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DR. MCLAUGHLIN: Issue One: The Economy -- Trick or Treat?

Federal Reserve Chairman Ben Bernanke tossed investors some Halloween candy this week -- a quarter-point interest rate cut. This followed two earlier interest rate cuts from the Fed and a 3.9 percent growth last quarter. But it wasn't enough to banish the Wall Street hobgoblins. A witch's brew of inflationary pressures and deteriorating indicators is boiling.

Last quarter's 3.9 percent growth came from strong consumer spending, but that consumer spending flattened in September. Heightening consumer credit and softness in construction have put the brakes on the economy. Economists expect an anemic 1.1 percent to 2 percent growth rate for this quarter. Real estate values in the top metropolitan markets are plummeting as much as 10 percent this year. Home heating bills this winter will jump by 20 percent. Oil climbed to $96 a barrel this week, a new record.

The decline in the dollar's value means imports cost more, another contributor to inflation. And the day after Bernanke's Halloween treat, the stock market dropped over 360 points.

We have a credit crunch, we have a slumping economy and we have inflation pressures, particularly from energy prices. Can it get any worse, Pat Buchanan?

MR. BUCHANAN: It certainly can, John. Mr. Bernanke at the Fed is cutting the interest rates; has cut them almost a full point, not quite, because there is a grave credit crunch and there could be a seizing up of the economy and the money.

However, at the same time, if you look at the price of gold, you look at the price of oil, you look at the Canadian dollar, the Euro, the pound, they're all saying that inflation is coming and the dollar is going down dramatically. So you've got two great conflicts here. One says cut interest rates to get the economy moving. The other says control coming inflation.

I think the country is going to head for stagflation. I think the economy is going to be the most serious issue in the year 2008 domestically, that and immigration. And I don't know what Bernanke can do. Greenspan gave him the ball behind the line of scrimmage, and he is in trouble.

DR. MCLAUGHLIN: Is gold over $800?

MR. BUCHANAN: Gold is over $800. That tells you that the dollar is sinking.

DR. MCLAUGHLIN: Are you in it?

MR. BUCHANAN: I'm still in gold.

DR. MCLAUGHLIN: Are you in big?

MR. BUCHANAN: I'm in big in gold and silver. (Laughs.)

DR. MCLAUGHLIN: Are you still buying? Are you still buying?

MR. BUCHANAN: I can't afford it now. (Laughs.)


MS. CLIFT: Look, the data points are not all bad. This economy is working well for people at the very top. I think what we see, though, is a lot of middle-class anxiety, and it goes beyond what happens on Wall Street. These corporations are still making billions. And Wall Street gets upset because Exxon comes in with lower profit margins than they've had in the past. But the consumer confidence is way down and everybody's worried about the Christmas spending. And so I think, you know, you're right. Going into the '08 presidential campaign, the economy is going to be every bit as big an issue as war.

DR. MCLAUGHLIN: What happens if there's a run on the dollar?

MR. BLANKLEY: If there's a run on the dollar -- you know, a precipitous drop in the dollar would be catastrophic. But look --

DR. MCLAUGHLIN: Is that likely?

MR. BLANKLEY: I have no idea. I don't think it's likely. It's possible. Look --

DR. MCLAUGHLIN: Suppose we go into a recession and --

MR. BLANKLEY: Well, let me make a couple of points here, because you've listed every possible bad thing that could happen. You line them up and you say, "If all that happens, will it be bad?" The answer is yes, it will be bad.

However, what is impressive -- and I understand the danger of the financial markets seizing up, and this is a huge potential crisis. But what is impressive is, in the face of all of this, of almost $100- a-barrel oil, of the financial crisis, of the inflation threats and all the rest, we had 3.9 percent growth, unemployment at 4.7 percent.

We have 160,000 more jobs created -- more, by the way, than the economists predicted. The same economists who are predicting the economy is going to shrink next quarter were predicting it was going to shrink last quarter. They were wrong.

So, yes, we should be concerned. I am concerned. But it's not just the rich people. We have 93.3 percent, because unemployment is only 4.7. So the American people are doing fine now, but justifiably everybody --

MS. CLIFT: They don't --

MR. BLANKLEY: But justifiably, everybody's anxious. So am I.

