PBS NewsHour - 2008-10-15
Channel: malgent
Transcript
Language: English (original, YouTube automatic captions)
[0:03] [music]
[0:09] >> Good evening. I'm Jim Lehrer. On the
[0:11] NewsHour tonight, the news of this
[0:13] Wednesday, and the latest on the
[0:15] prospects for a post-financial crisis
[0:18] recession. A report from Seattle on the
[0:20] ripple effect of a single bank collapse.
[0:23] The third of our Big Picture
[0:25] Battleground reports from New Mexico.
[0:27] Tonight's focus is health care. And a
[0:30] preview of tonight's presidential debate
[0:32] with Mark Shields and David Brooks.
[0:36] >> Major funding for the NewsHour with Jim
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[1:57] >> [music]
[2:00] >> Fears of recession overwhelmed Wall
[2:02] Street today. Heavy new losses erased
[2:04] most of the gains in Monday's record
[2:06] rally. The Dow Jones Industrial Average
[2:09] fell 733 points to close below 8578.
[2:14] It's only worse day was last month when
[2:17] it dropped 777
[2:19] points. The Nasdaq fell 150 points today
[2:22] to close at 1628.
[2:25] Two new government reports fed the
[2:27] sell-off. They show retail sales falling
[2:30] and wholesale prices rising much more
[2:32] than expected. Oil prices also fell
[2:35] sharply finishing near $74.50
[2:38] a barrel. Oil is down nearly 50% from
[2:42] its peak last July.
[2:44] The market's pessimism was reinforced
[2:46] when the chairman of the Federal Reserve
[2:48] spoke today. Ben Bernanke warned the
[2:50] economy's road back to health will not
[2:53] be easy. He spoke in New York.
[2:56] >> Stabilization of the financial markets
[2:57] is a critical first step.
[2:59] But even if they stabilize as we hope
[3:01] they will,
[3:02] broader economic recovery will not
[3:04] happen right away.
[3:06] Economic activity had been decelerating
[3:08] even before the recent intensification
[3:10] of the crisis.
[3:11] Ultimately, the trajectory of economic
[3:14] activity beyond the next few quarters
[3:16] will depend greatly on the extent to
[3:17] which financial and credit markets
[3:19] return to more normal functioning.
[3:22] >> The Fed reported worsening conditions
[3:24] nationwide in its latest survey today.
[3:27] Consumer spending and manufacturing were
[3:29] down in most regions. Despite the bad
[3:32] news, President Bush offered reassurance
[3:34] again today. He said he believes the
[3:37] economy will come out better than ever
[3:39] in the long run.
[3:41] The European Union today endorsed a
[3:43] banking crisis plan for the entire
[3:46] continent. Britain and 15 other EU
[3:48] members had already adopted the plan. It
[3:51] will cost $2.3 trillion.
[3:54] European leaders also called today for
[3:56] revamping the worldwide financial
[3:58] system. German Chancellor Merkel spoke
[4:00] in Berlin.
[4:03] >> We decide on comprehensive,
[4:05] far-reaching, and dramatic measures. We
[4:07] take drastic steps. We take drastic
[4:09] steps so that what we've experienced now
[4:11] will not happen again. Therewith, we
[4:13] establish the structures for a humane
[4:15] market economy in the 21st century.
[4:18] >> British Prime Minister Brown joined that
[4:20] appeal. He said there must be very large
[4:23] and very radical changes in the global
[4:25] financial system. French President
[4:27] Sarkozy said a summit should be held in
[4:29] New York. He said that is where
[4:31] everything started. Later, the US and
[4:34] the other Group of Seven industrial
[4:36] powers agreed to meet soon to address
[4:39] the crisis.
[4:40] US presidential candidates spent their
[4:42] stay making ready for their final
[4:44] debate. Democrat Barack Obama and
[4:46] Republican John McCain face off tonight
[4:49] at Hofstra University in Hempstead, New
[4:51] York. Obama now has a growing lead in
[4:54] the polls, and chief strategist David
[4:57] Axelrod said tonight is a chance to
[4:59] close the deal.
[5:01] >> It's the last chance for uh
[5:04] for folks to see these candidates side
[5:07] by side and take the measure of them,
[5:09] and I think that
[5:10] uh
[5:11] it's going to accelerate the
[5:12] decision-making process for
[5:15] people who are still
[5:16] pondering their choices. So, uh you
[5:19] know, it would be around the corner here
[5:21] to the final sprint.
[5:23] >> On the Republican side, vice
[5:24] presidential nominee Sarah Palin sought
[5:26] to rally support in Dover, New
[5:28] Hampshire. She said the critics have
[5:30] counted out John McCain before.
[5:33] >> They said there is no way that he would
[5:36] win the primary up here. He was down in
[5:38] the polls, but the people of New
[5:40] Hampshire went to the voting booth, and
[5:42] they turned the underdog into the
[5:45] victor. So, John McCain has a history of
[5:48] overcoming the odds in this great state,
[5:51] and that is exactly what you can help us
[5:53] do on election day on November 4th.
[5:56] >> The 90-minute debate will air on those
[5:58] PBS stations and all other networks
[6:01] starting at 9:00 p.m. Eastern time.
[6:03] We'll have more on the story later in
[6:05] the program tonight. Vice President
[6:07] Cheney was treated for an abnormal
[6:09] heartbeat today at a Washington
[6:11] hospital. Doctors applied a small
[6:13] electrical shock to restore the heart's
[6:15] rhythm for the second time in the last
[6:18] year. Later, Mr. Cheney left the
[6:20] hospital and waved to reporters. A
[6:22] spokeswoman said the procedure went
[6:24] smoothly. The Vice President is 67 years
[6:27] old. He has a history of heart trouble.
[6:31] The Prime Minister of Canada called for
[6:33] political cooperation on economic issues
[6:35] today after his party won national
[6:38] elections. Stephen Harper's
[6:40] Conservatives gained ground but fell a
[6:42] dozen seats short of a majority in
[6:44] Parliament. Today, Harper said all
[6:47] parties must work together to help
[6:48] Canada weather the world financial
[6:50] crisis.
[6:52] Leaders in Iraq molded new draft
[6:54] security pact with the US today. Prime
[6:57] Minister al-Maliki submitted the
[6:58] agreement for review. It was widely
[7:01] reported to set a deadline for a US
[7:03] pullout by the end of 2011.
[7:06] And American troops and contractors
[7:08] could face trial in Iraqi courts for
[7:11] major crimes committed off duty. In
[7:14] Washington State Department spokesman
[7:15] Sean McCormack confirmed a text is under
[7:18] review, but he insisted it is not final
[7:21] yet.
[7:22] >> Nothing is done until everything is
[7:24] done. Everything isn't done. The Iraqis
[7:26] are still talking among themselves. We
[7:27] are still talking to the Iraqis. You
[7:30] know, I feel these terms, you know,
[7:31] draft, final draft, and everything else.
[7:33] But, you know, my
[7:34] my standard is is it done? And it's not.
[7:37] Nothing it is not done yet because
[7:40] there's still discussions ongoing.
[7:42] >> Also today, the US military reported the
[7:44] number two leader of Al-Qaeda in Iraq
[7:47] was killed. Abu Qaswara died in a raid
[7:50] earlier this month. It happened in the
[7:52] northern city of Mosul.
[7:54] Officials in Afghanistan reported nearly
[7:57] 90 insurgents were killed overnight in
[7:59] Helmand province. Police and coalition
[8:02] forces killed 18 Taliban fighters
[8:04] outside the provincial capital. They
[8:07] were massing to attack for the second
[8:09] time in 3 days. And the local governor
[8:11] claimed an airstrike killed 70 more
[8:14] Taliban to the south. NATO said the
[8:16] figure was much lower.
[8:18] Firefighters in Southern California
[8:20] gained ground today with the help of
[8:22] calmer winds. Crews again battled two
[8:25] large fires in the Los Angeles area and
[8:28] a third at Camp Pendleton near San
[8:30] Diego. Flames still threaten homes and
[8:32] have already scorched 34 square miles.
