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CBS "THE MCLAUGHLIN GROUP" HOST: JOHN MCLAUGHLIN PANEL: PAT BUCHANAN, MSNBC; ELEANOR CLIFT, NEWSWEEK; MONICA CROWLEY, SYNDICATED RADIO COMMENTATOR; PETER BEINART, COUNCIL ON FOREIGN RELATIONS TIME: 11:30 A.M. EDT BROADCAST DATE: SUNDAY, MARCH 8, 2009

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DR. MCLAUGHLIN: Issue One: To be or not to be?

BEN BERNANKE (Chairman, Federal Reserve): (From videotape.) Nationalization, to my mind, is when the government seizes the bank, zeros out the shareholders and begins to manage and run the bank. And we don't plan anything like that.

DR. MCLAUGHLIN: Planned or not, the day when the United States nationalizes a major bank may be upon us. Citigroup was one of the world's largest banks. Only two years ago, its market capitalization was $270 billion. Today, Citigroup has shrunk to 5.4 billion (dollars). And that 5.4 billion (dollars) market cap is after receiving almost $50 billion in taxpayer bailouts. On Thursday, Citigroup's stock fell to an all-time low of 98 cents. That's a penny stock in a bank that had been, quote-unquote, "too big to fail."

Former Treasury Secretary James A. Baker III and ex-Fed Chairman Alan Greenspan, both conservatives, and Nobel Prize-winning liberal economist Paul Krugman favor nationalization. But here's the rub. Nationalization wipes out the shareholders, not the depositors, the shareholders. And once nationalized, getting the bank re-privatized is not easy. It takes a long time. The upside is stability.

Question: What's the principal downside of a nationalization of Citigroup?

MR. BUCHANAN: Complete wipe-out of shareholders, preferred shareholders and bondholders, the possibility of a run on the other banks, fearing the same thing is going to happen. John, I think the government of the United States has never ever run a bank this size. Many of these banks have interbank loans with other banks, which could mean Citibank is kind of like a guy on top of a ski slope and they're all tied together with a rope. He goes into the abyss, and if he's tied to the others, he pulls them all with him.

And Bernanke did this at the point where the banks were suddenly seen to be crashing because of a fear of nationalization. And he's tried to spike that fear by making this statement. But that's what he was afraid of, John.

DR. MCLAUGHLIN: Eleanor, where do you see this?

MS. CLIFT: I don't necessarily see that it would spark a run on banks because ordinary depositors aren't going to see this as a threat. This does, as you point out, it does wipe out the holdings of the people at the top. And I think, actually, the broader populous might enjoy the fact that the people at the top will be taking some kind of a hit.

Newsweek has a poll coming out in our issue next week done by Princeton Survey Research Associates, which finds that nationalization is surprisingly welcome among the public. They find a 56 percent majority --

DR. MCLAUGHLIN: Really?

MS. CLIFT: -- thinking that the government should get something in return for bailing out the banks. So I think you might want to look for another name. Call it restructuring, if you will. But it seems to me that this is the direction that we're heading in and that the public sees it as a way for the administration to begin to grab hold of the failing banks as opposed to just pouring money down a rat hole.

DR. MCLAUGHLIN: Do you want to clarify your use of the word "shareholders" as people at the top? The shareholders are affected. All of the shareholders are affected. It's not just the people at the top.

MS. CLIFT: But the shareholders --

DR. MCLAUGHLIN: It sounds like you're talking about the governing board or the management.

MS. CLIFT: That's a good point. The shareholders are already taking a beating with the shares down to 98 cents for Citigroup, so I don't know that that's --

MR. BUCHANAN: The bondholders are (good ?). When I said run on the bank, I didn't mean run on the people --

DR. MCLAUGHLIN: Not depositors. The depositors are okay.

MR. BUCHANAN: I mean everybody sells any stock, bonds they've got in banks. That kind of run.

MS. CROWLEY: Well, with all of this talk about nationalization, that sound you hear is Alexander Hamilton turning over in his grave. Look, there have been massive infusions of taxpayer money into the --

DR. MCLAUGHLIN: What does that mean -- Hamilton? What do you mean by that?

MS. CROWLEY: Starting the banking system in America --

DR. MCLAUGHLIN: There you go.

MS. CROWLEY: -- and laying the basis for a free market capitalist system in the United States and the Federal Reserve, exactly. Look, there have been massive infusions of taxpayer dollars, not just into the financial sector but also into the auto sector, the housing sector. And time and again, we see failure. There has been so much outlay, trillions of dollars already committed, not just, again, to the banks but across the board. And yet, all we have seen is continuing collapse. That share price for Citigroup, 98 cents, I mean, they have to change the rules on the stock exchange to allow under $1 now to prevent these companies from being de-listed. Nothing has worked. There have to be -- if we still have a free market system in this country, which is debatable, there have to be consequences to failure here, John. We have tried this. We have gone down the state route. It has not worked.

DR. MCLAUGHLIN: If GM is going down the drain, why don't we nationalize it?

