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MR. MCLAUGHLIN: Issue One: The Chairman Versus the President.

REPRESENTATIVE PAUL RYAN (R-WI): (From videotape.) It is time to stand up and do what is necessary to fix this country. We need to be honest with the American people about the problems we face. This is the path to prosperity.

MR. MCLAUGHLIN: The chairman of the House Budget Committee, Paul Ryan, on April 5th, last week, unveiled his "Path to Prosperity." That is the title of Ryan's plan to drive down the national debt, a national debt that is now more than $14 trillion.

The driving force of the Ryan plan is reforming Medicare and Medicaid, which many believe are the biggest debt drivers. Reforming Medicare: Beginning in 2022, roughly 10 years from now, Medicare would pay a portion of the premium for private health insurance plans, chosen by seniors themselves. The operative word is private health insurance plans.

Reforming Medicaid: Make it a block grant to the states. Projected savings: Chairman Ryan claims that over 10 years, his plan will cut nearly $800 billion.

President Obama, eight days later, April 13, delivered his counter-plan for long-term debt reduction. That plan is titled "Shared Prosperity and Shared Fiscal Responsibility."

PRESIDENT BARACK OBAMA: (From videotape.) I will not tell families with children who have disabilities that they have to fend for themselves.

MR. MCLAUGHLIN: Here are the Obama reforms on Medicare and Medicaid. Reforming Medicaid: Beginning in 2018, roughly seven years from now, there will be a hard cap on coverage costs. Reforming Medicaid: A single rate for all states. Projected saving: President Obama claims that over 12 years, his program will cut nearly $500 billion.

Let's look at these real clear metrics. Taxes: Obama plan raises taxes $1 trillion by 2023; Ryan plan cuts taxes by $2.3 trillion by 2021. Defense cuts: Obama plan, $400 billion by 2023; Ryan plan, $78 billion by 2021. Spending: Obama plan, 24 percent of GDP; Ryan plan, below 20 percent of GDP.

Question: Can we conclude that President Obama wants to keep the centrally directed, federally controlled, social-welfare state intact? Ryan, on the other hand, wants to dismantle Medicare as a federally controlled system and replace it with, quote-unquote, "premium support," and with Medicaid, give the 50 states latitude. Are those legitimate conclusions? Pat.

MR. BUCHANAN: They certainly are, John. What we have here is what Thomas Sowell calls a "conflict in visions." It is clear. It is dramatic. And what it tells us is there's going to be no big deal. President Obama is not going to accept Ryan's proposals on Medicare or Medicaid, which are at the heart of his proposals. Two hundred and thirty-five House members have signed the no-new-taxes pledge of Grover Norquist. They are not going to sign on to a trillion dollars of new taxes.

So you've got this tremendous conflict here. There'll be no great bargain. What we're going to get is, however, basically what Boehner and Obama and Reid put together. And so you're going to get marginal increases or marginal cuts on various things. It's going to anger and enrage the tea party and the Republican Party, especially if they go for revenue enhancement. On the other side, you're going to get a split in the Democratic Party because they are already screaming about the cuts that have been made, which have been insignificant. So I think you're going to get both parties divided, no grand bargain.

MR. MCLAUGHLIN: Eleanor, is there anything left for you to say now? (Laughter.)

MS. CLIFT: That was such a wonkish examination of what's going on.

Two political figures have set down their markers, and they are going to provide the parameters for the debate that's going to take us into the next presidential election, and that is the role of government and how much responsibility the federal government is going to take to keep the covenants with the American people in terms of Medicare, Medicaid and Social Security.

It seems to me that if you look at any polling of how people feel about Medicare, they are open to some modest reforms. They are not open to turning it into a private insurance scheme. I think it's a highly unpopular idea that Paul Ryan has put on the table, and it opens up lots of room for the president to set out a very different vision of America.

But I disagree with Pat. I do think there is room here for accommodation. You have a gang of six working in the Senate. They love gangs. It's three very conservative Republicans. And you have a rift within the anti-tax community in the Republican Party, with Senator Tom Coburn fighting with Grover Norquist --


MS. CLIFT: -- basically saying that if you remove subsidies from corporations, you really can't count that as a dreaded tax increase. And so I think there's some room for bargaining here.

