Copyright (c) 2008 by Federal News Service, Inc., Ste. 500 1000 Vermont Avenue, NW, Washington, DC 20005, USA. Federal News Service is a private firm not affiliated with the federal government. No portion of this transcript may be copied, sold or retransmitted without the written authority of Federal News Service, Inc. Copyright is not claimed as to any part of the original work prepared by a United States government officer or employee as a part of that person's official duties. For information on subscribing to the FNS Internet Service, please visit or call(202)347-1400

MR. MCLAUGHLIN: Issue One: Blago Bagged?

(Videotaped clips of Illinois Governor Rod Blagojevich, accompanied by the sound track to "Whole Lotta Shakin' Goin' On.")

ILLINOIS GOVERNOR ROD BLAGOJEVICH (D): (From videotape.) I don't believe there's any cloud that hangs over me. I think there's nothing but sunshine hanging over me.

PRESIDENT-ELECT BARACK OBAMA: (From videotape.) So let me be absolutely clear. I do not think that the governor at this point can effectively serve the people of Illinois. I hope that the governor himself comes to the conclusion that he can no longer effectively serve and that he does resign. MR. MCLAUGHLIN: President-elect Barack Obama is referring to the arrest of the governor of his home state of Illinois, Governor Rod Blagojevich. U.S. attorney in Illinois Patrick Fitzgerald brought the complaint against the Illinois governor.

PATRICK FITZGERALD (U.S. attorney): (From videotape.) Governor Blagojevich tried to sell the appointment to the Senate seat vacated by President-elect Obama. Blagojevich and others were working feverishly to get as much money from contractors, shaking them down, pay to play.

MR. MCLAUGHLIN: Fitzgerald quoted from the 76-page transcript of conversations of Governor Blagojevich wiretapped from late October to early December of this year.

MR. FITZGERALD: (From videotape.) "It's a 'bleeping' valuable thing. You just don't give it away for nothing," closed quote. Another quote: "I've got this thing, and it's 'bleeping' golden. I'm just not giving it up for 'bleeping' nothing."

MR. MCLAUGHLIN: The U.S. attorney described what Governor Blagojevich was seeking.

MR. FITZGERALD: (From videotape.) The tapes reveal that Governor Blagojevich wanted a number of things in exchange for making the appointment to the Senate seat -- an appointment as secretary of Health and Human Services or an ambassadorship, an appointment to a private foundation, a higher-paying job for his wife, or campaign contributions.

MR. MCLAUGHLIN: By the way, Elvis Presley's "A Whole Lotta Shakin' Goin' On" is Governor Blagojevich's favorite song and favorite vocalist.

Question: Is Patrick Fitzgerald making a mountain out of a mole hill, or does he in fact have a mountain? Pat Buchanan.

MR. BUCHANAN: John, trading offices is as American as apple pie. John Quincy Adams, in exchange for the electoral votes of Henry Clay, which Clay gave him, gave Clay secretary of State, and Adams got the presidency from the guy who won the election, Jackson.

But this is a different case. This is like putting the Senate seat of the next president of the United States up on eBay. This guy was auctioning it off to the highest bidder. He wanted money, presumably for himself or for his campaign.

MR. MCLAUGHLIN: And his wife.

MR. BUCHANAN: It was solicitation of bribery for that office. And it's a very serious problem, not for Obama personally. I don't think Obama conceded to do anything. I don't think the final thing went down. But it's a real problem for Obama's advisers, because it's not credible that they didn't talk to the governor about Obama's Senate seat; they didn't have their own ideas. And it's almost not credible that they didn't hear -- these smart, savvy guys didn't hear that the governor of Illinois was shopping around the Senate seat of Barack Obama.

Their problem is going to be, if they heard or if they knew, why didn't they go to the authorities? Why didn't they report them? And were they complicit in, if you will, negotiating a deal that never finally went down?

MR. MCLAUGHLIN: Okay, Obama says that he had no contact, as Pat points out, with the office of the governor, that he did not talk to the governor about who would replace him as junior senator from Illinois, and he knows that for certain. Obama does not say, however, that he did not have any conversation at all with the governor.

PRESIDENT-ELECT OBAMA: (From videotape.) I had no contact with the governor's office. I did not speak to the governor about these issues. That I know for certain.

MR. MCLAUGHLIN: Obama says he was uninvolved. But what about his aides, his advisers, his officials, his team?

