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MR. MCLAUGHLIN: Issue One: Barack's New Bete Noire.

PRESIDENT BARACK OBAMA: (From videotape.) I believe in the power of the free market. But a free market was never meant to be a free license to take whatever you can get, however you can get it. That's what happened too often in the years leading up to this crisis.

MR. MCLAUGHLIN: President Obama brought his campaign against America's banks to Lower Manhattan this week, our nation's financial nerve center. In the wake of his health-care-overhaul win, Mr. Obama has a new target. Instead of health-insurance companies, the president's new villain is Wall Street. The president has a five-prong action plan for regulatory reform: One, fix government bailouts. Shut down big banks when they begin to fail.

Two, the Volcker rule. Limit the risks taken by banks.

Three, transparency, especially for complicated investments like derivatives, where investors don't know all the players.

Four, consumer protection; more information for individual investors about the financial products they're buying, notably in the complex derivatives market.

Five, reform pay for executives. Investors and pensions vote on compensation for CEOs.

Mr. Obama emphasized that Wall Street has nothing to fear from his administration and its rules.

PRESIDENT OBAMA: (From videotape.) And unless your business model depends on bilking people, there's little to fear from these new rules. (Applause.)

MR. MCLAUGHLIN: Hold on, Mr. President. Bilking? Bilking? Who, sir, is the bilker? Goldman Sachs. The U.S. Securities & Exchange Commission, the SEC, chaired by your appointees, has fingered the 140-year-old titan of Wall Street, Goldman Sachs.

Goldman was charged last Friday with misleading investors by selling investments that were designed to fail. Goldman Sachs pleads total innocence. Investors who lost money were big boys who knew the potential risks and rewards.

One final note: Mr. Obama's critics observe, correctly, that the president received about $1 million from Goldman and its employees for its 2008 campaign. The Obama defense --

PRESIDENT OBAMA: (From videotape.) I got a lot of money from a lot of people, and the vast majority of the money I got was from small donors all across the country. And moreover, anybody who gave me money during the course of my campaign knew that I was on record again in 2007 and 2008 pushing very strongly that we needed to reform how Wall Street did business. And so nobody should be surprised in the position that I'm taking now, because it's one that I was very clear about during the course of the campaign.

MR. MCLAUGHLIN: Question: Is Goldman Sachs getting a bum rap? Pat Buchanan.

MR. BUCHANAN: Goldman Sachs had it coming, John. The whole Mexican bailout was for Goldman Sachs. The AIG bailout gave them $13 billion. Here this fellow Paulson, they created basically a time bomb, got Goldman Sachs to give it to its clients. It blew them to smithereens. And then Mr. Paulson makes a billion dollars. Now, I don't know whether this is illegal, but it is unethical. It is simple. It is easy to understand. Mr. Blankfein, who runs Goldman Sachs, said, "Here we do God's work." This is one the American people can understand. And I think whatever happens to Goldman Sachs, they deserve it. If they were in China, these guys would be put up against a wall for economic crimes.

MR. MCLAUGHLIN: You're not referring to the former Treasury secretary, Hank Paulson.

MR. BUCHANAN: No, it's John --

MR. MCLAUGHLIN: You're referring to John Paulson.

MR. BUCHANAN: It's not Hank Paulson. But I'll tell you, if this is what goes on on Wall Street, then, quite frankly, if they come down on them with both feet, most Americans will say, "Good."

MR. MCLAUGHLIN: Did Goldman make clear from the beginning that there was shorting of the stock going on --

MS. CLIFT: Well, first of all --

MR. MCLAUGHLIN: -- through Paulson?

MS. CLIFT: -- I want to align myself with everything Pat just said, except for the part about lining them up against the wall.

MR. BUCHANAN: That's the Chinese. (Laughs.)

MS. CLIFT: I'd stop there. What Goldman did is they created these investment vehicles, and they created them to fail, but they didn't confide that in the investors. The investors came in good faith, thinking they were investing in something that would be a successful property. And at the same time, they were then betting against this so that they set themselves up to win.