MS. CROWLEY: What do you think is going on here? (Laughs.)

DR. MCLAUGHLIN: (Laughs.) MS. CROWLEY: The nationalization of so many sectors here.

DR. MCLAUGHLIN: But with the bailouts, it doesn't seem to be working.

MS. CROWLEY: Right.

MR. BEINART: No, although we don't know what the consequences would have been had we let these things go under. I mean, we do know what happened when we let things go under late last year. And if you let AIG or Citigroup go under, we don't know what the path not taken would be. I think where we are here is we have a certain set of ideological constructs that we're still using about free market capitalism. And when Alan Greenspan and James Baker are saying that basically we have no alternative but to nationalize the banks, I think we are at a situation now where this lingo is not serving us well. Nobody wants the government to be running the banks over the long term. The question is whether we basically run out of other options.

DR. MCLAUGHLIN: Well, let's clear this up with the chairman. Mr. Chairman, what precisely do you want? What do you want Congress to do?

MR. BERNANKE: (From videotape.) I'd like to challenge the Congress to give us a framework where we can resolve a multinational, complicated financial conglomerate, like Citigroup, like AIG or others, if that became necessary. We do not have that framework; and therefore, we have to work within the constraints of what we have.

DR. MCLAUGHLIN: Sir, can you pin that down just a little bit more? So what's your feeling with regard to nationalization of individual banks?

MR. BERNANKE: (From videotape.) As a possible option in the future, as an abstract option, but I reiterate that we do not have the tools to do that.

DR. MCLAUGHLIN: We don't have the tools to do it, but he's not against it in theory.

MS. CLIFT: Well, yeah. I mean, I think they could find the tools to do temporary nationalization of failing banks. We're not talking about a permanent nationalization of the entire banking system. And frankly, we're heading in this direction. And the people who complain about that this is socialist engineering and that we should let the free markets prevail, another thing the Newsweek poll finds is that the critics are seen for what they are. They are not offering any kind of plausible alternative to what Obama is doing. It is too early to declare what he is doing a failure.

MS. CROWLEY: If the consensus is that nationalization of the banks is the only route that is going to salvage the financial system here, then it goes back to your point, Eleanor, and yours, Peter, too, about the temporary nature of this. Once we let the vampire into the house of the federal government, as we already have, as we have with the auto industry, as we have with the housing industry, the challenge is getting the government out. And we know the track record on this, Pat.

(Cross talk.)

DR. MCLAUGHLIN: I've got a question for you. I think there's a fundamental question of fairness to the shareholders. They're the ones who take the hit in this nationalization. How do you resolve that?

MR. BUCHANAN: Look, the stockholders are just about finished. I'm a preferred stockholder. I think we're going to be finished. Bondholders will be finished. It will be a serious problem. Let me speak for the vampires. You let Citibank go down and it pulls down these other banks. The Federal Depositor Insurance Company then will have to step in and cover everybody up to I think it's 250,000 (dollars) now. A lot of people above that, they're wiped out, and the whole thing continues down. Lehman Brothers took the market down 4,000 points.

DR. MCLAUGHLIN: Yeah. Exit question: Is the nationalization of Citigroup inevitable, yes or no? Pat Buchanan.

MR. BUCHANAN: I think it is.

DR. MCLAUGHLIN: Eleanor.

MS. CLIFT: I think it is, and I think allowing Lehman Brothers to go down early in this financial collapse was a huge mistake. We might not be where we are if that hadn't been allowed to happen.

MS. CROWLEY: The nationalization of Citigroup has already begun. All of us who are taxpayers are now involuntary shareholders of up to 39 percent of Citigroup. We're already down this path. The question is keeping it temporary.

DR. MCLAUGHLIN: Peter.

MR. BEINART: Absolutely. And it will become temporary because over time, when we come out of this, the natural free market instincts of the American people, which are in abeyance now, will return.

DR. MCLAUGHLIN: I do not think the nationalization of Citigroup is inevitable, but I do think the breaking up of Citigroup is inevitable. Issue Two: Pawlenty 2012.

GOVERNOR TIM PAWLENTY (R-MN): (From videotape.) We need to be talking about how to make opportunity and empower and provide jobs for people who have modest and middle incomes. I call them Sam's Club voters. We have to have a party that has a feel and a concern and a tone and an understanding of the importance and the challenges of the working class of this country.

DR. MCLAUGHLIN: The big news out of last weekend's Conservative Political Action Conference, CPAC, with its 8,000-plus conservative activists in the audience was an impassioned speech given by Tim Pawlenty, the Republican governor of Minnesota. He is now positioned to be one of the five frontrunners likely to head the Republican presidential ticket in 2012, along with Sarah Palin, Alaska governor, Mitt Romney, former Massachusetts governor, Bobby Jindal, current Louisiana governor, and Ron Paul, 15th year Texas congressman and '08 presidential candidate.