PRESIDENT-ELECT OBAMA: (From videotape.) Our office had no involvement in any deal-making around my Senate seat. That I'm absolutely certain of. That would be a violation of everything that this campaign has been about. And that's not how we do business.

MR. MCLAUGHLIN: The 76-page complaint, not indictment, against Blagojevich never mentions any direct conversations between Blagojevich and President-elect Obama. But note this: Obama's senior adviser, David Axelrod, said this three weeks ago, referring to Barack Obama conversing about his senatorial replacement with Governor Blagojevich.

DAVID AXELROD (senior adviser to President-elect Obama): (From videotape.) I know he's talked to the governor. And, you know, he's -- there are a whole range of names, many of which have surfaced.

MR. MCLAUGHLIN: Axelrod has since issued this statement. Quote: "I was mistaken when I told an interviewer last month that the president-elect has spoken directly to Governor Blagojevich about the Senate vacancy. They did not then or at any time discuss the subject," unquote.

Many Republicans, notably GOP Chairman Mike Duncan, are calling for Obama to be completely transparent. Quote: "Obama's carefully parsed and vague statements regarding his own contacts and that of his team with Blagojevich are unacceptable," unquote.

Chairman Duncan appears to refer to last Tuesday, when Obama changed a plural pronoun, "we," to a singular pronoun, "I." (Begin videotaped segment.)

Q Were you aware at all of what was happening with your Senate seat?

PRESIDENT-ELECT OBAMA: (From videotape.) I had no contact with the governor or his office, and so we were not -- I was not aware of what was happening.

MR. MCLAUGHLIN: Question: Is the Blagojevich scandal fraught with political risks for the president-elect? I ask you, Eleanor.

MS. CLIFT: Well, first of all, Blagojevich gives Elvis fans and Elvis impersonators a bad name. (Laughter.) And I regret that.

MR. MCLAUGHLIN: You mean the hair?

MS. CROWLEY: The hair.

MS. CLIFT: Well, the whole mannerism, the way he's adopted that look and turned it into political criminality. It's really a tragedy.

But, look, the danger here for Obama is that this feeds into the narrative that he comes out of this corrupt Chicago culture -- Do we really know who he is? Who are these various associations? -- and that it could become sort of a backdrop for his administration, the way Little Rock and all the feudal dealings there became a backdrop for the Clinton administration.

I don't think it's going to go that far. I think he's handled it quite well so far. He's promised transparency. According to the in- depth reporting that is beginning to emerge, he hasn't spoken to Blagojevich for a year. He didn't invite him to speak at the Democratic Convention. There are strained relationships between the two.

It would be very natural for there to have been conversations around the Senate seat by members of his staff, and he's now promised that he's going to reveal those conversations. And the FBI may be helping us with that -- (laughter) -- because they've been taping the governor. So we're going to learn more here.

MR. BUCHANAN: We can refresh the memories. (Laughs.)

MR. PAGE: That's right.

MR. MCLAUGHLIN: Why did Fitzgerald make the drop now?

MS. CROWLEY: Merry "Fitzmas." Fitzgerald made the drop now because he says that he was trying to prevent yet another crime, of Blagojevich actually appointing somebody, whether it's Jesse Jackson Jr. or any of the other Senate candidates who are unnamed in the criminal complaint.

MR. MCLAUGHLIN: You believe that.

MS. CROWLEY: You know, I'm not sure.

MR. MCLAUGHLIN: His own term ends on January the 20th; Fitzgerald's does.

MS. CROWLEY: Right. Yes, it does. And the question is whether or not Obama is going to continue having him in this role. I think he will. I don't think he's going to do a Saturday night massacre and end up firing -- MR. MCLAUGHLIN: Oh, that would be --

MS. CROWLEY: -- Patrick Fitzgerald. He's not going to do that. But, look, this is just the latest chapter in the Chicago hustle. This week The New York Times ran a story --

MR. PAGE: Smile when you say that.

MS. CROWLEY: -- a photo of three people -- Blagojevich on the left, Chicago Mayor Richard Daley on the right, and in the middle, Barack Obama. And we're being asked to believe that Obama came out of this primordial ooze of Chicago sleaze unscathed and virgin-like. And that may be true, but it really does strain credulity, especially when you've got all of these people around Obama, including Rahm Emanuel, his incoming chief of staff, maybe, who took over Blagojevich's congressional seat in 2002 when Blagojevich became governor.