MS. CLIFT: They don't feel like they're doing fine.

DR. MCLAUGHLIN: Do you think Tony has failed in his appeal to some optimism?

MR. ZUCKERMAN: No, I think there is reason for some optimism. But I have to tell you, I think we're facing the worst financial crisis in the last 40 or 50 years, maybe since the Great Depression. You have a situation where we have two and a half trillion dollars of paper, of which the estimate is that 25 percent of it is going to be wiped out in value. That's $600 billion. And that's just the estimates today. Those estimates get worse and worse as this paper gets to be worth less and less. And nobody knows what the consequences of that is. We've never been in that kind of situation.

Amongst other things, nobody knows who owns the paper. I mean, nobody -- Merrill Lynch announced that they were losing roughly $5 billion. It then went to $8 billion within a matter of three weeks, which they are the biggest seller of this kind of paper. They're off by 60 percent. I mean, if they're off by 60 percent, who knows what the real value is?

DR. MCLAUGHLIN: Is Citibank following in that wake?

MR. ZUCKERMAN: Well, nobody knows, again, because nobody knows how bad the paper is. But here is the -- Citibank, through what is called an SIV, a structured investment vehicle, in which they have some contingent liabilities -- these are these kinds of paper investments, securities, held outside the bank and financed, I might add, with short-term paper, which they may not be able to roll over. They have $80 billion. AAA paper has gone down to 79, AAA paper.

Nobody believes the ratings anymore, so nobody knows what the --

MR. BUCHANAN: Hey, John --

DR. MCLAUGHLIN: Wait a minute.

MR. ZUCKERMAN: And if they lose 20 percent of 30 percent of that $80 billion, that's going to be a huge hit on the bank.

DR. MCLAUGHLIN: Did you use the word "depression" a few minutes ago?

MR. ZUCKERMAN: I didn't use the word "depression." I said it is the worst financial crisis, potentially, since the Depression.


DR. MCLAUGHLIN: I don't hear any optimism in you at all.

MR. ZUCKERMAN: You know I've been on this show now -- I'm predicting that it's going to be much worse than people were saying for the last several months.

MR. BUCHANAN: John, this is why Bernanke --

MR. ZUCKERMAN: I predicted there'd be two Federal Reserve Bank cuts, and I think there's going to be more now.

MR. BUCHANAN: There's going to be more.

DR. MCLAUGHLIN: Who can tell me what Bernanke's quandary is?

MR. BUCHANAN: Bernanke --

DR. MCLAUGHLIN: What's his quandary?

MR. ZUCKERMAN: He has to save the financial system. He cannot -- if it's a credit squeeze, then he's got to make sure we do not have a freeze-up.

MR. BUCHANAN: Here's the thing -- MR. ZUCKERMAN: The problem is that as he lowers --

DR. MCLAUGHLIN: But they're also talking inflation.

MR. BUCHANAN: But John, that's the problem.

MR. ZUCKERMAN: Yes. But the inflation is very well-controlled. We may have inflation. Right now we don't have --

DR. MCLAUGHLIN: The quandary is how to balance growth against inflation.

MR. BUCHANAN: But Mort, this is preposterous.

MR. ZUCKERMAN: The inflation that they measure, if I may say so, is without food and energy. And on that basis, the inflation rate is about two and a half percent.

MR. BUCHANAN: But, look, look, I know it is now. But the dollar is sinking like a stone. We've got -- 16 percent of our economy is imports. Those prices are going to begin to rise. The Chinese and the Japanese are holding down their currencies like crazy.


MR. BUCHANAN: Let me tell you, as he pumps out the money -- I agree he's going to do -- inflation is going to hit the roof.

DR. MCLAUGHLIN: Do you think we should open the window and go to the ledge now?

MR. BUCHANAN: (Laughs.)

DR. MCLAUGHLIN: Is that what you want to do?

MR. BUCHANAN: Yesterday. (Laughs.)

