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THE MCLAUGHLIN GROUP HOST: JOHN MCLAUGHLIN PANEL: PATRICK BUCHANAN, MSNBC; ELEANOR CLIFT, NEWSWEEK; MONICA CROWLEY, SYNDICATED RADIO COMMENTATOR; CLARENCE PAGE, CHICAGO TRIBUNE TAPED: FRIDAY, OCTOBER 30, 2009 BROADCAST: WEEKEND OF OCTOBER 31-NOVEMBER 1, 2009

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DR. MCLAUGHLIN: Issue One: Affirmation and Abatement.

PRESIDENT BARACK OBAMA: (From videotape.) This is obviously welcome news and an affirmation that this recession is abating and the steps we've taken have made a difference.

DR. MCLAUGHLIN: Is the U.S. economy back? Is the longest period of contraction since the Great Depression now finally over?

Item: GDP, gross domestic product, grew at the rate of 3.5 percent, a big change. The previous four quarters, the top half of 2009 and the bottom half of 2010, 12 months, a full year, the economy shrank. Item: Consumer spending up 3.4 percent thanks to clunkers and other durables.

Item: Housing investment up 23 percent thanks to a tax credit for home buying.

Item: Business spending; equipment and software up.

Item: Stimulus working. It has created and/or saved 1 million jobs so far; so says the White House.

The big story of the week is the 3.5 economic growth figure for the third quarter, July, August and September.

Question: Was the 3.5 percent economic growth driven by the real economy, or was it due to the Obama stimulus? Pat Buchanan.

MR. BUCHANAN: It was due to the Obama stimulus, John, and also to the Federal Reserve, their doubling of the money supply. These are steroid shots for the American economy and they worked. The patient seems to be up. It's moving around, looks stronger, looks a lot better. But they're steroids. And the real economy hasn't really come back.

And this should carry us through for one or two more quarters, from what I understand from economists, but then we're going to see if the real economy, the private economy, is coming back. And there are no real signs of that right now. You've got your unemployment hanging in there at 9.8 percent, John. So I think obviously this is good news. It's helpful to a lot of people. But I don't think it's conclusive proof that the real economy has come back.

DR. MCLAUGHLIN: The stimulus helped, right, Eleanor?

MS. CLIFT: Oh, the stimulus helped, and it was principally the Cash for Clunkers program and the real-estate tax credit. And they have expired, or the real-estate credit is about to expire. But it's good news that government intervention actually did rescue us from the precipice. But what happens when these programs fade away? Is there enough confidence in the economy to sustain this recovery?

I think that's why President Obama was sort of uncharacteristically buoyant about this news. He usually tries to soft-pedal everything. He doesn't want to raise expectations. I think now he is trying to build confidence in the economy and try to get banks lending, people spending, and companies hiring. And he's trying to talk it up -- good news.

MS. CROWLEY: Well --

DR. MCLAUGHLIN: What about it, Monica -- big political win for Obama? MS. CROWLEY: Temporarily, yes. But at the risk of being the skunk at the garden party, I think we all need to be very cautious about this, for the reasons that Eleanor and Pat laid out. When you look at the 3.5 percent GDP growth in the third quarter, 3 percent of that growth, 3 percent, is due to government spending, whether it was Cash for Clunkers or the first-time home buyers' tax credit or the extension of unemployment benefits, so 3 percent. And they are temporary programs; let's keep that in mind. Cash for Clunkers is done. The first-time home buyers' credit isn't going to last forever. The unemployment extension benefits aren't going to last forever.

So what we've had here is a warping of whatever is left of the American free market with this massive infusion of government spending, and we've had a bubble here. But the cautionary note I want to sound is that, once all of these programs have run their course, like Cash for Clunkers -- in the month of September, auto sales have plummeted. They've gone back down to earth. So what we have is yet another bubble. And what I fear is that we might actually go into another dip.

DR. MCLAUGHLIN: Clarence, did you send your congratulations to your Chicago friend, Barack Obama? (Laughter.)

MR. PAGE: Happy days are here again, John -- (laughs) -- but not for everybody, though. As Pat mentioned, unemployment is still almost 10 percent. And it could go higher, even as GDP has gone up, even as home sales, car sales have gone up. And I hate to -- you're too wonderful to be a skunk at the party here, Monica.

MS. CROWLEY: Thanks, Clarence.