So the three of them go way back, at least six years. Obama was a top aide to Blagojevich, starting in 2002. So there may be some more difficulties here for Obama, at least politically, maybe not legally, that we don't know about yet.

MR. MCLAUGHLIN: Three governors of Illinois have been convicted. One's in jail now.

MR. PAGE: Right.

MR. MCLAUGHLIN: Two others have served time.

MR. PAGE: Right. We may have two governors in jail at the same time, the way things are going now.

MR. MCLAUGHLIN: What are you doing to try to clean up that environment with your column? (Laughter.)

MR. BUCHANAN: He's right in the thick of it, John. (Laughs.)

MR. PAGE: It's like him, Chicago. A lot of journalists come to Chicago because of the challenge, and it's a great media town.

MR. MCLAUGHLIN: Did you move to Chicago?

MR. PAGE: Yeah, I grew up in Ohio. And I chose Chicago, and I'm proud of it. You know, the fact is --

MR. MCLAUGHLIN: The fountain that keeps on giving.

MR. PAGE: Let me answer your question, because don't forget, Illinois is also the place where Adlai Stevenson, Paul Simon, Paul Douglas came from. We've had some -- can't forget Abraham Lincoln going way back -- but we've had some terrific -- MR. MCLAUGHLIN: You've got also Dick Durbin, who is a stalwart man.

MR. PAGE: Dick Durbin is a stalwart man. We have a lot of -- Obama coming out of the primordial ooze, Monica, would be laughable if you said that in Chicago, because everybody knows he comes from the goo-goo sector, the good government folks on the lake front, Hyde Park and all that.

MR. MCLAUGHLIN: Is that where his home is?

MR. PAGE: He's a Hyde Parker. And he started out in the independent wing of Chicago politics, which was anti-machine. He made his peace with the machine in order to operate in Springfield, and -- (inaudible) -- these marriages of convenience that resulted in his successful White House run. But he has always been in the middle of that garden of good and evil, balancing the two of them on. Everybody knows it. But he did not go to the dark side.

MS. CROWLEY: Then why didn't he push for --

MR. PAGE: I've just got to point out very quickly, Blagojevich himself on the tape talks about how "I approached them, and all they gave me was appreciation. Well, 'bleep' that." You know, that is the best exoneration Obama could have, because it shows the attitude.

MS. CROWLEY: But why didn't he push for more ethics reform --

MR. PAGE: He did.

MS. CROWLEY: -- while he was a state senator?

MR. PAGE: He did.

MS. CROWLEY: No, but he --

MR. PAGE: That was his hallmark in Springfield was ethics reform.

MS. CROWLEY: No, he never saw any of it through until this --

MR. MCLAUGHLIN: In fact, he was fighting his own deadline of January the 1st, the governor was, because his own legislation --

MR. PAGE: That's right.

MS. CROWLEY: But that was not going back --

MS. CLIFT: Obama pushed him --

MR. MCLAUGHLIN: All right, hold on.

MS. CLIFT: Obama pushed him to support -- MR. MCLAUGHLIN: What's your point about the ethics?

MS. CROWLEY: My point, that when he was a state senator and then a U.S. senator --

MR. MCLAUGHLIN: You mean, he's a good guy underneath --

MS. CROWLEY: -- he never reformed that far. He never saw it through in the state.

MR. PAGE: Actually, that was a hallmark --

MS. CLIFT: That's not true.

MR. PAGE: That was a hallmark of his Springfield career, along with a bill to require videotaped confessions of police. Those were his two hallmarks down there.

MS. CLIFT: And the --

MR. PAGE: And this was after years of unsuccessful ethics legislation that never got through. Obama helped to get it through.

MR. MCLAUGHLIN: Can we postulate that Rod Blagojevich has redeeming qualities?

MR. PAGE: Blagojevich? He used to. I don't know what's happened to the lad, I'll tell you. No, he really --

MR. MCLAUGHLIN: I mean, some of his legislation --

MR. PAGE: -- went over to the dark side.

MR. MCLAUGHLIN: -- some of his legislation that he proposed that did make it, and some that did not.

MR. PAGE: Yeah, but he's got --


MR. PAGE: I'll give you one number, John -- 13. That's his approval rating, 13 percent. George Bush thought he had it bad. I mean, you've got to do really well if even your distant cousins don't like you, including his powerful father-in-law.

