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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, NOVEMBER 14, 2008 BROADCAST: WEEKEND OF NOVEMBER 15-16, 2008

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MR. MCLAUGHLIN: Issue One: GM Zeroing Out?

RICK WAGONER (General Motors CEO): (From videotape.) I think it would be a devastating impact -- not just for GM, by the way. It would roll across -- it would be a domino effect across the whole industry.

MR. MCLAUGHLIN: Without a bailout, GM's stock will be worth zero by December 31, six weeks from now, and maybe earlier. So says, in effect, the CEO of GM. Therefore, Detroit's big three -- General Motors, Ford, Chrysler -- want $25 billion from the federal government. That money would be drawn from the original $700 billion bailout passed seven weeks ago. Massachusetts Congressman Barney Frank chairs the House Financial Services Committee. Frank says an auto bailout is unavoidable.

REP. BARNEY FRANK (D-MA): (From videotape.) In this weakened condition that the economy is in, a total collapse of the American automobile industry would do more damage than not doing anything.

MR. MCLAUGHLIN: Frank's view is the same as that of Speaker of the House Nancy Pelosi; no question that the Democratic House is on board for the auto bailout. But President Bush and his Treasury secretary, Henry Paulson, while sympathetic to helping the auto industry, nevertheless do not want to draw $25 billion in cash from the government's $700 billion rescue allocation, and they certainly do not favor bailing out companies that are going to go under anyway. Viability is a condition of federal money.

HENRY PAULSON (U.S. Treasury secretary): (From videotape.) Manufacturing is critical. I've said very clearly, and I think the administration said that, you know, we need a solution, but the solution has got to be one that leads to viability.

MR. MCLAUGHLIN: But some financial gurus have warned against any bailout lest it turn into a rolling economic mess, like Japan's in the '90s.

STEVE MASSOCCA (Pacific Growth Equities CEO): (From videotape.) What resulted from that was this sort of, quote-unquote, "zombie economy." You had these zombie companies that were kept alive simply by the fact that the government was able to support them.

MR. MCLAUGHLIN: And get this -- White House spokesperson Dana Perino indicated that a Chapter 11 proceeding, bankruptcy, is the president's preferred route. Barney Frank says the House, for its part, will legislate relief anyway, and the president can pursue his own option.

REP. FRANK: (From videotape.) We will pass the bill, and then he can decide to veto it or not.

MR. MCLAUGHLIN: Question: What's the argument for bailing out Detroit's big three, and what's the argument against the bailout, Pat?

MR. BUCHANAN: Well, the argument for it is millions of jobs will go under. You will lose the largest manufacturing unit in the United States, the heart and soul of American manufacturing. R&D goes with it. Technology goes with it. Engineering goes with it.

And more important, the auto industry has an enormous future in this world. Americans, we buy, in a good year, 17 million cars. China, India, all these countries are opening up. People are moving into the middle class. They're going to be wanting cars. You will carve the United States out of much of the future. But in terms of viability, what's killed General Motors, John, is they have dropped the greatest, highest-paid guys who give the most in taxes, the cleanest, safest factories, dropped them into global competition against factories in places like China, whose managers would be in a penitentiary if they were doing in the United States what they're allowed to do over there.

MR. MCLAUGHLIN: What's against the bailout?

MS. CLIFT: Well, first, I want to say there's also a national security component to having this major industry. I don't think we want to be known as a country that doesn't make cars.

The argument against it is that this is an industry -- it hasn't just been flooded by foreign competition. It has actively worked against the developments in making cars for the future. It has resisted every safety advance, from unsafe-at-any-speed airbags, safety belts. They've resisted everything. They've spent more money on lobbying to prevent any changes. They don't want to make cars that get more mileage out of every gallon of gasoline.

So they need to be punished, but you don't want to take down 3 million jobs along with getting the satisfaction of seeing them get their due. So I think in crisis there is opportunity. And if you do bail them out, you make it a loan and you exact all kinds of conditions back and you get rid of the management that has gotten us to this point.

MS. CROWLEY: Well, look --

MR. MCLAUGHLIN: Two hundred thousand workers and 3 million feeder jobs into that industry.

MS. CROWLEY: No, I understand. But at some point the bailout madness in this country has to stop. We have this long conga line of companies -- American Express, the Detroit big three; this is only the beginning -- that are lining up outside the Treasury Department wanting a piece of this pie.

I understand the significance of the auto industry in this country. But, look, what is dragging the car industry down, as Eleanor points out, they have not been willing to make cars that are competitive here in the United States and around the world. They're making cars that people don't want to buy. And at what point in a free market economy are there consequences for making a product that is failing?

There is a case to be made that General Motors should go bankrupt so that it's allowed to restructure itself --

MR. MCLAUGHLIN: Consolidate. MS. CROWLEY: -- consolidate, downsize, tear up the union contracts that are dragging these companies down. I mean, look, if you go to the American taxpayer and you say, "I'm sorry that your 401(k) is down 30 percent, but we're asking you for more money now to restore and rescue the UAW, the United Auto Workers, massive pensions for these workers."

The American taxpayer has had it up to here. And at some point we're going to put the brakes on and say some of these big companies, the argument that they're too big to fail doesn't fly anymore, and they should be allowed to go bankruptcy.

MR. MCLAUGHLIN: Also General Motors particularly has been persistent in failing to recognize the kind of cars it put out. This is not a new problem. It goes back to what, the early '90s or the late '80s?

MR. ZUCKERMAN: This has gone on for a long time. They do not have a business model that is viable today. So if there is going to be funding for them to help them out, given the fact that our economy is very weak, and to have this bankruptcy on top of it all, might have much more serious consequences than just GM.

