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THE MCLAUGHLIN GROUP HOST: JOHN MCLAUGHLIN PANEL: PATRICK BUCHANAN, MSNBC; MICHELLE BERNARD, INDEPENDENT WOMEN'S FORUM; DEREK MCGINTY, WUSA; MONICA CROWLEY, SYNDICATED RADIO COMMENTATOR TAPED: FRIDAY, JUNE 27, 2008 BROADCAST: WEEKEND OF JUNE 28-29, 2008

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DR. MCLAUGHLIN: Issue One: Gun Ban Shot Down.

The United States Supreme Court proclaimed this week that every American has the right to own guns for self-defense and for hunting. In a long-awaited ruling, the court declared that the District of Columbia's 32-year-old ban on handguns is unconstitutional.

The decision was 5-4. It marked the first significant Supreme Court ruling on gun rights in U.S. history, more than 200 years after the right to bear arms was enshrined in the Second Amendment of the Constitution. The amendment, ratified in 1791, declares, "A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed," unquote. The question for the justices was whether this right to bear arms refers to an individual's right or to whether it applies to a state militia only. Speaking for the majority, Justice Antonin Scalia declared that the Constitution does not allow for, quote, "the absolute prohibition of handguns held and used for self-defense in the home," unquote.

Gun enthusiasts were thrilled with the decision, particularly NRA, National Rifle Association, President Wayne LaPierre, who was ecstatic.

WAYNE LAPIERRE (National Rifle Association president): (From videotape.) The Supreme Court today has gone on record saying the Founding Fathers intended this to be an individual right. We acknowledge that. So the Second Amendment as an individual right goes down as a real permanent part of American constitutional law, and that's a monumental victory.

DR. MCLAUGHLIN: But there were critics, including D.C. Mayor Adrian Fenty.

ADRIAN FENTY (Washington, D.C. mayor): (From videotape.) Unfortunately and disappointedly, the Supreme Court did not uphold the three-decade-old handgun ban here in the District of Columbia. As mayor, although I am disappointed in the court's ruling and believe, as I have said for the past year, that more handguns in the District of Columbia will only lead to more handgun violence.

DR. MCLAUGHLIN: Question: The Supreme Court has never before affirmed that the right to bear arms is individual instead of collective. So is this a landmark precedent? Pat Buchanan.

MR. BUCHANAN: You've got the exact word, John. It is a landmark decision. Scalia really worked on it well, and he really put his heart and soul into it. What he did was drive right through the hedge rows of precedents and things like that from the Warren Court and the Burger Court straight back to the Constitution and the original public meaning of the Constitution, that this was an individual right like the other First Amendment rights.

John, that decision, plus the child rape case, where the state was deprived of the right to sanction child rape with the execution, these things have made the Supreme Court a burning issue in this presidential campaign. And the court is the one -- and courts and judges are one of the few issues under which I think the Republican Party and John McCain really still have the whip hand.

DR. MCLAUGHLIN: If the founders wanted to say individual and mean individual, why didn't they use the word? Why did they use militia and only militia? MR. BUCHANAN: Well, John, it seems to me unreasonable to suggest that what the Founding Fathers were saying was that the militia can have guns but individuals can't.

DR. MCLAUGHLIN: Guns were all over the place, muskets and so forth, to beat back the Redcoats.

MR. BUCHANAN: What Scalia is saying is that our freedoms rest on four boxes -- the soap box, the jury box, the ballot box and the cartridge box. (Laughter.)

MS. BERNARD: John, here's what's fascinating about the Supreme Court's analysis in this decision. When you talk about the individual, most of the early analysis in this case dealt with the treatment of slaves before the Civil War and with freed slaves after the Civil War, which I find absolutely fascinating, because the way that our ancestors was treated is what gave us the Supreme Court's ruling yesterday.

And when they talked about individuals, there was a question, post-Civil War, about whether or not freed slaves, men in particular, would have the right to bear arms, as other individuals did. And from that, Justice Scalia and the majority of the court deigned that individuals unconnected with militias always had the right to bear arms.