MR. MCLAUGHLIN: Why was that? Why was that rating so low?

MR. PAGE: A lot of different reasons, but he mainly -- you've got to say he went back on his word at every level, including to his colleagues, to his powerful machine brother-in-law --

MR. BUCHANAN: John, the problem with this is the cancer --

MR. PAGE: -- of course, to the public. You know, he has run down school financing, for example, while building up his campaign coffers. You name it.

MR. BUCHANAN: John, the problem is --

MR. MCLAUGHLIN: He named a highway after Ronald Reagan. (Laughter.)

MR. BUCHANAN: John, this cancer -- MR. MCLAUGHLIN: Is that redeeming at all?

MR. PAGE: In the Republican sector.

MR. BUCHANAN: The cancer is metastasizing.

MR. MCLAUGHLIN: What's that?

MR. BUCHANAN: The cancer is metastasizing. You've got Jesse Jackson Jr. involved in this in a very, very serious way. You've got an emissary of his --

MR. PAGE: Well, maybe not.

MR. BUCHANAN: -- who went in to the governor; an emissary went in, apparently made an offer of half a million, maybe a million and a half, if Jesse Jackson got the seat there. Jesse said he had nothing to do with it. He's a nice young guy, but he seems to be drawn into this. I think Rahm Emanuel -- he is refusing to give any interviews here, and here's a guy who's --

MR. MCLAUGHLIN: Who's Rahm Emanuel?

MR. BUCHANAN: Rahm Emanuel is the incoming chief of staff to the president of the United States. And frankly, if he's involved, it's difficult to see how he can become chief of staff, because --

MR. PAGE: But you don't --


MR. MCLAUGHLIN: Rahm Emanuel is a native Chicagoan?

MR. BUCHANAN: Yes. And a special prosecutor is going to be appointed.

MS. CLIFT: I know.

MR. MCLAUGHLIN: Does he have any --

MS. CLIFT: But guilt by association is one of your --

MR. BUCHANAN: It's not guilt by association.

MS. CLIFT: -- favorite themes, and then escalating into the special counsel, and then we get --

MR. BUCHANAN: You have to --

MS. CLIFT: -- the whiffs of Watergate. (Laughs.)

MR. BUCHANAN: You have to have a special prosecutor if he's chief of staff. MS. CLIFT: The fact that --

MR. PAGE: Pat --

MS. CLIFT: Excuse me. The fact that Rahm Emanuel is not asking questions may be simply because the FBI is involved. They want to make sure they have all their ducks in a row. It's not necessarily incriminating. You go from, you know, step A to step Z.

MR. BUCHANAN: But, no, it is automatic that you get an independent counsel if the chief of staff is involved.

MR. MCLAUGHLIN: All right, can I hear from Monica? Excuse me. Let's go, Monica.

MS. CROWLEY: Very deep in these tapes is Blagojevich talking about an unnamed Obama adviser talking about the 5th CD thing. What is the 5th CD? The 5th congressional --

MR. MCLAUGHLIN: CD -- C as in "cat"?

MS. CROWLEY: Fifth CD, which is the 5th congressional district of Illinois, held now by Rahm Emanuel, held previously by Rod Blagojevich. And the question now is, Rahm Emanuel has not yet resigned that House seat. So is there a question of wheeling-dealing, not just on the Senate seat, but also on the House seat?

MR. BUCHANAN: He doesn't appoint --

MR. PAGE: Or could Rahm Emanuel --

MS. CLIFT: (Inaudible) -- an election.

MR. PAGE: Could Rahm Emanuel have dropped the dime himself, which he denies? We don't know.

MS. CROWLEY: Yeah, but isn't that the question?

MR. BUCHANAN: He could have.

MR. PAGE: He could have. There are indications that somebody in the Obama camp --

MR. BUCHANAN: Ratted out on the governor?

MR. PAGE: -- (inaudible) -- may have dropped the dime to the U.S. attorney --

MR. MCLAUGHLIN: Are we all agreed --

MR. BUCHANAN: Ratted on the governor? MR. PAGE: Yeah, ratted on the governor, who was not a friend of Obama's, we must say.

MR. MCLAUGHLIN: Excuse me. Are we all agreed that this is a mountain and not a mole hill? Are we?

