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The McLaughlin Group

Host: John McLaughlin

Panel:
Pat Buchanan, Author and Columnist; Eleanor Clift, Newsweek;
Rich Lowry, National Review;
Mort Zuckerman, U.S. News & World Report

Taped: Friday, September 14, 2012
Broadcast: Weekend of September 15-16, 2012

Copyright © 2012 by Federal News Service, LLC, 1120 G Street NW, Suite 990, Washington, DC 20005-3801 USA. Federal News Service is a private firm not affiliated with the federal government. No portion of this transcript may be copied, sold or retransmitted without the written authority of Federal News Service, LLC. Copyright is not claimed as to any part of the original work prepared by a United States government officer or employee as a part of that person's official duties. For information on subscribing to the FNS Transcripts Database or any other FNS product, please email info@fednews.com or call 1-202-347-1400.

JOHN MCLAUGHLIN: Issue One: Arab Uproar.

U.S. diplomatic missions were hit by two separate attacks this week, both on Tuesday, the anniversary of the Twin Towers, Shanksville and Pentagon atrocities. In Cairo, Egyptian protesters scaled the walls of the U.S. embassy, desecrated a U.S. flag, and raised in its stead a black Islamic flag that praised the prophet Mohammed.

In Libya, the attack at the U.S. Benghazi consulate turned deadly when militants fired guns, stormed the compound and burned the building. Four Americans were murdered, including the ambassador to Libya, J. Christopher Stevens.
Secretary of State Hillary Clinton condemned the Benghazi crimes.

SECRETARY OF STATE HILLARY CLINTON: (From videotape.) How could this happen in a country we helped liberate, in a city we helped save from destruction?

MR. MCLAUGHLIN: The attacks in both Libya and Egypt are linked to a film called "Innocence of Muslims," made by a California-based director. The movie depicts the prophet Mohammed as a, quote-unquote, "fraud and a philanderer." A 14-minute trailer of the film was dubbed into Egyptian Arabic and posted on YouTube, thus shared on the Internet, including the Muslim world. By Thursday, national protests had spread to Yemen, Iran and elsewhere.

The secretary of state bluntly separated the U.S. from the inflammatory film.

SEC. CLINTON: (From videotape.) The United States government had absolutely nothing to do with this video. We absolutely reject its content and message. But as I said yesterday, there is no justification, none at all, for responding to this video with violence.

MR. MCLAUGHLIN: Question: Based on initial reports, can you deduce that Tuesday's attacks were coordinated to coincide with the 11th anniversary of our 9/11? Pat Buchanan.

PAT BUCHANAN: The guys that went into Benghazi, John, with rocket-propelled grenades and guns and all the rest of it, that was an organized, orchestrated attack, maybe inside a really dramatic uprising.

But, John, what this shows is the total collapse, I think, or the approaching collapse of the entire Obama policy of looking on the Arab spring as a great, glorious opportunity. We've liberated, helped liberate the Libyans, the Egyptians, the Tunisians, the Yemenis. And we find our embassies in all of these cases, as of Friday, under attack, being savaged.

And what has happened is, when the Arab spring came along, it liberated a lot of forces -- ethnic nationalism, tribalism, anti- Americanism -- all of these forces, John. And the United States of America -- there's a real dichotomy between the two of us. How do you get along when you can do a film out there, a video in Los Angeles that insults the prophet, something done in a basement, and it can set the entire region aflame against the United States? I think we've got to take a look at our entire policy over there.

MR. MCLAUGHLIN: Eleanor.

ELEANOR CLIFT: Well, the implication is that President Obama somehow could have prevented all of these uprisings. And I think that's a very false assumption. And some of the anti-American sentiment that you see in Egypt is because they think that U.S. policy was far too long on the side of Mubarak and repression. They don't look at us like great liberators. And I don't think --

MR. BUCHANAN: (Inaudible) -- Americans.

MS. CLIFT: And I don't think the president is putting us forward as the force that so-called liberated the Middle East. These are democracies that are working their way through new governments, and they're dealing with extremist elements in their own midst.