MR. PAGE: In fact, I worry about a double dip, a possible second dip coming up. But the stimulus has only begun to be spent. So, you know, there's still more in the pipeline. Some industries, some inventories are starting to see things move. So, you know, we'll keep our fingers crossed.

DR. MCLAUGHLIN: Okay. But he's got a little bad news, and that's the consumer spending has dropped in the last month. So he's had his winning streak. Would you say that?

MR. PAGE: Except Christmas is coming.

MS. CLIFT: I wouldn't say he's had his winning streak, no. First of all, there are more clunkers in society. They may apply that credit to appliances, which would be a good idea from an environmental point of view and a consumer point of view.

Secondly, he's got to worry about the flu shots getting here. If the flu vaccine gets here in time over the next couple of weeks -- a lot of it is about confidence in government and his ability to manage government in a different way than his predecessor. DR. MCLAUGHLIN: What about the fact that this is said to be a jobless recovery, and we've got 15 million Americans that cannot find a job in the United States?

MR. BUCHANAN: Well, basically, you've got about 17 -- 10 percent are unemployed, and you've got about 7 percent who are underemployed or dropped out of the force.

DR. MCLAUGHLIN: So 17.

MR. BUCHANAN: Secondly, John, during this past week, there's been another pull-back in the market. I agree with Clarence. I really fear -- and maybe it's because of instinct rather than hard knowledge -- that we're going to have another plunge downward.

DR. MCLAUGHLIN: Maybe it's your portfolio that you're worried about.

MR. BUCHANAN: Well, no, here's the thing, John. I talked to --

DR. MCLAUGHLIN: Do you have a lot of money invested in the market?

MR. BUCHANAN: Oh, immense amounts. But here's the thing.

I've talked to --

DR. MCLAUGHLIN: Immense amounts. (Laughter.)

MR. PAGE: That's true, John.

DR. MCLAUGHLIN: I thought it was gold.

MR. BUCHANAN: That's what saved me --

DR. MCLAUGHLIN: Gold is, what, $1,047?

MR. BUCHANAN: -- when everything went down. Yeah, when everything else went down, that went up. That's what saved me.

DR. MCLAUGHLIN: All right, what's your point?

MR. BUCHANAN: The point is -- and I spoke with Pearlstein about this. He believes that the market now is a bubble -- 50 percent run- up since March. That is a bubble, in his judgment, and I think he's right.

MS. CROWLEY: Well, when we talk about GDP -- and this number is positive, as it is, but again, the question is whether or not we're going to see a durable, sustained recovery here. And one of the ironies is when you look at the stimulus or you look at the movement on health-care reform. These are actual job-killers, because the amount of tax increases -- we're facing monumental tax increases to pay for all of this on small businesses, which are responsible for creating 70 percent of the jobs in this country, or at least used to be. The irony is --

(Cross talk.)

DR. MCLAUGHLIN: Well, what about --

MR. PAGE: They're getting a break.

MS. CROWLEY: -- that the government (movement ?) is going to put the kibosh on any kind of real economic growth. DR. MCLAUGHLIN: No one has said anything about the role of corporations in this economy. Now, corporations have let a tremendous amount of employees go to cut their spending.

MR. PAGE: Right.

DR. MCLAUGHLIN: And they look like -- they sound like they've learned how to live with that, to be lean and mean.

MR. BUCHANAN: Productivity.

DR. MCLAUGHLIN: And it's working for them. So they will not rehire them.

MS. CLIFT: Every economist --

MR. BUCHANAN: Productivity is up.

MS. CLIFT: Every economist has a different theory, and one is that the corporations have all adjusted and they don't need to hire people. You can also find economists who say that they've cut back so much that there will be a burst of activity. Let's enjoy this small moment and let's look to the White House and get them focused on --

DR. MCLAUGHLIN: No, I think that Buchanan ought to --

MS. CLIFT: -- creating jobs.

DR. MCLAUGHLIN: He ought to crab away.

Exit question: Is the U.S. economy out of the woods, or is the third-quarter growth a streak, just a streak, short-lived?

MR. BUCHANAN: I think it is relatively short-lived. I think we're probably going to have one or two more quarters of nice-looking numbers. And then we check after this goes -- the stimulus package goes out and that money goes out and Bernanke starts to pull the money out of the economy. What's underneath it?

