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THE MCLAUGHLIN GROUP HOST: JOHN MCLAUGHLIN PANEL: PATRICK BUCHANAN, MSNBC; ELEANOR CLIFT, NEWSWEEK; RICH LOWRY, NATIONAL REVIEW; JAMES WARREN, CHICAGO TRIBUNE TAPED: FRIDAY, SEPTEMBER 25, 2009 BROADCAST: WEEKEND OF SEPTEMBER 26-27, 2009

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DR. MCLAUGHLIN: Issue One: Iran Intrigue.

PRESIDENT BARACK OBAMA: (From videotape.) Iran has a right to peaceful nuclear power that meets the energy needs of its people. But the size and configuration of this facility is inconsistent with a peaceful program.

FRENCH PRESIDENT NICOLAS SARKOZY (Through interpreter): (From videotape.) If, by December, there is not an in-depth change by the Iranian leaders, sanctions will have to be taken.

BRITISH PRIME MINISTER GORDON BROWN: (From videotape.) The international community has no choice today but to draw a line in the sand. DR. MCLAUGHLIN: President Obama, alongside French President Nicolas Sarkozy and British Prime Minister Gordon Brown, warned Iran to come clean about its nuclear military program, a covert uranium enrichment facility concealed from international inspectors for years.

The secret plant is designed to hold 3,000 centrifuges, enough for one bomb. The U.S., Britain, France, China, Russia and Germany will hold face-to-face talks with Iran next Thursday, October 1.

Question: What sanctions can Obama impose if Iran still balks? Pat Buchanan.

MR. BUCHANAN: Well, I think they're going to go for economic sanctions at the end of December if Iran doesn't negotiate. But John, the key here is that the enrichment facility Obama and the Americans claim is to enrich to weapons-grade uranium, 90 percent uranium. That big plant at Natanz enriches to about 5 percent, which you can use in nuclear power plants. But they are saying -- even though we've known about this for years, they are saying suddenly they're enriching to weapons-grade, or that's what this plant is going to do.

There are a lot of questions to be answered. One of them is, how did the National Intelligence Estimate say Iran ended its program in 2003 to build a bomb if they knew this plant was being built to enrich to weapons-grade? A lot of things unanswered, John, but economic sanctions are the first step.

DR. MCLAUGHLIN: Let me pick up that point before I turn to Eleanor. Obama was first briefed on the plant before his January inauguration. After roughly 60 days in his presidency, then Obama delivered this Valentine to Iran.

PRESIDENT OBAMA: (From videotape.) The United States wants the Islamic Republic of Iran to take its rightful place in the community of nations. This process will not be advanced by threats. We seek instead engagement that is honest and grounded in mutual respect.

DR. MCLAUGHLIN: Question: What did this communicate to Iran about Obama's mindset if, in fact, he was advised of the secret facility and nevertheless he extended this palm of interest to Iran?

MS. CLIFT: Well, first of all, reading the text of the background briefings that they've had in New York by administration officials, they were watching this facility for some time. It takes years to build one of these facilities. And they were unclear whether it was going to be for commercial use. Apparently it would be much larger if it were for commercial use.

So they've been watching this for a long time. And I think it probably was not clear, when President Bush was in office, exactly what this facility was. And given the Bush administration's history with flawed intelligence, they didn't want to jump the gun too fast. I think the president now seems to have the goods on the Iranians. He's caught them essentially red-handed, which increases the leverage that the international community has on Iran. And clearly the president wants to deal with them diplomatically. And their choice is to proceed seriously when the talks get underway. If they don't, I think they risk being treated by this administration and much of the world the way they were during the Bush years. So I think the ball is in the Iranians' court.

DR. MCLAUGHLIN: Welcome, Rich. Is Iran clearly in violation of the Nuclear Nonproliferation Treaty?

MR. LOWRY: Yes, it is. And it also had to declare the decision to build the site, which it didn't. This is the third time they've been called out: In 2002, on a covert program; in 2003, on a program to try to develop a warhead to get on a Shahab missile; and now. And there are probably other secret programs we don't know about.