MS. CLIFT: I want to ask a very elementary question. Who owns all this paper you're talking about? I don't think I have any. And who takes the hit if the paper --

MR. BUCHANAN: We probably do, Eleanor, in our portfolios.

MR. ZUCKERMAN: The companies will take the hit. On the other hand, what's happening is a lot of individuals cannot -- take housing prices. Housing prices go down by 10 to 12 percent. That's a two- and-a-half-trillion-dollar loss --

MS. CLIFT: That I understand.

MR. ZUCKERMAN: -- for the average American.

DR. MCLAUGHLIN: Exit question -- MR. ZUCKERMAN: It's huge losses that we're facing.

DR. MCLAUGHLIN: Will the economy go into recession before next November's presidential election? Recession, yes or no?

MR. BUCHANAN: I think it's stagflation. I think it's rising inflation and slow growth. And the problems that Mort is talking about are coming.

DR. MCLAUGHLIN: Recession.

MR. BUCHANAN: I don't think a recession just yet.


MR. BUCHANAN: I think it could come next year, but I don't think for sure.

DR. MCLAUGHLIN: It's going to start in December, but we're not going to know it until June.

MR. BUCHANAN: No, we will know it soon if it comes in December.

DR. MCLAUGHLIN: No, we won't know it. It won't be visible until June.

MS. CLIFT: The definition of recession is two consecutive quarters of negative growth. I suspect we're going to have puny growth instead.


MR. BLANKLEY: I mean, if the financial --

DR. MCLAUGHLIN: Tony, relieve the pressure here, will you?

MR. BLANKLEY: If the financial crisis, in fact, hits, then, yeah, we're going to have a recession, of course. I don't know -- I have no clue and nobody knows whether the financial crisis is an apparent one that is managed or whether it's one that happens. So there's no point in predicting it.

DR. MCLAUGHLIN: What do you think the gut feeling of the Fed collectively is?

MR. ZUCKERMAN: Well, they have to -- they literally have to protect the financial system, the credit system. That is the lubrication that makes the whole economy work. If you have a collapse of the ability to finance --

DR. MCLAUGHLIN: Do you think they think there's going to be a recession? MR. ZUCKERMAN: I think they're trying to -- absolutely I think they may. If you have a freeze-up of the financial system, which is very possible, you will have not just a recession. You'll have a serious recession.

MR. BUCHANAN: But you've got to protect --

DR. MCLAUGHLIN: They'll be happy if it's a recession and not a depression.

MR. ZUCKERMAN: If there is a freeze-up -- that's what they're trying to avoid. The Fed has to do that.

DR. MCLAUGHLIN: I have already spoken. The answer is it will begin in December and it will be visible in June, before the election.

Issue Two: The Non-Smoking Gun.

It's tough to be number one, and Hillary Clinton is the number one Democratic contender for president. All the polls say so. So her rivals, Democrats all, tried to trap the senator with the smoking gun of double-talking out of both sides of her mouth. They targeted the issue of whether New York driver's licenses should be granted to illegal immigrants in New York State.

By the way, there are over 500,000 illegal immigrants in New York State.

(Begin videotaped segment.)

TIM RUSSERT (NBC News): Do you, the New York senator, Hillary Clinton, support the New York governor's plan to give illegal immigrants a driver's license? You told the New Hampshire paper it made a lot of sense. Do you support his plan?

SEN. HILLARY RODHAM CLINTON (D-NY): You know, Tim, this is where everybody plays "gotcha." It makes a lot of sense. What is the governor supposed to do? He is dealing with a serious problem. We have failed, and George Bush has failed.

(End videotaped segment.)

DR. MCLAUGHLIN: We've all seen repeatedly the videotaped sequence on the alleged inconsistency in what Hillary said. So let's go to Nashua. Tim Russert built his question out of Hillary's comments to a newspaper editorial board in Nashua, New Hampshire.

Here's what Hillary said at Nashua: "I think it's important to bring everybody out of the shadows, to do the background checks, to deport those who have outstanding warrants or have committed crimes in the United States, and then to say to those who wish to stay here, 'You have to pay back taxes. You have to pay a fine. You have to learn English, and you have to wait in line.' And I hate to see any state being pushed to try to take this into their own hands because the federal government has failed.