MR. BUCHANAN: It's a hill. It's a very big hill now. It's not a mountain yet.

MR. MCLAUGHLIN: It's a big hill. Is it --

MR. BUCHANAN: It is not Watergate.

MR. MCLAUGHLIN: Will it become a mountain, or will it recede into a mole hill?

MR. BUCHANAN: I think it's going to get into Obama's staff. I think he's up and clear himself.

MR. MCLAUGHLIN: Do you think that the depositions that will be coming out for the foreseeable future, starting when he enters the White House, that this is going to be just such a besmirchment --

MR. BUCHANAN: It is a distraction and a besmirchment. And the fear is that guys in the White House are going to be walking over there, having to testify and talking to their lawyers, not that they committed crime.

MR. MCLAUGHLIN: Now, Obama himself may be --

MS. CLIFT: (Inaudible.)

MR. BUCHANAN: No, no. I don't believe Obama will be put on the stand, unless there's a conflict.

MS. CLIFT: Not that they committed crimes is the key phrase here.

MR. MCLAUGHLIN: Do you think it's a mountain or a mole hill?

MS. CLIFT: I think -- as Pat says, I think it's a hill. But I think it's a hill that they will get over. And the problems facing this new administration coming in will make this look like rather silly media candy.

MR. MCLAUGHLIN: Do you fault Fitzgerald for bringing this case on the basis of what you've seen?

MS. CLIFT: No. No, I don't fault him for bringing this case. I think he --

MR. MCLAUGHLIN: You do not?

MS. CLIFT: No. I think he was outraged at what looked like the auctioning of --

MR. MCLAUGHLIN: And you're convinced it's a mountain, and you're convinced it's something in between. MS. CROWLEY: Well, it's a potential mountain.

MR. MCLAUGHLIN: All right, let's get --

MR. PAGE: No, mole hill for Obama; a mountain for Jesse Jackson Jr. That's what I think it is.


MR. PAGE: Yeah, because, no, Obama's camp isn't accused of any wrongdoing, except by the speculators, who are trying to read into it. And Republicans are having a field day, deservedly so. (They've seen ?) a lot of sad things lately.

MR. MCLAUGHLIN: Do you think Axelrod is now free and clear, since he cleared up that statement?

MR. BUCHANAN: Clarence is circling the wagons. (Laughs.)


MR. BUCHANAN: Clarence is circling the wagons around his Chicago friends.


MR. PAGE: No, I'm not. You know, I've covered plenty of indictable people, beforehand and afterwards, believe me.

MS. CROWLEY: John --

MR. MCLAUGHLIN: Don't forget, the Tribune --

MR. PAGE: It's a good story either way.

MS. CLIFT: They just dropped a dime on Jesse Jr.

MR. MCLAUGHLIN: The Tribune Company was also involved in this. Is that correct?

MR. PAGE: You know, we sold more papers on the day Blagojevich got arrested than any other day since Obama's election. It's incredible.

MS. CLIFT: It's good for journalism, good for business.

MR. MCLAUGHLIN: (Inaudible) -- that Sam Zell has now got the Tribune, what, for -- didn't he put it in --

MR. BUCHANAN: Bankruptcy.

MR. MCLAUGHLIN: -- Chapter 11? MR. PAGE: Bankruptcy protection, yeah, Chapter 11. We're still publishing.

MR. MCLAUGHLIN: Are you okay?

MR. PAGE: Am I okay? So far today. (Laughs.) Knock on wood.

MR. MCLAUGHLIN: Issue Two: Priming the Slump.

SEN. RICHARD SHELBY (R-AL): (From videotape.) I think this is a bridge loan to nowhere. This is a down payment on many billions to come.

SEN. JIM DEMINT (R-SC): (From videotape.) This is a business problem, and it won't be solved with a political solution. Congress can't run the car industry when it doesn't even know how to manage itself. It's time for these companies to restructure so they can be competitive for years to come. This is the best way to save jobs and help our manufacturers in the long term.

MR. MCLAUGHLIN: The Republican senators' anti-bailout reasoning is that bailouts erode capitalism. A bailout despoils one of America's most cherished principles and philosophies, that free enterprise should breathe, grow, live free and prosper on its own, without any outside influences.

The United States was established on the notion that big government leads only to big problems. Last Wednesday, the Democratic House of Representatives approved the $15 billion Detroit bailout package, 237 to 170.