Whatever is done -- and something probably will be done -- it must be done conditionally. There must be a way of changing the fundamental facts of that business. They have too many car models. They can't support it in terms of engineering. They can't support it in terms of advertising and promotion. They've got to change the business model if there's going to be any chance that you won't have to pour money in forever.

And that still has to be --

MR. BUCHANAN: John, let me just say, the Chinese --

MR. MCLAUGHLIN: I've got a question for you, Pat.

MR. ZUCKERMAN: It's not -- with all due respect, there are a lot of Japanese and Korean cars that are being made in this country that are made much more effectively and competitively. That's the problem. It's not imports. It's cars made in this country.

MR. MCLAUGHLIN: Is it also --

MR. ZUCKERMAN: They do not know how to compete.

MR. MCLAUGHLIN: What about the political component, that the Democrats want this?

MR. ZUCKERMAN: Of course.

MR. MCLAUGHLIN: The United Auto Workers gave Obama $150 million for his campaign.

MR. BUCHANAN: I doubt if they gave him that much, a single union. But there's no doubt unions came out very hard for Obama.

MR. MCLAUGHLIN: They spent $150 million.

MR. BUCHANAN: But look, let me tell you about politically --

MR. MCLAUGHLIN: Is this payback time? Is this positive payback time on the part of Obama?

MR. BUCHANAN: It's going to be payback by the Reagan Democrats, who will ditch the Republican Party if they don't stand up --

MR. MCLAUGHLIN: They already have.

MR. BUCHANAN: Well, why do you think they're leaving them, John? Because we're sending their jobs and factories to China and bringing in people to compete against them and bringing in Korean cars that don't carry the costs -- MR. MCLAUGHLIN: Do you want to buy them off? Is that what you want to do?

MR. BUCHANAN: I think we ought to restructure the American economy and tax system --

MR. MCLAUGHLIN: Do you hear her argument?

MR. BUCHANAN: John, I know the argument.

MR. MCLAUGHLIN: I can't believe you, Buchanan. You want both sides of the street.

MR. BUCHANAN: No, listen --

MS. CLIFT: I want to support Pat over here. Look, you're not going to change the auto industry by punishing the workers. There was a social contract when people took these jobs. These were well- paying, middle-class jobs. The economy has changed and their circumstances have changed. But they should not be the ones who get punished. The Obama administration, they will do something. The Democratic Congress will do something. And there will probably be some sort of an overseer appointed to restructure --

MS. CROWLEY: Well, but --

MR. ZUCKERMAN: That is not the point.

MS. CLIFT: Oh, I think it is the point.

MR. ZUCKERMAN: You're going to be rewarding failure and putting good money after bad.

MS. CLIFT: It's not rewarding. No, it's not punishing the worker. You don't want to punish the worker.

MR. BUCHANAN: What do we do with your banker friends? What do we do with the banks?

MR. ZUCKERMAN: If you don't want to punish those workers, then you don't want to punish any workers.

MS. CLIFT: What about the financial services industry? What about -- you seem to be fine with them.

MR. ZUCKERMAN: That's right. That's what I'm saying. If you want -- you can bail out everybody.

MR. BUCHANAN: But you bailed out the bankers.

MR. ZUCKERMAN: They're bailing the banks out because, without a financial system, this economy would collapse. That's the only reason. MS. CLIFT: And without the ability --

MR. BUCHANAN: And without manufacturing, goodbye America.

MS. CLIFT: -- to make cars --

MS. CROWLEY: You cannot --

MR. MCLAUGHLIN: Let Monica in, Eleanor.

MS. CROWLEY: You cannot --

MS. CLIFT: -- you suffer a lot more than it is currently now. You said that two minutes ago.

MS. CROWLEY: You cannot --

MR. ZUCKERMAN: Just on the right terms, okay?

MS. CLIFT: Exactly. I agree with that. I agree with you.

MR. ZUCKERMAN: The fact is that the average American worker, they get 70-odd dollars an hour, and that is not competitive anymore for that industry. Now, I'm not asking you to fire them. I'm saying they've got to be competitive.

MS. CLIFT: I don't think on the assembly line they get --

MR. MCLAUGHLIN: Look, there's a cocktail party going on over here. Kill the sidebar conversation. Go ahead.

MS. CROWLEY: You cannot keep throwing bad money -- good money after a bad situation. And you can bail out --

MS. CLIFT: (Off mike.)

MS. CROWLEY: I think one of you said it. You cannot continue to bail out businesses that refuse to reform themselves at the cost to the taxpayer. Look, Mort, you're absolutely right. There are other foreign companies building here in the United States -- Toyota, Kia, Volkswagen. Why? Because they don't have these massive pension plans that are killing the Detroit car industry.

MR. MCLAUGHLIN: Why doesn't GM merge with Chrysler? Wouldn't that be consolidation?

MR. ZUCKERMAN: Yes, that would be consolidation. I'll tell you why -- because what happens is they have to then let go a lot of people. And to do that, they have to pay severance costs. And they're afraid they don't have the money to pay the severance costs. So they have two companies, neither of which is making money, losing a lot of money, and there's no way of stopping them hemorrhaging, even if you give them $50 billion. They'll just use up that money in a matter of a few years.

MR. BUCHANAN: John, there are 1 million --

MR. ZUCKERMAN: Then they'll be back to the same problem.

MR. BUCHANAN: There are 1 million retirees, Monica, who are getting pensions and health care. You let these companies go down, what do you think is going to happen? They're going to wind up on the federal government of the United States, demanding national health care. That is what you are doing by killing manufacturing.

