PBS NewsHour - 2009-02-25

Channel: malgent

Transcript

Language: English (original, YouTube automatic captions)

[0:00] Hey,

[0:20] good evening. I'm Jim Lara. On the

[0:22] NewsHour this Wednesday, the lead story,

[0:25] President Obama presses the messages of

[0:28] his economic plan from his last night's

[0:30] speech. Then the other news of the day,

[0:33] plus a newsmaker interview with Treasury

[0:36] Secretary Gner about the new bank

[0:38] recovery plan, reaction from around the

[0:41] country to the president's address, and

[0:44] a conversation with the foreign minister

[0:46] of Pakistan.

[0:49] Major funding for the NewsHour with Jim

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[1:57] The Obama administration moved on

[1:59] several fronts today in his campaign to

[2:02] turn the economy around. The actions

[2:04] followed the president's address to

[2:06] Congress and to the nation. Jeffrey

[2:08] Brown has our lead story report.

[2:12] President Obama strolled to the

[2:14] Eisenhower Executive Office Building

[2:16] this morning with Vice President Biden

[2:18] for the day's opening event. Inside, he

[2:21] quickly picked up on his themes of last

[2:23] night as he nominated a new commerce

[2:25] secretary, former Washington State

[2:27] Governor Gary Lockach.

[2:29] >> Last night, I outlined my vision for our

[2:31] common future, one in which we accept

[2:34] the responsibility to act boldly and

[2:36] wisely to confront the extraordinary

[2:38] challenges of our times. put people back

[2:40] to work doing the work America needs

[2:42] done and lay a new foundation for

[2:46] America's growth and prosperity. You

[2:48] eloquently outlined your strategies last

[2:50] night on how America will rebuild,

[2:54] recover, and emerge stronger than ever

[2:56] before.

[2:58] Working with the professionals at the

[3:00] Department of Commerce, I'm committed to

[3:02] making the department an active and

[3:05] integral partner in advancing your

[3:07] economic policies and restoring the

[3:09] American dream to all Americans.

[3:12] >> At the capital, there were equally

[3:13] glowing tributes from Senate Democrats

[3:16] who said, "Mr. Obama more than met

[3:18] expectations." Every time that Obama

[3:20] gives a speech, the bar gets a little

[3:22] higher and a little higher, and you

[3:24] know, the guy always

[3:27] meets that bar. I was almost breathless

[3:28] when the speech was over. I just thought

[3:30] it was an incredible speech.

[3:33] >> Senator Schumer also vowed to act

[3:35] quickly on the economic initiatives and

[3:37] urged Republicans to join in.

[3:39] >> Our Republican colleagues have tried to

[3:42] act like they're cheering for the

[3:43] quarterback and then nitpick his play

[3:45] calling. Well, President Obama and his

[3:48] agenda are one and the same. You can't

[3:52] separate the man from the agenda. But

[3:54] reviews were mixed among House

[3:56] Republicans who spoke in the very

[3:58] chamber where the president delivered

[4:00] his address hours earlier.

[4:02] >> The president called for fiscal

[4:03] responsibility and I couldn't agree

[4:05] more. But I am perplexed that he would

[4:07] make this call sandwiched between the

[4:09] biggest wasteful spending bills that the

[4:11] liberals in Congress have ever

[4:13] submitted.

[4:14] >> We heard the call last night to start

[4:15] living within our means. And I applaud

[4:18] President Obama's commitment to reducing

[4:20] our national debt. Just like families

[4:22] and small businesses have to do with

[4:24] their budgets. Now is a time for both

[4:26] parties to back up their promises for

[4:28] fiscal discipline. In fact, fiscal

[4:31] discipline was a big part of the

[4:32] administration's message today. At the

[4:34] White House and here at the Treasury

[4:36] Department, the president and top

[4:38] deputies pressed their agenda on

[4:40] stimulus, housing, and regulatory

[4:42] reform. Vice President Biden led the

[4:45] way. Fresh from Ash Wednesday services,

[4:48] he met with his new oversight committee

[4:51] to monitor the $787 billion in stimulus

[4:54] money.

[4:55] >> We're going to do this uh once a week uh

[4:58] as we kick this thing off to make sure

[5:00] we know exactly what we're doing. Again,

[5:02] this has never been done before. We've

[5:04] never been in a position where this much

[5:06] money with this much need with this much

[5:08] urgency is available and the need for us

[5:12] to follow the money in ways we haven't

[5:14] done it before.