DR. MCLAUGHLIN: You don't see unemployment slipping below 9 percent.

MS. CLIFT: Look, people talk about V-shaped recoveries, U- shaped, Ws. I'm not going to be invested in failure, but, you know, I think we have problems in this country with job transformation. A lot of the jobs that have gone are not coming back. I'm just glad we have some people in the White House who are focusing on this, and I hope they think about it a whole lot over the next months.

DR. MCLAUGHLIN: Do you think that V stuff and W stuff is logarithmic? (Laughter.)

MS. CLIFT: Yes. DR. MCLAUGHLIN: You do?

MS. CLIFT: Yes.

DR. MCLAUGHLIN: She thinks that's logarithmic -- bad.

MS. CROWLEY: Do you want a logarithm? I've heard that this recovery is going to look like a square root. Figure that one out, John McLaughlin.

DR. MCLAUGHLIN: Pi R squared.

MS. CROWLEY: I think -- (laughs) -- I think --

MR. PAGE: Pie are round, John. (Laughs.)

DR. MCLAUGHLIN: Not bad.

MR. PAGE: Thank you. Thank you.

MS. CROWLEY: -- that the GDP number, for the exit question --

DR. MCLAUGHLIN: The what?

MS. CROWLEY: The GDP -- we should be talking about government domestic prop-up, because that's the burst that you saw here. And the real question is, is the real economy going to gain any strength? And the only way you're going to do that is by removing the tax burden on individuals and small businesses, and also the corporate tax rate.

DR. MCLAUGHLIN: What's the answer? Give me what I crave, will you, please?

MR. PAGE: (Laughs.) John, I think we are going to see some prolonged unemployment for a while here. The optimistic view would be the beginning of a real recovery by spring. If we don't see that --

DR. MCLAUGHLIN: Is that your view?

MR. PAGE: Yeah.

DR. MCLAUGHLIN: Is that your view?

MR. PAGE: Yeah. And if we don't see that, that's going to have severe political implications on the incumbents next fall.

DR. MCLAUGHLIN: The answer is it's about equal between Pat and Clarence.

Issue Two: Buying Gotham?

NEW YORK MAYOR MICHAEL BLOOMBERG: (From videotape.) I've got the greatest job in the world, and I'm going to keep doing it. DR. MCLAUGHLIN: Michael Bloomberg has been mayor of New York since 2002. His political history is unusual. Until he ran for mayor in 2001, eight years ago, Bloomberg had been a lifelong Democrat. He wanted to be mayor of New York, but the Democrats would not nominate him because he was deemed insufficiently left wing. And to become mayor, Bloomberg became a Republican. And, as a self-described Republican and mayor of overwhelmingly liberal New York, he won two four-year terms.

Then, two years ago, in 2007, the Republican mayor quit the GOP and announced himself as an independent. But this year he wants the Republican ballot line again, because the independent ballot line is buried among obscure, oddball political parties' designations.

MAYOR BLOOMBERG: (From videotape.) It would make more sense to not let being a member of one party get in the way. If you are independent, it just gives you a flexibility.

DR. MCLAUGHLIN: Mayor Bloomberg is a heavy favorite to win a third term. He's got a lead in the polls and is the richest man in New York. His net worth exceeds $17 billion. That's "B," as in "Bloomberg," billion. Mayor Bloomberg's campaign has already spent $85 million. That $85 million in personal spending is more than any other candidate for public office has ever spent of his or her own money.

Bloomberg's Democratic opponent is New York City's comptroller, Bill Thompson, who works downtown near City Hall. Thompson's campaign has spent $6 million; Bloomberg's, $85 million. That's 14 times more than Thompson.

Thompson says Bloomberg is buying the election.

NEW YORK CITY COMPTROLLER BILL THOMPSON (New York mayoral candidate): (From videotape.) The mayor has spent an obscene amount of money.

DR. MCLAUGHLIN: Question: Is Thompson right -- the mayor has spent an obscene amount of money? Is it obscene? What was it, $18 billion.

MS. CROWLEY: Eighty-five million.

DR. MCLAUGHLIN: Eighty-five billion dollars? Eighty-five million.

MR. BUCHANAN: He is not buying the election. He has bought the election. It is all over, John. And he eliminated the term-limits thing to get himself in there. He's got enormous power up there, but he's done a pretty good job. And he just owns the city, and so he's got no real resistance.

