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THE MCLAUGHLIN GROUP HOST: JOHN MCLAUGHLIN PANEL: PATRICK BUCHANAN, MSNBC; ELEANOR CLIFT, NEWSWEEK; MONICA CROWLEY, SYNDICATED RADIO COMMENTATOR; MORT ZUCKERMAN, U.S. NEWS & WORLD REPORT TAPED: FRIDAY, JANUARY 25, 2008 BROADCAST: WEEKEND OF JANUARY 26-27, 2008

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MR. MCLAUGHLIN: Issue One: Did You Say Money?

HOUSE SPEAKER NANCY PELOSI (D-CA): (From videotape.) The stimulus package would put money in the hands of hard-working Americans.

PRESIDENT GEORGE W. BUSH: (From videotape.) I firmly believe we're going to continue to lead the world.

MR. MCLAUGHLIN: A $150 billion economic stimulus package materialized from Congress and the White House this week. It will put checks in the mail this spring. Income tax payers: Individuals, $600; joint filer couples, $1,200. Non-income tax payers: Individuals, $300; joint filer couples, $600.

This announcement on Thursday comes on the heels of an emergency move Tuesday by the Federal Reserve to cut a key lending rate by 75 basis points, three-quarters of 1 percent, the biggest cut in almost a quarter of a century. The hope is that this infusion of cash will avert a recession.

Question: How big a bang for the buck will we get from this stimulus package? Pat Buchanan.

MR. BUCHANAN: John, it's 1 percent of gross national product. But, look, these aren't rebates. Nobody on this panel is going to get one of those rebates, and we all pay taxes. What this is is the United States government is in deficit. We are in a huge debt.

It's going to go out and it's going to borrow all this money, you know, this $150 billion, and it's going to parcel it out to all sorts of folks. It's going to increase the deficit. It's going to weaken the dollar. And the folks are going to go about and buy some goods. We're borrowing it from China, and they'll be buying a lot of goods that are made in China. I think it may perk up the economy a little bit, but this is Keynesian economics if it's not socialist economics.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: This is not about giving money to people on this panel. It's about giving money to people at the lower end of the income scale who will spend the money and give the economy the boost that it needs. And it's more about psychological balance. It's really more symbolic than is real. But it's important, because the panic was starting to spread from Wall Street to Main Street, or vice versa.

And it was also important for this government to show that it can function, that it can function in this crazily charged political environment. And it also shows that it functions best when there's compromise. And the problem with the Bush years is he has taken the approach that it's his way or the highway. And I think the fact that these people could work together finally, at least for the moment, is important.

MS. CROWLEY: Well, they're working together --

MR. MCLAUGHLIN: Do you think it's all psychology?

MS. CROWLEY: A big part of it is psychology. But they're all working together because they have no choice, because the economy and the problems in the economy now are ingrained. They're leading the headlines. Voters are talking about it nonstop. It's replaced Iraq as the number one issue. So of course politicians have to look like they're trying to do something. You mentioned the tax rebates. Look, it's a gimmick. Now, it doesn't mean that the gimmick won't work. The problem is, the last time that we gave tax rebates out for individuals and couples was the summer of 2001, and what most people did was save it or they put it to paying down their own personal debt, meaning they didn't inject it into the economy in terms of consumer spending the way we expected the last time. So I'm not quite so sure that it's going to work this time.

The package also has a lot of tax incentives for businesses and small businesses, which is always a good idea. But to me this seems like too little, too late.

MR. MCLAUGHLIN: How important is consumer spending to the recovery of the economy?

MR. ZUCKERMAN: Well, consumer spending is the most powerful force in the economy. But the question is, will this help consumer spending? And I agree with what Monica said. It's not going to have very much of an impact on the consumer, in part because the checks will not be distributed until well into the year just because of the nature of it.

And the part that is going to be devoted to giving accelerated depreciation to business, which is about $50 billion -- this is about a third of it -- will also not really affect the economy because, in fact, the economy is not short of capacity; it's short of demand, and particularly industrial demand.

What is involved now is something that neither the federal government nor the Federal Reserve really can do that much about, which is the inability of the financial system to provide loans, especially to the small and medium-size businesses, to which a lot of this money is --

MR. BUCHANAN: John --

MR. MCLAUGHLIN: Okay. The troubled economy. Which candidate can best deal with it? The vote in the Florida primary this Tuesday and the nomination itself may well hinge on the answer to that question. Which candidate can best deal with the slowdown?

FORMER MASSACHUSETTS GOVERNOR MITT ROMNEY (Republican presidential candidate): (From videotape.) I've done business around the world. Twenty different countries I've worked in, and negotiated in some cases in some of those countries. And I understand what it takes to grow and strengthen an economy.

MR. MCLAUGHLIN: Question: Is Romney the best-equipped Republican contender to handle economic problems that are now facing the country? I ask you, Eleanor. MS. CLIFT: Well, I think if you accept the fact that the two leading contenders on the Republican side are Mitt Romney and John McCain, Mitt Romney knows a lot more about the economy. It's sort of in his DNA. Of course, he's a merger and takeover artist, and he cares more about the corporate structure than he does about the workers. And that may hurt if he doesn't adopt a message that can relate to the Main Street voter.

John McCain, when he gives an economic speech, he talks about the bridge to nowhere and he talks about controlling --

MR. MCLAUGHLIN: John McCain --

MS. CLIFT: -- earmarks.

MR. MCLAUGHLIN: -- was chairman of the Commerce Committee.

MS. CLIFT: Yeah, but he's really more about national security. I think he'd make a better secretary of Defense, frankly, than somebody commanding the economy.

MR. MCLAUGHLIN: Is Romney stronger than Giuliani?

MS. CLIFT: Yes. (Laughs.)

MR. MCLAUGHLIN: Is Romney stronger than Huckabee?

MS. CLIFT: Yes. (Laughs.)

MR. MCLAUGHLIN: Okay, let's open the lens on Mitt.

(Begin videotaped segment.)

