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DR. MCLAUGHLIN: Issue One: So Help Me God.

PRESIDENT BARACK OBAMA: (From videotape.) The state of our economy calls for action, bold and swift. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together.

DR. MCLAUGHLIN: Amen. But President Obama's plan doesn't work fast enough, at least according to the mighty Congressional Budget Office. The CBO works for Congress and analyzes and estimates the cost of congressional spending. The CBO says that the majority of funds from the president's federal injection for public projects, with their many jobs, will not be spent by the end of 2010 -- two years, roughly, from now. Item: Highway construction. Of the $30 billion earmarked for highways, less than $4 billion can be spent over the next two years -- 13 percent.

Item: Green power. Of the $18.5 billion set aside for renewable energy, $3 billion will be spent over the next two years -- 16 percent of the total.

Item: Total projects. For all federal projects -- that includes highways, bridges, schools, et cetera -- the total money earmarked is $355 billion; of that $355 billion, $136 billion, 32 percent, spent by the end of 2010 -- 32 percent, about one-third of the total.

The time frame semantic for a public project to be up and running is, quote-unquote, "shovel-ready." That approval is needed before federal monies can be appropriated, and it must come from a variety of boards -- zoning, public health, utilities, environmental, and different levels of government -- state, municipal, village, township -- all of which can take up to several years. At an absolute minimum, it takes one year before a project is, quote-unquote, "shovel-ready," and putting paychecks into workers' hands. These federal outlays are practically the only projects that Obama has any control of.

Question: Do you agree that the problem with capitalizing the economy through federal money poured into infrastructure rebuilding, the problem is that the process, under the best of circumstances, takes between one and two years; it does nothing for the next 12 months? Pat Buchanan.

MR. BUCHANAN: John, that's just one of the problems with it. No doubt that is a problem. It's down the road. So it looks more and more like this is just a big permanent expansion of the federal government.

Secondly, the thing is beginning to be larded up with pork. The National Endowment for the Arts is coming in for $50 million.

Third, the Republican tax cuts are diminishing in size. This is going to be the mother of all pig-outs. It's losing, quite frankly, that cachet of an immediate, dramatic injection into the economy. And that's why the markets, under Barack Obama, since his election, the equity markets and things have been tanking. What they are saying is one of two things. Either he ain't going to get it through -- but he is -- or this is not going to work or it is not relevant to the economic crisis and the financial crisis this country faces.

DR. MCLAUGHLIN: The mother of all pig-outs. What do you think of that, Eleanor, Pat's description?

MS. CLIFT: First of all, the stock markets are tanking because of bank problems, and we're going to talk about that later. Secondly, what is Pat's alternative? I think, the last time I checked, the Republicans lost the election. And the president has set forth this as his vision.

We are in uncharted territory, and that phrase has been expressed on this show many times. There is a collective feeling among economists from the left and right that a massive spending package is required. And you cannot have the economy digest everything in the first year. Frankly, if the bulk of this is spent in two years and we get out of this in two years, we'll be ahead of the game.

So I think this is going to pass. And there's going to be lots of groveling, because a lot of Democratic priorities are going to be included. And the tax cuts will be there, but they won't be as much as the Republicans want. Republicans are powerless in the House. They still count in the Senate. And the president is going to try to bring them along. He probably won't get the huge bipartisan vote he'd like for this package.

MS. CROWLEY: Well, look, I mean, when we talk about one or two years down the road, look, when the Democrats came in and Obama won the presidency, they talked about having an economic stimulus package on his desk day one. Now they're talking about mid-February, toward the end of February. They can't get it together. Why? Because this economic stimulus bill is an epic mess. There are 152 different appropriations in there -- nurse training, Medicare, Head Start, weather-proofing your house.

MS. CLIFT: And those are bad things?

MS. CROWLEY: Yes, because --

DR. MCLAUGHLIN: Let her finish, Eleanor.