It's a little bit like rigging a World Series game. Now, whether it's illegal, we'll leave that up to the SEC to determine. But it certainly has no redeeming social merit. And this is the first overhaul of the financial system that we've had in 75 years. And for the U.S. to lead the way is important, because we are in a struggle for international control of the monetary and financial markets. And the Europeans are going to battle us for this. So it's important that the president get this legislation, which I believe he will, to set some new rules of the road.

MS. CROWLEY: Well, the last time I checked in this country, you were innocent until proven guilty. And I find it astonishing that people are willing to just assume the worst about Goldman Sachs. I'm not suggesting that they were angels, but this case needs to be adjudicated properly. I also found it astonishing that last Friday the SEC dropped the dime on Goldman Sachs in the middle of the trading day. I don't think anybody has seen quite anything like that before.

I also find it perfectly in keeping with President Obama and his assault on the free market in this country that he goes to Wall Street this week and he levels all of his ire at Wall Street and the biggest and meanest and greediest banks, but there's no mention about the two primary institutions or organizations that were really responsible for this financial crisis: Number one, the government-sponsored enterprises, Fannie Mae and Freddie Mac; and, number two, the Federal Reserve with their easy monetary policy. It would be nice if he leveled some of his ire at the government.

MR. MCLAUGHLIN: Mort, let me give you a piece of research that we have developed, whether or not Goldman made clear in this original offering, which is 2007 and something called the Abacus, which is a collectivized debt obligation. In that prospective, they made clear that other investors were shorting the deal. And both The Wall Street Journal and the Financial Times have seen the documents, and each of those newspapers have independently verified it. They made transparent the fact -- that is, Goldman -- that the CDO, the collectivized debt obligation, would have investors betting against it. So it was clear from the beginning.

MR. ZUCKERMAN: Absolutely.

MR. MCLAUGHLIN: They didn't hide that.

MR. ZUCKERMAN: Absolutely.

MR. MCLAUGHLIN: Is that true?

MR. ZUCKERMAN: The nature of that transaction, which is just basically a bet on whether mortgage prices are going to go up or down, it's not actual mortgage. It's just a bet on that. There is always somebody on the side who thinks they're going down.

MR. MCLAUGHLIN: That's called a derivative. MR. ZUCKERMAN: That's right, in this particular case. So, A, the buyers were very experienced people. They bought over $16 billion of it. And B, now it turns out that a senior executive of Paulson had informed them that Paulson was involved with it. And Paulson, by the way, at that point was a minor figure in Washington. And it would be as if Warren Buffett, for example, decided to sell his GE stock and said to Goldman, "Go ahead and sell it." They don't tell you that Goldman -- that Warren Buffett is the seller. They just sell it. You know, that's the nature of that thing.

MR. MCLAUGHLIN: Do you think --

MR. ZUCKERMAN: So it is absolutely not the case, ever the case, that they talk about --

MR. MCLAUGHLIN: Do you think that Eleanor --

MR. ZUCKERMAN: It was not --

MR. MCLAUGHLIN: Do you think that Eleanor's condemnation was over the top with regard to Goldman?

MR. ZUCKERMAN: Absolutely, because --

MS. CLIFT: Uh --

MR. ZUCKERMAN: Excuse me a second. Let me just finish.

MS. CLIFT: I just said --

MR. MCLAUGHLIN: Let him finish.

MR. ZUCKERMAN: There's at least five dollars of buyers at that point for every dollar of sellers. Everybody wanted to buy those securities. Now, in retrospect, it's --

MR. BUCHANAN: Mort, Goldman has done this before.

MR. MCLAUGHLIN: Was everybody who --

MR. ZUCKERMAN: Excuse me a second. I'm not going to debate -- I'm just debating --

MR. BUCHANAN: Having Goldman -- look, Goldman --

MR. ZUCKERMAN: I'm just going to debate this one point, because --

MR. BUCHANAN: All right. Okay. Well, let me --

MR. MCLAUGHLIN: Did anyone foresee a housing mortgage drop?

MR. ZUCKERMAN: Yes. Paulson did. MS. CROWLEY: Paulson.

MR. ZUCKERMAN: And he was one of the few people who did.

MR. MCLAUGHLIN: You mean -- you don't mean John Paulson. You mean John Paulson?