MR. MCLAUGHLIN: What do you think?

MR. LOWRY: There's not going to be a bargain. I think, you know, Ryan's achievement is smoking out the president of the United States and getting him to implicitly admit that his budget that he released in February was a bad joke. And he implicitly totally disavowed it.

Now, his speech was dishonest. It was classless. It was low- down. And it probably, unfortunately, is going to be politically effective because of the point Eleanor makes. The Medicare is so radioactive politically. There's so much education that has to go on there. And I would disagree with your characterization of it as dismantling Medicare. This will still be an enormous federal program, pumping out an enormous amount of money. There'll just be more an element of choice, the way you have with Medicare part D, the prescription-drug benefit.

And I haven't heard any liberals saying this is an awful thing we're doing to seniors because we're giving them premium support to go out and get their own prescription-drug plans. It worked with Part D. It's been more efficient than the rest of Medicare. And it makes sense to try to transform Medicare if you're actually going to save it and not do the kind of price controls and rationing that President Obama is talking about.

MR. MCLAUGHLIN: Do you think --

MR. PAGE: If only Part D were paid for, right, Rich? If only Part D were paid for.

MR. LOWRY: Well, you guys want it to be more expensive.

MR. PAGE: Yeah, but President Bush implemented it, didn't he?

MR. LOWRY: Democrats wanted it to be more expensive.

MR. PAGE: Yeah, it's a popular program. You're right. I mean, Rich, I like you. I consider you a friend.

MR. LOWRY: There's going to be a big "but" here. I can feel it. (Laughs.)

MR. PAGE: We do have a conflict of visions, yes. Everything you just critiqued Obama's speech for, Obama would say the same thing about Paul Ryan's speech if he was being perfectly candid, which presidents can't afford to be. But nevertheless, the fact is, neither of these plans is going to get through as proposed. This is the way these things happen.

But I think Obama has the stronger ground, even though he's battling on conservative ground, talking about budget cutting. That's not what Democrats usually like to talk about. But nevertheless, when you start talking about going after Medicare, Medicaid with an ax instead of a scalpel, you're really asking for trouble. So I think you're right on that conclusion that, however you want to characterize it, it's going to be -- MR. LOWRY: But the president's speech -- but do you agree about this as well? The president's speech wasn't fundamentally about advancing positive specific solutions. It was getting on slightly --

MR. PAGE: On deficit reduction?

MR. LOWRY: Hold on. It was getting on slightly better --

MR. PAGE: Well, tell me, why did Paul Ryan's speech want to deregulate Wall Street? What does that have to do with deficit reduction?

MR. LOWRY: It was getting on slightly better political ground in order to attack. It was a classic Jack Lew-Gene Sperling type plan. That's exactly what Clinton did in `95.

MR. PAGE: And Paul Ryan let him do it, didn't he? Paul Ryan gave him all that space by being so extreme right with his proposal.

MS. CLIFT: And --

MR. MCLAUGHLIN: Wait a minute. Wait a minute. Do you think -- wait, I want to ask Clarence a question. Do you think that the debate is beginning, or do you think the debate is ending?

MR. PAGE: Well, it is the beginning, you know.

MR. MCLAUGHLIN: Beginning.

MR. PAGE: Obama gave a very low-key announcement --

MR. MCLAUGHLIN: Is time more on the side of the president, or is time more on the side of Ryan?

MR. PAGE: I don't expect anything to happen before the election next year. (Laughs.)


MR. MCLAUGHLIN: You don't think that the more they see of Ryan's wonkish examination, the American public is going to prefer that --

MR. BUCHANAN: No, they're not.

MR. MCLAUGHLIN: -- to the existing state of affairs where 25 --

MR. PAGE: The Republicans have to kick this down for a couple of years. What are you talking about?

MR. MCLAUGHLIN: You know, the American people are now at a point where they're scared. And you know what's scaring them?

MR. PAGE: Which American people, John? Be specific. MR. MCLAUGHLIN: The size of the national -- the size of the national debt is what's scaring them.

MR. BUCHANAN: I'll tell you what they're scared of. They will be scared if you say we're going to fool around and something's going to happen to Medicare or Social Security.

MS. CLIFT: Right.

MR. BUCHANAN: That is real, John.