TIM RUSSERT (NBC News): Governor Romney, as has become apparent over the last few weeks, if Hillary Clinton is the Democratic nominee, she'll be running as a team with her husband. Specifically, how would you run against Hillary and Bill Clinton in November?

MR. ROMNEY: I frankly can't wait, because the idea of Bill Clinton back in the White House with nothing to do is something I just can't imagine. I can't imagine the American people can imagine it.

MR. RUSSERT: What does that mean?

MR. ROMNEY: I just think that we want to have a president, not a whole -- a team of husband and wife thinking that they're going to run the country. If Hillary Clinton is the nominee, it's going to be Hillary Clinton. I said before, Washington is broken. She is Washington to the core. Washington has made promises to us over the last decade that they just haven't been able to fulfill. You can go down the list. They said they'd solve the problem of Social Security. They haven't. They said they'd rein in spending. Somehow every year more and more and more money goes in. They said they'd live by high ethics. They haven't. They said they'd solve the problem of illegal immigration. They haven't. They said they'd get us off of foreign oil. They haven't.

MR. MCLAUGHLIN: Question: What is Romney trying to accomplish by his "Washington is broken" emphasis? Monica.

MS. CROWLEY: Well, let's see -- Ronald Reagan in 1980, Bill Clinton in '92, George W. Bush in 2000, running as an outsider. Outsiders win, especially now, for all the reasons that Romney just laid out in that clip. And he's already running a general election campaign against the junior senator from New York.

MR. MCLAUGHLIN: But that role has been taken. It's been taken by Obama, has it not? Is he stealing it?

MR. BUCHANAN: John, it is gone. Mitt Romney is very, very -- that was one of the most -- first, the wit was Reaganite. Secondly, the move against Washington, against the establishment, was perfect. Romney has gone to Michigan, saw the economic issue, pivoted completely, saw Obama being sort of taken down. He has grabbed the outsider, anti-Washington -- "Both parties are responsible; it needs fixing."

MR. MCLAUGHLIN: Does he only --

MR. BUCHANAN: He owns it because Obama is going to get defeated.

MR. MCLAUGHLIN: What?

MR. BUCHANAN: Obama is going to be defeated. And he owns the issue in the Republican Party.

MR. MCLAUGHLIN: Is he tailor-made for the issue?

MR. BUCHANAN: He is, because McCain is the ultimate insider.

MR. ZUCKERMAN: He's tailor-made only if we don't look at the lining, okay. This guy was the governor of Massachusetts. The growth of the --

MR. MCLAUGHLIN: Here we go again.

MR. ZUCKERMAN: Just a minute. Well, when he was handling a public economy, which was Massachusetts, the growth of jobs in Massachusetts was one-tenth of that of the national economy while he was governor. He then says, as he says here, that he's worried about -- that Washington didn't deal with the dependency on foreign oil. MR. BUCHANAN: Mort's --

MR. ZUCKERMAN: When he goes to Michigan, he opposes whatever efforts the Bush administration did to --

MR. BUCHANAN: Mort --

MR. MCLAUGHLIN: Why are you so --

MR. ZUCKERMAN: -- reduce fuel consumption.

(Cross-talk.)

MR. ZUCKERMAN: I'm just trying to tell the truth about --

MR. BUCHANAN: Your exasperation --

MR. ZUCKERMAN: He has totally, totally misrepresented what he did.

MS. CLIFT: My turn. (Laughs.)

MR. ZUCKERMAN: He's changed everything now that he's running for national office.

MS. CLIFT: He has more moves than a circus contortionist. He has adjusted himself to whatever the message of the day is. Now, maybe this is more his real self, because he does seem to understand business. But when it comes to authenticity, this guy --

MR. BUCHANAN: Okay. Mort --

MS. CLIFT: -- is the candidate in a Robert Redford film.

MR. BUCHANAN: Let me answer Mort here. All right, Mort's exasperation and rage tells me it is working. It is working, because the liberals and the others are up the wall over Romney because they see what he's doing. It's very effective.

MS. CLIFT: No --

MR. BUCHANAN: And I agree it's a new --

MS. CLIFT: Romney --

(Cross-talk.)

MR. ZUCKERMAN: Your face looks so calm, Pat. What are you talking about?

MR. MCLAUGHLIN: What is -- MR. ZUCKERMAN: What I don't like about him, frankly -- and I don't like him -- is because he's a total phony. He says he has one whole set of positions in Massachusetts. Now he's running for national office and he changes everything.

MS. CROWLEY: Wait a minute. He's running -- Romney is running on his strength as an economic turnaround guy. Look, there are two other executives in this race --

MR. MCLAUGHLIN: He's made a fortune.

MS. CROWLEY: -- two other executives in this race, Giuliani and Huckabee. Romney is the only one who has experience in the private sector, and very successfully.

MR. ZUCKERMAN: Excuse me --

MR. MCLAUGHLIN: Let her finish.

MS. CROWLEY: And when he was governor of Massachusetts, he lowered taxes 19 times. He balanced the state budget four times. And he ended up with a $2 billion state surplus as a rainy-day fund.

MS. CLIFT: I get the feeling you guys have your candidate. Am I right? (Laughs.)

MR. ZUCKERMAN: The candidate. But look --

MR. MCLAUGHLIN: What is the problem here? He's a billionaire.

MR. BUCHANAN: What's the problem, Mort?

MR. MCLAUGHLIN: Romney has a paltry $250 million, right?

MS. CLIFT: If he's the nominee --

MR. ZUCKERMAN: I don't hold his property against him. I promise you, John, that's not the issue.

MR. MCLAUGHLIN: Exit question: Does the current and projected state of the economy guarantee that this election will be about the economy and not the war? Pat Buchanan.

MR. BUCHANAN: Very probably the economy is going to be the number one issue, frankly, because I think it's going downhill. But that frankly will favor the Democratic Party. But there's no doubt the best guy the Republicans have on the issue is Romney.

MR. MCLAUGHLIN: Who's the Democrat who can take over the Romney clothing that he's wrapped himself in?

