The McLaughlin Group

Host: John McLaughlin

Pat Buchanan, Author and Columnist;
Eleanor Clift, Newsweek/The Daily Beast;
Mort Zuckerman, U.S. News & World Report;
Clarence Page, Chicago Tribune

Taped: Friday, April 5, 2013
Broadcast: Weekend of April 6-7, 2013

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JOHN MCLAUGHLIN: Issue One: Mutual Assured Provocation.

SECRETARY OF STATE JOHN KERRY: (From videotape.) The bottom line is, very simply, that what Kim Jong Un has been choosing to do is provocative. It is dangerous, reckless. And the United States will not accept the DPRK as a nuclear state.

MR. MCLAUGHLIN: North Korea detonated a small nuclear bomb seven weeks ago. This has escalated the ongoing cycle of provocation by North Korea and counterprovocation by the U.S. and the U.N.

March 7: U.N. Security Council votes unanimously to sanction Pyongyang, inflaming the hermit kingdom's 30-year-old leader, Kim Jong Un.

March 11: The U.S. and South Korea, our longstanding ally, begin joint annual war games.

March 12: North Korea nullifies Korean War 60-year-old armistice between North and South and threatens to attack South Korea.

March 20: North Korea launches cyberattack on Seoul, South Korea.

March 22: The U.S. and ally South Korea announce an agreement to retaliate jointly against any attack.

March 26: North Korea puts artillery and rocket forces on highest alert and cuts its hotline to South Korea.

March 28: The U.S. displays its nuclear umbrella in action. Two B-2 stealth bombers make a daylight bombing run at Osan in South Korea.

April 2, Tuesday of this past week: North Korea pledges to restart its Yongbyon nuclear reactor to make more nuclear weapons.

April 3: South Korea presses Washington for an OK to manufacture its own enriched nuclear-bomb-grade uranium, which could potentially result, of course, in a nuclear arms race in Asia.

JAY CARNEY (White House press secretary): (From videotape.) We seek the complete, verifiable and irreversible denuclearization through authentic and credible negotiations. The U.S. and our international partners have a shared goal of ensuring the denuclearization of the Korean peninsula.

MR. MCLAUGHLIN: Question: Secretary of State John Kerry and White House spokesman Jay Carney have both emphasized negotiations to describe the way forward for handling the North Korea problem. Will negotiations work? Pat Buchanan.

PAT BUCHANAN: Well, Churchill said better to jaw jaw than war war. And I agree we ought to talk with North Korea, John. But the problem is Kim Jong Un has painted himself into a corner, or, to use another metaphor, he is way out on a limb. He has threatened to attack American soldiers, American bases in Asia, use nuclear weapons on us, and attack the United States of America.

Now, if he does something now, the Americans this time, unlike in the past, are going to respond and hit him hard, in which case you could have a war. And if he does nothing, he is in real danger of being humiliated and losing face with his own military and in his own country. So he is really out there.

But I do agree with your basic premise, John. The United States, in my judgment, ought to communicate directly with him. And, quite frankly, if I were Barack Obama, in the last analysis, to prevent a war, I would call him up on the telephone and say I want to talk to you.

MR. MCLAUGHLIN: Why is Kim pushing Obama's buttons?

ELEANOR CLIFT: Because he's the third generation. He's 29 or 30 years old. He's proving himself as the new leader of North Korea. And he's playing the same kind of brinkmanship that his father and his grandfather played before him.

I think just about every one of these steps has been done before. They've shut down the factory zone that's inside North Korea. They have, you know, threatened -- made all these threats before. They've shut down and started these nuclear facilities.

So we've seen this movie many times before. The nervousness is whether this young man knows how to play brinkmanship as skillfully as his forbears, that he won't know when to stop, and that really that sort of an accidental war could begin.

So I think the administration so far is playing it pretty well. They're, you know, putting a missile defense system in place. They're upping the exercises that are done every year. And they're relying on China, which really is the power there that can exert some influence on North Korea, for China to play a more aggressive stand. And that's why talks could work if they get under way.