"So I know exactly what Governor Spitzer is trying to do, and it makes a lot of sense, because he's trying to get people out of the shadows. He's trying to say, 'Okay, come forward and we will give you this license.' But without a federal policy in effect, people will come forward and they could get picked up by ICE" -- that's the Immigration and Customs Enforcement Agency -- "tomorrow. I mean, this cannot work state by state. It has to be looked at comprehensively."

Now, the question is, are there any differences between what she said in Nashua and what she said at the Democratic debate? I ask you, Eleanor. MS. CLIFT: Well, you can't tell whether she's for it or against it in that long response. And what she's doing is --

DR. MCLAUGHLIN: I disagree with you.

MS. CLIFT: Well, she's --

DR. MCLAUGHLIN: If you analyze the language, she's in favor of what Spitzer's generally doing to bring aliens out of the darkness.

MR. ZUCKERMAN: The shadows.

MS. CLIFT: Yeah, but she says that in the context of the larger issue that it's not a good idea state by state.

DR. MCLAUGHLIN: Correct. She's okay with Spitzer.

MS. CLIFT: It's a complicated --

DR. MCLAUGHLIN: He's got 500,000. Under those circumstances, he should do it.

MS. CLIFT: It's a complicated issue that she's trying to fuzz up, because immigration has worked against the Republicans. And Democrats worry about a backlash against --


MS. CLIFT: Let me finish --

DR. MCLAUGHLIN: I think that's --

MS. CLIFT: -- against illegal immigration hurting them.


MS. CLIFT: She's triangulating, just like her husband.

MR. BLANKLEY: Let me make a point here.

MS. CLIFT: She's triangulating, just like her husband did successfully. But she's not as smooth, and you can see the gears moving.


MR. BLANKLEY: Let me make an important point here. I don't usually care much about the process coverage of political campaigns.


MR. BLANKLEY: No. I care -- DR. MCLAUGHLIN: When did that start?

MR. BLANKLEY: Since 1964, when I worked for Barry Goldwater. But let me tell you that this week something happened in Washington amongst mainstream media and amongst Democrats --

DR. MCLAUGHLIN: What was it?

MR. BLANKLEY: -- to get Republicans. What happened was they started questioning Hillary. They started showing her less respect than they have. And the question is, will she be able to sustain the image of the inevitable candidate through the next two, three, four weeks?

DR. MCLAUGHLIN: She was masterful. She rode that storm right through.

MR. ZUCKERMAN: She shifted the focus from her strength and from her experience and from her knowledge to whether or not she's evasive. It became an issue of trust and character. And that's the way the dialogue about her has shifted as a result, not just of this, but of the way she answered a whole series of questions.

MR. BUCHANAN: It is not only that. It is not only that. The next day she said she basically agreed with Spitzer. She is out there now supporting driver's licenses for illegal aliens. There's nuances in it.

DR. MCLAUGHLIN: Pat, there's three different --

MR. BUCHANAN: I know there's three --

DR. MCLAUGHLIN: -- kinds of licenses. One is not even a full license. It's a special card, and you get it for being on the road.

MR. BUCHANAN: John, what you don't understand is when you're in a presidential debate and a presidential campaign, you talking about three different driver's licenses doesn't do it. You're for giving driver's licenses to illegal aliens.

DR. MCLAUGHLIN: What you don't understand is the evolution that's --

MR. BUCHANAN: I do understand politics, John.

DR. MCLAUGHLIN: -- taking place in political rhetoric. Political rhetoric is normally glib. It's stereotypic, the way you want. What she's trying to do is bring some scholarship into political rhetoric.

MR. BUCHANAN: Scholarship is -- DR. MCLAUGHLIN: She's giving you some nuance, and you're spitting it back.

MR. BUCHANAN: You don't win with scholarship in a presidential election. My prediction today --


MR. BUCHANAN: -- is she will get off this --

MR. BLANKLEY: Nuance is B.S.