[8:36] Storm warnings went up today for Puerto
[8:38] Rico and the US Virgin Islands as
[8:40] Hurricane Omar approached. It was
[8:43] heading northeast on a direct course for
[8:45] St. Croix in the Virgin Islands.
[8:48] Neighboring islands were also on alert.
[8:50] The storm's path was expected to take it
[8:53] into the central Atlantic and away from
[8:55] the US mainland. And that's it for the
[8:58] news summary tonight. Now, the recession
[9:00] prospects. The failure of a bank,
[9:03] the healthcare issue in New Mexico, and
[9:06] a Shields and Brooks debate preview.
[9:15] There's new signs of a troubled economy.
[9:18] Jeffrey Brown has our story.
[9:20] The week began with euphoria in the
[9:22] markets after Europe and the US
[9:24] announced steps to prop up the global
[9:26] financial system, but just 2 days later
[9:28] a much more sober view of the economy
[9:31] led to a market plunge. We take our own
[9:33] look now with Liz Ann Sanders, chief
[9:35] investment strategist for Charles
[9:37] Schwab, Mark Zandi, chief economist at
[9:40] Moody's economy.com,
[9:42] and Jim Ellis, assistant managing editor
[9:44] at Business Week magazine. Well, Liz Ann
[9:47] Saunders, the markets took a hard look
[9:49] at the economy today. What did they see?
[9:52] >> Well, there were a couple of a numbers
[9:53] that were reported. Retail sales was uh
[9:57] for lack of a better word, ugly.
[9:59] Uh even without inflation taken into
[10:01] consideration, retail sales were down
[10:03] 1.2% and it was for the most part across
[10:06] the board. About the only glimmers of
[10:07] some strength were in the true
[10:10] non-discretionary areas. You know, food
[10:13] stores and drug stores. And obviously,
[10:15] that is not what you want to see to see
[10:16] any kind of health in retail sales. The
[10:18] Federal Reserve's Beige Book came out,
[10:20] which is just a broad measure of
[10:21] economic activity across the country.
[10:24] That was much weaker than expected.
[10:26] There was another consumer comfort poll
[10:28] or index that came out today with the
[10:30] second worst reading in history and a
[10:32] record jump in the percentage of
[10:35] respondents to that survey that believe
[10:37] the economy is worsening from here.
[10:39] Fully 82%, which was never seen a number
[10:41] that high. So, it was it was quite a mix
[10:43] of negative news today. And Mark Zandi,
[10:45] how fill in the picture a bit more.
[10:47] Regionally, were there differences,
[10:50] strengths or weaknesses?
[10:51] >> Well,
[10:52] you know, the Beige Book, which is a
[10:54] compendium of observations on the
[10:56] economy
[10:58] put together by the 12 Fed district
[11:00] banks across the country in Boston, in
[11:02] Chicago, San Francisco, and elsewhere
[11:05] were uniformly negative. I don't think
[11:06] I've ever read a report as uniformly bad
[11:10] as this one. It's uh they're
[11:13] suggesting that retailing is bad,
[11:14] housing's bad, manufacturing is bad,
[11:17] tourism is weak, banking. The only thing
[11:19] that is doing a lot well is agriculture
[11:22] and energy. And and based on my own
[11:25] work, uh there are now 27 states across
[11:28] the country that are in recession in my
[11:30] view. And another 14 that are pretty
[11:32] close and probably will be in a
[11:33] recession by the end of the year. So,
[11:36] one of the one of the hallmarks of the
[11:37] current economic environment
[11:40] is that the problems are so broad-based
[11:41] across the country.
[11:43] >> And so and Mark, I noticed that one
[11:44] thing that Ben Bernanke pointed to today
[11:47] was the
[11:48] exports would be down. I Is that's
[11:50] because of slowness overseas, I guess,
[11:53] right?
[11:54] >> Yeah, and that's the real disappointment
[11:55] because the only source of growth we
[11:58] have had over the past year now are
[12:00] exports. And that was because the global
[12:02] economy outside of the United States was
[12:04] doing reasonably well, particularly in
[12:05] Asia and Latin South America. And you
[12:07] combine that with the previously weaker
[12:09] dollar and we got a lot of exports, and
[12:11] that was very important to technology,
[12:13] agriculture, aerospace. But now our
[12:16] economic problems are everyone's
[12:18] problems and we're we're probably now in
[12:20] a global economic recession. And that
[12:23] means that our export growth will slow
[12:24] sharply and that source of growth that
[12:26] will no longer be there for us.
[12:28] >> Now Jim Ellis, the focus for days
[12:30] leading up to this was on the credit
[12:32] markets. Is it correct that that those
[12:34] markets have opened a bit and if so, why
[12:37] has that not translated into positive
[12:39] news for the economy?
[12:41] >> Well, if you look at some of the numbers
[12:43] and like London interbank trading or or
[12:45] trading in short periods of time between
[12:47] banks, there's been a slight decline in
[12:50] over the last 3 days in the amounts of
[12:52] that a bank would require another bank
[12:54] to pay it. You know, that shows that
[12:56] they're a little less worried. The
[12:58] problem is that there was all this
[13:00] euphoria at the beginning of the week
[13:02] when people said, "Great, we've actually
[13:04] found a way to stop some of the turmoil
[13:07] in the financial markets or in the
[13:08] credit markets." And then they woke up
[13:10] the next day and discovered that there's
[13:12] a severe recession ahead. So, let's not
[13:13] be too quick about this. But basically
[13:16] what's happening now is stock investors
[13:18] are saying, "We've got no good news on
[13:20] the horizon. It's time to basically
[13:21] reprice, you know, the markets. We're
[13:23] taking away all the pricing that was
[13:25] built up from a basically five years of
[13:28] of of of speculation, five years of over
[13:30] leverage and now we're saying let's get
[13:32] back to more realistic valuations.
[13:34] >> But Jim, we're always told not to pay
[13:36] too much attention to the market on any
[13:38] one given day. But when you have that's
[13:41] the mantra I've always heard as long as
[13:42] I've been doing this. But when you have
[13:44] these wild swings, you have 950 up one
[13:47] day and 730 down. Is there is there
[13:50] anything rational going on or is this
[13:52] just a sign of of pure confusion?
[13:54] >> What do we read it?
[13:55] >> There's definitely pure confusion here
[13:57] because people are trying to figure out
[13:58] what's the market telling us and the
[14:00] only thing the market really is telling
[14:01] us is that we were way overvalued and
[14:03] the problem is that the market's not
[14:05] saying what true value is. Remember that
[14:07] markets there's no such thing as
[14:09] intrinsic value. I mean basically value
[14:11] is what a person's willing to pay you
[14:12] today and the market is saying with a
[14:15] lack of capital out there to get from
[14:17] banks, banks are hoarding capital
[14:19] because they're so desperate to stay
[14:20] solvent. They're not lending which means
[14:22] that people don't have money to spend
[14:24] and so they're or commerce sort of comes
[14:26] to a halt. If that's the case, everybody
[14:28] says there's no reason to invest in
[14:30] stocks right now.
[14:31] >> Liz Ann Saunders, what's your answer?
[14:33] Same question about
[14:34] rational behavior in the markets or or
[14:37] sheer confusion?
[14:39] >> Well, I think one of the factors is we
[14:40] have to understand the mechanics of the
[14:42] market and who the big players are that
[14:44] may help to explain these wild swings
[14:46] that we're seeing in many cases on an
[14:48] intraday basis let alone from day to
[14:50] day. We we know what's going on in the
[14:53] traditional mutual fund industry. We
[14:55] know that there are record breaking
[14:56] redemptions, investors in those mutual
[14:58] funds calling up saying get me out, sell
[15:00] my shares. We had 72 billion dollars
[15:03] come out of equity mutual funds in
[15:04] September. We're approaching that in
[15:07] October at only the halfway point. So we
[15:10] will break the record in October that
[15:12] was just set a month ago in September.
