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THE MCLAUGHLIN GROUP HOST: JOHN MCLAUGHLIN PANEL: PATRICK BUCHANAN, MSNBC; ELEANOR CLIFT, NEWSWEEK; MONICA CROWLEY, WASHINGTON TIMES; MARTIN WALKER, UPI TAPED: FRIDAY, APRIL 16, 2010 BROADCAST: WEEKEND OF APRIL 17-18, 2010

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MR. MCLAUGHLIN: Issue One: Democrat Exodus.

REP. BART STUPAK (D-MI): (From videotape.) It just came to the point where I said I've accomplished what I want to do; time to make the break.

MR. MCLAUGHLIN: Michigan Democratic Congressman Bart Stupak announced last week that he would not seek a 10th term in office. Bart Stupak will have served 18 years in the U.S. House of Representatives. He had been expected to win handily in the coming November midterm election. Instead, Stupak is stepping down.

Stupak is one of 24 Democrats retiring this year, 19 from the House: Davis, Berry, Snyder, Watson, Meek, Ellsworth, Moore, Melancon, Delahunt, Stupak, Hodes, Sestak, Kennedy, Gordon, Tanner, Baird, Massa, Wexler, Abercrombie; and five from the Senate -- Dodd, Dorgan, Bayh, Kaufman, Burris.

The climate for Democrats seems to have been a toxic one. The party is now polling at an all-time record low, 41 percent.

Question: What explains the exodus of leading Democrats like Senator Dodd? Is this a case of rats leaving a sinking ship?

MR. BUCHANAN: Well, Dodd's got a particular problem. He really -- could have really lost that seat for the Democratic Party, John. But overall, I don't think there's too much Democrats retiring, but there is a hellish problem in the Democratic Party. The president is down at his lowest level. Health-care reform has gone down ever since it passed. The polls show the Democratic Party running for Congress at a lower level by four points than it was in 1994, when they got wiped out and lost 52 seats.

It is really the slough of despond for the Democratic Party in Washington, D.C., John. And there's real apprehensions, because tea party and Republicans are very energized. There is one hope for the Democrats, and that is some sort of bright lights in the national economy. But that's what they've really got to bet on to avoid a real disaster in November.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: Well, the slough of despond is in April. The election is in November. The Battleground poll that came out, which is a bipartisan poll, had the president at 50 percent. The number of retirements are actually fewer than they were in 1994. And the Democrats are going to lose seats.

But if you compare where President Reagan was and where President Clinton was at a similar point in their presidency, this president is at least eight points higher than either of them were in popularity. And President Reagan only lost 26 seats in the House and didn't lose any seats in the Senate, and President Clinton lost the House and the Senate. So I suspect President Obama would be happy with something in between, and I suspect that's what he'll get.

MS. CROWLEY: You're seeing this mass exodus because a lot of the Democrats are seeing the writing on the wall. But the writing on the wall is in their own hand. A lot of this is by their own doing.

Look, the ones that are choosing to remain and run for re- election in November and beyond are really, really worried, because they're incredibly vulnerable. When you look at the Rasmussen poll, it shows a nine-point gap on the generic polling between Republicans and Democrats. That is unprecedented. It's unheard of for Republicans to be running that far ahead. Even the Gallup poll shows a four-point spread on the generic congressional ballot, with Republicans running ahead. Last time that happened, and the margin was a lot smaller at that time, was 1994, when the Republicans took over the House.

But, look, Pat's right. The number one issue for most Americans is the economy. Americans look at the Democrats. What have they done over the last 15 or so months? They spent nearly a trillion dollars in the economic stimulus package. That looks like a political act and not an economic act. It had no traction whatsoever in terms of --

MR. MCLAUGHLIN: You mean, because of earmarks?

MS. CROWLEY: Yes, but payouts to unions and all of these widespread Democratic constituencies. It had no effect on the unemployment --

MR. WALKER: Hang on a second.

MR. MCLAUGHLIN: Martin.

MS. CLIFT: Yeah, right. Come on, Martin. (Laughs.)