MR. MCLAUGHLIN: Okay, 72 percent of Americans think that the incoming president, Barack Obama, will be able to restore the economy. Question: If you were Barack Obama, would you welcome this confidence on the part of the people, or are their expectations too high? I ask you, Mort.

MR. ZUCKERMAN: Well, I think his expectations are way too high. And therefore, since he's not going to be able to do very much about it for the first couple of years, no matter what he does, he could actually destroy a lot of the political support he now enjoys.

So I think he's got to be very careful to tamp down expectations, because you can't stop housing prices from dropping. You can't stop deleveraging or the removal of debt from our financial system.

Both of those things are inevitable, that we're going to deleverage and housing prices are going to go down. And that's going to have a major downward pressure on the economy, no matter what he does, no matter who's the next president.

MS. CLIFT: Yeah, but nobody --

MR. MCLAUGHLIN: What suggestions do you have for the next president?

MR. ZUCKERMAN: The first thing, he's got to stop the foreclosures of homes, because when foreclosed homes are thrown on the market, it overshoots the market on the down side, could break all of the housing prices. The foreclosure price now sets the house price in almost every market where there are foreclosures. That is a disaster for the United States.

MR. MCLAUGHLIN: This is the view of the FDIC chairwoman.

MR. ZUCKERMAN: That's exactly right, and many other people. It's why Paulson's program of going to support the financial industry rather than the housing industry was the wrong strategy.

MR. MCLAUGHLIN: Well, Paulson has modified his views. What do you think of that?

MR. ZUCKERMAN: It took a lot of time to get him to modify the views, and he was wrong. And I think it's right that he's --

MR. MCLAUGHLIN: To what extent has he modified his views?

MR. ZUCKERMAN: Well, he hasn't really done much about the housing yet. He's just beginning to think about using some of this money for the housing industry.

MR. MCLAUGHLIN: Do you think changing horses in midstream by Paulson --

MR. ZUCKERMAN: Absolutely.

MR. MCLAUGHLIN: -- is disturbing to people? MR. ZUCKERMAN: Well, sure, it undermines the confidence in the Treasury secretary. But he deserves to lose that confidence. We must do something about foreclosures. That was evident several months ago. We've lost several months. But every month that goes by, it's even more damaging.

MR. MCLAUGHLIN: A final question: When is this going to end? Do you think this is not going to end until 2010?

MR. ZUCKERMAN: I don't think it'll end by 2010. I don't think -- we'll be lucky if it ends by 2010.

MR. MCLAUGHLIN: At the end of 2010?

MR. ZUCKERMAN: I would be very happy if it ended in 2010.

MR. MCLAUGHLIN: Mort, this is 2008.

MR. ZUCKERMAN: I actually made that calculation. Thank you, John.

MR. MCLAUGHLIN: Yeah, but we're at the end of -- so it's going to last for two years?

MR. ZUCKERMAN: At least two years. It's inevitable.

MS. CLIFT: Well, look, Obama is not going to turn it around immediately, but he has a lot of good will and he has a lot of good ideas. And Sheila Bair, who heads the FDIC -- a Republican, strong regulator -- she's going to play a role in the new administration. This administration is missing --

MR. MCLAUGHLIN: What job is she going to get?

MS. CLIFT: Well, she may continue with what she's doing --

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

MS. CLIFT: -- which is good enough. And Henry Paulson --

MR. MCLAUGHLIN: Well, should she be secretary of the Treasury?

MR. BUCHANAN: No, no.

MS. CLIFT: Well, Henry Paulson -- excuse me, I want to say one more thing.

MR. BUCHANAN: This is a good thing --

MS. CLIFT: Henry Paulson, who looked like the indispensable man, now looks like an absolute fool because he has not made this work. He doesn't explain himself. And he has really made the situation a lot worse. MR. MCLAUGHLIN: Does anybody disagree with that? Do you disagree with that?

MR. BUCHANAN: Seventy-two percent, John, is a good thing for this. It's like FDR. Look, he's going to have to try a lot of things, and some of them aren't going to work and some of them are going to fail and some of them may succeed. But I do agree with the idea of action and doing something. And you've got to pick and choose what you're going to save and what you're going to let go. And I think he's a pragmatist and will do it.

MS. CROWLEY: Listen, I know that Barack Obama is supposed to have these miraculous powers, but even he is not going to be able to pull this economy out from where it is. Mort is absolutely right. It's going to be longer than two years. Think about the '90 to '91 recession. This one is a lot deeper. It's a lot more profound. The tentacles are everywhere in this economy.

And so if I were Obama -- and I'm surprised that he's not doing this -- tamp down those expectations; say, "Listen, I'm not a miracle worker here. We're going to try. We're going to do some things." But Paulson, the first wave of that bailout plan, $250 billion, what happened? It failed, which is why they have to switch strategies, because the banks ended up either acquiring each other or hording the money, and they didn't do anything to clean up the credit markets.

MR. MCLAUGHLIN: Exit question --

MS. CLIFT: To put this in perspective, as much money has been given to AIG, one company, as Barack Obama campaigned on running for his green energy recovery plan -- $150 billion.

MR. MCLAUGHLIN: Green is dead.

MS. CLIFT: No, green is not dead.

MR. MCLAUGHLIN: Green is relatively dead.

MS. CLIFT: No, green is the way to go. (Laughs.)

MR. MCLAUGHLIN: It's relatively dead, is it not?

MR. ZUCKERMAN: Let me put it this way. It's longer term than we thought it would be, because we don't have the money to go green.

MR. MCLAUGHLIN: That's what I'm saying.

MR. ZUCKERMAN: Yes, you're absolutely right.