[15:14] We know a lot of those redemptions not
[15:16] only come in at the end of the day, but
[15:18] the mutual funds themselves will do
[15:20] their selling in order to meet those
[15:21] redemptions at the end of the day.
[15:23] That's one piece of it that we actually
[15:24] can get hard data on. Another big piece
[15:27] of it is the vast amount of money in
[15:29] hedge funds. They're unregulated, we
[15:31] don't have the same kind of access to
[15:32] information. We know that they are very,
[15:35] very highly leveraged. So, they're being
[15:37] forced not only to de-leverage, but to
[15:39] sell in order to meet these redemptions.
[15:41] They also tend to kind of watch the
[15:43] market throughout the day and really
[15:45] unleash a lot of their trading at the
[15:47] end of the day. That's the piece we know
[15:49] that's contributing a lot to volatility,
[15:51] but we can't really get the hard numbers
[15:52] like we can for mutual funds. We know
[15:54] it's there, it's just harder to
[15:55] quantify.
[15:56] >> saying a lot of these big swings,
[15:58] especially down, could be these very big
[16:00] players, hedge funds, selling.
[16:03] >> Selling and de-leveraging. So, in many
[16:05] cases, it's not necessarily even because
[16:07] of redemptions, they're just trying to
[16:08] bring their their leverage down from
[16:10] what was unbelievably elevated levels.
[16:13] >> Now, Mark Zandi, when you come back to
[16:16] the economy and how this hits people,
[16:19] how do we measure consumer confidence at
[16:21] this point? How much do we know about
[16:24] how much people are really hurting
[16:26] already?
[16:27] >> Well, I I think this is a body blow to
[16:29] confidence. Consumer confidence,
[16:32] business confidence.
[16:34] You can see it in the retail sales
[16:35] numbers.
[16:36] Those numbers were as bad as I've ever
[16:38] seen them
[16:39] in the last 3 months. Sales have
[16:40] declined at a rate that we've not seen
[16:42] in the 40 years of the data that's
[16:43] available. We are starting to get some
[16:46] survey data and it's
[16:48] showing that there's there's panic.
[16:51] Particularly business people. We run a
[16:53] survey off of one of our websites every
[16:55] week
[16:56] and that plunged last week to a record
[16:59] low. So, I think there is a general
[17:02] breakdown in in in the collective
[17:04] psyche. I think that confidence is is
[17:07] really
[17:09] under a lot of pressure.
[17:10] >> And the real worry, Mark, I guess would
[17:11] be the extent to which this this turns
[17:13] into translates into job loss or or
[17:16] salary freezes. How much of that are we
[17:17] seeing?
[17:19] >> Uh well, I think we will see that uh
[17:21] clearly see it. Uh
[17:23] we're already losing jobs. We've lost
[17:24] 750,000 jobs since the beginning of the
[17:26] year.
[17:27] Uh and all of the indications are that
[17:29] those job losses are intensifying. I
[17:31] think it is important though to to make
[17:32] one point and that is I do think this is
[17:34] largely panic, but panics can become
[17:36] self-fulfilling and I think that's what
[17:38] we're seeing right here. People are so
[17:40] nervous, so scared that they're
[17:41] battening down the hatches. They're not
[17:43] spending, they're not hiring, they're
[17:44] not investing. And the result is that
[17:46] that it's resulting in an in an
[17:48] increasingly dark reality.
[17:50] >> Jim, let us weigh in on that. How do you
[17:52] How are people How do you measure how
[17:53] people respond and when it is panic and
[17:56] when it is grounded in the realities of
[17:58] their lives?
[17:59] >> Well, there's a there's a difference
[18:01] from, you know, looking at the way that
[18:02] consumers res- respond to markets today
[18:04] than there might have been 10, 20 years
[18:06] ago. Now, increasingly companies don't
[18:08] provide um, you know, traditional
[18:10] pension plans where they guarantee you a
[18:12] benefit. Instead, they've shifted that
[18:14] over to the employee where the employee
[18:16] directs his own retirement fund. I think
[18:18] that a lot of people therefore become
[18:19] much more sensitive to moves in the
[18:21] market and they have decided to move
[18:23] with their feet. I think we're really
[18:24] going to see a drop in confidence over
[18:26] the next few weeks when people are
[18:28] starting to see the um, you know, res-
[18:30] the results for their third quarter in
[18:32] their 401(k)s. I mean, basically the uh
[18:35] Congressional Budget Office last week
[18:36] said that there's been about $2 trillion
[18:39] in 401(k) and private pension declines
[18:43] in the last 15 months. And, you know,
[18:45] we're not even counting what happened in
[18:47] the, you know, the 3 days this week. I
[18:49] mean, a lot of people are going to say
[18:50] that and they're going to say, "I've got
[18:52] to either push back retirement, I've got
[18:54] to or save more." And, you know,
[18:56] Americans don't like to save more. And
[18:58] either one of those things is not
[18:59] particularly good for the economy,
[19:01] particularly the not, you know, sort of
[19:02] not spending. You know, not spending
[19:05] sort of is a bad thing right now. And
[19:07] we're not seeing people go out and say
[19:08] spend like we did after 9/11, but in
[19:10] some ways we can't afford for all this
[19:13] liquidity to flow back into the
[19:14] marketplace, which is what the Fed is
[19:16] trying to do. And people choose not to
[19:18] spend or borrow, it it sort of works
[19:20] against that.
[19:21] >> And yet Liz Ann Saunders and Ben
[19:23] Bernanke today and said that in spite of
[19:25] the the length that this will clearly
[19:27] take and the
[19:28] the difficulties out there, he said that
[19:30] we're using all the tools available and
[19:33] he expressed every confidence in the
[19:35] American economy. So, they clearly have
[19:37] to try to get that message out there.
[19:39] What are you looking forward to see if
[19:40] it's taking hold?
[19:42] >> Well, I I think you have to continue to
[19:44] look for an easing in spreads much as
[19:46] Jim talked about earlier, but you know,
[19:48] to another point
[19:49] >> spreads?
[19:50] >> Credit spreads, yeah. See the those
[19:52] borrowing rates the between banks come
[19:54] down. Because if banks aren't willing to
[19:56] lend to each other, they're sure not
[19:58] going to be willing to lend to
[19:59] businesses or consumers. But here's the
[20:01] other problem with the lending to
[20:02] businesses and consumers. We're so
[20:04] focused right now on the supply of
[20:07] credit,
[20:08] getting the credit seizure to to unseize
[20:11] and bring that liquidity into the
[20:12] system. We're not really focused much on
[20:15] the demand for credit side. So, if we do
[20:17] unfreeze the banking system
[20:20] the idea that that's going to
[20:21] automatically lead to lending,
[20:23] businesses borrowing, consumers
[20:25] borrowing, businesses borrowing to
[20:26] expand, consumers borrowing to spend,
[20:29] that's the thing that I think we is
[20:30] going to be a secondary concern. Um
[20:32] certainly on the part of consumers. I
[20:34] just don't really see where that demand
[20:37] for borrowing, particularly if it's for
[20:39] consumption to come from, because we are
[20:41] moving into more of a savings
[20:43] orientation. I think ultimately this is
[20:45] one of the longer-term silver linings is
[20:47] that as a society we are moving away
[20:50] from credit-driven consumption to
[20:52] savings and I think we'll ultimately all
[20:54] be better off. But the transition in the
[20:57] in that process is going to be a tough
[20:59] one.
[20:59] >> All right. Liz Ann Saunders, Mark Zandi
[21:01] and Jim Ellis, thank you all three.
[21:11] >> Now the banking crisis strikes home in
[21:13] Seattle with a collapse of Washington
[21:15] Mutual. Special correspondent Lee
[21:18] Hochberg reports.