MR. MCLAUGHLIN: Do you think --

MR. BUCHANAN: Look, Obama portrayed the Ryan plan as taking us back to Les Miserables. (Laughter.) Really. And that's why it was effective. I mean, it was effective, but it was left wing. But here's what Obama's doing. He appeased his left wing. He said, "These are terrible people." But he's got to deal. As Clarence said, he's got to deal on the turf of the right, cutting deficits, cutting budgets.

MR. MCLAUGHLIN: Does he have time on his side, or does Ryan have time on his side?

MR. BUCHANAN: I think time is on the side of the gang of six and Obama --

MS. CLIFT: Exactly.

MR. BUCHANAN: -- coming into the middle, and the tea party unhappy and the liberals unhappy.

MS. CLIFT: And --

MR. MCLAUGHLIN: Well, where does that end? Where does it end?

MR. BUCHANAN: Small beer. (Laughter.)

MS. CLIFT: And it's perfectly -- it's perfectly fair politics to point out that Paul Ryan's plan gets its cuts from taking money away from two thirds of the public that is poorer and hands it over in tax cuts to the top class.

MR. LOWRY: It's revenue-neutral.

MS. CLIFT: And to call that classless --

MR. LOWRY: It's a revenue-neutral tax reform.

MS. CLIFT: Who gets --

MR. LOWRY: He does not cut taxes. That is wrong. MS. CLIFT: Well, but the money --

MR. MCLAUGHLIN: Don't you think you're a little --

MS. CLIFT: Excuse me. The savings he gets, he transfers to the upper class. And you call the president's speech classless.

What do you mean by that --

MR. LOWRY: Historically, revenue --

MS. CLIFT: -- from a party that's in favor of --

MR. LOWRY: He invited Paul Ryan --

MR. MCLAUGHLIN: All right, let him in.

MR. LOWRY: -- to sit there in front of him and tell him he hates autistic kids, fundamentally. That is classless, Eleanor. There's no other word for that.

MS. CLIFT: What else would you expect from a socialist born in Kenya --

MR. BUCHANAN: There were aspects of demagoguery.

MS. CLIFT: -- who's hiding his birth certificate? (Laughs.)

MR. LOWRY: Well, maybe a little class; maybe a little class.

MR. MCLAUGHLIN: Wait a minute. There's too many talking here. Let's hear from Buchanan. Who's the demagogue?

MR. BUCHANAN: In the president's speech, there were real aspects of demagoguery, when he's talking about kids with autism and the rich getting their tax cuts.

MR. MCLAUGHLIN: You don't think the American people can see through that and they saw that it was demagoguery?

MR. BUCHANAN: Demagoguery works, John --

MS. CLIFT: Those --

MR. BUCHANAN: -- let me tell you. (Laughs.)

MS. CLIFT: Excuse me. Those --

MR. MCLAUGHLIN: Does it really? MR. BUCHANAN: I think it was a --

MR. MCLAUGHLIN: When they see the signs of the hole that Medicare and Medicaid are blowing into our budget --

MR. BUCHANAN: As a speech --

MR. MCLAUGHLIN: -- they may say, "Hey, maybe we've got too much bureaucracy."

(Cross talk.)

MR. MCLAUGHLIN: "Maybe it should be on the state level."

MR. BUCHANAN: As a speech, John, it was an excellent --

MR. MCLAUGHLIN: This is not necessarily an ax. You know, there is a big --

MR. LOWRY: If you want to talk about an ax, look at the president of the United States saying he's going to cap the growth of Medicare. And if it goes over that cap, he's going to have experts ration it.


MR. LOWRY: Isn't that an ax, Clarence? And that's Obama's --

MR. PAGE: If we go over that limit.

MR. LOWRY: That's Obama's alternative.

MR. PAGE: Well, it was. He's talking about a budget-cutting measure if you get past the trigger.

MR. MCLAUGHLIN: Is this a states' rights question over a federal question?

MR. BUCHANAN: Medicaid is. Let me tell you, here's the hidden secret. Medicaid is 100 percent. It goes to the states. You know what would happen? The entire federal bureaucracy --


MR. BUCHANAN: You have tens of thousands who deal with Medicaid. They're out of jobs. That is the core constituency of the Democratic Party.