MR. MCGINTY: You know, the most interesting thing about this decision, John, is that the unanimity of the city officials in the District Columbia -- so angry about it, saying they were against this decision -- and their constituents are very divided over this.

There are a lot of people in Washington who said, "I'm going out as soon as I can get to get me a gun so I can protect myself, because I'm worried about the crime in this town." There was one fellow quoted in The Washington Post who said, "I moved out to Fort Washington, Maryland in Prince George's County just so I could have access to firearms." So the reality is, I think that the constituents are ahead of the leaders in the city on this issue.

DR. MCLAUGHLIN: Do you think the case can be made that there is a reduction of crime if the citizenry is armed individually because of the research that shows that when a felon approaches you with a gun or attempts to or thinks about it, and if he knows that you have a gun, he is less inclined to do so?

MR. MCGINTY: You know, I don't know for sure about that research. I think you have to balance that with the research that shows many guns that are in the home are going to be used to kill people you know -- kill your friends, kill your family.

DR. MCLAUGHLIN: Do you like the way -- MR. MCGINTY: You have to balance those two things out. I don't know if the city is any safer because you can get guns, but I will say the court, I think, the Washington Post editorial page notwithstanding, probably made the right decision.

DR. MCLAUGHLIN: Do you think Fenty used the right words and said the right things afterwards?

MR. MCGINTY: I think he said the things he thought were politically palatable to say. I think in a city where polls have shown -- and again, I think the polls may be outdated -- three- quarters of the residents favor gun prohibition, that he had to say that. He has to fight for it. And you never lose any votes in D.C. saying, "I'm for gun control."

DR. MCLAUGHLIN: Will you make it clear that D.C. has had a ban against handguns, which now turns out to have been retrospectively, in a sense, illegal because it denied individuals -- for how many years?

MR. MCGINTY: Thirty-two years.

DR. MCLAUGHLIN: Thirty-years we banned them here. So he was saddened by the loss of that ban --

MR. MCGINTY: That's what he said.

DR. MCLAUGHLIN: -- because he sees it as an increase in crime.

Where do we come out on this?

MS. CROWLEY: Well, it's nice to see that the Supreme Court still has some affection for the Bill of Rights and the Second Amendment. Look, the fact that it hasn't been challenged in 32 years in any serious way until now tells me that there are all kinds of politics wrapped up on this. The Supreme Court 5-4 decision -- another 5-4 decision -- saying that the effect of this hand ban gun (sic) was essentially it disarms lawful citizens from the right to protect themselves -- self-defense -- they threw that out and they said it's unconstitutional, because after all of this political debate over 30 years, it's become clear that when you take guns away from lawful citizens, it doesn't take guns away from criminals. They will always find a way to find those guns. So why not provide the same manner of defense to those lawful citizens?

MR. MCGINTY: But part of the problem you have -- and this is on the other side of this -- is that a lot of those guns you're talking about are going to be taken from people's homes, those lawful citizens you're talking about. Their guns will be stolen. They'll be on the street. They'll add to the carnage. I mean --

MR. BUCHANAN: John, John, the point is, in New Hampshire --

DR. MCLAUGHLIN: Hold on, Pat. Practically speaking, is not this action taken by the court and the whole matter of individual rights eviscerated by the regulations and the restrictions that can still legally be put on the use of firearms?

MR. BUCHANAN: Well, no, I don't think anybody disagrees that you don't have a right to own a machine gun unless you get a license and all the rest of it. There are some restrictions that everybody thinks are valid. I mean, that's where you've got a real disagreement.

But let me say this. To Derek's point, New Hampshire has one of the freest gun laws in the country and the lowest levels of gun crime. Some of these -- like New York City --

MR. MCGINTY: What's the biggest city in New Hampshire? What's the biggest city in New Hampshire? MR. BUCHANAN: It's Manchester.

MR. MCGINTY: How big is it?

MR. BUCHANAN: Well, it's -- okay, Washington, D.C. has the strictest gun law and they're killing people left and right all over town.

DR. MCLAUGHLIN: Okay, candidate --

MR. MCGINTY: (Inaudible) -- about Chicago, any of the big cities. That's what I'm saying. The big cities are different.

