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THE MCLAUGHLIN GROUP HOST: JOHN MCLAUGHLIN PANEL: PATRICK BUCHANAN, MSNBC; ELEANOR CLIFT, NEWSWEEK; MONICA CROWLEY, SYNDICATED RADIO COMMENTATOR; DEMETRI SEVASTAPULO, FINANCIAL TIMES TAPED: FRIDAY, DECEMBER 19, 2008 BROADCAST: WEEKEND OF DECEMBER 20-21, 2008

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MR. MCLAUGHLIN: Issue One: Detroit Bailout For Real.

PRESIDENT GEORGE W. BUSH: (From videotape.) The terms of the loans will require auto companies to demonstrate how they would become viable. They must pay back all their loans to the government and show that their firms can earn a profit and achieve a positive net worth.

MR. MCLAUGHLIN: Question: Will this loan, with its conditions, satisfy Republican diehards? Excuse me -- stalwarts. Pat Buchanan.

MR. BUCHANAN: The Toyota Republicans will not be satisfied with it. But they've become irrelevant, John, because what Bush has done is given these folks enough money to kick it over into the new administration, where Obama and a new Congress, which is almost veto- proof, will deal with this. And they're not going to let these three companies go under.

There's no doubt these companies have got to do a lot of restructuring and, frankly, some downsizing. But I think the president threw them a life line. It was the right thing to do. You don't want George W. Bush saying, in effect, at Christmas time, at the end of his administration, "I sank General Motors and Chrysler," or something like that. He did the right thing. And I think the Republicans were very small-minded in really cutting them off without anything.

MR. MCLAUGHLIN: Eleanor, did he network it in with a lot of conditions that were okay with the Republicans?

MS. CLIFT: No. In fact, he didn't get as many conditions as the legislation that was emerging on Capitol Hill would have gotten. And the Senate Republicans killed that legislation. If President Bush had followed their lead, he would be condemning his party with Main Street for the foreseeable future. And I think what he did was right.

It may be painful for him because it goes against his ideology, but this is the end of ideology when we're looking at the financial collapse. This is an effort, really, to save capitalism. And I think President Bush did the right thing, and I applaud him for taking this action.

MR. MCLAUGHLIN: Do you recall any conditions in the Hill version that Bush did not encapsulate in his own proposal?

MS. CLIFT: The Hill version had a lot of conditions from the unions, and I don't think they're as explicit in the president's bailout. What the president has is this czar, and that was in the legislation. He's accomplished virtually the same thing, but it's not a better deal. If anything, it's a marginally worse deal.

MR. MCLAUGHLIN: So apparently he gave a pass to the unions by not mentioning any UAW demands. What do you think of that?

MS. CROWLEY: Well, let's keep in mind that 60 percent of the American people opposed this auto bailout. Ron Gettelfinger, who's the head of the UAW, the United Auto Workers, went on television this week and said, "The reason we're not giving up all these concessions is because we heard from the White House weeks ago that they were going to go ahead and do this bailout anyway." In other words, the fix was in.

And the reason why 60 percent of the American people opposed this bailout, not because they wanted to throw auto workers in the snow or force them to lose their jobs, but because it's not a bailout of the auto industry. It's a bailout of the unions. And because the Democrats are so tightly aligned with the unions, and now the unions haven't given up very much at all, and certainly no long-term concessions, the American people, for the most part, remain opposed to this. President Bush --

MS. CLIFT: That's not true, and I hope you will --

MS. CROWLEY: Excuse me, Eleanor. Poll after poll shows a majority of Americans opposed this bailout.

MS. CLIFT: Not 60 percent.

MS. CROWLEY: So really, don't make it sound like it's a small clique of Republican --

MS. CLIFT: No --

MS. CROWLEY: -- senators who torpedoed this.

MR. MCLAUGHLIN: Do you think --

MS. CROWLEY: This is where the public opinion was.

