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THE MCLAUGHLIN GROUP HOST: JOHN MCLAUGHLIN PANEL: PATRICK BUCHANAN, MSNBC; ELEANOR CLIFT, NEWSWEEK; MONICA CROWLEY, SYNDICATED RADIO COMMENTATOR; KRISHNA GUHA, FINANCIAL TIMES TAPED: FRIDAY, MARCH 20, 2009 BROADCAST: WEEKEND OF MARCH 21-22, 2009

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DR. MCLAUGHLIN: Issue One: Congress Pushes Back.

PRESIDENT BARACK OBAMA: (From videotape.) I don't want to quell anger. I think people are right to be angry. I'm angry.

DR. MCLAUGHLIN: Angry at what? Angry, allegedly, at the $165 million in bonuses to AIG staff. The failing AIG is the largest publicly held insurance company in the U.S. and one of the 18 largest companies in the world, with 116,000 employees. Size and standing? Yes, okay. But solvent? Barely. To stay afloat, AIG relies on taxpayer money, $180 billion altogether in federal bailouts.

Now, get this. Millions of dollars in holiday bonuses were given to AIG's upper echelon. Seventy-three employees -- the chief agents, by the way, of AIG's withering -- got bonuses of $1 million to $6.5 million each. This $165 million bonus payout was redirected by the U.S. Congress this week as CEO Edward Liddy sat in his witness chair and took heat.

REP. GARY ACKERMAN (D-NY): (From videotape.) Pay the $165 million back. Take it out of your profits down the road. Eat it now. It's a lot sweeter now than it's going to be later, because you've got legislation coming down the pike that they're going to call "I can't believe it's not waterboarding."

DR. MCLAUGHLIN: Liddy met Ackerman halfway.

EDWARD LIDDY (AIG CEO): (From videotape.) This morning I've asked the employees of AIG Financial Products to step up and do the right thing. Specifically, I've asked those who received retention payments in excess of $100,000 or more to return at least half of those payments.

DR. MCLAUGHLIN: But Liddy defended the bonus bonanza. It was either bonus or bust, he said.

MR. LIDDY: (From videotape.) I'm trying desperately to prevent an uncontrolled collapse of that business. This is the only way to improve AIG's ability to pay taxpayers back quickly and completely and the only way to avoid a systemic shock to the economy that the U.S. government help was meant to relieve.

DR. MCLAUGHLIN: On Thursday, Congress played its hand. The House passed a bill that would tax bonuses of employees earning more than $250,000 at those companies that received $5 billion or more in bailout funds. The bonuses will be taxed at a 90 percent rate.

Question: President Obama voiced outrage over the bonuses and said he wanted Geithner to figure out how to recoup them. Mr. Obama thereby focused the popular spotlight squarely on Wall Street. What was Obama trying to divert our attention from?

MR. BUCHANAN: The day before Obama said that, the administration, in the person of Mr. Summers and others, said, "We can't get them back. They're contractual obligations." And when the populist firestorm hit, suddenly Obama got out in front of this pitchfork-wielding crowd and said, "Let's go get 'em back," John.

And so that's what Congress has done. Congress has -- in this sense, I think Congress has behaved demagogically and irresponsibly. I think their legislation is close to a bill of attainder. It's directed at a particular tiny class. It's directed to get Congress off the hook for Mr. Dodd's having changed that amendment, which would have forbidden these things. The Democratic Party is in a panic, and it's behaving like a mob in panic.

DR. MCLAUGHLIN: Eleanor. MS. CLIFT: I think there are a lot of Republicans who voted for that 90 percent tax increase too, Pat, so it's not just the Democrats who are in a panic. It's the entire government and the Congress, because this has really touched a nerve. The derivatives and all the fancy financial maneuvering, people can't really follow. But they get it when the people who made the risky bets are now getting rewarded for their behavior to the tune of millions of dollars in some cases.

So I think the Congress is -- it's appropriate for them to respond. The bill may not hold up in court, but it just does not -- it strains credulity that the government, which now owns 80 percent of AIG and has poured $200 billion into that company, that then we listen to Mr. Liddy, who, granted, was brought in after the fact, and he says that they may all collapse if they don't get to keep their $165 million, or half of it. That doesn't compute.

MS. CROWLEY: You asked what President Obama was trying to distract us from -- two things. First of all, all of the Democrats in the House and the Senate voted for the economic stimulus package except for seven Democrats in the House, but the vast majority voted for it. That's where the provision was, put in by Chris Dodd on the Senate side, to protect those bonuses and make sure those bonuses went through.

Nobody in the House or the Senate had the time to read the thousand-page-plus economic stimulus bill. They all voted for it. Obama signed it into law. So they all sanctioned these bonuses by going ahead with the stimulus package. So he's trying to distract from that.

The other thing he's trying to distract from is that while we're all focused on $165 million, as appalling as these bonuses are, we're not focused on the trillions of dollars being laid out across the board in the budget, in the stimulus, in the pork and in the waste, nationalizing health care and the whole bit. This is a giant distraction. I'm not saying it's not worthy of some concern, but it's a distraction from the much bigger numbers and the vast amount of money being spent here.