What happened in Libya, what happened in Egypt and the other places, are very different. In Libya, protesters don't bring rocket launchers to protests. So this was evidently a planned attack; probably had something to do with the 9/11 symbolism. We'll see. There are some people under arrest as well. But the Libyan government did intercede to the best of their ability. Libyans carried the body of the ambassador to the hospital. And I don't think we can hold the Libyan people or American foreign policy guilty for a handful of terrorists.

And just as they need to root out terrorists in their society and extremists in their society, so do we. I mean, this film was total propaganda, and the chairman of the Joint Chiefs of Staff called that Florida preacher and told him that he was endangering national security. I'm not excusing what happened, but I think to then condemn all of foreign policy is certainly not the answer.

MR. MCLAUGHLIN: OK, before the attacks and after them.
Egyptian protesters were infuriated by the anti-Islamic film, massing at the U.S. embassy in Cairo, which issued a communique in an effort to quell the looming violence. It read in part, quote, "The embassy of the United States in Cairo condemns the continuing efforts by misguided individuals to hurt the religious feelings of Muslims, as we condemn efforts to offend believers of all religions," unquote.

The statement had no impact. The storming of the Cairo embassy went forward, followed by the deadly attacks in Libya. Mitt Romney condemned the U.S. embassy's words as too weak.

FORMER MASSACHUSETTS GOVERNOR MITT ROMNEY (R, Republican presidential candidate): (From videotape.) It's a terrible course to -- for America to stand in apology for our values. They clearly -- they clearly sent mixed messages to the world. And the statement that came from the administration was a statement which is akin to apology and I think was a severe miscalculation.

MR. MCLAUGHLIN: President Obama was asked what he thought of Mr. Romney's remarks.

PRESIDENT BARACK OBAMA: (From videotape.) There's a broader lesson to be learned here. And, you know, Governor Romney seems to have a tendency to shoot first and aim later.

MR. MCLAUGHLIN: Question: Did Governor Romney make a mistake by criticizing President Obama's handling of the embassy protests? I ask you.

RICH LOWRY: No. He was absolutely right. This press release was just atrociously stupid. And it aped the language promoted by people who want to limit free-speech rights in order to avoid offending Muslims, and it was also meant to appease this mob. And it failed in appeasing the mob, because mobs don't read press releases from embassies before they decide whether they're going to burn the place down or not.

And just a sign, John, of how utterly indefensible this press release was, as soon as Romney criticized it late on September 11th, the White House said, oh, we had nothing to do with this and this doesn't represent our views.

And, look, Pat is absolutely right. President Obama came in with the theory that if he just said he wasn't Bush anymore, if we wound down the wars, if we distanced ourselves from Israel and we made lots of soothing sounds, everyone in the Middle East would love us. That theory has been proven definitely false.

MR. MCLAUGHLIN: Mort.

MORT ZUCKERMAN: Well, I have to say, I think Governor Romney's intervention here was gratuitous, politically motivated, and not very constructive, given the circumstances. I just was astounded by it. And I'm not opposed to him, but I've just got to say that. To me, that was just an absolutely amateurish effort.

Nevertheless, having said that, I do think there's something fundamental that is going on here, and this was --and I believed it at the time and wrote it at the time -- that our -- the way we handled Mubarak, our most loyal ally for 30 years, was a disgrace as well.

In that part of the world, you don't abandon your friends that way without it having real costs in terms of your credibility and your support. I thought it was a huge mistake. It had nothing to do with what this is. It was a democratic election of a totalitarian regime in Egypt, which was totally predictable. Now the Muslim Brotherhood is there. We've lost a major ally. We've undermined our relationship with the rest of our allies in the region.

MR. BUCHANAN: John, Erdogan -- Erdogan, the prime minister of Turkey, said in our part of the world, democracy is a bus that you get off when it reaches your stop. And we helped overthrow and undermine Mubarak and all these others, and what has risen up is a lot of noxious forces, John, in all these countries.

And majorities in many of these countries do not like the United States of America, which means that the whole Arab spring idea, pushing democracy -- we're going to have governments rise all through this area that are anti-American, whether you like it or not.