Tim Pawlenty, 48-years old, University of Minnesota, BA and Juris Doctor; a practicing attorney for 15 years; Minnesota state legislature, House of Representatives 10 years, Minnesota House majority leader four years; state of Minnesota governor eight years and currently, 2002 to 2010 when his term ends.

Tim is known for witty political jibes.

GOV. PAWLENTY: (From videotape.) The Democrats convened a fiscal responsibility summit. (Laughter.) What's next? Are they going to have Rod Blagojevich convene an ethics summit?

DR. MCLAUGHLIN: Question: Only 2 percent of the CPAC, that's Conservative Political Action Conference, attendees voted Governor Tim Pawlenty as their top pick for president in 2012, last week at that conference. Did Pawlenty -- why did he score so poorly when he is a committed conservative with that irresistible political profile?

(Laughter.)

MR. BUCHANAN: John, I had breakfast with Pawlenty the very morning that Sarah Palin was picked. He's a nice fellow, he's a conservative. He is not known nationally. And as you saw, he's not a man that burns the paint off the walls --

DR. MCLAUGHLIN: He's not a bad speaker.

MR. BUCHANAN: He's a clear speaker, John, and he's a nice speaker, but that is not what the party's going to need.

DR. MCLAUGHLIN: Who's going to defeat him? Ron Paul? MR. BUCHANAN: I'll tell you, there's three people. I would say the frontrunners now, I would say Palin, Romney and Huckabee. Ron Paul would clearly get a vote, but he would not win. But I don't think Pawlenty is in the top five. Newt, quite frankly, is, I think, a good deal higher than Pawlenty would be.

DR. MCLAUGHLIN: Did you see the conservative ratings of some of these individuals that you mentioned as listed by Human Events this week, the classic conservative newspaper that I believe you endowed?

MR. BUCHANAN: (Laughs.) My column does very well there.

DR. MCLAUGHLIN: Human Events.

MR. BUCHANAN: Well, Human Events is traditional conservative, down the line solid conservative. Yeah. And they would very much be with the straight-line conservative point of view, no doubt about it. But I don't think they would be promoting Pawlenty as man of the year.

DR. MCLAUGHLIN: Well, that's only 2 percent of the conservative activists but he --

MS. CLIFT: Governor Pawlenty is going to be in the running for 2012, and he's going to represent the so-called moderate wing. And this was not his crowd, the CPAC conservatives. And you're right. Pawlenty comes from a working-class background. He has some connection with reality in his life, but he doesn't have the red meat rhetoric that appeals to the right wing. There are opportunities here for the Republicans, but they are not --

DR. MCLAUGHLIN: This may be outside of your orbit, so what do you have to say about that?

(Laughter.)

MS. CROWLEY: Well, you know, you mentioned the CPAC poll that showed Pawlenty only polling 2 percent. You know who polled the top? Mitt Romney. He gave a barn-burner, stem-winder of a speech at CPAC. It was the best speech by a Republican politician I've seen in a very long time.

DR. MCLAUGHLIN: Really?

MS. CROWLEY: Romney -- I think Romney is the frontrunner, to tell you the truth. I mean, Pawlenty is a very nice guy. He is sort of a go-along-to-get-along type conservative. And I can tell you from my radio show every day, I talk to the conservative base. They are in no mood to go along with Obama and his socialization plans for the United States. They want the stem-winder speeches. They want a dynamic conservative.

(Cross talk.)

DR. MCLAUGHLIN: Barn-burner conservatives, right? MR. BEINART: The barn-burner conservatives are heading straight towards their own 1972 in 2012. What's happening is there's kind of a death spiral in the Republican Party in the opposite way. This is going to be your McGovern. You're going to have your ideologically pure candidate because your party has gotten so small that the --

(Cross talk.)

Let me finish. You look at all the polling. The Republican base is further and further away from average America.

MR. BUCHANAN: Here's where you're wrong. You had a Democratic disaster in '79, and that opened the door for a tremendously authentic conservative, 100 percent, true-blue. Whoever the Republican nominee, if this thing --

MR. BEINART: No, no, you have it exactly wrong. You have it exactly wrong. Because even if things are bad, Obama still gets credit for trying.

DR. MCLAUGHLIN: Exit question: What are the odds that Pawlenty will win the GOP nomination in 2012? Pat.

MR. BUCHANAN: Same 2 percent he got.

DR. MCLAUGHLIN: Eleanor.

MS. CLIFT: Well, I think it's 50-50, but the party is at war with itself. The Republican leadership has imploded over the last two weeks with Rush Limbaugh, the face of the party, Bobby Jindal not ready for prime time, all the rest of them falling over themselves apologizing to Rush Limbaugh.

DR. MCLAUGHLIN: How do you even begin with that? You're going to go down the list?

(Cross talk.)

DR. MCLAUGHLIN: Let her in. Let her in. Let her in.

MS. CLIFT: I want to finish my statement, and that is that Pawlenty looks pretty good to people who aren't part of the right-wing mafia.

