The McLaughlin Group

Host: John McLaughlin

Pat Buchanan, Author and Columnist;
Eleanor Clift, Newsweek/The Daily Beast;
Susan Ferrechio, Washington Examiner;
Mort Zuckerman, U.S. News & World Report

Taped: Friday, July 12, 2013
Broadcast: Weekend of July 13-14, 2013

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JOHN MCLAUGHLIN: Issue One: Egypt Erupts.

EGYPTIAN MAN: (From videotape.) I saw people killed around me. I saw gun shoot in my leg and my hand. I saw them shoot to kill.

MR. MCLAUGHLIN: At least 55 people were killed and 435 wounded in Cairo this week. Egyptian troops opened fire on supporters of President Mohamed Morsi, who was ousted by the Egyptian military.

Within hours of the mayhem, the military-backed interim government released a fast-track plan for new elections. The president of the interim government is Adly Mansour. Mansour had been the chief justice of Egypt's high court. And with Morsi's deposing, Mansour automatically succeeded him.
New President Mansour wants parliamentary elections six months from now, early 2014. After these elections, a date will be set for a fresh presidential election.

Mansour then appointed the vice president for Egypt, reform leader Mohamed ElBaradei, the Nobel Peace Prize winner who had figured prominently 10 years ago as head of the IAEA, the International Atomic Energy Agency, which was tasked with verifying whether Iraq possessed WMD, weapons of mass destruction. The agency never found any WMD in Iraq after repeated exhaustive searches. ElBaradei was a familiar face on U.S. TV during that period.

Back to Egypt. Interim President Mansour, eminent as he is, does not resolve Egypt's crisis. Why? Because the powerful Islamist Muslim Brotherhood backed Morsi and installed Morsi. The famed Brotherhood's political, social and religious membership is outraged.

The Brotherhood points out correctly that Egypt had a democratic election one year ago and that the upshot of that presidential election was then and is now Mohamed Morsi. So now the Egyptian military has staged a coup, the Brotherhood says, and unseated Morsi. So Egypt's agony goes on -- Egypt, the home to the world's largest Arab population.

The U.S. has been delivering $1.3 billion in military aid to Egypt every year, and President Obama has signaled he wants that $1.3 billion to stay in place for Egypt. Arab countries are also pledging billions of dollars in aid to bolster Egypt's economy: The United Arab Emirates, the UAE, with a loan of $2 billion and a grant of $1 billion; Saudi Arabia, a loan of $3 billion, and for much-needed fuel an additional $2 billion.

Question: Is Egypt vital to U.S. interests? Pat Buchanan.

PAT BUCHANAN: Who governs Egypt is not vital to U.S. interests, because we would not send American troops, whether it was the military or Morsi and the Brotherhood ruling them. But we do have national interests there, John, but they conflict with our democratic ideals.

Whatever you say about it, the Muslim Brotherhood played by America's rules. They won the Parliament and the presidency fair and square. Then, with America's blessing, the Egyptian military, with American weapons, overthrew the elected government of Egypt.

I mean, we have -- I mean, America is reviled, almost, by both sides in this whole conflict. However, the military and the Muslim Brotherhood are the only two organizations that have the power and authority and ability to run Egypt. The place is a complete mess. I think what the Americans should do now, having done what we've done, is push as hard as we can for the earliest possible elections and consider an early exit.


ELEANOR CLIFT: Well, Egypt is key in keeping the peace with Israel, for starters, Israel being a key ally. And they're key in that region, a very important region of the world. We're not as dependent for oil from the Middle East, but we still need to be a major player there.

And the phrase that I've latched onto is people's coup. There were millions of people in the streets. More than 22 million people signed a petition wanting Morsi out of power. That's more than a quarter of the country. The alternative to the military stepping in would have been mob rule. They were ready to storm the palace.

So I see this as a temporary takeover by the military. I think they're saying mostly the right things. The firing, obviously, on the Morsi protesters was very bad. But they need to reach out and include the Muslim Brotherhood in whatever government evolves. Otherwise you drive them underground, force them to become violent, and you will never get a kind of stable, inclusive government.

I don't see this as an entirely negative step at all. I mean, I think this is a step towards an evolving democracy in a very important country.

MR. MCLAUGHLIN: Well, that's very reassuring.

MS. CLIFT: I'm glad I changed your mind. Thank you.

MR. MCLAUGHLIN: I didn't say that.