The question is, what are we going to do about it? Obama seemed set on a policy of engagement no matter what. I think actually the ball is in our court. What are we going to do to try to stop Iran? And I doubt Obama, plus this motley coalition of the Chinese, the Russians, the Europeans, are really going to muster the will and the cohesion to do the sort of sanctions that you need to stop --

DR. MCLAUGHLIN: We have an agency called the International Atomic Energy Agency. And the purpose of that, which is about half a billion dollars in budget -- half a billion -- their objective is to find these things. How is it that if the United States knew about this well in advance, and it had been known by others, the IAEA did not know about it, did not investigate and did not prosecute?

MR. LOWRY: Yeah, that's a great question. It doesn't relate directly to this, but you have the head of that agency, ElBaradei, who basically is doing all he can to suppress the most damning evidence about Iran's program, because he wants to do all he can to stop a confrontation over it rather than to stop the weapon from actually being built. And I think the best spin you can make on how the administration has handled this particular piece of intelligence is that they were planning some sort of Adlai Stevenson moment during the negotiations where they'd say, "Okay, you have the" --

DR. MCLAUGHLIN: So you want to make poor old ElBaradei whipping boy again.

MR. LOWRY: I do. I do.

DR. MCLAUGHLIN: What about the Americans --

MR. LOWRY: I'll do it over and over again.

DR. MCLAUGHLIN: -- the Americans we have serving at the IAEA as representatives of this country? MR. LOWRY: Well, look, he's the head of the thing, and he's clearly gone out of his way to suppress the most damning evidence. We saw that AP report a week or two ago.

DR. MCLAUGHLIN: Well, of course, he's been out of that position, I believe, for about a year, two years.

MR. WARREN: Another thing that's --

DR. MCLAUGHLIN: No?

MR. BUCHANAN: No, he's not.

MR. WARREN: Another thing that's rather curious about this is the formal letter from Iran 'fessing up to this to the aforementioned Vienna-based agency.

What is that all about? What's the catalyst for that? Are they now willing to play by certain --

MR. BUCHANAN: They found out --

MS. CLIFT: They found out --

MR. BUCHANAN: They found out that we knew about it.

MS. CLIFT: Right. Exactly.

MR. WARREN: They were tipped off. But nevertheless --

DR. MCLAUGHLIN: Maybe Obama tipped them off.

MR. WARREN: -- they 'fess up, and --

MS. CLIFT: That's a little too intrigued.

MR. WARREN: To underscore the obvious, obviously this strengthens Obama's hand, it would seem. Obviously it will allow people like Rich and Pat to say that the resolution the other day at the U.N. is basically toothless or --

MR. LOWRY: I'll say that. (Laughter.)

MR. BUCHANAN: Look, I was going to come to ElBaradei's defense until you started this stuff. (Laughs.)

MR. WARREN: The Obama folks would clearly say this is part of the needed multifaceted approach. We have the resolution. Now maybe we can have some sanctions. But at the heart of it, in the near term, this meeting in Geneva aside, this really shows the key problem here. This is a specific, grotesque act of non-compliance.

So what are you going to do? I think one thing that might be on the table is, for all the oil they ship out of there, they still bring back -- they import a whole lot of refined petroleum products. So if you want to get tough economically, and actually sort of hurt them, then really get tough when it comes to that.

DR. MCLAUGHLIN: Jim, is that freaky shirt of yours your answer to the nuclear bomb? MR. WARREN: No, this is from the Tony Blankley memorial collection. (Laughter.) Thank you very much.

DR. MCLAUGHLIN: Exit question: Assign a grade, A to F -- Tony, we love you -- on Obama's U.N. ratcheting up the pressure on Iran. Give him a grade on this, how he ratcheted up the pressure on Iran.

MR. BUCHANAN: I think the way we handled this and dropping the hammer on these guys at this time, I'd give them an A. I think they handled it very well. And I hope it's true that what they're saying is that this is weapons-grade material. But it does raise a question: When did they discover that it was? And if it's that and they can get to weapons-grade in a couple of months, it is very serious stuff.

DR. MCLAUGHLIN: Is that A on substance or A on --

MR. BUCHANAN: I'd give him an A for his handling of this.

