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MR. MCLAUGHLIN: Issue One: Rockets Red Glare.

North Korean President Kim Jong Il celebrated the 4th of July this year with fireworks of his own. The communist leader test-fired as many as 10 missiles. The most touted was the Taepo Dong II, an intercontinental ballistic missile with a possible reach to the Aleutian Islands, Hawaii, or the U.S. West Coast.

Taepo Dong II was a catastrophic failure. Forty seconds after its launch, the ICBM plummeted into the sea 320 miles from the Japanese city Niigata. The Japanese prime minister called for the U.N. Security Council to take immediate action. The U.S. envoy to the United Nations, John Bolton, urged the U.N. to bite the bullet.

JOHN BOLTON (U.S. ambassador to the United Nations): (From videotape.) This is a test of the Security Council. The Council should -- we're going to find out whether the Council is up to the challenge.

MR. MCLAUGHLIN: For his part, President Bush made clear that bilateral talks between the U.S. and North Korea were not in the cards. The best chance for diplomacy, he said, is to resume the six- party talks.

PRESIDENT GEORGE W. BUSH: (From videotape.) One thing I'm not going to let us do is get caught in the trap of sitting at the table alone with the North Koreans.

MR. MCLAUGHLIN: But two of the most powerful Security Council members, China and Russia, are resisting sanctions. Russian President Vladimir Putin urged compromise, saying, "Emotion should not drown out common sense."

Question: How much face did Kim Jong Il lose when his ICBM failed to reach even the second stage of ignition and plunged into the sea? How much face did he lose?

MR. BUCHANAN: John, he's got egg all over his face. Not only did the Taepo Dong II go into the Sea of Japan; another one of his short-range missiles almost landed on Russia. He has humiliated his two great patrons, China and South Korea, both of whom asked him not to launch. He has antagonized the Japanese, who have cut travel, trade and aid and are looking at missile defense and moving to the United States.

But John, we are in six-party talks right now. The president should give them a deadline of a couple of months. If the Chinese, the South Koreans and the Russians won't help us out with this guy, we ought to pull our troops out of South Korea and basically move closer to the Japanese, tell the Chinese their $200 billion trade deficit is coming to an end, and deal with this unilaterally ourselves, because these guys are using the United States and they've been no help.

MR. MCLAUGHLIN: You're talking military power?

MR. BUCHANAN: No, I'm not talking military power. I'm talking get our hostages off the DMZ and put our military power offshore, where it belongs and where it's not vulnerable to his artillery or his short-range rockets.

MR. MCLAUGHLIN: This loss of face can be interpreted to have political consequences of great moment. If he can't assemble a rocket and he (exposes ?) himself in this way, is he a paper tiger? Pamela. MS. HESS: I don't know about paper tiger. I think what he did is if he couldn't scare the United States, he certainly scared the region. And it's an interesting level of events that you've laid out there, but I'm not sure that that's what's going to happen.

I think that he has been presented as an international threat, where he's more of a regional threat now, and folks are seeing that he's willing to do this. But I think that what he did was really kind of a rational response. It's been portrayed as this crazy thing, but it's rational.

North Korea wants back in, and it wants back in on its own terms. The United States has said, "No, you're going to come in on our terms." And this is the only thing that they have to bargain. They have to scare people in the region. And that's what they've done.

MR. MCLAUGHLIN: He has to be questioning whether or not his nuclear warheads, if he has them, would land up in the sea, like the ICBMs he has. So I go back to my question: Is this an overheated crisis, artificially overheated, with him?

MR. BLANKLEY: No, it's not artificial. But I think we learned more about China's attitudes than about North Korea's in this instance, because although China said that they put pressure on North Korea, clearly they didn't, because they can turn the spigot off, and they didn't put the pressure on.

Now, this tells us something pretty interesting, because everybody has assumed that China really doesn't want Japan to go nuclear and have that kind of an arms race in East Asia. But China's willingness to let Japan get exercised by this, by not curtailing North Korea, tells, I think, us a new thing about how China views the world, which is they can live with that. At this point they're not prepared to rein in North Korea. And they're the only ones who can.

MR. MCLAUGHLIN: Well, the Chinese may view the Japanese as having been corrupted by us. And we're on record as saying that we have to contain China.