MS. CLIFT: We're not talking -- MR. MCLAUGHLIN: That's Barack Obama's vote.

MR. BUCHANAN: Exactly -- his people.

MR. MCLAUGHLIN: And that's spread out around the country, because they have offices all over the country.

MS. CLIFT: Excuse me, please.

MR. BUCHANAN: Exactly.

MS. CLIFT: My turn. My turn.

MR. MCLAUGHLIN: Don't think he doesn't know that.

MR. LOWRY: Eleanor wants to get in, John.

MS. CLIFT: My turn. This is not about jobs for bureaucrats.

MR. PAGE: Right.

MS. CLIFT: The president correctly pointed out the people who would be hurt under the Ryan plan, and it is people with autistic kids who depend on Medicaid. And the people on Medicare would be hurt because the premium support would give a fixed amount of money --


MS. CLIFT: -- and health costs would continue to go up. They would be borne by individuals instead of the government. It's cost- shifting.

MR. BUCHANAN: And the bureaucrats would be hurt, wouldn't they, Eleanor?


MR. PAGE: Most Medicaid goes to keeping the elderly in nursing homes.

MR. BUCHANAN: They'd lose their jobs.

MS. CLIFT: You can't get enough bureaucrats.

MR. PAGE: The parents of the middle class, keeping them in nursing homes. That's where most Medicaid money goes to. And that's the thing -- as soon as people figure that out, then you're going to see a backlash.

MR. MCLAUGHLIN: Exit question: Assuming this was the opening salvo of campaign 2012, who won, Obama and the Democrats or Ryan and the Republicans? MR. BUCHANAN: I think, quite frankly, even though, I mean, he's been hammered --

MR. MCLAUGHLIN: Don't excuse it. Just state it.

MR. LOWRY: (Laughs.)

MS. CLIFT: It's not coming out like he wants.

MR. BUCHANAN: I think basically the president ran an effective speech with his entire constituency.

MR. MCLAUGHLIN: Did he win it?

MR. BUCHANAN: And he's got it on the subject of Medicare. And, quite frankly, I think the Democrats are in a stronger position on not touching Medicare.

MR. MCLAUGHLIN: You think he won the opening salvo.


MR. BUCHANAN: I think the opening salvo was Ryan's. He did well with that. The return was very good, though. (Laughs.)

MR. MCLAUGHLIN: The two of them are the opening salvo. Now, who won it?

MR. BUCHANAN: I think Obama did.

MS. CLIFT: Come on, Pat.

MR. MCLAUGHLIN: You think Obama did.

MS. CLIFT: The president won it. He's the savior of the safety net, and he wants to raise taxes on millionaires. The other side wants to give tax breaks to millionaires and shred the safety net. No contest.

MR. LOWRY: We won't know till 2012.

MR. MCLAUGHLIN: Oh, come on.

MR. LOWRY: Seriously --

MR. MCLAUGHLIN: We're talking the opening salvo.

MR. LOWRY: Ryan won because he got President Obama -- MR. MCLAUGHLIN: Right.

MR. LOWRY: -- to come out. Obama wanted to duck and hide under his desk and pretend this problem didn't exist. And he can't do that anymore.

MR. PAGE: And after Obama's speech was over, Republicans wished he had hidden under his desk. (Laughs.)

MR. MCLAUGHLIN: You think the president won.

MR. PAGE: You know, when I was in high school debate, I always wanted to come second, because it was always easier to --

MR. LOWRY: Well, that was --

MR. PAGE: -- debate the opposition. And that's what Obama did. He came in second, debating against Ryan's proposal. And Ryan walked right into it, because Ryan was so extreme in his proposal.


MR. PAGE: Obama.

MR. MCLAUGHLIN: -- is playing catch-up?

MR. PAGE: Obama won.

MR. MCLAUGHLIN: Obama won.

MR. PAGE: Obama won the opening round.

MR. MCLAUGHLIN: Obama's playing catch-up. Ryan won.

Issue Two: GOP 2012 Fever.

FORMER MASSACHUSETTS GOVERNOR AND FORMER PRESIDENTIAL CANDIDATE MITT ROMNEY (Prospective 2012 Republican presidential candidate): (From videotape.) America's best days are still ahead. That's why today I am announcing my exploratory committee for the presidency of the United States.