MR. MCLAUGHLIN: Thus far, President Obama has not used military force in the Syria situation. Kim sees that, and he's calculating from that that he wants to figure out what is the limit of Obama's reluctance to use military force. Is that why he is doing what he's now doing?

MORT ZUCKERMAN: I don't think anybody really knows why he's doing it. He's clearly trying to establish some kind of sort of status for himself in that region. He particularly wants to intimidate South Korea. In the process, by the way, China is going to be the country that's going to worry about it, because over time South Korea may very well collapse and you may have a union of those two countries, South and North Korea. And then China would have a belligerent neighbor on its border. And that's one of the things they want to prevent.

So I think the first thing that we ought to do is to see what we can do with China, because they are there. They're going to be there. They've got a clear motivation to contain North Korea. And that's --

MR. MCLAUGHLIN: Do you think Japan feels the same way as China?

MR. ZUCKERMAN: Not quite the same way, but I think they are all worried about a very belligerent North Korea which has a lot of technological capability, which has a leader who's prepared to send a lot of people into war, apparently.
So everybody's worried about them.

What they're all going to do, I think, is, at this stage, a little bit premature, because they don't know to what extent Kim Jong Un is bluffing or just trying to assert himself in some way and whether or not he'll carry --

MR. MCLAUGHLIN: So China and Japan are probably also gauging their positions --


MR. MCLAUGHLIN: -- on whether or not they should enter into this. Correct?

MR. ZUCKERMAN: That's right. They have to figure out what to do. These two countries do not work together on too many things, but on this issue they can work together.

MR. MCLAUGHLIN: Is this all a replay of earlier history?

MR. ZUCKERMAN: Well, to some extent it is. After all, remember, we had a little to-do with Korea --

MR. MCLAUGHLIN: Yes, we did.

MR. ZUCKERMAN: -- years ago. We don't want to repeat that if we possibly can. And particularly we don't want to repeat it with troops on the ground. So we will find ways to find a way to deal with North Korea with our sophisticated weaponry.

MR. MCLAUGHLIN: For a good recap of that earlier history, read Kissinger's -- his most recent book; not his most recent on China. Maybe it's in there, but the earlier -- the slightly earlier one, because Kissinger was handling all of that.

CLARENCE PAGE: That's right. The problem with Kim Jong Un is we don't know what the heck he's up to because he's behaving kind of like the crazy guy in the penitentiary who nobody wants to go near because he's acting nuts. And this has been the problem, that Kim Jong Un has not behaved in a rational way so we know just what he's going to do.

We, at the same time -- well, China's in a similar situation to us because they're concerned not only about possible reunification or just any kind of further instability that will cause more refugees to come pouring across the border into China. And so the U.S. has been wise, through Republican and Democratic administrations, to push for multilateral talks. What Kim wants is direct talks --


MR. PAGE: -- with the White House.

MR. BUCHANAN: But, you know, the United States --

MR. PAGE: And so I think --

MR. BUCHANAN: -- has a long-term problem here. This guy is, as Eleanor said, 29 or 30 years old. He's got a nuclear device or nuclear bomb. He's got missiles. He has not married the two. But if he's not assassinated or not overthrown in a coup, he's going to be in power for 40 years and he is going to wed those atomic bombs to those missiles, and he'll be able to threaten South Korea and Japan and U.S. bases in Asia.

And John, in that case, we've got to ask ourselves, what are we doing with a 1950s policy with 28,000 Americans sitting on the DMZ of North Korea? South Korea's got an economy 40 times as large, twice the population. Japan and South Korea have got to be looking now at their own nuclear options.

MR. MCLAUGHLIN: Is this an argument for --

MS. CLIFT: Well, I don't see 28,000 --

MR. MCLAUGHLIN: Wait a minute, Eleanor. Wait a minute.
Is this an argument for assassination?

