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THE MCLAUGHLIN GROIUP HOST: JOHN MCLAUGHLIN PANEL: PATRICK BUCHANAN, MSNBC; ELEANOR CLIFT, NEWSWEEK; MONICA CROWLEY, SYNDICATED RADIO COMMENTATOR; MORTIMER ZUCKERMAN, U.S. NEWS & WORLD REPORT TAPED: FRIDAY, AUGUST 14, 2009 BROADCAST: WEEKEND OF AUGUST 15-16, 2009

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MR. MCLAUGHLIN: Nix Obamacare.

(Begin videotaped segment.)

TOWN HALL MEETING PARTICIPANT: They're Marxists. They're socialists. And you will not abandon that party.

TOWN HALL MEETING PARTICIPANT: The majority is against this plan. The majority is against this plan.



TOWN HALL MEETING PARTICIPANT: You have awakened the sleeping giant. (End videotaped segment.)

MR. MCLAUGHLIN: Vox populi, the voice of the people. The message: No on Obamacare. The president's effort to reform the health-care insurance system, an effort that includes a government- funded insurance agency, is flagging. Forty-nine percent of Americans now disapprove of Obama's health insurance vision, 43 percent approve.

Most worrisome is the growing defection from his critical political bloc, the independents. Thirty-five percent -- over one out of three -- of independents are now more sympathetic to the town-hall protesters, 16 percent less so.

Question: How do you explain the rancor the town-hall meetings are exhibiting, Pat?

MR. BUCHANAN: Well, there's real anger, John, at the belief in middle America that they're suffering the brunt of this recession at the same time Wall Street got a bailout and the politicians had that huge stimulus pig-out. That is one thing.

Secondly, health care; they believe this reform is going to take away benefits they have and that they expected for the rest of their life. And I'll tell you, it is accelerated by these Democrats, Steny Hoyer and Pelosi, calling them un-American, Harry Reid calling them "evil-mongers," other people calling them mobs and thugs and even Nazis. And I'll tell you, the backlash against the Democratic Party here is astonishing. Middle America, by two to one, they agree with the protesters and they don't agree with the Democratic Party.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: First of all, Nancy Pelosi and Steny Hoyer said to shout down other people's views is un-American. They didn't call the shouters un-American.

I think the president has lost the momentum here because people who have insurance are worried that they're going to lose something in this very extensive package. And the president really doesn't have a single bill that he can point to. He doesn't have a clear message. And all of the bills floating around on Capitol Hill provide lots of inviting targets for people who want to kill health care and want to kill the Obama presidency along with it.

The political stakes here are huge. And the president has done a much better job coopting the special interests that killed health care the last time around -- the pharmaceuticals, the hospital industry, the AMA. They're all tentatively on board. It's the political opposition that's much more intense this time, and it seems to have caught the Obama administration by surprise.

MS. CROWLEY: What you're seeing is that the American people are mad as hell and they're not going to take it anymore. They see an out-of-control, unresponsive government, which is supposed to be responsive and representative of what they want and what they need. They don't see that. They saw nearly a trillion dollars in economic stimulus that failed to stimulate the economy. It was a political act, not an economic act. They see cap and trade passed in the House, which is tantamount to the biggest tax increase in the history of the world.

This is the straw that broke the camel's back -- health-care overhaul, a nationalizing or near-nationalizing of nearly 20 percent of the U.S. economy. People are really angry, John. And for Democrats to show contempt for the American people when those same American people pay their salaries to represent their interests is not exactly a very good political move.

President Obama, who on the campaign trail was a master of rhetoric -- really he mastered the art of the silver tongue -- for him to not be able to sell his plan now, this is why you see these numbers falling, and also because the substance of the plan is so bad that the American people are recoiling from it.

MR. MCLAUGHLIN: Mort.

MR. ZUCKERMAN: Well, I think they understand now that this plan involves an expense and a deficit over the first decade of at least a trillion dollars. And what are they getting for it? Ninety percent of Americans have health care. Seventy-seven percent really like it. This is money that is going to the people of lower income. The whole idea of getting health-care costs under control seems to have been lost in the process. They don't know what in the world this program is all about. He's lost the momentum entirely on this thing, and it is getting worse and worse.