MS. CROWLEY: You know what? There is a limited appetite for what Pawlenty is selling, not at this moment. I don't believe he's the kind of candidate that Republicans are going to be looking for.

DR. MCLAUGHLIN: Go ahead.

MR. BEINART: I think his chances are a little better than Pat's. (Laughter.)

DR. MCLAUGHLIN: Issue Three: Honeymoon kaput! This week has seen a sudden rise in conversation and news of President Obama. Major newspapers had featured leading economic gurus slamming the president.

Paul Krugman of The New York Times, quote, "The reality is that when it comes to dealing with the banks, the Obama administration is dithering," unquote.

Steve Forbes, Wall Street Journal, quote, "What is most astounding about President Barack Obama's radical economic recovery program is not its breadth but its continuation of the most destructive policies of the Bush administration," unquote.

Michael J. Boskin, Wall Street Journal, quote, "The illusion that Barack Obama will lead from the economic center has quickly come to an end," unquote.

Charles Krauthammer, Washington Post, quote, "Few undertake the kind of brazen deception at the heart of Obama's radically transformative economic plan, a rhetorical slight of hand, so smoothly authored that few have noticed clever politics but intellectual dishonesty to the core," unquote.

What do you think of those favored terms of Mr. Krauthammer?

MR. BEINART: I'm shocked. (Laughter.)

DR. MCLAUGHLIN: Didn't you work with him?

MR. BEINART: I'm shocked. Charles Krauthammer and Steve Forbes and Michael Boskin, who is a Republican economist, are disapproving of Barack Obama? He must be going down --

MS. CROWLEY: Paul Krugman, though. And Paul Krugman. He's being hit from the left and the right.

MR. BEINART: Yeah, and Paul Krugman. Yes, he's being hit from the left, but the left has nowhere to go. The left is still going to be behind Obama. If you look at the polls which is, you know, a reality check here, for someone in the economy this bad, Obama is still remarkably popular.

MS. CLIFT: That's exactly right. Again, the Newsweek poll says the honeymoon is far from over. His personal approval ratings are high. His popularity is high. But Krugman is right when he says you can't just put principles out there and say, details to come. And the Treasury Department has failed on this front, and they haven't gotten their appointees in there.

MR. BUCHANAN: And he's made a strategic error, John. MS. CLIFT: The vetting process is holding up people.

DR. MCLAUGHLIN: What you might to also include in your vision is his disapproval rating.

His disapproval rating is up to 28 (percent) and that is --

(Cross talk.)

DR. MCLAUGHLIN: -- at the same point, in all the other collective presidencies since Gallup began, he is 50 percent off the mark. Is that correct?

MR. BUCHANAN: Right, right. But John, and also, look, he's made a strategic mistake. On Iraq, he's dead on. He's in the center and he's got the conservatives with him. His budget came out, it went, it came out of the closet all the way to the left, that budget, 1.75 trillion (dollars), and that's based on assumptions that are wrong. It's going over 2 trillion (dollars). He's going for health care. He's going for the carbon tax. He's going for everything. He's too far left.

DR. MCLAUGHLIN: Okay, okay. You know what that's called by some people? It's called snow. And this is a snow job. In a snowstorm, you can't find your way. Is that what Obama does?

MS. CROWLEY: Murkying it up?

DR. MCLAUGHLIN: Does he murk it up?

MS. CROWLEY: Well, listen, I think that when I look at this White House and all I see is panic and fear and doom and gloom, and that's not to say that the economy is not in a crisis, it is, but the problem here is that what we're seeing from this White House and the Treasury Department with a lack of a financial sector bailout with actual details and follow through, you are seeing an arrogant malaise.

(Cross talk.)

DR. MCLAUGHLIN: I want to talk about the number -- excuse me -- the number and the opacity of all of these issues that are blinding him.

MS. CLIFT: He's not hiding anything.

MR. BEINART: He's said exactly what he's -- he says he's going to do health care, he says he going to do global warming, he said he's going to do a big stimulus. He's done exactly what he said he was going to do.

DR. MCLAUGHLIN: Is Krauthammer right? Is it slight of hand?

MR. BEINART: No. It's an ambitious agenda, but it's a popular agenda.

DR. MCLAUGHLIN: Exit question. Is this criticism of Obama building? Will it build, or will it ebb?

MR. BUCHANAN: It is going to build and build and build. He has overloaded the circuit. And this program which nobody thinks is going to work had better work or they're going to be wiped out in 2010.

DR. MCLAUGHLIN: So that might ease the way for Tim Pawlenty, right?

MS. CLIFT: He is overloading the circuit. He has two agendas, the one that he ran on and the one that's been forced on him. And he's trying to do both.

DR. MCLAUGHLIN: He is overloading the circuit.

MR. BEINART: Not if you ask the American people.

MS. CLIFT: All the pieces fit together, and the American people, so far, are --

DR. MCLAUGHLIN: Do you think they can sort them out? Why isn't he focusing on the economy?

MR. BEINART: He is.