Question: Is capitalism versus socialism a false dichotomy? Monica.

MS. CROWLEY: The Chinese have actually managed it quite well, a capitalist economy with a socialist or communist political regime. If we're moving in the direction of China, that's a problem for the United States, although I will note that the breaking news out of China this week is that the Chinese government slashed interest rates and cut taxes.

So we may be in a very unique position here where the governments like Russia and China, that are traditionally socialist, are moving more and more toward a free market capitalist system, and we're going the other way.


MS. CLIFT: This isn't the Beijing University politics 101 class. This country has serious difficulties, with over a million people out of work, an auto industry that is tied to one out of seven jobs in the country. What went on on Capitol Hill is basically a game of chicken, because they all know there's a pot of money in the TARP, the money that the Congress authorized. And President Bush is my new best friend this week. He called the Republican senators and said, "If you let this go down, the Republican Party will be remembered as the party of Herbert Hoover forever."


MS. CLIFT: And he's right. We now know that this clack of southern senators, with foreign auto plants in their states, are protecting their constituency, which is Hyundai and --

MR. BUCHANAN: John, let me agree with Eleanor.


MR. BUCHANAN: Let me reinforce -- hold it. Let me reinforce what Eleanor said. These are the Toyota Republicans. You go down to Alabama and those places, Toyota, Mitsubishi, Honda, Hyundai, Nissan, BMW, all those plants are down there. These free trade fanatics and Toyota Republicans have sunk the Republican Party with middle America, working America.


MR. BUCHANAN: They've driven the Reagan Democrats out of the party for the last 20 years, and they finally succeeded.

MR. MCLAUGHLIN: What's gotten into you? What kind of heresy are you spouting here today?

MR. BUCHANAN: John, don't they understand? Manufacturing -- there are four ways you produce things -- mining, manufacturing, farms, factories. Those are the ways you do it. And they're giving up manufacturing in America.

MR. MCLAUGHLIN: You want to corporatize the state.

MR. BUCHANAN: I do not. I want to save the manufacturing base of our country, which they've sacrificed on the altar of Davos.

MS. CROWLEY: You can do it without a federal bailout, Pat.

MR. PAGE: The fact is you've got a situation here that there's bipartisan agreement. When you're in an emergency, a bailout is the only proper thing to do because you've got to get over that hump. And we're in a hump right now. Neither party can afford the job loss that would come from the collapse of the big three automakers.

MR. MCLAUGHLIN: And that would be traceable to the Republicans.

MR. PAGE: Well, you know, either way. That's why President Bush doesn't want to go out being known as the guy who closed the door on those jobs.

MR. BUCHANAN: Bush is doing the right thing.

MR. PAGE: Yeah.

MR. MCLAUGHLIN: Forced prediction: When this scandal has run its course, including that period of time, what's the degree of political peril to Barack Obama as president?

MR. BUCHANAN: One to 10? A seven.

MS. CLIFT: One-point-two. (Laughs.)

MS. CROWLEY: Six. MR. PAGE: A two at best. It's background noise.

MR. MCLAUGHLIN: Answer: Six.


(PBS segment.)

MR. MCLAUGHLIN: Issue Three: Folding Newspapers.

EDWARD ATORNINO (Media analyst): (From videotape.) It's been the worst year in my memory, and I've been following this industry over 25 years.

MR. MCLAUGHLIN: What has been a bad year for the newspaper industry was made worse by the announcement this week that the Tribune Company, owned by the storied entrepreneur Sam Zell, filed for Chapter 11 bankruptcy. The Tribune's profits have plunged, crippled by recession and a strangulating $13 billion debt.

Also, another shocker: The Trib's competitor, The New York Times Company, this week borrowed $225 million, collateralizing the loan with the Times' downtown Manhattan headquarters building. Another print media giant, the McClatchy Company, has put the 105-year-old Miami Herald on the market. The Herald is one of McClatchy's 30 newspapers, its largest and most prestigious, the winner of 19 Pulitzer prizes.

MR. MCLAUGHLIN: Question: Are newspaper troubles really due to a shift in readership and advertising because of the Internet, or is there another cause? Clarence.

