat scale -- what, you don't remember that, Pat?

MR. BUCHANAN: I remember it.

MR. MCLAUGHLIN: How often has this been occurring with you?

MR. BUCHANAN: (Laughs.)

MR. MCLAUGHLIN: Exit: On a terrorist threat scale from zero to 10, zero meaning zero danger, 10 meaning ultimate, absolute, metaphysical danger, how great is the danger of a terrorist attack on U.S. soil between now and November?

MR. BUCHANAN: I'd put it at approaching 50 percent.

MR. MCLAUGHLIN: Really?

MR. BUCHANAN: Yeah.

MR. MCLAUGHLIN: Eleanor.

MR. BLANKLEY: That would be a five?

MR. BUCHANAN: That's the math, yeah. Very good. (Laughs.)

MS. CLIFT: I would put it probably at a six. And I think we're going to have lots more alerts and we're not going to know what's real and what's politics until the bomb goes off.

MR. MCLAUGHLIN: Quickly.

MR. BLANKLEY: I think it's very hard, because -- I put it at 9.9 that it'll happen. But between now and November, I don't think our intelligence is capable of judging when "imminent: is from their point of view. So I can't say more than 50 percent. But the truth is, we don't know. I don't believe our intelligence people --

MR. MCLAUGHLIN: Well, thank you for telling us.

MR. BLANKLEY: Our intelligence people --

MS. CLIFT: That's right.

MR. MCLAUGHLIN: Tony, do you have any other insight into this?

MR. BLANKLEY: They don't have a real sense of the timing. They have a sense of the likelihood of it happening, but not of the timing.

MR. MCLAUGHLIN: I can help you out with that.

MR. HARDING: The most disturbing thing about everything that we've read and heard this week is that sense that you have deep in yourself that we really have no idea. And that's what I think so undermines all of these terror warnings and the whole debate about --

MR. MCLAUGHLIN: Is that a prelude to an excuse for not giving us a prediction?

MR. BUCHANAN: John --

MR. HARDING: No, no. I think it's the honest truth. I think five, six, eight -- I have no idea at all.

MR. MCLAUGHLIN: What do you think it is?

MR. HARDING: I have no idea at all.

MR. MCLAUGHLIN: Well, I want -- we've got to get out.

MR. BUCHANAN: I think we could abort this thing. Our guys are all over these guys. And I'm sure they're going to plan and plot something, maybe try it. But I bet we could abort something now.

MR. MCLAUGHLIN: I'm giving it a two -- a two. And that's because of the success of the efforts of the sainted John Ashcroft in ridding this country, to a great extent, of al Qaeda.

Issue two: Aren't you sick of it?

SEN. JOHN EDWARDS (DEMOCRATIC VICE PRESIDENTIAL NOMINEE): (From videotape.) In the weeks ahead, we know what's coming, don't we? More negative attacks. Aren't you sick of it?

MR. MCLAUGHLIN: One week after John Edwards said this, the attack hit. Three hundred Vietnam servicemen calling themselves "swiftboat veterans" launched a 60-second television ad in Ohio, West Virginia and Wisconsin, accusing the sainted John Kerry of telling big lies.

(Excerpt of campaign advertisement.)

BOB HILDRETH (VIETNAM VETERAN): I served with John Kerry. John Kerry cannot be trusted.

VAN O'DELL (VIETNAM VETERAN): John Kerry lied to get his Bronze Star. I know. I was there. I saw what happened.

LOUIS LETSON (VIETNAM VETERAN): I know John Kerry is lying about his first Purple Heart because I treated him for that injury.

(End of excerpt.)

MR. MCLAUGHLIN: Question: Who's telling the truth, the five comrades who served in the swiftboat with John Kerry, the one he commanded, or the 13 people in the ad? Actually 12, since one has already retracted. Who's telling the truth? I ask you.

MR. HARDING: I think this is just the most extraordinary story, because why would the Republicans want to take on Kerry on his Vietnam record? Do they want to get back into Alabama and the Texas Air National Guard? It's an extraordinary story. No one is going to want to fight this election on the question of Kerry's valor.

MR. MCLAUGHLIN: Why hasn't Bush himself denounced the ad?

MR. HARDING: Well, that's a problem.