MS. CLIFT: (Laughs.) OK.

MR. MCLAUGHLIN: You didn't change my mind. But it is reassuring.


SUSAN FERRECHIO: The problem is that they could be on the verge of a civil war here. As you say, what the military was doing, firing on people, is really leading them down a path to a potential civil war.

The United States has invested upwards of $70 billion in this country since the 1940s. Of all their imports, a fifth are from the United States. It's important strategically in the region. Yet their economy is collapsing. They're potentially on the verge of a civil war. And what happens next could influence what goes on in the whole region.
So it's pretty scary what's happening there right now. It's very unclear if there are going to be real solid elections that are going to lead to a durable peace in nine months.

MR. MCLAUGHLIN: Is Egypt vital to the U.S. interest?

MORT ZUCKERMAN: Yes, Egypt is absolutely vital. It's the most vital Arab country in that part of the world.
And let me just say this. While Morsi was elected in a democratic way, he wasn't governing in a democratic way.


MR. ZUCKERMAN: He violated every promise he made to get elected. So he was alienating a lot of people in that country. And that's what, in a sense, provoked all of this, OK?

Now, the real issue is, at this stage of the game, Morsi led the Muslim Brotherhood, which was a radical Muslim group who were in opposition to virtually every major national interest of the United States. So in this sense, we were fortunate that he got thrown out.

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

MR. ZUCKERMAN: And I think now we have a chance to work with a different kind of government, whom I think will at least be much more, shall we say, responsive to American interests.

MR. BUCHANAN: Mort, he got 50 percent of the vote, or more than that, and the Islamists, who are to his right, got 25 percent of the vote.

MR. ZUCKERMAN: Yes, I know.

MR. BUCHANAN: I mean, you're -- I mean, you've got to have the Islamists participate in the -- if you're going to have a democracy, they've got to participate in many, if not all, of the governments in the Middle East if they're going to be democracies.

MR. ZUCKERMAN: Yes, but you're saying if they're going to be democracies. Morsi was not running the country as a democrat. All of the people --

MR. BUCHANAN: So we --

MR. ZUCKERMAN: -- whom he said he was going to bring in --

MR. BUCHANAN: So we democratically sent the army in and threw him out?

MS. CLIFT: I don't think --

MR. ZUCKERMAN: Let me just put it this way. He turned out --

MS. CLIFT: The U.S. didn't send the army in.


MR. ZUCKERMAN: That's right.

MS. CLIFT: I think you're really overstepping with that.

MR. BUCHANAN: It was our blessing -- our blessing.

MR. MCLAUGHLIN: Let Mort back in.

MS. CLIFT: Not -- initially the White House said they did not want military action. And I think the military --

MR. BUCHANAN: Are you telling me they would have thrown him out without American support --

MS. CLIFT: You have --

MR. BUCHANAN: -- when they're getting one and a half billion --

MS. CLIFT: You have no --

MR. BUCHANAN: -- dollars a year?

MS. CLIFT: You have no knowledge that there was any direct blessing from --

MR. BUCHANAN: The only guys we got --

MS. CLIFT: They would have acted -- they would have done that with or without --

(Cross talk.)

MR. MCLAUGHLIN: Please relinquish. Relinquish.

MS. CLIFT: Look at what they're getting from other countries.

MR. MCLAUGHLIN: Let Mort back in. I want to know if the Israeli embassy is up and flourishing there.

MR. ZUCKERMAN: In Egypt now?


MR. ZUCKERMAN: I doubt if it's up and flourishing. But I do think that they will have --

MR. MCLAUGHLIN: What happened a couple of years ago to the embassy?

MR. ZUCKERMAN: Well, the embassy -- the embassy was attacked.


MR. ZUCKERMAN: Why? Because -- let's put it this way. They're not totally friendly to Jews in Egypt. And certainly the Muslims, the radical Muslims, are totally opposed to not only Israel, but Jews in general.

MR. BUCHANAN: But the Israelis are 100 percent behind the coup d'etat.

MR. MCLAUGHLIN: What are the Jews saying about Morsi?


MR. MCLAUGHLIN: What do they think about Morsi, the Israelis?

MR. BUCHANAN: They're glad he's out.

MR. ZUCKERMAN: They're glad he is gone. Somebody sent me -- from Israel somebody sent me a cable in which he said there is a God, and thank God he's Jewish, you know, after this happened, you know, because, from Israel's point of view, the emergence of Morsi and the Muslim Brotherhood -- which, by the way, would not have stopped in that country, OK? The Muslim Brotherhood was taken out of the platform to expand their role in the Arab world.