MR. MCLAUGHLIN: Former Massachusetts Republican Governor Mitt Romney announced this week an exploratory committee to assist him in determining whether he should seek to become the official GOP candidate to challenge Barack Obama for the office of president of the United States.

That committee will doubtless focus on "Romneycare," the Massachusetts health care reform law, enacted five years ago this week. The "Romneycare" law says that everyone in Massachusetts must have health coverage and that employers with 10 or more workers must make it available to those employees and must cover some of the "Romneycare" insurance cost. Now, "Romneycare" closely mirrors "Obamacare," many believe. And this will turn off Republican primary voters, which means no GOP official presidential candidate status for Romney, maybe.

Question: In the eyes of the exploratory committee, will "Romneycare" -- "Romneycare"; that's his health program in Massachusetts -- be a plus or a minus for Romney as the official candidate of the GOP? Eleanor.

MS. CLIFT: Well, it would be a plus for me in assessing Governor Romney --

MR. LOWRY: A famous Iowa caucus goer.

MS. CLIFT: -- because it covers --

MR. MCLAUGHLIN: Wait a minute. What do you mean? What do you mean?

MS. CLIFT: Well, because they now cover 98 percent of the population --


MS. CLIFT: -- in Massachusetts. It's a good plan. But I think that politically Romney, the only way he can steer his way through this is the old political maxim, "If you have a problem, hang a lantern on it." Don't run away from it. He's got to somehow convince people that what he did was right. And what he's been saying is that this is a plan for Massachusetts only. All the states should be allowed to develop --


MS. CLIFT: -- their plans, and he would never do a one size fits all. So I think that's the theme he's going to keep pushing. But I think it is -- in the Republican primaries, it's a negative.

MR. MCLAUGHLIN: You know, that's exactly what he is saying now on the campaign, if that's the proper word, in his tour across the country.

MR. BUCHANAN: He is the front runner, John. And he's like Nixon in 1968, with this exception. You know, Nixon was considered -- he's a loser; he can't win. And he was the front runner. But Nixon had an enormous base in the Republican Party that Romney does not have.

But it's hard to see, as of right now, who beats him, because he's better organized than anyone. He's very strong in New Hampshire. He's got legs. In other words, he can afford to lose a state or two or three and then keep on going down the road. And I don't see anyone who is that far advanced as of right now. MR. PAGE: But weren't we saying that before he was beaten by Mike Huckabee in Iowa?

MR. BUCHANAN: Well, if Huckabee got in and beat him in Iowa, Huckabee could be strong. I'm not sure he's in.

MR. PAGE: And Huckabee did not have the organization and the money Romney had. I mean, there are so many unknowns in this race.

MR. BUCHANAN: But he lost to Huckabee and McCain in New Hampshire, twice.

It's what killed him.

MR. PAGE: Right. Yeah. I mean, the whole race was full of surprises there until McCain got the nomination, which a lot of people did not predict. But, you know, this latest poll I saw from CNN showed Huckabee --

MR. LOWRY: That was astonishing.

MR. PAGE: -- and Donald Trump leading and Romney --

MR. LOWRY: Romney was at 11. Huckabee and Trump were at 19.

MR. PAGE: Yeah. Right, right.

MR. LOWRY: If Romney is the front runner, he is the weakest Republican front runner we have ever seen. He's even weaker than John McCain, who was an extremely weak front runner four years ago. This health care thing is an albatross. There's no good way to explain it. It has all the same aspects of "Obamacare" -- the individual mandate, the subsidies, the exchange.

I think what he's going to have to do is kind of work himself up to saying it's an experiment that failed --


MR. LOWRY: -- without being too explicit about it.

MR. MCLAUGHLIN: Are you taking Trump's --

MS. CLIFT: But it's not --

MR. MCLAUGHLIN: Hold on, please. Hold on.

MR. LOWRY: It's unpopular and expensive.

MR. PAGE: Among Republicans.

MR. MCLAUGHLIN: What about the birther business --

MR. LOWRY: It's totally ridiculous. MR. MCLAUGHLIN: -- which he's been --

MR. LOWRY: It's totally ridiculous. But he is speaking to a segment of the conservative id out there. He's taking things that conservatives believe and stating them in an inflammatory and crude way that connects in a certain manner.