DR. MCLAUGHLIN: Candidate opinions.

SEN. BARACK OBAMA (D-IL, presumptive Democratic presidential nominee): (From videotape.) I have said consistently that I believe the Second Amendment is an individual right. That right can be limited by sensible, reasonable gun laws. We can both uphold our traditions with respect to firearms and prevent the senseless killings that we see on the streets of so many American cities.

DR. MCLAUGHLIN: Republican nominee John McCain hailed the ruling and attacked his opponent, Barack Obama, for his, quote-unquote, "elitist" gun control view. "Unlike the elitist view that believes Americans cling to guns out of bitterness, today's ruling recognizes that gun ownership is a fundamental right, sacred, just as the right to free speech and assembly," unquote.

With the words "elitist views," Senator McCain was referring to Senator Obama's characterization of Pennsylvanians, uttered in April while in San Francisco.

SEN. OBAMA: (From videotape.) They cling to their guns or religion -- (inaudible) -- their frustrations.

DR. MCLAUGHLIN: Question: Does Obama really believe that the Second Amendment is an individual right, or is he paying lip service to the ruling to keep the gun issue off the table this fall? I ask you, Monica.

MS. CROWLEY: Well, the politics in this are pretty amazing, because Obama said, after this ruling came down, that he agreed with the Supreme Court. He is trying to neutralize the gun issue because of his past statement about "Well, rednecks in America that cling to their guns."

Back in February, he agreed with the handgun ban in Washington, D.C. He said he thought it was a great idea. It leads me to believe, based on Obama's past flip-flops, that if the Supreme Court had come the other way on the gun ban, 5-4 in the other direction, he would have agreed with that too. DR. MCLAUGHLIN: Exit question. Assume that the next president, in his early first term, will fill two vacancies on the court. Assume that this is President Obama who fills those vacancies. Assume that the gun issue was judged by that court, that Supreme Court. Question: Would we have the right of the individual to bear arms as we do now this week? Pat Buchanan.

MR. BUCHANAN: It all depends on which two justices stood down.

DR. MCLAUGHLIN: What's your instinct?

MR. BUCHANAN: Well, if it is John Paul Stevens, who's 107 -- (laughter) -- and if it's Ruth Bader Ginsburg, it wouldn't make any difference. But if Scalia stepped down or something happened to Anthony Kennedy, one more justice from the liberal point of view and this decision gets overturned, John.

DR. MCLAUGHLIN: Well, what --

MR. BUCHANAN: That's why the Supreme Court -- McCain's view of justices and Obama's view of justices conflict, and that's why this is one of the most important issues McCain has to rally the conservative movement.

DR. MCLAUGHLIN: You mean, if Stevens steps down and Obama puts in another liberal to replace him --

MR. BUCHANAN: It doesn't make any difference. This doesn't change things.

DR. MCLAUGHLIN: -- it cancels out.

MR. MCGINTY: I don't think you know what Obama's position on justice is. I mean, I think you make a good point that he's had a couple of positions --

DR. MCLAUGHLIN: Oh, no, we've done it on this show.

MR. BUCHANAN: I think I know what it is, Derek. (Laughs.)

DR. MCLAUGHLIN: Michelle.

MS. BERNARD: I don't -- we don't know what Obama's position is. I think he's straddling the fence, and he is --

DR. MCLAUGHLIN: Well, you were on the show, Michelle, where we got into Obama's attitude toward the Supreme Court, the criteria he was going to use -- work from the heart, relate to the people, not discretion. Don't you remember that show?

MS. BERNARD: No, I don't. (Laughter.) DR. MCLAUGHLIN: We've got to have you more often. Finish your point.

MS. BERNARD: What I was going to say was the Supreme Court does not readily overturn precedent. So regardless of who the next president is and regardless of who they appoint to the Supreme Court and who steps down, we're not going to see this case overturned in the next 100 years. It does not happen often. People think that you just go to the Supreme Court and you overturn a case, and that's not the way this country works.