MR. MCLAUGHLIN: Demetri, welcome.

MR. SEVASTOPULO: Thank you.

MR. MCLAUGHLIN: Do you think that what she's saying, while Americans today clearly oppose the bailout in large numbers, that that would swing around if, in fact, the bailout were opposed and the consequent effect on the financial condition of the country were to increase the joblessness that now exists, et cetera?

MR. SEVASTOPULO: I think all you have to do is look back to the bailout vote in the House before, a couple of months ago, where a lot of Republicans were against it. The day they voted no, the stock market tanked. The next day, a lot of Republicans woke up and said, "You know something? Maybe I shouldn't have voted no." I think it wouldn't be as dramatic immediately with the auto companies, but if one of them went under and you had massive unemployment, there's going to be a big backlash.

MR. BUCHANAN: John, what Monica says, there's no doubt the union played a major role in ramming this through. But Monica, I'll tell you, GM would have gone under. It would have gone Chapter 11. If it had gone Chapter 11, I believe it would have gone Chapter 7. And the whole company, not just the union, would have gone down.

There's no doubt some of these union guys are going to have to take scale-backs.

But you don't kill the whole thing because you're ticked off at the UAW.

MS. CROWLEY: But how do you explain the fact that, of the big three, Chrysler, GM and Ford, Ford announced on Friday that they don't want any part of this bailout?

MR. BUCHANAN: They've got cash. They've got cash in the bank.

MR. SEVASTOPULO: Ford is in a better financial position --

MR. MCLAUGHLIN: Why? Why?

MR. SEVASTOPULO: They have a little more time.

MS. CROWLEY: Because they could run the Ford Motor Company in more efficient ways than GM and Chrysler have. You can save these jobs. You can restructure under a Chapter 11 bankruptcy. Once you start down this slippery slope, I mean, this first wave of the bailouts is a gateway --

MR. SEVASTOPULO: Monica, how do you --

MS. CROWLEY: It's a gateway drug --

MR. SEVASTOPULO: How do you account for the fact --

MS. CROWLEY: -- for the auto companies.

MR. SEVASTOPULO: -- that the CEO of Ford is saying that he does not want his competitors to go under? When's the last time you heard a CEO saying, "I don't want my competitors going under"?

MS. CROWLEY: I understand that. But what I'm saying is --

MR. BUCHANAN: The suppliers would go under.

MR. SEVASTOPULO: Because the suppliers are -- (inaudible) -- and if you lose one company, the suppliers are in big trouble and it impacts your business.

(Cross talk.) MR. MCLAUGHLIN: Let Eleanor in.

MS. CLIFT: This is your hero, George Bush, who you give all sorts of accolades to, and now you're saying he's on the wrong side of this issue.

MS. CROWLEY: Absolutely, I am. And because you're with him tells me he's wrong. (Laughter.)

MS. CLIFT: What side are you on in terms of the unemployment that would probably cascade from this?

MS. CROWLEY: I am on the side of the free-market economic system.

MS. CLIFT: And the polls show that -- well, that's not --

MR. MCLAUGHLIN: Quickly, quickly. Exit question --

MS. CLIFT: -- (inaudible) -- collapsing. (Laughs.)

MR. MCLAUGHLIN: Exit question --

MS. CROWLEY: With government intervention, you're going to prolong this nightmare, not just for the auto companies but for the broader --

MR. MCLAUGHLIN: This is more of a merit question, the merits of the issue. If you were president, would you have made this announcement, and particularly if you're going to make it, as he did, on Friday, before Saturday's newspapers, the week before Christmas, Pat Buchanan?

MR. BUCHANAN: Oh, listen --

MR. MCLAUGHLIN: Do you think it feeds --

MR. BUCHANAN: No, I think, look, everybody's leaving town. They're going on vacation. This is the final day. He's making up his decision. He's trying to get the deal. The important thing is you get them across into the new administration, into March. You get President Obama and the Democratic Congress a chance to deal with it. You don't let it die and really kill it, if you will. You don't kill GM.

