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The McLaughlin Group

Host: John McLaughlin

Panel:
Pat Buchanan, Author and Columnist;
Eleanor Clift, Newsweek;
Susan Ferrechio, Washington Examiner;
Mort Zuckerman, U.S. News & World Report

Taped: Friday, October 12, 2012
Broadcast: Weekend of October 13-14, 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: Schlock and Awe.

VICE PRESIDENT JOE BIDEN: (From videotape.) Let's take a look at the facts. Let's look at where we were when we came to office. The economy was in free fall. We had the great recession hit. Nine million people lost their jobs; $1.7 (trillion) -- $1.6 trillion in wealth lost in equity in your homes and retirement accounts for the middle class.

REPRESENTATIVE PAUL RYAN (R-WI): (From videotape.) Did they come in and inherit a tough situation? Absolutely.

VICE PRESIDENT BIDEN: (Laughs.)

REP. RYAN: But we're going in the wrong direction. Look at where we are. The economy is barely limping along. It's growing at 1.3 percent. That's slower than it grew last year, and last year was slower than the year before. Job growth in September was slower than it was in August, and August was slower than it was in July. We're heading in the wrong direction.

MR. MCLAUGHLIN: Question: Who made the more powerful case on the economy, Biden or Ryan? Pat Buchanan.

PAT BUCHANAN: They both made the familiar case, John, that both parties have been making for a long, long time. This debate, however, John, was an excellent debate. It was dramatic. Ryan came there and presented himself as an intelligent, personable, attractive guy and someone you'd like a great deal, and who is also presidential.

But the star of the show was clearly Joe Biden. And he had a number of statements he made, I thought, that were excellent. But I'll tell you this. The issue the next day is that Joe Biden was boorish. He interfered. He interrupted. He was contemptuous and he was condescending to Ryan. And this is the talk the day out of the debate.
And I think, in that sense, people are saying -- Republicans are saying Ryan won; Democrats are saying Biden won. Biden -- he did do this. He rallied a base that had been demoralized by roughing up Ryan as best he could. But I think the second-day story both of Biden's performance and on Libya, where Biden really stepped into it, I think those things make it a negative for the Democratic Party the day after.

MR. MCLAUGHLIN: Well, boorish may be a little bit too high- octane, you know --

ELEANOR CLIFT: Yeah.

MR. MCLAUGHLIN: -- as a negative descriptive adjective.

MR. BUCHANAN: I'll hold to it.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: You're watching too much cable news television,
Pat. I thought Joe Biden did exactly what he needed to do. He rallied the Democratic base, which was demoralized. And he made up some of the ground that President Obama lost a week ago. He took the fight repeatedly to Paul Ryan. He didn't let him get away with any of that malarkey.

And he interrupted a lot, but it was a terrific debate. The two candidates engaged. Martha Raddatz did a fabulous job reining them in when she needed to, but keeping them on point. They both performed well. But the victor was Joe Biden, because he really scored on issue after issue.

MR. MCLAUGHLIN: Susan, welcome. What'd you think of the debate?

SUSAN FERRECHIO: Well, I think both Eleanor and Pat made some excellent points. I think what was interesting after the debate in the spin room, when you heard the Republican and Democratic aides talking about what happened,

Republicans conceded that Biden had won on passion, which is important in these things, because it's all about the optics -- how it looks, how it comes across. And that was a really big score for them.

They were very -- they were very, very excited, whereas the Republicans were -- the Democrats were very excited. The Republicans were a little more subdued, but they talked about Ryan as the winner because he was articulate and he put forward the arguments that are important to their base. And they thought he really outscored Biden in terms of getting the facts straight on things.

But, again, the emotion and things that Biden put forward were considered more valuable in some ways for the Democrats. They were really excited about it.

MR. MCLAUGHLIN: Did you think any of -- hear -- you were present down at the debate itself.

MS. FERRECHIO: That's right.

MR. MCLAUGHLIN: Anything else happen? Did you hear anything from Obama's top adviser that -- any expressions of disappointment?

MS. FERRECHIO: From Obama's top adviser?

MR. MCLAUGHLIN: Yeah.

MS. FERRECHIO: Actually, what David Axelrod said was that the president watched the debate on the plane coming home from Florida, where he'd been campaigning, and that he felt that Biden's performance for the president would be very informative to the president and that we would see a different President Obama on the debate stage on Tuesday.