DR. MCLAUGHLIN: Exclusively.

MR. BEINART: Health care is part of the economy. So is energy.

(Cross talk.)

DR. MCLAUGHLIN: You know why? You know why? What does he do at the health conference? He says, I don't want to interfere with any of the proceedings now going on. It sounds as though it's going to be a committee action --

MR. BEINART: No, that's smart because he doesn't want to get too identified with any specifics. That's exactly what George W. Bush did.

DR. MCLAUGHLIN: You know why? You know why?

MS. CROWLEY: Come on, that's his job! MR. BEINART: No, it's not.

MS. CROWLEY: Yes, it is.

MR. BEINART: No it's not. Smart presidents basically hang back a little bit and take credit.

DR. MCLAUGHLIN: He's building to hold his negatives to a minimum in 2012.

MR. BEINART: His negatives may go beyond 30 percent, heaven forbid.

MS. CROWLEY: The question is, is criticism going to continue to build? Yes, it will. And that's why he's moving 1,000 miles an hour because he knows he's got to jam everything into this agenda.

DR. MCLAUGHLIN: Issue Four: Stock market guru.

PRESIDENT BARACK OBAMA: (From videotape.) You spend all your time worrying about that, then you're probably going to get the long- term strategy wrong.

DR. MCLAUGHLIN: President Obama may now be stock analyst Obama. The stock market is safe, Barack says so, if you wait long enough, which we may have to do. In four months, the Dow Jones Industrial has dropped some 3,000 points. Nevertheless, the president says, buy and be patient.

PRESIDENT OBAMA: (From videotape.) Buying stocks is a potentially good deal if you've got a long-term perspective on it.

DR. MCLAUGHLIN: How long a perspective? Some say four years, 2012, after the president's reelection is safely behind him.

So is stock analyst Obama right? Is now the time to buy? Do you think the market will settle down?

MR. BUCHANAN: Stock analyst Obama is right. Let me tell you. When General Electric which I believe -- of course, I worked for the company -- is going to survive and it's at $6 a share, if I were a young man, I would put money into it. He's right. It's 6,000, John. It's come down from 14,000. It may be crunched a bit. But in the long term, it's going to come back if the country comes back, and I believe it will. But an awful lot of people have been burned and wiped out in the interim.

DR. MCLAUGHLIN: Haven't we seen a billionaire who invested x billions of dollars in GE?

MR. BEINART: We have, that's Warren Buffett. He hasn't done so well. But I don't think it's Barack Obama's place, actually, to be telling Americans where they should put their money. He may well be right, the stock market -- but it's not really the president's job to basically tell you to --

DR. MCLAUGHLIN: Wait a minute. You think the stock market is demeaning?

MR. BEINART: No, but Americans might want to put their money in bonds, they might want to put it in housing. So it's not his position to tell them where to invest. DR. MCLAUGHLIN: A stock market has existed, not this stock market, since 1606. Did you know that?

MS. CROWLEY: Sixteen o six?

DR. MCLAUGHLIN: Yeah, it had to do with spices from Indiana.

MS. CLIFT: I agree with --

(Cross talk.)

MR. BUCHANAN: Nobody was here in 1606, John. They didn't arrive until (1609 ?).

MR. BEINART: There were Native Americans who were here in 1606, Pat.

(Laughter.)

DR. MCLAUGHLIN: I didn't say a U.S. stock market, I said a stock market.

MS. CLIFT: I agree with Pat that if you have a long-time horizon, that buying stocks that are now under $1 that were once blue- chip stocks is probably a good investment. But I don't think it's Barack Obama's place to get into this. Ordinary consumers, I don't think, are going to follow his advice. And Wall Street recoiled in horror, and they look at this as a naive thing for a president to do. And Wall Street is already suspicious of this administration, whether they've got the cajones to pull all this off. And I think this just added to the sense of unease.

DR. MCLAUGHLIN: Okay, who's to blame?

PRESIDENT OBAMA: (From videotape.) I found this national debt, doubled, wrapped in a big bow, waiting for me as I stepped into the Oval Office.

(New videotape.) There were a lot of bad decisions that were made. We are cleaning up that mess. (New videotape.) When we walked in the door, we found a budget deficit of $1.3 trillion.

DR. MCLAUGHLIN: Pinning the economic rap on George Bush Mr. Obama may feel is smart politics. James Cramer of "Mad Money" fame says Obama's negativity is producing fear in the market.

JAMES CRAMER (CNBC financial analyst): (From videotape.) Is nothing safe? Can any group be protected from the wealth-destroying efforts of President Obama? So far, it seems like everything this president touches -- health care, the drug stocks, defense stocks, construction, the oils, even the utilities -- they all get crushed. You need to Obama-proof your portfolio. That's right, as in bomb- proof.

DR. MCLAUGHLIN: Question: Is Cramer's criticism excessive or on target, regarding Obama?

Peter.