MR. MCLAUGHLIN: You don't think -

MR. ZUCKERMAN: He's now resorting to a kind of attack that really is not going to suit him well.

MR. MCLAUGHLIN: Because they can get the plan now on the computer and there is widespread computer use and they can see what's in the plan, is that what is causing the disdain on the part of the American people towards the plan?

MR. BUCHANAN: John -

MR. MCLAUGHLIN: They understand it. They understand this so- called government option, which is a slippery semantic use of words anyway.

MR. ZUCKERMAN: Right. No, I think that is a part of it. But what the fundamentals are is something that is very disturbing to them. We are looking at a huge addition to the national debt. People are really concerned. They now realize that debts have consequences. They have mortgages that exceed the value of their homes. They have credit cards they can't (pay). And they see this in the country, and they don't like it.

MR. MCLAUGHLIN: Hold on. Let me get this in. What does Barack Obama really believe in his heart is the ideal health insurance system for the United States?

PRESIDENT BARACK OBAMA: (From videotape.) If I were starting a system from scratch, then I think that the idea of moving towards a single-payer system could very well make sense. That's the kind of system that you have in most industrialized countries around the world.

MR. MCLAUGHLIN: What does a single-payer system mean, Eleanor?

MS. CLIFT: A single-payer system is what we have with the Medicare system, where the government pays. You still can go to your own doctor, but the government is basically the bursar. The --

MR. MCLAUGHLIN: Now, Obama likes the single-payer system.

MS. CLIFT: No, he is saying that if you were to start over, it would be much more efficient to have a single-payer system.

But we have a whole insurance industry in place, and he is not about to disrupt that. And, in fact, Howard Dean, who is a physician and who is a liberal, says that he is in favor of what he calls the hybrid plan, which is uniquely American, where the insurance companies --

(Cross talk.)

MR. MCLAUGHLIN: Hold on.

MS. CLIFT: Excuse me -- plus the government, because the insurance companies have basically gotten out of hand. And I don't know if anybody on this panel has ever been sick, but, you know, insurance companies get in the way between you and your doctor. And what the Obama administration is trying to do is to beef up the public part --

MR. MCLAUGHLIN: Do you think --

MS. CLIFT: -- of the system so the insurance companies don't rule the roost.

MR. MCLAUGHLIN: Do you think he can get to what he wants, a single-payer system, which is a government-financed system, through the method that he has, arguing, as Mankiw, the economist, does, that you can't really compete with a piece of it being government because the government, with taxpayer money, can move in and take over?

(Cross talk.)

MS. CLIFT: I started out -- excuse me --

MR. BUCHANAN: Hold it, Eleanor. You've been talking --

MS. CLIFT: I started out quoting Howard Dean and I didn't finish that. He supports the hybrid system. This is not a Trojan horse.

MS. CROWLEY: Of course it is.

MR. BUCHANAN: That is exactly what it is.

MR. MCLAUGHLIN: Let Pat in. MR. BUCHANAN: Let me tell you --

MS. CLIFT: And if it were, it would be -- (inaudible) -- but it isn't.

MR. BUCHANAN: John, look, Obama basically believes in the single-payer system. He basically believes in a government takeover. They desperately want to get the government option in there, because when it gets in there, it undercuts the private insurance guys. People more and more move toward it. It's a complete takeover. That's what people are --

MS. CLIFT: I didn't know --

MR. MCLAUGHLIN: Has the public -- hold on, Eleanor. Has the public found out something else from reading it on the computer, namely, that this new system, when it's installed, is mandatory on everyone?

MR. BUCHANAN: Exactly. There's all these things in there. Obama comes in -- "You can keep your doctor" --

MR. MCLAUGHLIN: You don't have the choice about taking the insurance. You must take the insurance.

MR. BUCHANAN: He promised --

MR. MCLAUGHLIN: Is that understood?

MR. BUCHANAN: He promised you can have your own doctor --

MS. CROWLEY: Or you will be fined.

MR. BUCHANAN: -- and your own insurance company. But everybody knows all these pressures are moving you away from that --

MS. CLIFT: Well, there's nothing --

MR. MCLAUGHLIN: Let her in.