MR. MCLAUGHLIN: He sounds like a Democrat, doesn't he?

MR. BUCHANAN: I am a populist conservative.

MR. MCLAUGHLIN: Is he also muting it this weekend, in a sense, because the ones who want to hear it -- MR. BUCHANAN: No, he's not doing that at all.

MR. MCLAUGHLIN: -- they know about it, but the ones that don't have to hear it, they probably --

MR. BUCHANAN: You think Bush cares about his poll ratings now? If he does, he's got a problem. (Laughs.)

MR. MCLAUGHLIN: The legacy, right? The legacy.

MS. CLIFT: He's not going to go out the door --

MR. MCLAUGHLIN: Eleanor, quickly.

MS. CLIFT: -- and let an iconic American industry die on the doorstep of the new president.

MR. MCLAUGHLIN: We have icons all over the place in this country.

Quickly, quickly. Let's go.

MS. CROWLEY: Right. No, listen --

MS. CLIFT: I think she --

MS. CROWLEY: -- I believe Gettelfinger; the fix was in. He waited until this weekend to announce it. This is a gateway drug for more bailouts.

MR. MCLAUGHLIN: And it's a bad idea.

MS. CROWLEY: Bad idea.

MR. SEVASTOPULO: It's a life line for a few more months. I think we're going to be back with this. In three or four months we're going to be talking about exactly the same thing.

MS. CROWLEY: Exactly.

MS. CLIFT: It's a life line at a critical time in the economy. And again, President Bush had it exactly right.

MR. MCLAUGHLIN: I think the president could have gone for a structured and managed bailout, customized for speed and for reducing complexity and for rewards at the end of the tunnel that would have done the deed without going to the extent that he went to.

Issue Two: Christmas at Blago's.

ILLINOIS GOVERNOR ROD BLAGOJEVICH (D): (From videotape.) Hang loose. To quote Elvis, hang loose. Journalists are on the Blagojevich case. But the Illinois governor dodged their questions with the Elvis crack. But Blagojevich was quick to emphasize that he's not evading U.S. Attorney Patrick Fitzgerald's rap against him.

GOV. BLAGOJEVICH: (From videotape.) I can't wait to begin to tell my side of the story and to address you guys and, most importantly, the people of Illinois. That's who I'm dying to talk to.

MR. MCLAUGHLIN: The governor continues to report to work as usual. But his gubernatorial desk is off-limits -- same building, another location.

Illinois Attorney General Lisa Madigan, who is herself seeking to be governor in 2010, put a motion before the Illinois Supreme Court: Remove sitting Governor Blagojevich.

LISA MADIGAN (Illinois attorney general.): (From videotape.) We're really in a situation here in the state of Illinois where we don't have a governor who can legitimately govern. That's the reason for filing this really extraordinary lawsuit in front of the Illinois Supreme Court.

MR. MCLAUGHLIN: The court denied the motion without comment.

Question: Was this the first ray of sunshine in the governor's otherwise stormy life? And is there more sunshine for Blagojevich -- Blagojevich, excuse me -- (corrects pronunciation) -- Blagojevich, or is he headed for a train wreck? Eleanor Clift.

MS. CLIFT: This is jockeying for position. He is -- the one piece of leverage he has is that he still has his office. And he wants to get the best deal he can get with the smallest amount of jail time. He may have misread Fitzgerald, the prosecutor, who will hound him out of office for as long as it takes. But he will not do it on the basis of the wiretaps, which show obscene language and threatening phone calls, because there was no deal consummated.

And so I think we're going to hang on here for a while before this is resolved, and we've got some fine criminal lawyers at work. And it's going to be great political theater for everybody to watch.