[21:21] >> Washington Mutual was one of Seattle's
[21:23] largest homegrown companies. It rose
[21:25] from the ashes of Seattle's great fire
[21:28] 120 years ago. Today, its office tower
[21:31] soars 42 stories over downtown Seattle.
[21:35] Its nickname WAMU is all over Seattle,
[21:38] on a downtown theater,
[21:41] at concerts, at the zoo.
[21:48] Seattle residents celebrating the 4th of
[21:50] July go to the WAMU Family 4th.
[21:55] So when the bank collapsed last month,
[21:57] it concerned more than just depositors
[21:59] and stockholders. Washington Mutual had
[22:01] donated $50 million annually to
[22:04] organizations involved with affordable
[22:06] housing, community building, and
[22:08] education,
[22:10] including cash grants to schools in 15
[22:13] states. $8 million a year has gone to
[22:17] 250 nonprofit and civic groups in the
[22:20] Seattle area alone.
[22:22] >> They were a generous donor in this
[22:25] community, and one has to be concerned
[22:28] when they go away.
[22:29] >> John Fine is CEO of United Way of King
[22:32] County.
[22:33] >> Yes, an organization like that matters.
[22:35] >> Seattle's United Way chapter is the
[22:37] largest in the country. Last year, it
[22:40] raised $117 million.
[22:43] 2.1 million of that came from Washington
[22:45] Mutual and its 43,000 employees.
[22:49] >> The fear that that money won't be
[22:51] replaced is quite real, and you're
[22:53] talking about people who are very much
[22:55] in need and very much suffering. We
[22:58] spend that money on ending homelessness,
[23:01] getting kids ready for school, helping
[23:03] domestic violence victims, helping
[23:05] seniors, helping youth graduate. That
[23:07] money goes directly to those services
[23:10] and if we don't replace that money,
[23:12] those services will need to be cut.
[23:14] >> Washington Mutual is being taken over by
[23:17] New York-based J.P. Morgan Chase, a
[23:19] company that has shown its own largess,
[23:21] giving $100 million a year to year to
[23:24] nonprofits. It says it will be a good
[23:26] corporate citizen in Seattle, but it's
[23:29] too early to go specific.
[23:31] Chase may be closing 400 branches and
[23:34] says it will lay off some of the 3,500
[23:36] employees at Washington Mutual's Seattle
[23:39] corporate headquarters.
[23:41] >> Companies that are laying off employees
[23:43] have fewer employees to donate and they
[23:45] also have um
[23:48] uh more insecure employees when they're
[23:49] laying people off who are less less
[23:51] likely to donate their dollars and their
[23:53] time.
[23:55] >> Arts groups, too, are very concerned.
[23:58] Washington Mutual contributed liberally
[24:00] to Seattle Symphony, ballet, theaters,
[24:03] and art museums and gave more than
[24:06] $100,000 a year to Arts Fund, which
[24:09] raises money for local arts. Arts Fund
[24:12] president Jim Tune fears J.P. Morgan
[24:14] Chase won't have the same commitment to
[24:16] Seattle. He notes Seattle-based Airborne
[24:19] Express contributed $50,000 a year to
[24:22] his group until it was bought out by DHL
[24:26] with US headquarters in Florida. Since
[24:28] then, Arts Fund hasn't received a penny.
[24:32] >> J.P. Morgan Chase is headquartered in
[24:33] New York
[24:35] and while we had access to top
[24:37] management at WaMu, we will not have
[24:39] access to top management at Chase. So,
[24:42] that is the concern. A remote set of
[24:45] senior executives may not understand how
[24:47] it actually works in the community.
[24:50] >> And then that translates
[24:51] >> That that that translates into some loss
[24:54] of support, I think.
[24:56] >> Seattle's Repertory Theatre, the largest
[24:59] non-profit resident theater in the
[25:01] Northwest, may struggle to replace
[25:03] WaMu's $50,000 annual contribution. But,
[25:07] managing director Benjamin Moore says
[25:09] it's more than money that's at stake.
[25:12] It's personal interest in activities
[25:14] like this high school theater next door,
[25:17] sponsored by the Repertory Theater.
[25:20] >> Members of the WaMu
[25:22] staff that have served on our board
[25:25] became advocates
[25:27] to preserve that kind of activity. They
[25:28] saw that as something that is a core of
[25:31] our mission. And we're able to help me
[25:34] sustain those activities. That's 30 kids
[25:38] every year. It's very concentrated work,
[25:41] but over time, uh, we know that makes a
[25:44] difference.
[25:47] >> For now, Seattle is wondering who will
[25:49] make those differences in the future.
[26:00] >> Next, our big picture look at the
[26:02] battleground state of New Mexico
[26:04] continues. Tonight, it's health care.
[26:07] Correspondent Betty Ann Bowser begins
[26:09] with a report from our NewsHour Health
[26:11] Unit, a partnership with the Robert Wood
[26:14] Johnson Foundation.
[26:17] >> Once a month, badly needed food and
[26:19] health care come to the small rural
[26:22] towns that dot the country roads of
[26:24] Chaves County.
[26:26] In this part of the state, one quarter
[26:28] of the people live below the federal
[26:29] government's poverty line.
[26:32] They've been hit hard by rising food and
[26:34] gas prices.
[26:37] So, when the Roadrunner Food Pantry
[26:38] hands out 50 lb of groceries for $2,
[26:42] that's an offer locals can't refuse.
[26:46] While people wait for food, Jane Batson
[26:48] works the line, looking for those with
[26:51] health care problems. and we got one.
[26:53] >> Are you a doctor?
[26:54] >> No.
[26:55] As Dean of Health at Eastern New Mexico
[26:58] University, Roswell, Batsin is keenly
[27:01] aware that nearly 1/4 of the people in
[27:03] New Mexico have no health insurance.
[27:06] That's the second highest percentage of
[27:07] any state in the nation.
[27:10] Many of these people work for the small
[27:11] businesses that drive much of the
[27:13] economy of the state, and whose owners
[27:16] can't afford to offer health insurance.
[27:19] So, Batsin, in conjunction with the food
[27:22] pantry, Blue Cross Blue Shield, and
[27:24] several drug companies, runs this
[27:26] outreach program.
[27:30] It provides blood pressure checks,
[27:32] diabetes screening, and help for people
[27:35] like Sandra Beckley.
[27:41] Beckley has asthma, rheumatoid
[27:43] arthritis, four herniated discs, carpal
[27:47] tunnel syndrome, and no health
[27:49] insurance.
[27:50] She's too disabled to work, and can't
[27:53] afford the drugs she needs to control
[27:55] her asthma.
[27:56] >> There's been several times this past
[27:58] month since I've run out of my inhaler
[28:01] that I seriously thought about calling
[28:03] 911 because I felt like I was
[28:06] just breathing through a straw.
[28:08] >> You have any new symptoms?
[28:09] >> Yeah.
[28:10] >> She's really
[28:11] >> Yeah.
[28:11] >> quite typical.
[28:12] >> And what's what did you drink?
[28:13] >> You're seeing what we see all the time.
[28:15] The university has a lot of outreach
[28:17] programs, and our intent is to try to
[28:19] just make a little dent, or to at least
[28:21] provide some access to the health care
[28:23] system.
[28:23] >> That's what Beckley got that afternoon
[28:26] when she was examined by nurse
[28:27] practitioner Carrie Hendra. The exam was
[28:31] paid for by the outreach program.
[28:33] >> So, we want to get you back on the
[28:34] medicine for sure.
[28:36] >> Tragically, 2 and 1/2 weeks after we
[28:39] interviewed Beckley, she died.
[28:41] The cause of death is still
[28:43] undetermined. But, even And she had had
[28:45] insurance, Beckley lived in an area
[28:48] where health care of any kind is hard to
[28:51] come by.