MR. BUCHANAN: You know, us getting involved in assassination? I'll tell you, if a war starts, I would go for regime -- if a war starts and God -- you know, nobody wants a war. But I think regime change would be in order. If they're going to go to all-out war --

MS. CLIFT: Yeah.

MR. BUCHANAN: -- we're going to have to go to regime --

MS. CLIFT: Regime change has gotten a bad name, thanks to George W. Bush. We're nowhere near that. This is not 1962 with the Cuban missile crisis, where we're at the edge of our chairs. We're not going to have 28,000 troops turn tail, come home, because we don't want to protect our ally. So, I mean --

MR. BUCHANAN: It's 60 years since the Korean War.

MS. CLIFT: Yeah, but --

MR. BUCHANAN: Twenty years since the Cold War ended. What are they doing there?

MS. CLIFT: Allies -- allies are allies as long as --

MR. BUCHANAN: How long are they going to be there?

MR. MCLAUGHLIN: Do you want to --

MS. CLIFT: We're going to be there for them.

MR. MCLAUGHLIN: We're going to go to the exit question.

MS. CLIFT: We're going to be there for them.

MR. PAGE: I was going to say --

MR. MCLAUGHLIN: Did you finish your point?

MS. CLIFT: I'm just standing up for South Korea. (Laughter.)

MR. MCLAUGHLIN: Great. Then you're on the right side.


MR. BUCHANAN: (Laughs.)

MR. PAGE: I was going to say, Kim's trying to roll that policy back. He's already, what, rescinded the earlier armistice. He's doing every kind of bit of saber rattling that he can do. And we, meanwhile, we don't know what he's up to. We don't even know exactly how old he is. So some reports say he's 28, some 29, some 30.


MR. PAGE: And hopefully by the time they're able to deliver a nuke, we will know more about what he's up to, who's really running things in North Korea --

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

MR. PAGE: -- because they're not there yet.

MR. MCLAUGHLIN: Let's wrap --

MS. CLIFT: He's playing video games. (Laughs.)

MR. MCLAUGHLIN: Let's wrap it up, Eleanor.

Exit question: On a military readiness scale, DEFCON 5 -- do you know what that means?


MR. MCLAUGHLIN: What's it mean, DEFCON?

MR. BUCHANAN: It means the DEFCON is a very low level. When you raise it to one, you're at war.

MR. MCLAUGHLIN: Yeah, but what does DEFCON mean? D-E-F-C-O-N.

MR. BUCHANAN: Defense -- defense condition or something
like that.

MR. PAGE: Right.

MR. BUCHANAN: We raised it in the Nixon White House.

MS. CLIFT: Ready to go. (Laughs.)

MR. BUCHANAN: We raised it in the Nixon White House, John, if you recall.

MR. MCLAUGHLIN: OK, DEFCON 5, meaning normal peacetime conditions; DEFCON 1, meaning U.S. forces on maximum alert. How high will this crisis reach before it is resolved?

MR. BUCHANAN: I don't think it's a nuclear crisis, so I don't think you ought to raise the DEFCON at all. I think it's a conventional crisis, and I hope it's resolved.

MS. CLIFT: Well, I'll go along with all of that.

MR. BUCHANAN: (Laughs.)

MS. CLIFT: But that certainly -- that certainly is a big come- down from all your doomsday talk of about two minutes ago, isn't it?

MR. BUCHANAN: I mean, look, if he -- he can't back down. I think he's got -- if he does something, he could start a war.

MS. CLIFT: He can back down. He can back down. His father and his grandfather backed down. This is a --

MR. BUCHANAN: They didn't back down at all.

MS. CLIFT: This is a very familiar script.

MR. MCLAUGHLIN: A former hawk, seeing you in front of my eyes convert into a dove.

MR. BUCHANAN: Do you really want a war, John, in Korea?

