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MR. MCLAUGHLIN: Issue One: Iraq on Trial.

Quote: "It is not in the national security interest of the United States to set an arbitrary date for the withdrawal or redeployment of United States armed forces from Iraq," unquote.

This Republican resolution ignited impassioned debate on the floor of the House of Representatives this week. The House speaker spoke for the GOP majority.

HOUSE SPEAKER DENNIS HASTERT (R-IL): (From videotape.) I came home from Iraq believing even more strongly that it is not enough for this House to say we support our troops. To the men and the women in the field, in harm's way, that statement rings hollow if we don't also say we support their mission. MR. MCLAUGHLIN: Supporting the troops is one thing. The troops' mission in Iraq, as set forth by Commander-in-Chief Bush, is another. This is especially evident this week as the nation crossed the threshold of 2,500 young men and young women who have given their lives for this, quote-unquote, "mission." That's what Democrats believe.

HOUSE MINORITY LEADER NANCY PELOSI (D-CA): (From videotape.) The war in Iraq has been a mistake; I say a grotesque mistake. It must be our resolve to end the war as soon as possible and to resolve to not make similar mistakes in the future. We owe it to the American people. We owe it to the young men and women that we send in to fight the fight.

MR. MCLAUGHLIN: The vote was 256-153 rejecting a timetable for pulling U.S. forces out of Iraq.

Question: The U.S. House of Representatives has just made a huge promise, namely, we stick with Iraq for as long as it takes. So the president and the Pentagon now have carte blanche to determine when, if ever, to leave Iraq. Will the nation come to regret this, or will it later come to cheer it? Pat Buchanan.

MR. BUCHANAN: I don't think the nation will remember this vote, John. The president of the United States is not going to pull out of Iraq. It would have been a terrible mistake, in my judgment, to set a date certain and tell the enemy exactly when our forces are going to be out of Iraq.

But the president should, in his own mind, set his own timetable and his own set of conditions as to when we should leave and when we have put enough in there. But John, as of right now, look, the administration, the president is going to fight this war. As for Congress, the next benchmark will come after the election when they take another look at it. Then you'll have another vote.

MR. MCLAUGHLIN: Pat says this vote doesn't matter in the long term. But come this November, and even beyond, in 2008, the Democrats and the Republicans are now cemented in to their positions on Iraq. Correct?

MS. CLIFT: Well --

MR. MCLAUGHLIN: So this vote will come back to haunt either the nation or the politicians running it.

MS. CLIFT: This was a political stunt. It is a typical Karl Rove tactic to try to turn a weakness into a strength, to showcase the war, frame it as a choice between victory and defeatism, put the Democrats on the defensive. It worked in 2004. It worked in 2002. It may work again. But if the events on the ground in Iraq do not improve, then the public will see that this is a false promise, if you will. And this will play out in November.

MR. MCLAUGHLIN: Okay. Going to your very point, Eleanor Clift, what do American troops themselves on the ground in Iraq say about staying in Iraq?

In a poll lasting one month, conducted four months ago, of 944 American troops on the ground in Iraq, 72 percent of the troops said the U.S. should exit within one year. Twenty-nine percent of the respondents, serving in various branches on the armed forces on the ground in Iraq, say the U.S. should withdraw immediately -- almost one-third of the troops.

Question: Why have the troops themselves lost faith in the mission? Tony.

MR. BLANKLEY: They haven't. But you should lose faith in Zogby's poll. Look, he was polling negatively all through 2004. In the exit pollings, we found out that two-thirds of the armed services voted for Bush. You have the highest re-enlistment rates in the units that are actually fighting in Iraq now. I don't believe that poll, and neither do the soldiers.

But let me go to the other point about the floor debate in the House. This was not a Karl Rove trick. This is the result of the Democrats demanding for months that they wanted to have a debate. Now, just by serendipity, the date was scheduled before we knew that Zarqawi was going to be caught, before we knew that Bush was going to go to Baghdad. So in the last moment it turned on the Democrats.