MS. CROWLEY: -- because what we need right now is an immediate economic stimulus that is going to have immediate short-term gains in the exact areas we need it. We do not need pork in there for weather- proofing your house. Okay, we need it targeted. And if it's targeted with tax cuts, a temporary halt on payroll taxes, relief for businesses, in ways that are not going to blow up this $1.2 trillion deficit as it is -- I mean, what we're talking about now is not economic stimulus. This is a $1 trillion load of pork running down Pennsylvania Avenue like a herd.

DR. MCLAUGHLIN: I think the estimate is more like $2 trillion by the end of the year.

But let me ask you this, to give this a different direction, and that is, when Obama -- since Obama is going with this relatively long- term government infusion, is Obama therefore telling us what he thinks the length of the recession is going to be?

MR. ZUCKERMAN: Well, I don't know that he would like to tell us that that's going to be the length of the recession in this way. In fact, I think it is the wrong -- it is a well-intentioned but ill- focused program.

Certainly it's going to go -- this recession is going to go on for a long time. And if he has a program that moves as slowly as this, he's finally going to be blamed for it and he's not going to be able to lay it off against President Bush.

There is another alternative to this kind of capital investment, which is to work through the state and local governments, who have pre-approved programs that can get started right away. It takes it out of the hands of the federal government, and therefore out of whatever their political benefits would be. But that seems to me to be by far the better way to do it and the faster way to do it.

It is critical, critical, that we get this jobs program going as soon as possible. This economy is still going downhill at an accelerating rate. And if he doesn't have a federal program that moves fast enough, he is going to and should be blamed for it.

DR. MCLAUGHLIN: What grade do you give, Mort, to President Obama's inaugural address?

MR. ZUCKERMAN: Listen, I have to say, I thought it was a good speech, not a great speech. For me, the great moment of it was the fact that he was the person giving the speech. I didn't find it terribly inspiring. There wasn't -- I couldn't --

DR. MCLAUGHLIN: Structure?

MR. ZUCKERMAN: I couldn't think of a single line out of it that you walked away with. If you asked people, "Name me one line from that," it just -- that didn't come through. There was no great moment there.

DR. MCLAUGHLIN: Do you think there wasn't enough structure to it?

MR. ZUCKERMAN: No, I think, you know, it was all over the place.

DR. MCLAUGHLIN: All over the place. There was a smorgasbord. If you wanted something, you could find it there. Is that what you mean?

MR. ZUCKERMAN: Yes. And he also -- DR. MCLAUGHLIN: I don't want to put words in your mouth.

MR. ZUCKERMAN: No, no, no. You put words that I would like to think of. (Laughter.) Now, the only thing I'm trying to --

DR. MCLAUGHLIN: I want to help you in whatever way I can.

MR. ZUCKERMAN: And you are.

DR. MCLAUGHLIN: But right now I want to help Eleanor.

MS. CLIFT: I can think of plenty of lines to quote from that inaugural address. "Let's set aside childish things." "We want to extend" --

DR. MCLAUGHLIN: What about that, Eleanor? What did he mean by that?

MS. CLIFT: He means that it's time to confront the issues that are facing the country, and he's about to do that --

DR. MCLAUGHLIN: Is he talking about the political infighting between Democrats and --

MS. CLIFT: -- from disavowing torture, from lifting restrictions on stem cell research, to putting a cap on salaries over $100,000 in the White House. He has done a number of things that a lot of Americans are going to applaud.


MS. CLIFT: And it was a speech that was -- he was a stern task master. He's looking out at almost 2 million people. He didn't reach for the rhetorical heights because he doesn't need to. He does need to tamp down expectations.

MR. BUCHANAN: Eleanor's exactly --

DR. MCLAUGHLIN: Okay, now --

MR. BUCHANAN: She's exactly --

DR. MCLAUGHLIN: -- the principal political objective --

MS. CLIFT: Let's hear Pat. He's about to agree with me.