MS. CROWLEY: Well, but here's the difficulty. And Pat is absolutely right that John McCain should be making this a crucial centerpiece of his campaign. These votes are coming down by the Supreme Court 5-4, whether it's extending constitutional rights and privileges to the terror suspects at Guantanamo Bay, the child rape case that came down this week, and this on guns. The balance is very delicate. You've got one swing vote. It depends on how many vacancies there are. There may be more than two for a President Obama. And that's why McCain has to be hammering this home.

MR. MCGINTY: If I was John McCain, I wouldn't mention it at all, because it'll get Obama's supporters fired up just as much as it'll get McCain's fired up.

MR. BUCHANAN: They're fired up already, Derek. They're all fired up and ready to go.

MR. MCGINTY: That's a fair point.

MR. BUCHANAN: It's our guys that need to be fired up and ready to go. (Laughs.)

MS. BERNARD: I don't think I want to see John McCain out holding a gun saying, you know, "This is great" or "This isn't great." It just doesn't --

MR. BUCHANAN: Well, I mean, it's the only thing that's going to get our people -- guns gets our people excited. The Supreme Court gets them excited.

MR. MCGINTY: You won that. You won that.

DR. MCLAUGHLIN: The answer to the exit question is that a future Supreme Court will not, in our lifetimes -- well, in Michelle's lifetime --

MR. BUCHANAN: (Inaudible.) (Laughter.)

MS. CROWLEY: Some of us are younger than others.

DR. MCLAUGHLIN: -- see any change in the action taken this week by the Supreme Court.

When we come back, is it fair to make speculators the whipping boys for high gas prices, or are speculators being scapegoated?

(Announcements.)

DR. MCLAUGHLIN: Issue Two: Speculation Be Gone?

Speculation -- it's become a term of art in the financial world. Speculation is when investors and traders place bets on lucrative and predictable commodities and how high their price will go in the future, commodities like gold or grains or beef or orange juice.

To make money, speculators want to place their bets on commodities -- obviously, commodities whose odds are most favorable like the big "O" commodity, oil. Oil is a sure bet financially speaking. The price is going up and up. So speculators are in rat- pack pursuit, placing bets, their highest bets, on oil futures. Isn't that okay? Isn't that the American way, seizing a sure bet and running with it? Well, there's a problem. Speculation is driving up the price of oil. So the public is pointing its finger at Wall Street's speculators. Speculators are villains. That's the proposition -- speculators are to blame for making oil so expensive, almost $140 a barrel.

When oil goes up, so does gas -- $4.07 a gallon national average this week. Critics argue that speculation skews the laws and functions of supply and demand. They also claim that without the distortions of speculation, the price of oil could plunge by -- get this -- 50 percent in just one month.

Speculators argue they are not the villains. The true villains, they say, are the critics of speculators. And here's how those critics, if they press on, will damage the economy.

JACK BURKMAN (D.C. Insider): (From videotape.) What they're proposing to do here is worse than even de facto price control. It's worse than that, because you're talking essentially about blowing up the market. The whole thing will be driven offshore. The U.S. will lose complete control over oil speculation.

DR. MCLAUGHLIN: In other words, there will be nothing left for Congress to do if it tries to step in. The control will be gone, whereas Congress might be able to regulate it if the, quote-unquote, "speculation" has not gone offshore.

Question: Is speculation driving up the cost of oil and gas? I ask you, Michelle.

MS. BERNARD: No. I think this is an absurdity. Maybe it has a little bit to do with the price of gas, but speculators operate in a free market system. They're either going to win big or they're going to lose big. They can absolutely go broke. This is a question of supply and demand, what we see happening in emerging markets. If you look at China, if you look at India, these are emerging nations, and they're using just as much oil as we are, if not more. And if there's less supply, then the price of oil is going to go higher.

DR. MCLAUGHLIN: If they bet, for example, that the current price of a barrel of oil, which is about $142, will go up, they could lose their shirts.

MR. MCGINTY: That's right.

MR. BUCHANAN: Sure. John --

DR. MCLAUGHLIN: They could be peaking now.