I agree that I don't think anybody is going to care about this particular vote. The reality on the ground will determine the politics. But this was not a Karl Rove stunt. It was a Democratic wish gone bad.

MS. CLIFT: It is the Karl Rove strategy to put the war out front. And the president --

MR. BLANKLEY: But this particular event was not designed by Karl Rove.

MS. CLIFT: And if you recall --

MR. BLANKLEY: It was pushed by the Democrats, for goodness' sake.


MS. CLIFT: It pleases Karl Rove --

MR. BLANKLEY: Many things please Karl Rove the Democrats do. MS. CLIFT: It pleases Karl Rove.

MR. MCLAUGHLIN: Okay. Tony makes a good point. What about the Iraqi people, the people we are trying to help? What do they want? And they want, the answer is, personal security. And whom do the Iraqi people themselves trust to protect their personal security?

REP. JOHN MURTHA (D-PA): (From videotape.) Who do they trust? Who do they trust for personal security? Forty-three percent trust the Iraqi police. Thirty-five percent trust the Iraqi army. Six percent trust the insurgents; 6 percent trust the insurgents and 4 percent trust the armed militia. One percent -- 1 percent -- trust the multinational force.

MR. MCLAUGHLIN: To recap Murtha, whom do the Iraqi people themselves trust to protect their personal safety? Forty-three percent Iraqi police, 35 percent Iraqi army, 6 percent the insurgents -- the insurgents -- 4 percent the armed militias, 1 percent -- 1 percent -- trust the U.S. and the multinational force.

And he bases that, by the way, on this documentation here.

What do you think of that?

MS. DANIEL: Well, I think it's actually quite good news that they have such confidence in the Iraqi military and in the Iraqi police force, given that --

MR. MCLAUGHLIN: What a great spin that is.

MS. DANIEL: Well, given that these are the people who are going to be taking over the country and running it anyway, it's better that they don't trust the multinational forces, because they'll be gone, you know, within the next few years.

MR. MCLAUGHLIN: Well, what about that 1 percent? Does that surprise you that they don't regard the United States as the source of their personal security?

MS. DANIEL: Yes, I agree, that does surprise me that it's as low as 1 percent.

MR. MCLAUGHLIN: Do you have thoughts on the forgoing parts of this learned and sprightly discussion?

MS. DANIEL: I agree that it was a political stunt in terms of trying to get Democrats on the record about issues of timing of withdrawal.

MR. MCLAUGHLIN: What about the procedural aspects of this and the complaints registered by Democrats so vociferously?

MS. DANIEL: Well, I have to say, it's great to see a proper debate, actually, on Iraq. I mean, I'm amazed that we haven't had more common debates on how rare it is in American politics --

MS. CLIFT: (Inaudible.)

MR. MCLAUGHLIN: Let her finish.

MS. DANIEL: -- how rare it is in American politics you don't have parliamentary-style debates like this more often. MR. MCLAUGHLIN: Well, they were pointing out that there wasn't any room for amendments, and various other procedural disadvantages were set out by the Republicans.

MR. BUCHANAN: John, you know why the Democrats lost the debate?

MS. CLIFT: It was not a proper debate.

MR. MCLAUGHLIN: Let Eleanor get in here.

MS. CLIFT: It was not a proper debate. They shut down any Democratic alternatives. All they did was go up and deliver their little rhetorical speeches. And in terms of trusting, only 1 percent trust, this is not a war; this is an American occupation from the point of view of the Iraqi citizens. And when they trust their own militias, their sectarian militias -- if you're a Shi'ite, you trust your militia; if you're a Sunni, you're scared to death of them. It's a death squad. It is a civil war over there.

MR. BUCHANAN: Let's --


MR. BUCHANAN: Let's talk the politics of it. Look, the reason the Republicans are winning is not simply because they got good news but, for better or worse, they're standing united behind the president and Cheney and the others, who believe in the policy.