DR. MCLAUGHLIN: His handling of it -- total handling.

MR. BUCHANAN: Of this -- today? Yes.

DR. MCLAUGHLIN: And the substance.

MS. CLIFT: No, he gets an A, definitely. And the Iranians evidently discovered that their security had been breached, why is why they drafted this letter to look like they were coming clean. And at the very least, it sets back their program. They've got to either shut this thing down or clean it out or do something. So it was a lot better than having the Israelis go in there and bomb.

MR. WARREN: I'll go with --

DR. MCLAUGHLIN: Hold on.

MR. LOWRY: John, the revelation itself puts pressure on Iran. But in terms of what Obama did at the U.N., it's a D. It was nothing. It was shockingly weak. He's gotten some nice noises from the Russians about sanctions. It probably won't last.

DR. MCLAUGHLIN: Really? You're that tough on them.

MR. LOWRY: Yes, I am.

MR. WARREN: No, style we'll give him definitely a B+. I mean, just the photo op there with Obama and Sarkozy and Brown of Great Britain, I think that was a significant image for the world to see. But again, the history on this subject tends to be, for us and the rest of the world, a lot of tough talk, not a whole lot of action. Let's see what happens this week in Geneva. MR. BUCHANAN: John, the ayatollah has been exposed, if this is true. He issued a fatwa, in effect. "We're not going for nuclear weapons. It's against our religion." His credibility as a religious leader is on the line if, as the Americans claim, this is going to build to bomb-grade material.

DR. MCLAUGHLIN: I have to give him an A on substance and an A+ on diplomatic agility.

MR. LOWRY: (Laughs.)

MR. BUCHANAN: And you're talking about Pittsburgh, not the U.N., right?

MS. CLIFT: No, he's talking about the U.N.

DR. MCLAUGHLIN: No, I'm talking about the U.N.

MS. CLIFT: And he's right.

DR. MCLAUGHLIN: Issue Two: Obama, Not Bush.

PRESIDENT OBAMA: (From videotape.) The United States stands ready to begin a new chapter of international cooperation, one that recognizes the rights and responsibilities of all nations.

DR. MCLAUGHLIN: President Obama addressed the U.N. General Assembly this week. At the U.N. podium, he challenged world leaders to work with the U.S. in confronting problems that afflict mankind: The bomb, global warming, the recession, terrorism.

President Obama promised his fellow world leaders that he would dedicate himself to a new relationship with them, because without them, he stressed, neither he nor the U.S. could solve the world problems. But the president emphasized that with the cooperation of his fellow leaders, the falsification rug would be pulled out from under those who persist in blaming America first.

PRESIDENT OBAMA: (From videotape.) Those who used to chastise America for acting alone in the world cannot now stand by and wait for America to solve the world's problems alone.

DR. MCLAUGHLIN: Question: Has Obama set a new tone for an American foreign policy? Rich Lowry.

MR. LOWRY: Of course, he's set a new tone. I mean, and his main diplomatic instrument is declaiming over and over again how he's not George W. Bush, which everyone knows. John, it's a kind of realism, because he's willing to accept and deal with the world's nastiest regimes, but it's a realism of weakness, because it's based on the idea if we show our self-effacing niceness over and over again, that alone will convince everyone to go along with us. DR. MCLAUGHLIN: On his point that --

MS. CLIFT: I don't think -- this is not self-effacing niceness. This is basically acting in concert with your allies and challenging your allies to step up, maybe help out in Afghanistan.

MR. LOWRY: Yeah. How's that going?

MS. CLIFT: It's also --

MR. LOWRY: How's that going in Afghanistan?

MS. CLIFT: It's also acknowledging that we are playing catch-up on climate change with the Europeans. But it's also saying to China and India, "You've got to come along." You start with words, and then you follow through with policy.

MR. LOWRY: So you think he's going to get troops --

MS. CLIFT: It's --

MR. LOWRY: He's going to get European troops in Afghanistan by being nice?

MS. CLIFT: I don't think -- no. They view it as Bush's war, and they're not interested.

MR. LOWRY: It's ridiculous. It's ridiculous. You think it's Bush's war?