MR. ZUCKERMAN: Yes, John Paulson.

MS. CROWLEY: John Paulson.

MR. ZUCKERMAN: He was one who did. Look, I have to say, so did I. But that --

MR. MCLAUGHLIN: Did Bernanke? No.


MR. MCLAUGHLIN: Did Greenspan?


MR. MCLAUGHLIN: Greenspan was pumping up the real-estate market. Was he not?

MR. ZUCKERMAN: Most of the investment community, most of the banks --

MR. MCLAUGHLIN: And you would have said so and I would have said so, that this was not going to spiral down.


MR. ZUCKERMAN: At that point, nobody knew.

MR. BUCHANAN: Goldman Sachs has been in trouble before. It was recommending some of its own clients buy Russian bonds at the same time it's unloading them. Look, this may be -- as Eleanor says, it may not be illegal --

MR. MCLAUGHLIN: Do you think you're oversimplifying the way she did?

MR. BUCHANAN: Look, the truth is that what these guys are doing -- look, they're big hustlers is what they are. They've got this famous name.

MR. ZUCKERMAN: That is absolutely outrageous, Pat.

MR. BUCHANAN: They're totally arrogant. They're totally arrogant. MR. ZUCKERMAN: Look --

MS. CLIFT: They're totally arrogant, and they made --

MR. MCLAUGHLIN: Let him in. Let him back in.

MS. CLIFT: Let him back in? (Laughs.)

MR. ZUCKERMAN: Let me just say this, okay? Everybody knows Goldman Sachs on the street. They have an outstanding reputation.

They may be arrogant because they're the most successful firm on the street. They attract the most talented people. And every firm that looks for financing would rather have --

MR. MCLAUGHLIN: Do you know anything about the Russian deal he's talking about?

MR. ZUCKERMAN: I have no idea about the Russian deal.

MR. BUCHANAN: They were the Russian --

MR. MCLAUGHLIN: Let Eleanor in. Let Eleanor in.

MS. CLIFT: I thought this was the McLaughlin Group. This is Wall Street Week, a little island of defense for Wall Street. The rest of America looks at what went on and they place blame on the unconscionable risk-taking that these firms took. I'm not for destroying Goldman. I'm for punishing them. And frankly, all they'll take is a little nick on their bottom line.

MS. CROWLEY: Well, how about -- but the point is setting all of this into --

MS. CLIFT: That is the point.

MS. CROWLEY: The point is to set all of this in context. What this administration has done is direct all of their anger and all of their populist outrage at Goldman Sachs and Wall Street when the government --


MS. CROWLEY: -- government has the lion's share --

MR. ZUCKERMAN: I've got to say one thing.

MR. MCLAUGHLIN: What is he trying to keep off the front page? What is Obama trying to keep off the front page?

MS. CROWLEY: Fannie Mae and Freddie Mac --

MR. ZUCKERMAN: Right. MS. CROWLEY: -- began this entire crisis with the Community Reinvestment Act and giving out subprime loans to people who could not afford them. It started to blow up. And President Bush and his Treasury secretaries started to reform. They wanted to reform these GSEs. And you know who stopped them? Senator Obama, Senator Biden --


MS. CROWLEY: -- Senator Dodd and Barney Frank.

MR. MCLAUGHLIN: Barney Frank and Dodd.

MS. CLIFT: That is --

MR. MCLAUGHLIN: I want to let you in here. I want to let you in here. I want to listen to Pat.

MR. BUCHANAN: Paul Volcker --

(Cross talk.)

MR. BUCHANAN: Paul Volcker is quite a man. Paul Volcker is, I think, quite an individual. I think he's as responsible as Reagan for the success of the '80s. He says, look, 1950s and '60s, we didn't have all the derivatives, CDOs and the rest of the stuff. We had a good economy. What is the social benefit of what these guys are doing who took down the American economy, almost to disaster? The financials.

MS. CLIFT: Exactly.


MR. ZUCKERMAN: What caused these bonds to go down in value was the collapse of the housing market. What happened to the housing market, we had a bubble in the housing market. What created the bubble in the housing market, particularly in the low end of the housing market?

MR. BUCHANAN: Who created --

MR. MCLAUGHLIN: Let him finish. Let him finish.