MR. BUCHANAN: They don't want a nuclear --

MR. MCLAUGHLIN: You see how this geometry kind of --

MR. BLANKLEY: Obviously Japan has been moving closer to us since the last missile launch. And there's an arms race in Asia generally on the question surrounding China. But I think most experts had assumed that what China really didn't want was for Japan to get too excited. Now apparently they're willing to live with that.

MR. MCLAUGHLIN: Are we at this point in our conversation here, namely, that Japan could wish to, under the circumstances, remilitarize? MR. CARNEY: Oh, I think we're a long way from that. I think the concern about China is well put by China. But I also think what Pam said is right, which is what Kim Jong Il did was a provocation deliberately designed to get attention, to force the attention back on North Korea and to get back involved in these talks, where he can get something in exchange for some level of cooperation.

There's no immediate threat from these missiles, certainly not the United States, as demonstrated by the failure of the Taepo Dong II. But there is an immense threat in North Korea, a terrible threat, a far bigger threat than we face --

MR. MCLAUGHLIN: What's that?

MR. CARNEY: -- which is that they have nuclear material that they could pass on to bad guys, who might be willing to use it. I mean, North Korea is never going to -- the assumption that Kim Jong Il is a crazy madman who will one day push a button and launch a nuclear missile at the United States is ridiculous. It is a small, small --

MR. MCLAUGHLIN: Well, what's the point in what you're saying?

MR. CARNEY: A much likelier possibility is that he would pass it on to some third party who could use it in the United States.

MR. BUCHANAN: But he will not do that for the very reason you said. He is not crazy.

MR. CARNEY: He's not.

MR. BUCHANAN: And he's not going to give nuclear material or a dirty bomb to terrorists when he knows the consequence of their use of it on us would be the end of North Korea.


MR. BLANKLEY: But Pat, that's --

MR. BUCHANAN: We didn't have to know Iraq was behind 9/11 to attack them.

MR. BLANKLEY: The fingerprints don't have to be on it. That is the danger. They're a proliferator. And unlike Iran, that might proliferate for ideology, North Korea will do it for cash. And they'll sell to anybody.

(Cross-talk.) MR. BUCHANAN: That would be suicidal for North Korea.


MR. BUCHANAN: That would be suicidal to give the bomb to terrorists. The Americans would be liable to go all-out and smash them, whether we knew they did it or not.

MR. MCLAUGHLIN: Why not handle it the way --

MR. BUCHANAN: (Inaudible) -- all those nuclear weapons.

MR. MCLAUGHLIN: Why not handle Kim Jong Il the way we're handling Iran? What we do is we call for a halt in uranium production, and if he passes that test --

MR. BUCHANAN: John, this has failed. Pam's right.

MR. MCLAUGHLIN: What's the legal basis?

MS. HESS: If you go back to --

MR. BUCHANAN: There's no legal basis.

MR. MCLAUGHLIN: If there's no U.N. resolution that justifies military force, what's the legal basis --

MR. BUCHANAN: There is none.

MR. BLANKLEY: We don't need a legal basis. We're a sovereign country.

MR. BUCHANAN: The North Koreans are outside the NPT.

MR. MCLAUGHLIN: I'm (on ?) that theater of military force, okay? Now, what's the legal basis for taking military force, surgical operation --

MR. BLANKLEY: There's no moral --

MR. MCLAUGHLIN: This isn't the question. The question is not out yet. And there's no U.N. resolution to -- obviously Putin would vote against it, and so would the Chinese.

MR. BUCHANAN: The legal reason is --

MR. MCLAUGHLIN: What is our legal platform for taking any action?

MR. BUCHANAN: Force majeure. Force majeure. We're a greater power than they are, and we say, "Don't do it." MR. MCLAUGHLIN: Come, come, come. You sound like Hitler.

MR. BUCHANAN: (Laughs.)

MR. BLANKLEY: There's no law above the sovereignty of a country. And we haven't --

MR. MCLAUGHLIN: The sovereignty of the country is governed by international law.

MR. BLANKLEY: No, it's not.

MR. MCLAUGHLIN: I want to know what would justify taking that action?