MS. CLIFT: There are -- tell me how President Obama could have stopped these revolutions from happening.

MR. BUCHANAN: President Obama was naive.

MS. CLIFT: Social media --

MR. BUCHANAN: He is naive.

MS. CLIFT: Social media; lots of young men without jobs. All of that came together. There is no single leader in this country --

MR. BUCHANAN: You don't think he was naive?

MS. CLIFT: -- however exceptional we are --

MR. BUCHANAN: You don't think he was naive?

MS. CLIFT: -- who could have kept the lid on that. And now it's up to our government to work --

MR. MCLAUGHLIN: Mm-hmm. (Acknowledging.)

MS. CLIFT: -- with these new governments. And President Morsi now realizes he should have come out a lot earlier --

MR. MCLAUGHLIN: That's the --

MS. CLIFT: -- to condemn what was happening.

MR. LOWRY: Can I --

MR. MCLAUGHLIN: Hold on for a minute. Hold on. Hold on.

MS. CLIFT: And he's now trying to make up for that.

MR. MCLAUGHLIN: What's the --

MS. CLIFT: And we don't -- we're not going to abandon Egypt either.

MR. MCLAUGHLIN: What's the first place that President Obama visited after he became president?

MR. BUCHANAN: Cairo. He went to Cairo and spoke right there. The problem --

MR. MCLAUGHLIN: Who did he speak to?

MR. BUCHANAN: He spoke to the whole Muslim community there --

MR. MCLAUGHLIN: What did he say to them?

MR. BUCHANAN: -- to the whole Middle East. He basically said, look, we favor democracy, all the things you like. But Morsi -- the Egyptian government, whom we aid, sat there and did nothing while this attack on our embassy --

MR. LOWRY: This is --

MR. BUCHANAN: -- was going on.

MS. CLIFT: Yeah, because Morsi --

MR. BUCHANAN: That's Morsi.

MS. CLIFT: -- because Morsi was playing to his domestic crowd.

MR. BUCHANAN: Well, fine.

MS. CLIFT: And they don't like America.

MR. LOWRY: Can I try to --

MS. CLIFT: He's trying to get balance.

MR. LOWRY: Can I quickly try to split the difference here?

MS. CLIFT: You don't write him off immediately.

MR. MCLAUGHLIN: Hold on, Eleanor.

MR. LOWRY: Can I try to split the difference here? I think Eleanor is right. There's nothing that Obama could have done that would have saved Mubarak. Mubarak would not have been able to save himself, short of undertaking a Bashar al-Assad sort of murder and slaughter in Egypt. And if he tried to do that, the military wasn't going to be with him. And it was basically a kind of military coup that happened in Egypt.

But Pat is right about how naive this administration has been about the Muslim Brotherhood, just pretending they're sort of great liberal democrats.

MS. CLIFT: He's not pretending --

MR. LOWRY: And we need to be much --

MS. CLIFT: -- they're liberal democrats.

MR. LOWRY: Yes. We have to be much --

MS. CLIFT: Oh, no, they're not.

MR. LOWRY: We have to be much tougher on them --

MS. CLIFT: They're --

MR. LOWRY: -- and hold their feet to the fire in a way we haven't.

MR. MCLAUGHLIN: Mort --

MS. CLIFT: That's exactly --

MR. MCLAUGHLIN: Hold on, please.

MS. CLIFT: -- what Obama is doing, saying they're not --

MR. LOWRY: Now. Now.

MS. CLIFT: No. And they're an elected government, so you deal with them.

MR. LOWRY: That doesn't --

MR. MCLAUGHLIN: OK, kindly relinquish. Let's go.

MR. LOWRY: (Inaudible.)

MR. MCLAUGHLIN: Mort, this is what the headlines are saying around the world. "Mob at U.S. embassy in London burns American flag." "Protesters smash windows, set fire at the U.S. embassy in Tunisia." "Gunfire heard at embassy in Sudan." "German embassy in Sudan on fire." "Clashes intensify near U.S. embassy in Cairo." "Embassies on high alert as protests spread." Finally, "Crowd in Lebanon torches KFC."