MR. LOWRY: But he's -- I don't believe he's going to run.

MR. MCLAUGHLIN: If his people go down and there is no certificate but there is a record of it --

MR. LOWRY: There is a certificate. There is a certificate.

MR. MCLAUGHLIN: -- and the record is in the depths of some city hall, and they go down there and they photograph it --

MR. BUCHANAN: Well, he's got --

MR. MCLAUGHLIN: -- where does he go from there?

MR. BUCHANAN: He's got that vote.

MR. LOWRY: There's a Mike Isikoff story --

MR. MCLAUGHLIN: No, not at all.

MR. BUCHANAN: He goes for economic nationalism, John. The one thing Trump's got going for him, he's an America-first economic nationalist. "Stand up to the Chinese. Don't let these Arabs push us around."

MR. LOWRY: Steal their oil. (Laughs.)

MR. BUCHANAN: That is economic nationalism.

MR. MCLAUGHLIN: You will note that when the president of Georgia -- that's Georgia in the trans --

MR. BUCHANAN: Caucasus.

MR. MCLAUGHLIN: -- in the Caucasus -- he came over to New York and he was squired around by Trump. And he wanted to be squired around by Trump, because Trump knows the international scene and he has investment opportunities and seized opportunities abroad.


MR. MCLAUGHLIN: So there is that factor to Trump -- MR. BUCHANAN: He's a celebrity.

MR. MCLAUGHLIN: -- namely, that he's --

MR. BUCHANAN: He's a celebrity.

MR. MCLAUGHLIN: -- an international figure in a way.

MR. BUCHANAN: He's a celebrity, and he's got enormous self- confidence. And people like -- he's interesting.

MS. CLIFT: He is behaving --

MR. LOWRY: He has a vivid personality.

MS. CLIFT: He is behaving like a fool. He's behaving like he'll do anything to keep his reality show on TV and get on cable news. He's not going to get the Republican nomination. He may run as an independent, and that would only hurt the Republicans.

MR. MCLAUGHLIN: OK. Well now that you've settled that --

MS. CLIFT: I have. (Laughter.)

MR. MCLAUGHLIN: Exit question: Is Romney the GOP front runner? Yes or no.

MR. BUCHANAN: Yes, he is.


MS. CLIFT: Yes, he is. And front runners typically have near- death experiences. But, like Bob Dole and John McCain, he'll probably survive.

MR. MCLAUGHLIN: What do you think?

MR. LOWRY: I'd say he's barely the Republican front runner.

MR. MCLAUGHLIN: But he is.

MR. LOWRY: Just barely. It's as wide open as it's ever been.

MR. MCLAUGHLIN: You think Pawlenty?

MR. LOWRY: No, I think it's as wide open as it's ever been. We've never seen --

MR. MCLAUGHLIN: Is he the front runner, barely or otherwise?

MR. PAGE: I've been saying for the last year Romney is the front runner. I still say that. But, you know, because of the way the Republican primaries are set up -- state by state, winner take all -- it's different than the Democrats. And that can work to his advantage, as it did for McCain. But it remains to be seen.

MR. MCLAUGHLIN: I think he's barely the front runner.

But I think the more you see of him, the more you like him.

Issue Three: Inside Job.

CHARLES FERGUSON (director, "Inside Job"): (From videotape.) Forgive me. I must start by pointing out that three years after a horrific financial crisis caused by massive fraud, not a single financial executive has gone to jail. And that's wrong.

MR. MCLAUGHLIN: That's Charles Ferguson. He is the director of the documentary called "Inside Job" that analyzes the global economic meltdown of 2008, which some see as the greatest economic crisis since the Great Depression.

"Inside Job" won an Oscar a month and a half ago. Upon accepting his Oscar, Ferguson stated, in effect, that justice had not been delivered to those responsible. Well, that justice may be on the way. The U.S. Senate's Permanent Subcommittee on Investigations this week issued a 650-page report titled, quote, "Wall Street and the Financial Crisis: Anatomy of a Financial Collapse," unquote.

The bipartisan report targets four causes of the financial meltdown, now in rocky recovery.

Reckless lending. Banks loaned excessively high-risk mortgages and then sold securities that bundled those mortgages. When the bundles defaulted, the securities crashed.