MR. BUCHANAN: It's gotten to be, John --

MS. CLIFT: It started out as Bush's war, definitely.

MR. BUCHANAN: It's gotten to be same old, same old. You know, "We don't torture. I don't do this. I didn't do what Bush did, you know, and I've got a different approach, and why don't you all realize it?" But look what you're dealing with. I mean, half of those countries in there are represented by people that murdered their way to power.

MS. CLIFT: The same old, same old --

DR. MCLAUGHLIN: Hold on, please.

MS. CLIFT: -- is music to the ears of a lot of people, Pat. You may be tone-deaf, but not the rest of the world.

DR. MCLAUGHLIN: All right, please relinquish. Please relinquish. Let's hear Obama speak to that "I'm not George Bush."

PRESIDENT OBAMA: (From videotape.) I've prohibited, without exception or equivocation, the use of torture by the United States of America. (Applause.) I ordered the prison at Guantanamo Bay closed. And we are doing the hard work of forging a framework to combat extremism within the rule of law. DR. MCLAUGHLIN: Question: Why did President Obama say this at the U.N.? I ask you, James.

MR. WARREN: Well, he was, you know, preaching, in a sense, to a certain choir and underscoring the notion that "I'm here as a kind of senior well-resourced partner, not the boss," eschewing what, at least in the first four years of the Bush administration, was, you know, a distinctly unilateral approach. Well, I think it was very different in the last four years.

DR. MCLAUGHLIN: He wants to make it clear we're on a new foreign policy approach, right?

MR. WARREN: And you guys can't deny the fact, if you travel around the world, that our name is mud in all too many places. You may think that's empirically unfair; it's a misinterpretation of what Bush was trying to do. But we have an awful reputation in the world. This guy is trying to resurrect it.

Now, the proof of the pudding is there are a lot of yellow flashing lights out there, whether it's dealing with Russia or Iran's nukes or with climate control. You've got people like China and Russia and India who are saying, "No, no, no." And he's going to have to get pretty tough --

MR. BUCHANAN: This might surprise you, but --

MR. WARREN: -- in some places and do something.

MR. BUCHANAN: -- I agree. I agree with his policy of engagement with Russia, with Burma, with some of these other countries. But for heaven's sakes, stop the apology tours. Stop saying all the wonderful things I have done since I got here. People are getting bored with it, and it comes to sound like blame America first.

MS. CLIFT: Pat, you may be getting bored, but you can't speak for the populists of the world.

MR. BUCHANAN: I can speak for the tea party people.

MS. CLIFT: And Guantanamo -- yeah, that's right, a key minority.

MR. BUCHANAN: (Laughs.)

MS. CLIFT: And closing Guantanamo -- pledging to close Guantanamo and ending torture is an attempt to reclaim the moral standing that this country lost over the last eight years.

MR. LOWRY: This speech --

MS. CLIFT: And that's an important foundation --

DR. MCLAUGHLIN: All right, let's -- MR. BUCHANAN: Bush is gone.

MR. LOWRY: This speech, at its bottom, was absurdly utopian, based on the idea that there's a mutual interest of every country in the world, which is false. It's always been false.

MS. CLIFT: One planet. One planet.

MR. LOWRY: It's always been proven false.

MS. CLIFT: Mutual interest.

MR. LOWRY: Russia and Georgia don't have the same interests. Israel and Iran don't have the same interests. India and Pakistan don't have the (same) interests. It's sophomoric. It's embarrassing for a president of the United States to be so ahistorical and so --

MS. CLIFT: Climate change threatens --

MR. BUCHANAN: Is a fraud.

MS. CLIFT: Is not a fraud. It threatens to submerge whole countries under water.

MR. BUCHANAN: (Laughs.)

MS. CLIFT: And it's not a laughable thing.

MR. BUCHANAN: It is a --

MS. CLIFT: And this week -- excuse me -- this week in Washington, the Council on Competitiveness, a lot of Republicans and CEOs, met. Company CEOs realize climate change is real, and they're dealing in a world where there's lots of mutual interest in the planet where the life of the planet is --

MR. BUCHANAN: They're going to make money out of green.