MS. CROWLEY: (Inaudible.)

MS. CLIFT: No, this is three against one, as it always is. But there is nothing sinister about requiring people to have health insurance. We have automobile insurance. What that does is it increases the pool so everybody can get covered.

MS. CROWLEY: If you don't --

MS. CLIFT: This is not socialistic.

MS. CROWLEY: If you don't -- MR. ZUCKERMAN: Automobile --

MR. MCLAUGHLIN: Hold on, Monica.

MR. ZUCKERMAN: Automobile insurance is not mandatory, by the way, by way of analysis.

MR. MCLAUGHLIN: Okay, I'm going to go to you right after this.

MS. CLIFT: Well, driving without --

MR. ZUCKERMAN: (Inaudible.)

MR. MCLAUGHLIN: I think it's really four to one, Eleanor.

MS. CLIFT: I agree. (Laughs.)

MR. MCLAUGHLIN: Okay, Obama's self-inflicted injuries.

Why is Obama losing the political battle? Has he wounded himself? Self-inflicted injuries; for example, surgeons. Did Obama borrow trouble by taking this shot at doctors, notably surgeons?

PRESIDENT OBAMA: (From videotape.) You come in and you've got a bad sore throat or your child has a bad sore throat or has repeated sore throats. The doctor may look at the reimbursement system and say to himself, "You know what? I make a lot more money if I take this kid's tonsils out."

MR. MCLAUGHLIN: A cheap shot? Tonsillectomies for a quick buck? Whatever. These words triggered this response from the American College of Surgeons, self-described as, quote, "a scientific and educational organization that was founded in 1913 to raise the standards of surgical practice," unquote. The college has more than 76,000 members and is the largest organization of surgeons in the world.

What they said, quote: "That remark of President Obama was ill- informed and dangerous, and we were dismayed by this characterization of the work surgeons do. Surgeons make decisions about recommending operations based on what's right for the patient," unquote.

Question: Was it a mistake for President Obama to suggest that a surgeon would remove a child's tonsils in order to make more money? Mort.

MR. ZUCKERMAN: Yes. I mean, it's the kind of political charge in this environment that, in my judgment, is not going to get him anywhere. But what he is going for and is talking about is the fee- for-services program, whereby every single procedure, every single visit, every single prescription, is a part of the bill that is paid for by the federal government. And right now there are no incentives to keep that system under control. That's what he didn't introduce in his health-care program and what he should have done, because that's what's causing runaway health-care costs, which is what the country knows we have, and what we know we have to do --

MS. CROWLEY: And also --

MR. MCLAUGHLIN: Let's pursue this a little bit further. Okay, hitting surgeons again.

Obama took another shot at surgeons during a town hall in Portsmouth, New Hampshire this week.

PRESIDENT OBAMA: (From videotape.) If a family-care physician works with his or her patient to help them lose weight, modify diet, monitors whether they're taking their medications in a timely fashion, they might get reimbursed a pittance. But if that same diabetic ends up getting their foot amputated, that's $30,000, $40,000, $50,000 immediately the surgeon is reimbursed.

MR. MCLAUGHLIN: This is the surgeons' response to the president's remarks. Quote: "There are times when even a perfectly managed diabetic patient needs a surgeon. The president's remarks are truly alarming and run the risk of damaging the all-important trust between surgeons and their patients. We assume that the president made these mistakes unintentionally, but we would urge him to have his facts correct.

"

Question: Was it a mistake for President Obama to suggest that a surgeon would amputate a foot in order to make more money?

MS. CROWLEY: Yes. And he keeps making this mistake. The first one you could say, "Well, he went off the Teleprompter; maybe he didn't really mean it." But he keeps --

MR. MCLAUGHLIN: He was reading that, wasn't he?

MS. CROWLEY: -- he keeps kicking doctors in the head. And I'll tell you something else. The health-care reform panel advising him is led by Dr. Ezekiel Emanuel, Rahm Emanuel's brother. None of these doctors advising him see patients on a daily basis. They're all philosophers. They're into ethics. None of them see patients. That leads to the tone-deafness that we have seen in his --

MR. BUCHANAN: (Inaudible.)