MR. CARNEY: This is esoteric and irrelevant, because this president, because of his decision to go and gamble with Iraq, is not in any position to use military force against North Korea or Iran, because his military is stretched thin --


MR. MCLAUGHLIN: I want to let Pam in.

MS. HESS: (Inaudible) -- topple North Korea, it will make Iraq look like a joke. You can't go in there and just remove it.

MR. BLANKLEY: This administration has no motivation to use force in North Korea. And I agree with you.

MR. BUCHANAN: Why should they?

MR. MCLAUGHLIN: In his press conference on Friday, the president sedulously -- do you know what that word means, Pat?


MR. MCLAUGHLIN: You were trained by the Jesuits.

MR. BUCHANAN: (Laughs.)

MR. MCLAUGHLIN: What's it mean? He carefully and he studiously avoided even addressing the question of anything but being in with these six nations. He did not say anything about military. He didn't say anything about sanctions. He did, however, preach to us about the starvation in the country and how he's repelled by it.

MR. BUCHANAN: There's two reasons for that, John. One is, we can't do -- we don't want to do anything and we're not going to do anything. And he's going to go back to the six-party talks. But John, if the Chinese and the South Koreans don't help us out and use the leverage they have, we ought to get out of those talks because they're headed nowhere. MR. MCLAUGHLIN: Pamela, is it your belief, since you cover the Pentagon very carefully, is it your belief that a sense of crisis really doesn't exist with regard to North Korea, that it has been defanged, if you will, particularly owing to the ICBM total and colossal and embarrassing failure?

MS. HESS: It is related to that. But they were not terribly worked up about it even before. There was definitely -- this launch could go at any second. But I think that the real issue here is really what Tony's been talking about is that North Korea has been after cash from the start, and this is their way of going.

Something most people don't recognize is that this moratorium that's been on for six years of North Korea not launching its missiles, which was put in after the '98 launch, was an agreement that the United States and North Korea had. And at the time of the Clinton administration, the agreement was about "We will not launch missiles if you will discuss with us what we're going to do instead about exporting our missiles to get cash."

When the Bush administration came in, they took that linking out and they said, "No, you need to capitulate on everything. You need to capitulate on nuclear, conventional and missiles." And it's been a standoff since then. And this -- I think what the Bush administration is doing is really almost a parenting technique, which is "We're not going to respond to you. You're throwing a tantrum and we're not going to respond to you."

MR. MCLAUGHLIN: Does anybody remember how many North Koreans were killed in the war?

MR. BUCHANAN: Well, there were hundreds of thousands.

MR. MCLAUGHLIN: Try 2 million.

MR. BUCHANAN: It could well be. And the Chinese lost --

MR. MCLAUGHLIN: Two million. And is there residual ill feeling towards America owing to that war? MR. BUCHANAN: Sure, there is.

MR. CARNEY: One would imagine.

MR. MCLAUGHLIN: One would imagine, would one not? Is that calculated into the whole question of the hostility or --

MR. BUCHANAN: They see the Americans as the ones who prevented them from realizing what they should be on the world stage.

MR. MCLAUGHLIN: We've been assured by Pamela that the sense of crisis never really existed. Let's stop exercising ourselves on this issue right here. Is that a good idea?

Exit question: Has the North Korean threat to the United States been overstated?

MR. BUCHANAN: Yes, it has, because North Korea knows if it goes to war with the United States, that's the end of the country. Therefore, they're trying to extract what Pamela is talking about.

MR. MCLAUGHLIN: It's (wrong ?) even before that, because it doesn't have the technology. And the ICBM --

MR. BUCHANAN: It has 1 million soldiers and 11,000 artillery pieces on the DMZ, where we've got 33,000 guys.

MR. MCLAUGHLIN: Do you think we should be cruising around with our destroyers around the coast of South Korea?

MR. BUCHANAN: I think we should pull our troops off the Korean peninsula, where they are hostages.

MR. MCLAUGHLIN: Should we be shaking his cage, as we are now doing?


MR. MCLAUGHLIN: Pamela, you remember the question?

MS. HESS: (Laughs.) I don't remember.

MR. MCLAUGHLIN: Is it overstated?