[28:52] More than half of all the people in New
[28:54] Mexico live in non-urban areas, many in
[28:57] small towns like Hagerman, population
[29:00] 1,200. Here there are no big
[29:03] supermarkets, there's no pharmacy, there
[29:05] is one gas station, but Hagerman has no
[29:08] doctor. Two years ago, Hagerman's only
[29:11] clinic shut down.
[29:13] Now, Mayor Cliff Hayes says, "Patients
[29:16] must drive 25 miles or more to the
[29:19] nearest urban emergency room."
[29:21] >> If they're going to get the treatment
[29:22] right away, it seems like that's about
[29:24] the only way to do it.
[29:26] There's The doctors in the in the area
[29:28] are so overloaded that it's 6 weeks to
[29:31] get an appointment.
[29:32] >> 6 weeks?
[29:33] >> A lot of time that's
[29:34] >> And you're sick right now?
[29:36] >> You're either cured or dead by the time
[29:38] you get in to see the doctor if you
[29:39] don't do that.
[29:40] >> So, what what do you do if you get sick?
[29:43] >> Usually I just suffer.
[29:44] >> Hagerman is not unique. All over the
[29:47] state, there are towns whose economies
[29:50] are driven by small businesses like
[29:52] Picolino's.
[29:53] >> Picolino restaurant in Hagerman?
[29:54] >> Owner Carlos Tarango doesn't provide
[29:57] health insurance for his workers.
[29:59] >> I wish I could have, but I cannot afford
[30:02] it.
[30:03] >> Jane Batson says, "Towns like Hagerman
[30:06] also don't attract primary care
[30:08] physicians."
[30:09] >> The rural health professional shortage
[30:11] in New Mexico is acute. Primary care
[30:13] physicians are on call 24 hours a day, 7
[30:15] days a week. In a small community, they
[30:17] may not have anybody to can substitute
[30:19] for them.
[30:21] >> 100 miles west of Hagerman is another
[30:24] area with an acute doctor shortage, the
[30:26] Mescalero Apache Indian Reservation.
[30:30] The only medical facility on the 460,000
[30:33] acre reservation is this 13-bed hospital
[30:37] run by the federal government's Indian
[30:39] Health Service, or the IHS.
[30:43] The Mescalero Apaches and other Native
[30:45] American tribes were promised health
[30:48] care through treaties with the federal
[30:49] government and by an act of Congress in
[30:52] 1921.
[30:54] But the IHS has been chronically
[30:57] underfunded by Washington for decades.
[31:00] Just three doctors serve 4,000 Mescalero
[31:03] Apaches, and only the most basic medical
[31:06] conditions can be treated.
[31:10] Even though the Mescalero Apaches own
[31:12] this big resort and casino, the vast
[31:15] majority are unemployed.
[31:17] >> About three quarters of the reservation
[31:20] is forest.
[31:21] >> Carlton Naiche Palmer, president of the
[31:23] tribal council, says that means poor
[31:26] health outcomes.
[31:27] >> Because of
[31:29] the lack of funding, we have people that
[31:31] are
[31:32] uh dying prematurely
[31:35] uh because of various diseases like
[31:37] diabetes.
[31:39] >> The New Mexico Department of Health says
[31:41] the state's 200,000 Native Americans
[31:44] have the highest rates of diabetes,
[31:47] pneumonia, and alcoholism of any other
[31:50] group in the state, and the highest
[31:52] death rate.
[31:55] Some tribal members, like Ellis Nine
[31:57] Tortilla, don't like to go to the Indian
[32:00] Health Service because they think the
[32:02] care is inadequate.
[32:04] 62-year-old Ellis Tortilla lives on
[32:07] social security disability payments and
[32:10] has no insurance.
[32:12] Still, he won't go to the IHS unless
[32:15] he's desperate.
[32:17] Recently, Tortilla needed abdominal
[32:19] surgery. Since the IHS wasn't equipped
[32:22] to do the procedure, they referred him
[32:25] to an outside doctor.
[32:27] When they refer a patient to medical
[32:29] facilities off the reservation, the IHS
[32:33] is supposed to pay for that treatment.
[32:36] Is this a bill for all those things you
[32:38] used?
[32:38] >> They were done.
[32:39] >> Yeah.
[32:40] >> What are you going to do about this
[32:41] bill?
[32:42] >> $10,750.
[32:44] >> I'm going to take it back to IHS.
[32:47] >> Is that the Indian Health?
[32:48] >> Yes, the Indian Health Service.
[32:50] >> For TM, they have a long wait. The IHS
[32:53] ran out of money to pay for the medical
[32:55] treatment off the reservation in July.
[32:59] Until new funding comes from the federal
[33:01] government, they are paying only for
[33:03] cases they consider life-threatening.
[33:06] >> You don't get paid?
[33:07] >> No.
[33:08] >> Dr. Luis Bella is frustrated, too.
[33:11] He was recruited to work for the health
[33:13] service from Puerto Rico. Do you feel
[33:16] like you have enough tools to work with
[33:18] here?
[33:18] >> Nope.
[33:20] >> Budget problems?
[33:21] >> Yep. You're working without money.
[33:23] >> With no funds?
[33:24] >> Without funds.
[33:26] >> The hospital closes at 10:00 p.m. After
[33:29] that, if there's an emergency, the
[33:31] closest ambulance is 20 miles away. If a
[33:34] tribal member suffers a stroke or a
[33:36] heart attack, President Niiche Palmer
[33:38] says they're in trouble.
[33:40] >> People in many cases just die because
[33:45] service is just too slow and far away.
[33:54] >> Some tribal members turn to Paul Ortega
[33:56] for care. He's a shaman, a medicine man.
[34:00] >> People get hurt at night more than they
[34:02] do in the daytime.
[34:05] They feel the pain, they feel the thing.
[34:07] They can't go to the hospital because
[34:09] the hospital's closed.
[34:11] >> So, what do you do?
[34:13] Where do you go?
[34:14] >> You can't go nowhere. Try to take care
[34:16] of they go see Sometimes they call a
[34:18] medicine man, they'll call over here and
[34:20] want to know if I have anything because
[34:22] so-and-so is hurting.
[34:25] >> Ironically, some of the Mescaleros and
[34:27] other uninsured New Mexicans might be
[34:30] eligible for Medicaid or other
[34:32] government assistance.
[34:33] Jane Batson says, "Lack of knowledge and
[34:36] bureaucracy keep people away."
[34:38] >> They become discouraged about looking
[34:40] for access because they've been unable
[34:42] to find it. They may have been turned
[34:43] away. They're unfamiliar with the
[34:45] programs that are there, and so they
[34:47] really don't know what to do.
[34:49] >> Some officials like Batson would like to
[34:51] see universal coverage in New Mexico,
[34:55] but concede that even if all the state's
[34:58] residents had health insurance, they
[35:00] would still have trouble getting access
[35:03] to health care.
[35:07] >> Jody Woodruff in Albuquerque takes it
[35:09] from there.
[35:11] >> So, how do the presidential candidates
[35:13] say they can fix the health care
[35:15] problems in New Mexico and throughout
[35:17] the nation? For that, we turn to health
[35:19] care experts representing both
[35:21] campaigns. Here on behalf of Barack
[35:23] Obama is Michelle Lujan Grisham. She's
[35:26] former health secretary of New Mexico.
[35:29] And Dr. J.R. Damron, he is John McCain's
[35:32] state health care chair and a practicing
[35:35] radiologist in Santa Fe. Thank you both
[35:38] for being here, and let's start with it.
[35:40] We We heard a pretty grim picture saw a
[35:42] pretty grim picture painted there of the
[35:44] health care situation in the state. But,
[35:46] let me begin with you, Dr. Damron. What
[35:48] about this real problem of access?
[35:50] People who not only don't have insurance
[35:52] coverage, don't have a way to get to a
[35:54] doctor or a nurse.
[35:55] >> Access is a huge problem. It's not just
[35:58] in New Mexico, it's a problem throughout
[35:59] the United States.