MR. BUCHANAN: John, I was down in Texas, Midland-Odessa, 10 years ago. The price of a barrel of oil had fallen below $10. It's gone way, way down. It's gone way up. It looks to me like it's too high. It may not be. But these guys -- these are bets. These are gambles. And you can lose big or you can win big.

MR. MCGINTY: I think you've got to look at what would happen -- let's just say that the people who say that speculators are responsible for doubling the price -- what would happen if it went back down to $70?

MR. BUCHANAN: They'd lose.

MR. MCGINTY: We wouldn't use less. We'd use a lot more. There'd be less supply, and the price would go right back up. I just don't see how you can blame speculators for that.

MS. CROWLEY: The word "speculators" is just another word for "investors," and they have been scapegoated in this entire situation. There are so many forces making the price of oil what it is, including rapidly developing nations who are demanding this stuff like crazy.

If the United States were to do other things, such as drilling to increase supply, exploration, go into alternative sources of energy -- wind, solar, nuclear, flex-fuel cars -- I mean, we're not addicted to oil in this country. Our cars are addicted to oil. We've got to change the whole --

(Cross-talk.)

MS. CROWLEY: But wait a minute. Let me just finish my point. If we were to do all of those things, those speculators or investors would be selling in the opposite direction, and they'd be helping to bring the price down.

DR. MCLAUGHLIN: The sainted investors, right? Okay, what are McCain and Obama saying about speculation?

SEN. JOHN MCCAIN (R-AZ, presumptive Republican presidential nominee): (From videotape.) We must purge the market of the reckless speculation, unrelated to any kind of productive commerce, that has inflated the price of gasoline at the expense of working men and women across our country.

DR. MCLAUGHLIN: In a statement, Barack Obama outlined his stance on oil speculation. "For the past years, our energy policy in this country has been simply to let the special interests have their way, opening up loopholes for the oil companies and speculators so that they could reap record profits while the rest of us pay $4 a gallon."

Question: Are politicians, including McCain and Obama, who complain about speculation and oil prices, grandstanding? Or does the real fault lie with the politicians and the regulators who let the mortgage industry and banks run wild, a Congress that loosened the reins on the financial industry in the 1990s, setting the stage for this credit crisis we have today, a Fed chairman who is testing out his pet academic theory -- deep interest cuts? I ask you, Monica.

MS. CROWLEY: Oh, well, that's a rather long list to choose from, John. (Laughter.) What was the question? I lost track.

DR. MCLAUGHLIN: Are the politicians hiding behind the skirts --

MS. CROWLEY: Grandstanding?

DR. MCLAUGHLIN: -- of a phony rap on speculators?

MS. CROWLEY: Of course they are. And that's because our politicians, Republican and Democrat, for 35 years have failed us on energy. You know, Jimmy Carter, his idea of solving his energy crisis was put on a sweater and turn off the Christmas lights in the White House two years in a row; Republicans, same thing. And that is why, now that the United States has a gun to our heads and the crisis is upon us, these politicians are now only gingerly saying, "Well, maybe we ought to do some offshore drilling and some other things." They ought to get a lot more aggressive. That's both of them.

DR. MCLAUGHLIN: What about that?

MR. MCGINTY: Well, considering the -- we talked gun to our heads in the last segment there. But I think that obviously they're running for president, and people want somebody to blame for all their problems.

What they don't want to hear is, "It's kind of your fault for keeping using so much energy." Nobody wants to hear that.

MR. BUCHANAN: John, this --

MR. MCGINTY: So you've got the presidential candidates -- you'll never hear them say that.

MR. BUCHANAN: Take the word --

DR. MCLAUGHLIN: Well, you sound as though you back them; you approve of what they're doing.

MR. BUCHANAN: Take the word "speculator."

MR. MCGINTY: No, look, I understand just what they're doing.

DR. MCLAUGHLIN: Ah. Okay.

MR. BUCHANAN: Everybody that buys stocks or buys gold or buys silver or coffee or wheat or corn or oil, they're all speculators. They're all investing, anticipating, hoping it'll go up. That's what the whole market is about.

DR. MCLAUGHLIN: Exit question --

MR. BUCHANAN: Everybody speculates.