MR. MCLAUGHLIN: I guess the presumption is --

MR. ZUCKERMAN: It is absolutely, from the United States --


MS. CLIFT: I want to make a point, please.

MR. MCLAUGHLIN: I want to -- just a moment, please. I want to --

MR. BUCHANAN: But the Israelis --

MR. MCLAUGHLIN: Just a moment.

MR. BUCHANAN: Let me talk about the Israelis.

MR. MCLAUGHLIN: Just a moment. Wait a minute. Wait a minute. You know, you've been talking for about five minutes continuously.


MR. MCLAUGHLIN: I want to know whether the Israelis have drawn some comfort from the high court justice now running the country.

MR. ZUCKERMAN: Yes. I think they think he is a reasonable man and, in a sense, more or less, a centrist.

MR. MCLAUGHLIN: Because he's got about a year before this situation is settled, maybe more than a year.

MR. ZUCKERMAN: No. But, look, let me put it this way. It's going in a much better direction --


MR. ZUCKERMAN: -- not only from Israel's point of view, but from the point of view of the United States.

MR. MCLAUGHLIN: Exit question: What course of action best serves U.S. interests -- suspending aid to Egypt or maintaining aid to Egypt? Pat Buchanan. Keep it short.

MR. BUCHANAN: The best course of action now would be to maintain military assistance for a while as we phase it out. And the Israelis, John --

MR. MCLAUGHLIN: Phase it out? Why?

MR. BUCHANAN: The Israelis are demanding that we maintain -- phase it out because the Arab spring is turning into the Arab war of all against all.

MS. CLIFT: Maintaining our support, which is far less than other countries in that region are giving, is very important. And secondly, this president and this administration has gotten criticism for standing on the sidelines too much when it comes to the developments in the Middle East. And I believe that the military would have acted in what I am calling a people's coup with or without any kind of blessing from the White House. This was not an Obama-led takeover.

MR. MCLAUGHLIN: By no means.

MS. FERRECHIO: To help provide an economic lifeline to giving them this money. And I think it'll eventually help them stave off a civil war, because that's part of the reason that brought this overthrow in the first place is the economy is not doing very well.


MR. ZUCKERMAN: Several weeks ago on this show, I predicted that the Egyptian economy was going to collapse because they had run out of foreign exchange. They'd had no money to even pay for food. So they were heading into a tremendous economic crisis.

And this billion and a half from the United States will help the military. But they're going to get $11 billion from various Arab countries. And they would not have gotten that if Morsi was in power. So this is going to help Egypt, in a sense, maintain itself as a coherent country. So in my judgment, this is by and far away the best outcome we could have hoped for.

MR. MCLAUGHLIN: Where did Obama go to give his first speech after he was elected president?

MR. ZUCKERMAN: He went to Cairo.


MR. ZUCKERMAN: You know, that's a good question. I've asked myself that many, many times. He wanted to speak, frankly, to the Arab world in some way.

MR. MCLAUGHLIN: I think that he mentioned -- I think (maybe ?) he's mentioned in his biography that his close personal friend when he was at Harvard Law School was an Egyptian that he met there, or about that time. At any rate, he went there within five months after he was elected president.


MS. CLIFT: Well, because --

MR. MCLAUGHLIN: And he gave a speech. Was he responsible also for the Arab spring, by reason of the fact that he talked to young people there?

MR. ZUCKERMAN: I don't think he was responsible. I mean, the Arab spring has been brewing for a long time in many of those countries.

MR. MCLAUGHLIN: So he didn't (catalyze it ?).

MS. CLIFT: He --

MR. MCLAUGHLIN: He might have been a little more of a catalyst than you've thus far --

MS. CLIFT: He was trying to --

MR. MCLAUGHLIN: -- indicated, Mr. -- what'd you say your name was? -- Zuckerman.

Issue Two: Snowden Still on the Lam.

Edward Snowden is the 30-year-old information technician who worked in Hawaii for Booz Allen Hamilton, a military contractor within the National Security Agency, the NSA. Snowden was a crypto- mathematician who leaked data about top-secret U.S. programs that collect vast amounts, incredible amounts, of telephone data and Internet data.
Snowden continues to elude the U.S. government, holed up at the Sheremetyevo Airport in Moscow. He has applied for political asylum in more than two dozen countries. Of these, Venezuela, Nicaragua and Bolivia say that Snowden is welcome. And of these, Venezuela seems to be his most likely eventual haven.