DR. MCLAUGHLIN: Krishna, about $170 million involved in the bonus -- for all the bonuses that were paid out.

MR. GUHA: That's right.

DR. MCLAUGHLIN: However, there's another number related to AIG, and that's the insurance claims that were brought against them by banks around the world. What is that amount of money?

MR. GUHA: Well, this is in the tens of billions of dollars, so vastly more money than we're talking about. DR. MCLAUGHLIN: The figure I have is $120 billion was paid out by AIG to banks around the globe. Now, how does that figure into this matter, if at all?

MR. GUHA: Well, the connection is this. AIG essentially wrote insurance on a bunch of dodgy structured credit products that were built off of mortgages that have gone bad.

DR. MCLAUGHLIN: Where? Where?

MR. GUHA: It sold this insurance to banks around the world, particularly banks in Europe. Now, what happened is these bets all went south. The European banks and Goldman Sachs and some of the banks in the U.S. called the money from AIG. AIG is not in a position to pay that back. That's why the federal government had to come in in the first place.

DR. MCLAUGHLIN: The federal government bailed out, what, about $180 billion?

MR. GUHA: That's right, so AIG could make good what it owed to these other banks.

DR. MCLAUGHLIN: One hundred and twenty billion (dollars) to those banks.

We're talking "b" as in "boy" billion --

MR. GUHA: That's right.

DR. MCLAUGHLIN: -- as opposed to $170 million for the bonuses.

MR. BUCHANAN: And they kept it --

DR. MCLAUGHLIN: Is there any case that can be made for the executives who claimed a bonus in the light of that development? What about the paperwork involved? What about the fact that they know all these people and there's kind of a fraternity? Does that work against them or for them? Are they trying to maintain these clients abroad?

MR. GUHA: So here's the link. The link is that the people at AIG Financial Products, who were getting these retention bonuses, were the people who wrote these stupid contracts in the first place, right?

MS. CLIFT: Right.

MR. GUHA: So what enrages people --

DR. MCLAUGHLIN: That's the $120 billion.

MR. GUHA: Yeah. But what enrages people is that these are the guys who built the bomb, and now we're having to pay them to dismantle the bomb. The bomb is these tens of billions in payments owed to all the banks around the world.

MR. BUCHANAN: You don't give the Unabomber a retention bonus. But, John, your point is --

DR. MCLAUGHLIN: Why the emphasis on the bonuses instead of the emphasis --

MR. BUCHANAN: You are exactly right.

DR. MCLAUGHLIN: -- on the $120 billion?

MR. BUCHANAN: You are exactly right. And it is the foreign banks -- Deutsche Bank, the Societe Generale -- DR. MCLAUGHLIN: French banks.

MR. BUCHANAN: -- Barclay's got it; all of these people got it. And not only that; this was done by -- and the biggest winner in the U.S. was Goldman Sachs.

MR. GUHA: Absolutely.

MR. BUCHANAN: They kept this secret during the election.

DR. MCLAUGHLIN: Why is Obama deflecting attention, if that's a proper verb, and --

MR. BUCHANAN: Well, these --

DR. MCLAUGHLIN: -- going after bonuses of executives --

MR. BUCHANAN: He's being dragged --

DR. MCLAUGHLIN: -- when it's piddling in comparison?

MR. BUCHANAN: But he's being dragged in that direction.

DR. MCLAUGHLIN: Why? Why?

MR. BUCHANAN: Because that's where the mob is. But, John, you are exactly right. This is where the big, giant scandal is, because not only Paulson, but Mr. Rubin who was in it, both of them are alumni of Goldman Sachs. This private money, about $12 billion, went to Goldman Sachs in the fall. We were kept in the dark during the election. But nobody's focused on it.

MS. CLIFT: Yeah, but --

DR. MCLAUGHLIN: Is that kind of an economic mafia going around the world?

MR. BUCHANAN: You bet it is.

DR. MCLAUGHLIN: That's too strong a word, but it is a fraternity, is it not? They all know each other.

MR. BUCHANAN: It's a cabal.

MS. CLIFT: AIG actually operated like a hedge fund that sold insurance on the side. They made a lot of bets that went sour. They operate in 140 countries around the world and in all 50 states. And I guess I believe that if you let them collapse, the whole financial system collapses.

MR. GUHA: This --

MS. CLIFT: Point of order. MS. CROWLEY: The argument --

MS. CLIFT: Excuse me. Point of order. Chris Dodd put in language that would not have allowed these retention bonuses to be paid, and it was the administration who didn't want them to be --

MS. CROWLEY: This was -- (laughs) --

MS. CLIFT: Excuse me --

MS. CROWLEY: You can defend Chris Dodd all you want, but he had a tortured explanation for it this week.

MS. CLIFT: Excuse me -- who didn't --

MS. CROWLEY: Dodd.

MS. CLIFT: It was the administration who intervened, and so it's Geithner who is really going to take the heat here. And he is part of the Wall Street crowd. He speaks Wall Street speak. And I think right now it's very difficult for Obama to get rid of him, but --

DR. MCLAUGHLIN: Quickly.

MS. CROWLEY: Well, I mean, between Chris Dodd and Tim Geithner, I mean, it's the lesser of two evils here.