MR. BUCHANAN: You know, John, I think that Blagojevich -- I don't think they're going to impeach him. He hasn't been convicted of anything, and he's obviously engaged in some seedy conduct. I don't think they're going to convict him of selling that Senate seat because the seat wasn't sold. It didn't get him anything. He didn't give anything. He obviously talked about it. But thinking about it is not a felony.

I think -- but Fitzgerald is on the spot now. He filed the complaint, he arrested the guy, and now he's got to indict him, and now he's got to convict him. And I think Blagojevich, who is two touchdowns down, is now coming back. MR. MCLAUGHLIN: Right.

MR. BUCHANAN: And he's fighting. And people like a fighter. They like an underdog. And I think he's -- in that sense, I think there's going to be some sympathy and people are going to say, "Wait a minute. Let's not lynch the guy," because he's not convicted.

MR. MCLAUGHLIN: Okay. On Friday, Blagojevich insisted that he was innocent. What's the next chapter in the ongoing saga of Blago? Listen to this.

The Illinois legislature has now moved to impeach the governor on grounds of corruption. But the powerful Barbara Currie, majority leader of the Illinois House of Representatives and chairperson of the impeachment committee, cautioned that the hurried calls for Blagojevich's head would not lead to abandoning the protection that every U.S. citizen enjoys -- innocent until proven guilty.

STATE SENATOR BARBARA CURRIE (Illinois Senate majority leader): (From videotape.) It is absolutely critical that we do this deliberatively, that we don't rush to judgment, that we don't say, because the public is clamoring for his head, we should take the head first and do the trial later.

MR. MCLAUGHLIN: Question: We all agree that impeachment is a nonstarter. Right, Demetri?

MR. SEVASTOPULO: I wouldn't say it's a nonstarter. I'd say it's looking unlikely at the moment, but I think it could still happen.

MR. MCLAUGHLIN: To get any evidence, they've got to tread on what has been done by Fitzgerald, and Fitzgerald is not going to turn that over to an impeachment committee.

MR. SEVASTOPULO: That's true. But when you have an investigation like this, there are a lot of people right now who are probably nervous as to how it's going to impact them. And I wouldn't be surprised if information doesn't start coming out in different ways.

MR. MCLAUGHLIN: Okay, Ed Genson to the rescue.

ED GENSON (Attorney for Gov. Blagojevich): (From videotape.) The case that I've seen so far is significantly exaggerated. It's just not -- it's not what people think it is.

MR. MCLAUGHLIN: Famed Chicago attorney Ed Genson is defending Blagojevich. Among the celebrities Genson has defeated are musician R. Kelly and newspaper magnate Conrad Black. Genson made clear that the Fitzgerald case against his client is not only flimsy; he also faults the impeachment committee for premeditated bias. MR. GENSON: (From videotape.) They made comments which shows that Rod Blagojevich cannot get a fair and impartial hearing of this committee.

MR. MCLAUGHLIN: What does the choice of Genson signal to Obama?

MS. CROWLEY: Signal to Obama, or to Blagojevich?

MR. MCLAUGHLIN: Obama.

MS. CROWLEY: Oh, to Obama. Well, listen, Mr. Genson is somebody who's known as representing the Mob and every hoodlum and rascal in Chicago and Illinois.

MR. MCLAUGHLIN: He knows all the tricks.

MS. CROWLEY: He's playing with the big boys. He also knows where all of the bodies are buried in Illinois and all of that corruption. And he's the one throwing on the brakes on all of this. He's the one largely responsible for sending the signal to the state legislature that this guy, Blagojevich, is essentially channeling Jennifer Hudson in "Dream Girls," saying, "I am not going anywhere."

MR. MCLAUGHLIN: Who is Genson going to pin the blame on?

MS. CROWLEY: Oh, well, it depends on what kind of case he's got in front of him.

MR. MCLAUGHLIN: He is going to pin the blame on Rahm Emanuel.

MS. CROWLEY: Rahm Emanuel, right.