[5:15] >> And Treasury Secretary Gner met with

[5:18] housing secretary Shawn Donovan on the

[5:20] president's housing plan. Gitener said

[5:23] it's all interconnected.

[5:24] >> Stimulus will be more effective if the

[5:27] financial system is working for

[5:29] recovery, not just against recovery.

[5:31] the housing crisis will be easier to

[5:33] arrest and solve if we move aggressively

[5:36] to put in place this program to help

[5:38] save uh jobs and stimulate private

[5:40] investment. They all work together. Very

[5:42] important to recognize that. So, we're

[5:44] trying to move quickly on all those

[5:45] fronts.

[5:46] >> And Dunovan urged Americans to reach out

[5:48] for help if they're facing foreclosure.

[5:51] Everything that we do cannot be

[5:53] effective if a homeowner that's in

[5:55] distress uh can't get in touch with

[5:58] somebody to find out about the program

[6:00] and to actually make it work. I know

[6:02] from my own experience in New York City

[6:05] many homeowners uh paralyzed literally

[6:08] by fear of what's happening to them, not

[6:11] picking up the phone, not knowing who

[6:12] out who to reach out to uh to be able to

[6:15] save their homes. Later, the president

[6:17] met with Secretary Gitener and

[6:19] congressional leaders and called for

[6:21] stronger financial regulations.

[6:23] >> The choice we face is not between some

[6:26] oppressive governmentrun economy or a

[6:31] chaotic and unforgiving capitalism.

[6:34] Rather, strong financial markets require

[6:36] clear rules of the road, not to hinder

[6:39] financial institutions, but to protect

[6:40] consumers and investors. and not just to

[6:43] manage crisis, but to prevent crisis

[6:45] from happening in the first place by

[6:47] restoring accountability, transparency,

[6:50] and trust in our financial markets.

[6:52] >> Secretary Gener echoed the call for

[6:55] accountability by the banks. He told the

[6:57] NewsHour, "They've created a deep hole

[7:00] of public distrust and anger, which is

[7:02] enormously damaging, and they have a

[7:04] huge obligation to try to restore that

[7:07] basic trust and confidence, and we're

[7:09] going to make sure they do it." The

[7:11] government also launched its so-called

[7:13] stress tests on major banks today,

[7:16] including Cityroup, to determine their

[7:18] health. But at a House hearing, Federal

[7:20] Reserve Chairman Ben Bernani again

[7:23] dismissed talk of outright federal

[7:25] takeovers.

[7:26] >> A nationalization to my mind is when the

[7:28] government seizes the bank, zeros out

[7:31] the shareholders,

[7:32] um, and begins to manage and run the

[7:35] bank. And we don't plan anything like

[7:36] that. It may be the case that the

[7:38] government will have a substantial

[7:39] minority share uh in in city or other

[7:43] banks.

[7:44] >> At the same time, the Treasury announced

[7:46] the largest banks will have immediate

[7:48] access to more help from the $700

[7:51] billion rescue fund. That news helped

[7:53] Wall Street cut its losses on the day

[7:56] the Dow Jones Industrial Average was off

[7:58] 80 points to close at 7270. The Nasdaq

[8:02] lost 16 points to close at 1425. the

[8:06] markets and everyone else now look ahead

[8:08] to the president's budget for the coming

[8:10] fiscal year being rolled out tomorrow.

[8:14] The House today approved a huge spending

[8:16] bill for the current fiscal year. It

[8:18] would fund a dozen cabinet departments

[8:21] through the end of September. The bill

[8:23] total $410 billion with major increases

[8:27] for domestic programs. That's on top of

[8:30] more than 300 billion of new spending

[8:32] included in the economic stimulus

[8:34] package. The measure now goes to the

[8:37] Senate. The government will miss its own

[8:39] deadline for screening all cargo

[8:41] entering the country. The new Secretary

[8:43] of Homeland Security, Janet Npalitano,

[8:46] confirmed that at a House hearing.

[8:49] Congress had set a timetable for

[8:51] checking freight for radiological and

[8:53] nuclear material. Npalitano said it's

[8:56] not feasible.

[8:58] My initial view is that the 2012

[9:00] deadline is is is not going to work and

[9:03] we're going to have to work on uh what

[9:05] we do uh beyond that. Um uh to do 100%

[9:10] uh scanning uh requires for example

[9:13] agreements with many many countries. Uh

[9:16] there are lots of issues with that.