MR. BUCHANAN: Nobody. Hillary is -- the good thing for Romney is Hillary is going to be nominated, and she and Bill are the ultimate insiders.

MR. MCLAUGHLIN: Yeah, but as he's pointed out in his own address, Hillary is characteristically and fundamentally Washington.

MR. BUCHANAN: Sure.

MR. MCLAUGHLIN: And Washington is broken.

MR. BUCHANAN: Exactly. And he's outside.

MS. CLIFT: Well, and Hillary Clinton does present solutions. And a lot of the worry about the economy has to do with health care. And I think Hillary Clinton, despite her past on that issue, is considered to be somebody who could actually turn it around.

MR. MCLAUGHLIN: Do you think Hillary could take the issue away from Romney?

MS. CROWLEY: No, I don't think she's equipped to take the issue away from Romney. He is the candidate on the economy. He's finally wised up to it, and he's centered his campaign around it. Barring some sort of foreign policy catastrophe or a terrorist attack against the United States, the economy will be the number one issue. And that's why Romney now is so well positioned to not just take the nomination but win in November.

MR. MCLAUGHLIN: How do you account for Mort Zuckerman's vitriol against Romney?

MR. BUCHANAN: He's nervous.

MR. MCLAUGHLIN: Nervous?

MS. CROWLEY: Ask him.

MS. CLIFT: And how do you account for the polls?

MR. MCLAUGHLIN: What?

MS. CLIFT: How do you account for the polls that all show Romney being defeated by a dozen points by either of the Democratic --

MR. BUCHANAN: Now. Listen, you want to come out as an underdog. (Laughs.) MS. CLIFT: Oh, I see. Okay, he's the underdog. I got it. (Laughs.)

MR. ZUCKERMAN: Look, Romney does have very good private business experience. Giuliani, I might say to you, did a very good job with the economy of the city of New York. I'm not saying he can do it nationally, but he did a good job. So let's give him his proper due.

If there is one possible candidate who really does understand the economy in national terms, it is a guy who has not yet announced, and I hope he will, and that, of course, is the mayor of New York, Mike Bloomberg.

MR. MCLAUGHLIN: Romney also has executive experience. He was governor of Massachusetts.

MR. ZUCKERMAN: Yes. He was not the greatest governor of Massachusetts.

MR. MCLAUGHLIN: He was also president of that company, wasn't he?

MR. BUCHANAN: Bain.

MR. ZUCKERMAN: Bain & Company, yes.

MR. MCLAUGHLIN: Bain & Company?

MR. ZUCKERMAN: And he did a very good job with Bain & Company. I can tell you that.

MR. MCLAUGHLIN: Well, don't overdo it here.

MR. ZUCKERMAN: No, no. I want to be fair to him. What I don't like about him is that I don't think he has any political --

MR. MCLAUGHLIN: Well, you don't like him because you called him a fraud.

MR. ZUCKERMAN: Yeah, because he has no political integrity.

MR. MCLAUGHLIN: The answer is it's Romney's, and Romney will keep this issue.

Issue Two: Hot Rage.

(Begin videotaped segment.)

SENATOR BARACK OBAMA (D-IL, Democratic presidential candidate): Let's talk about Ronald Reagan. What you just repeated here today is patently -- SEN. HILLARY CLINTON (D-NY), Democratic presidential candidate): Barack --

SEN. OBAMA: Wait. No, Hillary, you just spoke --

SEN. CLINTON: Barack, I did not say --

SEN. OBAMA: You just spoke for two minutes.

SEN. CLINTON: I did not say anything about Ronald Reagan. You said two things.

SEN. OBAMA: You just spoke --

SEN. CLINTON: You talked about admiring Ronald Reagan --

SEN. OBAMA: Hillary, I'm sorry, but --

SEN. CLINTON: -- and you talked about the ideas of the Republicans.

SEN. OBAMA: -- you just --

SEN. CLINTON: I didn't talk about Ronald Reagan.

SEN. OBAMA: Hillary, we just had the tape. You just said that I complimented the Republican ideas. That is not true. What I said -- and I will provide you with the quote -- what I said was that Ronald Reagan was a transformative political figure because he was able to get Democrats to vote against their economic interest to form a majority to push through their agenda, an agenda that I objected to. So these are the kinds of political games that we are accustomed to.

SEN. CLINTON: No. Now, wait a second.

SEN. OBAMA: I'm sorry.

SEN. CLINTON: Wolf -- wait a minute.

(End videotaped segment.)

MR. MCLAUGHLIN: Question: Did this exchange unveil a hidden side of Obama's personality? I ask you, Monica.

MS. CROWLEY: Well, the Clinton team fights like biker chicks at a biker bar with broken beer bottles, right, and they've got you on the defensive. And the next thing you know, they've got their combat boot on your neck. Barack Obama is like Wile E. Coyote. Finally the anvil has landed on his head and he's woken up to the tactics of the Clinton team. And what you saw in that clip is Obama finally wising up to the fact that the Clintons play gutter politics. And unless he is willing to be as aggressive on the substantive points and actually calling her out -- and him, by the way, meaning Bill -- calling them out on their tactics, he's going to be sunk --

MR. MCLAUGHLIN: You think Obama --

MS. CROWLEY: -- (inaudible).

MR. MCLAUGHLIN: Do you think Obama appeared mean-spirited in any way in that exchange?

MS. CLIFT: Actually, that reminded me of the McLaughlin Group. And when I heard him say, "Let me finish," I identified with him -- (laughs) -- not with her. And I have to admit, I wanted to close my eyes and imagine Romney or Giuliani standing in Obama's place, because, look, Hillary Clinton knows how to fight, and that's the whole premise of her campaign is that she can handle it in the fall.

I think it was hard to watch and I think Obama is beginning to find his voice in fighting back. But he doesn't want to damage his brand as a healer and a unifier. And if he gets down there in the back and forth --

MR. BUCHANAN: He's been dragged --

MS. CLIFT: -- it hurts him.