MS. CLIFT: (Inaudible.)

MR. MCLAUGHLIN: Let Pat in, Eleanor.

MR. BUCHANAN: John, this is an utterly shameful, contemptible thing to say about doctors. Many of us have had great favors done for us by doctors. But I'll tell you this. Him keep coming back to that, that reflects who he is and where he comes from. Now, he ran a great campaign as a moderate. What is coming out is a hard leftist, anti- capitalist, socialist.

MR. MCLAUGHLIN: Pat, wait a minute. Does it go beyond that? Is it class warfare?

MR. BUCHANAN: That's exactly -- he's a hard left-wing -- this is Saul Alinsky speaking.

MS. CLIFT: (Laughs.) He wants to amputate all the conservatives' foot? Is that what you're trying to say?

MR. BUCHANAN: No, somebody saying doctors -- MR. MCLAUGHLIN: Do you want to defend Obama on this?

MS. CLIFT: I want to say that you have completely distorted what he said.

MR. MCLAUGHLIN: Oh, really?

MS. CLIFT: What he is saying is that the primary-care physicians, who take care of people who are mostly well, do not make money. And what we need is people to manage people with chronic illnesses. And the surgeons make a large amount of money for doing an operation. He's not saying the operation wasn't necessary.

MS. CROWLEY: (Laughs.)

MS. CLIFT: But we have to shift to the chronic management of illness and away from --

MR. MCLAUGHLIN: Well, he also --
MS. CLIFT: -- the fee for service. And part of --

MR. ZUCKERMAN: I mean, give me a break.

MS. CLIFT: I'm sorry, you can laugh all you want, but that's the way --

MR. ZUCKERMAN: That's not what he said.

MS. CLIFT: That is what he said.

MR. ZUCKERMAN: We understand plain English. For goodness' sakes, you could not misinterpret what he said.

MS. CLIFT: The doctors are basically supporting the plan because they know the system we have now is unsustainable.

MR. MCLAUGHLIN: The AMA --

MS. CROWLEY: Most doctors do not --

MR. MCLAUGHLIN: The AMA membership is in revolt.

MS. CROWLEY: They are.

MS. CLIFT: I don't --

MR. MCLAUGHLIN: They are in revolt.

MS. CLIFT: I don't think that's the case.

MR. MCLAUGHLIN: That's what the delegation of the AMA said. MS. CLIFT: Primary-care physicians are very supportive of --

MS. CROWLEY: No, they are not.

MR. MCLAUGHLIN: Obama also falsified -- he falsified the fees for taking off a foot.

MS. CROWLEY: That's right.

MS. CLIFT: No --

MR. MCLAUGHLIN: It's $1,050 by Medicare.

(Cross talk.)

MR. MCLAUGHLIN: Exit question: Has the momentum of Obama's fundamental health-care reform stalled irretrievably, or can he regain traction?

MR. BUCHANAN: It is in reverse. He is losing every day. But I do agree with Eleanor to this extent. The correlation of forces out there for some kind of reform enable Obama, if he gets his act together, I think, to get something, if he starts dropping off these crazy things that have been add-ons.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: Yes, he can get the momentum back, and in part thanks to Pat and Monica and people like them and their over-the-top distortions of what this health-care reform is about. (Laughter.)

MR. MCLAUGHLIN: I didn't hear my name in there.

MR. BUCHANAN: Are we causing the demonstrations? (Laughs.)

MS. CLIFT: In the end, I'm still optimistic. I believe the truth will win out.

MR. ZUCKERMAN: I think it --

MS. CROWLEY: He --

MR. ZUCKERMAN: I'm sorry.

MS. CROWLEY: The American people are in near-revolt. You see these poll numbers hemorrhaging on health-care reform. Over 50 percent -- 53, 56 percent of senior citizens are now in revolt against this. Over 60 percent of independents are now in revolt against this. I think that he has lost the momentum, because it's no longer about health care; it's about the government's role in individuals' lives.

MR. MCLAUGHLIN: Mort. MR. ZUCKERMAN: I think he's got to refocus this and really talk about cost containment. That's not what he's talking about, not in a reasonable way.