MR. MCLAUGHLIN: I don't want a war, but I'm just, you know, facing reality.

MR. BUCHANAN: You're raising the DEFCON. (Laughs.)

MR. MCLAUGHLIN: What do you think?

MR. ZUCKERMAN: Listen, I don't think that we can expect anything from Kim Jong Un at this stage of the game. So we're going to --


MR. ZUCKERMAN: Oh, I think it'll go more than that.


MR. ZUCKERMAN: Yes, lower than that.


MR. ZUCKERMAN: Yes, I think it's going to -- until he gets the sense -- and we're going to have to do something to back that up -- that we're really prepared to do something.

MR. MCLAUGHLIN: If it's a three, you're correct.



MR. PAGE: Well, right now Dennis Rodman knows more about this new leader over there than our CIA does --

MR. MCLAUGHLIN: He played basketball with him.

MR. PAGE: -- according to --


MR. PAGE: Yeah, according to some of our own top defense establishment people. It's ridiculous to raise the DEFCON level at a time when you don't really know who you're dealing with or what.

MR. MCLAUGHLIN: You're saying 5?

MR. PAGE: Yeah, keep it --

MR. MCLAUGHLIN: At the lowest level?

MR. PAGE: Keep it at 5 at this point, sure.

MR. BUCHANAN: Let's hear it for Clarence.

MR. PAGE: No time to panic.

MR. BUCHANAN: Clarence is right. Don't raise the DEFCON.

MR. MCLAUGHLIN: Basing it on Rodman's basketball acquaintance with --

MR. PAGE: No, but let's talk to Dennis Rodman about that.


MR. PAGE: I mean, you know, we really don't know anything --
MR. MCLAUGHLIN: You mean, there's got to be something --

MR. PAGE: -- about this kid, you know. And he's not behaving rationally.

MR. MCLAUGHLIN: I think it's a DEFCON 3, which means, with you, it's a level of alert, but it's not -- you know, we're not going crazy.

MR. ZUCKERMAN: It'll get up there, I think.

MR. MCLAUGHLIN: Issue Two: POTUS Pays It Forward.

The president of the United States, POTUS, announced this week that he will take a 5 percent pay cut in his presidential salary. What's Mr. Obama's pay? Four hundred thousand dollars a year. This is income, and it is subject to standard income taxation, and those taxes are due April the 15th, roughly a week from now.

The sequester cuts, worth $85 billion through the end of this September, and $1.2 trillion over a decade, have settled in slowly so far. The president's salary is exempt from sequestration; that is, the forced budget cuts that automatically cut federal spending on March 1.

Everyone is taking a hit. White House visitor tours are closed. So are certain local air traffic control towers. Federal agencies will come under further strain in the coming weeks. Certain U.S. government departments are expected to close on certain days. And then sequestration impacts the economy full force, and that will impact politics. So this presidential budget gesture may ease sequestration backlash.

Chuck Hagel, by the way, the defense secretary, makes $199,700 a year. He also took a pay cut worth 14 furlough days to share the pain of Pentagon civilian employees forced to take 14 days of unpaid leave.

Question: Does the White House really think 5 percent of President Obama's salary -- that is, $20,000 -- will alleviate public backlash to the Obama sequester? So is it a smart move or a dumb move on the president's part? Eleanor.

MS. CLIFT: It's a smart and symbolic move. And I commend Secretary Hagel for starting. A number of Cabinet officials have joined in. But I notice members of Congress are very quiet about it. You know, most of them can afford to give up 5 percent, and they're not doing it. And they're the ones who really gave us this sequester --

MR. MCLAUGHLIN: Well, House members --

MS. CLIFT: -- because they were unable to come up with a budget proposal that would be fair across the board.

MR. MCLAUGHLIN: We know that four out of five senators are millionaires.

MS. CLIFT: Right.

MR. MCLAUGHLIN: So they ought to be able to take it. Is that what you're saying?