MR. MCLAUGHLIN: He did say that -- the spokeswoman did say for him, "We will not say anything negative about the war record of John Kerry." But the president hasn't said that himself.

MR. HARDING: Well, these guys seem to have recruited John McCain into the Kerry camp. It's an extraordinary achievement.

MR. MCLAUGHLIN: You mean, the accidental recruitment.

MR. HARDING: The accidental recruitment.

MR. BUCHANAN: I'll tell you why this is being done.

MR. HARDING: McCain has come out this week --

MR. MCLAUGHLIN: Yes.

MR. HARDING: -- and attacked the ads, attacked the White House not for condemning the ads fully enough. It plays to the worst public perception of Bush as someone who is --

MS. CLIFT: McCain --

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: McCain is acting as a referee in this election. He's saying what goes over the line. And he was the target of similar attacks in the South Carolina primary, and so he's ready to blow the whistle. But, look, these same characters have surfaced in the past during Kerry campaigns. They were --

MR. BUCHANAN: That is grossly unfair.

(Cross-talk.)

MS. CLIFT: Excuse me!!

MR. BLANKLEY: No way. That's not true.

MS. CLIFT: Excuse me, Tony.

MR. MCLAUGHLIN: Eleanor, let Tony in.

MS. CLIFT: I get to finish. To imply that the gentleman whose life Kerry rescued is lying, along with the people lined up with him, they were there. These people are name-calling. There's no credible charge.

MR. MCLAUGHLIN: Right. They were not in the boat with him.

MR. BLANKLEY: Wait a second.

MS. CLIFT: And John McCain is right to call them on this.

MR. BLANKLEY: Let's not have a misrepresentation of the facts here. The guys making the charge -- one of them was in the boat a few yards away, saw the incident. Now, I don't know who's telling the truth. You've got two sets of men, both --

MS. CLIFT: Yes, you do.

MR. BLANKLEY: No, I don't, Eleanor.

MR. MCLAUGHLIN: Eleanor, the five guys in the boat, all surviving five guys, were there, and they praised Kerry to the sky.

MR. BLANKLEY: And so was the man who treated him for the injury. So was the man who saw the guy being pulled out by Kerry.

MR. MCLAUGHLIN: The man who said he treated him for his injuries did not sign the medical paper of the surgeon who was supposed to take care of him.

MR. BLANKLEY: The point is that if, in fact, the charge is true, it's significant. If it's not true, it's defamatory.

MR. BUCHANAN: The origin of it is not a disgruntled character. It's John O'Neill, who has refused to go after Kerry in any of his Senate campaigns, who served on the swiftboat Kerry had. They're outraged and embittered that Kerry came home and called all these guys war criminals --

MS. CLIFT: O'Neill was Richard Nixon's favorite vet during the Vietnam War. This is highly political.

MR. BUCHANAN: Look, the guy's a decorated veteran who served in a swiftboat.

MR. MCLAUGHLIN: Hey, Eleanor, Pat and I were there for that.

MS. CLIFT: Right. (Laughs.)

MR. MCLAUGHLIN: We saw that develop.

Okay, you've hit upon something. This is the real reason why these anti-Kerry veterans have come forward. Listen closely. It goes by fast.

GRANT HIBBARD (VIETNAM VETERAN): (From videotape.) He betrayed all his shipmates. He lied before the Senate.

MR. MCLAUGHLIN: There you are -- "He lied before the Senate." Vietnam veterans are fathers today and grandfathers. Their children are asking them, how could they have committed atrocities against the ordinary people of Vietnam, the children, the mothers, the fathers, torturing them before killing them, as John Kerry said in his testimony?

MR. BUCHANAN: This is --

MR. MCLAUGHLIN: That's why they --

MR. BUCHANAN: This is the motivation behind it. But Tony is right. They have guys who were in the boat right beside him heading for the beach. Others said there was no shooting going on.

MR. MCLAUGHLIN: Pat --

MR. BUCHANAN: It is a conflict in testimony.

MR. MCLAUGHLIN: Pat, the one --

MR. BUCHANAN: I believe both groups of guys are honorable men. I don't think anybody --

MR. MCLAUGHLIN: Rasmussen (sic/means Rassmann) was in the -- said he saved his life. He came forward, and the others all said the same thing.