MR. PAGE: In a word, yes. Newspapers' business model has been going on since Gutenberg; hasn't changed. The Internet is very different. We're getting more readers than ever, many more, on the Internet. But we haven't learned how to be able to monetize the ads on the Internet the same way as the newspaper. So you get 20 times more revenue per reader from paper. Until that model changes, we're going to have this problem with keeping newspapers alive.

MR. MCLAUGHLIN: All right.

MR. BUCHANAN: Rupert Murdoch says the last newspaper will be published in April of 2042. They're going under. My newspaper went under 20 years ago. Television started it. Cable TV is doing it. Talk radio is doing it. The Internet is doing it. Everybody's moving to other sources. It is enormously expensive to put out a million, half a million pieces of paper that you like to hold in your hands, like our generation does. And I just don't see how they survive. And it's a tragedy, but I think that's the way the world is going.

MR. MCLAUGHLIN: I think this is all extremely facile, the two of you. It's shallow thinking. (Laughter.) What's going on is -- MR. BUCHANAN: We work in newspapers.

MR. MCLAUGHLIN: -- that we have a financial now recession of moment, and everybody is affected, particularly newspapers that were originally bought as a form of leveraging and then into deleveraging.

MR. PAGE: But this problem started before the current recession.

MR. MCLAUGHLIN: What's happening is the deleveraging of newspapers, and that's creating the illusion that this is a massive, widespread, uncontrollable tornado coming at us. Is that true or false?

MS. CROWLEY: But I think the decline of newspapers and news magazines, like Newsweek and Time and all of the layouts that you're seeing, this precedes the economic meltdown that we're seeing today. And it's because you can get the editorial content online for free. People have hand-held devices now; they can read this stuff in their hand if they want to have that tactile feeling. And they can get it for free. So going from --

MR. PAGE: You can't wrap a fish in it, though. (Laughs.)

MS. CROWLEY: Right. Well, that part is missing. But they're going from dollars to pennies in terms of advertising revenue, and that's the problem.

MR. MCLAUGHLIN: What's this tactile feeling? Is that something new?

MS. CROWLEY: Holding something in your hand -- tactile.


MS. CLIFT: Well, the good news is that people really want news. And we have a new administration coming in. We have a lot that's going on around the world. But they don't necessarily want to get that news wrapped in a piece of paper at the end of their driveway. And so the new way that we are receiving news is not --

MR. MCLAUGHLIN: Do you think --

MS. CLIFT: -- is not buttressed by advertising.

MR. MCLAUGHLIN: Do you think that democracy can survive without newspapers?

MS. CLIFT: No. And --

MR. MCLAUGHLIN: Are you serious?

MS. CLIFT: No, I think -- well, newspapers, okay -- MR. BUCHANAN: Without information.

MS. CLIFT: -- without information.

MR. BUCHANAN: Look at Life, Look, the Saturday Evening Post, Collier's. Remember all those great magazines?

MR. MCLAUGHLIN: That's a different theater of activity.

MR. BUCHANAN: No, they're all going out together.

MR. PAGE: Similar problem, though.

MR. MCLAUGHLIN: Can democracy survive without the newspaper?

MS. CLIFT: The newspaper, as long as it arrives in some form. And I imagine the printed word will continue to arrive. I imagine it will service more -- I hate to say it -- the elites. But I think --

MR. MCLAUGHLIN: Do you want to give me a sweeping answer to that question? Can democracy survive without newspapers?


MR. PAGE: John, there are electronic newspapers being developed with electronic ink.


MR. PAGE: Twenty years from now, maybe less, you're going to have something that looks like a newspaper and feels like it, but it's going to be --

MR. MCLAUGHLIN: Who wants to sit in front of an image when you can relax in a Barcalounger --

MR. PAGE: What you're doing now. But the image --

(Cross talk.)

MR. BUCHANAN: John, you're not going to have to, because you're not going to be here. (Laughs.)

MR. MCLAUGHLIN: What's the story?

MS. CROWLEY: Well, I mean, my generation and the generations coming up behind me are used to reading their newspapers online, on their hand-held devices. And that's the direction we're going.

MR. MCLAUGHLIN: No, what you need is a level of knowledge and interpretation and opinion that you get in newspapers. You can't get it anywhere else. MS. CLIFT: How --

MR. MCLAUGHLIN: It's the best buy in the world -- 25 cents, 35 cents.

MR. BUCHANAN: I agree. It's the best buy in the world. You're exactly right.

MS. CLIFT: Right.