MR. WALKER: First of all, we can turn this around and say why aren't Republican grandees getting into this race if it's so good? Why is Tommy Thompson not running in Wisconsin? Why is George Pataki not going in New York. They're not.

Secondly, on the economy, I know that Obama and the Democrats won't get much credit for having fended off a new great depression, but frankly, they did. Secondly, there was a lot of traction in that stimulus money, because so much of it went to the individual states to make up for their declining revenues.

Final point is, all of these congressional races -- big losses, big defeats -- they're cyclical. They follow a period when there was a big swing for the Democrats 10, 15 years ago, just as they followed a big swing to the Republicans in '94. Sometimes one party does badly, sometimes the other.

The Democrats are going to lose seats. I don't think they will lose a small majority --

MR. MCLAUGHLIN: Could it be --

MS. CLIFT: And the --

MR. MCLAUGHLIN: Let me get this in. Could this be a trap that's being laid by the Democrats because they want to build overconfidence on the part of Republicans?

MR. WALKER: (Laughs.) MS. CROWLEY: Oh, I don't think so, John. (Laughs.)

MR. BUCHANAN: Then they're doing an excellent imitation.

MR. MCLAUGHLIN: You don't think that Republicans habitually suffer from overconfidence?

MS. CROWLEY: I think that the Democrats wish it were so. But, no, look, I think the danger is for the Republicans to set expectations --

MS. CLIFT: The economy --

MR. MCLAUGHLIN: Who's going to get out the vote? Who's going to get out the vote this November?

MS. CLIFT: Well, the energy --

MR. MCLAUGHLIN: Are the Democrats going to stay home?

MS. CLIFT: The energy is on the right, but some of that is going to be destructive energy. The tea-party folks are out there. And if they succeed in some of these primaries, they're going to nominate candidates that are too far out for the mainstream. And we saw a fascinating profile of the tea party in The New York Times this week. They're basically older white men who love their guns.

MR. MCLAUGHLIN: Was that a reprint from The New York Times? Didn't they run with that about two weeks ago, the same story?

MS. CLIFT: USA Today had a similar poll some weeks ago.

MR. BUCHANAN: John --

MS. CLIFT: They get a lot of attention, but they are, you know, far from the mainstream of this country.

MR. WALKER: Do you know the biggest problem the Democrats are going to have? That one of their secret weapons has retired -- Andy Stern, head of the Service Employees Union, the most successful labor leader in this country. He's stepping down. He was the guy who really brought out a lot of Democratic field workers, a lot of Democratic activists. MR. BUCHANAN: Right.

MR. WALKER: And that's gone.

MR. BUCHANAN: But John, here's the key in terms of your question as to where's the energy, fire and passion. Obama won because young people came out in record numbers. African-Americans came out in record numbers. Hispanics came out in very high numbers. And these three constituencies did not come out in 2009. But the people coming out are -- they're white, working-class, middle-class folks, tea party, Republicans, energized, on fire.

MR. MCLAUGHLIN: All right, let's settle this --

MS. CLIFT: They're not unemployed, and they make a lot more money than the rest of the country, according to The New York Times. (Laughs.)

MR. BUCHANAN: Well --

MR. MCLAUGHLIN: Excuse me. Excuse me. Please relinquish. Remember that? Please relinquish.

Exit question; let's settle it. Which party has the political momentum headed into November -- the Democrats, with their health-care bill in hand, or the Republicans? Who has the momentum?

MR. BUCHANAN: That is a joke question. (Laughs.) The Democrats have nothing going for them. Republicans have it all. The question is how far they're going to go.

MR. MCLAUGHLIN: You mean because they're angry?

MR. BUCHANAN: Because they're impassioned. They want to get to this election.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: Well, the out party always has the momentum in these midterm elections. The economy is the frame that this election will be fought against. And Newsweek Magazine's cover this week was the recovery. America is back. There are a lot of positive indications.

MS. CROWLEY: Well, when you've got --

MR. WALKER: We've had one special election. We've had one special election on health care --

MR. BUCHANAN: Democrats won it.