MR. BUCHANAN: Kyoto -- MR. MCLAUGHLIN: Exit question -- thank you, Mort. Exit question -- back to Detroit's big three bailout bill. If it passes Congress, should President Bush sign it or President Bush veto it? You.

MR. BUCHANAN: First, I don't think it'll get through this Congress.

MR. MCLAUGHLIN: You mean the Senate.

MR. BUCHANAN: Senate. And I think the president will veto it. I don't think he should. But I do agree, you've got to change the situation. And we're not going to do that. But I would not let them go under. I would not let them go under.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: There aren't the votes in the Senate. The Republicans are going to block the bill. And if the dire consequences evolve, it becomes part of the Bush legacy, Bush Republican legacy.

MS. CROWLEY: It's true. I agree. I don't think it's going to get out of this Congress. But, listen, the bailout madness has to --

MR. MCLAUGHLIN: You mean the Senate.

MS. CROWLEY: Out of the Senate. It's not going to make it to the president's desk.

MR. MCLAUGHLIN: Why? He needs Republicans.

He won't get Republicans?

MS. CROWLEY: That's true, because --

MR. MCLAUGHLIN: What's their logic? What's the Republicans' logic, in view of the high emphasis on this panel so far to go with it?

MS. CROWLEY: Because of the failure so far of the stimulus bill. There's another $500 billion stimulus coming up behind it. Taxpayers have had it. The Republicans in the House and in the Senate, they're hearing from their constituents. The bailout madness has to end.

MR. MCLAUGHLIN: What do you think?

MR. ZUCKERMAN: The Republicans, in my judgment, should not oppose it. They should oppose it if it doesn't contain the conditions to make these companies viable. If that isn't there, it makes no sense. We're just going to be pouring a lot of money. They've got to be able --

MR. BUCHANAN: If the Republican Party kills General Motors and Ford, goodbye and good luck.

MR. MCLAUGHLIN: The president should make Obama pay for his own IOUs to the United Auto Workers, et cetera. He should veto.

Issue Two: Is This Why Obama Won?

In 2002, six years ago this month, the GOP victory in Congress was almost history-making. Republicans were ecstatic. They had visions that they would be the majority party and it would last forever. Karl Rove, the political strategist, was saluted once again as a genius. Republican President George Bush was viewed as the creator of a new Republican realignment.

Two years later, the Bush-Cheney 2004 re-election helped cement the realignment prospects. But 2006 arrived, and with it a Republican catastrophic upset. The Democrats swept both the House and the Senate. Then, two years after that, namely this year, three weeks ago, Democrats bloated their 2006 numbers in both the Senate and the House, and in addition, seized the White House. Barack Obama took control of the executive branch of the U.S. government, with its 15 Cabinet departments and their massive collective bureaucracy.

This year's total Democratic blowout means a GOP shutout. Why? The Iraq invasion; the administration's botched response to Hurricane Katrina; Mr. Bush's astronomical spending; and the failure to see and prevent the financial crisis of 2008. It has the dimensions of a Greek tragedy, the plunge of George Bush's image from that of a strong leader to the image of that of a political incompetent.

The president's disapproval rating soared to its highest ever recorded for any single president since ratings began; disapproval, 76 percent, so bad that not one Republican candidate for the House or the Senate or the White House called on Mr. Bush to help in his or her campaign.

Question: What do you make of that, namely that Obama won not by reason of his winning but by Bush losing?

MS. CROWLEY: I agree that it was more an anti-Bush vote than a pro-Obama vote. And the Republicans have a lot of work to do, because the one thing that the Democrats, and in particular Barack Obama, did in this election was update their message. They had a 21st century campaign strategy along with a 21st century candidate. And the Republicans need to figure that out, and they've got a lot of work to do.

MR. MCLAUGHLIN: Mort.

MR. ZUCKERMAN: It is not an accident that the Republicans had the highest disapproval rating and more people wanted change than at any time that poll was taken. The Republicans did not deserve to be re-elected. And Obama offered hope and change, and both of those things were lacking in the Republican campaign.

MR. MCLAUGHLIN: Do you agree with all of what's been said so far?

MR. BUCHANAN: Pretty much. George W. Bush has presided over the expiration of the Nixon new majority and the Reagan coalition. And the Democrats, if they handle things correctly, can put together what I think is a growing governing coalition demographically.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: The Republicans' problems are much bigger than George W. Bush. They've lost all the groups that are growing, the new generation that's coming on line, over --

MR. MCLAUGHLIN: Reagan Democrats have gone?

MS. CLIFT: The Reagan Democrats have been eroded. Hispanics, they lost them over the immigration debate. The Republicans are now basically the party of the old Confederacy, a handful of states in the South and a few states in the West.

MR. MCLAUGHLIN: All right, give me a one-word answer. Was this election dominantly a Republican loss or an Obama win?

MR. BUCHANAN: Anti-Republican.

MS. CLIFT: Oh, I think the Democrats have earned the right to be trusted --

MR. MCLAUGHLIN: Okay --

MS. CLIFT: -- momentarily.

MS. CROWLEY: No, no. Specifically it was an anti-Bush vote.

MR. ZUCKERMAN: No, I think it was as much pro-Obama as it was anti-Bush.

MR. MCLAUGHLIN: I think I agree with you.

Predictions. Pat.

MR. BUCHANAN: Republicans will lose two out of the three finally contested Senate races. They will win Georgia.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: The meeting between President-elect Obama and Senator McCain will signal the beginning of a real partnership. There's going to be much more good will there than you would have anticipated from the campaign.