DR. MCLAUGHLIN: Exit question: Grade President Obama's --

MS. CLIFT: I hope so.

DR. MCLAUGHLIN: -- United Nations debut, from A to F, Pat, substance and style.

MR. BUCHANAN: Well, his style is always okay. I'm going to give him a gentleman's C on both, John, because I know he's got to do this for those folks. But frankly, for me, he was much more impressive in Pittsburgh.

DR. MCLAUGHLIN: Eleanor. MS. CLIFT: Well, in Pittsburgh he had to deal with what seems like --

DR. MCLAUGHLIN: Serious stuff.

MS. CLIFT: -- yeah, an imminent crisis, this revelation of a possible nuclear platform in Iran. But he did fine on the world stage, and he chaired the Security Council, I think the first time an American president ever did that. He gets As.

MR. LOWRY: On style, it's an A. I mean, he always makes a wonderful impression. On substance, it's an F. It was an embarrassing and, in some respects, dangerous speech.

DR. MCLAUGHLIN: Anti-American?

MR. LOWRY: I wouldn't go that far, but a discomfort with American power, with American exceptionalism as it's traditionally been defined.

DR. MCLAUGHLIN: Well, you know, his central purpose was to convince them that they had to do their share. We could not carry this load alone. Is there anything wrong with that?

MR. LOWRY: It's not going to happen. It's not going to happen.

MS. CLIFT: And American exceptionalism worked so well over the last eight years.

MR. WARREN: With the stipulation that these speeches never have a scintilla of impact unless you have the crazy theatrics of Qhadafi or Castro, whatever, that the people giggle over, this is all about style. An A+ he gets. And the fact he was able to convene those folks on a general resolution on nonproliferation -- purely political act -- he gets an A.

DR. MCLAUGHLIN: Your judgment is surprisingly good, despite that shirt you're wearing. (Laughter.)

Issue Three: Pariah at the Podium.

LIBYAN PRESIDENT MUAMMAR QADHAFI (Through interpreter.): (From videotape.) It should not be called the Security Council. It should be called the terror council.

DR. MCLAUGHLIN: Muammar Qadhafi made his first visit to the U.N. this week in 40 years as Libya's leader. But the 70-year-old made up for lost time. Qhadafi occupied the U.N. podium for over 90 minutes, almost three times longer than the speaker who preceded him -- namely, President Barack Obama.

The Libyan president delivered a wide-ranging and some say rambling speech. Qhadafi on the JFK assassination.

PRESIDENT QHADAFI (Through interpreter.): (From videotape.) An Israeli killed Lee Harvey, who killed Kennedy.

DR. MCLAUGHLIN: Qhadafi on Obama's term in office.

PRESIDENT QHADAFI (Through interpreter.): (From videotape.) We are content and happy if Obama can stay forever as a president of the United States of America.

DR. MCLAUGHLIN: The Qhadafi visit was marred by controversy. That's because last month Qhadafi welcomed home Abdelbaset Ali Mohammed al-Megrahi, the convicted bomber of the Pan Am Flight 103, which crashed in Lockerbie, Scotland. Al-Megrahi was freed by the Scottish government because of his prostate cancer condition. He had served eight and a half years in jail on a life sentence. FRANK DUGGAN (President, American Victims of Pan Am Flight 103): (From videotape.) There were three clowns here today. There's Hugo Chavez, Ahmadinejad and Qhadafi. But the other two are just nuts. Qhadafi is a murderer. He's a monster. He's got blood on his hands.

DR. MCLAUGHLIN: Question: Is this the price we pay for succeeding in bringing pariah nations back into the fold? The pariah has a podium. I ask you, Rich, again.

MR. LOWRY: It is. It was an entertaining performance. I think he said the bill for making up for the West's colonial sins throughout history would be $7.7 trillion, which I think, compared to the entire price of what we've done to support our financial system, might actually be cheap, might be a deal.

But, you know, Obama said at the end of his speech we can either coddle -- the U.N. can either coddle tyranny or show moral authority. Immediately afterwards you had this clown on for 90 minutes.

DR. MCLAUGHLIN: What about the role of the prime minister of England in answering the question whether or not he got a Libyan oil deal by reason of releasing of Megrahi?