MR. WALKER: -- and that was the one in Florida. And some Republicans were saying, "We're going to do another Massachusetts turnaround." Not at all. The Democrat won with 62 percent. MS. CROWLEY: Well, you can talk about the recovery, and I hope that that is, in fact, true. But when you have nearly 10 percent unemployment and a total unemployment rate of nearly 20 percent, that is the most politically toxic element going into November. There's a huge enthusiasm gap.

MR. MCLAUGHLIN: Who's got the momentum?

MS. CROWLEY: Look, what a difference two years makes, because two years ago, Barack Obama and the Democrats had all of the enthusiasm on their side. Now all of the Republicans. Why? Because the independents are the key, John.

MR. MCLAUGHLIN: The answer is -- the answer is Republicans have the momentum.

Issue Two: Gibbs's Gibes.

(Begin videotaped segment.)

ROBERT GIBBS (White House press secretary): April, April, calm down. Just take a deep breath for one second. See? This happens with my son. He does the same thing.

Q Don't play with me on this.

MR. GIBBS: I'm not --

Q I'm being serious. Do not blow it off.

MR. GIBBS: And I'm giving you a serious answer.

(End videotaped segment.)

MR. MCLAUGHLIN: Robert Gibbs is White House press secretary. He's been at the president's side since the Obama presidency began 15 months ago. The job of White House press secretary requires a good working relationship with the White House press corps.

That relationship is now perceived as far from harmonious. The press sees Gibbs as smug, sarcastic and disliked, if you believe the remarkable reporting on Gibbs' behavior in a front-page, four-column- out-of-six, above-the-fold, 2,500-word recap by reporter Jason Horowitz in the influential Washington Post.

And the press-Gibbs relationship is said to be degenerating with each passing day, so much so that White House journalists are planning to meet with Gibbs for a candid exchange, including availability.

"Unlike other press secretaries past, who would make rounds of calls to reporters as they neared deadlines, Gibbs is notoriously tough to get on the phone. His soliloquies are full of," quote, "'First and foremost,'" unquote, and "'I will say this,'" unquote. "And he relies on escape-hatch promises to 'check and get back to you,'" unquote.

Then there's this. Check out the Web. "The White House now turns out to be a suite of social networking tools -- YouTube, Whitehouse.gov, Twitter -- that mix innovation and evasion. On the morning of March 12th, Gibbs broke major news in a Twitter message.

" Quote: "'The president will delay leaving for Indonesia and Australia -- will now leave Sunday -- the first lady and the girls will not be on the trip,'" unquote.

Question: Is Gibbs the real target of the Washington press corps ire, or is it the president himself who is in the crosshairs? Martin.

MR. WALKER: I think it's three things in turn. First of all, it is the president in the crosshairs. Secondly, Gibbs has the look of a man who's been there too long. He clearly is not enjoying the job. He's not liking the press corps. Thirdly, the press corps has always been unhappy, and in particular they're getting unhappy because the press is losing traction, influence, readership and prestige.

MR. BUCHANAN: I think the --

MS. CLIFT: Right. The White House press corps is a bit of an anachronistic group at this point. It's mostly mainstream media, and they resent the White House that is using all these other tools to reach the American public. The White House has 17 million followers on Twitter. So when they announce something like that, a little tidbit like that they toss out, they get a lot of reward for it.

The press corps is rightfully frustrated that the president hasn't had a press conference since July, and he hasn't had one of those because the American people don't seem to be clamoring for it. And it distracts from whatever the focused message he wants to get across.

We're in a media transformation. There are all kinds of different ways to reach the people.

MR. MCLAUGHLIN: Do you think --

MS. CLIFT: President Reagan was famous for going over the heads of the White House press corps.

MR. MCLAUGHLIN: Do you think it's dangerous for the nation to have a movement away from a live question and answer of the president, for the White House to put it on the Web, where everything is controlled? MR. BUCHANAN: No, I don't.

MR. MCLAUGHLIN: The president likes control. He uses the teleprompter whenever he --

MR. BUCHANAN: John --

MR. MCLAUGHLIN: -- whenever he can. And in this situation, it is strictly as dictated on Twitter.