Credit-rating agencies, like Moody's and Standard & Poor's. They were giving top ratings, AAA, to junk securities based on bad mortgages.

Investment bank practices, like betting against securities they had told clients to buy. When those clients lost money, the bank gained.

No real government oversight. Notably, the Office of Thrift Supervision, a regulator of savings banks, was irresponsible in not stopping the issuance of high-risk, insufficiently secured mortgages. The U.S. Justice Department is now reviewing the bipartisan Senate committee's report for possible criminal prosecution of any offending parties named within. Question: Is there a perception among liberals that the cause of the global economic crisis was Wall Street? Rich Lowry.

MR. LOWRY: Of course. Of course. (Laughs.)

MR. MCLAUGHLIN: More so than any other cause.

MR. LOWRY: Who else would they blame? Of course. Look, it's a very simplistic understanding. There are a lot of people here to blame -- as your intro mentioned, the ratings agencies; the banks that thought the housing bubble was going to go on forever; the lenders who were pushing out these trash subprime mortgages; and the people, frankly, who were taking them.

But underlying it all was the belief that housing was going to go up forever. And even among the people who didn't necessarily believe that, they just thought there was too much money to be made while it was temporarily going up. So it was just a classic bubble and mania that everyone believed in.

MR. PAGE: There was fraud. There was at least one major financial house that was betting against itself, knowing that they were selling junk, and they --

MR. MCLAUGHLIN: Which house?

MS. CLIFT: Goldman.

MR. PAGE: Goldman.

MS. CLIFT: Goldman Sachs.

MR. LOWRY: It was Morgan Stanley that was buying the other end. So it's not as though they were ripping off grandma.

MR. PAGE: This is what the movie spells out very well, that so- called business as usual. It raises real questions about the people who were --

MR. MCLAUGHLIN: It's not illegal.

MR. PAGE: Well, it is illegal. Fraud is illegal, John.

MR. MCLAUGHLIN: Well, it's not illegal --

MR. PAGE: It's not easy to prosecute. But remember the S&L crisis? You had -- how many dozens were indicted behind that? Nobody's been indicted following the Wall Street meltdown.

MR. MCLAUGHLIN: It's not illegal to cover your bet by betting the other side. MR. BUCHANAN: John --

MR. PAGE: Well, it can be --

MS. CLIFT: And it is illegal --

MR. PAGE: -- if you haven't told people.

MS. CLIFT: It is illegal if you're not giving accurate information to the people you're marketing your securities to.

MR. MCLAUGHLIN: That's different. That's different.

MR. PAGE: That's what happened.

MS. CLIFT: Well, and that's what they did.

MR. PAGE: Yeah.

MS. CLIFT: Look, the movie, "Inside Job," is terrific. And there are plenty of enablers. I think what's particularly shocking to me was all the elite academic institutions.

MR. MCLAUGHLIN: Are you talking banks here?

MS. CLIFT: No, the academics who went along --

MR. BUCHANAN: Them and the politicians, John.

MS. CLIFT: -- with various theories to make Wall Street look good.

MR. PAGE: Harvard, Princeton. (Laughs.)

MS. CLIFT: But the American public is most angry at the Wall Street bankers, because they made out like bandits. Nobody has gone to jail.

MR. MCLAUGHLIN: Predictions. Pat.

MR. BUCHANAN: I think, John, there's going to be real pressure on the United States to reinstitute the air strikes in Libya until we drive Qadhafi out. And then the pressure will come to put boots on the ground for the aftermath.


MS. CLIFT: The Republican plan to gut Medicare will put the 25 seats in the House that the Democrats need into play to make it plausible that Democrats could regain the majority in two years, or a year and a half.

MR. MCLAUGHLIN: Rich. MR. LOWRY: A gas tax holiday passes the House.

MR. MCLAUGHLIN: Is that good?

MR. BUCHANAN: Cut taxes is always good.

MR. LOWRY: The politics are good.

MS. CLIFT: It doesn't pass the Senate.


MR. PAGE: I think Obama will keep tax cuts for those who are not rich, but only for a million dollars and up.

MR. MCLAUGHLIN: You stole my prediction, Clarence.

MR. PAGE: Well, you're very bright, John. I didn't know that. (Laughs.)