MR. ZUCKERMAN: It was Fannie Mae and Freddie Mac who did it --

MS. CLIFT: Come on.

MR. ZUCKERMAN: -- and the FHA who did that.

MS. CLIFT: Come on.

MR. ZUCKERMAN: Just a minute. That's what caused those securities to go down. That's the underlying cause. MS. CLIFT: My turn.

MR. ZUCKERMAN: Everybody was buying those securities because housing prices were going up in a bubble.

MS. CLIFT: My turn.

MR. ZUCKERMAN: That bubble was caused by the federal government doing what they did.


MS. CLIFT: My turn. Freddie Mae -- Fannie Mae and Freddie Mac rode the bandwagon that all of the private equity firms started. They got in on the subprime mortgages, and then they securitized them and they sold them, and they had no skin in the game. That's where it started. You can't blame it all on the two government entities.

MR. ZUCKERMAN: That is totally untrue. Right now --

MS. CLIFT: And frankly --

MR. MCLAUGHLIN: Let her in. Let her finish, quickly.

MS. CLIFT: Excuse me. And frankly, the Republican Party is going to run to back this legislation on Capitol Hill, because their base --


MS. CLIFT: -- is furious at Wall Street.

MR. MCLAUGHLIN: Exit question --

MS. CLIFT: And their base is right.

MR. MCLAUGHLIN: Senate Majority Leader Harry Reid is forcing a vote on Monday, this Monday, to put new financial restrictions, regulations, on Wall Street. Will the Goldman rap boost financial restrictions, or will it work to defeat them?

MR. BUCHANAN: (Laughs.) It has greased the wheels --

MS. CLIFT: Absolutely.

MR. BUCHANAN: -- on this baby. It is going right through.

MS. CLIFT: The Republicans are in full retreat.

MR. ZUCKERMAN: It's demonizing the financial world, which the American public is very responsive too, and that's what's going to help get it through. MS. CROWLEY: Yeah. Well, look, essentially this is an executive-branch power grab. You've got the executive branch, the Treasury, the FDIC --

MR. BUCHANAN: They had it coming.

MS. CROWLEY: -- and the Fed grabbing control over credit allocation and the rest of it. Big mistake.

MS. CLIFT: The laissez-faire days that led us over the cliff are over.


MR. BUCHANAN: Mort is not all wrong. Let me say that.

MR. MCLAUGHLIN: What does that mean?

MR. BUCHANAN: The government had a huge, huge role in this.

MR. ZUCKERMAN: That's what started it, Pat. That's what started it.

MS. CLIFT: It's not what started it.

MS. CROWLEY: Of course.

MR. ZUCKERMAN: Excuse me. It is what started it.

MS. CROWLEY: Of course it is.

MR. BUCHANAN: He's right about that.

MR. ZUCKERMAN: That's what started the housing bubble.

MR. MCLAUGHLIN: Well, why have you defamed Goldman?

MR. BUCHANAN: Because I think they're all at fault.

MR. MCLAUGHLIN: You've defamed Goldman Sachs.

MR. BUCHANAN: I think Goldman Sachs -- everything I said is true. But what he said is true also.

MR. MCLAUGHLIN: What about this legislation? MR. ZUCKERMAN: Well, I think it's definitely going to get through. I'm not saying it's -- there's a lot of stuff in which I agree. I think there should be higher equity for the banks. There should be lower leverage. There should be a market for derivatives. That's one thing. It's another thing who to blame it on. It is the Congress that started all of this.

MR. MCLAUGHLIN: What do you think of Blankfein's legal team with Larry Craig in there?

MR. ZUCKERMAN: Ken -- it's not Larry.

MR. BUCHANAN: Greg Craig.

MR. ZUCKERMAN: Greg Craig.


MR. ZUCKERMAN: You know, I'm sure there is --

MR. MCLAUGHLIN: Who is he?

MR. ZUCKERMAN: I'm sure he's a very good lawyer. He was going to be the -- he was in the White House.

MR. MCLAUGHLIN: He's their top legal counsel.


MR. MCLAUGHLIN: He's got his dander up, doesn't he?