MR. BUCHANAN: All right, look, John, you know, we were with Nixon. My view was then, and I believe it was ours, was, look, he's been elected president of the United States. He has to communicate with the American people. He decides when, where and how is best for him to communicate. Is it through the press corps? Almost always it is not. What you are getting with Gibbs --

MR. MCLAUGHLIN: What do you mean?

MR. BUCHANAN: I think --

MR. MCLAUGHLIN: You mean he does it by a speech?

MR. BUCHANAN: The press corps is a filter. And quite frankly, you do it directly if you can.

MR. MCLAUGHLIN: Is there any substitute for that? Is there any proper substitute for the Q&A?

MR. BUCHANAN: There is no necessity.

MR. MCLAUGHLIN: When you look at John Kennedy surrounded by the press --

MR. BUCHANAN: That's what he did.

MR. MCLAUGHLIN: -- and when you look at Reagan surrounded by the press --

MR. BUCHANAN: The press adored him.

MR. MCLAUGHLIN: -- isn't there something there that is needed, human interaction?

MR. BUCHANAN: The press adored Jack Kennedy. I was at one of those things. They loved him. He was good at the --

MR. MCLAUGHLIN: So did the nation.

MR. BUCHANAN: Reagan was not good at the press conferences. He was good at the direct --

MR. MCLAUGHLIN: So what? So therefore you eliminate press conference and you go to a -- MR. BUCHANAN: He communicates as he wants to communicate. It's his decision.

MR. MCLAUGHLIN: What is the story on this? How serious is this matter?

MS. CROWLEY: Well, look, I would like to see the president do formal press conferences more often. Remember, when he first came into office, he was doing it all the time, to the point where on this panel we were talking about whether or not he was overexposed. Then, when health care started going down the road and the economy wasn't really improving, he took himself out of the mix and he put Gibbs in as the stand-in.

The problem is that the White House press corps, just like nationally, for the most part -- not everybody, but for the most part in the press they have become so invested in promoting and protecting Obama that they don't want to attack him directly, so they're leveling their ire at Gibbs. Now, Gibbs has certainly fed into it because he is petty and sarcastic with them and with everybody else. He's not exactly the best spokesperson for a president.

MS. CLIFT: That kind of banter has gone on in the White House press room forever. And there is a natural tension between the press corps and the White House. The press corps wants to know things the White House doesn't want them to know. They think everything the White House puts out is advertising. And so you don't have people over there protecting the president.

MR. BUCHANAN: All right, Obama --

MS. CLIFT: You have them desperately trying to find out what's going on.

MR. MCLAUGHLIN: Do you not see the value of human interaction and finding out what this man is really like or what this woman --

MR. BUCHANAN: So what?

MR. WALKER: As a journalist, you bet I do.

MR. BUCHANAN: Sure.

MR. WALKER: But part of the reason for this is that you don't have a real live questioning opposition in this country because you don't have something like question time that they do in the UK.

MR. MCLAUGHLIN: You don't have a Tony Blair.

MR. BUCHANAN: But you know why he --

MR. WALKER: Exactly. What's more, you've got a press corps which is losing readers. It's losing viewers. MR. BUCHANAN: Right.

MR. WALKER: People aren't watching national news. In other words, you've got a White House press corps that's withering on the vine --

MR. MCLAUGHLIN: If we rely exclusively on the computer to furnish us with news about the White House --

MR. BUCHANAN: Hey, John --

MR. MCLAUGHLIN: -- isn't that really perilous for the nation?

MR. WALKER: That would be terrible for democracy.

MR. BUCHANAN: But John, do you know why Obama stopped the press conferences? He had --

MR. MCLAUGHLIN: Sure. He wants control.

MR. BUCHANAN: No. He had a big press conference. I think it was on health care. And at the end of it, somebody asked him about Sergeant Crowley, and he went out and stepped on a land mine, and it blew up. And that burned the guy --

MR. MCLAUGHLIN: Is this story bigger than it sounds or smaller than it sounds?

MR. BUCHANAN: Smaller than you've made it. (Laughs.)

MR. MCLAUGHLIN: Bigger than it sounds?

MS. CLIFT: Smaller than it sounds. He's communicating in many ways.

MR. MCLAUGHLIN: Bigger than it sounds?