MR. BUCHANAN: (Laughs.)

MR. MCLAUGHLIN: Did he say anything about Ryan -- the president -- through Axelrod?

MS. FERRECHIO: Did Axelrod say anything about Ryan?

MR. MCLAUGHLIN: Yeah.

MS. FERRECHIO: Well, the argument Republicans (sic/means Democrats) are making is that Ryan is misstating the facts on the economy, on Medicare. You know, it's a common mantra that the Republicans -- Democrats put forward is that the Republicans aren't being truthful about things, and they pushed forward that message really strongly last night after the debate.

MR. MCLAUGHLIN: Was it a net big win for Ryan --

MS. CLIFT: (Laughs.) John --

MR. MCLAUGHLIN: -- as you read the community there?

MS. CLIFT: You're leading the witness, John. (Laughs.)

MR. MCLAUGHLIN: Well, let me -- let's talk about the audience, the audience.

MS. FERRECHIO: The Republicans talked about it as going into Tuesday as 2-0 for the Republicans. But they didn't say it with the effervescence that the Democrats were when they talked about their guy winning. Both guys said they were winning. The Democrats had a little more conviction --

MR. BUCHANAN: Right.

MS. FERRECHIO: -- in their statement.

MORT ZUCKERMAN: John --

MR. MCLAUGHLIN: Did you know that there was a focus group down there, put together by CNN -- I think --

MS. FERRECHIO: Yeah.

MR. MCLAUGHLIN: Did you know that?

MS. FERRECHIO: They were talking about -- it was a flash poll talking about what people thought during the debate and after the debate of each candidate.

MR. MCLAUGHLIN: And the group thought that the winner of the debate --

MR. BUCHANAN: 49-44, Ryan.

MR. MCLAUGHLIN: -- 49-44, Ryan.

MS. FERRECHIO: And importantly --

MR. MCLAUGHLIN: Now, they were watching it in a controlled group, correct?

MR. BUCHANAN: Yeah, but CBS had it 50-31.

MR. MCLAUGHLIN: Did they have a group?

MS. FERRECHIO: Much bigger gap.

MR. BUCHANAN: Well, they just had a sample. I heard them say it, 50-31, Biden.

MR. MCLAUGHLIN: Sample of what?

MR. BUCHANAN: CBS ran it, so it would at least have some credibility.

MR. ZUCKERMAN: Can I just make one small comment here? Look, I think Ryan did well. He presented himself well. He presented himself as a credible national figure who understands the issues.

Biden spoke very well, spoke with great energy. The one thing that was a negative was the kind of condescending -- the smiling in the middle of it, the interruptions. I don't think he came across as a likable figure in the way that you would hope that he would have if you were a Democrat. And that, I think, was the only negative.

MS. FERRECHIO: It was likable to his base. But importantly here, was he likable to the key independent --

MR. BUCHANAN: Moderates --

MS. FERRECHIO: -- voters?

MR. ZUCKERMAN: I wasn't talking about his base. The moderates --

MS. CLIFT: Yeah, this was about the base. This was about the base. And he drove home every issue. Medicare -- which party do you trust? Social Security -- Paul Ryan wanted to privatize it. Abortion rights -- Paul Ryan wants to return that issue back to the states, overturning Roe v. Wade.
Issue after issue, he drew the contrast after a week when Governor Romney tried to blur all the differences. The Etch-a-Sketch moment was finally ended last night. The contrasts between --

MR. BUCHANAN: Right.

MS. CLIFT: -- these two tickets are very clear.

MR. BUCHANAN: John --

MR. MCLAUGHLIN: Were you disappointed that the women in this focus group were faulting Biden because of Biden's lack of manners?

MR. BUCHANAN: Exactly.

MR. ZUCKERMAN: Because that's the way women --

MS. CLIFT: I'm sorry --

MR. ZUCKERMAN: Women feel they're treated that way.

MS. CLIFT: (Laughs.)

MR. MCLAUGHLIN: Women feel they're treated that way.

MR. ZUCKERMAN: That's right. And they didn't like the way Biden behaved.

MR. BUCHANAN: They thought he was contemptuous, John.

MR. ZUCKERMAN: That's right.