[9:18] >> A leading obstacle to total screening is

[9:21] training US workers to man scanning gear

[9:24] in more than 700 foreign ports. A

[9:27] religious group in Utah has lost its bid

[9:30] to place its own marker in a Salt Lake

[9:32] City public park. The US Supreme Court

[9:35] ruled the city had the right to refuse a

[9:37] monument with the group's teachings. The

[9:40] park already has a marker with the Ten

[9:42] Commandments on it. Also today, the

[9:44] state of Hawaii asked the court to let

[9:46] it sell more than 1 million acres of

[9:49] land. That's despite ownership claims by

[9:52] Native Hawaiians. The outcome could set

[9:54] a precedent for other native

[9:56] populations.

[9:58] Federal agents have arrested more than

[10:00] 750 members of a Mexican drug cartel in

[10:03] sweeps around the US. Attorney General

[10:06] Holder announced the raids in 120

[10:10] cities. They were the culmination of an

[10:12] investigation that's lasted nearly two

[10:14] years. It it's clear that with this

[10:19] operation as successful as it is uh as

[10:22] large as it is the problem that we face

[10:25] is is one that will continue. It doesn't

[10:28] anyway however decrease the importance

[10:31] of what we are announcing today. Uh this

[10:33] is an ongoing effort.

[10:35] >> Drug enforcement officials also seized

[10:38] more than $59 million in drugs, cash and

[10:41] weaponry during the crackdown. Human

[10:45] rights was the subject of the day at the

[10:46] State Department and there were sharp

[10:48] words for China. In an annual report,

[10:51] the department said the government of

[10:53] China's human rights record remain poor

[10:56] and worsened in some areas. Last week,

[10:59] Secretary of State Clinton said human

[11:01] rights concerns should not interfere

[11:03] with winning China's cooperation on

[11:06] climate change and economic recovery.

[11:09] State Department officials also voiced

[11:11] fresh concerns about nuclear actions in

[11:13] Iran. The Iranians announced engineers

[11:17] carried out a test run on a Russianbuilt

[11:19] nuclear plant. They said it could be

[11:22] generating electrical power by years

[11:25] end. At a second site, Iran claimed a

[11:28] dramatic increase in its capacity to

[11:30] enrich uranium. The US has warned both

[11:33] sides could generate material for

[11:35] nuclear weapons. Iran denies any such

[11:39] plans. Glaciers at the bottom of the

[11:41] world are melting faster than anyone

[11:44] thought. That finding from scientists in

[11:46] 60 countries was released by a research

[11:49] committee based in Britain. The group

[11:51] cited satellite imagery and ground

[11:54] station data. It said huge ice

[11:56] formations across western Antarctica are

[11:59] sliding into the sea 40 to 80% faster

[12:02] than previous findings suggested.

[12:12] Still to come on the NewsHour tonight,

[12:14] Treasury Secretary Gner outside

[12:17] Washington reaction to the president's

[12:19] speech and the Pakistani foreign

[12:21] minister. I talked with Secretary Gener

[12:24] at the Treasury Department in Washington

[12:26] earlier today about his plan to fix the

[12:29] banks.

[12:32] Mr. Secretary, welcome.

[12:34] Where are you now in implementing the uh

[12:37] stress test for the banks? Uh

[12:39] >> Jim, today we uh launched this careful

[12:44] more forward-looking assessment of the

[12:47] financial health of the nation's major

[12:49] banks. You know, stress testing is a

[12:51] like a core part of what banks do and

[12:53] what supervisors do. But we wanted to

[12:55] bring a more consistent, more

[12:57] conservative, more forward-looking

[12:58] approach so that we helped lift this

[13:01] cloud of uncertainty that's hanging over

[13:02] our financial system that's getting in

[13:03] the way of credit flowing again.

[13:06] >> So you started it today.

[13:07] >> Yeah, the process started today and we

[13:08] announced today how it's going to work.

[13:11] Uh what it's designed to achieve and

[13:13] very important, we announced the capital

[13:16] assistance program the government's

[13:18] going to provide to make sure there's

[13:19] going to be capital available for these

[13:21] institutions as they go forward. So you

[13:24] think about Y

[13:25] >> so you think of that as a two-part

[13:26] thing. There's this careful health

[13:28] assessment uh designed to sort of look

[13:31] forward

[13:32] >> make sure these institutions have a

[13:34] additional cushion of resources

[13:35] necessary to withstand a more severe

[13:38] economic environment. But we're also

[13:40] providing the details and the terms of

[13:42] capital the government will be willing

[13:43] to provide where that's necessary. Of

[13:46] course we want these firms to be able to

[13:47] raise capital in private markets. We're

[13:49] providing a sort of a backs stop, a form

[13:50] of insurance uh to make sure that again

[13:53] they they're strong enough to get

[13:55] through a more challenging economic

[13:56] environment.