DR. MCLAUGHLIN: Do you think it's stimulus spending? Stimulus for New York. (Laughter.)

MR. BUCHANAN: Stimulus -- there are a lot of preachers. There are a lot of radio stations and TV stations doing wonderfully.

MS. CLIFT: He could have bought the election for a third of that amount of money.

MR. PAGE: Yeah.

MS. CLIFT: He's done a good job. And he's like the FDR of Manhattan. And they love him, and he's turning around the schools. He's going to cream the other guy.

MS. CROWLEY: As the sole resident of New York City on this panel, I can back that up. He has done a fine job in New York City. He's taken mayoral control of the schools. He's really done great work in reforming the public-education system in there. Test scores are up. Charter schools are coming in. He's supportive of all of that. And I will say, you know, on security he's done a great job with the police and so on. So he deserves re-election. But the amount of money he's spent -- he's not the only rich guy running. Jon Corzine is running for re-election as governor of New Jersey.

DR. MCLAUGHLIN: Right.

MS. CROWLEY: He has spent $24 million.

DR. MCLAUGHLIN: Right.

MS. CROWLEY: He opted out of the public-finance system, just like Michael Bloomberg did, and he is outspending his Republican challenger, Chris Christie, by three to one.

MS. CLIFT: And you're more worried about that than you are about Mayor Bloomberg. (Laughter.)

MS. CROWLEY: Right.

DR. MCLAUGHLIN: Bloomberg should spend a lot more money. You know why?

MR. PAGE: Oh, yeah? Why?

DR. MCLAUGHLIN: What kind of an election is this shaping up to be?

MR. PAGE: A Bloomberg election. (Laughs.)

DR. MCLAUGHLIN: Do I have to tell you the broad theme?

MR. PAGE: The big theme?

DR. MCLAUGHLIN: Yeah.

MR. PAGE: Big theme? Here, go ahead.

DR. MCLAUGHLIN: Anti-incumbency.

MR. PAGE: Ah, okay. Okay.

DR. MCLAUGHLIN: Do you sense that?

MR. PAGE: Well, yeah, people do kind of like that.

MR. BUCHANAN: He's the incumbent --

DR. MCLAUGHLIN: That's why he should spend the money. Don't take anything for granted.

MR. PAGE: But it's not hurting him, though.

(Cross talk.) DR. MCLAUGHLIN: Corzine has a problem.

MR. PAGE: You get that big of a lead, you can talk about for granted. Now, Corzine is a different story.

DR. MCLAUGHLIN: Do you think --

MR. PAGE: Corzine is in a horse race.

DR. MCLAUGHLIN: Don't you sense that in the air, anti- incumbency?

MR. BUCHANAN: Oh, there's --

DR. MCLAUGHLIN: These smaller figures are --

MR. PAGE: There's something to be said about that, indeed. And I think, to some degree, the famous New York 23 race is reflecting some of that too. There's too much complacency.

DR. MCLAUGHLIN: Tell me about that.

MR. PAGE: Well, you've got the Republican-endorsed candidate who's in third place behind the Democrat and a conservative candidate, who are tied now.

MR. BUCHANAN: Doug Hoffman.

DR. MCLAUGHLIN: You're telling me that a conservative is strong in the 23rd district.

MS. CROWLEY: Yes.

MR. PAGE: Yeah, because --

DR. MCLAUGHLIN: Tell me about that, Pat.

MR. BUCHANAN: All right, here's the thing. It's like the Buckley race with Goodell, remember, in 1970 and Ottinger?

DR. MCLAUGHLIN: Right.

MR. BUCHANAN: This fellow Hoffman, he's a conservative; the Club for Growth. Sarah Palin's moved in and endorsed him. Pataki's endorsed him. Even though he's the Conservative Party candidate, over Skozzafava -- I think I got that right --

MR. PAGE: You got it. Very good.

MR. BUCHANAN: -- who's run third, and the Democrat now, Owens, I think Hoffman is going to win this thing. DR. MCLAUGHLIN: What about Michele Bachmann? Has she endorsed him?

MR. BUCHANAN: Your point, John, is very important. Fifty percent of the country says they would like to see a third party, and 50 percent say they would vote for the new guy against my guy.

MS. CLIFT: Well, the same anger against the political parties that existed toward the campaign is still present. I would like to point out, though, that Doug Hoffman, the new favorite, the new sweetheart of the Republican conservatives, doesn't even live in the district.