MR. BEINART: It's excessive. You know, Obama's only been there for a little while. This, he hadn't hit bottom when he came in. I think the person who deserves the most blame is Alan Greenspan, who kept interest rates much too low for much too long and created this bubble.

DR. MCLAUGHLIN: Who else? What other president urged (buy, buy ?) in any regard? George Bush did.

MS. CROWLEY: Well, listen. I agree with Eleanor --

DR. MCLAUGHLIN: And what about George Bush Sr.? Didn't he do something in 1991?

(Cross talk.)

MR. BUCHANAN: George Bush -- when I was running against him, George, he went down to Rockville, I believe, and bought four pair of socks to beat the recession.

MR. BEINART: Did that work?

DR. MCLAUGHLIN: This is George H.W. Bush?

MR. BUCHANAN: George H.W. Bush, yeah.

DR. MCLAUGHLIN: There you go.

MS. CLIFT: If everybody buys four pairs of socks, we can get out of this thing.

(Laughter.) (Cross talk.) MS. CROWLEY: I wish it were that easy. Cramer's criticism is right on target. Barack Obama's known for his oratorical skills, and yet he has done nothing to inspire any kind of confidence in investors, people who have skin in the game. The stock market has lost 3,000 points since this guy was elected. They believe that his policies are crushing free enterprise, they're crushing the investor class, they don't like it.

DR. MCLAUGHLIN: Congratulations, Sir Ted Kennedy. Bye-bye.

END.

olled the top? Mitt Romney. He gave a barn-burner, stem-winder of a speech at CPAC. It was the best speech by a Republican politician I've seen in a very long time.

DR. MCLAUGHLIN: Really?

MS. CROWLEY: Romney -- I think Romney is the frontrunner, to tell you the truth. I mean, Pawlenty is a very nice guy. He is sort of a go-along-to-get-along type conservative. And I can tell you from my radio show every day, I talk to the conservative base. They are in no mood to go along with Obama and his socialization plans for the United States. They want the stem-winder speeches. They want a dynamic conservative.

(Cross talk.)

DR. MCLAUGHLIN: Barn-burner conservatives, right? MR. BEINART: The barn-burner conservatives are heading straight towards their own 1972 in 2012. What's happening is there's kind of a death spiral in the Republican Party in the opposite way. This is going to be your McGovern. You're going to have your ideologically pure candidate because your party has gotten so small that the --

(Cross talk.)

Let me finish. You look at all the polling. The Republican base is further and further away from average America.

MR. BUCHANAN: Here's where you're wrong. You had a Democratic disaster in '79, and that opened the door for a tremendously authentic conservative, 100 percent, true-blue. Whoever the Republican nominee, if this thing --

MR. BEINART: No, no, you have it exactly wrong. You have it exactly wrong. Because even if things are bad, Obama still gets credit for trying.

DR. MCLAUGHLIN: Exit question: What are the odds that Pawlenty will win the GOP nomination in 2012? Pat.

MR. BUCHANAN: Same 2 percent he got.

DR. MCLAUGHLIN: Eleanor.

MS. CLIFT: Well, I think it's 50-50, but the party is at war with itself. The Republican leadership has imploded over the last two weeks with Rush Limbaugh, the face of the party, Bobby Jindal not ready for prime time, all the rest of them falling over themselves apologizing to Rush Limbaugh.

DR. MCLAUGHLIN: How do you even begin with that? You're going to go down the list?

(Cross talk.)

DR. MCLAUGHLIN: Let her in. Let her in. Let her in.

MS. CLIFT: I want to finish my statement, and that is that Pawlenty looks pretty good to people who aren't part of the right-wing mafia.

MS. CROWLEY: You know what? There is a limited appetite for what Pawlenty is selling, not at this moment. I don't believe he's the kind of candidate that Republicans are going to be looking for.

DR. MCLAUGHLIN: Go ahead.

MR. BEINART: I think his chances are a little better than Pat's. (Laughter.)

DR. MCLAUGHLIN: Issue Three: Honeymoon kaput! This week has seen a sudden rise in conversation and news of President Obama. Major newspapers had featured leading economic gurus slamming the president.

Paul Krugman of The New York Times, quote, "The reality is that when it comes to dealing with the banks, the Obama administration is dithering," unquote.

Steve Forbes, Wall Street Journal, quote, "What is most astounding about President Barack Obama's radical economic recovery program is not its breadth but its continuation of the most destructive policies of the Bush administration," unquote.

Michael J. Boskin, Wall Street Journal, quote, "The illusion that Barack Obama will lead from the economic center has quickly come to an end," unquote.

Charles Krauthammer, Washington Post, quote, "Few undertake the kind of brazen deception at the heart of Obama's radically transformative economic plan, a rhetorical slight of hand, so smoothly authored that few have noticed clever politics but intellectual dishonesty to the core," unquote.

What do you think of those favored terms of Mr. Krauthammer?

MR. BEINART: I'm shocked. (Laughter.)

DR. MCLAUGHLIN: Didn't you work with him?