MR. BUCHANAN: This is where he hurt himself. I agree with Eleanor. I think the Democratic base is exhilarated over it. You know, Biden went in there and beat him up. But to women, it was here's a guy being abusive and nasty and disrespectful and interrupting.

MR. ZUCKERMAN: Condescending.

MR. BUCHANAN: And they don't like that, an awful lot of them. And the question is, did Biden hurt the ticket in the middle as much as he helped it on the left?

MS. CLIFT: No --

MR. MCLAUGHLIN: OK, hold on.

MS. CLIFT: The Democratic base is women. (Laughs.) So how can he please the Democratic base --

MR. MCLAUGHLIN: OK --

MS. CLIFT: -- and insult women?

MR. MCLAUGHLIN: Medicare. Medicare.

VICE PRESIDENT BIDEN: (From videotape.) When the congressman had his first voucher program, the CBO said it would cost $6,400 a year, Martha, more for every senior 55 and below when they got there. Folks, follow your instincts on this one.

REPRESENTATIVE RYAN: (From videotape.) They got caught with their hands in the cookie jar, turning Medicare into a piggybank for "Obamacare.
"

MR. MCLAUGHLIN: Question: What is Ryan getting at, Eleanor
Clift?

MS. CLIFT: This is the $716 billion that the administration took out of Medicare Advantage, which was going to insurance companies, and they diverted it in part to close the donut hole for prescriptions, to provide free preventive care for seniors. No seniors have lost any benefits. And what Romney is saying is he would take that money and put it back into the insurance companies. It's a phony argument.

MR. BUCHANAN: But it --

MS. CLIFT: And they're trying to pretend --

MR. BUCHANAN: The Republicans --

MS. CLIFT: -- the Democrats are going to hurt --

MR. BUCHANAN: But the Republicans --

MS. CLIFT: -- are going to hurt Medicare, when the history --

MR. BUCHANAN: Eleanor --

MS. CLIFT: -- of the Republican Party is they never wanted
Medicare in the first place.

MR. BUCHANAN: Eleanor, the Republicans used the $716 billion out of Medicare, using Medicare as a piggybank and giving it to "Obamacare," because they've tested it. They've polled it. They've mentioned it every time they go on television. It's effective. And despite the fact of your response --

MS. CLIFT: It's not true.

MR. BUCHANAN: -- it's an effective argument. And
Republicans don't have a great many effective arguments, because we didn't --

MS. CLIFT: Well, now, I agree with you on that one, Pat.

MR. BUCHANAN: -- we weren't -- we didn't start Medicare, as I recall. (Laughs.)

MR. MCLAUGHLIN: OK, taxation.

VICE PRESIDENT BIDEN: (From videotape.) The middle class will pay less and people making a million dollars or more will begin to contribute slightly more.

REP. RYAN: (From videotape.) And so the next time you hear them say don't worry about it, we'll get a few wealthy people to pay their fair share, watch out, middle class. The tax bill is coming to you.

MR. MCLAUGHLIN: Question: Is this class warfare, Susan Ferrechio?

MS. FERRECHIO: Yes. And it works fabulously, so absolutely. It's been going on on Capitol Hill now for two years, and it's certainly part of this presidential campaign. It's the Obama campaign saying we're standing up for the middle class, and Romney -- and he's standing up for the rich; he's standing up for the wealthy. It's one of the main arguments in Obama's platform.

And I think Ryan did a very effective job talking about it, just leveling it out a little bit by saying eventually it's going to encompass the middle class as well.

MR. BUCHANAN: But did you notice, John -- did you notice --

MR. MCLAUGHLIN: Do you think there's argument that, A, it is old, because wealth is no longer seen as an evil when you have all kinds of magazines featuring on the front cover Buffett and -- who's the number one wealthiest man in the world?

MR. BUCHANAN: Gates. But listen --

MR. MCLAUGHLIN: Yeah, maybe so.

MR. BUCHANAN: But, John, the key thing here --

MR. MCLAUGHLIN: Well, let's hear it from the voice of authority over here.

MR. BUCHANAN: The key thing --

MR. MCLAUGHLIN: Then I'll call you.

MR. BUCHANAN: Let me just make one quick point. The key thing is Obama -- I mean, Biden changed the Democratic position to the Schumer position. Normally it's $200 (thousand) to $250,000, above that. Biden kept talking about a million dollars. That's Schumer's position. And if Obama moves there, it would be a very smart type move, just like Romney did in the last debate.