MR. ZUCKERMAN: Who does? Craig? Craig is not exactly happy with the Obama administration.


MR. ZUCKERMAN: I'm sure that Goldman Sachs is.

MR. BUCHANAN: (Laughs.)

MS. CLIFT: They'll fight that out in the legal arena. But the point has been made that the kind of behavior that they engaged in is over the line.

MR. MCLAUGHLIN: I'm talking about Blankfein. He's fighting mad.

MR. ZUCKERMAN: Of course he's fighting mad, because you can disagree with whether or not this should have been an appropriate transaction.


(Cross talk.) MR. ZUCKERMAN: That's a reasonable thing. But it is not --

MR. MCLAUGHLIN: Do you know what he said about Obama?

MR. ZUCKERMAN: It is not civil fraud. That is an outrage.

MR. MCLAUGHLIN: He said Obama's actions are bad for America.


MR. MCLAUGHLIN: Do you think Obama's actions are bad for America?

MR. ZUCKERMAN: I think --

MR. BUCHANAN: Goldman Sachs is not America.


MR. BUCHANAN: Goldman Sachs is not America.

MS. CROWLEY: Oh, come on, Pat.

MR. MCLAUGHLIN: I'm talking about what he said.

MR. ZUCKERMAN: That is not their doing.

MR. BUCHANAN: That's just it.

MR. MCLAUGHLIN: I want to hear what you say about that.

MR. ZUCKERMAN: It's not -- what he's saying is that the financial system should not be jeopardized irrationally and for political reasons. The financial system is the blood supply of our economy.

MR. MCLAUGHLIN: You don't think --

MR. ZUCKERMAN: We have the major --

MR. MCLAUGHLIN: You don't think, in the final analysis, it's going to be concluded by both the American people and the Congress?

MR. ZUCKERMAN: I doubt it. This is a populist issue at this stage of the game, and I understand the politics of it.

MR. MCLAUGHLIN: Can it be defeated?


MR. ZUCKERMAN: I don't see how it'll be defeated. MR. MCLAUGHLIN: I think it can be defeated.

Issue Two: Divas Come Together.

Dueling divas and media darlings rapping together -- former Governor Sarah Palin and Congresswoman Michele Bachmann.

SARAH PALIN (former Alaska governor and former Republican vice presidential candidate): (From videotape.

) This fireball, she is not afraid to stand up with that stiff spine. I think she notices, too, that as her spine has stiffened, it sure makes the rest of us be inspired.

REP. MICHELE BACHMANN (R-MN): (From videotape.) She did a wonderful job, I think, as the vice presidential candidate. And I think the world is her oyster. If she wants to run, I think that she has tremendous support from the American people.

MR. MCLAUGHLIN: Both political figures are favorites of tea partiers. Republican Michele Bachmann is up for re-election for a third term in Congress from Minnesota.

Question: Are the tea partiers looking for a national leader? Eleanor Clift.

MS. CLIFT: Well, if they're looking for one, it's not Sarah Palin, because the New York Times poll said that a plurality of tea partiers -- I think it's 47 or 42 percent -- think she's not qualified to be president.

The tea parties are really a Rand Paul or Ron Paul -- his son is Rand -- it's a libertarian movement. And they kind of naturally recoil from the notion that they have one particular leader they're following. But I think it's become evident that they're foot soldiers of the Republican Party, and Newt Gingrich has said that they're the activists or the radicals within the Republican Party. And I think the chance of them voting for any Democrats is, like, nil. I mean, they're a Republican adjunct.

MS. CROWLEY: Well, first of all -- first of all, the tea party is no longer a movement. It actually is now mainstream American. While 60 percent of the tea partiers or those who sympathize or agree with what the tea party stands for -- i.e., limited government, controlled spending, reducing the deficit, reining in the national debt -- 60 percent of them do lean Republican or are Republican, but 40 percent of them are Democrats and independents.

And the reason you've got this great feminine force here with Sarah Palin and Michele Bachmann is because those two have essentially taken modern feminism and turned it on its head. Modern feminism said you can have it all. You can have a great career and be accomplished and have a family as well, but you have to toe the ideological line of the left. You have to be a liberal woman in order to be a good feminist.