MR. MCLAUGHLIN: The lamb in the middle of all of these wolves in Chicago politics --

MR. BUCHANAN: That's outrageous.

MR. MCLAUGHLIN: -- is the lamb, Blagojevich.

MR. BUCHANAN: I don't think Rahm has done anything wrong. And if he did something wrong, it was --

MR. MCLAUGHLIN: How many phone calls did he have?

MR. BUCHANAN: I don't care if he's had 20.

MS. CROWLEY: Twenty-one.

MR. MCLAUGHLIN: Twenty-one?

MS. CROWLEY: Twenty-one.

MR. MCLAUGHLIN: How many were recorded? MS. CROWLEY: Maybe all of them.

MR. BUCHANAN: That's the gossip columnists, John. But even if Rahm listened, the worst thing Rahm did was listen to a solicitation for a bribe.

That's the worst possible --

MR. MCLAUGHLIN: They were working out a deal on who gets Obama's Senate seat.

MR. BUCHANAN: No, Blagojevich said, "All they offered me was gratitude."

MR. MCLAUGHLIN: That's the assumption, I'm saying.

MS. CLIFT: Only on The McLaughlin Group would we exonerate Blagojevich and indict Rahm Emanuel. (Laughter.) This is Alice in Wonderland.

MR. MCLAUGHLIN: You remember Jesus on the cross? You remember Dismas and Gestas?

All right, do you want to speak to this?

MR. SEVASTOPULO: I'm bewildered.

MR. BUCHANAN: "Lord, remember me."

MR. SEVASTOPULO: They may try to pin it on Rahm Emanuel --

MR. BUCHANAN: You remember, John. "Lord, remember me when you come into your kingdom."

MR. MCLAUGHLIN: Right.

Go ahead.

MR. SEVASTOPULO: I think they may try and pin it on Rahm Emanuel, but we have to wait and see where the evidence takes us.

MR. BUCHANAN: But Rahm -- what has Rahm done wrong?

MS. CLIFT: Nothing.

MR. BUCHANAN: That's preposterous.

MS. CLIFT: Nothing. MR. BUCHANAN: If any crime's been committed, it's Blago, and there's no crime committed.

MS. CROWLEY: Listen --

MR. SEVASTOPULO: When someone accused of a crime can quote Rudyard Kipling on national television, anything can happen.

MR. BUCHANAN: (Laughs.)

MR. MCLAUGHLIN: Who was the one that put the deal together for the lot next to the house that was --

MR. BUCHANAN: Rezko.

MS. CROWLEY: Tony Rezko.

MR. BUCHANAN: Rezko's singing. That's a good point. Rezko is singing like a canary.

MR. MCLAUGHLIN: Yeah, but what is the status of Blagojevich's wife as far as occupation is concerned?

MS. CROWLEY: Patti Blagojevich, who also on Friday hired a criminal defense attorney of her own.

MR. MCLAUGHLIN: What does she do for a living?

MS. CROWLEY: She's a real estate agent, and her major client was Tony Rezko.

MR. MCLAUGHLIN: Okay, now --

MS. CROWLEY: So this kind of incestuous cess pool of Chicago and Illinois politics --

MR. MCLAUGHLIN: Do you think she put the deal together between Michelle Obama and Rezko's wife for the lot next door?

MS. CROWLEY: We don't know that. We don't know that.

MR. MCLAUGHLIN: And then where does it go from there?

MS. CROWLEY: Well, the missing link to the story is Tony Rezko, because this week a judge suspended any sentencing for Rezko, who was convicted back in June. He postponed the sentencing indefinitely, which means he's talking to the feds.

MR. MCLAUGHLIN: You mean, Rezko is singing?

MR. BUCHANAN: Rezko is singing. MS. CLIFT: Of course he's singing. But he's singing about Blagojevich. You two ought to get together and write an episode of CSI based on Patti Blagojevich dealing with the land property for the Obamas. Maybe she's trying to find them a place to live in Washington. (Laughs.)