MR. BUCHANAN: Mort, cost containment comes at the expense of the elderly. That's -- (inaudible).

MR. ZUCKERMAN: No, it doesn't. The fee for service is broken there. It's got to be a change in that system. Otherwise the federal government is seen as the person who is going to pay all the bills.

MR. BUCHANAN: The elderly see them taking away their benefits at the end of their lives.

MR. ZUCKERMAN: The more things you do --

MS. CLIFT: And $30,000 to remove a foot --

MR. MCLAUGHLIN: Hold on. We've got to move on.

MS. CLIFT: -- versus caring for a patient over a period of years who is a diabetic has a lot to do with fee for service.

MR. MCLAUGHLIN: He's lost momentum irretrievably on this formulation. If he drops public option, which Congress will force him to do -- so-called public option, which means government-funded health insurance -- and he concentrates on one or two major changes in the health reform, he can get a health bill, like portability and its successor to that, then he will get his bill. And he will go for that bill, and he will say, "We'll accomplish it later."

Issue Two: Hillary in Africa.

SECRETARY OF STATE HILLARY CLINTON: (From videotape.) The United States condemns these attacks and all those who commit them and abet them. And we state to the world that those who attack civilian populations using systematic rape are guilty of crimes against humanity.

MR. MCLAUGHLIN: Secretary of State Hillary Clinton spent 11 days in Africa this month. The visit included a trip to the refugee camp in the Congo, now the Democratic Republic of the Congo, the DRC, formerly Zaire. She condemned the epidemic of rape that has broken out in the Congo.

Question: Why should Hillary be spending her time, her talent and her status in Africa? I ask you, Eleanor.

MS. CLIFT: Well, it's instead of going to Martha's Vineyard. I mean, it's the dead of August and she's spending a long time there. And she's particularly paying attention to development issues, and development issues regarding women. She's really -- ever since she was first lady of Arkansas, she's been involved in those microloans, trying to empower women in these communities.

And also, Africa, some places are doing well. There are some failed areas there, and they're breeding ground for terrorism.

MR. MCLAUGHLIN: Yes.

MS. CLIFT: And, in fact, al Qaeda's over there as we speak. So, I mean, there's a serious side to this, in addition to the -- MR. MCLAUGHLIN: We have a lot of people over there. We have a lot of military people in the embassies. We have a lot of CIA people in the embassies; embassies in all the countries. They all communicate with each other. So it's quite possible that Hillary could get information. Isn't that true?

MR. ZUCKERMAN: Yeah, absolutely.

MR. MCLAUGHLIN: About al Qaeda.

MR. ZUCKERMAN: But it is still a side show. Let's face it, it is not any of the major issues that the United States --

MR. MCLAUGHLIN: Should she --

MR. ZUCKERMAN: -- is dealing with in national security terms.

MR. MCLAUGHLIN: Should she take credit?

MR. ZUCKERMAN: Well, she's doing what she can do. That, unfortunately, is where she is.

MR. BUCHANAN: John, this is the situation. Mitchell's got the Middle East. Dennis Ross has Iran and Iraq. Holbrooke's got Af-Pak. Gates is all over the place. And her husband is over there taking the cream off the North Korea thing. So she gets Africa.

MR. MCLAUGHLIN: Is Africa a failed continent?

MR. BUCHANAN: Yes.

MR. MCLAUGHLIN: A failed continent?

MS. CLIFT: It's a neglected continent. We have a president whose ancestry goes back there. So I think he actually thinks a lot about paying attention to Africa.

MR. MCLAUGHLIN: Hillary took a question about what allegedly Mr. Clinton thinks about Chinese trade in the Congo.

(Begin videotaped segment.)

Q What does Mr. Clinton think, through the mouth of Mrs. Clinton?

SEC. CLINTON: Wait. You want me to tell you what my husband thinks? My husband is not the secretary of State. I am.

Q (Off mike.)

SEC. CLINTON: If you ask my opinion, I will tell you my opinion. I'm not going to be channeling my husband. (End videotaped segment.)

MR. MCLAUGHLIN: Question: Why did this question touch a nerve with Hillary? Is it the point you made earlier?