MR. MCLAUGHLIN: The public is concerned about health insurance. They're concerned about the price of gasoline. They're concerned about the state of the economy. And they're talking about whether or not you're a Reaganite.

MR. BUCHANAN: What happened is --

MR. MCLAUGHLIN: What is that, dancing on the head of a pin?

MR. BUCHANAN: No, I think the Clintons have done a job on Obama. He came out of Iowa. He was a transcendent, transformative figure. He'd gotten all these white votes. He's running way up high. And they gutted him and kicked him and dragged him down. And now he's fighting back, and it's very unseemly. And he's being reduced to the African-American vote in South Carolina. He's lost the women. He's lost the Hispanics. He's lost the --

MR. MCLAUGHLIN: Because of the evil Clintons.

MR. BUCHANAN: Because they all got him into this ugly brawl.

MS. CLIFT: I'm not going to go that far. MR. ZUCKERMAN: The way she is now fighting in this campaign is the kind of -- it's an echo of the partisan politics that was associated with the Clintons while they were in office. And I think both of them were diminished as a result of it, because he went off -- she forced him off the pedestal.

MR. MCLAUGHLIN: Why don't you focus on the weakness of his campaign, Obama's campaign?

MR. ZUCKERMAN: No, I think -- not only I have focused on it, frankly, because I think the real problem with it is it's too ethereal. There is not enough substance in the way of policy.

MR. MCLAUGHLIN: Okay. Icy rage -- icy rage.

Obama taunted Hillary by saying that during Ronald Reagan's presidency, he, Obama, was pounding the streets in Chicago as a community organizer at the same time Hillary was a director on Wal- Mart's board.

SEN. OBAMA: (From videotape.) While I was working on those streets, watching those folks see their jobs shift overseas, you were a corporate lawyer sitting on the board of Wal-Mart.

MR. MCLAUGHLIN: That Wal-Mart barb from Obama triggered Clinton to correct Obama, saying that she actually fought the Reagan policies while Obama was on the payroll of a lowlife influence-peddler.

SEN. CLINTON: (From videotape.) I was fighting against those ideas when you were practicing law and representing your contributor, Rezko, in his slum landlord business in inner-city Chicago.

MR. MCLAUGHLIN: The Rezko that Hillary named is Tony Rezko, a Syrian-born American restaurateur and real estate developer. Rezko is regarded as a political fixer and a back-room operator.

1990 -- Obama, still at Harvard Law School, interviews for a job at one of Rezko's development companies and declines it.

'93 -- Obama joins a Chicago law firm that represents Rezko.

'95 -- Rezko contributes $2,000 to Obama's Illinois Senate campaign.

'98 -- Illinois Senator Obama seeks government funding for a Rezko housing development.

2003 -- Rezko foots the bill for a $1,000-a-head kickoff cocktail reception for Obama's U.S. Senate run. Obama appoints Rezko to serve on his U.S. Senate campaign finance committee.

'04 -- FBI begins investigating Rezko for business fraud, influence-peddling, extortion, conspiracy and money laundering. June '05 -- Obama executes land transaction with Rezko involving an Obama $1.65 million home purchase, $300,000 under the asking price, and the purchase of land adjacency involving Mr. And Mrs. Rezko.

December '05 -- Obama purchases a piece of the adjacent lot from Mr. And Mrs. Rezko for $104,000.

'07 -- Obama divests himself of $44,000 in funds tied to Rezko.

January '08, one week ago, on the eve of the debate, Obama divests himself of an additional $40,000 in Rezko-linked contributions.

February 25, '08, one month from now, Tony Rezko goes on trial on federal charges of business fraud, influence-peddling, extortion, conspiracy, money laundering, with Patrick Fitzgerald as prosecutor -- the same U.S. attorney who gained headlines and the conviction of Scooter Libby.

Rezko and Obama have had dealings for 17 years.

FYI, there is no evidence whatsoever that Barack Obama or Mrs. Obama were involved in anything illegal regarding Tony Rezko.

Question: Is Obama tarnished by Rezko? Eleanor Clift.

MS. CLIFT: With all due respect, John, you're not the first person to turn over all these rocks. It's been examined by the Chicago newspapers.

MR. MCLAUGHLIN: Sun-Times.

MS. CLIFT: Right. And, yeah, I mean, I think the Clintons are going to try to make this seem like Jim McDougal and Whitewater, the 2008 version of that, which was a whole lot about nothing.

MR. MCLAUGHLIN: They've been on it for a year, examining it.

MS. CLIFT: Right. But, you know, if you want to make charges like this stick, there has to be some underlying characteristic about this candidate that makes you uneasy. I really don't think people look at Barack Obama and think corrupt; they think he's in it for the money somehow.

MR. MCLAUGHLIN: The public will say, "Why is he hanging out with this guy?" MR. BUCHANAN: Well --

MS. CLIFT: Well, and the Clintons also hung out with this guy.

MR. BUCHANAN: But John, you know, this --

MS. CLIFT: There's actually photographic evidence of that.

MR. MCLAUGHLIN: Okay. Okay. She's raised a point. This photograph has emerged of the Clintons and Rezko.

(Begin videotaped segment.)

MATT LAUER (NBC "Today"): It is undated, I'm going to tell you right now. We know it's him. We don't know when it was taken. We think it was taken during your husband's presidency. I'm just curious. Do you know anything about the picture? Do you know when it was taken? Do you remember meeting this man?

SEN. CLINTON: No, I don't. You know, I probably have taken hundreds of thousands of pictures. I don't know the man. I wouldn't know him if he walked in the door. I don't have a 17-year relationship with him.

MR. LAUER: Does it make sense to use someone like this, Tony Rezko, against Senator Obama when there really is no such thing as political purity anymore?

SEN. CLINTON: There's a big difference between standing somewhere taking a picture with someone you don't know and haven't seen since and having a relationship.

(End videotaped segment.)

MR. BUCHANAN: You know, John --

MR. MCLAUGHLIN: Question: Has this photograph turned Hillary's bullets, destined for Obama, into blanks? Pat Buchanan.