MS. CLIFT: Yeah, at the very least, to show --

MR. MCLAUGHLIN: On the other hand, the millionaires may be in hock.

MS. CLIFT: -- some solidarity with the American public.

MR. PAGE: (Inaudible.)

MR. MCLAUGHLIN: What's that?

MS. CLIFT: To show some solidarity with the American public.

MR. BUCHANAN: Nancy Pelosi --

MS. CLIFT: That's the least they could do.

MR. BUCHANAN: -- said that House members are not going to take any 5 percent. She's defending her union, quite frankly. There'd probably be a prison riot if they tried it.

MR. MCLAUGHLIN: What's the union?

MR. BUCHANAN: The union is the Democratic caucus, John. Let me tell you about the sequester.

MS. CLIFT: The Republicans aren't stepping up either, Pat.

MR. BUCHANAN: Let me talk to you about -- the sequester is going to get very serious, because yesterday there was a report that these clinics, because of the sequester, are not going to be able to give these vital cancer drugs to folks on Medicare. And that is very, very serious, John.
Look, $85 billion -- everybody laughs about it -- that's a serious -- I don't care what you say; that's a serious cut. And there's going to be pain. And as more and more comes in, I think what you're going to get is you're going to get both the Congress and the president are going to say, look, let's decide where we should cut rather than have an automatic slicer.

MS. CLIFT: Right. And the president introduces his budget next week, and there could be some talks and they could -- (inaudible.)

Listen, on the cancer drugs, the people who are being turned away at clinics have to go to hospitals to get it, and it's much more expensive. So the federal government is --


MS. CLIFT: -- screwing itself, basically, by making it --


MS. CLIFT: -- more expensive.

MR. MCLAUGHLIN: -- this is a question for you, for obvious reasons. White House aircraft -- Air Force One costs $180,000 an hour --


MR. MCLAUGHLIN: -- an hour to fly.

MR. ZUCKERMAN: That's right.

MR. MCLAUGHLIN: Obama -- President Obama flew this week to Colorado to give a -- what shall I say? -- nonpolitical talk.

MR. ZUCKERMAN: At a fundraiser.

MR. MCLAUGHLIN: At a fundraiser. And he bills that, of course, to the American public. Then he flies from there --

MS. CLIFT: No, he doesn't.

MR. MCLAUGHLIN: -- to California.

MS. CLIFT: The fundraiser, he bills the campaign committee or the DNC.

MR. MCLAUGHLIN: The Colorado --

MS. CLIFT: But the Colorado trip --

MR. MCLAUGHLIN: -- trip, as I understand --

MS. CLIFT: The Colorado trip is public policy that the taxpayers pay for.

MR. MCLAUGHLIN: Public policy. That's billed to you and me --

MS. CLIFT: That's right.

MR. MCLAUGHLIN: -- and the rest of the American public.

MS. CLIFT: That's right.

MR. MCLAUGHLIN: Then he flies from Colorado to San Francisco and to another point in California, and then he flies back. So he bills that -- he bills the sector from Colorado to California, both directions, to the DNC, the Democratic National Committee. The balance he bills to the American public.

So do you think he's calculating to keep the DNC budget as high -- as stable as it is?

MR. BUCHANAN: All presidents do it, John. All presidents --
(Cross talk.)

MR. MCLAUGHLIN: They calculate how they can bill the public for their political --

MR. BUCHANAN: We attach -- you have a public-policy event and a public-policy event, and then a political event alongside. And these guys work it out in both White Houses. And all of them, probably, they err on the side of --

MR. MCLAUGHLIN: How much do you think --

MR. BUCHANAN: -- billing the public. (Laughs.)

MR. MCLAUGHLIN: How much do you think the Colorado segment cost us by reason of Air Force One? Two million dollars.

MR. PAGE: Why are you trying to nickel and dime all this, John?

MR. MCLAUGHLIN: Why couldn't he have done that in Washington at a microphone and reached a bigger audience?