The problem the Democrats have is they're confused. They're conflicted. They're divided. They're afraid of taking a stance. They're trying to maneuver politically to be in the right place. And that is always a losing position to be in.

The administration and the Republicans may be wrong, but at least they believe in their position.

MR. MCLAUGHLIN: You've got a good point there. Okay, before we go further, how big is the insurgency itself? The U.S. military says 100 different insurgent groups -- 100 -- account for 50,000 regulars, mostly former regime elements, then another 1,000 -- 50,000, rather -- radicals and anti-U.S. militias. So, all told, there are 100,000 fighters in the insurgency in Iraq, not just sympathizers, constituting that insurgency. What does this tell you about the future of the war?

MR. BUCHANAN: That would be horrible news, John, if it were true, because you've got to have 10 to one to beat guerrillas, and we don't got a million men.

MR. BLANKLEY: Look, I don't -- MR. MCLAUGHLIN: Pat, as you saw on the screen, this was The New York Times of very recent vintage, January the 11th. Take a look at it.

MR. BLANKLEY: Yeah, let me --

MR. MCLAUGHLIN: It was issues of the week, Pat.

MR. BLANKLEY: Look, The New York Times, unfortunately, falls in the same category as some other --

MR. MCLAUGHLIN: Oh, here we go.

MR. BLANKLEY: Yeah. Well --

MR. MCLAUGHLIN: Here we go.

MR. BLANKLEY: And the poll that you were citing with only 1 percent, you said a Zogby poll -- Zogby was the same pollster who predicted that Kerry was going to win. He was off by about 4 million American votes. So I wouldn't rely too much on what he was able to poll in the back country of Iraq.

MS. CLIFT: Kill the messenger when you don't like the message. (Laughs.)

MR. BLANKLEY: No. Look, The New York Times is so slanted, who could possibly believe their reporting?

MS. CLIFT: Tony, they have reporters over there. I think they probably have more reporters there than the Washington Times.

MR. BLANKLEY: Unfortunately, they have editors over here in Manhattan.

MS. CLIFT: I don't think they're overriding the reporters.

MR. BUCHANAN: John, listen to me. If you've got 100,000 guerrillas, as I said, by the old rules you've got to have 10 to one to beat them. That would mean we'd need a million troops to beat them, Iraqis and Americans. We've got nowhere near that. I find it impossible to believe they've got 100,000 fighters. And if they do, we are in very bad shape.

MR. MCLAUGHLIN: Okay. Well, we know the president got a very sobering message from the military when he was over there. We know that.

Okay, the insurgency. What do the citizens of Iraq think of the insurgent attacks on U.S. forces?

REP. MURTHA: (From videotape.) In another poll taken at the beginning of this year, 47 percent approve the attacks on United States forces. MR. MCLAUGHLIN: Before you try to burlesque that, Blankley, this was conducted in January by the Program on International Policy Attitudes, 1,150 Iraqis polled.

Question: Is it any surprise that 47 percent -- that's almost half -- of Iraqis say they approve of the insurgents attacking U.S. forces? Caroline.

MS. DANIEL: Again, I think it just reflects their frustration at how long the American occupation has lasted in Iraq. And there's inevitably going to be discontent about that. And you have examples like Haditha, which doesn't necessarily help the American case on the ground.

MR. MCLAUGHLIN: You mean what, the 24 members of the various families that were allegedly killed by U.S. Marines?

MS. DANIEL: Yeah, exactly. But there are many --

MR. MCLAUGHLIN: Then there was another episode in Hamantha (sic/Hamandiyah), or someplace like that, where the Marines --

MR. BLANKLEY: That has been debunked.

MR. MCLAUGHLIN: That has been debunked?

MR. BLANKLEY: That one has been debunked.

MR. MCLAUGHLIN: I thought it was the other way around, that the 24 was in question.

MR. BLANKLEY: No, Haditha has not yet been debunked. It's questionable. But the other one has been --

MS. CLIFT: The president went over there so he could look into the eyes of the new prime minister, Maliki. And one of the first trial balloons the new government puts out is that they're considering granting amnesty for killers of American soldiers.