[13:57] >> And that's what the test is designed to

[13:59] determine how much government money is

[14:02] needed to keep the bank healthy. Is that

[14:03] >> it's like an assessment of the scale of

[14:06] resources they may need additional

[14:07] resources to make and make sure again

[14:09] they have this additional buffer

[14:11] >> of strength to get through a more

[14:13] damaging economic environment.

[14:14] >> Now there are 9,000 banks that are

[14:16] United States. Are you going to test all

[14:18] of them?

[14:18] >> This this program is focused on the

[14:19] nation's major banks. They account for

[14:21] the vast bulk of assets in the system.

[14:23] >> That's 20 roughly 20 and uh that's the

[14:27] right place to start again because they

[14:28] play a very central role in how our

[14:30] markets work and we want the world to be

[14:32] confident that they're going to be able

[14:33] to play that role on an ongoing basis

[14:35] going forward.

[14:36] >> Are there uh uh tests I mean tests

[14:40] within the test that you could explain

[14:42] to us that we would understand beyond

[14:43] the technical side? In other words, what

[14:45] is it that you want to know about these

[14:47] banks before you make a decision about

[14:49] whether to help them uh further or

[14:51] whatever, right? The the basic uh

[14:54] framework is designed again to look at

[14:57] the scale of losses they might face

[15:00] >> if might face

[15:00] >> they might face

[15:02] >> if we went through a more challenging

[15:03] environment, economic environment. And

[15:06] again so that they can reassure the

[15:08] world and we can um be confident that

[15:11] they've got that necessary cushion of

[15:13] resources that allow them to lend

[15:15] support recovery because you know right

[15:17] now there's this cloud of uncertainty

[15:19] over the economy and the financial

[15:20] system because of uncertainty about how

[15:22] deep and how long the recession might be

[15:25] and that's making the financial system

[15:26] more defensive.

[15:29] uh people are hoarding capital and

[15:31] liquidity and the best way to break that

[15:33] and arrest it is to try to get ahead of

[15:35] that and get these institutions to look

[15:37] forward at again the range of potential

[15:40] they might face uh as we go forward and

[15:42] critically to make sure they've got the

[15:44] cushion of resources you can think of as

[15:46] a form of insurance from the government

[15:48] that they can get through that. Is it

[15:50] possible that one of these banks might

[15:53] fail the test altogether that you might

[15:55] conclude, hey, wait a minute, this is

[15:57] not worth this bank is not worth popping

[15:59] up?

[15:59] >> It's it's not a pass fail test. And

[16:01] again, it's directed at making sure they

[16:02] have the margin of additional resources

[16:05] they need.

[16:06] >> Okay, now you think?

[16:07] >> Yeah, these these banks now have very

[16:10] sub substantial amounts of capital

[16:13] relative to what you would have seen in

[16:14] the US economy going into previous

[16:16] recessions. Uh but what we want to make

[16:19] sure is again they have that additional

[16:20] cushion even if things deteriorate

[16:23] further going forward that they're going

[16:24] to be able to lend and be in a strong

[16:26] position. And that's that's what's

[16:28] critical because right now the financial

[16:31] system is working against recovery. And

[16:33] for this very powerful economic recovery

[16:36] and reinvestment act that Congress

[16:38] passed just recently to be fully

[16:41] effective need the financial system

[16:43] stronger

[16:44] uh so that again the businesses that

[16:46] might benefit from the program of

[16:49] investment incentives that the recovery

[16:50] act passes are able to borrow money to

[16:53] put people to work and make those

[16:55] investments so critical to our future.

[16:56] That is why these things are so

[16:57] important to go together. But that's the

[16:59] key to your assessment, is it not? As to

[17:01] whether or not these banks are going to

[17:03] be in a position to money.