MR. BUCHANAN: She will get off this --

DR. MCLAUGHLIN: You analyze her language; there's no inconsistency whatsoever.

MR. BUCHANAN: She will get off this position. She will get off amnesty.

DR. MCLAUGHLIN: Okay, politics, yes. Cannibalism like Buchanan, yes, and politics, no.

JOHN EDWARDS (Democratic presidential candidate): (From videotape.) Unless I missed something, Senator Clinton said two different things in the course of about two minutes just a few minutes ago. And I think this is a real issue for the country.

I think the American people, given this historic moment in our country's history, deserve a president of the United States that they know will tell them the truth and won't say one thing one time and something different at a different time.

DR. MCLAUGHLIN: Unfortunately for John Edwards, Bill Richardson, in Hillary's defense, returned fire.

NEW MEXICO GOVERNOR BILL RICHARDSON (Democratic presidential candidate): (From videotape.) You know what I'm hearing here? I'm hearing this holier-than-thou attitude toward Senator Clinton. It's bothering me, because it's pretty close to personal attacks that we don't need. Do we trust her?

DR. MCLAUGHLIN: Question: Was that a cheap shot from Edwards? Mort Zuckerman.

MR. ZUCKERMAN: Well, I think almost every shot from Edwards is a cheap shot. I mean, I find him absolutely -- if he is a breath of fresh air in this campaign, bring in the Environmental Protection Agency. I have so much difficulty with what he's saying. He talks about lobbying, right? He is the guy who accepts more money from the trial lawyers than anybody else.

DR. MCLAUGHLIN: And hedge funds.

MR. ZUCKERMAN: He's a total -- I mean, in this sense, I've always said he's a flyweight trying to pass himself off as a lightweight. I just simply cannot get --


MR. ZUCKERMAN: If he is the worst she has to deal with, she'll be fine.

DR. MCLAUGHLIN: Does he exemplify the old rhetoric that's about 10 to 15 years old, in contradistinction to Clinton, who is trying to elevate the rhetoric?

MR. ZUCKERMAN: He represents hypocrisy.

MS. CLIFT: Hillary Clinton -- MR. ZUCKERMAN: Hypocrisy and glibness; that's what he represents.


MS. CLIFT: Hillary Clinton is the front-runner and John Edwards is trying to elbow himself back into the race. She's a big girl. She can handle it. And you could make the argument that this gets her in fighting shape for the arguments the Republicans are going to make. All of these vulnerabilities are out there, including the one about her electability. So let's see how she handles them. She didn't handle them very well the other night.

DR. MCLAUGHLIN: What are you exacerbated about now?

MR. BLANKLEY: You're giving her the credit for some sort of lofty intellectual discussion when that's the most calculated evasion of taking a position on any position that I've seen in a presidential campaign.

DR. MCLAUGHLIN: Oh, that's nonsense. She took a position on it. She said it's not good for every state.

MR. BUCHANAN: John -- look, John --

DR. MCLAUGHLIN: She said in the case of his, there's a lot of sense to it.


DR. MCLAUGHLIN: She doesn't want to leave the impression --

MR. BLANKLEY: You're going to be ambassador to France --

DR. MCLAUGHLIN: She doesn't want to leave the impression with the public that this is good for all the states.

MR. BUCHANAN: Let me get into this, John. She was utterly unprepared for an easy question she was certain to be asked about Spitzer. She should have said, "He's got a very rough assignment, but I'm not for giving driver's licenses to illegals, period. Get it out of there."

MS. CLIFT: Pat, I have news --

DR. MCLAUGHLIN: You're back in your era of the Reform Party, Buchanan.

MR. BUCHANAN: John, the whole country doesn't want --

MS. CLIFT: Pat, I have news for you. In most areas of this country, you get a driver's license with a birth certificate and proof of residence with some utility bills. There are lots of illegals that have driver's licenses.

DR. MCLAUGHLIN: Just remember --

MR. BLANKLEY: Seventy-five percent of --

DR. MCLAUGHLIN: -- Spitzer has a third division. He has a special card. It's not a license.

MS. CLIFT: It's reality.

DR. MCLAUGHLIN: Issue Three: But Can Hillary Get the Vote?