MR. PAGE: I have to object as to why you want to nickel and dime all this.

MR. MCLAUGHLIN: Because he wanted to go to California. That's why.

MR. PAGE: Is this something new? I mean, really, every president does that.

MR. MCLAUGHLIN: So what? Does that justify it?

MR. PAGE: Let's talk about the real sequestration.


MR. PAGE: Let's talk about the real sequestration and talk about cancer drugs, talk about other costs that are not being paid right now, and how this really affects real people out there --

MS. CLIFT: Do you want your president to --

MR. PAGE: -- and not the executive functions of the commander in chief.

MS. CLIFT: Do you want your president to live in a bubble and never go out and lobby for public policy?

MR. MCLAUGHLIN: No. No. But I don't want him to bill the public when it is --

MS. CLIFT: Well, who should he be billing?

MR. MCLAUGHLIN: Because it was really a construct for getting to California.

MS. CLIFT: It was a construct to go to Colorado, which is passing new gun laws. And he went to a police academy, which is right near where the Aurora shooting was. There's major federal legislation before the Hill. This is a historic moment in the way this country is facing --

MR. MCLAUGHLIN: Do you think --

MS. CLIFT: -- the gun culture.

MR. MCLAUGHLIN: -- that this was an add-on to a preexisting trip? Or did he say to his lieutenants --

MS. CLIFT: It was a legitimate --

MR. MCLAUGHLIN: -- get me out to Colorado; I'll go from there to California?

MR. BUCHANAN: No, he went to Colorado because Colorado has had the gun issues --

MR. MCLAUGHLIN: That's right.

MR. BUCHANAN: -- twice, in Aurora and Columbine.

MS. CLIFT: Columbine.

MR. PAGE: Right.

MR. BUCHANAN: And so he --

MR. MCLAUGHLIN: Well, wouldn't it have been just as well to do it from the White House, in fact, better from the White House?


MR. BUCHANAN: No. No, look, this is what he does. He travels the country --

MS. CLIFT: It's what presidents do.

MR. BUCHANAN: -- and he makes his case, you know, in those forums.


MR. BUCHANAN: And he uses the White House very effectively.

MR. MCLAUGHLIN: This is not flying the way I thought it would fly.

MS. CLIFT: No. (Laughs.)
(Cross talk.)

MR. MCLAUGHLIN: OK, the new U.S. economy numbers.

MR. PAGE: (Inaudible.)

MR. MCLAUGHLIN: On Friday, the Labor Department -- excuse me, Clarence --

MR. PAGE: OK, John.

MR. MCLAUGHLIN: -- reported that the economy added 88,000 jobs last month, in March, and that the unemployment dropped to 7.6 percent.

Question: Mort, what do you think about these numbers?

MR. ZUCKERMAN: Well, the 88,000 was much below most -- what most people expected. It's a very, very low, very, very low increase --

MR. MCLAUGHLIN: Job creation.

MR. ZUCKERMAN: -- in the job creation. We are still living with the problem of job creation. And one of the governors of the Federal Reserve Bank came out and indicated that over 25 percent of the jobs that we are creating are low-wage, part-time jobs. So even those numbers are really dismayingly low, particularly in the context of a trillion-dollar national deficit and a trillion-dollar input of money into the Federal -- through the Federal Reserve.
So with the most aggressive stimuli, both monetary and fiscal, this is all we can do? We've got real problems in the economy, and they're not being cured. And the policies that have been followed have really not helped very much.

MR. BUCHANAN: Labor --

MR. MCLAUGHLIN: They got 88,000 new jobs.


MR. MCLAUGHLIN: But before that, the experts had predicted 190,000.

MR. ZUCKERMAN: That's right.

MR. BUCHANAN: But John --

MR. ZUCKERMAN: It's a very low number.

MR. BUCHANAN: -- labor force --

MR. ZUCKERMAN: We need 150 (thousand) to 200,000 jobs every month just to stay even, and close to 300,000 to be able to make a dent in the unemployment number.