MR. MCLAUGHLIN: Obama is saying that he's going to make some revelations or he's going to make some disclosures about who --

MR. BUCHANAN: Coming this week, John, he's going to come out with all the investigations, his own staff, all their contacts with Blago --

MR. MCLAUGHLIN: Is he going to be around, or is he going away?

MR. BUCHANAN: He's going to be (here ?) the 23rd.

MS. CLIFT: He's going to Hawaii. He'll be in Hawaii.

MR. MCLAUGHLIN: He's going to Hawaii? So he's going to make the drop, go to Hawaii --

MR. BUCHANAN: Drop it Christmas Eve and head for Hawaii.

MS. CROWLEY: (Laughs.)

MR. MCLAUGHLIN: Exit question: On a legal probability scale from zero to 100, what's the likelihood that Blagojevich's defense will try to pin the blame for any deal-making on Rahm Emanuel?

MR. BUCHANAN: I don't know what the likelihood they may try, but the likelihood they'll do it, succeed, is zero.

MS. CLIFT: Pat's exactly right on that one.

MS. CROWLEY: Yeah, I think so too.

MR. MCLAUGHLIN: Zero?

MS. CROWLEY: Yeah. They may try, but I don't think there's anything there.

MR. SEVASTOPULO: You've got four here saying the same thing. (Laughter.)

MS. CLIFT: You want to reconsider?

MR. BUCHANAN: Four of a kind, John. (Laughs.)

MS. CLIFT: Do you want to revise your century mark? (Laughs.)

MR. MCLAUGHLIN: TBD -- to be determined. Issue Three: Madoff Made Off Big Time.

For a while, Bernard Madoff, 70 years of age, the former chairman of Nasdaq, the largest screen-based equity securities trading market in the world, and founder of a private investment securities firm bearing his own name, was arrested and charged 10 days ago with securities fraud.

Investigators describe a Ponzi scheme in which early investors were paid with unusually high returns using the money from late investors. This epic deceit could involve losses of over $50 billion. The repercussions of this incredible criminality are being felt worldwide.

Besides Madoff as the culprit, so is the U.S. Securities and Exchange Commission, the SEC, as it takes some heat too.

CHRISTOPHER COX (chairman, Securities and Exchange Commission): Credible allegations about Mr. Madoff have been made over nearly a decade, and yet never referred to the Commission for action.

MR. MCLAUGHLIN: Referral or not, the SEC is getting regulatory blame. Former SEC ranking attorney Jacob Frenkel claims that government investigators were superficial and gullible when they did investigate Madoff.

JACOB FRENKEL (former SEC ranking attorney): (From videotape.) When they did go in to Madoff's operation and Bernie Madoff would say, "Look at this and look at this," and the SEC would say, "Thank you," and not pursue it.

MR. MCLAUGHLIN: Question: Is that the answer, that the SEC failed on its mission, Demetri?

MR. SEVASTOPULO: I think it's one of the answers. They had several opportunities to look at Madoff's books. They didn't seem to pick up on what was going on. They had whistleblowers. They had people in the investment community saying, "This is strange. How is he making so much money, particularly when markets are tanking?" And they didn't seem to get the answer to the problem.

MR. MCLAUGHLIN: Is this a question of avarice on Madoff's part, exclusively avarice? Is he in any way a scapegoat?

MR. SEVASTOPULO: Well, I think it's avarice on his part. You've got to ask, is it avarice on the part of his investors? He didn't give his investors online access to their accounts. These are sophisticated people. Why did they not want to see what their accounts were? MR. MCLAUGHLIN: He gave them 15 percent return in many instances on their money, correct?

MR. SEVASTOPULO: Well, the question is, did they just not want to ask the question because they knew that there was a fishy answer?