MR. BEINART: I'm shocked. Charles Krauthammer and Steve Forbes and Michael Boskin, who is a Republican economist, are disapproving of Barack Obama? He must be going down --

MS. CROWLEY: Paul Krugman, though. And Paul Krugman. He's being hit from the left and the right.

MR. BEINART: Yeah, and Paul Krugman. Yes, he's being hit from the left, but the left has nowhere to go. The left is still going to be behind Obama. If you look at the polls which is, you know, a reality check here, for someone in the economy this bad, Obama is still remarkably popular.

MS. CLIFT: That's exactly right. Again, the Newsweek poll says the honeymoon is far from over. His personal approval ratings are high. His popularity is high. But Krugman is right when he says you can't just put principles out there and say, details to come. And the Treasury Department has failed on this front, and they haven't gotten their appointees in there.

MR. BUCHANAN: And he's made a strategic error, John. MS. CLIFT: The vetting process is holding up people.

DR. MCLAUGHLIN: What you might to also include in your vision is his disapproval rating.

His disapproval rating is up to 28 (percent) and that is --

(Cross talk.)

DR. MCLAUGHLIN: -- at the same point, in all the other collective presidencies since Gallup began, he is 50 percent off the mark. Is that correct?

MR. BUCHANAN: Right, right. But John, and also, look, he's made a strategic mistake. On Iraq, he's dead on. He's in the center and he's got the conservatives with him. His budget came out, it went, it came out of the closet all the way to the left, that budget, 1.75 trillion (dollars), and that's based on assumptions that are wrong. It's going over 2 trillion (dollars). He's going for health care. He's going for the carbon tax. He's going for everything. He's too far left.

DR. MCLAUGHLIN: Okay, okay. You know what that's called by some people? It's called snow. And this is a snow job. In a snowstorm, you can't find your way. Is that what Obama does?

MS. CROWLEY: Murkying it up?

DR. MCLAUGHLIN: Does he murk it up?

MS. CROWLEY: Well, listen, I think that when I look at this White House and all I see is panic and fear and doom and gloom, and that's not to say that the economy is not in a crisis, it is, but the problem here is that what we're seeing from this White House and the Treasury Department with a lack of a financial sector bailout with actual details and follow through, you are seeing an arrogant malaise.

(Cross talk.)

DR. MCLAUGHLIN: I want to talk about the number -- excuse me -- the number and the opacity of all of these issues that are blinding him.

MS. CLIFT: He's not hiding anything.

MR. BEINART: He's said exactly what he's -- he says he's going to do health care, he says he going to do global warming, he said he's going to do a big stimulus. He's done exactly what he said he was going to do.

DR. MCLAUGHLIN: Is Krauthammer right? Is it slight of hand?

MR. BEINART: No. It's an ambitious agenda, but it's a popular agenda.

DR. MCLAUGHLIN: Exit question. Is this criticism of Obama building? Will it build, or will it ebb?

MR. BUCHANAN: It is going to build and build and build. He has overloaded the circuit. And this program which nobody thinks is going to work had better work or they're going to be wiped out in 2010.

DR. MCLAUGHLIN: So that might ease the way for Tim Pawlenty, right?

MS. CLIFT: He is overloading the circuit. He has two agendas, the one that he ran on and the one that's been forced on him. And he's trying to do both.

DR. MCLAUGHLIN: He is overloading the circuit.

MR. BEINART: Not if you ask the American people.

MS. CLIFT: All the pieces fit together, and the American people, so far, are --

DR. MCLAUGHLIN: Do you think they can sort them out? Why isn't he focusing on the economy?

MR. BEINART: He is.

DR. MCLAUGHLIN: Exclusively.

MR. BEINART: Health care is part of the economy. So is energy.

(Cross talk.)

DR. MCLAUGHLIN: You know why? You know why? What does he do at the health conference? He says, I don't want to interfere with any of the proceedings now going on. It sounds as though it's going to be a committee action --

MR. BEINART: No, that's smart because he doesn't want to get too identified with any specifics. That's exactly what George W. Bush did.

DR. MCLAUGHLIN: You know why? You know why?

MS. CROWLEY: Come on, that's his job! MR. BEINART: No, it's not.

MS. CROWLEY: Yes, it is.

MR. BEINART: No it's not. Smart presidents basically hang back a little bit and take credit.

DR. MCLAUGHLIN: He's building to hold his negatives to a minimum in 2012.

MR. BEINART: His negatives may go beyond 30 percent, heaven forbid.

MS. CROWLEY: The question is, is criticism going to continue to build? Yes, it will. And that's why he's moving 1,000 miles an hour because he knows he's got to jam everything into this agenda.

DR. MCLAUGHLIN: Issue Four: Stock market guru.

PRESIDENT BARACK OBAMA: (From videotape.) You spend all your time worrying about that, then you're probably going to get the long- term strategy wrong.