MS. CROWLEY: I think it's big for this reason, because Obama promised the most transparent White House --

MR. MCLAUGHLIN: Right. MS. CROWLEY: -- in American history, and he has failed to deliver that.

MR. MCLAUGHLIN: Is there a constitutional right here?

MR. BUCHANAN: No.

MS. CLIFT: He's delivering it and he's --

MR. MCLAUGHLIN: Is there a constitutional right?

MR. BUCHANAN: No.

MS. CROWLEY: No.

MR. MCLAUGHLIN: Freedom of inquiry on the part of the press.

MR. BUCHANAN: Let them inquire.

MS. CROWLEY: The press corps, sure, but they have to be able to get to him.

MR. MCLAUGHLIN: There's no press. It's a computer. It's the White House feeding it one way.

MR. BUCHANAN: So what?

MR. MCLAUGHLIN: Yes or no?

MS. CROWLEY: Every White House tries to control --

MR. WALKER: You're right. But the problem is not just the press. It's there's fewer readers of that press. There's fewer viewers of that press. The entire nature of public discourse has shifted, has migrated to other platforms.

MR. MCLAUGHLIN: And the more the White House can move it in that direction -- (inaudible) -- the computer.

MS. CLIFT: We live --

MR. MCLAUGHLIN: Controlled speech.

MR. WALKER: They will be --

MS. CLIFT: We live in the digital age, and they are communicating in the way that more and more people are receiving communication.

MR. BUCHANAN: Sure.

MS. CLIFT: I believe President Bush -- MR. MCLAUGHLIN: Well, maybe this --

MS. CLIFT: -- had seven full-fledged press conferences in his eight years.

MR. MCLAUGHLIN: Oddly enough --

MS. CLIFT: And I didn't hear a lot of complaints about that.

MR. BUCHANAN: But so what?

MR. MCLAUGHLIN: Maybe this ties into it. Issue Three: No Moon Landing.

PRESIDENT BARACK OBAMA: (From videotape.) I am 100 percent committed to the mission of NASA and its future.

MR. MCLAUGHLIN: On Thursday, President Obama was at the Kennedy Space Center in Cape Canaveral, Florida, and he unveiled his vision for the future of NASA, the National Aeronautics & Space Administration, responsible for the nation's space program.

Primary features:

Item: Budget, $6 billion, added to the existing $20 billion budget, spread over the next five years.

Item: Private companies taking over space-flight programs.

Item: Robotic technology, with a solar-system exploration program using robots.

So what's out? No landing on the moon by astronauts and no more humans in space except for at least 20 years. The Constellation program to put astronauts back on the moon has about $110 billion left, but it's been zeroed out.

The original moon walkers, Neil Armstrong, joined by his fellow astronauts Jim Lovell and Gene Cernan, penned an open letter criticizing the president for killing the Constellation program. They argued that, quote, "For the United States, the leading spacefaring nation for nearly half a century, with no human exploration capability to go beyond earth orbit, destines our nation to become one of second- or even third-rate stature. Without the skill and experience that actual spacecraft operation provides, the USA is far too likely to be on a long downhill slide to mediocrity," unquote.

But Neil Armstrong's crewmate, Buzz Aldrin, defends the Obama plan.

BUZZ ALDRIN (former astronaut): (From videotape.) People with patience, with an open mind and the willingness to listen, would understand that this is a doable, exciting program. MR. MCLAUGHLIN: Is this the same story -- depression of the individual, of the human entity, and going to a machine --

MS. CLIFT: No.

MR. MCLAUGHLIN: -- that they think they can control?

MS. CLIFT: No.

MR. MCLAUGHLIN: Is there something that a human can do in that position as an astronaut --

MS. CLIFT: No.

MR. MCLAUGHLIN: -- as Armstrong says, that a machine cannot do?

MS. CLIFT: No. He's saying that we're not going to go to the moon again, that we're going to think about sending manned spaceships into the orbit of Mars and eventually on Mars, with a goal date of 2035.

MR. MCLAUGHLIN: That's 20 years, 20 years from now, with no man on the moon --

MS. CLIFT: Because the current program --

MR. MCLAUGHLIN: -- after September, when the three additional flights take place.