MR. BUCHANAN: Labor --

MR. MCLAUGHLIN: Was that low number of jobs created due to sequestration?

MR. ZUCKERMAN: No, it was not due to sequestration.


MR. ZUCKERMAN: It was due to the fact that we have a very weak economy that has not been cured by the policies --

MR. BUCHANAN: Historically, John --

MR. ZUCKERMAN: -- that we have.

MR. MCLAUGHLIN: Why did retail jobs fall 51,000?


MR. ZUCKERMAN: Because retail is falling off the edge of the cliff. That's the real problem. The economy is growing --

MR. BUCHANAN: But the real problem is --

MR. ZUCKERMAN: -- at a very low rate.

MR. MCLAUGHLIN: Is that because there's not consumer spending?

MR. BUCHANAN: John, the real problem --

MR. ZUCKERMAN: That's exactly right.

MR. BUCHANAN: -- is far bigger --

MR. MCLAUGHLIN: And what follows from that?

MR. BUCHANAN: John, the real problem is much bigger than that.

MR. ZUCKERMAN: Well, we may have -- yes, it is a very big problem. We may have another -- we have such a low growth at this stage of the game that it's the equivalent of another recession.

MR. BUCHANAN: Look, labor force participation is down to 63.3 percent --

MR. ZUCKERMAN: The lowest it's been in 30 years.

MR. BUCHANAN: -- the same level as 1979.

MR. MCLAUGHLIN: I want to hear from Clarence. Quickly, Clarence.

MR. ZUCKERMAN: It's the lowest in 30 years.

MR. PAGE: We have a slow time of year, on top of that --

MR. BUCHANAN: Since `79.

MR. PAGE: -- following Christmastime. But it's the same old problem.

MR. MCLAUGHLIN: That's true.

MR. PAGE: We have a two-tier economy right now where Wall Street's going like gangbusters, but job creation is still sluggish. And I don't see that changing right now, especially when you've got so much uncertainty in Washington. The business world hates uncertainty, and we're seeing that reflected.

MS. CLIFT: The structure of jobs --

MR. MCLAUGHLIN: (Inaudible.)

MS. CLIFT: The structure of jobs and work in this country are changing, just like the media industry has gone through this transformation. Really everybody's work life is. And we haven't caught up.


MS. CLIFT: But the Congress is completely missing the focus by focusing on austerity. We need to --

MR. MCLAUGHLIN: OK, we've got to --

MS. CLIFT: -- pump up the job availability.

MR. MCLAUGHLIN: Issue Three: Green Flunks.

BP is abandoning wind power. The oil super-giant is selling its $1.5 billion U.S. wind-power unit. BP is the 12th-largest owner of wind power in the U.S. In 2011, BP spent $1.6 billion on alternative- energy projects. Lord Browne was the company's chief executive. He served for 12 years. Lord Browne then pledged to set the company on a course of, quote-unquote, "beyond petroleum." He wanted to green BP.
Now BP wants to unload most of its green, notably wind power. If the sell-off goes through, BP's biofuel business and some research initiatives would be all that was left of BP's alternative clean renewable energy.

And there's this. Besides wind power, BP for 35 years has been trying to make solar energy, the photovoltaic cell, fulfill BP's stockholders' expectations. Well, now Bob Dudley, BP's current chief executive officer, announced last month that on solar energy, BP has, quote, "thrown in the towel," unquote.

Question: Big oil is retreating from renewable energy. Why? Because there is no money in it. Is there still a future in renewable energy? Clarence Page.

MR. PAGE: Yeah, there is, or they wouldn't be in it in the first place. We know that for the future we need to lower our oil dependency. But what this demonstrates, though, BP is caving to pressure from their stockholders, which is predictable, because when you engage in basic research, there is no foreseeable profit turnaround unless you get real lucky.