MS. CLIFT: (Laughs.) Right.

MR. BUCHANAN: (Laughs.)

MR. MCLAUGHLIN: Do you want to speak to this? Do you --

MR. ZUCKERMAN: Let me --

MS. CLIFT: Mort speaks to this very eloquently, actually.

MR. ZUCKERMAN: I'm trying to speak -- I want to qualify, as much as I possibly can, to talk on this subject. But let me just say this. I'm just thinking about this in terms of what will stimulate the economy. And I have believed for years -- and I've written it for years -- that, in a sense, what Romney is talking about makes a lot of sense. We have to lower the tax rates for everybody, not so much for the wealthy, but for the middle class of this country.
And the way you compensate for the lower rates is by eliminating a lot of these itemized deductions. By the way, only 30 percent of Americans itemize their deductions. They're the ones who benefit from it. They happen to be the upper-income people. So it is a progressive way of taxing. But it is the most stimulative thing you can do for the economy, both for business and for the consumer.

MR. MCLAUGHLIN: I don't get it. Give me the addition.

MR. ZUCKERMAN: The addition is --

MR. MCLAUGHLIN: Why is that going to --

MR. ZUCKERMAN: Let's just say --

MR. MCLAUGHLIN: Why is that going to create more wealth --

MR. ZUCKERMAN: It's not --

MR. MCLAUGHLIN: -- and spread it around? Spread it around.

MR. ZUCKERMAN: It'll -- that's right, because you will increase the real incomes of the middle class of America.

MR. MCLAUGHLIN: Why, because they're going to --

MR. ZUCKERMAN: They'll have lower tax rates.

MR. MCLAUGHLIN: -- better jobs -- and jobs?

MR. ZUCKERMAN: No, they'll have lower tax rates --

MR. BUCHANAN: Right.

MR. ZUCKERMAN: -- and less deductions, OK?

MR. MCLAUGHLIN: OK.

MR. ZUCKERMAN: That's the way it'll average out. And they will be willing to spend it. The same thing will be true of business. They will lose a lot of their deductions, but they'll have lower rates.
And the --

MR. MCLAUGHLIN: And the financing of this --

MR. ZUCKERMAN: You saw the numbers, OK?

MR. MCLAUGHLIN: Yeah.

MR. ZUCKERMAN: There's $1,200,000,000,000 that comes out of the tax revenue and $1,100,000,000,000 that comes out of the elimination of all these special deductions.

MR. MCLAUGHLIN: All right. Now, let's talk about that, because that's key -- the elimination of the loopholes, so to speak --

MR. ZUCKERMAN: That's right.

MR. MCLAUGHLIN: -- the deduction, legitimate deductions.

MR. ZUCKERMAN: Right.

MR. MCLAUGHLIN: Eliminate those.

MR. ZUCKERMAN: That's right.

MS. CLIFT: What loopholes? (Laughs.)

MR. MCLAUGHLIN: That means more money in the government -- more money in the government.

MR. ZUCKERMAN: That's right.

MR. MCLAUGHLIN: That takes care of the middle class.

MR. ZUCKERMAN: It is not --

MR. MCLAUGHLIN: That'll be spread out there.

MR. BUCHANAN: It's revenue-neutral.

MR. MCLAUGHLIN: Revenue-neutral.

MR. ZUCKERMAN: Revenue-neutral for the government.

MS. CLIFT: Excuse me. But --

MR. MCLAUGHLIN: Not bad. What's wrong with that?

MS. CLIFT: Governor Romney doesn't say what loopholes. He refers to these loopholes. You go to his website. There's no mention of loopholes. There's no mention of what he's going to close.

MR. BUCHANAN: No.

MS. CLIFT: And so what is he going to close, and who is it going to affect?

MR. BUCHANAN: Well, there's easy ways to do it. You could say, look, no more than 10 percent deductions off your income. But it's revenue-neutral.

MS. CLIFT: If it's so easy, why doesn't he say so?

MR. BUCHANAN: The thing, John -- let me mention -- Eleanor, let me mention, the key that you were asking Mort about is what does it do? You increase the reward for work, the individual incentive to work. If you cut the taxes, say, from 35 to 28, people are going to say, look, let's not worry about this. Let's go out and make more money. And you energize business and individuals. You've got to get the tax rate down because we're competitive with other countries.