MR. MCLAUGHLIN: Did they also conceal anything that they may have known or any suspicions that they may have had? Surely these investors, with their knowledge of the market, with their knowledge not only of the street, but their knowledge of the financing, they must have known that 15 percent --

MR. SEVASTOPULO: It's not just the 15 percent. Sometimes people make big returns. It's the fact that it was so consistent.

MR. MCLAUGHLIN: Were they creating their own kind of scheme to keep it all together?

MR. BUCHANAN: No, it's --

MR. MCLAUGHLIN: And was it avarice really -- is avarice the real source of this problem?

MR. SEVASTOPULO: It was avarice and it was a pyramid scheme.

MR. MCLAUGHLIN: What about those capital sins, Pat? Are you okay on those -- avarice, sloth? What about lust? Is that okay? I mean, envy, pride --

MR. BUCHANAN: There's seven -- pride, covetousness, lust, anger, gluttony --

MR. MCLAUGHLIN: All right, do you want to rate yourself --

MR. BUCHANAN: I'm okay on five. (Laughter.)

MR. MCLAUGHLIN: Issue Four: Happiness Virus.

Happiness may, in fact, be contagious, but you need a social network. Not bad to hear some happy talk during a holiday recession downer -- mortgages defaulting, dollar slipping, markets teetering, 10 million Americans jobless. Thank God happiness is still there. In fact, James Fowler and Nicholas Christakis did a study that finds the reason to be optimistic about happiness occurring in your future; namely, if you have social networks.

JAMES FOWLER (political scientist, University of California at San Diego): (From videotape.) We found that happiness can spread like a virus through social networks. In fact, if your friend's friend's friend becomes happy, it significantly increases the chance that you'll be happy. MR. MCLAUGHLIN: James Fowler is a political scientist at UC-San Diego. Nicholas Christakis, his co-author, is an M.D., now teaching sociology at Harvard. So we have an M.D. and a sociologist. Their 20-year study finds that if your next-door neighbor is happy, your chances of being happy improve by one in three. If your friend within a mile is happy, you are one in four more likely to be happy yourself. If your sibling living within a mile is happy, your chances of being happy yourself drop to one in seven.

Now, here's curveball number two. If your income goes up an extra $10,000, it increases the probability of your happiness -- get this -- by a measly 2 percent. So what to ask for this Christmas? Not a Christmas bonus. Not a mink jacket. Not a new pair of earrings. They're all material girl things. What you want is a social network.

Question: If social networks correlate to happiness, what correlates to unhappiness? What do you think, Monica?

MS. CROWLEY: Correlates to unhappiness?

MR. MCLAUGHLIN: What about the material things for material girl?

MS. CROWLEY: No, but -- well, yes, the material stuff, true, I think people -- and we're seeing this now in this economic meltdown, where a lot of people --

MR. MCLAUGHLIN: Are happier?

MS. CROWLEY: -- (inaudible) -- losing their jobs. No, but everything that they thought was the truth or their reality is now no more. And now people are going back to, I think, a sense of social networking, a sense of friendship, what really matters, what really feeds into happiness; material stuff. But also I think that when you see what correlates to unhappiness --

MR. MCLAUGHLIN: Wait. You think that material things do not make you happy.

MS. CROWLEY: I think they give you a temporary injection of happiness. A new pair of shoes makes me happy, but for about five minutes.

MR. MCLAUGHLIN: How about a new Porsche?

MR. SEVASTOPULO: Not a new Porsche, but, I mean, a couple of good glasses of wine or a pint of Guinness on the bar with a few friends, that'd make me pretty happy.

MS. CLIFT: Yeah, I'm --

MR. MCLAUGHLIN: You're kind of a simple fellow. MR. SEVASTOPULO: I am, you know.

MR. MCLAUGHLIN: You've got a Greek name, but you're Irish on both sides.

MR. BUCHANAN: That's genetics. That's genetics. He's Irish. (Laughs.)

MR. MCLAUGHLIN: There's nothing wrong with being simple. Simplicity, as a matter of fact, may be the panacea.