MS. CROWLEY: Oh, yeah, here it comes. The government of Iceland is bankrupt. They're trying to sell their forward base, Keflavik Air Base. Guess who's going to take it over.

MR. BUCHANAN: The Russians.

MS. CROWLEY: The Russians.

MR. MCLAUGHLIN: Wow.

MR. ZUCKERMAN: The bailout of Fannie Mae and Freddie Mac will cost way above what the government estimated. It'll run in the range of $500 billion at the very least.

MR. MCLAUGHLIN: Wow.

MR. ZUCKERMAN: Right -- $500 billion. MR. MCLAUGHLIN: If the United States goes forward with putting missiles in Poland and the Czech Republic, Russia will put missiles not only in Kaliningrad, but also in Cuba.

Bye-bye.

(PBS segment.)

MR. MCLAUGHLIN: Issue Three: We Are Family.

PRESIDENT-ELECT BARACK OBAMA: (From videotape.) Sasha and Malia, I love you both more than you can imagine, and you have earned the new puppy that's coming with us to the White House.

MR. MCLAUGHLIN: On Inauguration Day, two months away, George Bush won't be the only one with a successor. Barney will have one too -- the White House Scottie. President-elect Obama has described the problem with choosing a puppy from the pound.

PRESIDENT-ELECT OBAMA: (From videotape.) One is that Malia is allergic, so it has to be hypoallergenic. There are a number of breeds that are hypoallergenic. On the other hand, our preference would be to get a shelter dog, but obviously a lot of shelter dogs are mutts like me.

MR. MCLAUGHLIN: Peru -- that is, the nation of Peru -- may have the answer for the Obamas' new four-legged family member -- a hairless dog, the Peruvian dog. It has no hair and -- get this -- no teeth, as a rule. This week a Peruvian dog association offered one of this bald breed to America's next first family.

The Peruvian hairless dog, by the way, dates from -- get this -- 3,000 years ago.

Question: Is this dog what Obama's daughters had in mind for a family pet, or should they get a female pit bull with lipstick named Sarah? Mort Zuckerman.

MR. ZUCKERMAN: Well, actually, I think, to help out their father, they should get a seeing-eye dog. I think if he has to figure out what he has to figure out, that's the only thing I think that will help them.

MR. MCLAUGHLIN: What do you think, Pat?

MR. BUCHANAN: I think we need an American dog, John, none of these Peruvian dogs or German dogs. An American dog is what they need.

MS. CLIFT: Well, as an animal lover --

MR. BUCHANAN: Pick something like Lassie. (Laughs.)

MS. CLIFT: -- as an animal lover, I applaud what the president- elect said, that he would like to adopt from the shelters. There are thousands of -- hundreds of thousands, probably, of animals who are unwanted. And he said rather tellingly that they're mutts like him. Mutts, I guess, are mixed breed. But in the shelters they're often abandoned. I think it gives you an insight into how --

MR. MCLAUGHLIN: What's the economic component of this? Shall I tell you.

MS. CROWLEY: Sure. I just wanted to take this great opportunity to actually agree with Eleanor on something about the shelter animals.

MR. MCLAUGHLIN: Now, don't go over the --

MS. CROWLEY: It's so important to make sure that they're adopted. And I think that they would show a great example if they went and got a shelter animal.

MR. MCLAUGHLIN: Barbara Bush wrote a book on whom? MS. CROWLEY: On the dog.

MR. BUCHANAN: She wrote it on Millie.

MR. MCLAUGHLIN: Millie.

MR. BUCHANAN: Millie.

MR. MCLAUGHLIN: Was that a success?

MR. BUCHANAN: Yeah. Listen, she -- when I moved up to my neighborhood, which was her neighborhood, she showed up at my door. The first visitor was J. Fred Muggs, the late J. Fred Muggs, the dog who was replaced by Millie.

MS. CROWLEY: Hey, Buchanan and I still miss Checkers.

MR. BUCHANAN: (Laughs.)

MS. CROWLEY: We're going back to the Checkers era.

MR. BUCHANAN: Who said, "If you want a friend in Washington, get a dog"?

MS. CROWLEY: Harry Truman.

MR. BUCHANAN: Truman.

MS. CLIFT: I miss Caroline Kennedy's hamster. (Laughs.)

MR. MCLAUGHLIN: Teddy Roosevelt -- what about his kids? Didn't he have dogs for them?

MR. BUCHANAN: They had ponies and everything there.

MS. CLIFT: Well, there's a great romance about White House pets. They go into the history books along with the people.

MR. BUCHANAN: There was Macaroni, which was Caroline's dog -- I mean, pony -- that her father got for her.

MR. MCLAUGHLIN: Do you think we should get a dog for the set?

MS. CLIFT: I think we already have a few dogs for the set. (Laughter.) Couldn't resist. That was such a softball. (Laughter.)

MS. CROWLEY: We do need a mascot for the show, though, John. We need a mascot.

MR. MCLAUGHLIN: We do?

MS. CROWLEY: Yes. MR. ZUCKERMAN: Yes.

MR. MCLAUGHLIN: Would you work on that?

MS. CROWLEY: I'm on it. I'm on it.

MR. BUCHANAN: We've got Oliver.

MR. MCLAUGHLIN: Oliver my dog -- right. Oh, I've got to get the pictures of Oliver. My production company is named after my dog -- a basset hound.

MR. ZUCKERMAN: Finally you remembered.

MR. MCLAUGHLIN: Okay. Family man Obama.

President-elect Obama visited the White House this week and engaged one on one with the sitting president, who shared with the public this impression of the president-elect.