MS. CLIFT: -- the current program wasn't working and had severe cost overruns. And we don't have the money to fritter away to go to the moon again --

(Cross talk.)

MS. CLIFT: -- having been there once.

MR. MCLAUGHLIN: Is it in the interest of the perpetuation of the NASA program to have a human in space? Is it not because the investment of people in the operation is therefore real, where if it's machine only, it will evaporate, and the budget will evaporate? MR. WALKER: I entirely agree with you. It is not just a question of the budget. It's a question of the human spirit. We've got to send ourselves out there. And besides, if the United States doesn't, the Chinese sure as hell will. That's, I think, a really important factor.

MR. BUCHANAN: John --

MR. WALKER: But beyond that, we've simply got to decide whether this country is going to be part of the world's future or not.

MR. MCLAUGHLIN: There you go, Pat.

MR. BUCHANAN: Martin is exactly right. It is spirit. Look, in the 1950s and '60s, we had a great space program. Nobody was on food stamps. Now we've got 36 million people on food stamps --

MS. CLIFT: Oh, so food stamps are connected to the space program?

MR. MCLAUGHLIN: Monica, get in -- okay, hold on, Eleanor. Monica, get in here fast.

MR. BUCHANAN: We're a socialist state, wasting our money on this stuff.

MS. CLIFT: Oh, wasting our money on food stamps?

MR. MCLAUGHLIN: Let Monica get in here.

MR. BUCHANAN: It's waste.

MS. CROWLEY: Our national space program is a symbol of American exceptionalism. And I know the economy is in dire straits, but we have to continue down the road of manned space flight. JFK in 1961 said, "We'll put a man on the moon." We did it in seven years. Here we're talking 20, 30 years.

MR. MCLAUGHLIN: The answer is a robot has its limits.

Issue Four: Accentuate the Positive.

BEN BERNANKE (Federal Reserve chairman): (From videotape.) On balance, the incoming data suggest that growth in private final demand will be sufficient to promote a moderate economic recovery in coming quarters.

MR. MCLAUGHLIN: "Moderate economic recovery," quote-unquote. Federal Reserve Chairman Ben Bernanke accentuated the positive this week -- bullish, in fact; maybe even sees a soft spot in the economy. When the chairman says, quote, "Growth in private final demand," his argot translates to "Growth in business and consumer spending." Bernanke also shows cautious optimism about our U.S. banks. MR. BERNANKE: (From videotape.) On net, the financial condition of banking firms has strengthened markedly during recent quarters.

MR. MCLAUGHLIN: Now the chairman's less than optimistic views: First, unemployment, long-term unemployment.

MR. BERNANKE: (From videotape.) I'm particularly concerned about the fact that in March, 44 percent of the unemployed had been without a job for six months or more. Long periods without work erode individual skills and hurt future employment prospects.

MR. MCLAUGHLIN: Second, debt. The current U.S. debt is over $12 trillion. That's nearly as monumental as the total value of the U.S. economy, the GDP, which today is worth about $14 trillion. Bernanke believes that at this rate, by the year 2020, 10 years from now, our U.S. public debt will be the red balloon.

MR. BERNANKE: (From videotape.) Federal debt would balloon to more than 100 percent of GDP.

MR. MCLAUGHLIN: Question: Is there a risk that the Federal Reserve could withdraw support for the economy too soon? Martin.

MR. WALKER: Well, it's already started. It stopped in March buying mortgage-backed securities. It's steadily dismantling the term asset loan facility. The real problem is, when do they start cutting back on the money supply and raising interest rates? Because the real difficulty that we're facing -- sure, we've got a recovery now. Of course we do. We put all this deficit spending and liquidity into the market. But we're now out of ammunition. We can't do this again. So if the private sector can't take up the slack, then we're going to be into a double-dip recession next year.

MR. MCLAUGHLIN: The chronology goes both ways, and it's very delicate. If he does it too soon, he hits a big problem. If he does it too late, it's a bigger problem.

MR. WALKER: It's a worse problem.

MR. MCLAUGHLIN: Then you have inflation.