[36:01] I mean, we're We are
[36:03] in a real critical shortage for health
[36:06] care providers, whether they're nurses
[36:08] or whether they're physicians or nurse
[36:10] practitioners or PAs.
[36:11] >> And what would Senator McCain do about
[36:13] that if president?
[36:14] >> Well, Senator McCain understands this.
[36:15] He understands that there is a health
[36:17] care shortage. He would put federal
[36:19] monies into this. He would
[36:21] try to help whatever way possible where
[36:24] to support the states as well as the
[36:26] nation that we have enough health care
[36:28] providers for for our population.
[36:30] >> And Michelle Grisham, what would
[36:32] >> Fundamental differences. Senator Obama's
[36:34] going to invest in providers directly,
[36:36] which means we're going to do loan
[36:38] forgiveness. We're going to have
[36:39] incentives for practicing in rural
[36:40] areas, where they'll invest in
[36:42] prevention and public health models.
[36:43] We're going to have health information
[36:45] technology, which connect you to
[36:47] physicians and specialists. And you do
[36:49] this by recognizing that we're going to
[36:51] have a better model for guaranteeing
[36:55] access to insurance coverage for New
[36:57] Mexicans and all Americans.
[36:58] >> Cost, how do you pay for it?
[36:59] >> Oh, cost, two things. We can save 50 to
[37:02] 65 billion dollars by taking waste out
[37:06] of the current system. 25% of all the
[37:08] money that you spend in premiums and
[37:10] direct care goes to overhead and
[37:12] administrative burdens. And the second
[37:14] way we do that is tax reform, so that
[37:17] folks paying the uh the making the most
[37:19] money and paying the fewest taxes would
[37:21] would now pay their fair share.
[37:23] >> And why isn't that approach the right
[37:25] approach, Mr. Chairman?
[37:26] >> Regulation. If you want more federal
[37:28] regulation, if you want more government
[37:31] uh mandates and regulation and
[37:32] subsidies, then the Obama plan would be
[37:35] the way to go. But, the
[37:38] but the McCain plan is based upon uh
[37:41] access, affordability of cost, as well
[37:45] as a choice, and uh an increase in the
[37:49] competition in the in the private
[37:50] market. So, I mean, I
[37:52] the there is a significant difference
[37:54] here, and there is no other issue
[37:57] that is before these two candidates that
[38:00] separates the differences. I mean, we
[38:02] agree on certain things. We and there's
[38:05] bipartisan agreement uh on certain
[38:08] things like prevention, wellness, um
[38:11] chronic disease management, even
[38:13] probably the pharmaceutical industry.
[38:14] >> But, the crux of the difference you're
[38:16] saying is the role of government here.
[38:18] Is that
[38:18] >> I think it's the role of government.
[38:20] It's if you go down the left side,
[38:22] you're going to go with the Obama plan.
[38:23] But if you go down the right side,
[38:25] you're going to go with the McCain plan,
[38:26] which is more free enterprise versus
[38:28] government heavy government related. Is
[38:30] that the crux of it?
[38:31] >> Oh, it's the crux, but it's a I think an
[38:33] inaccurate statement about who gets
[38:35] what. Under the Obama plan, for the
[38:36] first time, we're protected. We have
[38:39] guaranteed access to insurance. I can't
[38:42] get insurance. I'm the kind of person
[38:43] that would be excluded because of a
[38:45] pre-existing condition. There's more
[38:47] burden on the patient in the McCain
[38:49] plan. You shop when you're sick, you
[38:51] shop shop when you're a caregiver. That
[38:53] makes no sense at all. When we talk
[38:54] about regulation, we're talking not
[38:56] about regulation. We're talking about
[38:58] protecting individuals. Talk to senior
[39:00] citizens about having a prescription
[39:03] drug plan with their particular drug on
[39:05] it, only to find out within 7 days later
[39:07] that that drug can be unilaterally taken
[39:10] off the market. They don't have access.
[39:12] It's about protection.
[39:14] >> Dr. Delman, John McCain does move away
[39:17] from the current employer-based
[39:19] insurance model. Why does he think that
[39:21] the current system isn't working?
[39:23] >> Well, it has worked for us in the past
[39:25] and and and it worked very well, but
[39:27] there are
[39:28] costs um the cost of medical care
[39:32] far outpaces the the cost for inflation.
[39:35] So, what he feels like should happen is
[39:38] that because less and less employers are
[39:41] providing uh health care for their
[39:44] employees, that we should move away from
[39:46] a employer-based model in which the
[39:49] employer gets the tax
[39:51] benefits to a model in which the
[39:54] individual or the family gets the tax
[39:57] benefit.
[39:58] >> And why doesn't that work?
[40:00] >> Bait and switch. Now, you get a tax
[40:02] credit, and then it's not enough to pay
[40:04] for your premium, and employers are
[40:06] actually incentivized to drop coverage
[40:09] for their employees. What we heard on
[40:11] the on the on the tape, or you saw in uh
[40:14] Southern New Mexico, was an employer who
[40:16] wants to provide health insurance for
[40:18] his employees, but he can't afford to
[40:21] provide it. This is a plan that invests
[40:23] in most small providers by giving them a
[40:25] tax credit and assistance with health
[40:28] care coverage for their employees.
[40:29] That's exactly how you build access in
[40:32] this plan.
[40:33] >> And and what would Senator McCain do
[40:34] about those small employers?
[40:36] >> Well, the small employers, um,
[40:38] look at it like this.
[40:40] Right now, they're already paying for
[40:42] health care benefits for their
[40:43] employees.
[40:44] We're giving the tax benefit to the
[40:48] individual or to the family. $2,500
[40:52] per individual, $5,000 for the
[40:55] for the family. So, in addition,
[40:58] there that employer will not be buying
[41:01] health care coverage, and a lot of
[41:03] employees, including my own employees,
[41:06] do not want to have the type of health
[41:09] care that I choose as an employer for
[41:12] them. So, they will I will do what with
[41:15] that extra money? I'll put that back
[41:18] into salaries.
[41:18] >> And they get more choice.
[41:20] >> And they get more choice.
[41:21] >> And again, why isn't that the
[41:22] >> Limited choice cuz again, you can't
[41:24] access those insurance premiums cuz
[41:26] they're priced out. You can't afford
[41:28] them. You can't deal with There's no
[41:30] guaranteed access. And let's not forget
[41:33] that for the first time ever, McCain is
[41:34] proposing to actually tax your health
[41:36] care benefits. I mean, it is really
[41:38] classic bait and switch, which is I
[41:40] promise to give you something, but in
[41:41] the end, I'm going to tax you somewhere
[41:43] else in order to pay for my plan.
[41:45] >> What about that point?
[41:45] >> Well, I'm going to have to
[41:46] disrespectfully disagree with that,
[41:49] uh, because it's
[41:51] Of course, you know, anytime that you
[41:53] get, uh, you get money, there's going to
[41:55] be a tax, but the amount of tax is
[41:57] significantly lower than what you're
[41:59] getting back as a refundable tax credit,
[42:01] uh, from from the government. And in
[42:04] addition, you get the choice of what in
[42:07] what, uh, type of, uh,
[42:09] plan that you might want to have for
[42:11] yourself or for your family, which we
[42:14] don't have with the employer-based
[42:16] uh healthcare plan currently.
[42:18] >> You absolutely do. Obama is saying, "If
[42:20] you're happy with what you have now, you
[42:21] get to keep it. If you can't get access,
[42:23] I'm going to make sure that you do
[42:24] that." And here's the real difference.
[42:27] I'm going to invest in you. People
[42:29] first, make sure that you have coverage,
[42:31] and the McCain plan is putting patients
[42:34] and individuals out on their own.
[42:36] >> And just quickly, the criticism to
[42:38] Senator Obama's approach would lead to
[42:41] uh government takeover of healthcare in
[42:42] this country.