MR. BUCHANAN: And that guy was fired. That guy was fired.

MS. CLIFT: That's because so far it's our puppet government.

MR. MCLAUGHLIN: Who's putting that out? Who's offering that amnesty?

MR. BUCHANAN: The deputy guy -- the deputy.

MR. MCLAUGHLIN: All right, I want to continue with this with you. Isn't it true, isn't it true that occupations, if they last long enough, always breed this type of reaction from the people living under the occupation -- always?

MS. DANIEL: I think historically that has to be true, and we're seeing evidence of that in terms of changing public opinion within Iraq, changing -- and also a lack of confidence in the American administration to make any real changes on the ground.

MR. MCLAUGHLIN: Wasn't it true of the French in Vietnam?

MR. BUCHANAN: John, let me tell you --

MR. BLANKLEY: And the Germans and the Japanese and the Koreans after --

MR. MCLAUGHLIN: Oh, now, wait a minute. MR. BLANKLEY: We occupied Germany for, what, 40 years, and we were very popular with the Germans.

MS. CLIFT: (Inaudible.)

MR. BLANKLEY: He just said every occupation.

MR. MCLAUGHLIN: Exit question --

MR. BLANKLEY: Every occupation doesn't end up that way.

MR. MCLAUGHLIN: Oh, every occupation is loved, I suppose, right?

MR. BLANKLEY: No, I'm saying our occupation of Germany and Japan was very popular with the Germans.

MR. MCLAUGHLIN: In the beginning.

Exit question: After this week's big Bush Iraq campaign, the breakaway, which way is public opinion's pendulum now swinging, for Bush and the Republicans or for John Murtha and the Democrats? Pat Buchanan.

MR. BUCHANAN: It's clearly towards President Bush and the Republicans and giving the president and the American military another extension of time to get the job done, because most Americans would like to see it a success and they don't want to see us lose the war.

MR. MCLAUGHLIN: You're pulling into that the Zarqawi matter; that is, his elimination. You're pulling into that the president's personal visit to Baghdad.

MR. BUCHANAN: The American people were desperate for good news, and they got great news with Zarqawi. And let me commend the president for a brave, bold, dramatic thing he did going over there, and the right thing. And there's no doubt that the president's base is feeling a lot better about him and the conflict than they were.

MS. CLIFT: His base may be feeling a lot better, but the majority of the American people still think it was a mistake to go into Iraq, and an even bigger majority would like to see us begin to get out, not necessarily a date certain, but begin to say we're going to start drawing down and to let the Iraqis and the American people know we're not there forever in the middle of a protracted civil war.

MR. BLANKLEY: Look, pendulums move back and forth. Right now the pendulum is moving in Bush's direction.

MR. MCLAUGHLIN: Do you think it's transitory?

MR. BLANKLEY: It can just as easily swing the other way. The fact is that public opinion is not going to matter, finally. What happens in Iraq is going to matter. If things get better in Iraq, his numbers will get better. If things get worse, his numbers will go bad. So all of this taking the pulse every minute doesn't make a lot of difference.

MR. MCLAUGHLIN: What do you think, Caroline? Do you think the Democrats are now on the ropes?

MS. DANIEL: I think it's pretty bad that some Democrats don't think that the killing of al-Zarqawi or the creation of a national unity government is great news. They were asked in an opinion poll this week; only 20 percent of Democrats said it was a significant victory, both of those --

MR. MCLAUGHLIN: Why did they say that?

MS. DANIEL: -- which is remarkable to me.

MR. MCLAUGHLIN: They've got a defense minister. They've got interior minister. They've got a secretary of state.

MR. BUCHANAN: You know, you're touching on a very important point here, John.

MS. CLIFT: (Inaudible.)

MR. MCLAUGHLIN: Let her finish.

MR. BUCHANAN: Yeah, but this is a very important point, John. It is the Democrats are increasingly being perceived as gleeful at bad news.

MS. CLIFT: Oh, that's not true.