MS. CLIFT: Whoever said that?

MS. CROWLEY: They've turned that completely upside down. Well, I don't see any women really on the left supporting Sarah Palin or Michele Bachmann.

MS. CLIFT: Well --

MS. CROWLEY: And because they are fearless in their defense of limited government and individual liberty, that's why they're favorites of the tea partiers.

MR. BUCHANAN: John, they are --

MS. CLIFT: You don't see women on the left supporting her because she's not the right.

MR. BUCHANAN: John, these are --

MS. CLIFT: She's on the right. Women on the left aren't going to support a woman --

MS. CROWLEY: I was making a point about --

MR. MCLAUGHLIN: Let Pat in. Let Pat in.

MS. CLIFT: -- (who is ?) on the right.

MR. BUCHANAN: Look, these are very passionate, attractive women, and they've got a tremendous following. And about the tea party, John, the tea party represents -- and Monica is correct in this sense -- that is the swing vote that took Virginia, which Obama won, and handed it over to a Republican governor by 17 points, and New Jersey by five points, which Obama won. These are the swing votes and the independents. And I'll tell you, the smart Democrats --

MS. CLIFT: They're not --

MR. MCLAUGHLIN: Let Mort in.

MR. BUCHANAN: The smart Democrats are not really attacking tea- party folks.

MR. MCLAUGHLIN: Mort, who's better versed on national policy, Bachmann or Palin?

MR. ZUCKERMAN: I would say actually Bachmann is. I don't think Palin -- MR. MCLAUGHLIN: Because she's a congresswoman.

MR. ZUCKERMAN: Yeah. She's been involved in it in a much more intimate way. One doesn't get the total sense of confidence in Sarah Palin's immersion in national politics. But I agree exactly with what Pat's saying.

MR. MCLAUGHLIN: She's a --

MR. ZUCKERMAN: There is a huge swing vote.

MR. MCLAUGHLIN: This is the way Bachmann describes the Democratic monopoly on power in our government today. Control of the White House, House and Senate, she calls gangster government. What do you think of that?

MR. ZUCKERMAN: Again, I think --

MR. MCLAUGHLIN: Do you think in terms of John Dillinger? (Laughter.)

MR. ZUCKERMAN: No. I think that rhetoric is completely misplaced. I don't know who they think it's appealing to. I can't even imagine that most of their people like that kind of language. It's just unnecessarily, you know, arousing.

MS. CLIFT: The notion that the tea party is a swing group of voters -- the wins in Virginia and in New Jersey, neither of those Republican candidates had Sarah Palin in to campaign for them. She's a force in the primaries when the Republicans decide between the right --

MR. BUCHANAN: What about Massachusetts?

MS. CLIFT: -- and the far right?

MR. BUCHANAN: What about Massachusetts?

MR. MCLAUGHLIN: What do you think of --

MR. BUCHANAN: What explains that?

MS. CLIFT: What explains that is that Scott Brown adopted the tea party because he liked the energy, but he's not going to their events.

MR. BUCHANAN: He won. (Laughs.)

MS. CLIFT: He's not a tea partier.

MR. BUCHANAN: He's a senator.

MS. CLIFT: Yeah, but he's not tea partier -- MR. MCLAUGHLIN: What do you think of Al Capone --

MS. CLIFT: -- anymore.

MR. MCLAUGHLIN: -- Bugsy Siegel, John Dillinger? What do you think of all that reference, gangster government?

MS. CROWLEY: Well, what --

MR. MCLAUGHLIN: Does that sound like Bachmann?

MS. CROWLEY: What Michele Bachmann was saying -- what her point was -- and maybe the language wasn't totally appropriate -- but what her driving point was is that this government is not being responsive to the majority of the American people. And you saw that evidenced in the health-care debate. You saw it evidenced over the economic stimulus. The American people are speaking out, telling their government, "Hey, rein it in. Rein in the spending. Start lowering our taxes, not raising them." And they're being heard.

MR. MCLAUGHLIN: Exit question: Is a Palin-Bachmann ticket plausible, or is it conservative fantasy? Pat.

MR. BUCHANAN: It's a little bit of a reach right now, John.