SEN. CHRIS DODD (D-CT): (From videotape.) Whether it's fair or not fair, the fact of the matter is that my colleague from New York, Senator Clinton, there are 50 percent of the American public who say they're not going to vote for her.

DR. MCLAUGHLIN: The number Senator Dodd is referring to comes from a Zogby poll out this month. Question: "Which candidate would you never vote for as president?" Clinton, 50 percent; Kucinich, 49; Gravel, 49; Paul, 47; Tancredo, 46; McCain, 45; Hunter, 44; Giuliani, 43; Romney, 42; Edwards, 42; Thompson, 41; Dodd, 41; Biden, 40; Obama, 37; Huckabee,35; Richardson, 34. Remember, big numbers are bad; small numbers are good.

The Zogby poll is an interactive Internet poll done on the computer by self-selected people, which means that it is not scientific, meaning it's not a random scientific sampling in accordance with generally accepted polling standards. It's done on the computer. You got the picture?

Question: Should we disregard the 50 percent polling of Hillary -- in fact, the entire poll? I ask you.

MR. ZUCKERMAN: No, I don't think you can. Now, he may be, shall we say, exaggerating. He said it's within a plus or minus of 1 percent accuracy.

DR. MCLAUGHLIN: I know that. How did he say that? Why did he say that?

MR. ZUCKERMAN: Well, we don't know how they are selected. This may be a group that he typically handles through the computer, through the Internet, and it's a very --

DR. MCLAUGHLIN: They select themselves.

MR. ZUCKERMAN: Every one of them are self-selected on each poll? On each poll? He just throws the question out and --

DR. MCLAUGHLIN: He said, "Do you want to be polled?" MR. BLANKLEY: Let me make another point here. Whether this poll --

MR. ZUCKERMAN: But then he may have a random sample, if that's the case.

DR. MCLAUGHLIN: This is not --

MR. BLANKLEY: Whether this poll is right or not, there are other polls, the Rasmussen poll, that show that she's like at 48 percent against any candidate.

DR. MCLAUGHLIN: I can show you a poll of Zogby earlier --

MR. BLANKLEY: I'm not a great fan of --

DR. MCLAUGHLIN: -- that attacks his own poll.

MR. BLANKLEY: I know. What I'm saying is, forget the Zogby poll. The fact is that she has a fairly low ceiling. It may be 51 percent. It may be 48 percent.

DR. MCLAUGHLIN: We should insist that polling be done in person by professional pollsters.

MR. BUCHANAN: All right, John, throw the poll out. But every single poll ever taken nationally, she's at the top in terms of numbers who will never vote for her. And by the way, 74 percent of New Yorkers don't want the driver's licenses.

DR. MCLAUGHLIN: You know she's going to win the nomination, right?

MR. BUCHANAN: I think she's going to win it.

DR. MCLAUGHLIN: All right, she's going to win the nomination. She has from January -- let's say from February 5, Super Tuesday, from then until the election to turn it around. She can turn it around. Granted, it's 50 percent.

MR. BUCHANAN: From then until the election she's going to be pounded every day.

MS. CLIFT: Any --

DR. MCLAUGHLIN: Let Eleanor in.

MS. CLIFT: Any Democrat would be pounded going into the election. And every matchup with the Republicans, she beats the Republican. She beats Giuliani by nine points.


MS. CLIFT: That's a much more relevant figure than this one.

DR. MCLAUGHLIN: Let's assign a letter grade for Hillary's debate performance Tuesday night, A to F. Pat Buchanan.


MS. CLIFT: I would agree with that. She was not as sure-footed as she has been in the past.

MR. BLANKLEY: It was about a C, but it was like President Ford's debate. The worst that happened to her was afterwards.

MR. ZUCKERMAN: I wouldn't give her more than a C.

MS. CLIFT: What happened to her afterwards? MR. BLANKLEY: It changed all the comment about her.

MR. ZUCKERMAN: It changed the whole dialogue about her, from her competence and her ability to command these debates into one of evasiveness and trust and character. That's the big issue that people really identify her with, and she reminded everybody of her weakness.