What do you make of that?

MR. ZUCKERMAN: Well, it's obvious what we have to make of it, which is that this has been a trigger point for a rise in anti- American sentiment around that whole part of the world. And it also speaks, if I may say so, to the decline in the respect they have for the United States. So we've got a huge problem there, because we have a great deal that's dependent upon our support in that part of the world.

MR. MCLAUGHLIN: We give a billion and a half in aid to Egypt.

MR. ZUCKERMAN: That's right.

MR. BUCHANAN: John --

MR. MCLAUGHLIN: Do you think we should continue that aid?

MR. ZUCKERMAN: Not if this continues from this government, OK. We undermined the military --

MR. BUCHANAN: John --

MR. ZUCKERMAN: -- in the first place. We have to be very careful about what we do now.

MR. BUCHANAN: John --

MR. MCLAUGHLIN: Do you think --

MR. BUCHANAN: The anti-Americanism --

MR. MCLAUGHLIN: What is the most severe danger that could result from --

MR. BUCHANAN: Look, the whole region, John --

MR. MCLAUGHLIN: -- the kind of protests that we see developing?

MR. BUCHANAN: The problem is anti-Americanism, and for reasons Eleanor mentioned and others have mentioned, and Mubarak, is pandemic through this entire region.

MS. CLIFT: That's not news.

MR. BUCHANAN: And our -- hold it. And our program is democratizing these places. But when a single item, a video, can set off something like that, the United States has got to lower its profile, reduce its troop presence, reduce its diplomatic presence over there, and don't cut off aid to Morsi unless he says, you know, I can't defend the embassy. Then we ought to do it.

MR. MCLAUGHLIN: Does this impose any kind of a danger for the United States? Danger?

MS. CLIFT: We don't want to --

MR. MCLAUGHLIN: Physical danger?

MS. CLIFT: Egypt is the most --

MR. BUCHANAN: There's danger for our guys all over there, John, and that's why we don't have people in Benghazi when those kinds of things go.

MS. CLIFT: No, no, you don't want to immediately pull out and turn it into Fortress America. You want to try to keep your presence there. But we are reliant on the host countries to provide some protection. Libya did not. Egypt didn't. And Morsi now realizes he's on a tightrope if he wants to continue to get that aid. It's going to be very hard for President Obama to go to Congress and ask for that aid unless they really do show they're going to --

MR. LOWRY: Every --

MS. CLIFT: -- uphold the treaty with Israel and that they're going to work to protect --

MR. LOWRY: Every dollar of that aid --

MS. CLIFT: -- our diplomats.

MR. LOWRY: -- should now be used as leverage.

MR. MCLAUGHLIN: Do you think that a variety of countries, such as I've mentioned here, will want to keep away from the United States, that the United States --

MR. LOWRY: Well, a lot of these governments -- and you saw with Morsi, he plays a double game. And when these radicals show up at the embassy, he doesn't want to denounce them forthrightly or take action to stop them, because he's afraid of being outflanked to his right. But at the same time, he's happy to have his hand out and take a billion dollars every year from the United States government.

MS. CLIFT: Well, that's a balancing --

MR. MCLAUGHLIN: Is that out of control?

MS. CLIFT: That's a balancing act every leader --

MR. ZUCKERMAN: We have lost --

MS. CLIFT: -- has to play.

MR. ZUCKERMAN: Look, these are not democracies in the general sense that they really have that kind of control or support in their people. They're either autocracies or semi-autocracies. We have to work with that kind of political community. We've lost their respect. We've lost the relationship with them, the Saudis in particular; the Egyptians, of course, under Mubarak. This is a huge issue for the United States. We do not have --

MR. MCLAUGHLIN: Do you think --

MR. ZUCKERMAN: -- allies in that part of the region.

MR. MCLAUGHLIN: Do you think --

MR. ZUCKERMAN: And we need them.

MR. MCLAUGHLIN: Do you think that we could become isolationist by reason of this --

MS. CLIFT: No.

MR. MCLAUGHLIN: -- worldwide phenomenon, if that's what it is?