MR. WALKER: You do, indeed. And, what's more, this is not a solitary U.S. problem. We've got a world that's going on different cylinders right now. We've got the Chinese with a V-shaped recovery; the Europeans, an L-shaped recovery, still down. We're hoping the U.S. will be a U-shape, down and eventually up.

MR. MCLAUGHLIN: We're talking about the Fed's plan to buy back mortgages --

MR. WALKER: Yeah. MR. MCLAUGHLIN: -- and to help the banks a lot. When does he start withdrawing that?

MR. BUCHANAN: He stopped. Martin's exactly right. Look, I think they've bought about $1.25 trillion worth of mortgage-backed securities, virtually doubled the money supply.

Things are starting to pick up. And now he's got to start pulling back here. And the question is, what happens when he does? Do you have a second -- are we in a bubble is the key question, John. Are we in a bubble right now? And will next year --

MR. WALKER: A government bubble.

MR. BUCHANAN: -- will it --

MR. WALKER: A government bubble.

MR. BUCHANAN: Yeah.

MS. CLIFT: It's always risky to read Fedspeak, but as I heard what he said, he's basically not all that bullish at all. He's saying that there are still severe weaknesses in the economy and that he's going to keep interest rates at a very low rate for an extended period of time. So that's not a pulling back to me. I thought that was fairly -- and he said while the risk of --

MR. WALKER: He can't.

MS. CLIFT: -- the risk of that --

MR. WALKER: Eleanor, he can't.

MS. CLIFT: Excuse me -- the risk of that double-dip recession has been --

MR. WALKER: Eleanor, it's not down to --

MS. CLIFT: -- diminished, it is still there.

MR. WALKER: Eleanor, it's not down to Bernanke. He can control short-term interest rates, but the long-term interest rates are set by the market. And they are going up, because the markets are fearing --

MR. MCLAUGHLIN: Let's --

MS. CLIFT: Well, the Fed is --

MR. MCLAUGHLIN: Let's tie this thing together. Is Bernanke more bullish than he is bearish on the economy? MR. BUCHANAN: I think he's positive on the economy, but nervous.

MR. MCLAUGHLIN: What do you think?

MS. CLIFT: I would agree with that. He's walking a very delicate line.

MR. MCLAUGHLIN: Is he slightly more bullish than he is bearish?

MS. CROWLEY: Well, I think he's slightly more bearish. I mean, I think he's very cautious. He's very weary. And the Fed pumps so much money down into the system that trying to calibrate mopping it all up is very difficult.

MR. WALKER: He's got to sound bearish, but in his heart he's bullish.

MR. MCLAUGHLIN: He --

MR. WALKER: Other way around -- he's got to sound confident. In his heart, he's not. (Laughter.) He's got to sound bullish.

MR. BUCHANAN: He's terrified.

MR. MCLAUGHLIN: He's got to sound bullish?

MR. WALKER: That's his job.

MR. MCLAUGHLIN: Do you think, in his heart, he is more bearish?

MR. WALKER: I think he's rather more worried than --

MR. MCLAUGHLIN: I think unquestionably he's more bullish.

Predictions, Pat. Ten seconds.

MR. BUCHANAN: The Democrats are going to take big losses in November, but that will mean, I think, a lot of changes in the Cabinet, a lot of changes in the White House coming up.

MR. MCLAUGHLIN: Like who? Like who?

MR. BUCHANAN: Well, I would say Eric Holder would be one maybe, John.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: I suspect Eric Holder stays. And I think John McCain is going to handily win his primary, eliminating the competition from the right. MS. CROWLEY: Last week at the nuclear summit, President Obama snubbed the Georgian president, Mikhail Saakashvili. Watch for Russia's Vladimir Putin to read that as license to renew his aggression against the state of Georgia.

MR. MCLAUGHLIN: Wow.

MR. WALKER: Watch for revolution in British politics after the first American-style TV debate. Nick Clegg, leader of the third-party Liberal Democrats, walked away with the honors. That party is going to be the king makers. Forget about the Tories and the (Consularities ?). Keep your eye on this third party.

MR. MCLAUGHLIN: Really?

I predict that Eric Holder will step down by mid-summer.

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END.