MR. BUCHANAN: No, it hasn't. Look, anybody that's been in politics know they walk people through hundreds of them at fund- raisers and you take a photograph and move on. That's what that is.

Now, this thing -- he does have a connection with a sleazy character, but let me defend Obama. I have seen no hard evidence that this guy did anything criminal at all -- I'm talking about Obama -- for this guy. He's got a guy who hangs around politics, who turned out to be very sleazy and maybe a crooked character. And I think it's tarnished Obama. And I think it's somewhat unfair, all this attention focused on that.

MS. CROWLEY: Yeah. And you know what? The reason that Hillary did this is because that's the only thing that they have on the guy. Barack Obama is a very intelligent, skilled, class act. They found one guy, and so she gets panicky in the debate. She goes nuclear on Obama by dragging up the Rezko guy, which is particularly rich coming from the queen of the mother of all shady land deals, Whitewater, okay.

MS. CLIFT: Which was a whole lot about nothing.

MS. CROWLEY: Wait a minute. What the Clintons are so good at is accusing their rivals and opponents, accusing them of exactly what they are guilty themselves of.

MR. MCLAUGHLIN: Are you so positive towards --

MS. CROWLEY: It's -- (inaudible) -- from them.

MR. MCLAUGHLIN: Are you so positive towards Obama because of your odium for the Clintons?

MS. CROWLEY: Look --

MR. MCLAUGHLIN: Is that why you're positive towards him?

MS. CROWLEY: I would not -- no, no, no. Look, I think that the Clintons have a rap sheet of shady donors going right up to Norman Hsu as of, what, last week. But there's some nerve on the part of the Clintons to attack Barack Obama for one night --

MR. MCLAUGHLIN: Do you think a list could be put together --

MR. BUCHANAN: How about Marc Rich?

MS. CROWLEY: He has apologized and given the money to charity.

MR. MCLAUGHLIN: Two-part exit question. Part one: Will Rezko's association with Obama torpedo Obama's prospects in the primaries to come? Second part: Will Rezko torpedo Obama's prospects long term?

MR. BUCHANAN: No. But look, there's a tarnish, a bit of a smear on Obama. But, no, that's not what's going to kill him, John. What's going to kill him (is) what's already been done in Nevada and South Carolina, which is turn him from a candidate who happened to be black into the black candidate.

MR. MCLAUGHLIN: Have you forgotten something?

MR. BUCHANAN: And second --

MR. MCLAUGHLIN: I'm doing this for the rest of the panel so they will not embarrass themselves. We've got a trial coming up. The trial is going to be prolonged. There are many counts.

MR. BUCHANAN: I don't know of -- MR. MCLAUGHLIN: It's Patrick Fitzgerald. It's day in and day out, video every night --

MR. BUCHANAN: I don't know that Rezko --

MR. MCLAUGHLIN: -- of Rezko.

MR. BUCHANAN: I don't know of a thing that Obama has done for Rezko that is in any way shady or criminal.

MR. MCLAUGHLIN: I'm telling you, the trial is not going to leave a pleasant odor.

MS. CLIFT: The answer is double no. Barack Obama is not on trial. And every politician in Washington has a rap sheet of donors. It's unfortunately the system that we operate under.

MS. CROWLEY: Well, what is going to torpedo Barack Obama is the Clinton war machine. It's not this individual Rezko charge.

MR. MCLAUGHLIN: You mean, there's more that they have on him?

MS. CROWLEY: Well, I mean, look at how the Clintons are playing this game. Barack Obama is trying to run a class operation, and the Clintons wouldn't know class if it hit them on the head.

MS. CLIFT: It's called politics, Monica. (Laughs.)

MR. MCLAUGHLIN: Could there be a counter-sympathy for Obama because of what the alleged Clintons are doing?

MR. ZUCKERMAN: Well, I think there is. There's been a lot of editorial comment really hostile to both Bill Clinton and Hillary for doing exactly this. And frankly, both of them end up being diminished by it. The country is just sick and tired of this kind of stuff. If you want to go back through the Clintons, you could find all kinds of material, okay, that could be brought up. I think this is an absolute non-issue.

MR. MCLAUGHLIN: The trial will be a non-factor?

MR. ZUCKERMAN: Absolutely. He is not on trial. You know, it is really a ridiculous issue. It is just another attempt to smear. And I think both of them --

MR. BUCHANAN: Hey, Mort -- you've got to get behind Romney, Mort. (Laughs.)

MR. ZUCKERMAN: I will. I will, if I knew who he was, okay? MR. BUCHANAN: (Laughs.)

MS. CLIFT: Which Romney should you get behind?

MR. ZUCKERMAN: Right. Which Romney?

MR. MCLAUGHLIN: My feeling is Obama --

MR. ZUCKERMAN: Who is he today?

MR. MCLAUGHLIN: Can we get out? My feeling is Obama will not be hurt permanently by the Rezko matter.

Predictions. Pat.

MR. BUCHANAN: Hillary, Giuliani, Thompson will all endorse McCain.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: Barack Obama will get another red-state governor endorsing him. And on Super Tuesday, he will win more red states than Hillary Clinton.

MR. MCLAUGHLIN: Monica.

MS. CROWLEY: This week the Russians launch long-range missiles into the Atlantic off the coast of France and Spain. Vladimir Putin, even though he's giving up the presidency in about six weeks, he will continue to stoke Cold War tensions to hold on to power.

MR. MCLAUGHLIN: Five seconds.

MR. ZUCKERMAN: My prediction was exactly that of Pat's, except for the fact that I don't support Romney on these issues. (Laughter.)

MR. MCLAUGHLIN: Before Thanksgiving this year, the U.S. unemployment rate will climb to 7 percent.

Bye-bye.

(PBS segment.)

Issue Three: Hillary's attack dog.

(Videotaped segment of former President Bill Clinton falling asleep at Martin Luther King Jr. birthday event.)