MR. BUCHANAN: Picky, picky, picky. (Laughter.)

DR. MCLAUGHLIN: The answer to my exit question is that Bloomberg is a shoo-in. Now let's move on.

Issue Three: Madame GOP.

Michele Bachmann -- unforgettable. That's what Republicans hope -- a new hot property. Bachmann is a Republican congresswoman from Minnesota's sixth district who took office in 2007, so she's now in her second term. Congresswoman Bachmann and her husband have five natural children and 23 foster children. The 53-year-old congresswoman is a lawyer. In fact, she holds a master's degree in law from the College of William and Mary.

Prior to coming to Washington, she served in Minnesota's state senate for six years.

As for her politics, Americans for Democratic Action, ADA, the premier liberal rating system, on a scale of zero to 100, rates Michele Bachmann as a zero liberal. The premier conservative rating system, on the other hand, the American Conservative Union, the ACU, on a scale from zero to 100, rates her as a 100. So Michele Bachmann's stars are in perfect alignment. She is perfectly conservative and perfectly illiberal.

Congresswoman Bachmann speaks her mind on many political issues. On the Obama public option for health care --

REP. MICHELE BACHMANN: (From videotape.) I think that it has a tremendous potential to do great harm to the nation. And I think, again, we need to make sure it doesn't pass.

DR. MCLAUGHLIN: On the Obama energy policy --

REP. BACHMANN: (From videotape.) Now, because of this underlying bill, the federal government will virtually have control over every aspect of lives for the American people.

DR. MCLAUGHLIN: On the Obama plan for the economy --

REP. BACHMANN: (From videotape.) We could truly bring hope and change to the American people if we would put into place a positive solution that would give people certainty about where they're going to go in this economy.

DR. MCLAUGHLIN: Why the extreme level -- I think we can say that -- of invective against Bachmann, similar to what we have against Palin? For example, Montel Williams, on Air America, said that she should, quote-unquote, "slit her wrists" and, quote-unquote, "start right at the collarbone."

MR. BUCHANAN: (Laughs.)

DR. MCLAUGHLIN: What about that?

MS. CLIFT: Well, that's a little extreme. (Laughter.) But --

DR. MCLAUGHLIN: But you feel that, don't you? Don't you feel the Palin factor returning to you? MS. CLIFT: No. She does not have nearly the star power that Sarah Palin has. And she has -- if she's a rising star, she's in a way far-out galaxy. And she has said things over the course of the last year -- she wanted members of Congress tested because she felt they were un-American. I mean, she's just gone way over the line. And I don't see that she has a big following --

DR. MCLAUGHLIN: Do you think we're hearing some of the invective I've been --

MS. CLIFT: -- on the conservative side.

DR. MCLAUGHLIN: Is that invective -- what is it about these women in the party?

MS. CROWLEY: I'll tell you. Michele Bachmann is dynamite. She's a heroine to conservatives because she's smart. She's fearless. She is a true conservative. She's got guts to stand up for her convictions. She never compromises, and she's tough. And she's also attractive and she is a mom.

And I'll tell you what, the criticism that was leveled at Sarah Palin, like the criticism leveled at Michele Bachmann, is because these two women represent existential threats to liberalism. (Laughter.) They are women, they are conservatives, and they are pro- life.

DR. MCLAUGHLIN: What about that?

MS. CROWLEY: And it drives liberals crazy.

MR. PAGE: Actually --

DR. MCLAUGHLIN: What about --

MS. CLIFT: She's no more of an existential threat than you are.

DR. MCLAUGHLIN: Let me hear from Clarence.

MS. CROWLEY: And I am. (Laughs.)

MR. PAGE: I mean, she does rally the base, no question about that, just like Sarah Palin does. But liberals love her because she embarrasses the conservative cause so often --

MS. CLIFT: Right.

MR. PAGE: -- her sound bites, et cetera, you know. And --

DR. MCLAUGHLIN: Do you think -- MR. PAGE: -- this also shows a leadership problem among congressional Republicans, because she gets quoted more often than Boehner does.

DR. MCLAUGHLIN: Do you see -- Boehner.

MR. PAGE: John Boehner. Remember him? Republican leader of the House.

DR. MCLAUGHLIN: He's no threat to Bachmann.

MS. CLIFT: He's no Sarah Palin either.