MR. BUCHANAN: She's exactly right. It was not an eloquent speech, but it was an excellent speech. It fits the temper of the times, the mood of the moment. It was a sermon. It was authoritative when he quoted Paul in 1 Corinthians. It's like a man speaking with authority. "Let's put aside childish things. We are in deep trouble here." He laid it out. There was conservatism in that speech. He mentioned Kason from Vietnam, elevated it to the same level as Normandy.

DR. MCLAUGHLIN: Can you believe this from Buchanan?

MR. BUCHANAN: Look, I'll tell you --

DR. MCLAUGHLIN: Wait a minute. Let me get out the orchestra, will you?

MR. BUCHANAN: No, look, I'm telling you, there was a lot of -- there were some neo-Reaganite lines. He talked about the old truths that remain true -- hard work, all these things. That's what got us through.

DR. MCLAUGHLIN: Monica, will you --

MS. CLIFT: Pat is --

DR. MCLAUGHLIN: Let Monica --

MS. CLIFT: Pat is with the 70 percent of the American people who were applauding --

DR. MCLAUGHLIN: Yeah, he sold out. All right, let's go.

MS. CLIFT: No, I don't call that selling out.

MS. CROWLEY: And let me speak for the 30 percent --

MR. ZUCKERMAN: I didn't think it was a bad speech. I just don't think it was a great speech.

DR. MCLAUGHLIN: Let Monica in. I want to hear from her.

MS. CROWLEY: Let me speak for the 30 percent who thought it was a dud. This guy, when he ran, when he was campaigning, he was an extraordinary speaker. That's what got him to beat Hillary, his ability to give a speech, lofty rhetoric. That guy didn't show up on Tuesday. All right, that guy -- this guy gave a speech that was basically incoherent. And, yes, there was something in it for everybody, but there was no overriding narrative, nothing that was essentially going to set the tone for where he wanted to go as president, because frankly I'm not quite sure even he knows where he wants to go.

DR. MCLAUGHLIN: Exit question. In addition to his inauguration this week, President Obama has done the following: Number one, toughened ethics rules; two, capped White House pay; three, ordered Guantanamo closed; four, restricted torture interrogation; five, outlined a process for ending hostilities between Palestinians and Israelis. Grade him on the week, Pat. MR. BUCHANAN: Well, he fouled up his oath, he and Roberts did, and he took the second oath without a Bible. So, John, I'm going to have to give him at best a B this week. They've had a lot of glitches, his administration.

DR. MCLAUGHLIN: Because of a transposed word in the oath?

MR. BUCHANAN: Well, no, all week long there have been problems with him and his administration and staff and Biden and other things.

You cannot give him an A.

DR. MCLAUGHLIN: What problems have there been?

MR. BUCHANAN: Well, did you see Biden making a joke about Roberts's giving the oath? Obama looked like he was going to slug him.

DR. MCLAUGHLIN: What was so unfunny about Biden making that joke? What was so unfunny?

MR. BUCHANAN: Take a look at the president of the United States, who's going to be seen for 100 years taking the oath. It was a bad glitch. It was Roberts's fault.

DR. MCLAUGHLIN: What about the call to redo it? Was that a mistake?

MR. BUCHANAN: They had to do it, because the blogosphere demanded he do it and said, "You're not the president."

MR. BUCHANAN: The blogosphere is governing the country? (Laughter.) The oath is not essential to his office.

MR. ZUCKERMAN: That is right.

MR. BUCHANAN: The oath is in the Constitution.

DR. MCLAUGHLIN: That oath is not essential.

MR. BUCHANAN: It's in the Constitution. That's why he did it again.

DR. MCLAUGHLIN: But getting the office does not depend upon whether you take the oath or not.

MR. BUCHANAN: Tell that to him and Roberts.

MS. CLIFT: Yeah, Fox News and Monica would have dined out for years on whether he's truly constitutionally sworn in.

MR. BUCHANAN: (Laughs.) MS. CLIFT: So I think that was fine to do it over.

DR. MCLAUGHLIN: Did it blow the impact --

MS. CLIFT: Roberts screwed up.

DR. MCLAUGHLIN: I mean, everybody's talking about the oath. Did that blow the impact of the inaugural?