MS. CLIFT: Well, you got it inaccurate, so I want to correct that.

MS. CROWLEY: No, I didn't. It was actually a very tortured explanation on the part of Chris Dodd. He tried to throw the administration under the bus, who had a completely different explanation.

MS. CLIFT: He changed (the terms ?).

DR. MCLAUGHLIN: What's your point?

MS. CROWLEY: The justification for the bonuses now, because this is like an organized crime syndicate, is that they have to keep these guys because they did build the bomb. And now they're afraid that if they go elsewhere, they're going to turn around and demolish, torpedo AIG with the information that they have.

DR. MCLAUGHLIN: Do you want to make a point here?

MR. GUHA: Only to say that the key question here in terms of the tens of billions of dollars going to foreign banks is that, in the first instance, there is no question U.S. taxpayers' money is going out to foreign banks. That's the facts of the matter. Now, the defense for this, such as it is, is that all these banks are interconnected. It's a global financial system. So if you bring down the European banks --

MR. BUCHANAN: Why don't the --

MR. GUHA: -- you'll end up bringing down the U.S. banks too. That is the defense for it.

DR. MCLAUGHLIN: I'm not sure that's altogether understood. Why is that the case?

MR. BUCHANAN: John, why don't --

DR. MCLAUGHLIN: Why the interconnection?

MR. BUCHANAN: They all are.

MR. GUHA: Because all of these banks are involved in massive trades with each other.

MR. BUCHANAN: John --

MR. GUHA: So you want to avoid a domino situation.

DR. MCLAUGHLIN: But why isn't that hit head-on by Obama? Why doesn't he describe the larger picture here? Why is he focusing on the bonuses for executives? You heard him.

MR. GUHA: I don't think he wants to get into a conversation trying to explain --

DR. MCLAUGHLIN: Why is that? Does that affect his other legislation?

MR. GUHA: I don't think he wants to have to explain why you have to bail out Societe Generale.

DR. MCLAUGHLIN: Does that also affect any future plans he has for the economy?

MR. BUCHANAN: Well, John, there's a reason --

MR. GUHA: I think there's a very serious problem right now.

DR. MCLAUGHLIN: Let him finish.

MR. GUHA: There's a very serious problem right now that the way this ends up is it poisons the political mood about dealing with the banks. Congress isn't going to be able to put up any more money to rescue the banks and repair our financial system. The bankers and investment people aren't going to want to have anything to do with any more government programs. This lack of cooperation could be devastating for the U.S. economy.

DR. MCLAUGHLIN: In a sense, you could say this is a false perpetrator. The perpetrator, so to speak, is the whole financial system, the European banks that are largely getting the benefit of this $120 billion.

MR. GUHA: Well, in defense of the European banks, they entered into a business contract with AIG, and the question is whether AIG is going to make good on that contract. MR. BUCHANAN: John, the question is, why don't the Germans bail out their own bank? Why don't the French bail out their own bank? Why don't the Canadians? Why don't the Brits?

DR. MCLAUGHLIN: Do we have a whipping boy here?

MS. CLIFT: Because AIG belongs to us. (Laughs.)

DR. MCLAUGHLIN: The whipping boy is the bonuses.

MR. BUCHANAN: No, the whipping boy is the folks back in September, Paulson and these guys. Why did they send that money secretly, if you will, to bail out Goldman Sachs and all these European banks? The American people would have raised --

DR. MCLAUGHLIN: Why did they? Why did they? Because it's all --

MS. CLIFT: It's all --

DR. MCLAUGHLIN: Was Paulson justified in doing that?

MR. GUHA: At the time when this broke --

MS. CLIFT: Given the alternative, yes.

DR. MCLAUGHLIN: Let him finish.

MR. GUHA: I think it's very hard for us to judge this. Remember what happened when they let Lehman go. There were a lot of people saying, "Enough with these bailouts. Let them go. It's not going to make too much trouble anyway."

MR. BUCHANAN: But Lehman's an American bank. Lehman's American.

MR. GUHA: Lehman's collapse (skittled ?) the markets globally and caused vast losses. Now, AIG was going down on the Tuesday after the Lehman weekend. What would have happened if we'd let Lehman collapse and then had AIG collapse on top of that?

DR. MCLAUGHLIN: What about the obligation of our politicians, particularly the president of the United States, to make this all clear to the American people?

MR. GUHA: I think that's absolutely true. The past administration failed to do it, and the current administration is --

DR. MCLAUGHLIN: This administration has praised itself on its transparency. Is this transparency?

MS. CLIFT: He's got a primetime news conference next week. He needs to do a better job explaining, because the chain of events this week really have damaged the president's credibility, and I think they have damaged people's faith in the government to carry out these programs as they're spending billions upon billions. So, yeah, there needs to be some damage control here, rescue effort.

DR. MCLAUGHLIN: Issue Two: Cheney Counterstrikes.

(Begin videotaped segment.)

JOHN KING (CNN): Do you believe the president of the United States has made Americans less safe?

FORMER VICE PRESIDENT DICK CHENEY: I do.

(End videotaped segment.)