MR. ZUCKERMAN: We cannot. We cannot afford to lose that region, I think, in this sense. What was said was absolutely correct.

MR. BUCHANAN: Mort, we've lost it.

MR. ZUCKERMAN: Well --

MR. BUCHANAN: Look --

MS. CLIFT: That's way too sweeping.

MR. BUCHANAN: John, anti-Americanism is pandemic throughout that region.

MS. CLIFT: That's --

MR. BUCHANAN: The polls show Americans are disliked, detested, hated.

MS. CLIFT: That's not new.

MR. BUCHANAN: Pakistan -- it's not new, but what I'm saying is --

MS. CLIFT: It's not new.

MR. BUCHANAN: -- when you've got a simple stupid video that can ignite this whole thing, we ought to realize that that's there and pull back, for heaven's sakes.

MS. CLIFT: But remember the Danish cartoonist?

MR. BUCHANAN: You can't alter -- you can't change the mindset of these people. East is east and west is west, and never the twain shall meet.

MR. LOWRY: You've got to remember, Pat, a lot of this --

MS. CLIFT: That's classic Patrick Buchanan isolationism. East is east and west is west. We're not going to draw a line. We can't withdraw from the world.

MR. BUCHANAN: How are you going to alter them to be like us?

MS. CLIFT: The Danish cartoons, it was the same sort of uprising.

MR. BUCHANAN: You've got a cartoonist and you've got -- the whole place explodes.

MR. LOWRY: You've got to remember, Pat --

MR. MCLAUGHLIN: Issue Two: Easing the Easement -- QE3.

BEN BERNANKE (chairman, Federal Reserve Board of Governors): (From videotape.) We have tried very, very hard, and I think we've been successful, at the Federal Reserve to be nonpartisan and apolitical. We make our decisions based entirely on the state of the economy and the needs of the economy for policy accommodation. So we just don't take those factors into account. And we think that's the best way to maintain our independence and maintain the trust of the public.

MR. MCLAUGHLIN: Question: The U.S. Federal Reserve has launched an open-ended program to ignite a recovery by injecting an extra $40 billion into the economy each month. How does the Fed do it? It buys mortgage-backed securities.
Can you tell us more on this, Mort?

MR. ZUCKERMAN: Yes. Well, the purpose of the thing is to improve the liquidity in the country and also to keep interest rates very low. And he'll accomplish both objectives. The real problem is this is the third effort that he's done of the same kind, and it has had very little effect in terms of getting the economy to grow.
There is an argument that it prevented the economy from getting worse. But right now we have made virtually no progress in four years with the biggest fiscal and monetary stimulus in our history. So you have to ask, what is wrong here?

One of the main things that is wrong is we still are trying to deal with what they call overleveraging -- too much debt in the society. But the other thing, frankly, is that we misjudged and miscalculated the fiscal stimulus. It was not nearly enough and was badly structured, and that did not give the economy the jolt that it needed, given how rapidly the economy was declining.

MR. MCLAUGHLIN: You're talking about the public debt, which is 16 and a half trillion dollars.

MR. ZUCKERMAN: That's right. That is a huge amount of money, even for an economy like the United States. A stimulus program in the form of monetary stimulus tends to benefit you in the short run. Then the interest on the money begins to be a depressant. We're going to get to that point very soon, and monetary policy is not going to be effective.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: Bernanke has made a huge shift here, because now, instead of worrying about inflation, he's decided that unemployment is the biggest problem facing the society. And he's saying he's going to take this action now. He may take it again next month or the month after. He's now committed to getting this economy off the ground.

I would argue with you that we haven't made any progress. We did get saved from the great depression. We'd be a lot worse off if the Congress and the president didn't take these steps. But Congress is not going to undertake any more stimulus. It's now in the hands of the Fed. And I commend Mr. Bernanke for shouldering the burden that he understands now is his.

MR. MCLAUGHLIN: This is six months before President Obama is going to ask the American people to give him a second term.

MS. CLIFT: Second months?