MR. ZUCKERMAN: No, it didn't.

MS. CLIFT: No, not one bit.

MR. ZUCKERMAN: No, it didn't.

MS. CLIFT: This was a glorious inaugural that millions of people will remember. The world stopped as everybody watched.

DR. MCLAUGHLIN: Well, he got about 10 million --

MS. CLIFT: And he got off to a terrific start in every sphere -- foreign policy, domestic policy, setting a tone. You've got to give him an A+.

DR. MCLAUGHLIN: He didn't get the TV audience that Reagan got. He was 10 million short of it.

MR. BUCHANAN: Four million.

MS. CROWLEY: For the inaugural.

DR. MCLAUGHLIN: Four or 10?

MR. BUCHANAN: Four million.

DR. MCLAUGHLIN: I saw 10 (million).

MR. BUCHANAN: It was 42-38.

MS. CROWLEY: You're asking me to grade his first week -- a lot of rookie mistakes. You can overlook some of them because it's their first week. But on foreign policy, number one, the first phone call he makes as president is to Mahmoud Abbas, dissing our Israeli allies. The second thing he does is --

MS. CLIFT: There's a crisis going on over there, Monica. Did you notice?

MS. CROWLEY: -- close Guantanamo. Yes, and we have an ally -- Eleanor, we have an ally named Israel. He could have called them first. Secondly, he closed Guantanamo Bay, which will prove to be one of the most irresponsible things ever done by a commander in chief. DR. MCLAUGHLIN: Do you think it was a --

MS. CROWLEY: I give him a C+.

MS. CLIFT: John McCain --

DR. MCLAUGHLIN: Do you think there was a list of red herrings in there too? In other words, they had a certain -- I guess they had a little bit of glitz to them. But, you know, were any of those things that he did really that consequential?

MR. ZUCKERMAN: Well, I think he gave a sense of somebody who is in command.

DR. MCLAUGHLIN: And change.

MR. ZUCKERMAN: Yes, and change.

DR. MCLAUGHLIN: He also (expected ?) change.

MR. ZUCKERMAN: So I give him an A or an A-. I thought he did very well in his first week.

DR. MCLAUGHLIN: Well, once again, Mort, I think you've hit it right on the nose. I'll give him an A-.

Issue Two: Bank Jitters.

PRESIDENT OBAMA: (From videotape.) Forty-four Americans have now taken the presidential oath. The words have been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often, the oath is taken amidst gathering clouds and raging storms.

DR. MCLAUGHLIN: Mr. President, you've got it right. That's what we have -- quote-unquote, "gathering clouds and raging storms." The nation's biggest banks on the stock exchange plunged this week, almost in perfect sync with President Obama's inaugural address. On Tuesday, Citigroup lost 20 percent of its stock value. Bank of America lost 29 percent of its value. State Street, the bankers' bank, lost 59 percent of its value.

Many investors shed their financial stocks in fear that some of the nation's biggest banks are no longer financially solvent. Shares of Citigroup fell to $2.80, despite plans to restructure by splitting up the conglomerate. Bank of America shares fell to $5.80. CEO John Thain resigned from BOA on Thursday. In London, the British pound fell 5 percent because of bank woes.

The reason investors are dumping bank stocks is because they fear the government bailouts are not working and that the next step could be nationalization of the banks. That leaves stockholders high and dry. No surprise that the Dow Jones Industrial Average dropped 332 points on Tuesday, the worst Inauguration Day performance in its 113- year history -- since it was founded, that is, in 1896. Question: Does anyone in the Obama administration know how to tackle this crisis? Mort Zuckerman.

MR. ZUCKERMAN: Well, I think they have some thoughts about it. I don't think anybody --

DR. MCLAUGHLIN: How about Geithner?

MR. ZUCKERMAN: I don't think anybody knows how to -- this is a completely unprecedented kind of challenge. I think they're going about it in the right way at this stage of the game. There is no doubt but that the critical element now is the lack of any credit, and the reason there is no credit is because the banking system is underwater. And they do not have the resources to make loans. All they're doing is preserving their own capital to protect themselves. So that is a critical element. That's what they're focusing on. I believe they're going to have to develop a program about that.