MS. HESS: Yeah, I think so. And it serves some political purposes. It was North Korea's launch in '98 that really created pressure on deploying a national missile defense system. And I'll be interested to see what its failure does --

MR. MCLAUGHLIN: Now, you think it's an unlimited menace, do you not?

MR. BLANKLEY: No, I've never said -- MR. MCLAUGHLIN: General Blankley, you've got to stick by your principles.

MR. BLANKLEY: It depends -- I've never said North Korea is an unlimited danger. But look, it depends who's stating it. This is a serious problem. The fact that the missile failed -- you learn a lot from missile tests. So this doesn't mean they're not going to have the capacity.

Now, I agree, as I said earlier, the chance of them launching a missile at us is not the threat. Proliferation is. Also, destabilizing the politics of East Asia is a big deal, and this is destabilizing that politics. To dismiss this as inconsequential is to understate the danger.

MR. MCLAUGHLIN: That's more hyperbole.

MR. CARNEY: I second what General Blankley said. This is a legitimate and serious threat -- not the missile potential, but the proliferation issue, which is a far bigger threat than Saddam Hussein was.

MR. MCLAUGHLIN: I think it's overstated.

Issue Two: Murder Most Foul.

PRESIDENT GEORGE W. BUSH: (From videotape.) We live in liberty because of the courage they displayed, from Bunker Hill to Baghdad, from Concord to Kabul.

MR. MCLAUGHLIN: President George Bush delivered a morale boost to U.S. soldiers stationed at Fort Bragg in North Carolina this week. The Bush rally had a hollow ring for many Americans. It coincided with a recent grim milestone -- over 2,500 U.S. soldiers dead in Iraq.

It also comes at a time when the U.S. military is edgy over charges that U.S. soldiers have killed Iraqi civilians in cold blood. A new incident has come to light, the fifth in recent weeks, and especially chilling and abhorrent.

Steven D. Green was released this past May from the U.S. Army due to a, quote-unquote, "personality disorder." On Monday he was charged with premeditated rape and premeditated murder of four Iraqis. The crime occurred on March 12th in Mahmudiyah, south of Baghdad.

Then-Private First Class Green allegedly conspired with at least three other U.S. soldiers to rape a young woman. They went to her house at night, three of the four soldiers changing into dark clothing. According to one account, Green and a second soldier both raped the woman. Afterwards, Green also allegedly shot and killed her, along with her mother, father, and a five-year-old sister. The rape victim's body reportedly had also been burned. The justice minister of the new Iraq government called the revelations, quote-unquote, "monstrous and inhuman," and he demanded that the United Nations Security Council intervene to stop these, quote, "violations of human rights and condemn them," unquote.

EUGENE FIDELL (military law expert): (From videotape.) If they prove to be true, it's a very disturbing set of facts. And it's certainly going to have a terrible effect on relations with the Iraqi people.

MR. MCLAUGHLIN: Mr. Green has pled not guilty.

Question: If true, is this most likely an aberration, or is it a reflection of a deeper malaise, really an animosity between American troops and the Iraqis that we're supposed to liberate? Are we treating the people as the enemy, and are the people treating us as the enemy? Pamela Hess.

MS. HESS: It's an aberration, and it's something that we've seen in every war, if you go back. However, in this case it's mounting up. And because of the coincidence of events, it's having an effect.

But one of the really tragic things I found in Iraq is that the Iraqi people have come to expect that sort of treatment from whoever's in charge. And so it might not have the lasting effect that you're really worried about.

I asked people about Abu Ghraib. I asked people about other things. And mostly they kind of shrugged and said, you know, "This is what we get."

MR. MCLAUGHLIN: How much damage, do you think, Pat, has been done to the image of the U.S. military in the eyes of the Muslim world?

MR. BUCHANAN: Well, there's no doubt, John, if you take Abu Ghraib, you add Guantanamo, you add this, you add Haditha and the other things, they are aberrations in war. They are horrible. This is a particularly ugly, awful atrocity. They do great damage to the image of the United States. But they are aberrations. They do occur in wartime.

And what's different about America is that this guy has gone on trial for his life. And if he's guilty, I would not be surprised to see him, and if someone else was involved, get the death penalty.