MR. MCLAUGHLIN: It also vitiates the argument stemming from class warfare.

MR. BUCHANAN: It does.

MS. CLIFT: But going back to the tax rates of --

MR. MCLAUGHLIN: It does.

OK, Ryan's reprimand.

VICE PRESIDENT BIDEN: (From videotape.) But it shouldn't be surprising for a guy who says 47 percent of the American people are unwilling to take responsibility for their own lives.

REP. RYAN: (From videotape.) And with respect to that quote, I think the vice president very well knows that sometimes the words don't come out of your mouth the right way. (Laughter.)

MR. MCLAUGHLIN: Question: Did Mr. Ryan effectively counter the infamous 47 percent Mitt Romney quote?

MS. CLIFT: No.

MR. BUCHANAN: No. (Laughs.)

MS. CLIFT: No. And you didn't play -- you didn't play Biden's response there. He said I always say what I mean, and so does Governor Romney. That was a wonderful response to that comment.

MR. BUCHANAN: But John --

MS. CLIFT: The 47 percent is not --

MR. BUCHANAN: -- the 47 percent --

MS. CLIFT: -- a made-up thing. It is what Governor Romney believes.

MR. BUCHANAN: The 47 percent riff by Biden, I think, the early riff, was one of the -- was the best part of the debate for him, I mean, because he felt passionate. He said, look, what are you talking about? My folks -- I go up to Scranton; my neighbors, my parents. And when he did it at that period, that was the best moment for Joe Biden in the whole debate.

MR. MCLAUGHLIN: Did you observe anything special about that moment that Buchanan is glorifying here?

MS. FERRECHIO: I agree. I think Biden was very effective with that argument. And it set up something for Ryan to attempt to try to discount it by saying Biden is full of all these gaffes all the time. But I didn't think it came across as effectively as they wanted it to. And the audience did laugh, but, you know, it didn't kill the whole argument Biden was making about the 47 percent.

MR. MCLAUGHLIN: Issue Two: Benghazi Blame Game.

ERIC NORDSTROM (former State Department regional security officer, Libya): (From videotape.) When I requested assets, instead of supporting those assets, I was criticized. And somehow it was my responsibility to come up with a plan on the ground.

MR. MCLAUGHLIN: Eric Nordstrom, a State Department official, was the agent in charge of security for U.S. diplomats functioning in Libya at the U.S. embassy in Tripoli and U.S. consulate in Benghazi. He appeared before a congressional committee this week and testified that he had alerted the State Department in Washington that the situation in post-revolution Libya after Qadhafi was precarious.

MR. NORDSTROM: (From videotape.) Routine civil unrest, militia- on-militia violence, general lawlessness.

MR. MCLAUGHLIN: The House Oversight and Government Reform Committee is chaired by California Republican Darrell Issa. Issa's committee is examining whether Nordstrom's requests for security assistance were ignored by the State Department in the months prior to the attack on the U.S. consulate in Benghazi on September 11, three and a half weeks ago.

Four Americans were killed, including the U.S. ambassador to Libya, Christopher Stevens, the first U.S. ambassador to be murdered since 1979, 33 years ago.

Charlene Lamb, the State deputy assistant secretary, testified that she and the department did not support the request for more security. According to Lamb, given the information available, the number of security agents, called assets, was adequate.

CHARLENE LAMB (deputy assistant secretary of state for international programs): (From videotape.) We had the correct number of assets in Benghazi.

MR. MCLAUGHLIN: As to the number of assets, Chairman Issa said this.

REPRESENTATIVE DARRELL ISSA (R-CA): (From videotape.) To start off by saying you had the correct number, and our ambassador and three other individuals are dead and people are in the hospital recovering because it only took months to breach that facility, somehow doesn't seem to ring true to the American people.

MR. MCLAUGHLIN: The chairman's point was reinforced this week by the State Department's own description of the attack as carried out by, quote-unquote, "dozens of heavily armed men."

Question: Given the facts that have come out since the September 11th Benghazi attack, can it be said with certitude that there was adequate forewarning of the security gaps but inadequate follow- through by the Department of State? Mort Zuckerman.