PRESIDENT GEORGE W. BUSH: (From videotape.) One impression I can share with you is that one of the things that President-elect Obama was really interested in after we had had our policy discussions was his little girls. How would they like the White House? And it was interesting to watch him go upstairs, and he wanted to see where his little girls were going to sleep. And clearly this guy is going to bring a great sense of family to the White House.

MR. MCLAUGHLIN: Question: Bush and Obama share a common both. Both men have two daughters. Is it likely they bonded on that level, Pat?

MR. BUCHANAN: No, I think Bush is a family man. He had two daughters and this guy's got two daughters. And he's very -- he was really appealed to by Barack Obama's concern where those kids are going to sleep.

MS. CLIFT: And while it's wonderful and all that to live in the White House, there's also a great personal cost. I mean, they give up their friends. They give up their freedom in many ways. And I think it's traumatic, and I think he's worried about how his girls are going to adjust.

MR. MCLAUGHLIN: By the way, let me point out, in defense of --

MS. CLIFT: Along with himself. (Laughs.)

MR. MCLAUGHLIN: -- in defense of George Bush, we have not had a terrorist attack in this country in seven years.

MR. BUCHANAN: You know, and Bush has been denied a lot of credit for a lot of good things he's done. And it's good to point that out, John. MR. MCLAUGHLIN: Bush really looked happy with Obama, didn't he?

MR. BUCHANAN: I think he looks happy to be going home.

MS. CLIFT: Right.



END.

MR. MCLAUGHLIN: Yeah, but we're at the end of -- so it's going to last for two years?

MR. ZUCKERMAN: At least two years. It's inevitable.

MS. CLIFT: Well, look, Obama is not going to turn it around immediately, but he has a lot of good will and he has a lot of good ideas. And Sheila Bair, who heads the FDIC -- a Republican, strong regulator -- she's going to play a role in the new administration. This administration is missing --

MR. MCLAUGHLIN: What job is she going to get?

MS. CLIFT: Well, she may continue with what she's doing --

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

MS. CLIFT: -- which is good enough. And Henry Paulson --

MR. MCLAUGHLIN: Well, should she be secretary of the Treasury?

MR. BUCHANAN: No, no.

MS. CLIFT: Well, Henry Paulson -- excuse me, I want to say one more thing.

MR. BUCHANAN: This is a good thing --

MS. CLIFT: Henry Paulson, who looked like the indispensable man, now looks like an absolute fool because he has not made this work. He doesn't explain himself. And he has really made the situation a lot worse. MR. MCLAUGHLIN: Does anybody disagree with that? Do you disagree with that?

MR. BUCHANAN: Seventy-two percent, John, is a good thing for this. It's like FDR. Look, he's going to have to try a lot of things, and some of them aren't going to work and some of them are going to fail and some of them may succeed. But I do agree with the idea of action and doing something. And you've got to pick and choose what you're going to save and what you're going to let go. And I think he's a pragmatist and will do it.

MS. CROWLEY: Listen, I know that Barack Obama is supposed to have these miraculous powers, but even he is not going to be able to pull this economy out from where it is. Mort is absolutely right. It's going to be longer than two years. Think about the '90 to '91 recession. This one is a lot deeper. It's a lot more profound. The tentacles are everywhere in this economy.

And so if I were Obama -- and I'm surprised that he's not doing this -- tamp down those expectations; say, "Listen, I'm not a miracle worker here. We're going to try. We're going to do some things." But Paulson, the first wave of that bailout plan, $250 billion, what happened? It failed, which is why they have to switch strategies, because the banks ended up either acquiring each other or hording the money, and they didn't do anything to clean up the credit markets.

MR. MCLAUGHLIN: Exit question --

MS. CLIFT: To put this in perspective, as much money has been given to AIG, one company, as Barack Obama campaigned on running for his green energy recovery plan -- $150 billion.

MR. MCLAUGHLIN: Green is dead.

MS. CLIFT: No, green is not dead.

MR. MCLAUGHLIN: Green is relatively dead.

MS. CLIFT: No, green is the way to go. (Laughs.)

MR. MCLAUGHLIN: It's relatively dead, is it not?

MR. ZUCKERMAN: Let me put it this way. It's longer term than we thought it would be, because we don't have the money to go green.

MR. MCLAUGHLIN: That's what I'm saying.

MR. ZUCKERMAN: Yes, you're absolutely right.

MR. BUCHANAN: Kyoto -- MR. MCLAUGHLIN: Exit question -- thank you, Mort. Exit question -- back to Detroit's big three bailout bill. If it passes Congress, should President Bush sign it or President Bush veto it? You.

MR. BUCHANAN: First, I don't think it'll get through this Congress.

MR. MCLAUGHLIN: You mean the Senate.

MR. BUCHANAN: Senate. And I think the president will veto it. I don't think he should. But I do agree, you've got to change the situation. And we're not going to do that. But I would not let them go under. I would not let them go under.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: There aren't the votes in the Senate. The Republicans are going to block the bill. And if the dire consequences evolve, it becomes part of the Bush legacy, Bush Republican legacy.

MS. CROWLEY: It's true. I agree. I don't think it's going to get out of this Congress. But, listen, the bailout madness has to --

MR. MCLAUGHLIN: You mean the Senate.

MS. CROWLEY: Out of the Senate. It's not going to make it to the president's desk.

MR. MCLAUGHLIN: Why? He needs Republicans.

He won't get Republicans?

MS. CROWLEY: That's true, because --

MR. MCLAUGHLIN: What's their logic? What's the Republicans' logic, in view of the high emphasis on this panel so far to go with it?