DR. MCLAUGHLIN: Geithner gave testimony this week and Geithner said that he thought the reason was due to the Chinese manipulating their currency. What do you think about that, Buchanan?

MR. BUCHANAN: Well, the Chinese manipulating their currency is one of the reasons why you have a $250 billion trade deficit with China every year, and they're sucking jobs, technology, factories out of this country. But Mort is right. This issue --

DR. MCLAUGHLIN: But they're also buying our debt, are they not?

MR. BUCHANAN: Yeah, they're buying and holding a lot of our debt, as are the Japanese.

DR. MCLAUGHLIN: Like how much? What percentage?

MR. BUCHANAN: The Japanese and the Chinese have probably got about more than 50 percent of all our outstanding debt, I would guess. Look, John, but here's the fundamental point. Mort is right. You've got all this horrible toxic paper, far more than we imagined. Nobody knows what it's doing on the -- how it's damaging the books. It's been sold abroad. The price of houses goes down and more of the mortgages become toxic, and nobody knows what to do, and they're dragging them down. And these banks, they don't know what to do. They're holding on to their cash. So it's a mess. MS. CLIFT: The banks are not lending because they believe more is coming. People are defaulting on their auto loans, on college loans. The credit card industry is about to come down. And so the banks are holding on to what little they have because they expect that more is coming. So you're going to have to do either some form of nationalization or you're going to have to separate out all the toxic assets that Pat was talking about.

DR. MCLAUGHLIN: Are you frightened by that word, nationalization, and --

MS. CROWLEY: I'm terrified by it.

DR. MCLAUGHLIN: -- the reality of it?

MS. CROWLEY: I'm terrified by it, because we could be entering the Obama administration as the United States and leaving the Obama administration, whether it's four or eight years down the road, as France. But, look, the situation is so dire. You mentioned China manipulating its currency, but China's economy is also starting to tank because this is global. So their ability to buy our debt is greatly reduced as well. And now we're stuck. There are three elements to this. Mort, Pat, everybody, Eleanor, everybody is right. It's credit, it's housing and it's confidence. And those three things are --

DR. MCLAUGHLIN: What are you going to do with your portfolio?

MS. CROWLEY: -- linked.

DR. MCLAUGHLIN: What are you going to do with your --

MS. CROWLEY: And nobody knows how to solve it.

DR. MCLAUGHLIN: What are you going to do with your portfolio?

MR. BUCHANAN: What portfolio? (Laughs.)

MS. CROWLEY: I've got my money in my mattress. And I think more and more people are starting to stuff their mattresses.

DR. MCLAUGHLIN: Exit question. Assume that Obama needs to raise about $2 trillion through Treasury bond sales this year. If China stops buying or stops selling, we may need to dramatically raise interest rates. That could lead to a trade war with China. Is this scenario, a trade war with China, more probable or more improbable?

MR. BUCHANAN: The idea of a trade clash with China is increasingly probable, John. There's no doubt about it. Whether or not they bite is -- I think what the Fed's going to do is going to print an awful lot of money if we can't borrow it. They're going to print it. But there's no doubt about it, one way or the other -- DR. MCLAUGHLIN: Well, what's the danger of that? The danger is inflation -- deflation.

MR. BUCHANAN: No, inflation and destruction of the dollar down the road. On the other side, the borrowing is interest rates going up because people don't trust them.

DR. MCLAUGHLIN: Serious question: How worried are you? Serious question.

MR. BUCHANAN: How worried are you?

DR. MCLAUGHLIN: How worried are you?

MR. BUCHANAN: I'm not too worried now because my portfolio is in the grave besides Lehman Brothers.

DR. MCLAUGHLIN: Humor aside, how worrisome is this situation?