MR. LOWRY: Yeah, he denies it. But the justice minister, Jack Straw, has pretty much said, "Yeah, of course, there are lots of considerations." And British Petroleum, I believe, got a deal shortly thereafter.

DR. MCLAUGHLIN: The Brits are pretty tight with him, because the previous prime minister arranged for Qhadafi -- Qhadafi gave up the bomb in, what was it, 2004?

MR. BUCHANAN: That was Bush's doing, right after Iraq.

MR. LOWRY: That was the after-effect of the Iraq war.

DR. MCLAUGHLIN: Bush did that through him?

MR. BUCHANAN: Bush was -- I agree with that. That was a successful policy. But this is a detestable human being. They got him to give up the bomb and to give up any attempts to build it. And then to bring him back into the so-called community of nations is fine. But on the British thing, Brownie doth protest too much. It has everything to do with oil.

MR. WARREN: There's oil, but there's also a lot of tension between the Scots and Gordon Brown. The fact is, this was their decision.

DR. MCLAUGHLIN: What have the Scots got to do with it?

MR. WARREN: Because he was their -- they made the deal. He was their inmate. DR. MCLAUGHLIN: Megrahi. That's where Pan Am 103 went down.

MR. WARREN: The fact is, there are folks, both liberal and conservative, in the Scottish legal establishment who make the argument that this guy was actually railroaded; this wasn't a just conviction. But B, let's not forget the fact that there have been 24 Scottish inmates who have been released just like this. The notion is --

DR. MCLAUGHLIN: Well, the Scots have their own parliament. They have their own parliament.

MR. WARREN: That's right, and it's --

DR. MCLAUGHLIN: They're not independent, are they?

MR. WARREN: It's run by nationalists --

DR. MCLAUGHLIN: They don't like Ireland.

MR. WARREN: It's run by nationalists, who are not in bed with Gordon Brown. So there's no --

(Cross talk.)

DR. MCLAUGHLIN: What, are you a covert lobbyist?

MR. BUCHANAN: Yeah, Scottish independence.

DR. MCLAUGHLIN: Does that derive from finance, or does that derive from nationality?

MR. BUCHANAN: That derives from ethnicity.

MS. CLIFT: Qhadafi --

DR. MCLAUGHLIN: What about frugality?

MR. BUCHANAN: (Laughs.) They were good on that before the Royal Bank of Scotland went under.

MS. CLIFT: Qhadafi made a deal that was in his best interest. A lot of the countries around the world are ruled by people we don't like. They still come to the U.N. And I'm glad the U.N. exists, although it's far from perfect.

DR. MCLAUGHLIN: Issue Four: Down But Not Out.

PRESIDENT OBAMA: (From videotape.) We're not going to recover overnight. Unemployment is still going to be a big problem for at least another year. DR. MCLAUGHLIN: The unemployment rate is 9.7 percent, and it's likely to hit double digits. Fifteen million people are currently without jobs. Those numbers are the reason for President Obama's sober assessment.

But there are also positive economic signals: The stock market up big, about 50 percent from its low in March, six months ago; home construction up 1.5 percent last month to a nine-month high, but existing home sales fell unexpectedly; retail sales up 2.7 percent last month.

Consumer spending, 70 percent of the economy, is stabilizing, thanks in part to Cash for Clunkers. Household net worth rose nearly 4 percent last quarter, the first increase since the recession began two years ago. Banks -- they're improving. Many have repaid bailout money to the taxpayers, more than $70 billion in total. That's the good news.

Now the worries. The Federal Reserve says business is still cutting back on big purchases and on hiring. Credit remains tight. Interest rates -- the Fed vows to keep them low. The sainted chairman says he doesn't want to nip the recovery in the bud.

FEDERAL RESERVE BOARD CHAIRMAN BEN BERNANKE: (From videotape.) Even though, from a technical perspective, the recession is very likely over at this point, it's still going to feel like a very weak economy for some time.

DR. MCLAUGHLIN: Question: The leaders of the world's major economies, the G-20, are gathered in Pittsburgh this weekend. They are exploring ways to revive the world economy.