MR. MCLAUGHLIN: Do you think that the timing of this --

MR. BUCHANAN: It's eight weeks. It's eight weeks, John. I don't know that the timing is influenced. I don't believe it is. I think Bernanke's a good man. The timing is influenced by the fact he really is alarmed. But politically, this will help Obama. You already saw the stock market seeing all this new money --

MR. MCLAUGHLIN: Right.

MR. BUCHANAN: -- pouring in.

MR. MCLAUGHLIN: Right.

MR. BUCHANAN: And where does the money go? It starts chasing commodities and things like that. It could drive the market up. It's gone hundreds of points. And that is clearly going to help Barack Obama with a huge part of that 1 percent and 10 percent --

MR. MCLAUGHLIN: Yeah.

MR. BUCHANAN: -- that he's not so well off with.

MS. CLIFT: It was high a week ago too.

MR. ZUCKERMAN: The real issue is employment. That's the real issue.

MR. LOWRY: Yeah.

MR. ZUCKERMAN: Will this help employment?

MR. BUCHANAN: Mort, we know that already.

MR. ZUCKERMAN: It has not --

MR. BUCHANAN: In the short term, no.

MR. ZUCKERMAN: It has not helped it.

MR. BUCHANAN: Short term, no.

MR. LOWRY: Right. But that's -- I think that's politically much more significant. I mean, this will help the optics because it gets the numbers of the stock market up. But it doesn't create any jobs, not in the short term, at least. It doesn't make the labor force participation any better.

MR. BUCHANAN: No.

MR. LOWRY: And it's a sign that, three and a half years after a recession, this economy is still being held together with baling wire and duct tape. And the idea that stimulus, by the way, prevented a depression is absurd, given that the recession ended before most of the stimulus even had a chance to kick in.

MR. MCLAUGHLIN: You understand that the morale of the country is low.

MR. LOWRY: Yes. Of course it is.

MR. MCLAUGHLIN: This is bound to have some elevating effect --

MR. LOWRY: I don't know, John.

MR. MCLAUGHLIN: -- on the morale.

MR. LOWRY: I don't think --

MR. MCLAUGHLIN: The overall feeling.

MR. LOWRY: I don't think those people --

MR. MCLAUGHLIN: And that overall feeling -- huh?

MR. LOWRY: -- (inaudible) -- the stock market and say, OK, I know a cousin or a neighbor who's lost a job. I feel better because the Federal Reserve is inflating the stock market.

MR. MCLAUGHLIN: It won't do much for jobs in the short run.

MR. BUCHANAN: It's an amphetamine.

MR. MCLAUGHLIN: But it will nevertheless --

MR. BUCHANAN: It's an amphetamine, and it will -- people will think better. And it may be marginal, but it's positive on net for Barack Obama.

MS. CLIFT: The stock market --

MR. MCLAUGHLIN: Did Barack Obama lift up the phone and call him up and say --

MS. CLIFT: No, no, no, no, no.

MR. ZUCKERMAN: No, no.

MR. MCLAUGHLIN: -- would this be something you would want to consider?

MR. BUCHANAN: (Laughs.)

MS. CLIFT: No. The stock market --

MR. MCLAUGHLIN: He didn't tell him to do it. He said, you know, the idea occurred to me --

MR. LOWRY: John -- (inaudible) -- sent a text message.

MR. MCLAUGHLIN: -- that it might be time for a little extra stimulus.

MR. ZUCKERMAN: I think the president would be -- would have been very unwise to call the head of the Federal Reserve. That's an independent agency.

MR. MCLAUGHLIN: They all say that. They all say that.

MR. ZUCKERMAN: Listen, I'll tell you --

MR. MCLAUGHLIN: So you send an emissary over there.

MR. ZUCKERMAN: When you find out for sure that that conversation took place, call me first.

MR. MCLAUGHLIN: No, this is all hypothesis.

MR. ZUCKERMAN: It is not only hypothesis.

MR. MCLAUGHLIN: In point of fact --

MR. ZUCKERMAN: It is hypothetical.

MR. MCLAUGHLIN: In point of fact, there's a political payoff, it would appear.