DR. MCLAUGHLIN: Is the rap against speculators a fair rap or a bum rap, or are speculators being scapegoated? Quick answer, Pat.

MR. BUCHANAN: Well, they're being scapegoated. But guys speculating in oil, maybe they should be. (Laughter.)

MR. BUCHANAN: Michelle.

MS. BERNARD: Scapegoating.

MS. CROWLEY: Bum rap.

DR. MCLAUGHLIN: Bum rap. MR. MCGINTY: Scapegoating.

DR. MCLAUGHLIN: Scapegoating is right.

We'll be right back with predictions.

(Announcements.)

DR. MCLAUGHLIN: The U.S. coin, the penny, will be taken out of circulation. Yes or no?

MR. BUCHANAN: Never.

MS. BERNARD: No.

MS. CROWLEY: I still stop to pick them up off the ground. I hope not.

MR. MCGINTY: I try to get rid of them as quickly as possible. I hope so.

DR. MCLAUGHLIN: The answer is no. Collectors love it, and so do consumers.

Bye-bye.



END.

l Stevens, who's 107 -- (laughter) -- and if it's Ruth Bader Ginsburg, it wouldn't make any difference. But if Scalia stepped down or something happened to Anthony Kennedy, one more justice from the liberal point of view and this decision gets overturned, John.

DR. MCLAUGHLIN: Well, what --

MR. BUCHANAN: That's why the Supreme Court -- McCain's view of justices and Obama's view of justices conflict, and that's why this is one of the most important issues McCain has to rally the conservative movement.

DR. MCLAUGHLIN: You mean, if Stevens steps down and Obama puts in another liberal to replace him --

MR. BUCHANAN: It doesn't make any difference. This doesn't change things.

DR. MCLAUGHLIN: -- it cancels out.

MR. MCGINTY: I don't think you know what Obama's position on justice is. I mean, I think you make a good point that he's had a couple of positions --

DR. MCLAUGHLIN: Oh, no, we've done it on this show.

MR. BUCHANAN: I think I know what it is, Derek. (Laughs.)

DR. MCLAUGHLIN: Michelle.

MS. BERNARD: I don't -- we don't know what Obama's position is. I think he's straddling the fence, and he is --

DR. MCLAUGHLIN: Well, you were on the show, Michelle, where we got into Obama's attitude toward the Supreme Court, the criteria he was going to use -- work from the heart, relate to the people, not discretion. Don't you remember that show?

MS. BERNARD: No, I don't. (Laughter.) DR. MCLAUGHLIN: We've got to have you more often. Finish your point.

MS. BERNARD: What I was going to say was the Supreme Court does not readily overturn precedent. So regardless of who the next president is and regardless of who they appoint to the Supreme Court and who steps down, we're not going to see this case overturned in the next 100 years. It does not happen often. People think that you just go to the Supreme Court and you overturn a case, and that's not the way this country works.

MS. CROWLEY: Well, but here's the difficulty. And Pat is absolutely right that John McCain should be making this a crucial centerpiece of his campaign. These votes are coming down by the Supreme Court 5-4, whether it's extending constitutional rights and privileges to the terror suspects at Guantanamo Bay, the child rape case that came down this week, and this on guns. The balance is very delicate. You've got one swing vote. It depends on how many vacancies there are. There may be more than two for a President Obama. And that's why McCain has to be hammering this home.

MR. MCGINTY: If I was John McCain, I wouldn't mention it at all, because it'll get Obama's supporters fired up just as much as it'll get McCain's fired up.

MR. BUCHANAN: They're fired up already, Derek. They're all fired up and ready to go.

MR. MCGINTY: That's a fair point.

MR. BUCHANAN: It's our guys that need to be fired up and ready to go. (Laughs.)

MS. BERNARD: I don't think I want to see John McCain out holding a gun saying, you know, "This is great" or "This isn't great." It just doesn't --

MR. BUCHANAN: Well, I mean, it's the only thing that's going to get our people -- guns gets our people excited. The Supreme Court gets them excited.