MR. ZUCKERMAN: Yes, I think that is the only assumption or conclusion that you can take from it. There was plenty of warning. They wanted more support and military protection and police protection for the embassy, and it was not given. In fact, they had virtually nothing at that point. They took away the plane that was standing by to take them out in case of an emergency. It absolutely was a disgrace, frankly.

MS. CLIFT: Right. They considered that facility -- it wasn't even a consulate, and so somehow it didn't merit getting the same kind of security, which is why you had that ridiculous statement by this woman. But there is now an investigation headed by Thomas Pickering, a respected career diplomat; goes back to the Reagan years.
And it's -- what we have to find out is how far up the chain did the request for security go? Who denied it, and on what grounds? Did it go up to senior levels --

MR. BUCHANAN: John --

MS. CLIFT: -- in the State Department? Did it reach Hillary Clinton?

MR. BUCHANAN: This is getting bigger and bigger, John.

MS. CLIFT: This is -- Pat's convinced there's a cover-up of some sort.

MR. BUCHANAN: Well, there -- let me --

MR. MCLAUGHLIN: Well, Pat knows a lot about cover-ups.

MS. CLIFT: He knows cover-ups. You beat me to that one.

MR. MCLAUGHLIN: This is Nixon's employee.

MS. CLIFT: I know that.

MR. BUCHANAN: I've been involved in -- I've been involved in -- (inaudible). (Laughs.)

MR. MCLAUGHLIN: I want to know, since it goes up to the top, that she didn't mention who's at the top -- Hillary Clinton.

MR. BUCHANAN: This is the point. Joe Biden said last night we were not informed of any security threat in Benghazi.

MR. MCLAUGHLIN: Do you believe that?

MR. BUCHANAN: Yes. What he's saying is before the event, those of us in the White House -- and the White House confirmed that today -- they were not informed. But in the State Department, obviously they knew about it.
And as Eleanor said, how far up the chain of command, John, did it go in the State Department? Did it go to Hillary Clinton? Because Susan Rice went out five days later -- she's virtual number two in the State Department -- and said, oh, it was not premeditated. It was not preplanned. This was a protest.

MR. MCLAUGHLIN: Yes.

MR. BUCHANAN: Out of the protest, all this violence came, which was complete malarkey.

MR. ZUCKERMAN: Completely wrong.

MR. MCLAUGHLIN: OK, let's hear what Vice President Biden said.

VICE PRESIDENT BIDEN: (From videotape.) We weren't told they wanted more security there. We did not know they wanted more security.

MR. MCLAUGHLIN: Question: In the face of diplomatic testimony at the Issa hearing, what justification is there for Vice President Biden to say they were not notified?

MS. FERRECHIO: This is not really --

MS. CLIFT: Well, he's basically saying it didn't reach him.

MR. MCLAUGHLIN: What?

MS. FERRECHIO: I know what the White House was arguing, saying that they only didn't know because the State Department didn't tell them. That's not really a good excuse. I mean, there are four dead Americans, the first ambassador killed since 1979. You have the vice president saying, who ran a foreign policy committee in the Senate for, you know, decades, says I didn't know about it. That doesn't really ring true.

MS. CLIFT: Nobody's saying it's a good excuse, but we don't know where --

MR. MCLAUGHLIN: Good excuse?

MS. CLIFT: We don't know where the --

MR. ZUCKERMAN: We didn't know about it. The State Department knew about it.

MS. CLIFT: Well, we don't know where the --

MR. BUCHANAN: Yeah, did the NSC?

MR. MCLAUGHLIN: Eleanor, there's a massive breakdown --

MS. CLIFT: I just said --

MR. MCLAUGHLIN: -- of communication.

MS. CLIFT: I just said nobody said that was a good --

MR. MCLAUGHLIN: We have four people dead, and the president -- the next day the president flies out to Las Vegas to do his --

MR. BUCHANAN: The White House is saying --

MS. CLIFT: Life goes on, John.

MR. BUCHANAN: John, the White House is saying today --

MS. CLIFT: What would you have expected him to do, closet himself in the White House --

MR. MCLAUGHLIN: Yes, I would.

MS. CLIFT: -- until the --

MR. MCLAUGHLIN: Yes, I would.

MR. BUCHANAN: John --

MS. CLIFT: Well, that's not how you respond to world events.