MS. CLIFT: (Inaudible.)

MR. BUCHANAN: I do not think we're going to have a Palin- Bachmann ticket. (Laughs.)

MS. CLIFT: To quote Jonathan Capehart, who's been on this show, Washington Post, they're the Thelma and Louise of politics, and they'll take the Republican Party right over the cliff.


MS. CROWLEY: As a conservative, John, I might luxuriate in that fantasy. But is it probable? No. But I think they are very strong forces in the conservative movement.

MR. MCLAUGHLIN: Yeah, but who's going to end up in the dominant position if that's continued to be brooded about? Is it going to be Palin-Bachmann, or is it going to be Bachmann-Palin in that order? MR. ZUCKERMAN: No, I think Palin has still got much more national recognition and appeal. I think --

MR. MCLAUGHLIN: You don't think Bachmann can catch up?

MR. ZUCKERMAN: Anything is possible with Sarah Palin. Don't get me wrong on that.

MR. MCLAUGHLIN: Well, she's also experienced more in national policy.

MR. ZUCKERMAN: Yeah. And she's been speaking a lot. But I must say, her voice has gotten to be a little bit more shrill than I think is --

MR. MCLAUGHLIN: Katie Couric is --

MR. BUCHANAN: It's the rally-speech problem.

MR. ZUCKERMAN: Don't you think?

MR. BUCHANAN: It's the rally-speech problem.

MR. MCLAUGHLIN: Issue Three: Salt in the Wound.

MAN: (From videotape.) The single most harmful chemical in our food supply.

MR. MCLAUGHLIN: Americans consume one and a half teaspoons of salt a day, more than double the recommended maximum intake. Why so much? Because most processed food already has a lot of salt in it. Eighty percent of American salt intake comes from processed foods -- soups, cereals, restaurant food. Experts argue that more salt increases the risk of high blood pressure, strokes and other problems.

DR. HOLLY ANDERSEN (cardiologist): (From videotape.) Simply, when you absorb extra salt, you also absorb extra water. And that has to go into the same circulation. So the pressure increases. And that pressure can damage the heart, the brain and the kidneys.

MR. MCLAUGHLIN: The Food & Drug Administration is working on a strategy to reduce the amount of sodium in all processed foods.

Critics say that the government's involvement symbolizes yet another effort at establishing a, quote-unquote, "nanny state."

DR. MANNY ALVAREZ: (From videotape.) Ultimately, this is a long argument so far as is government going to be coming down your throat and mandating exactly how you're going to live your life? No smoking, no drinking, no texting, no whatever; now no salting.

MR. MCLAUGHLIN: Question: Is this more nanny-state nagging? Monica. MS. CROWLEY: Yes. This administration seems allergic to individual choice and personal responsibility. It was bad enough when the government climbed into our cars, our banks, our health care and our student loans. But now the government wants to climb into our salt shaker.

The FDA this week issued a statement about this, saying that these were the first steps to placing legal limits on the amount of salt that can go in food. Do you want your government dictating to restaurants --


MS. CROWLEY: -- and fast food and to you --


MS. CROWLEY: -- how much salt you can put in your food?


MS. CROWLEY: That is outrageous.

MS. CLIFT: Now that the federal government is involved in our health care, this is a matter of public health.

MS. CROWLEY: See -- making my point.

MS. CLIFT: And many people go to --

MR. MCLAUGHLIN: All right, let her in.

MS. CLIFT: Many people go to the doctor and they're told to reduce the salt in their diet. You could throw out every salt --

MR. MCLAUGHLIN: What does it produce?

MS. CLIFT: You're supposed to --

MS. CROWLEY: Hypertension.

MS. CLIFT: Hypertension.

MR. MCLAUGHLIN: High blood pressure.

MS. CLIFT: Right.

MR. MCLAUGHLIN: Bad for the heart.

MS. CLIFT: And you could throw out every salt shaker and you would have a very difficult time reducing salt, because the processed foods that many of us buy for convenience are loaded with salt. And what the FDA is trying to do is to get the food industry to lower that. You're supposed to get between 1,500 and 2,500 milligrams in a day. And there's 1,500, 2,000 in some of these soups, in some of these pizzas.