DR. MCLAUGHLIN: The answer is she gets an A.

MR. BUCHANAN: (Laughs.)

DR. MCLAUGHLIN: She gets an A because she was under attack on all sides, and she kept her cool and she answered the questions extremely well. People can understand why she's number one.

Issue Four: Hillary's Revenge.

(Videotaped excerpt of other presidential candidates evoking Senator Clinton's name.)

SEN. CLINTON: (From videotape.) I seem to be the topic of great conversation and consternation, and that's for a reason.

DR. MCLAUGHLIN: The politics of pile-on. Question: Does it benefit Hillary to play the victim? Besides playing the victim, is she also playing the gender card? Eleanor.

MS. CLIFT: Well, the gender issue is obvious. It was a tag team, and it was all guys going after her, and optics do matter. I think they're looking at the 2000 Senate race when her opponent there sort of invaded her space in a debate and it really rallied women. And I think she followed up the debate with a speech at Wellesley College, which is her alma mater.

And she's depending on rallying women, not only Democratic women but Republican women. And Mark Penn, her pollster, says that she can get up to 24 percent of Republican women. So the gender issue is obvious, but she shouldn't overplay it.

MR. BLANKLEY: Yeah, look --

DR. MCLAUGHLIN: They're all men, Pat -- all men.

MR. BLANKLEY: Yeah, she made --

MR. BUCHANAN: I know they were all men. Let me say this. Look, I think that was very effective. Wellesley was effective. I agree with Eleanor. She went up to all these young gals and said, you know, "We're up there. We're in there with the boys now. We're doing fine." I think that's terrific. But don't overplay it and don't act like a victim. I don't think she is. I think she's handled it. And I think that tape was good. I still think, John, the answer -- DR. MCLAUGHLIN: You sound like Hillary. You're going all over that question. Where do you come down?

MR. BUCHANAN: I come down that she's handled it, after the first 24 hours, extremely well.


MR. BLANKLEY: What you didn't show was John Edwards' ad where he showed Hillary on both sides of about four different issues. She gave a lot of grist for the advertising mill.

MR. ZUCKERMAN: Well, that's the way the other Democrats are going to go after her; not only John Edwards, but Obama is going to go after her as well. And that's her vulnerability. And she gave them material for that. I agree with Tony. She also handled it well. Nevertheless, she's now vulnerable in a way that she has not been vulnerable since this campaign began.

DR. MCLAUGHLIN: Wild exaggeration -- wild.

Predictions. Pat.

MR. BUCHANAN: Hillary came back well at Wellesley, John. But after she gets the nomination and before this election, she will get away from that driver's license. She will also repudiate amnesty, because that is the one burning populist issue that reaches Democrats, independents, working folks, black Americans. You cannot hold a position of softness on illegal immigration and be elected.

MS. CLIFT: Well, first of all, there's no Democrat calling for amnesty, so that should destroy part of your prediction.

MR. BUCHANAN: Are you serious?

MS. CLIFT: People calling for amnesty.

DR. MCLAUGHLIN: Quickly, Eleanor. What's your prediction?

MS. CLIFT: It's not a plan for amnesty; never was.

DR. MCLAUGHLIN: Eleanor, give us a prediction.

MS. CLIFT: The prediction is that the Democrats have legitimized the Republican attacks on Hillary Clinton, and "Slick Billary" will become part of Republican attacks.


MR. BLANKLEY: A recent Zogby poll --

MS. CLIFT: "Slick Hillary." MR. BLANKLEY: -- shows that despite the fact that energy independence is the most important domestic issue for the public, even more so than health care, the Congress will not pass an energy bill to the president's desk this year.

DR. MCLAUGHLIN: Well, what about health care?

MR. BLANKLEY: They won't pass a health care bill either.


MR. ZUCKERMAN: In a recent poll, 87 percent of voters between the ages of 18 and 30 say they will vote. This is going to be a dramatic help for the Democrats, not for the Republicans.

DR. MCLAUGHLIN: I predict that Judge Michael Mukasey will be confirmed as U.S. attorney general by the Senate.