MR. BUCHANAN: I'm not kidding.

MR. MCLAUGHLIN: You mean Zarqawi?

MR. BUCHANAN: No, Zarqawi --

MR. MCLAUGHLIN: You mean gleeful at Zarqawi?

MR. BUCHANAN: Zarqawi was good news for America.

MR. MCLAUGHLIN: That's what I mean.

MR. BUCHANAN: Many of them were just dumping all over it. And it's hurting them.

MS. CLIFT: What Democrats are saying is it was great to get Zarqawi. It's nice they've completed the government, and maybe we've turned a corner. But we've said this before; we've been there before. There are an infinite number of corners in Iraq. And unless they can get a handle on that sectarian violence -- and there is no indication that they can -- we're going to be right back in the same old status quo very quickly.

MR. MCLAUGHLIN: Okay. To settle the matter, the answer is that this is a strong win for the president, a strong win. And it was brilliant leadership to have brought together those personages at Camp David early in the week to plan this breakaway -- brilliant.

MS. CLIFT: No. Come on.

MR. MCLAUGHLIN: However, it is a transitory one, and it reminds me of "Mission accomplished."

MR. BUCHANAN: (Laughs.)

MR. MCLAUGHLIN: An American giant, West Virginia Senator Robert Byrd, became the longest-serving senator in U.S. history. This week, Senator Byrd, tell us what you believe to be your greatest vote that you ever cast in your 47 years in the Senate.

SEN. ROBERT BYRD (D-WV): (From videotape.) Here in the United States of America, during a preemptive strike, invading a country without our having been provoked, that was unconstitutional, in my book. It was wrong, and it's still wrong. And I said it was wrong. It's the greatest vote I ever cast. I've cast over 17,000 votes.

MR. MCLAUGHLIN: The Group joins me in this salute to Senator Byrd.

Issue Two: Smelling Like a Rove.

PRESIDENT BUSH: (From videotape.) And now we're going to move forward. And I trust Karl Rove, and he's an integral part of my team.

MR. MCLAUGHLIN: Karl Rove, President Bush's chief political strategist, was informed this week that he was no longer under investigation by special prosecutor Patrick Fitzgerald.

Aboard Air Force One on his return from Baghdad on Tuesday, President Bush said this to the press: "It's a chapter that has ended. Fitzgerald is a very thorough person. I think he's conducted his investigation in a dignified way, and he's ended his investigation. There's still a trial to be had, and those of us in the White House are going to be very mindful of not commenting on this issue."

I'll take the position here that Rove is not quite out of the woods, because he has to give testimony in all probability at the Libby trial. Then that testimony has to be matched exactly to all the testimony that he's given before the grand jury. I'm very happy for him and happy for the president that it worked out this way, but I'm not sure he's out of the woods.

Do you agree with me?

MS. CLIFT: He's acting like he's exonerated. I don't think that's the case. I think he escaped indictment. But I really don't see more legal jeopardy for him. And that trial doesn't get underway until next January, and by then these November elections will be over; Bush will be a lame duck. But this is a tribute to aggressive lawyering.

MR. MCLAUGHLIN: You mean Luskin?

MS. CLIFT: Yeah. What he did is he put Rove before the grand jury five times. Three of the times he volunteered Rove. And usually a criminal lawyer never exposes their client to that sort of jeopardy. It was very gutsy.

MR. BUCHANAN: That may be --

MR. MCLAUGHLIN: Am I correct in saying that he reduced himself -- Luskin did, Rove's lawyer -- to a witness status, a private citizen status, in order to testify that by his own knowledge, in interviewing Vivica Novak, that that was the lead to prompt the memory recollection of Rove?


MR. MCLAUGHLIN: Am I correct in that? What did Luskin do before he became a lawyer? Could I help you?

MR. BUCHANAN: He was a Democratic activist.

MR. MCLAUGHLIN: He was a journalist for the Providence Herald, a great newspaper from Rhode Island.