MR. BUCHANAN: -- the White House is saying --

MR. MCLAUGHLIN: Or at least not create the erroneous impression by doing a (stump ?) and staying --

MS. CLIFT: Well --

MR. MCLAUGHLIN: -- (inaudible) -- in Vegas, too, preparing for --

MR. BUCHANAN: John, the White House --

MS. CLIFT: There have been other embassy attacks.

MR. BUCHANAN: John, let me just say --

MR. MCLAUGHLIN: All right, go ahead.

MR. BUCHANAN: The White House is saying today that the president of the United States did not know beforehand about this problem and the vice president of the United States did not know. Now, he's a key guy in national security.

Secondly, what about the National Security Council? Did the State Department inform their counterparts at the NSC on security, look, we're getting complaints about Benghazi? This whole thing needs to be -- this whole rotten can needs to be opened up.

MR. MCLAUGHLIN: OK, exit question. I'm calling this a scandal. It's the scandal of lax security at our consulate in Benghazi. Is it waxing or is it waning, Pat?

MR. BUCHANAN: It is suppurating and it's getting larger and larger, John.

MS. CLIFT: (Laughs.)

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: It's under investigation, and I hope we get some answers pretty soon so that the worst scenarios Pat is fantasizing about do not come true.

MR. BUCHANAN: Somebody didn't tell the truth, Eleanor.

MR. MCLAUGHLIN: Did you hear that word he used, suppurating?

MS. FERRECHIO: Yeah, it's --

MR. MCLAUGHLIN: What does that mean?

MS. FERRECHIO: Tell us.

MR. BUCHANAN: I don't know. (Laughs.)

MR. MCLAUGHLIN: Becoming more inflamed, Pat.

MR. BUCHANAN: Exactly. Exactly. Well, it's -- basically, it's bleeding.

MR. MCLAUGHLIN: Bleeding. That's pretty good.

MS. FERRECHIO: It is a question of what the nation's
attention span is for foreign policy issues. This is a big deal, because four people were killed. So I think that there is a really good chance that we're going to be hearing more about this.

The Senate is going to have its own investigation after the election, because Democrats are running things over there and they don't want it to interfere with the election. There are going to be likely classified hearings on the Hill involving Ambassador Rice, because they want to know, what did she know? But I just don't think you're going to get any level of participation from the administration that's going to necessarily give us the answers we're all asking for.

MR. ZUCKERMAN: And when he says we didn't know, it all depends what "we" means, right?

MS. FERRECHIO: Exactly.

MR. ZUCKERMAN: I mean, you say the president (and I ?) didn't know. But the whole administration has to be responsible for this. This isn't something you can just slough off. This is a very serious matter. A lot of people knew about it.

MR. BUCHANAN: Yeah.

MR. ZUCKERMAN: They should have had some way of responding to it.

MS. FERRECHIO: It at least went to the undersecretary.

MR. MCLAUGHLIN: That ground where this occurred is American ground, because the embassy --

MR. BUCHANAN: It's a consulate.

MR. MCLAUGHLIN: -- and the consulate is there.

MR. ZUCKERMAN: That's right. That's right.

MR. MCLAUGHLIN: That includes the consulate ground, correct?

MR. ZUCKERMAN: That's right.

MR. MCLAUGHLIN: So it was on American soil that this occurred.

MR. BUCHANAN: It's the worst --

MR. MCLAUGHLIN: There was also a killing in Yemen this week in a similar situation.

Issue Three: Economy Goosed.

Some encouraging news this week from the Federal Reserve. Economic activity in August and September, quote-unquote, expanded modestly nationwide. So reported all 12 districts of the Fed's domain, thousands of sources, including 12 district banks, key businesses, economists and market experts.

Part of the economic pickup comes from residential real estate authorities, quote-unquote. Most districts reported strengthening in existing home sales. And home prices were described as, quote, steady to increasing, unquote. Construction of homes was also reported up in most regions. Also manufacturing was, quote-unquote, mixed, but on balance somewhat improved; also consumer spending up slightly; also car sales generally favorable levels.
Besides the Federal Reserve, the Department of Labor announced a drop in the unemployment rate. It fell to 7.8 percent in September, from 8.1 percent in August. This is the lowest since February 2009, nearly four years ago.
This positive announcement has its skeptics, however, including former GE CEO Jack Welch. Mr. Welch led GE from 1981 to 2001, 20 years, and made it the largest international corporation in the world, 410,000 employees. On October 5, the day the labor report was released, Mr. Welch challenged the accuracy of the report and its timing.