MR. MCLAUGHLIN: Question: Is Bill Clinton's snooze a setup on the part of Bill Clinton? I ask you, Monica. (Laughter.)

MS. CROWLEY: Our (wild-hair ?) former president with the colorful psyche. If we didn't have him, we'd have to make him up. (Laughs.) God, he's just the gift that keeps on giving. No, I don't think this was a setup, but it's nice to know he doesn't need Ambien like the rest of America.

MR. MCLAUGHLIN: Hasn't everyone fallen asleep in church at one time or another?

MR. ZUCKERMAN: I have many times. Many of the times that I've gone there, I've fallen asleep.

MS. CLIFT: Look, we've all been there when you struggle to keep your eyes open. And some of those speeches do go on too long. But for the most part, this guy is out there on the campaign trail for his wife, willing to take a hit in his lofty status in order to get her elected, and he doesn't show any signs of fatigue.

MR. BUCHANAN: Reagan used to fall asleep at his Cabinet meetings. (Laughter.)

MR. MCLAUGHLIN: Listen --

MR. BUCHANAN: He said, "If you've ever been there, you would understand." (Laughs.)

MR. MCLAUGHLIN: How's Clinton doing as a member of the team, the Clinton team? How's he doing? Bill.

MR. BUCHANAN: Oh, I think he's doing -- he's torn this fellow Obama to pieces. I mean, he's diminished himself.

MR. MCLAUGHLIN: Has he?

MR. ZUCKERMAN: Oh, yes.

MR. BUCHANAN: Yeah. But he's diminished him. It's just been awful for Obama. It's been awful for the Democrats. It's been awful for Bill. But it's been good for Hillary. She's going to be the nominee.

END.
y is patently -- SEN. HILLARY CLINTON (D-NY), Democratic presidential candidate): Barack --

SEN. OBAMA: Wait. No, Hillary, you just spoke --

SEN. CLINTON: Barack, I did not say --

SEN. OBAMA: You just spoke for two minutes.

SEN. CLINTON: I did not say anything about Ronald Reagan. You said two things.

SEN. OBAMA: You just spoke --

SEN. CLINTON: You talked about admiring Ronald Reagan --

SEN. OBAMA: Hillary, I'm sorry, but --

SEN. CLINTON: -- and you talked about the ideas of the Republicans.

SEN. OBAMA: -- you just --

SEN. CLINTON: I didn't talk about Ronald Reagan.

SEN. OBAMA: Hillary, we just had the tape. You just said that I complimented the Republican ideas. That is not true. What I said -- and I will provide you with the quote -- what I said was that Ronald Reagan was a transformative political figure because he was able to get Democrats to vote against their economic interest to form a majority to push through their agenda, an agenda that I objected to. So these are the kinds of political games that we are accustomed to.

SEN. CLINTON: No. Now, wait a second.

SEN. OBAMA: I'm sorry.

SEN. CLINTON: Wolf -- wait a minute.

(End videotaped segment.)

MR. MCLAUGHLIN: Question: Did this exchange unveil a hidden side of Obama's personality? I ask you, Monica.

MS. CROWLEY: Well, the Clinton team fights like biker chicks at a biker bar with broken beer bottles, right, and they've got you on the defensive. And the next thing you know, they've got their combat boot on your neck. Barack Obama is like Wile E. Coyote. Finally the anvil has landed on his head and he's woken up to the tactics of the Clinton team. And what you saw in that clip is Obama finally wising up to the fact that the Clintons play gutter politics. And unless he is willing to be as aggressive on the substantive points and actually calling her out -- and him, by the way, meaning Bill -- calling them out on their tactics, he's going to be sunk --

MR. MCLAUGHLIN: You think Obama --

MS. CROWLEY: -- (inaudible).

MR. MCLAUGHLIN: Do you think Obama appeared mean-spirited in any way in that exchange?

MS. CLIFT: Actually, that reminded me of the McLaughlin Group. And when I heard him say, "Let me finish," I identified with him -- (laughs) -- not with her. And I have to admit, I wanted to close my eyes and imagine Romney or Giuliani standing in Obama's place, because, look, Hillary Clinton knows how to fight, and that's the whole premise of her campaign is that she can handle it in the fall.

I think it was hard to watch and I think Obama is beginning to find his voice in fighting back. But he doesn't want to damage his brand as a healer and a unifier. And if he gets down there in the back and forth --

MR. BUCHANAN: He's been dragged --

MS. CLIFT: -- it hurts him.

MR. MCLAUGHLIN: The public is concerned about health insurance. They're concerned about the price of gasoline. They're concerned about the state of the economy. And they're talking about whether or not you're a Reaganite.

MR. BUCHANAN: What happened is --

MR. MCLAUGHLIN: What is that, dancing on the head of a pin?

MR. BUCHANAN: No, I think the Clintons have done a job on Obama. He came out of Iowa. He was a transcendent, transformative figure. He'd gotten all these white votes. He's running way up high. And they gutted him and kicked him and dragged him down. And now he's fighting back, and it's very unseemly. And he's being reduced to the African-American vote in South Carolina. He's lost the women. He's lost the Hispanics. He's lost the --

MR. MCLAUGHLIN: Because of the evil Clintons.

MR. BUCHANAN: Because they all got him into this ugly brawl.

MS. CLIFT: I'm not going to go that far. MR. ZUCKERMAN: The way she is now fighting in this campaign is the kind of -- it's an echo of the partisan politics that was associated with the Clintons while they were in office. And I think both of them were diminished as a result of it, because he went off -- she forced him off the pedestal.

MR. MCLAUGHLIN: Why don't you focus on the weakness of his campaign, Obama's campaign?

MR. ZUCKERMAN: No, I think -- not only I have focused on it, frankly, because I think the real problem with it is it's too ethereal. There is not enough substance in the way of policy.

MR. MCLAUGHLIN: Okay. Icy rage -- icy rage.

Obama taunted Hillary by saying that during Ronald Reagan's presidency, he, Obama, was pounding the streets in Chicago as a community organizer at the same time Hillary was a director on Wal- Mart's board.