MR. MCLAUGHLIN: Many U.S. soldiers in Iraq now report the Iraqis as hajjis, which is a derogatory term, similar to "gook" that was used. Was it "gook" during the Vietnam War? MR. BUCHANAN: "Gook" or "jap" or "kraut" or "dago," all these other things. In wartime, that always happens.

MR. BLANKLEY: That's not true. But John, that's not true.

MR. MCLAUGHLIN: Some say that loose rules of engagement have developed when there is a suspected enemy in a --

MR. BLANKLEY: No, quite to the contrary, the rules of engagement are remarkably tight and hard on our troops. They restrain them from firing prematurely or even in time to defend themselves. And I haven't been to Iraq, but I've talked to a lot of troops, both by e- mail and some in person who have come back, and my sense is you don't have this kind of rude language; that, in fact, there's a pretty good relationship between the average soldier on the street and the average Iraq.

MS. HESS: In general there is. What needs to be looked at in this case in particular, along with the kidnapping and killing of the two soldiers, they're from the same unit and the same area. And we have to try and figure out what it was that they were doing out there alone. There might be a problem within the leadership of this unit that's allowing these small groups to go out where they can't protect themselves, and they can't look out for each other.

MR. MCLAUGHLIN: One word and then we've got to get out.

MR. BLANKLEY: And there may be a relationship --

MR. CARNEY: A bigger problem here, which is there may be a better relationship than there was in previous wars, but there is a sense, in talking to Marines and soldiers who've come back, of not knowing who the enemy is; that fear that when you go into a house, you don't know who the enemy is. And that tension -- you know, people come back and they say, "We don't know who the good guys are or the bad guys are." And I think that does affect morale among our servicemen.

MS. HESS: And they're often told, "You need to win hearts and minds" and also have a plan for killing everybody in the room. So it's a difficult position for them to be in.

MR. MCLAUGHLIN: Issue Three: Web Wagers.

The ante is up, and the odds are long, but Republicans are determined to crack down on Internet gambling. Wagering on the Net is a worldwide industry that attracts nearly $12 billion in bets each year -- slot machines, sports betting, Texas Hold 'Em.

Conservatives say it's an industry without redeeming social value, and the Justice Department says that Internet gambling is illegal. So right wingers have set online wagering regulation at the top of their, quote-unquote, "American values agenda." This agenda is expected to dominate election-year debate in the Republican House of Representatives and will include other conservative red-meat issues like the Bush-proposed amendment of the U.S. Constitution banning gay marriage.

So does this mean the end of web gambling? Many say no; the Internet is simply too far-reaching, with web gambling companies operating offshore, flourishing in places like Gibraltar, Antigua and Costa Rica. As many as 80 countries have taken steps to both legalize and tax Internet gambling. The British are even offering incentives for online gambling companies to relocate their headquarters to Great Britain itself.

Question: If Internet gambling is banned under new law, who stands to gain?

MR. BLANKLEY: I suppose -- it's not going to happen, but I suppose it would be bricks-and-mortar gambling casinos. But look, I think I'm a pretty good card-carrying conservative, and I don't buy into this idea that playing poker is un-American. It's an American word.

The only thing I have against playing poker digitally is it's more fun with the guys with an open bottle between you rather than by yourself in a room. But other than that, there's nothing wrong with poker. And this is not going to become law, and I think it's a silly issue.

MR. BUCHANAN: I disagree.

MR. MCLAUGHLIN: You don't see this becoming law, do you?

MR. CARNEY: I don't see it becoming law. I think it's a silly issue. I think it's, you know, much like the flag-burning amendment --

MR. BLANKLEY: It's different. That's serious.

MR. CARNEY: Oh, it's not at all serious.

MR. MCLAUGHLIN: We know that --

MR. CARNEY: It's part of an effort to distract voters from real issues and to mobilize the base to turn out in the midterms.

MR. MCLAUGHLIN: We know that Jack Abramoff was representing casinos, brick-and-mortar tepee casinos, right?

MR. BUCHANAN: Some casinos.

MR. BLANKLEY: There are some values conservatives who have a little bit of -- MR. MCLAUGHLIN: We also know that Ralph Reed was involved, to the tune of $4 million I think he got last year. Is that correct?



MR. BUCHANAN: Not last year, but over a period of years.