MR. BUCHANAN: Let me say this, John. I think what Monica says is very true. I mean, you grew up and my parents certainly grew up through the Depression, and most people lost everything -- 25 percent unemployment. But it was a happy time, even with Prohibition. They were going out, making their own booze, you know, and they --

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: Time erases the negative memories.

MR. MCLAUGHLIN: What's that again?

MS. CLIFT: Time erases the negative memories. I think remembering the Depression as a happy time is a little over the top. I'm with the old adage that money can't buy happiness, but it can sure help. And I would like to pose the question, what if you're a panelist on a talk show and three of the four other panelists are constantly disagreeing with you? How does that affect your sense of happiness or unhappiness? (Laughter.)

MR. BUCHANAN: It's the self-esteem that that gives a problem to.

MS. CLIFT: (Inaudible) -- at all. (Laughter.)

MR. MCLAUGHLIN: Does that build your self-esteem? Does that build your self-esteem, or does it doom it?

MR. BUCHANAN: Well, it makes you angry, John. But Murray Kempton said --

MR. MCLAUGHLIN: Murray Kempton.

MR. BUCHANAN: Yeah. He said he's reached that --

MR. MCLAUGHLIN: The columnist for --

MR. BUCHANAN: The great late columnist for the New York Post. He said, "You know, I've reached that period in life where one's greatest pleasures lie in the misfortunes of others." (Cross-talk.)

MS. CROWLEY: But there's another point.

MR. MCLAUGHLIN: Another Irishman.

MR. MCLAUGHLIN: Quickly.

MR. SEVASTOPULO: I think he was German.

MS. CROWLEY: There's another point, where you say happiness -- when you're surrounded by happy people, you're happy. The correlation to unhappiness, which was your first question, I think, is isolation and that people who are blocked off from having social interaction tend to be more unhappy.

MR. MCLAUGHLIN: Why do we say it's causality rather than a simple correlation? Is that too much for you? Is it too much for you?

MS. CLIFT: That's too Jesuitical. (Laughs.)

MR. MCLAUGHLIN: A lot of these correlate, but they're not caused by each other.

MR. SEVASTOPULO: Well, it can be correlated if it's caused by it too. They're not mutually exclusive.

MR. MCLAUGHLIN: What does misery do?

MR. BUCHANAN: Misery loves company.

MR. MCLAUGHLIN: Predictions. Pat.

MR. BUCHANAN: At least one of Barack Obama's Cabinet appointees will not be confirmed by the Senate.

MR. MCLAUGHLIN: What state is he from? (Laughter.)

MR. BUCHANAN: I could throw out --

MR. MCLAUGHLIN: New Mexico.

Eleanor.

MS. CLIFT: I think he's talking about Eric Holder, and there is sort of conservative sentiment that they're going to really try to block his appointment. Am I right, Pat?

MR. MCLAUGHLIN: Quickly, quickly.

MR. BUCHANAN: You only get one prediction. MS. CLIFT: Okay, my prediction is Al Franken is going to eventually win the Senate race in Minnesota.

MS. CROWLEY: Regardless of whether or not Rahm Emanuel is found guilty to have done anything on these tapes, Barack Obama needs a sacrificial lamb on the scandal. He will ask Emanuel to step aside as chief of staff and be his point man in the Congress.

MR. MCLAUGHLIN: Interesting.

MR. SEVASTOPULO: In three or four months' time, we're going to still be talking about the auto companies and bailouts and we're going to be talking about credit card debt.

MR. MCLAUGHLIN: Right, another reason why they should have gone into clearing the decks with a managed and structured and rewarded Chapter 11.

I predict that President Bill Clinton's disclosure of the sources and amounts of his worldwide donations to his foundation will do nothing to imperil Hillary's nomination to Obama's Cabinet as secretary of State.

Merry Christmas. Bye-bye.

END.