[42:43] >> Absolutely not. This is reinvesting and
[42:45] supporting small business privately
[42:48] um insurance market. That's what we're
[42:51] investing in by and then you want to
[42:52] shore up government programs. This is
[42:54] about protection. When they talk about
[42:56] regulation, it's an absolute misnomer.
[42:58] It's about protecting patients and
[43:00] families to have care access.
[43:02] >> Uh
[43:03] I I have to disagree with this.
[43:05] Uh you know, the Obama plan relies
[43:06] heavily on government mandates and on
[43:10] regulations, on subsidies. He wants to
[43:13] put in a national healthcare exchange
[43:17] plan as a new plan for the federal
[43:19] government, which will then compete
[43:22] against our private uh insurance
[43:24] industry. With this new plan, which is
[43:27] sort of based like Medicare, but it
[43:29] could be toward Medicaid, uh what we've
[43:32] got then is a leading toward and people
[43:34] are concerned about this, toward
[43:36] single-payer system, which would be a
[43:38] totally government-run program.
[43:39] >> This attack on on the the Obama plan is
[43:42] really in my mind because
[43:45] uh utilize because McCain does not have
[43:48] a comprehensive federal healthcare plan
[43:50] or policy that achieves these things:
[43:53] affordability, access, accountability,
[43:56] quality, and choice for New Mexicans and
[43:58] Americans. And until we do that, no one
[44:01] has guaranteed protected access to
[44:03] healthcare.
[44:04] >> Fundamentally different approaches from
[44:06] the two candidates, and we thank you
[44:08] both for being with us. Michelle, thank
[44:09] you. And Risha and Dr. J.R. Damron,
[44:12] thank you very much.
[44:13] >> Thank you.
[44:14] >> There's more on New Mexico health care
[44:16] and the presidential race on our
[44:18] website. Just go to pbs.org
[44:21] and then scroll down to NewsHour
[44:23] reports.
[44:30] And finally tonight, what to expect on
[44:33] and from tonight's third and final
[44:35] presidential debate as seen by Shields
[44:38] and Brooks syndicated columnist Mark
[44:40] Shields, New York Times columnist David
[44:41] Brooks. How many times have we heard the
[44:44] state all this is it for John McCain? Is
[44:47] it really it for John McCain tonight,
[44:48] Mark?
[44:49] >> Hey, it was it for John McCain last
[44:51] summer. Last fall in New Hampshire, it
[44:53] was it for John McCain.
[44:55] Uh
[44:55] Jim, we're running out of times for John
[44:58] McCain and I think what John McCain has
[45:00] to do, first he has to win tonight.
[45:02] Uh Jim, the question of you know, what
[45:04] is win?
[45:05] >> When when is there's a consensus not to
[45:07] simply vote as watch it independents
[45:09] that but that he comes out of it with a
[45:12] a second day story
[45:14] >> Mhm.
[45:14] >> uh for this debate
[45:15] >> And the wonder class has to see it as
[45:17] well.
[45:17] >> Well, that's right. But I think that it
[45:19] has to be he has to have a theme tonight
[45:22] from this debate that carries into the
[45:24] next two weeks. He can't be re-retooling
[45:27] come uh next Thursday or retooling again
[45:30] this weekend. So and I think the most uh
[45:33] compelling story he's got is that John
[45:35] McCain is a fighter. Uh I think it's
[45:37] believable. I think he has to tell you
[45:39] why he's made those fights not simply
[45:41] he's fought with his party and Obama
[45:42] hasn't but why he made those fights, why
[45:45] he disagreed, uh what difference it made
[45:47] in people's lives and what difference he
[45:48] would make in people's lives. I think
[45:50] he's exhausted mining, if you would, the
[45:53] anti-Obama stuff. I don't think there's
[45:55] anything left there for him. He's got to
[45:57] make the case for John McCain.
[45:58] >> You agree it's got to be for himself.
[46:00] >> Yeah, I'm not sure about that. I mean, I
[46:02] think he may end up doing that, but I
[46:04] think the electorate is settled on
[46:05] Obama. And so, I think he's got to knock
[46:07] some of those people off Obama.
[46:08] >> Mhm.
[46:08] >> Uh
[46:09] maybe I agree 2 3 weeks ago or a month
[46:11] ago the fighter saying the positive
[46:13] here's why I'm doing this was the right
[46:15] thing to do. But at this point, we're
[46:17] very late in the day. Obama's got this
[46:19] highly significant lead, 7 or 8 points
[46:21] or 14 according to my newspaper's poll.
[46:24] and all the fundamentals are running
[46:26] against him. And it could be he's got to
[46:28] knock something off Obama. And that's a
[46:30] very tough thing to do. Because that
[46:32] would mean he'd have to be very harsh,
[46:34] pretty negative, kind of unattractive.
[46:36] And so, there's the impulse to do that
[46:39] to try to knock something off Obama. At
[46:40] the same time, he's got to be thinking
[46:41] about his long-term reputation.
[46:43] >> Yeah.
[46:43] >> And how he wants to be remembered. And
[46:45] so, that's the dilemma.
[46:46] >> Eight years ago,
[46:48] John McCain was the most popular
[46:50] political figure in the country.
[46:52] Um and boy, I I would I'd spend the next
[46:56] 2 hours looking at those films as to
[46:58] what made him that. And I
[47:00] there was just one vignette from the
[47:01] town meetings in New Hampshire in 2000
[47:03] that I haven't seen in 2008. When John
[47:06] McCain would be asked then, "What about
[47:07] a patient's bill of rights?" He'd turn
[47:09] right to the questioner and he'd say,
[47:10] "We're not going to have a patient's
[47:11] bill of rights as long as my party's
[47:13] owned by the insurance companies and the
[47:15] Democrats are owned by the trial
[47:16] lawyers." And people a light bulb would
[47:19] go on and people could understand that.
[47:20] >> He was telling the truth. He was a
[47:22] truth-teller. And I just think I really
[47:25] think that's that's important. I think
[47:26] David's right, you got to understand how
[47:28] and appreciate how you want to be
[47:30] remembered.
[47:31] And he doesn't want to be remembered for
[47:33] demolition derby.
[47:34] >> Mhm.
[47:34] >> What about the bad news again today on
[47:37] the economy on the day of this debate? I
[47:40] mean, the economy was already there.
[47:41] This just
[47:42] increased McCain's problems.
[47:44] >> I think so. Well, A, because it's the
[47:46] party in power and that's that's just
[47:47] unavoidable.
[47:49] If he's a Republican, the Republicans
[47:50] are in power, you get blamed. But the
[47:52] second thing, and this is something I
[47:53] think he can solve, There that there's
[47:56] is there's a expectation out there that
[47:58] this was part of the free market system.
[48:00] We have had the 20 years of
[48:01] deregulation. What are these people who
[48:03] are free marketeers, what do they have
[48:05] to say to get us out of this? And I
[48:06] think he's got to say here's what we
[48:08] say, here's where we think government
[48:09] should act and here's where we think it
[48:11] should not act. And there is a narrative
[48:13] that he could form. It would be
[48:14] challenging to form it in a debate
[48:16] format as opposed to a long 40-minute
[48:18] speech which would get us talking. But I
[48:20] I think he's got to somehow not have
[48:23] plans. He's Believe me, they all have
[48:24] plans. It's coming out of their ears.
[48:26] They've spent all the GDP six times over
[48:29] in the last month. But just having a a
[48:30] philosophy, here's what where the
[48:32] government needs to get involved and
[48:33] here's where we're going to stay out.
[48:34] That's why we're conservative.
[48:36] >> It goes back to one of the questions
[48:37] that from the from the first debate in
[48:39] fact which was which one of these two
[48:41] men is is more likely to be able to lead
[48:44] the country out of the financial
[48:46] problems and the economic problems,
[48:47] right?