MS. CLIFT: Yeah. It is deadly.

And it is high time --

MR. MCLAUGHLIN: What is in dispute --

MS. CLIFT: -- the FDA is talking about voluntary --

MR. MCLAUGHLIN: I don't think what's -- is the science of salt in dispute? I don't think it is.


MS. CLIFT: No, it's not.

MR. MCLAUGHLIN: I think what's in dispute is the government saying you must limit it.


MR. MCLAUGHLIN: Now, they're going to do it in a way where it's imperceivable. In other words, they've got a salt substitute in there. But salt substitutes, you know, don't really taste like salt.

MR. ZUCKERMAN: Well, that's the issue. The issue is that salt tastes good and makes food taste good. But the problem is, it has real health consequences. And as Eleanor said --

MR. MCLAUGHLIN: Well, why is it nanny-state --

MR. ZUCKERMAN: -- now that the government is --

MR. MCLAUGHLIN: Why is it nanny-state business? That's the point. Why does the government have to legislate this?

MR. ZUCKERMAN: Why does the government --

MS. CLIFT: We don't have --

MR. ZUCKERMAN: Why does the government have to pay for health care, if that's the case?

MR. BUCHANAN: John -- MR. MCLAUGHLIN: Well, presumably there's a threshold where the individual can decide for himself.

MS. CLIFT: You don't have individual --


MR. MCLAUGHLIN: Yet the government says this is the risk involved.

MR. BUCHANAN: John, let me get in --

MR. MCLAUGHLIN: This is the percentage of people affected by it.

MR. ZUCKERMAN: Why do we control smoking?

MR. BUCHANAN: John, let me get into this.

MR. MCLAUGHLIN: All right, get in.

MR. ZUCKERMAN: Why do we control smoking?

MR. BUCHANAN: Look, the United States government cannot defend our borders, win our wars or balance our national budget.


MR. BUCHANAN: But it's going to protect us from salt. (Laughter.) The Founding Fathers are turning over in their graves.

MR. MCLAUGHLIN: Right. Right.

MS. CLIFT: Most people are more threatened by salt than they are from a hard-working Mexican coming across the border.


MR. BUCHANAN: Tell it to the cops in Arizona.

MR. MCLAUGHLIN: Why are Americans such restless improvers? Is that the impulse behind this prohibitionist craze?

MR. BUCHANAN: There's nothing wrong with that. What's wrong is that they try to get the government to impose it on you.

MS. CLIFT: But the point is, people can't do this for themselves. Senator Tom --

MR. BUCHANAN: We all know --

MS. CLIFT: I don't care whether we're Americans, what nationality you are. Unless you're willing to go to the supermarket and read every label, you have no idea how much sodium you get. MR. BUCHANAN: How did the Founding Fathers survive?

MS. CLIFT: And that's unhealthy.

MS. CROWLEY: It is not --

MR. MCLAUGHLIN: It's secrecy. It's secrecy.

MS. CROWLEY: It is not the government's job --

MS. CLIFT: It is the government's job.

MS. CROWLEY: -- to regulate how much salt goes into your food. If you're at risk for developing hypertension --

MR. MCLAUGHLIN: Do you think --

MS. CROWLEY: -- that should be between you and your doctor, and your doctor should be counseling you.

MR. MCLAUGHLIN: Are we all fundamentally utopians in this country?

MR. ZUCKERMAN: Well, we're all fundamentally people who believe that --

MR. MCLAUGHLIN: What happened to --

MR. ZUCKERMAN: -- our life will get better --

MR. MCLAUGHLIN: What happened to utopia?

MR. ZUCKERMAN: -- and life for the next generation.

Utopia? I have to tell you, I've rarely visited utopia.

MR. MCLAUGHLIN: Where did utopia originate?

MR. BUCHANAN: Thomas Moore.

MR. ZUCKERMAN: Thomas Moore, sure.

MR. MCLAUGHLIN: Goldman Sachs will settle. Yes or no?

MR. BUCHANAN: You betcha.



MR. MCLAUGHLIN: Monica. MS. CROWLEY: No. They'll stand and fight.


MR. ZUCKERMAN: Eventually.