MR. BUCHANAN: And she's very tired. It's a long, hard trip. And she let down her guard. And it's a bad mistake, because that dominated her whole trip.

MR. MCLAUGHLIN: Well, when they mentioned Clinton --

MR. BUCHANAN: Yeah --

MR. MCLAUGHLIN: -- does that -- (inaudible) -- about Holbrooke, about Mitchell, about Biden, all getting a piece of the State Department action?

MR. BUCHANAN: And about Clinton bringing home the two hostages from North Korea and him being in Vegas with his --

MS. CLIFT: She supported that. She supported that. She was his boss, in effect. (Laughs.)

MR. BUCHANAN: I know.

MR. MCLAUGHLIN: Is Hillary Clinton a figurehead, a token?

MS. CLIFT: No. She's a substantial person. And she could have used a little more humor in that answer, but she's got three and a half more years. She's going to do fine.

MR. MCLAUGHLIN: Has she done a lot already, particularly with China?

MS. CLIFT: Behind the scenes, she's very active, yes.

MS. CROWLEY: Look, Hillary --

MS. CLIFT: She's been to China.

MS. CROWLEY: Hillary certainly had a moment. To be fair to her, there was a mistranslation. The questioner meant Mr. Obama. "What does he think?" It was translated as Mr. Clinton.

MR. MCLAUGHLIN: Right.

MS. CROWLEY: But the point is that when President Obama proposed this job to her, he promised her that she'd have free rein in personnel appointments. And all of the big portfolios, all of those things have been taken away from her.

MR. MCLAUGHLIN: Mitchell has delivered Syria. You know about that. But should the president put limits on these other envoys that are crowding Hillary? MR. ZUCKERMAN: He brought them in there specifically to cover these areas. He didn't bring them in there to give them limits. You can't limit somebody who wants to try and resolve the Middle East dispute between the Israelis and the Palestinians. You can't limit somebody who's --

MR. MCLAUGHLIN: Well, if you favor dividing up the world, as Obama is doing, and giving it out to envoys, in addition to the secretary of State --

MR. ZUCKERMAN: If I were the secretary of State, I would object to it. It's the White House that is dominating foreign policy, which it always has, especially in this administration.

MR. MCLAUGHLIN: Actually, on "Meet the Press" she said it's a good idea --

MR. ZUCKERMAN: Of course that's what she's going to say.

MR. MCLAUGHLIN: -- because the world is big and the world is complex.

Issue Three: Economic Headwinds.

Data released on Thursday show the U.S. is still facing strong economic headwinds.

Item: Retail sales unexpectedly fell.

Item: Weekly jobless claims unexpectedly rose.

Item: Foreclosures up, roiling the housing market.

That was the bad news. Now some sunnier signs for the economy: Home sales up 3.8 percent in the second quarter; productivity, hours worked, up; U.S. imports and exports, up slightly; construction spending also up; unemployment down last month to 9.4 percent from 9.5 percent; $787 billion economic stimulus, a limited but significant effect. Some economists say it may have saved 1 million jobs from being lost. The stock market up 40 percent from its low in March. The Federal Reserve says this week that the economy is leveling out.

But the banks are still troubled. Credit remains tight. And we have 7 million people unemployed since the recession began. It could take a long time to get those jobs back -- maybe a decade.

Question, Mort: Is the economy leveling out?

MR. ZUCKERMAN: No, I don't believe it is. It is not falling off the end of the table. It is just rolling downhill at a slightly lesser pace in the last couple of months. But we are by no means through this recession and we are by no means through the problems created by higher unemployment. Homes where the mortgage exceeds the value of the home, which today is 25 percent of the homes -- Deutschebank predicts that in 2011, 48 percent of the homes will have mortgages that exceed the value of the homes. That is a huge, huge event in this country. It will affect everybody's sense of net worth and the consumption economy that we are relying on. So we're not out of the woods. I'm not saying it's going to be a depression, but we've still got a lot of problems ahead of us.

MR. MCLAUGHLIN: The Cash for Clunkers program was supposed to bail us out. What happened to that?