MR. MCGINTY: You won that. You won that.

DR. MCLAUGHLIN: The answer to the exit question is that a future Supreme Court will not, in our lifetimes -- well, in Michelle's lifetime --

MR. BUCHANAN: (Inaudible.) (Laughter.)

MS. CROWLEY: Some of us are younger than others.

DR. MCLAUGHLIN: -- see any change in the action taken this week by the Supreme Court.

When we come back, is it fair to make speculators the whipping boys for high gas prices, or are speculators being scapegoated?

(Announcements.)

DR. MCLAUGHLIN: Issue Two: Speculation Be Gone?

Speculation -- it's become a term of art in the financial world. Speculation is when investors and traders place bets on lucrative and predictable commodities and how high their price will go in the future, commodities like gold or grains or beef or orange juice.

To make money, speculators want to place their bets on commodities -- obviously, commodities whose odds are most favorable like the big "O" commodity, oil. Oil is a sure bet financially speaking. The price is going up and up. So speculators are in rat- pack pursuit, placing bets, their highest bets, on oil futures. Isn't that okay? Isn't that the American way, seizing a sure bet and running with it? Well, there's a problem. Speculation is driving up the price of oil. So the public is pointing its finger at Wall Street's speculators. Speculators are villains. That's the proposition -- speculators are to blame for making oil so expensive, almost $140 a barrel.

When oil goes up, so does gas -- $4.07 a gallon national average this week. Critics argue that speculation skews the laws and functions of supply and demand. They also claim that without the distortions of speculation, the price of oil could plunge by -- get this -- 50 percent in just one month.

Speculators argue they are not the villains. The true villains, they say, are the critics of speculators. And here's how those critics, if they press on, will damage the economy.

JACK BURKMAN (D.C. Insider): (From videotape.) What they're proposing to do here is worse than even de facto price control. It's worse than that, because you're talking essentially about blowing up the market. The whole thing will be driven offshore. The U.S. will lose complete control over oil speculation.

DR. MCLAUGHLIN: In other words, there will be nothing left for Congress to do if it tries to step in. The control will be gone, whereas Congress might be able to regulate it if the, quote-unquote, "speculation" has not gone offshore.

Question: Is speculation driving up the cost of oil and gas? I ask you, Michelle.

MS. BERNARD: No. I think this is an absurdity. Maybe it has a little bit to do with the price of gas, but speculators operate in a free market system. They're either going to win big or they're going to lose big. They can absolutely go broke. This is a question of supply and demand, what we see happening in emerging markets. If you look at China, if you look at India, these are emerging nations, and they're using just as much oil as we are, if not more. And if there's less supply, then the price of oil is going to go higher.

DR. MCLAUGHLIN: If they bet, for example, that the current price of a barrel of oil, which is about $142, will go up, they could lose their shirts.

MR. MCGINTY: That's right.

MR. BUCHANAN: Sure. John --

DR. MCLAUGHLIN: They could be peaking now.

MR. BUCHANAN: John, I was down in Texas, Midland-Odessa, 10 years ago. The price of a barrel of oil had fallen below $10. It's gone way, way down. It's gone way up. It looks to me like it's too high. It may not be. But these guys -- these are bets. These are gambles. And you can lose big or you can win big.

MR. MCGINTY: I think you've got to look at what would happen -- let's just say that the people who say that speculators are responsible for doubling the price -- what would happen if it went back down to $70?

MR. BUCHANAN: They'd lose.

MR. MCGINTY: We wouldn't use less. We'd use a lot more. There'd be less supply, and the price would go right back up. I just don't see how you can blame speculators for that.

MS. CROWLEY: The word "speculators" is just another word for "investors," and they have been scapegoated in this entire situation. There are so many forces making the price of oil what it is, including rapidly developing nations who are demanding this stuff like crazy.

If the United States were to do other things, such as drilling to increase supply, exploration, go into alternative sources of energy -- wind, solar, nuclear, flex-fuel cars -- I mean, we're not addicted to oil in this country. Our cars are addicted to oil. We've got to change the whole --

(Cross-talk.)