MS. CROWLEY: Because of the failure so far of the stimulus bill. There's another $500 billion stimulus coming up behind it. Taxpayers have had it. The Republicans in the House and in the Senate, they're hearing from their constituents. The bailout madness has to end.

MR. MCLAUGHLIN: What do you think?

MR. ZUCKERMAN: The Republicans, in my judgment, should not oppose it. They should oppose it if it doesn't contain the conditions to make these companies viable. If that isn't there, it makes no sense. We're just going to be pouring a lot of money. They've got to be able --

MR. BUCHANAN: If the Republican Party kills General Motors and Ford, goodbye and good luck.

MR. MCLAUGHLIN: The president should make Obama pay for his own IOUs to the United Auto Workers, et cetera. He should veto.

Issue Two: Is This Why Obama Won?

In 2002, six years ago this month, the GOP victory in Congress was almost history-making. Republicans were ecstatic. They had visions that they would be the majority party and it would last forever. Karl Rove, the political strategist, was saluted once again as a genius. Republican President George Bush was viewed as the creator of a new Republican realignment.

Two years later, the Bush-Cheney 2004 re-election helped cement the realignment prospects. But 2006 arrived, and with it a Republican catastrophic upset. The Democrats swept both the House and the Senate. Then, two years after that, namely this year, three weeks ago, Democrats bloated their 2006 numbers in both the Senate and the House, and in addition, seized the White House. Barack Obama took control of the executive branch of the U.S. government, with its 15 Cabinet departments and their massive collective bureaucracy.

This year's total Democratic blowout means a GOP shutout. Why? The Iraq invasion; the administration's botched response to Hurricane Katrina; Mr. Bush's astronomical spending; and the failure to see and prevent the financial crisis of 2008. It has the dimensions of a Greek tragedy, the plunge of George Bush's image from that of a strong leader to the image of that of a political incompetent.

The president's disapproval rating soared to its highest ever recorded for any single president since ratings began; disapproval, 76 percent, so bad that not one Republican candidate for the House or the Senate or the White House called on Mr. Bush to help in his or her campaign.

Question: What do you make of that, namely that Obama won not by reason of his winning but by Bush losing?

MS. CROWLEY: I agree that it was more an anti-Bush vote than a pro-Obama vote. And the Republicans have a lot of work to do, because the one thing that the Democrats, and in particular Barack Obama, did in this election was update their message. They had a 21st century campaign strategy along with a 21st century candidate. And the Republicans need to figure that out, and they've got a lot of work to do.

MR. MCLAUGHLIN: Mort.

MR. ZUCKERMAN: It is not an accident that the Republicans had the highest disapproval rating and more people wanted change than at any time that poll was taken. The Republicans did not deserve to be re-elected. And Obama offered hope and change, and both of those things were lacking in the Republican campaign.

MR. MCLAUGHLIN: Do you agree with all of what's been said so far?

MR. BUCHANAN: Pretty much. George W. Bush has presided over the expiration of the Nixon new majority and the Reagan coalition. And the Democrats, if they handle things correctly, can put together what I think is a growing governing coalition demographically.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: The Republicans' problems are much bigger than George W. Bush. They've lost all the groups that are growing, the new generation that's coming on line, over --

MR. MCLAUGHLIN: Reagan Democrats have gone?

MS. CLIFT: The Reagan Democrats have been eroded. Hispanics, they lost them over the immigration debate. The Republicans are now basically the party of the old Confederacy, a handful of states in the South and a few states in the West.

MR. MCLAUGHLIN: All right, give me a one-word answer. Was this election dominantly a Republican loss or an Obama win?

MR. BUCHANAN: Anti-Republican.

MS. CLIFT: Oh, I think the Democrats have earned the right to be trusted --

MR. MCLAUGHLIN: Okay --

MS. CLIFT: -- momentarily.

MS. CROWLEY: No, no. Specifically it was an anti-Bush vote.

MR. ZUCKERMAN: No, I think it was as much pro-Obama as it was anti-Bush.

MR. MCLAUGHLIN: I think I agree with you.

Predictions. Pat.

MR. BUCHANAN: Republicans will lose two out of the three finally contested Senate races. They will win Georgia.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: The meeting between President-elect Obama and Senator McCain will signal the beginning of a real partnership. There's going to be much more good will there than you would have anticipated from the campaign.

MS. CROWLEY: Oh, yeah, here it comes. The government of Iceland is bankrupt. They're trying to sell their forward base, Keflavik Air Base. Guess who's going to take it over.

MR. BUCHANAN: The Russians.

MS. CROWLEY: The Russians.

MR. MCLAUGHLIN: Wow.

MR. ZUCKERMAN: The bailout of Fannie Mae and Freddie Mac will cost way above what the government estimated. It'll run in the range of $500 billion at the very least.

MR. MCLAUGHLIN: Wow.

MR. ZUCKERMAN: Right -- $500 billion. MR. MCLAUGHLIN: If the United States goes forward with putting missiles in Poland and the Czech Republic, Russia will put missiles not only in Kaliningrad, but also in Cuba.

Bye-bye.

(PBS segment.)

MR. MCLAUGHLIN: Issue Three: We Are Family.

PRESIDENT-ELECT BARACK OBAMA: (From videotape.) Sasha and Malia, I love you both more than you can imagine, and you have earned the new puppy that's coming with us to the White House.

MR. MCLAUGHLIN: On Inauguration Day, two months away, George Bush won't be the only one with a successor. Barney will have one too -- the White House Scottie. President-elect Obama has described the problem with choosing a puppy from the pound.

PRESIDENT-ELECT OBAMA: (From videotape.) One is that Malia is allergic, so it has to be hypoallergenic. There are a number of breeds that are hypoallergenic. On the other hand, our preference would be to get a shelter dog, but obviously a lot of shelter dogs are mutts like me.