[48:48] >> The problem for both of them, Jim, is
[48:50] that the country has confidence in
[48:51] either one. Even though Obama does have
[48:53] a lead in the the Gallup poll had a
[48:55] question that was in USA Today yesterday
[48:58] that probably would ought to be sobering
[48:59] for both of them as they go in tonight
[49:01] and start talking about their promises
[49:03] and their and and their pledges. And
[49:05] they asked if do you have confidence in
[49:07] Barack Obama, John McCain, President
[49:10] George W. Bush to fix the economy. Is
[49:12] Obama with a 52% you know, to 45 43%
[49:16] lead or 44% lead in that poll? 44% said
[49:19] yes, they have confidence and 50% don't.
[49:21] McCain, it was 31% had confidence, 63
[49:24] don't. The president of the United
[49:25] States, 16% said they had confidence,
[49:28] 80% no confidence. I mean, the the
[49:30] deficit in public trust cannot be
[49:33] overstated. There's a loss and a
[49:34] hemorrhaging of public confidence. And
[49:36] that's got to be restored. And the only
[49:38] way you're going to restore that with is
[49:39] with candor.
[49:40] >> It's not with more no more programs or
[49:43] no more numbers.
[49:44] >> They've thrown programs at people, most
[49:46] of which are are nonsensical and
[49:49] extremely expensive.
[49:51] Uh McCain had a cap gains cut. It seems
[49:53] like a tick every time something goes
[49:55] wrong, the Republicans suggest a cap
[49:56] gains cut. Uh
[49:58] Obama wanted a moratorium on
[50:00] foreclosures. When Hillary Clinton
[50:02] suggested that, he said it was a stupid
[50:03] idea, and he was right then, but he's
[50:04] wrong now in endorsing it. So, they're
[50:06] just giving away the candy store, and
[50:08] it's not fooling anyone.
[50:09] >> David,
[50:10] uh back to Obama specifically and the
[50:12] debate, is there anything Barack Obama
[50:14] could do tonight to lose this thing?
[50:16] >> In my view, is that if he swore
[50:17] allegiance to Al-Qaeda, he could lose a
[50:18] few swing states. He might still win the
[50:20] election.
[50:21] Uh but but no, I I think he'd be he
[50:23] speaks calmly, he'll be fine.
[50:25] >> Mhm.
[50:26] >> Uh and that's something he does very
[50:27] well. I mean, I I I think he's
[50:29] >> presidential.
[50:29] >> He appears presidential. Well, listen,
[50:30] the guy One thing we've learned about
[50:32] the guy is his limbic system is on low.
[50:34] Uh he he's not that emotional. He
[50:36] doesn't lose his cool. He he acts
[50:38] presidential. He acts very assuring. And
[50:41] if you know, he's like a golfer, it's
[50:43] 17th hole, he's up by six strokes, hit
[50:45] in the middle of fairway, lay up before
[50:46] the green, putt it in, go for par. I
[50:49] hear you, and he'll be fine.
[50:50] >> Go for par?
[50:51] >> Go for par.
[50:53] >> Yeah, do you golf?
[50:54] >> That's the analogy. Yeah, yeah. I I
[50:55] think he has to go.
[50:56] >> At least he doesn't have to do a Hail
[50:57] Mary. It doesn't have
[50:58] >> Oh, different different different sport.
[51:00] >> That's a totally different phrase in
[51:01] this in this sport.
[51:03] >> I I I understand that, Jeff. Now, I I
[51:05] just think I I think
[51:07] that voters have
[51:09] you know, understand the next
[51:11] president's going to have a very very
[51:12] short honeymoon. And uh
[51:14] >> Or maybe none at all.
[51:15] >> Or none at all. And you can't come in
[51:17] and discover that there's a problem, cuz
[51:19] everybody in the country knows there is
[51:21] a problem. I mean, Ronald Reagan in in
[51:23] 1980 offered the country, quite
[51:25] honestly, he's going to double the
[51:26] defense budget, cut spending by a third,
[51:28] cut taxes by a third, cut taxes by a
[51:30] third, a patriotic investment to take
[51:32] 1/3 tax cut, and balance the budget.
[51:34] Which was sort of the the political
[51:35] equivalent of a hot fudge sundae diet.
[51:37] You know, you eat four or five of these
[51:38] a week, and you know, you're going to
[51:40] lose weight.
[51:40] >> Yeah.
[51:40] >> And and
[51:42] this is not the time for that. This is
[51:44] not the time And that's what I think
[51:45] both of them are doing.
[51:46] >> This is
[51:47] >> Um it's just kind of the hot fudge
[51:48] sundae diet. I mean, one of them has got
[51:50] to come forward and say, "Look, folks,
[51:52] we're in a terrible, terrible mess and
[51:54] it's you know, it's
[51:56] not all the old promises to get them."
[51:59] Uh they they are rescinded.
[52:01] >> That's the question. I honestly don't
[52:03] know where either would come down on
[52:04] this. It could be next year if you
[52:06] believe the first 20 minutes of our
[52:07] program, you could have a 9%
[52:09] unemployment rate and within a couple of
[52:10] years or within a year, you could have a
[52:12] steep recession. At the same time, I
[52:15] your Times colleague David Leonhardt
[52:16] estimates the federal budget deficit
[52:18] they will inherit will be $750 billion,
[52:21] high percentage of GDP.
[52:23] So, what choice do you make? Do you say,
[52:24] "Okay, we're going to blow the budget
[52:25] deficit. We'll go to $1.2 trillion
[52:27] deficit, 7 or 8 or whatever percentage
[52:30] of GDP because we've got to spend money
[52:32] to get that that unemployment rate down"
[52:34] or do you say, "We're constrained and
[52:36] we're going to shelf some of these
[52:36] programs." That's a basic fundamental
[52:39] choice the next president's going to
[52:40] face and frankly I have I have guesses
[52:43] about how each one would respond, but I
[52:45] don't really know.
[52:46] >> Meanwhile, the issue is who who is the
[52:49] calm hand on the tiller or not the
[52:51] tiller. Just use another analogy.
[52:53] >> Steady hand.
[52:54] >> Yeah, steady hand. Who who sails by the
[52:56] fixed star? I I think I think Obama has
[52:59] come across that way.
[53:01] By in contrast, I mean, it's it's just
[53:03] like tonight, John McCain is going to be
[53:05] better off sitting at the table than he
[53:07] was in the town meeting because he won't
[53:10] he won't be eclipsed physically by Obama
[53:13] and I think he'll probably appear more
[53:15] steady. He has not appeared to be a
[53:17] steady hand.
[53:18] >> Same rules apply to this debate that
[53:20] were from the first debate and although
[53:22] they'll be seated, it's each candidate
[53:24] gets 2 minutes for each question and
[53:26] then there's a 5-minute discussion
[53:27] period afterward but they will be
[53:29] seated. You think that will influence
[53:30] the way they act?
[53:31] >> I'm struck in talking to people about
[53:33] the middle debate, the town hall
[53:34] meeting, how many people talked about
[53:35] the physical of McCain walking around,
[53:37] taking notes, always in the background
[53:39] of the shots.
[53:40] And and pay attention to that stuff and
[53:42] this I think will probably help them.
[53:43] All right. David Mark, we'll see you
[53:45] later. Thank you.
[53:51] >> [music]
[53:54] >> And again, the other major developments
[53:56] of this day, fears of recession sent the
[53:58] Dow Jones Industrial Average falling 733
[54:01] points. The chairman of the Federal
[54:03] Reserve, Ben Bernanke, warned recovery
[54:05] will not come quickly, and Vice
[54:07] President Cheney was treated
[54:08] successfully for an abnormal heartbeat.
[54:11] We'll broadcast that presidential debate
[54:13] with analysis by Mark and David, among
[54:15] others, on most PBS stations beginning
[54:17] at 9:00 p.m. Eastern time. Our coverage
[54:20] will also continue always online, and
[54:23] we'll be back here on the NewsHour
[54:25] tomorrow night. For now, I'm Jim Lehrer.
[54:27] Thank you, and good night.
[54:35] Major funding for the NewsHour with Jim
[54:38] Lehrer is provided by
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