Russian officials are not comfortable with Snowden taking up quarters at their airport. In fact, Alexei Pushkov, the head of Russia's International Affairs Committee, sent out a thinly veiled exit now to Snowden in the form of a tweet. Quote: "Venezuela is waiting for an answer from Snowden. This perhaps is his last chance to receive political asylum," unquote.

Question: What's the remedy? Does America need stronger privacy laws, Eleanor Clift?

MS. CLIFT: I think that Snowden has already forced the discussion on these spy programs, and so he's accomplished his mission. And I think the sideshow of him holed up in the airport, lacking money, trying to meet with human rights groups and hanging on to WikiLeaks, has sort of overshadowed the real purpose of the revelations that he produced.
And so at this point, I think even those Latin American countries, even Venezuela, in the wake of Chavez's death, may not be willing to take him, because they have some interest in bettering relations with the U.S. And he doesn't have a passport. So unless some foreign country now wants to sneak into the Moscow airport, how do you get through airspace? I mean, he looks like he's pretty stuck right now.

MR. MCLAUGHLIN: There's some indication that Russia is changing its mind.

OK, is this why Snowden skipped town?

WILLIAM BINNEY (former NSA technical director): (From videotape.) Twelve FBI agents with their guns drawn came in. My son opened the door, let them in, and they pushed him out of the way at gunpoint. And they came upstairs to where my wife was getting dressed, and I was in the shower, and they were pointing guns at her. And then one of the agents came into the shower and pointed a gun at me, at my head, and, of course, pulled me out of the shower.

MR. MCLAUGHLIN: William Binney spent 40 years at the NSA, the National Security Agency, where Edward Snowden also worked. Like Snowden, Binney blew the whistle on the NSA's vast collection of data on U.S. citizens.

Unlike Snowden, Binney registered his qualms internally, and for seven years trying to get upper-echelon government attention to what Binney saw as illegal and unconstitutional behavior by the NSA.

MR. BINNEY: (From videotape.) Domestic spying, accumulating information and knowledge about the U.S. -- the entire U.S. population. So I thought of that as a J. Edward Hoover on super- steroids, you know. It wasn't that he had information and knowledge to leverage just the Congress. You have information and knowledge to leverage everyone, judges included, in the country. So that's why I got so concerned.

MR. MCLAUGHLIN: The FBI tried to prosecute Mr. Binney for leaking to the press. They raided his home with guns drawn, as he described. But in the end, he was never charged.
Two other respected NSA whistleblowers have also surfaced. Thomas Drake, a 19-year veteran, raised his concerns about the NSA invading U.S. citizens' privacy rights. Drake was indicted under the Espionage Act and sentenced to a year of probation.

Also J. Kirk Wiebe spent more than 30 years at the NSA, where he was awarded the NSA's second-highest honor. Wiebe too was suspected of leaking to The New York Times, revealing the extent to which the NSA probes the private lives of American citizens. Wiebe's security clearance was revoked. He and his family were subjected to the embarrassment of a day-long armed raid of their home, and Wiebe has not had a job in six years since.

To my knowledge, USA Today broke this part of the story in the July the 7th issue, for those who may be interested.

Question: So are these three American public servants, or are they public traitors, do you think? Susan.

MS. FERRECHIO: I think it changes the story, as you say. You know, instead of everybody -- it changes the story about Snowden, who's really in the news. You know, hearing about these whistleblowers, you get the picture about why Snowden felt like talking to someone and getting it all over the press, because it wasn't being handled the right way when people were trying to come forward --

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

MS. FERRECHIO: -- and do this thing the right way. They were -- look what just happened. They had their homes raided. They lost their freedom. They lost their jobs. So, I mean, the question elevates -- it raises the question, really, about, you know, whether we're throwing out our liberty for the sake of preventing the next terrorist attack. And that's what these folks are trying to ask about. That's what they're trying to start the dialogue on.


MR. ZUCKERMAN: Well, first place, let me say Snowden is not a Muslim. I want to make that clear.

MS. CLIFT: (Laughs.) Right.

MR. ZUCKERMAN: Now, look, seriously, this is one of the most serious things that has happened to the United States, because we have intelligence on any number of potential attacks on the United States; by common consent, at least 50 of them, OK.