MS. CROWLEY: But wait a minute. Let me just finish my point. If we were to do all of those things, those speculators or investors would be selling in the opposite direction, and they'd be helping to bring the price down.

DR. MCLAUGHLIN: The sainted investors, right? Okay, what are McCain and Obama saying about speculation?

SEN. JOHN MCCAIN (R-AZ, presumptive Republican presidential nominee): (From videotape.) We must purge the market of the reckless speculation, unrelated to any kind of productive commerce, that has inflated the price of gasoline at the expense of working men and women across our country.

DR. MCLAUGHLIN: In a statement, Barack Obama outlined his stance on oil speculation. "For the past years, our energy policy in this country has been simply to let the special interests have their way, opening up loopholes for the oil companies and speculators so that they could reap record profits while the rest of us pay $4 a gallon."

Question: Are politicians, including McCain and Obama, who complain about speculation and oil prices, grandstanding? Or does the real fault lie with the politicians and the regulators who let the mortgage industry and banks run wild, a Congress that loosened the reins on the financial industry in the 1990s, setting the stage for this credit crisis we have today, a Fed chairman who is testing out his pet academic theory -- deep interest cuts? I ask you, Monica.

MS. CROWLEY: Oh, well, that's a rather long list to choose from, John. (Laughter.) What was the question? I lost track.

DR. MCLAUGHLIN: Are the politicians hiding behind the skirts --

MS. CROWLEY: Grandstanding?

DR. MCLAUGHLIN: -- of a phony rap on speculators?

MS. CROWLEY: Of course they are. And that's because our politicians, Republican and Democrat, for 35 years have failed us on energy. You know, Jimmy Carter, his idea of solving his energy crisis was put on a sweater and turn off the Christmas lights in the White House two years in a row; Republicans, same thing. And that is why, now that the United States has a gun to our heads and the crisis is upon us, these politicians are now only gingerly saying, "Well, maybe we ought to do some offshore drilling and some other things." They ought to get a lot more aggressive. That's both of them.

DR. MCLAUGHLIN: What about that?

MR. MCGINTY: Well, considering the -- we talked gun to our heads in the last segment there. But I think that obviously they're running for president, and people want somebody to blame for all their problems.

What they don't want to hear is, "It's kind of your fault for keeping using so much energy." Nobody wants to hear that.

MR. BUCHANAN: John, this --

MR. MCGINTY: So you've got the presidential candidates -- you'll never hear them say that.

MR. BUCHANAN: Take the word --

DR. MCLAUGHLIN: Well, you sound as though you back them; you approve of what they're doing.

MR. BUCHANAN: Take the word "speculator."

MR. MCGINTY: No, look, I understand just what they're doing.

DR. MCLAUGHLIN: Ah. Okay.

MR. BUCHANAN: Everybody that buys stocks or buys gold or buys silver or coffee or wheat or corn or oil, they're all speculators. They're all investing, anticipating, hoping it'll go up. That's what the whole market is about.

DR. MCLAUGHLIN: Exit question --

MR. BUCHANAN: Everybody speculates.

DR. MCLAUGHLIN: Is the rap against speculators a fair rap or a bum rap, or are speculators being scapegoated? Quick answer, Pat.

MR. BUCHANAN: Well, they're being scapegoated. But guys speculating in oil, maybe they should be. (Laughter.)

MR. BUCHANAN: Michelle.

MS. BERNARD: Scapegoating.

MS. CROWLEY: Bum rap.

DR. MCLAUGHLIN: Bum rap. MR. MCGINTY: Scapegoating.

DR. MCLAUGHLIN: Scapegoating is right.

We'll be right back with predictions.

(Announcements.)

DR. MCLAUGHLIN: The U.S. coin, the penny, will be taken out of circulation. Yes or no?

MR. BUCHANAN: Never.

MS. BERNARD: No.

MS. CROWLEY: I still stop to pick them up off the ground. I hope not.

MR. MCGINTY: I try to get rid of them as quickly as possible. I hope so.

DR. MCLAUGHLIN: The answer is no. Collectors love it, and so do consumers.

Bye-bye.



END.