DR. MCLAUGHLIN: In his first televised interview since leaving office January 20, the former vice president criticized President Obama freely. Mr. Cheney noted the military and strategic difference between the Bush and Obama administrations; notably, interrogation of terror suspects, Guantanamo Bay's detention facility, the War on Terror, U.S. presence in Iraq, and use of the words "enemy combatants."

FORMER VICE PRESIDENT CHENEY: (From videotape.) We said, "This is a war. It's not a law enforcement problem." Now he's making some choices that, in my mind, will, in fact, raise the risk to the American people of another attack.

DR. MCLAUGHLIN: Question: Is there merit in Obama's claim that he's dealing with messes that he inherited? Eleanor Clift.

MS. CLIFT: Now, what does that have to do with the Cheney comments that you put up on the screen? He's criticizing what the president is doing to mediate the messes he's inherited, the wars and so forth. Okay. I think that --

DR. MCLAUGHLIN: Did you complete that circuit, Eleanor? (Laughter.)

MS. CLIFT: Right, I'm struggling here. You know, the former vice president has very little credibility. And it really, I think, is offensive that he is coming out and saying the fact that we shut or pledged to shut down Guantanamo, which is a mark of shame around the world, and that this president's administration has said waterboarding is torture -- again, responding to a mark of shame against this country.

To say that therefore that makes this country less safe, I would argue it's the opposite. The policies of the Bush administration created more enemies around the world, created more terrorists than we would ever be able to kill or capture.

DR. MCLAUGHLIN: Let me draw that out a little bit, Eleanor's point; okay -- "Not my mess." PRESIDENT OBAMA: (From videotape.) I found this deficit when I showed up. I found this national debt doubled, wrapped in a big bow waiting for me as I stepped into the Oval Office.

PRESIDENT OBAMA: (From videotape.) There were a lot of bad decisions that were made. We are cleaning up that mess.

PRESIDENT OBAMA: (From videotape.) We've got a big mess that we're having to clean up.

DR. MCLAUGHLIN: So does Dick Cheney have a valid point -- one, the origin of this crisis is a flaw in the global economic model? And two, did Bush try to correct the worst of the mortgage problems, only to be blocked by Democrats like Barney Frank and Chris Dodd?

MR. BUCHANAN: Well, listen, the president -- Dick Cheney does have a point. This is a financial crisis, first and foremost. It's not due to the tax cuts and things like that. But it did happen on Bush's watch. And Barack Obama is exactly right.

He inherited a terrible situation in the financial community and the economy going down.

DR. MCLAUGHLIN: Is it good politics for Obama to keep repeating that?

MR. BUCHANAN: No, that is a mistake, because what that does, it gets him away from the new politics of bipartisanship, reaching out, "Let's work together to solve this, put that behind us."

DR. MCLAUGHLIN: More than that --

MR. BUCHANAN: That is a mistake.

DR. MCLAUGHLIN: You know, I mean, it's common law in this country that you don't really poke at the previous president, blaming him; you just pick up where you left off.

MR. BUCHANAN: That's why I said it's a mistake.

DR. MCLAUGHLIN: Does it look a little bit --

MS. CROWLEY: Immature.

MR. GUHA: Right. But let's be fair here. The housing bubble and the credit bubble burst, let's say, 2007, right. Obama hasn't been in office for more than a couple of months. So we can't possibly say that, you know, he did not inherit this problem. He clearly did.

Cheney makes one very interesting point, I think, which isn't discussed enough here, which is folks in the U.S. like to think of this crisis as a made-in-America crisis. Actually, it has a lot to do with how the whole global economy is fitted together, how you had surplus savings from these fast-growing emerging economies like China washing around the world, pushing down interest rates, pushing down risk (premiums ?), stimulating markets like housing markets, encouraging people to borrow, go out and spend, rely on their home as an ATM. This all happened in a global system. It wasn't just made in America.

MS. CLIFT: Also -- DR. MCLAUGHLIN: Okay, on this "We inherited an economic mess" rap, Cheney made this point.

FORMER VICE PRESIDENT CHENEY: (From videotape.) I think the notion that you can just sort of throw it off on the prior administration, that's interesting rhetoric, but I don't think anybody really cares a lot about that. What they care about is what's going to work and how we're going to get out of these difficulties.

DR. MCLAUGHLIN: Question: Is Mr. Cheney also correct about Fannie Mae and Freddie Mac? Bush tried to correct problems, but the Democrats in Congress blocked him. Monica.

MS. CROWLEY: Yes, that is true. President Bush was beating the drum on this very early, starting in 2001, the first year of his presidency. He sent his first Treasury secretary, Paul O'Neill, out. John Snow followed him; Hank Paulson. They were all beating the drum. And the Democrats, who then controlled Congress after 2006, blocked the reforms that the Bush administration wanted in place to try to contain the contagion that was starting to blow up around Fannie and Freddie.

And you mentioned Barney Frank. Barney Frank and Chris Dodd were these guys who were out there defending Fannie and Freddie, saying, "Things aren't so bad. Don't worry about it. We're going to recover."

MS. CLIFT: Well --

MS. CROWLEY: And they were the ones who blocked what the president was trying to do. So to try to pile on Bush and say --

MR. GUHA: It was Republicans in Congress too -- Democrats and Republicans in Congress both.