MR. PAGE: From my hometown district.

MR. BUCHANAN: Boehner's enormously exciting.

DR. MCLAUGHLIN: What about what he's saying?

MR. BUCHANAN: This is the queen of the tea parties and town-hall crowd, Michele Bachmann is. She's a Minnesota Palin. I agree with you.

DR. MCLAUGHLIN: How many foster --

MR. BUCHANAN: I think she's terrific. They've got pizzazz.

DR. MCLAUGHLIN: What about that, five natural children and 23 foster children?

MS. CROWLEY: That's right. She's acceptable.

MR. PAGE: Hey, family values.

MR. BUCHANAN: The very fact, John, that she's --

MS. CROWLEY: She, like Sarah Palin, is accessible to the average American, who might be very dissatisfied with the out-of-control rogue government that we have --

MR. BUCHANAN: Does she do provocative things?

DR. MCLAUGHLIN: She led the cause to defund ACORN. Do you remember that?

MS. CROWLEY: Yes.

MR. BUCHANAN: Sure, sure.

DR. MCLAUGHLIN: What about that?

MR. PAGE: Fox News loves her. (Laughs.) MR. BUCHANAN: She's a leader in this sense.

DR. MCLAUGHLIN: Huh?

MR. PAGE: Fox News loves her. That's their pet cause.

MS. CROWLEY: Come on --

DR. MCLAUGHLIN: You think ACORN was a noble cause?

MS. CLIFT: The three of you can have your little love-in -- (laughter) -- but Michele Bachmann could not win a statewide race or anything else beyond the little safe conservative district that she has.

MS. CROWLEY: Don't be so sure.

MS. CLIFT: And anybody that --

MR. BUCHANAN: That's what they said about Sarah.

MS. CLIFT: Anyone that -- it's probably true about her too.

DR. MCLAUGHLIN: Eleanor, you know that Michele --

MS. CLIFT: And anyone that --

DR. MCLAUGHLIN: Michele is under your skin, Eleanor. (Laughter.

)

MS. CLIFT: No, I'm analyzing --

DR. MCLAUGHLIN: She's like Sarah.

MS. CLIFT: -- the issue here.

DR. MCLAUGHLIN: What is it about these women? What is it?

MR. BUCHANAN: She's rattling the cages. (Laughs.)

MS. CROWLEY: That's right.

DR. MCLAUGHLIN: Issue Four: Where's Osama?

The al Qaeda worldwide terrorist organization is led by the sinister but charismatic Osama bin Laden. Bin Laden is also the mastermind of the deadliest attack on U.S. soil in our history, September 11th, 2001. Bin Laden has been in hiding for eight years. His lair during that time has been the tribal areas of Pakistan, according to U.S. officials. But the Pakistani officials claim that they have no idea where bin Laden is or where any other al Qaeda leaders are.

Secretary of State Hillary Clinton was in Pakistan this week for some fence-mending with Pakistan, but she also infuriated Pakistani officials. Hillary said that the idea that the Pakistani government does not know where bin Laden and other al Qaeda leaders are -- are hiding, that is -- was incredible, beyond belief.

To believe it, one would also have to believe that the heralded Pakistani government intelligence agency, their equivalent of the CIA, does not know after eight years, that the top military brass does not know where he is, and that the president of Pakistan, Ali Zardari, and his chief aides do not know where he is. Clinton was not buying it. Quote: "I find it hard to believe that nobody in your government knows where they are and couldn't get them if they really wanted to," unquote.

Question: Is it believable that the Pakistani government might not know where bin Laden is hiding, Pat? MR. BUCHANAN: John, what Hillary Clinton has accused the Pakistani government of is either cowardice or collusion with the terrorists. Now, if we feel that, that is something you ought to say very privately. To say that publicly, when the Pakistani army is fighting in South Waziristan and has fought in the Swat Valley -- and Pakistani military are very proud guys and believe they're doing a good job -- I think, A, it was outrageous to do it publicly.

But secondly, John, if we knew that the Pakistani intelligence knew where bin Laden was, we would too, because if the Taliban got people in the ISI, so do the Americans, and we would have hit them. So I think it's untrue.