MR. BUCHANAN: But the other guys said there was no shooting going on.

MR. MCLAUGHLIN: Exit question: What's the more politically damaging, the swiftboat ad's impact on John Kerry or the July jobs numbers' impact on George Bush, i.e. a measly 32,000? I ask you.

MR. BUCHANAN: Well, the economy is going to be a big issue, but this is coming around too.

MS. CLIFT: Easy choice. The jobs numbers.

MR. MCLAUGHLIN: Jobs.

MR. BLANKLEY: The jobs, unless these ads prove to be valid in the book that comes out, in which case this could be a real killer for Kerry.

MR. MCLAUGHLIN: Jobs.

MR. HARDING: The jobs, the jobs, the jobs, the jobs. No one is going to --

MR. MCLAUGHLIN: Yeah, Bush will be debunked. Jobs definitely.

Issue three: England under siege.

Lynndie England defended herself in a military pretrial hearing this week against charges that could get her a court-martial and up to 38 years in prison. Nineteen charges have been brought against Private England, from assault to indecent acts. She became the public face of the Abu Ghraib prison scandal when she posed in photographs of U.S. soldiers humiliating Iraqi detainees. England says that the photos were taken on orders from military intelligence officers.

LYNNDIE ENGLAND: (From videotape.) They'd look at the pictures and they'd state, "Look, that's a good tactic. Keep it up. That's working. This is working."

MR. MCLAUGHLIN: Now 21 years old, Private Lynndie England grew up in a trailer on the edge of rural Fort Ashby, West Virginia, population 1,400. England joined the Army to pay for college, says her mother. She loved thunderstorms and wanted to be a meteorologist.

Army lawyers this week tried hard to portray Private England as an undisciplined soldier who repeatedly ignored orders. A former Abu Ghraib supervisor told the hearing that England was often late for work -- she served as a clerk at Abu Ghraib -- and that she took unauthorized leave to sleep with Corporal Charles Graner, another accused soldier whose child Private England is now six months pregnant with.

The legal defense of Private England is taking shape. Two months ago, classified memoranda from both the Defense Department and the Justice Department were leaked. They determined that torture in wartime can be legal. Quote: "We conclude that certain acts may be cruel, inhumane or degrading, but still not produce pain and suffering of the requisite intensity to fall within United States Code Section 2340A's proscription against torture," unquote.

Those memos give Private England a defense; namely, that wartime prisoner abuse, when necessary, is approved at the highest levels of the U.S. government.

Exit question, starting with you, James: Is Lynndie England facing a kangaroo court?

MR. HARDING: Look, Lynndie England is a PR challenge by any measure. But they're not addressing the real issue. The real issue are those memos. The real issue is the U.S. position on torture.

MR. MCLAUGHLIN: Right. And your newspaper, in a good piece by Dimitri, writes that the military intelligence people were with the military police and this woman was a military police clerk, doing the things that are attributed to her.

MR. HARDING: I think the only thing that we do know is that the rotten-apples argument is not the whole story.

MR. MCLAUGHLIN: What do you think?

MR. BLANKLEY: You're exactly right. My paper, the Washington Times, my page, we reported months ago that it goes higher. Clearly it does. She may well be guilty, but she's not the only one.

MR. MCLAUGHLIN: Eleanor, five seconds.

MS. CLIFT: Well, she's facing 37 years, most of them for having consensual sex with fellow soldiers.

MR. MCLAUGHLIN: Is it a kangaroo court?

MS. CLIFT: Yes.

MR. MCLAUGHLIN: Is it a kangaroo court?

MR. BUCHANAN: I think this woman has degraded behavior but she's a scapegoat.

MR. MCLAUGHLIN: She's a scapegoat. It's a kangaroo court.

MR. BUCHANAN: I think other people were responsible.

MR. MCLAUGHLIN: Definitely. It's a kangaroo court and another national disgrace if it succeeds.

Issue four: Wall Street sang-froid.

On Sunday, Homeland Security chief Tom Ridge put Wall Street on orange alert. On Monday, the next day, the Dow Jones climbed 40 points. The S&P index grew half a percent. The Nasdaq also went up. Investors all but shrugged off the terror threat. Why? Two reasons: One, the boy-who-cried-wolf syndrome; been there, done that. This is the sixth time in two years that Secretary Ridge has raised the terror alert from yellow to orange. Wall Street has grown accustomed to his fuss, like breathing out and breathing in.