JACK WELCH (former GE CEO): (From videotape.) It's just ironic that these assumptions all came this way the month before the election. These numbers don't smell right when you think about where the economy is right now. Every economist this morning predicted roughly 90 (thousand) to 120,000 and 8.2 unemployment.

MR. MCLAUGHLIN: Question: Aside from being out of line with economists' predictions, what anomalies in the jobs report made Jack Welch suspicious?

MR. ZUCKERMAN: Well, amongst other things, we created 114,000 jobs in that month, which is less than the 150,000 we need. The numbers went up because a whole group of people left the labor force in terms of being unemployed and took on part-time jobs. And those part-time jobs, they're out of that 8.3 or the 8.1 that's called U-3, but they're in what is called U-6, which is another measure and a much wider and more rational measure. And that did not go down at all. U- 6 stayed exactly where it was. So the numbers on -- the headline number that we always use, which is U-3, came down, but it's not the most realistic assessment.

MS. CLIFT: I think Jack Welch has pretty much backed down from that. He conceded he should have put a question mark, that he has no evidence on which he was basing --

MR. BUCHANAN: Did you see --

MS. CLIFT: -- his comments.

MR. BUCHANAN: -- his piece in The Wall Street Journal?
(Cross talk.)

MS. CLIFT: And you look at the Bureau of -- yeah, and he's now not writing for Fortune Magazine anymore because they editorialized against him. I think the weight of opinion basically is that he was taking -- he was creating an issue that doesn't exist. The Bureau of Labor Standards (sic/means Statistics) is a bunch of government bureaucrats. There are lots of people involved in these numbers. Cooking the numbers would be a very hard conspiracy to pull off.

MR. ZUCKERMAN: Well, they --

MR. MCLAUGHLIN: No, there's something more -- there's something more about this story --

MS. FERRECHIO: Right.

MR. MCLAUGHLIN: -- that has not fully emerged.

MS. FERRECHIO: Which we learned at the late -- at the end of the week --

MR. ZUCKERMAN: California.

MS. FERRECHIO: -- about California.

MR. ZUCKERMAN: It was left out.

MS. FERRECHIO: Their numbers were not included. California has one of the highest unemployment rates in the country.

MR. MCLAUGHLIN: How can you construct a number for the nation without the numbers of California, which were not in it? It vitiates the whole report.

MS. CLIFT: They then come back and revise numbers. They revise numbers just about every month. It's as much an art as it is a science.

MR. BUCHANAN: But John --

MS. CLIFT: And sometimes businesses don't get their numbers in. It's not precise.

MR. MCLAUGHLIN: Yeah, but this is --

MR. ZUCKERMAN: And they have to declare it.

MS. CLIFT: But all of the indicators --

MR. BUCHANAN: John, can it be cooked?

MS. CLIFT: -- (seem ?) to be --

MR. BUCHANAN: Let me talk.

MS. CLIFT: -- that the economy is slowly recovering.

MR. MCLAUGHLIN: Yes.

MR. BUCHANAN: John, we did a segment a while ago on LIBOR, the famous interest rate, and we found out all the banks -- (laughs) -- in England were cooking the biggest number in the world. Of course they can. And there's another factor behind Jack Welch. The drop in unemployment was the greatest drop in 30 years, since the Reagan recovery. (Laughs.) And there's no Reagan recovery going on out there.

MS. CLIFT: Well, the LIBOR people who were cooking the books were all people pulling down six-figure salaries. They're not the government bureaucrats who put together these numbers.

MR. BUCHANAN: They get six-figure salaries too. (Laughs.)

MS. CLIFT: And these are career people. And, you know, I would stake whatever reputation I have on the fact that they do --

MR. BUCHANAN: BLS.

MR. MCLAUGHLIN: They're careerists. You're with them.

MS. CLIFT: And this is -- whenever the Republicans are losing, they question the numbers.

MR. MCLAUGHLIN: Four weeks away, who's going to win the election? Don't develop it.

MR. BUCHANAN: Too close to call.

MS. CLIFT: Obama.

MS. FERRECHIO: Too close.

MR. ZUCKERMAN: Romney.

MR. MCLAUGHLIN: Romney.

Bye-bye.

END