MR. BUCHANAN: I think this situation is the worst financial situation we've confronted since 1929. The economy --

DR. MCLAUGHLIN: Now, wait a second. I can give you good literature that says it's bad, but it's not as bad as '82 --

MR. BUCHANAN: No, the financial --

DR. MCLAUGHLIN: -- as '82.

MR. BUCHANAN: Well, the real economy is not as bad as '82 yet, but the financial situation is 1929-1930.

MS. CLIFT: Well, it's not as bad as '29 because we have government safeguards in place to protect people. Look, the saving grace in terms of China is the theme that President Obama set in his inaugural address, and that is that we're all in it together. They can't afford more of a global downturn either. So I think the increased diplomacy -- thank you, Hillary Clinton and Barack Obama -- will assuage some of the hard feelings with China. We can deal with them on an economic level.

DR. MCLAUGHLIN: Except that China has enormous liquidity. Am I correct?

MR. ZUCKERMAN: Yes, it does. And it's going to use less of that liquidity to buy Treasuries because it can use the money to stimulate their own economy.

DR. MCLAUGHLIN: Can you give me 10 seconds?

MS. CROWLEY: That's right. Well, look, they've got to figure out what to do, whether or not it's creating a new Resolution Trust Corp. -- you know, United States Bank of Bad Banks to absorb all of the bad assets, and then how would that work? But all of this increased nationalization in spending, the question is, once the economy recovers many years down the road, then what happens? Is there a retraction? Do we go back to where we are today or where we were two years ago? Nobody knows.

DR. MCLAUGHLIN: Predictions.


MR. BUCHANAN: Bad news in Afghanistan, John. I believe the United States is going to undercut President Karzai. I don't think President Karzai is going to last out this year. The conflict between the coalition and Karzai over the bombings, over other things, is getting very, very serious.

DR. MCLAUGHLIN: We're putting in 60,000 people over there.

MR. BUCHANAN: You're putting in an extra 30,000 --

DR. MCLAUGHLIN: Thirty on 30 is 60.

MR. BUCHANAN: Yeah, 30 and 30 is 60. But we're not going to put them behind Karzai.

MS. CLIFT: The so-called bad bank which will hold the toxic assets is a done deal on Capitol Hill. And you have members of Congress now talking about $2 (trillion) or $3 trillion to sustain the banking system. It is truly scary.

DR. MCLAUGHLIN: Two trillion dollars of toxicity.

MS. CROWLEY: Yes, I know. President Obama has been focused on a draw-down, ultimate draw-down in Iraq, and also focused on increasing troops in Afghanistan. But more and more, he's going to have to be focused on Africa. We have new al Qaeda activity in Yemen and Algeria, and now the Iranians are moving into Tanzania.


MR. ZUCKERMAN: The next Israeli prime minister will be Bibi Netanyahu. The next Israeli defense minister will be the current defense minister, Ehud Barak. And they're going to present a very, very tough front to the Palestinians in Gaza going forward.

DR. MCLAUGHLIN: But Netanyahu is not a particularly new prediction.

MR. ZUCKERMAN: No, it's not a new prediction, but -- DR. MCLAUGHLIN: What about Tzipi? She's left out in the cold?

MR. ZUCKERMAN: Everybody thought that what happened during the war would change the balance. If anything, it has intensified his support.

MR. BUCHANAN: You've got a left-right coalition.

DR. MCLAUGHLIN: President Obama next week will lift federal restrictions on stem cell research.


(PBS segment.)

DR. MCLAUGHLIN: Issue Three: At Last.

PRESIDENT OBAMA: (From videotape.) A man whose father, less than 60 years ago, might not have been served at a local restaurant can now stand before you to take a most sacred oath.

DR. MCLAUGHLIN: Does the Barack Obama presidency mean that America has achieved a post-racial society status? And, in fact, is Obama's electoral win the proof of that post-racial national status?

KEN BLACKWELL (former Ohio secretary of state): (From audiotape.) I think we are moving rapidly towards a post-racial America. And Dr. King had that vision.

MICHAEL ERIC DYSON (Georgetown University professor): (From audiotape.) One of the interesting things, of course, is that people think, "Well, Barack Obama's president now; we're in a post-racial society." No, it ain't really that simple.