And I will say what I've said before on this program. If we were in a situation where people were able to -- where we were unable to interdict those attacks and we started to get attacks like we had in Boston, every month or every two months, this country would be totally changed. So I think the government has the right to do what they think is necessary and appropriate under these circumstances to try and protect this country from those kinds of attacks.

MS. FERRECHIO: But that's the word -- totally changed. That is the word. Are we eventually going to be totally changed because of our loss of privacy, the point where --

MR. ZUCKERMAN: I don't think so.

MS. FERRECHIO: -- you question how much it's worth it --

MR. ZUCKERMAN: I don't think so.

MS. FERRECHIO: -- when it comes to fighting terrorism?

MR. BUCHANAN: Let me get in here.

MR. ZUCKERMAN: That is not, it seems to me, what the issue is. I'm not saying it isn't an issue. But the issue is going to be nothing if we have a series of terrorist attacks --

MR. BUCHANAN: Well, Mort is right --

MR. ZUCKERMAN: -- in the United States.

MR. BUCHANAN: -- to this extent. The Congress of the United States is not going to restrict the National Security Agency. Second, these three people, I don't think they're right in going outside, breaking their oath and leaking things, because we've got a Congress of the United States. We've got established rules and regulations. You don't have a right to break the law.

But I do respect the fact that they faced the music. They go out. They stayed right in the country and they said what the government is doing is wrong, and they took it.

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

MR. BUCHANAN: This Snowden, who runs off, he's getting what he deserves. I hope he stays in that airport for about another month and then goes to --

MS. CLIFT: Well, in reading --

(Cross talk.)

MS. CLIFT: In reading about these three gentlemen, they did have a vested interest here in the sense that they had developed a program within the NSA -- at least two of them had -- called Thin Thread, which they believed could have averted the 9/11 attacks.

The head of the agency, Tom (sic/means Michael) Hayden at the time, ignored it and came up with another much more expensive program called Trailblazers. And so they had -- they were really angry that they thought that their work was being ignored. So they went to Congress. They did do all the right things. But they're enjoying their freedom now. I think they have a consulting company. They paid a price.

MR. BUCHANAN: Tom Hayden is a radical. Michael Hayden was with the CIA.

MR. MCLAUGHLIN: No, no, no, no. I think you've got it wrong.

MS. CLIFT: Michael Hayden, OK.

MR. MCLAUGHLIN: I think you've got it wrong, at least on one of those three. And I think he's selling clothes for some --

MS. CLIFT: Well --

MR. MCLAUGHLIN: -- department store.

MS. CLIFT: They have paid a price, but --

MR. MCLAUGHLIN: They have paid a price.

MS. CLIFT: -- probably not nearly as much --


MS. CLIFT: -- as what Mr. Snowden is going to pay.

MR. MCLAUGHLIN: For those who've invested their time, and they know the system thoroughly and they've experienced what Snowden has experienced, or vice versa, and they have a crisis of conscience as to what to do, and they did what they thought was right, and they still were evicted.

MR. BUCHANAN: They took the consequences --

MS. CLIFT: They -- right.

MR. BUCHANAN: -- which was what they should do.

MR. MCLAUGHLIN: Oh, please, Pat. Please.

MR. BUCHANAN: Do I have a right, as a White House aide, to walk out, you know, with secret information and give it out because I don't like what the president is doing? No.

MR. MCLAUGHLIN: Well, the --

MS. FERRECHIO: Maybe it depends what the president's doing.

MR. BUCHANAN: All right. Then if the president's doing something wrong, I should take the consequences when I walk out and say here's what's going on; I think it's wrong, and I'll take the consequences.

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

MS. FERRECHIO: Were those consequences right, you know? Guns in the shower. I don't know.

MR. MCLAUGHLIN: Hollywood writer and director Oliver Stone, writing in the Financial Times this week, says Obama's domestic surveillance lays the foundation for a future dystopia. Do you know what a dystopia is, Mort?

MS. CLIFT: (Laughs.)

MR. MCLAUGHLIN: Do you want to fool around with that and manage to screw that up? (Laughter.)

MR. ZUCKERMAN: I'll leave you to define it, and then I'll comment on your definition.

MR. MCLAUGHLIN: The opposite of a utopia.

MR. ZUCKERMAN: Yeah. No, I assumed that.

MR. MCLAUGHLIN: Is Obama facing a revolt from the left right now? From the left.

MR. ZUCKERMAN: I don't think so.