MS. CROWLEY: Democrats controlled Congress since the election --

MR. GUHA: Only since 2006 --

MS. CROWLEY: -- in 2006.

MR. GUHA: -- not since 2001.

MS. CLIFT: Right.

MS. CROWLEY: And they were the ones who were blocking when it really mattered.

MS. CLIFT: Right. And I recall President Bush running on an ownership society. It was part of his compassionate conservatism. And look, both parties are to blame, but the deregulatory fever that the Republicans ran on -- and it goes back a number of years -- created the climate for the next 15 years. MS. CROWLEY: Right, Eleanor. We need reregulation. Exit question --

MS. CLIFT: We do. And we're going to get it, John. (Laughs.)

DR. MCLAUGHLIN: Is this just sour grapes from Mr. Cheney, or are his observations pearls of wisdom? Bad fruit or precious jewels? Which is it, Pat?

MR. BUCHANAN: I think Cheney -- there's a good deal of truth in what Cheney had to say. But at the same time, the Bush administration is far from blameless for the mess we are in.

DR. MCLAUGHLIN: Eleanor.

MS. CLIFT: Look, Democrats have run on the back of Herbert Hoover for half a century. There's a lot more mileage to get out of George W. Bush and Dick Cheney and the administration --

DR. MCLAUGHLIN: Now you know that there's revisionist history being written on Hoover, which means there's hope for all of us.

MR. BUCHANAN: It's a little late, John. (Laughs.)

MS. CROWLEY: If President Obama --

DR. MCLAUGHLIN: Something's better than nothing.

Go ahead.

MS. CROWLEY: If President Obama is going to continue going down this track of blaming Bush and Cheney for everything, that is not leadership, and eventually it's going to backfire on him. And in terms of the national security issues, oh, you know, President Obama really inherited a mess. He inherited a national security apparatus that kept us safe for seven and a half years. And if he starts piece by piece, as he is doing, deconstructing that national security apparatus and we are hit again, his presidency is over.

DR. MCLAUGHLIN: You mean, like Guantanamo?

MS. CROWLEY: And matriculating these terrorists from Guantanamo Bay into the United States, into the criminal justice process.

DR. MCLAUGHLIN: Krishna, what's the answer?

MR. GUHA: On the economy, which is my area of expertise, I would say Cheney's right to highlight global factors. He's right to point out Fannie and Freddie. But he's wrong to suggest that Fannie and Freddie was the heart of this mortgage problem. This was a much wider problem -- collapse of discipline in the private markets as well as bad doings in Fannie and Freddie and with their sponsors on the Hill. DR. MCLAUGHLIN: Issue Three: A Troubling Trend.

GEN. PETER CHIARELLI (Army vice chief of staff): (From videotape.) For many, many years we were well below the national average. That's because we did things -- we were very aware of this problem and did things to prevent suicides. My fear is, as stressed a force we are today, that we forgot to do some of those things.

DR. MCLAUGHLIN: Army Vice Chief of Staff Peter Chiarelli's fear may now become reality. In 2007, the Army reported 115 suicides. In 2008, that figure rose to 143. In 2009, this year, January and February, the trend continues upward -- 24 soldier suicides in January, 18 in February. If this rate stays the same, the Army in '09 will suffer 252 suicides.

The Army is now responding, and this week announced a new suicide prevention program. General Chiarelli testified before Congress, stressing basic practices like asking a buddy if he or she needs help and making sure he or she is linked up with a chaplain or mental health provider.

Chiarelli also targets a larger goal -- changing the culture of America's Army. Quote: "In the past, there has been a stigma associated with seeking help from any kind of mental health professional. Soldiers avoided seeking this type of assistance for fear that it might adversely affect their careers. That is not the case, and we are taking the necessary steps to change this misperception across the Army," unquote.

Question: What explains the rise of soldier suicides? I ask you, Monica.

MS. CROWLEY: You know, in past wars -- World War II, Korea, Vietnam -- once you left the military, once the war ended, the soldiers were matriculated back out into society without a safety net of some sort of mental health provision or health care for the soldiers. And I think now we have a much better system in place where we do have those mental health professionals, psychiatrists and medical doctors, available.

I think a lot of it is cultural to the military, where they don't want to seek the help because, say, their fathers or their grandfathers left World War II or Korea, for example, and said, "I don't need any help," when, in fact, they probably did. I also think these long engagements in Iraq and Afghanistan, the stop loss --

DR. MCLAUGHLIN: Long deployments.

MS. CROWLEY: -- long deployments and so on, really wear on these soldiers. And that's why I think you're seeing an escalated rate.

DR. MCLAUGHLIN: What about the Iraq war itself and the fact that there seems to be little honor bestowed on those who are serving in the military --

MS. CLIFT: Oh, I don't agree with that.

DR. MCLAUGHLIN: You do not agree with that.