MR. BUCHANAN: John, there is a possibility that the reason Rove went in and testified five times under oath and was not found to have a hard contradiction there after 15 hours is he may have been telling the truth; he did not deliberately out this woman.

MR. MCLAUGHLIN: All right, quickly, quickly.

MR. BLANKLEY: The real scandal here is journalism's misreporting this story for years now.


MR. BLANKLEY: There's an NBC correspondent who predicted on the air he was going to be indicted, and commentary setting similar to this that for years has been saying he's on the brink of being indicted. A few of us were wrong.

MR. MCLAUGHLIN: Well, your locutions --

MS. CLIFT: (Inaudible.)

MR. MCLAUGHLIN: Wait a minute. Your locutions on this air were not quite so permissive about Rove's innocence, not quite so unquestioning as you're appearing now.

Exit question. These five events occurred between June 7 and June 18: One, the bagging of Zarqawi; two, the new Iraq government; three, the president's surprise trip to Baghdad; four, the congressional Iraq resolution giving the president carte blanche; five, the Karl Rove reprieve. Do these events collectively give Bush the mouth-to-mouth resuscitation that his political life depended on at this particular point? You.

MR. BUCHANAN: He is not only out of intensive care, John; he's walking the halls, flirting with the nurses.

MS. CLIFT: No, he's still hostage to what happens on the ground in Iraq. And immigration, the issue is still a big problem for him.

MR. MCLAUGHLIN: Wasn't this a kiss-and-tell moment, a critical point in his presidency, this very past week?


MR. MCLAUGHLIN: And he not only cleared the hurdle, but he bought himself time. True?


MR. BLANKLEY: Yeah, he's gone up from the low 30s to around 40. That's a big deal. And I don't know how long he stays there, but getting closer to 40 and away from 30 is a big deal. And I agree with you.

MR. MCLAUGHLIN: That's like the famous Jack the Ripper scale. "This year I committed 10 murders. Last year it was 20 murders."

MS. DANIEL: I think the big change in the last two weeks is that moderate Republicans are starting to come back to the president. The Fox poll this week showed it was up from 71 percent to 82 percent. That's a big issue.

MR. MCLAUGHLIN: Issue Three: Zoo Blues.

LES SHOBERT (former zookeeper): (From videotape.) There's a strong movement in this country to try and improve these conditions for the elephants. I think it's time that the zoos, you know, wake up and smell the coffee.

MR. MCLAUGHLIN: Zoos are not fit for elephants. Elephants don't breed well in captivity. Their numbers are dwindling. And the concrete floors of zoos give elephants joint and foot ailments. Elephants need more room for physical exercise or they become fat, bored and lazy.

BOB BARKER (animal rights activist): (From videotape.) I personally would like to see every zoo in the world closed.

MR. MCLAUGHLIN: Question: Are zoos barbaric? Tony.

MR. BLANKLEY: No. Look, a couple of things. Zoos' designs have gotten vastly better over the last 30 years. They're no longer little cages. MR. MCLAUGHLIN: Right.

MR. BLANKLEY: Plus the fact that there are a lot of animals that would become extinct. They're poaching the elephants. They're killing off the tigers. And the zoos may be the last place we even are able to keep the animals alive. So we need zoos. We need them continually to be improved, but they're much better than they used to be.

MR. MCLAUGHLIN: Don't the zoos help us preserve an animal habitat interest?

MS. DANIEL: I think zoos are great. I love going to the zoos. I looked at the elephant pictures and I saw -- the only place I felt sorry for the elephants was in Chicago, in a Chicago winter, that they have to sort of stand outside moping around.

MR. MCLAUGHLIN: Yeah, well, don't get too attached to the elephants, because they're quite vicious.

MR. BUCHANAN: John, if we think --

MR. MCLAUGHLIN: Not the ones in the zoo, but the wild elephants are vicious.

MR. BUCHANAN: John, if you think the elephants have --

(Cross talk.)