MR. MCLAUGHLIN: Do you follow me?


MR. ZUCKERMAN: I don't think so.

MS. CLIFT: Very, very minor. (Laughs.)

MR. BUCHANAN: A lot of people that had faith and confidence and belief, the idealistic Obamaites, are losing their idealism about the guy.

MS. CLIFT: But it's not on --

MS. FERRECHIO: (Inaudible.)

MS. CLIFT: It's not on this issue, because, you know, a lot of young people think what's the big deal. You know, all of this stuff should be out and --

MS. FERRECHIO: I disagree, Eleanor; I think a lot on social media, people talking about this and pretty much making a laughingstock of the president over it.

MR. BUCHANAN: The NSA is a big deal for some young people. I mean, this privacy stuff with libertarians --

MS. CLIFT: So is the Keystone pipeline and a lot of other issues.

MR. BUCHANAN: -- (inaudible).

MS. CLIFT: He has disappointed across the board.

MS. FERRECHIO: It's such a contrast to what he campaigned on, though.

MR. MCLAUGHLIN: Be sure to read David Bromwich in the current issue of the London Review of Books.


MR. MCLAUGHLIN: It's marvelous writing. And he takes the view that what is happening is very dangerous.

Issue Three: U.S.-China Trade Talks.

High-level meetings between the U.S. and Chinese officials in Washington this week, the U.S.-China Strategic and Economic Dialogue conference, with Secretary of State John Kerry and Secretary of Treasury Jack Lew speaking for the U.S.

The hot-button topic of China's currency, the Yuan, which is widely considered to be undervalued, was front and center of the discussion. Also Vice President Joe Biden participated.

VICE PRESIDENT JOSEPH BIDEN: (From videotape.) The next steps that China needs to take, for its own economy, happen to be in the interest of the United States as well. Your own plans call for the kinds of changes that have to take place that are difficult, like here. But if they do, they will benefit us both, including freeing exchange rates, shifting to a consumption-led economy, enforcing intellectual property rights and renewed innovation.

MR. MCLAUGHLIN: Question: Did this fifth U.S.-China dialogue produce any significant breakthroughs? Mort Zuckerman.

MR. ZUCKERMAN: No, I don't think, not at this point. I mean, it's helpful. It's going to be a process. It's not going to happen in any one great moment. But I do think the dialogue between the United States and China on economic matters has dramatically improved, and there isn't the kind of sort of latent hostility that exists on either side at this stage that makes agreement so much more difficult.


MS. FERRECHIO: I think the announcement of a bilateral investment treaty and this shifting toward more of a consumption-based economy, those were all talked about. It sounds like the Chinese are moving in that direction.


MS. FERRECHIO: To me it seemed far more optimistic this time around than past talks. It had a positive outlook.

MS. CLIFT: Let's give --

MR. MCLAUGHLIN: Do you think the Chinese are pseudo-communists?

MS. FERRECHIO: Well, I think that -- yes. (Laughs.)

MS. CLIFT: They're communist capitalists.

MR. ZUCKERMAN: They are the most capitalistic --

MS. FERRECHIO: That's why they're pseudo-communists.

MR. ZUCKERMAN: They are natural capitalists.

MR. MCLAUGHLIN: Natural capitalists?

MR. ZUCKERMAN: Absolutely. They are the most entrepreneurial --

MR. MCLAUGHLIN: It's only a question of time?

MR. ZUCKERMAN: -- hard-working people, who save for themselves.

MS. FERRECHIO: That's the (first name ?) for them.

MR. MCLAUGHLIN: What do they have to do? Because of the established communist echelon, they will keep the facade of communism for the sake of --

MS. CLIFT: Well, they're trying to keep control.

MR. MCLAUGHLIN: -- (inaudible).

MR. ZUCKERMAN: It is a facade.

MS. CLIFT: Right.

MR. ZUCKERMAN: Let me say, the leadership of China also is very capitalistic. They're all interested in doing well, OK?

MR. MCLAUGHLIN: Well, why not just come out and say so?

MR. ZUCKERMAN: Well, they have a whole tradition, OK, that they have to live up to. It is called the Chinese communist party.

MR. MCLAUGHLIN: So you think they're easing into a full dress -- a full dress rehearsal for the real thing?