MS. CLIFT: No, I don't. I think even people who oppose the war --

DR. MCLAUGHLIN: You don't think that the Iraq war is so unpopular --

MS. CLIFT: The war is unpopular, but the soldiers are popular. And that's what makes it so different from Vietnam, where --

DR. MCLAUGHLIN: You don't see any rub-off. MS. CLIFT: No, I don't. And I think the suicides of people who are serving have gone up because you do have these repeated deployments, some of them three and four times. And then they're taking people into the military to meet their recruiting tools that may not necessarily be suited for Army life. They're not checking them out as rigorously before they go in. And then the stigma still exists. People don't want to look like sissies --

MR. GUHA: This is --

MR. BUCHANAN: The stigma --

MS. CLIFT: -- complaining about mental health issues.

DR. MCLAUGHLIN: Go ahead, Krishna.

MR. GUHA: No, I was just going to say, isn't this evidence of how much of a burden for the nation is being carried by actually a very small number of people serving in the military and their families? I mean, you know, there are so many ways in which the pressure of these deployments is likely to lead to increased suicide, but one of which is the amount of time that people are being kept away from their families.

I mean, people are under enormous stress. If they have emotional or mental problems, the fact that they are not spending time with their wives, they're not seeing their kids, their parents, their brothers and sisters -- I think the nation is putting too much strain on too few people.

DR. MCLAUGHLIN: Strain on the relationships.

MR. GUHA: Strain on the individuals that they're having to carry; you know, this, and their families.

DR. MCLAUGHLIN: The deployment now has been increased to 15 months. That has not been reduced to 12, correct?

MR. BUCHANAN: They're cutting that back. They're cutting that back to normal, I think, 13-month deployments.

DR. MCLAUGHLIN: Was it ill-advised to start with?

MR. BUCHANAN: Well, you know, John, it was a tough situation in the war and they had so many troops. And that's why they did it, because they had to do it.

DR. MCLAUGHLIN: Out of time. Bye-bye.



END.

DR. MCLAUGHLIN: Why did they? Why did they? Because it's all --

MS. CLIFT: It's all --

DR. MCLAUGHLIN: Was Paulson justified in doing that?

MR. GUHA: At the time when this broke --

MS. CLIFT: Given the alternative, yes.

DR. MCLAUGHLIN: Let him finish.

MR. GUHA: I think it's very hard for us to judge this. Remember what happened when they let Lehman go. There were a lot of people saying, "Enough with these bailouts. Let them go. It's not going to make too much trouble anyway."

MR. BUCHANAN: But Lehman's an American bank. Lehman's American.

MR. GUHA: Lehman's collapse (skittled ?) the markets globally and caused vast losses. Now, AIG was going down on the Tuesday after the Lehman weekend. What would have happened if we'd let Lehman collapse and then had AIG collapse on top of that?

DR. MCLAUGHLIN: What about the obligation of our politicians, particularly the president of the United States, to make this all clear to the American people?

MR. GUHA: I think that's absolutely true. The past administration failed to do it, and the current administration is --

DR. MCLAUGHLIN: This administration has praised itself on its transparency. Is this transparency?

MS. CLIFT: He's got a primetime news conference next week. He needs to do a better job explaining, because the chain of events this week really have damaged the president's credibility, and I think they have damaged people's faith in the government to carry out these programs as they're spending billions upon billions. So, yeah, there needs to be some damage control here, rescue effort.

DR. MCLAUGHLIN: Issue Two: Cheney Counterstrikes.

(Begin videotaped segment.)

JOHN KING (CNN): Do you believe the president of the United States has made Americans less safe?

FORMER VICE PRESIDENT DICK CHENEY: I do.

(End videotaped segment.)

DR. MCLAUGHLIN: In his first televised interview since leaving office January 20, the former vice president criticized President Obama freely. Mr. Cheney noted the military and strategic difference between the Bush and Obama administrations; notably, interrogation of terror suspects, Guantanamo Bay's detention facility, the War on Terror, U.S. presence in Iraq, and use of the words "enemy combatants."

FORMER VICE PRESIDENT CHENEY: (From videotape.) We said, "This is a war. It's not a law enforcement problem." Now he's making some choices that, in my mind, will, in fact, raise the risk to the American people of another attack.

DR. MCLAUGHLIN: Question: Is there merit in Obama's claim that he's dealing with messes that he inherited? Eleanor Clift.

MS. CLIFT: Now, what does that have to do with the Cheney comments that you put up on the screen? He's criticizing what the president is doing to mediate the messes he's inherited, the wars and so forth. Okay. I think that --

DR. MCLAUGHLIN: Did you complete that circuit, Eleanor? (Laughter.)

MS. CLIFT: Right, I'm struggling here. You know, the former vice president has very little credibility. And it really, I think, is offensive that he is coming out and saying the fact that we shut or pledged to shut down Guantanamo, which is a mark of shame around the world, and that this president's administration has said waterboarding is torture -- again, responding to a mark of shame against this country.

To say that therefore that makes this country less safe, I would argue it's the opposite. The policies of the Bush administration created more enemies around the world, created more terrorists than we would ever be able to kill or capture.

DR. MCLAUGHLIN: Let me draw that out a little bit, Eleanor's point; okay -- "Not my mess." PRESIDENT OBAMA: (From videotape.) I found this deficit when I showed up. I found this national debt doubled, wrapped in a big bow waiting for me as I stepped into the Oval Office.