MR. ZUCKERMAN: Well, it --

MS. CLIFT: It's going strong. It's a wonderful program. MR. MCLAUGHLIN: But it's not helping retail sales. It's bleeding it from retail.

MR. ZUCKERMAN: That's right. That's the problem. It did not really stimulate retail -- it has stimulated car sales --

MS. CLIFT: Car sales.

MR. ZUCKERMAN: -- at the expense of other consumption. And that's the problem. We have a very --

MR. BUCHANAN: But John --

MR. MCLAUGHLIN: Well, what is the net on clunkers? Is it still a plus?

MR. ZUCKERMAN: It's a plus.

MS. CLIFT: It's a visible sign of the government doing something for the little guy. And for that alone, I think it's positive, as opposed to more money going to the banks.

MR. BUCHANAN: It was $1 billion. That's about one-tenth of 1 percent of the stimulus program. One of the problems, John, is that the banks still have this big, cancerous tumor in their belly. All these bad toxic paper are being kept on the banks' books at 100 cents on the dollar. You're going to have commercial real estate crashing. So I think you've got -- I mean, but you do have Europe. You've got France and Germany and China --

MR. ZUCKERMAN: (Inaudible) -- commercial real estate.

MR. MCLAUGHLIN: What? What about them?

MR. BUCHANAN: Some of your property -- (laughs) --

MR. MCLAUGHLIN: France, Germany and China are doing well.

(Cross talk.)

MR. MCLAUGHLIN: Okay. Chairman Bernanke, where's the Federal Reserve, and what is it doing?

BEN BERNANKE (Chairman, Federal Reserve Board): (From videotape.) The Federal Reserve is here and is going to do everything possible to support this recovery.

MR. MCLAUGHLIN: If we have indeed averted economic catastrophe, it is Ben Bernanke who deserves the credit, many believe. But his job is on the line. Bernanke's four-year term ends in January, and President Obama must decide whether to reappoint him to a second four- year term. Wall Street wants him to stay, and so do most economists. A Wall Street Journal survey of several dozen economists last week found that all but two, 98 percent, support another term for Bernanke. President Obama threw him a compliment two months ago.

PRESIDENT OBAMA: (From videotape.) I think he has done a fine job under very difficult circumstances.

MR. MCLAUGHLIN: Not only Bernanke should get the credit, but also Hank Paulson. Why?

MS. CROWLEY: Well, because they began the TARP program. They began the financial sector --

MR. MCLAUGHLIN: Liquidity.

MS. CROWLEY: Exactly right. But, you know, all the politicians, Barack Obama and the Democrats, come out. Now they're going to start claiming credit that the economic stimulus got the economy moving. What really got it moving was the Fed pumping all of this money into the economy. But that presents the next upcoming challenge for Bernanke or his successor, which is going to be inflation.

MR. MCLAUGHLIN: Do you think, Eleanor, that our leader --

MS. CLIFT: I agree with President Obama. I think Bernanke has done a good job.

MR. MCLAUGHLIN: Do you think Bernanke should get a second term?

MS. CLIFT: I think so, because I think stability and consistency is very important when you're trying to rebuild confidence in the economy. And I think he's been more visible than his predecessor.

MR. BUCHANAN: They've got to, John, I think, because he is a stable figure. And also I think Summers broke his pick when he went on national television and said all options are on the table, including tax increases.

MS. CROWLEY: Raising taxes.

MR. BUCHANAN: I think Summers is done. I think he's got to pick him. The guy's -- international bankers, others -- he's the one figure a lot of people have confidence in.

MR. MCLAUGHLIN: Do you share that view?

MR. ZUCKERMAN: Absolutely. Bernanke redefined the role of the Federal Reserve. He saved the financial system almost singlehandedly by the new programs he put in.

MR. MCLAUGHLIN: Will heads roll at the White House because of the health-care debacle? MR. BUCHANAN: Yep.

MS. CLIFT: No.

MR. MCLAUGHLIN: No?

MS. CROWLEY: Yes. That was my prediction last week. (Laughs.)

MR. ZUCKERMAN: In a few months, yes; not right now, but in a few months.

MR. MCLAUGHLIN: Yes, indeed, they will. And we can't wait for it.

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