MR. BUCHANAN: Do you remember, John --

MR. MCLAUGHLIN: There's not much of a down side, not in six or eight weeks.

MR. ZUCKERMAN: No, I agree with that. But this is not going to have very much of an up side in six or eight weeks.

MS. CLIFT: Well --

MR. ZUCKERMAN: The real issue is how bad is the economy today for how many people? And that's going to be laid at the doorstep of the president, like it or not.

MR. BUCHANAN: It already is.

MS. CLIFT: The only --

MR. MCLAUGHLIN: If you were president, you'd lift up that phone and say, hey, Ben, have you thought of this?

MR. ZUCKERMAN: No.

MS. CLIFT: Bernanke only has to --

MR. MCLAUGHLIN: If you were president.

MS. CLIFT: -- read the newspapers, John --

MR. ZUCKERMAN: I would never do that.

MS. CLIFT: -- to know what's going on.

MR. MCLAUGHLIN: Oh, (come off it ?).

MS. CLIFT: Come on.

MR. BUCHANAN: You remember Nixon?

MS. CLIFT: He only has to read the newspapers to see how the economy is hurting. And I don't think he sits there and says I'm going to put my finger on the scale for Obama.
But Mitt Romney --

MR. MCLAUGHLIN: Well, you know, his term is --

MS. CLIFT: -- says he's not going to appoint him.

MR. MCLAUGHLIN: His term is practically up, and then he can --

MR. ZUCKERMAN: John, here's what really worries me. The Federal Reserve has more information about the economy than any other place in the United States.

MR. MCLAUGHLIN: Right.

MR. ZUCKERMAN: And when he looks at the economy and sees how bad it is and does this, you can imagine what his private information is about the economy.

MS. CLIFT: I don't --

MR. ZUCKERMAN: It just tells you something about how bad the economy is.

MR. BUCHANAN: But --

MS. CLIFT: Well --

MR. BUCHANAN: The economy's bad, but Obama is winning in the polls. And this is a small net positive for Obama.

MR. ZUCKERMAN: Well, sure.

MR. BUCHANAN: I don't see how you could say otherwise.

MR. MCLAUGHLIN: You think it could drive the economy --

MR. ZUCKERMAN: I don't say that.

MR. MCLAUGHLIN: -- the unemployment rate from --

MR. BUCHANAN: Not in the short term.

MR. MCLAUGHLIN: -- 8.2 to 1 percent -- 7 percent?

MR. BUCHANAN: In the short term, it's not going to do a thing.

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

MR. MCLAUGHLIN: It won't?

MR. LOWRY: It hasn't in the past. It's not going to now, certainly not before the election.

MS. CLIFT: It's a tonic --

MR. ZUCKERMAN: The economy is declining now, with all of that stimulus.

MS. CLIFT: It's a tonic, and it may not take effect before the election.

MR. MCLAUGHLIN: All right, the question is --

MS. CLIFT: But the economy needs it. He's doing the right thing.

MR. MCLAUGHLIN: -- is there more to Bernanke than meets the eye?

Issue Three: Rubber Soul.

PRESIDENT OBAMA: (From videotape.) Madam Chairwoman, delegates, I accept your nomination for president.

MR. MCLAUGHLIN: The verdict is in. A consensus of pollsters has decreed that President Obama got a respectable post-convention bounce. It ranges from 3 percent to 5 percent percentage points after the Democratic Party gathering in Charlotte last week.

Here's the tally of likely voters, Democrat, Republican or independent. If the election were held today, 52 percent would vote for Obama, 46 percent for Romney, according to a CNN/ORC poll; then this Fox News poll of likely voters -- Obama, 48 percent, Romney, 43 percent; Reuters, Obama, 48 percent, Romney, 45 percent.

But it's not all bad news for Romney. Two polls found the post- convention presidential contest to be a dead heat. Rasmussen's tracking of likely voters, polled between September 10 to the 11th, has Obama at 46 percent, Romney, 45 percent; ABC News/Washington Post poll between September 7th through the 9th, Obama, 49 percent, Romney, 48 percent.