SEN. OBAMA: (From videotape.) While I was working on those streets, watching those folks see their jobs shift overseas, you were a corporate lawyer sitting on the board of Wal-Mart.

MR. MCLAUGHLIN: That Wal-Mart barb from Obama triggered Clinton to correct Obama, saying that she actually fought the Reagan policies while Obama was on the payroll of a lowlife influence-peddler.

SEN. CLINTON: (From videotape.) I was fighting against those ideas when you were practicing law and representing your contributor, Rezko, in his slum landlord business in inner-city Chicago.

MR. MCLAUGHLIN: The Rezko that Hillary named is Tony Rezko, a Syrian-born American restaurateur and real estate developer. Rezko is regarded as a political fixer and a back-room operator.

1990 -- Obama, still at Harvard Law School, interviews for a job at one of Rezko's development companies and declines it.

'93 -- Obama joins a Chicago law firm that represents Rezko.

'95 -- Rezko contributes $2,000 to Obama's Illinois Senate campaign.

'98 -- Illinois Senator Obama seeks government funding for a Rezko housing development.

2003 -- Rezko foots the bill for a $1,000-a-head kickoff cocktail reception for Obama's U.S. Senate run. Obama appoints Rezko to serve on his U.S. Senate campaign finance committee.

'04 -- FBI begins investigating Rezko for business fraud, influence-peddling, extortion, conspiracy and money laundering. June '05 -- Obama executes land transaction with Rezko involving an Obama $1.65 million home purchase, $300,000 under the asking price, and the purchase of land adjacency involving Mr. And Mrs. Rezko.

December '05 -- Obama purchases a piece of the adjacent lot from Mr. And Mrs. Rezko for $104,000.

'07 -- Obama divests himself of $44,000 in funds tied to Rezko.

January '08, one week ago, on the eve of the debate, Obama divests himself of an additional $40,000 in Rezko-linked contributions.

February 25, '08, one month from now, Tony Rezko goes on trial on federal charges of business fraud, influence-peddling, extortion, conspiracy, money laundering, with Patrick Fitzgerald as prosecutor -- the same U.S. attorney who gained headlines and the conviction of Scooter Libby.

Rezko and Obama have had dealings for 17 years.

FYI, there is no evidence whatsoever that Barack Obama or Mrs. Obama were involved in anything illegal regarding Tony Rezko.

Question: Is Obama tarnished by Rezko? Eleanor Clift.

MS. CLIFT: With all due respect, John, you're not the first person to turn over all these rocks. It's been examined by the Chicago newspapers.

MR. MCLAUGHLIN: Sun-Times.

MS. CLIFT: Right. And, yeah, I mean, I think the Clintons are going to try to make this seem like Jim McDougal and Whitewater, the 2008 version of that, which was a whole lot about nothing.

MR. MCLAUGHLIN: They've been on it for a year, examining it.

MS. CLIFT: Right. But, you know, if you want to make charges like this stick, there has to be some underlying characteristic about this candidate that makes you uneasy. I really don't think people look at Barack Obama and think corrupt; they think he's in it for the money somehow.

MR. MCLAUGHLIN: The public will say, "Why is he hanging out with this guy?" MR. BUCHANAN: Well --

MS. CLIFT: Well, and the Clintons also hung out with this guy.

MR. BUCHANAN: But John, you know, this --

MS. CLIFT: There's actually photographic evidence of that.

MR. MCLAUGHLIN: Okay. Okay. She's raised a point. This photograph has emerged of the Clintons and Rezko.

(Begin videotaped segment.)

MATT LAUER (NBC "Today"): It is undated, I'm going to tell you right now. We know it's him. We don't know when it was taken. We think it was taken during your husband's presidency. I'm just curious. Do you know anything about the picture? Do you know when it was taken? Do you remember meeting this man?

SEN. CLINTON: No, I don't. You know, I probably have taken hundreds of thousands of pictures. I don't know the man. I wouldn't know him if he walked in the door. I don't have a 17-year relationship with him.

MR. LAUER: Does it make sense to use someone like this, Tony Rezko, against Senator Obama when there really is no such thing as political purity anymore?

SEN. CLINTON: There's a big difference between standing somewhere taking a picture with someone you don't know and haven't seen since and having a relationship.

(End videotaped segment.)

MR. BUCHANAN: You know, John --

MR. MCLAUGHLIN: Question: Has this photograph turned Hillary's bullets, destined for Obama, into blanks? Pat Buchanan.

MR. BUCHANAN: No, it hasn't. Look, anybody that's been in politics know they walk people through hundreds of them at fund- raisers and you take a photograph and move on. That's what that is.

Now, this thing -- he does have a connection with a sleazy character, but let me defend Obama. I have seen no hard evidence that this guy did anything criminal at all -- I'm talking about Obama -- for this guy. He's got a guy who hangs around politics, who turned out to be very sleazy and maybe a crooked character. And I think it's tarnished Obama. And I think it's somewhat unfair, all this attention focused on that.

MS. CROWLEY: Yeah. And you know what? The reason that Hillary did this is because that's the only thing that they have on the guy. Barack Obama is a very intelligent, skilled, class act. They found one guy, and so she gets panicky in the debate. She goes nuclear on Obama by dragging up the Rezko guy, which is particularly rich coming from the queen of the mother of all shady land deals, Whitewater, okay.

MS. CLIFT: Which was a whole lot about nothing.

MS. CROWLEY: Wait a minute. What the Clintons are so good at is accusing their rivals and opponents, accusing them of exactly what they are guilty themselves of.

MR. MCLAUGHLIN: Are you so positive towards --

MS. CROWLEY: It's -- (inaudible) -- from them.

MR. MCLAUGHLIN: Are you so positive towards Obama because of your odium for the Clintons?

MS. CROWLEY: Look --

MR. MCLAUGHLIN: Is that why you're positive towards him?