What are the principal issues under discussion? I ask you -- do you want this, Jim?

MR. WARREN: When they're not having a grand old time at one of the great underrated cities of America, Pittsburgh, when they're actually talking turkey, it's pretty obvious it's going to be on the table. They're going to do postmortems on their stimulus packages around the world, how those have worked; should they infuse their economies with more direct government investment, the pros and cons of that.

There'll be a lot of folks who say, "Uh-oh, we've already gone too far." They're going to be talking a very intriguing notion, which is going to scare the dickens out of some folks, which is actually peer review of your economy by the other 19 countries in this group of 20.

So actually, the notion is that this group can tell the U.S. that they're doing something right or something wrong, say the same to the Chinese. And finally, they're going to be discussing the obvious unpredictability of when you come out of the recession, because, as we find out here, all these economic indicators going up are all well and good --

DR. MCLAUGHLIN: Are they going to exhort --

MR. WARREN: -- but there are too many people who are unemployed and underemployed. And we're not going to have true growth and job creation for quite a while.

DR. MCLAUGHLIN: Are they going to exhort the Chinese to consume more?

MR. WARREN: Yes.

MR. BUCHANAN: Ah, now you've touched on it, John. I think one thing that they should be talking about, I believe they'll be talking about, is imbalances of trade. In other words, the United States has consumed all this production of China. We buy about seven times more than --

DR. MCLAUGHLIN: The U.S. should consume less. Is that right? MR. BUCHANAN: What I'm saying is they should consume more of what we produce and we should consume less of what they produce. Frankly, if you had a reciprocal trade agreement instead of this free- trade nonsense, you'd be able to do that.

MS. CLIFT: Well, they're ahead of us at coming out of the recession, actually. But U.S. consumers have basically fueled economic growth for the last decade, and American consumers aren't doing it anymore. They don't have faith in their own job future stability and they're not spending. And so I think we've got to come to grips with that, but so does the rest of the world.

The other thing they're doing in Pittsburgh is coming to a consensus on rules for financial institutions and the banking industry going forward. And I think the Treasury secretary, Tim Geithner, has some sort of deal cooked on that, pre-cooked going into that.

DR. MCLAUGHLIN: A lot of unemployment lies ahead. There seems to be unanimity on that.

MR. LOWRY: Yes.

DR. MCLAUGHLIN: Is that worldwide?

MR. LOWRY: Yeah. I mean, unemployment is obviously a lagging indicator. But the thing is, John, we're probably going to recover pretty robustly in terms of GDP numbers. It's probably going to be 2 (percent), 3 percent third quarter, maybe even higher fourth quarter. But for most of next year, and it's probably what matters most politically, you're going to, you know, have 8 (percent), 9 (percent), maybe 10 percent unemployment. And that's a big vulnerability to Obama and the Democrats going into the fall elections.

DR. MCLAUGHLIN: Did you know that on October 3rd of 2008, one year ago almost to this very weekend, I said on air that unemployment, which was then about 6.7 percent, would rise to 11 percent?

MR. LOWRY: I didn't know that.

DR. MCLAUGHLIN: You foolishly burlesked me. You burlesked me, Buchanan. And now we may reach 11 percent.

MR. BUCHANAN: I think our friend here is wrong. I think you're going to get a double dip in this recession.

MR. WARREN: John, the fact is, 11 is probably too low, if you factor in the people --

MR. LOWRY: (Inaudible.)

MR. BUCHANAN: (Inaudible.) DR. MCLAUGHLIN: Hold on. There's a sidebar conversation going on here.

MR. WARREN: The people who are underemployed, the people who are forced to work part-time, the people who have given up going to the unemployment office, collecting unemployment, it's probably in states like Illinois; 13 (percent), 14 percent is really prodigious.

DR. MCLAUGHLIN: Forced prediction: Will the Iranian underground facility be bombed by either Israel or the U.S.? Yes or no.

MR. BUCHANAN: No.

MS. CLIFT: No.

MR. LOWRY: Yes.

MR. WARREN: Economic sanctions. No bombing.

DR. MCLAUGHLIN: No bombing. No bombing.

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