PRESIDENT OBAMA: (From videotape.) There were a lot of bad decisions that were made. We are cleaning up that mess.

PRESIDENT OBAMA: (From videotape.) We've got a big mess that we're having to clean up.

DR. MCLAUGHLIN: So does Dick Cheney have a valid point -- one, the origin of this crisis is a flaw in the global economic model? And two, did Bush try to correct the worst of the mortgage problems, only to be blocked by Democrats like Barney Frank and Chris Dodd?

MR. BUCHANAN: Well, listen, the president -- Dick Cheney does have a point. This is a financial crisis, first and foremost. It's not due to the tax cuts and things like that. But it did happen on Bush's watch. And Barack Obama is exactly right.

He inherited a terrible situation in the financial community and the economy going down.

DR. MCLAUGHLIN: Is it good politics for Obama to keep repeating that?

MR. BUCHANAN: No, that is a mistake, because what that does, it gets him away from the new politics of bipartisanship, reaching out, "Let's work together to solve this, put that behind us."

DR. MCLAUGHLIN: More than that --

MR. BUCHANAN: That is a mistake.

DR. MCLAUGHLIN: You know, I mean, it's common law in this country that you don't really poke at the previous president, blaming him; you just pick up where you left off.

MR. BUCHANAN: That's why I said it's a mistake.

DR. MCLAUGHLIN: Does it look a little bit --

MS. CROWLEY: Immature.

MR. GUHA: Right. But let's be fair here. The housing bubble and the credit bubble burst, let's say, 2007, right. Obama hasn't been in office for more than a couple of months. So we can't possibly say that, you know, he did not inherit this problem. He clearly did.

Cheney makes one very interesting point, I think, which isn't discussed enough here, which is folks in the U.S. like to think of this crisis as a made-in-America crisis. Actually, it has a lot to do with how the whole global economy is fitted together, how you had surplus savings from these fast-growing emerging economies like China washing around the world, pushing down interest rates, pushing down risk (premiums ?), stimulating markets like housing markets, encouraging people to borrow, go out and spend, rely on their home as an ATM. This all happened in a global system. It wasn't just made in America.

MS. CLIFT: Also -- DR. MCLAUGHLIN: Okay, on this "We inherited an economic mess" rap, Cheney made this point.

FORMER VICE PRESIDENT CHENEY: (From videotape.) I think the notion that you can just sort of throw it off on the prior administration, that's interesting rhetoric, but I don't think anybody really cares a lot about that. What they care about is what's going to work and how we're going to get out of these difficulties.

DR. MCLAUGHLIN: Question: Is Mr. Cheney also correct about Fannie Mae and Freddie Mac? Bush tried to correct problems, but the Democrats in Congress blocked him. Monica.

MS. CROWLEY: Yes, that is true. President Bush was beating the drum on this very early, starting in 2001, the first year of his presidency. He sent his first Treasury secretary, Paul O'Neill, out. John Snow followed him; Hank Paulson. They were all beating the drum. And the Democrats, who then controlled Congress after 2006, blocked the reforms that the Bush administration wanted in place to try to contain the contagion that was starting to blow up around Fannie and Freddie.

And you mentioned Barney Frank. Barney Frank and Chris Dodd were these guys who were out there defending Fannie and Freddie, saying, "Things aren't so bad. Don't worry about it. We're going to recover."

MS. CLIFT: Well --

MS. CROWLEY: And they were the ones who blocked what the president was trying to do. So to try to pile on Bush and say --

MR. GUHA: It was Republicans in Congress too -- Democrats and Republicans in Congress both.

MS. CROWLEY: Democrats controlled Congress since the election --

MR. GUHA: Only since 2006 --

MS. CROWLEY: -- in 2006.

MR. GUHA: -- not since 2001.

MS. CLIFT: Right.

MS. CROWLEY: And they were the ones who were blocking when it really mattered.

MS. CLIFT: Right. And I recall President Bush running on an ownership society. It was part of his compassionate conservatism. And look, both parties are to blame, but the deregulatory fever that the Republicans ran on -- and it goes back a number of years -- created the climate for the next 15 years. MS. CROWLEY: Right, Eleanor. We need reregulation. Exit question --

MS. CLIFT: We do. And we're going to get it, John. (Laughs.)

DR. MCLAUGHLIN: Is this just sour grapes from Mr. Cheney, or are his observations pearls of wisdom? Bad fruit or precious jewels? Which is it, Pat?

MR. BUCHANAN: I think Cheney -- there's a good deal of truth in what Cheney had to say. But at the same time, the Bush administration is far from blameless for the mess we are in.

DR. MCLAUGHLIN: Eleanor.

MS. CLIFT: Look, Democrats have run on the back of Herbert Hoover for half a century. There's a lot more mileage to get out of George W. Bush and Dick Cheney and the administration --

DR. MCLAUGHLIN: Now you know that there's revisionist history being written on Hoover, which means there's hope for all of us.

MR. BUCHANAN: It's a little late, John. (Laughs.)

MS. CROWLEY: If President Obama --

DR. MCLAUGHLIN: Something's better than nothing.

Go ahead.