MS. CLIFT: Well, that's putting a very particular spin on it that is putting a very negative spin on what Hillary Clinton said. We have come off of eight years of the Bush administration basically colluding with President Musharraf, sending billions of dollars of aid, which they mostly used to beef up their arsenal against India. And what the secretary of state was saying is what many Americans have been thinking and saying, and more importantly, what members of the administration have been saying privately.

Now, whether going public with it -- this is not something that all of those Pakistani officials have never heard before. That is the centerpiece of every conversation members of this administration have with Pakistani officials. She's put it out on the table. Whether that proves to be a smart thing or not smart thing, I don't know. But it forces the issue and puts the relations on a much more candid basis.

MS. CROWLEY: It is --

DR. MCLAUGHLIN: Do you approve or disapprove of what Hillary did?

MS. CLIFT: She disapproves, of course.

MS. CROWLEY: No, no. Well, yes, I actually -- no, I approve of her message, because I think what she stated was absolutely true. I disapprove of the way she did it. Blunt diplomatic conversation like this does need to happen behind closed doors, especially when we're about to approve a $7.5 billion aid package to Pakistan to try to prove to the Pakistanis that we are in this with them for the long haul. You don't want to throw gasoline on a fire, which is exactly what she did. The ISI for years has been shot through with Islamists, shot through with al Qaeda sympathizers and al Qaeda itself. So what she said --

DR. MCLAUGHLIN: The army --

MS. CROWLEY: -- was true. It is very hard to believe -- it strains credulity to believe that the Pakistani government and the ISI doesn't know where Osama bin Laden is. DR. MCLAUGHLIN: What's the ISI?

MS. CROWLEY: The intelligence services, yeah. And this is what I mean about --

DR. MCLAUGHLIN: Do you agree with Hillary or not?

MR. PAGE: Well, what's been said is true, that she was just stating out loud what everybody knows quietly, and I'm sure the Bush administration was saying quietly over the years with the Pakistani government.

I don't know if I agree with Pat, though, insofar as the Pakistani troops are concerned. It is true, they have done a great job in certain battles, but they have not kept the pressure on. It seems like every time we begin to ratchet up the pressure a little bit, then all of a sudden we see a military action. I think Hillary Clinton is just saying --

DR. MCLAUGHLIN: Let's get one thing straight. Let's get one thing straight. Was it off the cuff? Was it like the outburst at the question? "Are you asking me about whether my husband went to North Korea?" Do you remember that?

MR. BUCHANAN: Yeah.

DR. MCLAUGHLIN: Was it that kind of a thing?

MR. BUCHANAN: I think it was, John.

DR. MCLAUGHLIN: Or is this settled State policy that we've got to hold them for -- (inaudible) -- on this?

MR. BUCHANAN: I think it was settled State policy to read them the riot act. But does anybody on this panel believe that the Pakistani government and the Pakistani ISI and the army know exactly where bin Laden was?

MR. PAGE: They've got an idea.

MR. BUCHANAN: And we don't know it or they won't hit it?

MR. PAGE: They've got an idea.

DR. MCLAUGHLIN: But you disapprove of her talking --

MR. BUCHANAN: Doing it publicly is terrible.

MS. CROWLEY: Right. Yeah.

MS. CLIFT: They have been playing double game for a long time. MR. BUCHANAN: You think they know where he is?

MR. PAGE: Yes. Yes.

MS. CLIFT: And I sympathize with their double game, because they've got to deal with the extremists. And they kept the extremists at bay up until --

DR. MCLAUGHLIN: Do you think --

MS. CLIFT: -- about the last several months.

DR. MCLAUGHLIN: Quickly, do you --

MS. CLIFT: Now they've got a bigger fight on their hands.

DR. MCLAUGHLIN: DO you think it's possible they don't know where he is?

MS. CLIFT: I think they have an idea where he is, yes.

DR. MCLAUGHLIN: They must know where he is.

MR. PAGE: They do.

DR. MCLAUGHLIN: Predictions, Pat. Lock and load.

MR. BUCHANAN: The Republicans sweep in Virginia and Republicans win -- or the conservatives win in the 23rd.

DR. MCLAUGHLIN: Wow.

MS. CLIFT: Split decision in the governor's race. Republicans take Virginia. Dems take New Jersey.

MS. CROWLEY: Cap and trade is officially dead.

MR. PAGE: I think a split in the governors' races. And California is going to legalize marijuana next time around.

DR. MCLAUGHLIN: Philip Roth will win the Nobel Prize in literature next year.

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