MR. ZUCKERMAN: I don't know that they're doing it as a full dress rehearsal, but there's no --

MS. CLIFT: They still have a lot of people living in poverty. Let's not forget that. And I want to give the president some credit. That shirtsleeve summit a month or so ago in California, I think, set the stage for these talks. And, you know, they didn't do anything concrete --


MS. CLIFT: -- but they've kind of come into an accord on reducing pollution and increasing investment, which is --


MR. MCLAUGHLIN: The president deserves a lot of credit --


MR. MCLAUGHLIN: -- for the Chinese meeting, and also for the EU meeting, which is very, very big -- huge.

MS. CLIFT: Right.

MR. MCLAUGHLIN: That's also going on.

MR. BUCHANAN: John, last year the Chinese ran a $300 billion trade surplus at the expense of the United States, the largest between any two countries in history. They are cleaning our clocks, and they continue to do so.

MR. MCLAUGHLIN: Do you think that the mood of the country, the zeitgeist, is it melancholy? Is it pessimistic? Is it optimistic?

MR. BUCHANAN: The mood of America --

MR. MCLAUGHLIN: What is it?

MR. BUCHANAN: The mood of America is pessimistic. There's a feeling that the country is in decline, that we're not the great nation we were under Reagan and that era.

MS. CLIFT: Oh, please.


MR. BUCHANAN: And it's very pervasive.

MR. MCLAUGHLIN: Well, how do you explain the market this week?

MS. CLIFT: (Laughs.)

MR. MCLAUGHLIN: Well, the market -- the Fed. (Laughs.)

MS. CLIFT: That's Pat's particular --


MS. CLIFT: That is Pat's particular vision. He specializes --

MR. BUCHANAN: No, he asked me what's the mood of the country.

MS. CLIFT: -- (inaudible).
(Cross talk.)

MR. MCLAUGHLIN: Yeah. That's the way he makes his money from his books. He tries to fill everybody --

MS. CLIFT: The economy is getting -- the economy is getting better.

MR. MCLAUGHLIN: You've got to run to the bookstand because you're scared stiff. You've got to read what Buchanan says next.

MS. CLIFT: Americans are resilient and optimistic.

MS. FERRECHIO: (Inaudible.)

MR. MCLAUGHLIN: What? What? What? Quickly.

MS. FERRECHIO: You're the expert, Mort, but I would say the market is a reflection of propping things up with quantitative easing.

MR. ZUCKERMAN: The market is a direct reflection of what Bernanke said, OK --

MR. BUCHANAN: That's -- exactly.

MS. CLIFT: Right.

MR. ZUCKERMAN: -- in which he said we're going to keep basically low interest rates for a long period of time. That's what --

MS. CLIFT: Well, that's his job. He should be doing that.

MR. BUCHANAN: He's just printing money.

MR. MCLAUGHLIN: The inflation rate is still low, correct?

MR. ZUCKERMAN: Yes, very low.

MR. MCLAUGHLIN: And the market had a good week, correct?


MR. MCLAUGHLIN: What is the other good news? I can't believe this is coming from you.

MR. ZUCKERMAN: No, I'm sorry, we had bad news in terms of the regular growth of the economy, which is sub-2 percent. It's less than 2 percent --

MS. FERRECHIO: It's stagnant, totally stagnant.

MR. ZUCKERMAN: -- despite the biggest fiscal and the most stimulative monetary policy --

MR. MCLAUGHLIN: But there are greater days ahead, right, Mort?

MS. CLIFT: Right. (Laughs.)

MR. ZUCKERMAN: Absolutely, they are. The future lies ahead. (Laughter.)

MR. MCLAUGHLIN: Predictions. Pat, be quick.

MR. BUCHANAN: Amnesty or a path to citizenship will not get out of the House this session or this Congress.

MR. MCLAUGHLIN: Eleanor Clift.

MS. CLIFT: Republican-only farm bill that strips money for food stamps is dead on arrival in the U.S. Senate.

MR. MCLAUGHLIN: Susan Ferrechio.

MS. FERRECHIO: Instead the House will pass a bill that offers citizenship to people brought here unlawfully as children.

MR. MCLAUGHLIN: Mort Zuckerman.

MR. ZUCKERMAN: The economy is weak enough, and particularly the employment is weak enough, that the Federal Reserve Board is going to continue quantitative easing in one form or another for years to come.

MR. MCLAUGHLIN: I predict that Oliver Stone's July 10th Financial Times essay about how President Obama is creating a dystopia marks the beginning of the end of Hollywood's infatuation with the Obamas.


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