MR. MCLAUGHLIN: So obviously --

MR. BUCHANAN: John, this is a serious --

MR. MCLAUGHLIN: -- obviously there is an interest among right wingers like you to maintain the brick-and-mortar --

MR. BUCHANAN: No, no. Let me say this.

MR. MCLAUGHLIN: -- brick-and-mortar gambling houses and casinos.

MR. BUCHANAN: Let me say this. There is something wrong -- and it's really wrong, because it really affects poor people -- about video poker and people in their houses coming home with a few bucks and getting on the machine and losing every dollar they earn.


MR. BUCHANAN: Look, I don't mind Las Vegas and people going out there.

MR. MCLAUGHLIN: -- they could be at the Buchanan saloon down the street. There are all kinds of ways of relieving social stress.

MR. BUCHANAN: You know, I'm not in favor of all these casinos all over the country. But you put this on machines in every house and you're going to destroy a lot of homes.

MR. MCLAUGHLIN: You want to restore the libertarian streak --

MR. BUCHANAN: I'm not a libertarian. I'm a traditionalist.

MR. MCLAUGHLIN: You've got a libertarian streak in you, and --

MR. BUCHANAN: It's very small, and it's getting smaller. (Laughs.)

MR. MCLAUGHLIN: And over the years it has coarsened. You've got to get it back into shape. MR. BUCHANAN: (Laughs.)

MR. MCLAUGHLIN: Internet gambling may look -- as I said, it makes the Republicans look hypocritical, because they savor the brick- and-mortar museums.

MS. HESS: I think you could argue that they're hypocritical. They're trying to set a political agenda for this next election to make Democrats be pro-gambling, anti-flag protection, pro-abortion. That's what this whole --

MR. BUCHANAN: That's what the Democrats are. (Laughs.)

MR. MCLAUGHLIN: I'm giving the count. Five of us are opposed to law banning Internet gambling. Correct?

MR. BUCHANAN: Four to one.

MR. MCLAUGHLIN: You're still for it?


MR. MCLAUGHLIN: Right on, Pat.

Issue Four: World Cup Mania.

This Sunday the entire planet will tune in to the final soccer match of the World Cup. But Americans could care less. Is this a mistake?

Question: What about that? Should Americans be as enthused about soccer as they are about baseball and basketball and football and NASCAR? Should they --

MR. CARNEY: There's no "should" here, John. I think that Americans have become gradually more interested in soccer because of the women's national team that did so well several years ago. You know, the professional soccer league in America continues to gather more and more adherents. But it's a slow process.

And part of the problem is the games, especially in the World Cup, can sometimes be riveting and fascinating and great to watch or deadly dull because no goals are scored. They should do away with offsides and they should fix the rules in some way to jack up the scoring, because I don't think Americans like to watch games that are 0-0 after overtime.

MR. MCLAUGHLIN: They watch hockey.

MR. CARNEY: Not many.

MR. BLANKLEY: Not many. They went bankrupt. Look, nothing -- MR. MCLAUGHLIN: Golf is sexy.

MR. BLANKLEY: Nothing much happens in soccer. In baseball you have a hit; you have outs. Things actually happen. In soccer they usually run back and forth to a 0-0 tie. No wonder Americans don't like the game.

MR. MCLAUGHLIN: I think it's an anti-Gallic attitude.

MR. BUCHANAN: A friend of mine -- John, a friend of mine described it as the metric system in short pants.

MR. MCLAUGHLIN: Predictions. Pat.

MR. BUCHANAN: Kim Jong Il will test another Taepo Dong soon. He's got to.

MR. MCLAUGHLIN: Will it be better than this one?

MR. BUCHANAN: It has to be -- a few more miles.


MS. HESS: France wins the World Cup in a shootout.


MS. HESS: Yeah.


MR. BLANKLEY: I think the Democrats are going to try to get to the right of Bush on North Korea and start calling for military bombing of the sites, as former Secretary of Defense Perry did and as The Washington Post suggested they might be in favor of this week.


MR. CARNEY: Senator Ted Stevens, who recently called the Internet "a collection of tubes," will soon hire an Internet adviser to his staff.

MR. MCLAUGHLIN: The Federal Reserve Board will not raise the interest rate on August the 8th, thus breaking their 17 for 17 streak.