And so you need some government subsidy, which is why we've had government programs to subsidize wind energy. And this kind of a pull-back is indicative of why China is way ahead of us on this technology and will continue to be unless we offer some kind of --

MS. CLIFT: It's a well-intentioned effort to diversify on the part of BP. But why should they? They're fat and happy with all the tax credits they still get from the federal government into the oil industry. And when I saw BP come up, I thought you were going to address the oil spill in Arkansas, where they're -- the pipeline with the tar-sands oil has taken out --

MR. MCLAUGHLIN: Yeah, I knew you'd go for that.

MS. CLIFT: (Laughs.) Right. Exactly. I figured --

MR. MCLAUGHLIN: All you environmentalists.

MS. CLIFT: That's right. (Laughs.)


MS. CLIFT: When I saw green, I thought that's what we're going to be talking about.


MR. MCLAUGHLIN: This is how state and local governments are mandating -- state and local governments are mandating a compulsory market for renewable energy. That's green energy. Legislation like California's mandate -- they mandate utility companies to acquire a fixed percentage of their energy supply --


MR. MCLAUGHLIN: -- from renewable companies. In other words, you must go green.

MR. BUCHANAN: Why is --

MR. MCLAUGHLIN: Then you and I, or the taxpayers in California, rather --


MR. MCLAUGHLIN: -- they have to pay for --

MR. BUCHANAN: Let me tell you why BP --

MR. MCLAUGHLIN: -- the extra costs involved in that --

MR. BUCHANAN: Here's why BP is bailing --

MR. MCLAUGHLIN: -- because --

MR. BUCHANAN: Let me tell you why BP --

MR. MCLAUGHLIN: -- renewables charge more.

MR. BUCHANAN: Here's why BP is bailing out, three things: Tar sands in Canada; secondly, fracking, which has opened up all this enormous oil in North Dakota --


MR. BUCHANAN: -- and in the Soviet Union, Russia, far more than that; and also natural gas. I shifted in my own home, John, to natural gas, because it's a lot cheaper, and America's got enormous amounts of it.

MR. ZUCKERMAN: That's right.

MR. BUCHANAN: And so all these old sources of energy --

MR. ZUCKERMAN: These are not going to be --

MR. BUCHANAN: -- are less and less expensive.

MR. MCLAUGHLIN: Are you under any constraint, by reason of the government of Maryland, where you live, to go into renewable energy?

MR. BUCHANAN: No, I live in Virginia, and we don't do those kinds of things.

MR. MCLAUGHLIN: You don't?

MR. BUCHANAN: (Laughs.)

MR. PAGE: First you've got to catch --

MR. BUCHANAN: We're in the Confederacy. (Laughs.)

MR. MCLAUGHLIN: That's the home of most of the American presidents, Virginia.

MR. BUCHANAN: Yeah, but that's --

MR. MCLAUGHLIN: But you live in Virginia, and, you know, you --

MR. BUCHANAN: Virginia --

MR. MCLAUGHLIN: -- tried three times, Pat.

MR. BUCHANAN: The mother of presidents hasn't been pregnant for 100 years, John. (Laughter.)

MR. MCLAUGHLIN: Did you want to say something?

MR. ZUCKERMAN: Yeah. Pat's absolutely right. The reason why they're going to get out of these renewables is because they make no economic sense anymore, because the support -- the sources of energy, fracking and natural gas and all of that, that has just emerged in the last few years, is changing energy supplies and energy prices forever.

MR. MCLAUGHLIN: Forced prediction: Will the economy improve by the end of the year?

MR. BUCHANAN: I think the economy is just going to go straight along sort of the sluggish path it's on right now.


MS. CLIFT: I think it's poised to get better, and will.


MR. ZUCKERMAN: I think it's going to continue to slowly subside and get worse between now and the end of the year.

MR. PAGE: Poised to get better, and will.

MR. MCLAUGHLIN: The answer is Mort rules.


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