MS. CROWLEY: I would not -- no, no, no. Look, I think that the Clintons have a rap sheet of shady donors going right up to Norman Hsu as of, what, last week. But there's some nerve on the part of the Clintons to attack Barack Obama for one night --

MR. MCLAUGHLIN: Do you think a list could be put together --

MR. BUCHANAN: How about Marc Rich?

MS. CROWLEY: He has apologized and given the money to charity.

MR. MCLAUGHLIN: Two-part exit question. Part one: Will Rezko's association with Obama torpedo Obama's prospects in the primaries to come? Second part: Will Rezko torpedo Obama's prospects long term?

MR. BUCHANAN: No. But look, there's a tarnish, a bit of a smear on Obama. But, no, that's not what's going to kill him, John. What's going to kill him (is) what's already been done in Nevada and South Carolina, which is turn him from a candidate who happened to be black into the black candidate.

MR. MCLAUGHLIN: Have you forgotten something?

MR. BUCHANAN: And second --

MR. MCLAUGHLIN: I'm doing this for the rest of the panel so they will not embarrass themselves. We've got a trial coming up. The trial is going to be prolonged. There are many counts.

MR. BUCHANAN: I don't know of -- MR. MCLAUGHLIN: It's Patrick Fitzgerald. It's day in and day out, video every night --

MR. BUCHANAN: I don't know that Rezko --

MR. MCLAUGHLIN: -- of Rezko.

MR. BUCHANAN: I don't know of a thing that Obama has done for Rezko that is in any way shady or criminal.

MR. MCLAUGHLIN: I'm telling you, the trial is not going to leave a pleasant odor.

MS. CLIFT: The answer is double no. Barack Obama is not on trial. And every politician in Washington has a rap sheet of donors. It's unfortunately the system that we operate under.

MS. CROWLEY: Well, what is going to torpedo Barack Obama is the Clinton war machine. It's not this individual Rezko charge.

MR. MCLAUGHLIN: You mean, there's more that they have on him?

MS. CROWLEY: Well, I mean, look at how the Clintons are playing this game. Barack Obama is trying to run a class operation, and the Clintons wouldn't know class if it hit them on the head.

MS. CLIFT: It's called politics, Monica. (Laughs.)

MR. MCLAUGHLIN: Could there be a counter-sympathy for Obama because of what the alleged Clintons are doing?

MR. ZUCKERMAN: Well, I think there is. There's been a lot of editorial comment really hostile to both Bill Clinton and Hillary for doing exactly this. And frankly, both of them end up being diminished by it. The country is just sick and tired of this kind of stuff. If you want to go back through the Clintons, you could find all kinds of material, okay, that could be brought up. I think this is an absolute non-issue.

MR. MCLAUGHLIN: The trial will be a non-factor?

MR. ZUCKERMAN: Absolutely. He is not on trial. You know, it is really a ridiculous issue. It is just another attempt to smear. And I think both of them --

MR. BUCHANAN: Hey, Mort -- you've got to get behind Romney, Mort. (Laughs.)

MR. ZUCKERMAN: I will. I will, if I knew who he was, okay? MR. BUCHANAN: (Laughs.)

MS. CLIFT: Which Romney should you get behind?

MR. ZUCKERMAN: Right. Which Romney?

MR. MCLAUGHLIN: My feeling is Obama --

MR. ZUCKERMAN: Who is he today?

MR. MCLAUGHLIN: Can we get out? My feeling is Obama will not be hurt permanently by the Rezko matter.

Predictions. Pat.

MR. BUCHANAN: Hillary, Giuliani, Thompson will all endorse McCain.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: Barack Obama will get another red-state governor endorsing him. And on Super Tuesday, he will win more red states than Hillary Clinton.

MR. MCLAUGHLIN: Monica.

MS. CROWLEY: This week the Russians launch long-range missiles into the Atlantic off the coast of France and Spain. Vladimir Putin, even though he's giving up the presidency in about six weeks, he will continue to stoke Cold War tensions to hold on to power.

MR. MCLAUGHLIN: Five seconds.

MR. ZUCKERMAN: My prediction was exactly that of Pat's, except for the fact that I don't support Romney on these issues. (Laughter.)

MR. MCLAUGHLIN: Before Thanksgiving this year, the U.S. unemployment rate will climb to 7 percent.

Bye-bye.

(PBS segment.)

Issue Three: Hillary's attack dog.

(Videotaped segment of former President Bill Clinton falling asleep at Martin Luther King Jr. birthday event.)

MR. MCLAUGHLIN: Question: Is Bill Clinton's snooze a setup on the part of Bill Clinton? I ask you, Monica. (Laughter.)

MS. CROWLEY: Our (wild-hair ?) former president with the colorful psyche. If we didn't have him, we'd have to make him up. (Laughs.) God, he's just the gift that keeps on giving. No, I don't think this was a setup, but it's nice to know he doesn't need Ambien like the rest of America.

MR. MCLAUGHLIN: Hasn't everyone fallen asleep in church at one time or another?

MR. ZUCKERMAN: I have many times. Many of the times that I've gone there, I've fallen asleep.

MS. CLIFT: Look, we've all been there when you struggle to keep your eyes open. And some of those speeches do go on too long. But for the most part, this guy is out there on the campaign trail for his wife, willing to take a hit in his lofty status in order to get her elected, and he doesn't show any signs of fatigue.

MR. BUCHANAN: Reagan used to fall asleep at his Cabinet meetings. (Laughter.)

MR. MCLAUGHLIN: Listen --

MR. BUCHANAN: He said, "If you've ever been there, you would understand." (Laughs.)

MR. MCLAUGHLIN: How's Clinton doing as a member of the team, the Clinton team? How's he doing? Bill.

MR. BUCHANAN: Oh, I think he's doing -- he's torn this fellow Obama to pieces. I mean, he's diminished himself.

MR. MCLAUGHLIN: Has he?

MR. ZUCKERMAN: Oh, yes.

MR. BUCHANAN: Yeah. But he's diminished him. It's just been awful for Obama. It's been awful for the Democrats. It's been awful for Bill. But it's been good for Hillary. She's going to be the nominee.

END.