DR. MCLAUGHLIN: Question: Polls show that one-third of whites say they were victims of discrimination in hiring, employment or university admissions -- one-third. If whites and blacks both feel that they are being discriminated against because of their race, does that make us a post-racial society? Eleanor Clift.

MS. CLIFT: No, you're always going to feel personal slights on an individual basis. But where we are, we're post-racial in the sense that we're more racially conscious, but in a very good way. Diversity is something to be celebrated. And the fact that we now have the first African-American president is a threshold in our maturity as a country. But is it going to help the black guy trying to get a cab at 2:00 in the morning in Manhattan? Probably not. So you don't wipe away attitudes and change attitudes with one election.


MS. CROWLEY: Well, I think what's interesting about Barack Obama's election is, yes, it's the ultimate position of power in America. We've had black secretaries of State before. We may have a black attorney general if Eric Holder gets confirmed. But getting the presidency is a whole special symbolic move.

What I think was so important about Obama getting elected with regard to race is that the power of him being in there is that he's erasing race; that when you look at Obama, you don't see a black man. You see the president of the United States. And as long as that holds -- and I have no reason to think that it won't hold -- that, I think, is the true racial achievement here.

DR. MCLAUGHLIN: Do you think it signifies in race relations that there is a black elite and there's a white elite, and to Obama you say, "Welcome to the black elite"?

MR. BUCHANAN: John, you are exactly right. On the elite level, there is obviously economic integration and a measure of social integration. But when you get to the working-class African-Americans, the racial consciousness, racial pride, racial identity is growing. It's true with Hispanics. And it's beginning to grow with the white working class, the ones who really take the hit on affirmative action programs.

I think we have had really had two countries, and at the elite level it is -- I mean, there's tremendous integration among African- Americans and whites economically --

DR. MCLAUGHLIN: Is the greater divide --

MR. BUCHANAN: -- economically, but not socially.

DR. MCLAUGHLIN: Is the greater divide in American society race or socioeconomic class, Mort? You ought to know.

MR. ZUCKERMAN: I still believe it's race.


MR. ZUCKERMAN: Yes, I do. There has always been a socioeconomic divide and there always will be. But race has been such a unique American experience from the inception of the country, and it is still there. We have made enormous progress. Obama is a symbol of extraordinary progress on the public level. We still have a long ways to go on the private level. I think we'll make progress on that too. A lot will depend on how well and how Obama conducts himself as president.

DR. MCLAUGHLIN: What's the goal post? Is the goal post a color- blind society?

MR. ZUCKERMAN: I don't think we can ever have a color-blind society. It doesn't work that way. You would have to be blind, and I don't think we are. DR. MCLAUGHLIN: Well, we have Latino-Americans.

MR. ZUCKERMAN: Yes. We have a big Asian population.

DR. MCLAUGHLIN: We've got Asian-Americans. We've got Japanese- Americans.

MR. ZUCKERMAN: But there are going to be ethnic conflicts --

DR. MCLAUGHLIN: We've got Mexican-Americans.

MR. ZUCKERMAN: There are going to be ethnic conflicts and conflicts between the Latinos and the blacks, which exist, for example, out in California. That's going to be --

DR. MCLAUGHLIN: Well, why are you (saying that ?) socioeconomic class is the greater divide?

MR. BUCHANAN: It's -- ethnicity and race, frankly tribalism, is going to be the great cause of conflict in the 20th (sic) century in the United States and in the world.


MS. CLIFT: Look, you don't need to erase --

MR. ZUCKERMAN: I would try the 21st century.

MR. BUCHANAN: (Laughs.)

MS. CLIFT: You don't need to erase racial consciousness. It's fine to celebrate your ethnicity. And I know Pat is --

MR. BUCHANAN: Do you celebrate your white ethnicity, Eleanor?

DR. MCLAUGHLIN: Do you agree with Pat --

MS. CLIFT: I think we do that every day in this country.