MS. CROWLEY: If President Obama is going to continue going down this track of blaming Bush and Cheney for everything, that is not leadership, and eventually it's going to backfire on him. And in terms of the national security issues, oh, you know, President Obama really inherited a mess. He inherited a national security apparatus that kept us safe for seven and a half years. And if he starts piece by piece, as he is doing, deconstructing that national security apparatus and we are hit again, his presidency is over.

DR. MCLAUGHLIN: You mean, like Guantanamo?

MS. CROWLEY: And matriculating these terrorists from Guantanamo Bay into the United States, into the criminal justice process.

DR. MCLAUGHLIN: Krishna, what's the answer?

MR. GUHA: On the economy, which is my area of expertise, I would say Cheney's right to highlight global factors. He's right to point out Fannie and Freddie. But he's wrong to suggest that Fannie and Freddie was the heart of this mortgage problem. This was a much wider problem -- collapse of discipline in the private markets as well as bad doings in Fannie and Freddie and with their sponsors on the Hill. DR. MCLAUGHLIN: Issue Three: A Troubling Trend.

GEN. PETER CHIARELLI (Army vice chief of staff): (From videotape.) For many, many years we were well below the national average. That's because we did things -- we were very aware of this problem and did things to prevent suicides. My fear is, as stressed a force we are today, that we forgot to do some of those things.

DR. MCLAUGHLIN: Army Vice Chief of Staff Peter Chiarelli's fear may now become reality. In 2007, the Army reported 115 suicides. In 2008, that figure rose to 143. In 2009, this year, January and February, the trend continues upward -- 24 soldier suicides in January, 18 in February. If this rate stays the same, the Army in '09 will suffer 252 suicides.

The Army is now responding, and this week announced a new suicide prevention program. General Chiarelli testified before Congress, stressing basic practices like asking a buddy if he or she needs help and making sure he or she is linked up with a chaplain or mental health provider.

Chiarelli also targets a larger goal -- changing the culture of America's Army. Quote: "In the past, there has been a stigma associated with seeking help from any kind of mental health professional. Soldiers avoided seeking this type of assistance for fear that it might adversely affect their careers. That is not the case, and we are taking the necessary steps to change this misperception across the Army," unquote.

Question: What explains the rise of soldier suicides? I ask you, Monica.

MS. CROWLEY: You know, in past wars -- World War II, Korea, Vietnam -- once you left the military, once the war ended, the soldiers were matriculated back out into society without a safety net of some sort of mental health provision or health care for the soldiers. And I think now we have a much better system in place where we do have those mental health professionals, psychiatrists and medical doctors, available.

I think a lot of it is cultural to the military, where they don't want to seek the help because, say, their fathers or their grandfathers left World War II or Korea, for example, and said, "I don't need any help," when, in fact, they probably did. I also think these long engagements in Iraq and Afghanistan, the stop loss --

DR. MCLAUGHLIN: Long deployments.

MS. CROWLEY: -- long deployments and so on, really wear on these soldiers. And that's why I think you're seeing an escalated rate.

DR. MCLAUGHLIN: What about the Iraq war itself and the fact that there seems to be little honor bestowed on those who are serving in the military --

MS. CLIFT: Oh, I don't agree with that.

DR. MCLAUGHLIN: You do not agree with that.

MS. CLIFT: No, I don't. I think even people who oppose the war --

DR. MCLAUGHLIN: You don't think that the Iraq war is so unpopular --

MS. CLIFT: The war is unpopular, but the soldiers are popular. And that's what makes it so different from Vietnam, where --

DR. MCLAUGHLIN: You don't see any rub-off. MS. CLIFT: No, I don't. And I think the suicides of people who are serving have gone up because you do have these repeated deployments, some of them three and four times. And then they're taking people into the military to meet their recruiting tools that may not necessarily be suited for Army life. They're not checking them out as rigorously before they go in. And then the stigma still exists. People don't want to look like sissies --

MR. GUHA: This is --

MR. BUCHANAN: The stigma --

MS. CLIFT: -- complaining about mental health issues.

DR. MCLAUGHLIN: Go ahead, Krishna.

MR. GUHA: No, I was just going to say, isn't this evidence of how much of a burden for the nation is being carried by actually a very small number of people serving in the military and their families? I mean, you know, there are so many ways in which the pressure of these deployments is likely to lead to increased suicide, but one of which is the amount of time that people are being kept away from their families.

I mean, people are under enormous stress. If they have emotional or mental problems, the fact that they are not spending time with their wives, they're not seeing their kids, their parents, their brothers and sisters -- I think the nation is putting too much strain on too few people.

DR. MCLAUGHLIN: Strain on the relationships.

MR. GUHA: Strain on the individuals that they're having to carry; you know, this, and their families.

DR. MCLAUGHLIN: The deployment now has been increased to 15 months. That has not been reduced to 12, correct?

MR. BUCHANAN: They're cutting that back. They're cutting that back to normal, I think, 13-month deployments.

DR. MCLAUGHLIN: Was it ill-advised to start with?

MR. BUCHANAN: Well, you know, John, it was a tough situation in the war and they had so many troops. And that's why they did it, because they had to do it.

DR. MCLAUGHLIN: Out of time. Bye-bye.



END.