MR. MCLAUGHLIN: Peru -- that is, the nation of Peru -- may have the answer for the Obamas' new four-legged family member -- a hairless dog, the Peruvian dog. It has no hair and -- get this -- no teeth, as a rule. This week a Peruvian dog association offered one of this bald breed to America's next first family.

The Peruvian hairless dog, by the way, dates from -- get this -- 3,000 years ago.

Question: Is this dog what Obama's daughters had in mind for a family pet, or should they get a female pit bull with lipstick named Sarah? Mort Zuckerman.

MR. ZUCKERMAN: Well, actually, I think, to help out their father, they should get a seeing-eye dog. I think if he has to figure out what he has to figure out, that's the only thing I think that will help them.

MR. MCLAUGHLIN: What do you think, Pat?

MR. BUCHANAN: I think we need an American dog, John, none of these Peruvian dogs or German dogs. An American dog is what they need.

MS. CLIFT: Well, as an animal lover --

MR. BUCHANAN: Pick something like Lassie. (Laughs.)

MS. CLIFT: -- as an animal lover, I applaud what the president- elect said, that he would like to adopt from the shelters. There are thousands of -- hundreds of thousands, probably, of animals who are unwanted. And he said rather tellingly that they're mutts like him. Mutts, I guess, are mixed breed. But in the shelters they're often abandoned. I think it gives you an insight into how --

MR. MCLAUGHLIN: What's the economic component of this? Shall I tell you.

MS. CROWLEY: Sure. I just wanted to take this great opportunity to actually agree with Eleanor on something about the shelter animals.

MR. MCLAUGHLIN: Now, don't go over the --

MS. CROWLEY: It's so important to make sure that they're adopted. And I think that they would show a great example if they went and got a shelter animal.

MR. MCLAUGHLIN: Barbara Bush wrote a book on whom? MS. CROWLEY: On the dog.

MR. BUCHANAN: She wrote it on Millie.

MR. MCLAUGHLIN: Millie.

MR. BUCHANAN: Millie.

MR. MCLAUGHLIN: Was that a success?

MR. BUCHANAN: Yeah. Listen, she -- when I moved up to my neighborhood, which was her neighborhood, she showed up at my door. The first visitor was J. Fred Muggs, the late J. Fred Muggs, the dog who was replaced by Millie.

MS. CROWLEY: Hey, Buchanan and I still miss Checkers.

MR. BUCHANAN: (Laughs.)

MS. CROWLEY: We're going back to the Checkers era.

MR. BUCHANAN: Who said, "If you want a friend in Washington, get a dog"?

MS. CROWLEY: Harry Truman.

MR. BUCHANAN: Truman.

MS. CLIFT: I miss Caroline Kennedy's hamster. (Laughs.)

MR. MCLAUGHLIN: Teddy Roosevelt -- what about his kids? Didn't he have dogs for them?

MR. BUCHANAN: They had ponies and everything there.

MS. CLIFT: Well, there's a great romance about White House pets. They go into the history books along with the people.

MR. BUCHANAN: There was Macaroni, which was Caroline's dog -- I mean, pony -- that her father got for her.

MR. MCLAUGHLIN: Do you think we should get a dog for the set?

MS. CLIFT: I think we already have a few dogs for the set. (Laughter.) Couldn't resist. That was such a softball. (Laughter.)

MS. CROWLEY: We do need a mascot for the show, though, John. We need a mascot.

MR. MCLAUGHLIN: We do?

MS. CROWLEY: Yes. MR. ZUCKERMAN: Yes.

MR. MCLAUGHLIN: Would you work on that?

MS. CROWLEY: I'm on it. I'm on it.

MR. BUCHANAN: We've got Oliver.

MR. MCLAUGHLIN: Oliver my dog -- right. Oh, I've got to get the pictures of Oliver. My production company is named after my dog -- a basset hound.

MR. ZUCKERMAN: Finally you remembered.

MR. MCLAUGHLIN: Okay. Family man Obama.

President-elect Obama visited the White House this week and engaged one on one with the sitting president, who shared with the public this impression of the president-elect.

PRESIDENT GEORGE W. BUSH: (From videotape.) One impression I can share with you is that one of the things that President-elect Obama was really interested in after we had had our policy discussions was his little girls. How would they like the White House? And it was interesting to watch him go upstairs, and he wanted to see where his little girls were going to sleep. And clearly this guy is going to bring a great sense of family to the White House.

MR. MCLAUGHLIN: Question: Bush and Obama share a common both. Both men have two daughters. Is it likely they bonded on that level, Pat?

MR. BUCHANAN: No, I think Bush is a family man. He had two daughters and this guy's got two daughters. And he's very -- he was really appealed to by Barack Obama's concern where those kids are going to sleep.

MS. CLIFT: And while it's wonderful and all that to live in the White House, there's also a great personal cost. I mean, they give up their friends. They give up their freedom in many ways. And I think it's traumatic, and I think he's worried about how his girls are going to adjust.

MR. MCLAUGHLIN: By the way, let me point out, in defense of --

MS. CLIFT: Along with himself. (Laughs.)

MR. MCLAUGHLIN: -- in defense of George Bush, we have not had a terrorist attack in this country in seven years.

MR. BUCHANAN: You know, and Bush has been denied a lot of credit for a lot of good things he's done. And it's good to point that out, John. MR. MCLAUGHLIN: Bush really looked happy with Obama, didn't he?

MR. BUCHANAN: I think he looks happy to be going home.

MS. CLIFT: Right.



END.