Question: The post-convention polls of likely voters range from a 6 percent lead for Obama to a statistical tie. What explains the volatility of these polls? Patrick.

MR. BUCHANAN: Well, John, first, there's different pollsters and there's different sampling. But all of the polls, basically, except for Rasmussen, whose latest poll even has Romney ahead, what they've got is --

MR. MCLAUGHLIN: On what count?

MR. BUCHANAN: They've got him about three or four points ahead nationally. But it's an outlier, sort of. It's the only one that does.

Here's the problem for Romney. He is behind in something like seven of the eight major states -- behind in Ohio, Florida, Virginia, Colorado -- of those big states.

MR. MCLAUGHLIN: That's ruinous.

MR. BUCHANAN: It's ruinous. Secondly, Obama is back at
around 50 percent approval. And third, in the head-to-head polls, the average in Real Clear Politics puts Obama ahead about four points. That is very, very tough to overcome, and it's hard to see what's going to bring Romney around to overcome it.

MR. MCLAUGHLIN: What are the three states that he has to show well in if he's going to -- Romney?

MR. BUCHANAN: He's got to -- Romney's got to win Virginia, he's got to win Florida, and he's got to win Ohio.

MR. MCLAUGHLIN: He's behind in all three states right now.

MR. LOWRY: Ohio is the most important.

MR. ZUCKERMAN: Ohio's the most important.

MR. BUCHANAN: Behind in all three.

MR. MCLAUGHLIN: Can he close the gap?

MR. BUCHANAN: Yeah, I think he -- I think he can close the gap, but it's going to take something. I don't see what's going to do it, because I think foreign policy will, by and large, redound to the benefit of the guy, the president, who can act as well as speak.

MR. LOWRY: But, John, you need a little more time to settle down after the convention. There's no doubt the Democrats had quite an effective convention. I would think, in retrospect, Bill Clinton's speech was especially effective. But I suspect, when the bounce settles down a little bit, it's a one- or three-point lead nationally.

But there are two big challenges. One Pat mentioned -- Ohio. Romney really can't win without Ohio, and the Obama campaign has really done a number on him there; and the debates. There's major, major pressure on Romney to perform well in those debates now.

MS. CLIFT: Right. And the gender gap is double digits in all of those major battleground states. And the Republicans spent their convention -- as Pat said, they feminized the convention, going for the ladies, and it didn't appear to have any impact on the polls.

And what he didn't do was spell out exactly, if he were president, what would be different. He wants people to take it on faith that somehow his business credentials will transform the economy. And the media are really hammering him, because he's got to cough up some more details.

MR. MCLAUGHLIN: Do you see any correlation here -- the interviews for the Fox poll began on the 9th, the same day Romney told David Gregory he would keep some parts of "Obamacare." Romney lost ground, while Obama's support was virtually unchanged between the Post and the Fox News poll, 49 percent, 48 percent, respectively. Romney fell from 48 percent in the Post to 43 percent in the Fox News poll. So he should never have made that admission, I guess.

MR. BUCHANAN: Well, he's got one problem that you're touching on, which is a slight demoralization and apprehension taking hold among the conservative intellectuals and writers in that community. And at the beginning of this week, it was something approaching panic.

MR. MCLAUGHLIN: Predictions. Pat.

MR. BUCHANAN: Obama's called Bibi's bluff. There will be no Israeli strike on Iran before the election.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: President Clinton's convention speech skillfully framed the economic arguments in Obama's favor, and his campaigning in Florida will carry the state for Obama and thereby the election.

MR. MCLAUGHLIN: Rich.

MR. LOWRY: If Republican panic over the polls continues, you'll see the sharp knives begin to come out for Stuart Stevens, who's running the Romney campaign.

MR. MCLAUGHLIN: Mort.

MR. ZUCKERMAN: Despite what Mr. Bernanke has just done, the employment numbers are going to get worse, or more or less the unemployment numbers will get worse. And it's going to have a huge effect on the outcome of the election.

MR. MCLAUGHLIN: A majority of the United Nations member states will support tighter regulation of the Internet, pitting the United States and other western countries against the global community.

Bye-bye.

END