MR. BUCHANAN: If you think the elephants have a tough time in the zoo, turn them loose in the jungle and see how they like that, John. They've got an excellent deal here. They live a lot longer.

MS. CLIFT: But they are wild animals, and they probably would be happier in their natural habitat.

MR. BUCHANAN: (Laughs.)

MS. CLIFT: And we are mimicking their natural habitat more in the zoos.

MR. MCLAUGHLIN: Would we be losing --

MS. CLIFT: There's more progressive thinking in the zoo world.

MR. BLANKLEY: Elephants have lived with people for thousands of years. As you know, in Asia they are domesticated, virtually. They work. They're transportation. They move things.

MR. MCLAUGHLIN: How did Hannibal --

MR. BLANKLEY: So it's not --

MR. MCLAUGHLIN: How did Hannibal and his army cross the Alps?

MR. BLANKLEY: Yeah, he brought a few elephants.

MR. MCLAUGHLIN: Do you believe that story, by the way?


MR. BLANKLEY: I just read a history --

MR. MCLAUGHLIN: Have you seen the Alps? MR. BUCHANAN: He used them in --

MR. MCLAUGHLIN: Can you imagine getting elephants over the Alps?

MR. BUCHANAN: He used them in battle against the Romans.

MR. BLANKLEY: I can imagine them --

MR. BUCHANAN: He used them in battle, John.

MR. MCLAUGHLIN: Well, they can take somebody like this and just flip them around, and that's the end of that.

MR. BUCHANAN: What do you think --

MR. MCLAUGHLIN: That's a big trunk out there, Pat.

MR. BUCHANAN: If you see a lot of elephants coming at you, what would you do? (Laughs.)

MR. BLANKLEY: Actually, the way the infantrymen attacked the elephants was to go after their trunk and that upset them. So that was the infantry response to the very effective elephant attack.


MR. MCLAUGHLIN: A month ago, the market misbehaved and the economy slipped, thanks to, it is alleged, the new head of the Fed, Bernanke's talk about inflation. On Thursday of this week he gave a speech to the Economic Club of Chicago. The market bolted upwards, 161 points. Bernanke talked about the resilience and the flexibility of the United States economy. Is Bernanke now learning how to pitch his pipes?

MR. BUCHANAN: No, he is not. He ought not to be out there talking, knowing what the reaction of the stock market is going to be. I mean, he ought to avoid that consciously. And he's not supposed to be doing that, John.

MR. MCLAUGHLIN: Do you agree with that, or does he know how to cast his chord now, musical chord?

MS. CLIFT: Well, I think he wanted to send a message that he was serious about inflation. And then, whoops, he got the reaction and an overreaction, and now he's trying to calm it down. I think he's learning how powerful he is.

MR. BLANKLEY: Look, his problem is, as Greenspan before him, is that he has to prove his bona fides as an inflation fighter. Greenspan had to cause a recession to get there. And I don't know that Bernanke is going to be able to get by just on his credibility. MR. MCLAUGHLIN: Do you think that Bernanke had this all planned from the start; namely, he wants to avoid any active intrusion by the Fed, and therefore he did make his veiled comments about inflation? It's all orchestrated and wired. What do you think?

MS. DANIEL: I think that it was not orchestrated. I think he had no idea, when he started in the job, that he was going to be interpreted --


MS. DANIEL: -- in quite the way that he has.

MR. MCLAUGHLIN: But he'd been working there and living in the Fed. He must have known the value and the effect of his words.

MS. DANIEL: But I think the fact is, most analysts and commentators expect interest rates to go up at the end of June. One hundred percent of the analysts think that's going to happen. So I think clearly the market knows what they want to read into some of the forecasts he's making right now.

MR. MCLAUGHLIN: What's your prediction for this program?

MS. DANIEL: That England will win the World Cup and the Americans will be out by the end of the first round.

MR. MCLAUGHLIN: England's going to win the soccer cup?

MS. DANIEL: I think so. They have as good a chance as any this year.

MR. MCLAUGHLIN: I think we all have to settle for that since we're out of time.