Two: Built-in immunity to alerts. The possibility of an attack has been built into the market, with investors already braced for the possibility. Wall Street believes it can quickly rebound from an al Qaeda strike, and so it has inoculated itself from significant financial harm.

Question: Is this a rosy scenario? Wouldn't there be a financial panic in the markets if there were a second major terrorist strike in the United States? I ask you, James.

MR. HARDING: Most probably, although the extraordinary thing, of course, about the resilience of the U.S. economy, the resilience of Wall Street, has been that it rose out of September 2001. The economy grew out of September 2001.

So I guess it's a little disturbing if you're Tom Ridge, the fact that you make this kind of announcement, you say that the New York Stock Exchange is a target of attack, and everyone goes about business as usual. But I think you're right. It tells you something about the view and the skepticism among the American people about these terror threats.

MR. MCLAUGHLIN: Which is also why he went with it on a Sunday, because of the markets. True?

MR. BUCHANAN: But I think, John, look, if you had another 9/11, I think you would have a horrendous blow to the American economy. But if you simply had a bombing in a mall or a supermarket or something like that -- but the key thing is, John, later in the week, when retail sales fell for the second straight month and employment only rose by 30,000, the market went in the dumpster. The Dow is now down lower than it's been this entire year.

MR. MCLAUGHLIN: All right, let me ask you this. I want to get out on this particular question. I'd like you all to address it. One assumption is that terrorists manage to strike a financial target in the United States. Will it cause a market sell-off? I ask you, Pat.

MR. BUCHANAN: It depends. If it's a bomb outside of Wall Street, you'll have a couple of days and the market will reassert itself. You get another 9/11 and you'll have a terrible blow to the markets.

MR. MCLAUGHLIN: What do you think, Eleanor? Would it cause a sell-off?

MS. CLIFT: Corporate America has done its homework. They know that orange alerts are CYA acts by the government. If there truly is an attack, the market will respond negatively.

MR. MCLAUGHLIN: Will it cause a sell-off, or has terrorism been discounted?

MR. BLANKLEY: I think the long-term risk has been internalized in the market, but there will be a short-term sell-off. I don't think it's a question of -

MR. MCLAUGHLIN: Short-term dip -- a dip.

MR. BLANKLEY: I don't think it's a cynical question. I think that people are accepting reality.

MR. MCLAUGHLIN: Well, look, quickly -- a sell-off or a dip?

MR. HARDING: No, I think the really extraordinary thing is how there's been a myth about September 11th in the economy. The economy has grown out of September 2001. There wouldn't be a significant sell-off. The real issue is about the structural problems in the economy and jobs.

MR. MCLAUGHLIN: Interesting, and you're right.

Predictions. Pat.

MR. BUCHANAN: You are sorely mistaken, John. Mr. Kerry's wartime record, as well as his immediate post-war record and his record talking about Vietnam, is going to be a major issue because he has made it the centerpiece of his campaign.

MR. MCLAUGHLIN: E. Clift.

MS. CLIFT: I've got to respond to that.

MR. MCLAUGHLIN: Quickly.

MS. CLIFT: The election will turn on what's going to happen in the future, not on refighting Vietnam.

American teams will be booed at the Olympics, and that will shock and surprise a lot of Americans.

MR. MCLAUGHLIN: Tony.

MR. BLANKLEY: Bush will have a bounce coming out of his convention of about three to five points. The race will be basically dead-even come September 3rd.

MR. MCLAUGHLIN: James.

MR. HARDING: Alan Greenspan and the Fed will raise interest rates on Tuesday and then halt in September, and everyone will wonder whether or not the great Greenspan is quite as wise as they thought he was.

MR. MCLAUGHLIN: By how much?

MR. HARDING: Oh, by 25 basis points on Tuesday.

MR. MCLAUGHLIN: Quarter of a point.

MR. HARDING: Quarter of a point.

MR. MCLAUGHLIN: I predict that the price of oil will climb to over $50 a barrel within the next four months, right around election time.

Next week, the International Olympic Committee meets in Athens. Will the drugs war mar the Olympics?

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