DR. MCLAUGHLIN: President Obama may now be stock analyst Obama. The stock market is safe, Barack says so, if you wait long enough, which we may have to do. In four months, the Dow Jones Industrial has dropped some 3,000 points. Nevertheless, the president says, buy and be patient.

PRESIDENT OBAMA: (From videotape.) Buying stocks is a potentially good deal if you've got a long-term perspective on it.

DR. MCLAUGHLIN: How long a perspective? Some say four years, 2012, after the president's reelection is safely behind him.

So is stock analyst Obama right? Is now the time to buy? Do you think the market will settle down?

MR. BUCHANAN: Stock analyst Obama is right. Let me tell you. When General Electric which I believe -- of course, I worked for the company -- is going to survive and it's at $6 a share, if I were a young man, I would put money into it. He's right. It's 6,000, John. It's come down from 14,000. It may be crunched a bit. But in the long term, it's going to come back if the country comes back, and I believe it will. But an awful lot of people have been burned and wiped out in the interim.

DR. MCLAUGHLIN: Haven't we seen a billionaire who invested x billions of dollars in GE?

MR. BEINART: We have, that's Warren Buffett. He hasn't done so well. But I don't think it's Barack Obama's place, actually, to be telling Americans where they should put their money. He may well be right, the stock market -- but it's not really the president's job to basically tell you to --

DR. MCLAUGHLIN: Wait a minute. You think the stock market is demeaning?

MR. BEINART: No, but Americans might want to put their money in bonds, they might want to put it in housing. So it's not his position to tell them where to invest. DR. MCLAUGHLIN: A stock market has existed, not this stock market, since 1606. Did you know that?

MS. CROWLEY: Sixteen o six?

DR. MCLAUGHLIN: Yeah, it had to do with spices from Indiana.

MS. CLIFT: I agree with --

(Cross talk.)

MR. BUCHANAN: Nobody was here in 1606, John. They didn't arrive until (1609 ?).

MR. BEINART: There were Native Americans who were here in 1606, Pat.

(Laughter.)

DR. MCLAUGHLIN: I didn't say a U.S. stock market, I said a stock market.

MS. CLIFT: I agree with Pat that if you have a long-time horizon, that buying stocks that are now under $1 that were once blue- chip stocks is probably a good investment. But I don't think it's Barack Obama's place to get into this. Ordinary consumers, I don't think, are going to follow his advice. And Wall Street recoiled in horror, and they look at this as a naive thing for a president to do. And Wall Street is already suspicious of this administration, whether they've got the cajones to pull all this off. And I think this just added to the sense of unease.

DR. MCLAUGHLIN: Okay, who's to blame?

PRESIDENT OBAMA: (From videotape.) I found this national debt, doubled, wrapped in a big bow, waiting for me as I stepped into the Oval Office.

(New videotape.) There were a lot of bad decisions that were made. We are cleaning up that mess. (New videotape.) When we walked in the door, we found a budget deficit of $1.3 trillion.

DR. MCLAUGHLIN: Pinning the economic rap on George Bush Mr. Obama may feel is smart politics. James Cramer of "Mad Money" fame says Obama's negativity is producing fear in the market.

JAMES CRAMER (CNBC financial analyst): (From videotape.) Is nothing safe? Can any group be protected from the wealth-destroying efforts of President Obama? So far, it seems like everything this president touches -- health care, the drug stocks, defense stocks, construction, the oils, even the utilities -- they all get crushed. You need to Obama-proof your portfolio. That's right, as in bomb- proof.

DR. MCLAUGHLIN: Question: Is Cramer's criticism excessive or on target, regarding Obama?

Peter.

MR. BEINART: It's excessive. You know, Obama's only been there for a little while. This, he hadn't hit bottom when he came in. I think the person who deserves the most blame is Alan Greenspan, who kept interest rates much too low for much too long and created this bubble.

DR. MCLAUGHLIN: Who else? What other president urged (buy, buy ?) in any regard? George Bush did.

MS. CROWLEY: Well, listen. I agree with Eleanor --

DR. MCLAUGHLIN: And what about George Bush Sr.? Didn't he do something in 1991?

(Cross talk.)

MR. BUCHANAN: George Bush -- when I was running against him, George, he went down to Rockville, I believe, and bought four pair of socks to beat the recession.

MR. BEINART: Did that work?

DR. MCLAUGHLIN: This is George H.W. Bush?

MR. BUCHANAN: George H.W. Bush, yeah.

DR. MCLAUGHLIN: There you go.

MS. CLIFT: If everybody buys four pairs of socks, we can get out of this thing.

(Laughter.) (Cross talk.) MS. CROWLEY: I wish it were that easy. Cramer's criticism is right on target. Barack Obama's known for his oratorical skills, and yet he has done nothing to inspire any kind of confidence in investors, people who have skin in the game. The stock market has lost 3,000 points since this guy was elected. They believe that his policies are crushing free enterprise, they're crushing the investor class, they don't like it.

DR. MCLAUGHLIN: Congratulations, Sir Ted Kennedy. Bye-bye.

END.