[17:05] >> It's really to ensure them ensure they

[17:08] have the additional cushion resources

[17:09] necessary. They could be comfortable

[17:10] lending and providing the credit

[17:12] necessary for recovery. That's the

[17:14] central goal and central objective. And

[17:16] but we're not just doing this. uh the

[17:19] the program that we've laid out is not

[17:21] just trying to make sure that the banks

[17:23] can lend and support credit and that our

[17:25] resources are devoted to that objective,

[17:27] but we need to do some very substantial

[17:30] things to try to get the credit markets

[17:33] going again, too, because they're

[17:34] essentially frozen now. And that makes

[17:35] it harder for a small business, for a

[17:38] family that wants to buy a car or

[17:40] finance a college education or buy a

[17:42] house to be able to do so on reasonable

[17:44] terms. So, we're trying to both just

[17:46] make not sure maybe we make the banking

[17:48] system stronger, but we're getting a

[17:49] credit flowing again directly to those

[17:52] parts of the market that again so

[17:53] central to um small business lending

[17:56] into households.

[17:56] >> But these are these are uh parts of the

[17:59] credit market system beyond the bank.

[18:02] Yeah, we have this complicated system

[18:04] that relies not just on banks,

[18:05] >> but on the credit markets, the

[18:07] securization markets. And those markets

[18:09] are

[18:10] >> frankly badly damaged. And to get them

[18:12] working again, uh, working with the Fed,

[18:15] we're going to provide a substantial

[18:16] level of financing to help open them up

[18:19] again.

[18:20] >> All right. Now, back to the banks for a

[18:22] moment. Much has been said and discussed

[18:24] about nationalizing the banks.

[18:27] >> Fit that word into what we've just been

[18:29] talking about,

[18:30] >> Jim. I think I think that's the wrong

[18:31] strategy for the country and I don't

[18:33] think it's a necessary strategy. Uh what

[18:35] we need to do is to make sure that these

[18:37] institutions have the resources

[18:40] necessary to perform their critical

[18:42] function on an ongoing basis in our

[18:44] economy as a whole, these major banking

[18:46] institutions. Now there may be

[18:48] circumstances which we have to provide

[18:51] to the benefit of the economy as a whole

[18:53] exceptional levels of support. And when

[18:55] we do that, as the president said last

[18:57] night, we're going to be very careful

[18:58] that that comes with conditions to make

[19:00] sure our support is helping support

[19:02] lending.

[19:05] That it comes with conditions to make

[19:06] sure these institutions restructure so

[19:08] they are stronger

[19:11] so that there is accountability

[19:14] and so that we make it more likely, not

[19:16] less likely, that private capital comes

[19:18] in and replaces the government's capital

[19:21] as soon as that's possible. But the

[19:24] government is not going to be running

[19:25] these banks in exchange for for propping

[19:28] them up financially if it becomes

[19:29] necessary.

[19:30] >> I think our system works better if these

[19:32] institutions are managed and remain in

[19:35] private hands. But again, we're going to

[19:37] have to make sure that they have the

[19:38] support necessary to get through this

[19:40] and play their critical role. We're

[19:41] going to do that.

[19:42] >> But the president made a big point last

[19:44] night that there are strings attached.

[19:46] >> Absolutely. What are the strings?

[19:47] >> The conditions are going to be very

[19:48] important. So you're going to you you

[19:49] will see conditions on to make sure that

[19:50] the support generates more lending than

[19:53] what would have been possible that the

[19:55] support does not go to pay dividends or

[19:58] excess compensation to make sure that

[20:00] the conditions come with the kind of

[20:02] changes in the structure of the entity

[20:04] necessary to make them stronger going

[20:05] forward. And they provide

[20:06] accountability. And the terms are very

[20:08] important too because not just to

[20:09] protect the taxpayer, but because we

[20:10] want the the terms designed so that as

[20:14] conditions normalize, our support is

[20:16] expensive and unattractive. And

[20:17] therefore, these firms will have a big

[20:19] incentive to go out and get private

[20:20] capital to replace the government's

[20:22] capital as soon as possible. And this

[20:24] will allow us to solve this more quickly

[20:28] >> than governments that typically address

[20:29] these crises. You know, the the big

[20:30] lesson of financial crisis is that

[20:32] governments tend to underestimate the

[20:34] scale of the problem. They move too

[20:36] slowly. They're too tentative and

[20:38] gradual. They escalate late and that

[20:42] makes crises deeper. They cause more

[20:45] damage to businesses and to households

[20:46] and the families and they're ultimately

[20:48] more expensive to the taxpayer, results

[20:49] in higher long-term deficits. So, we're

[20:51] trying to get ahead of this

[20:53] >> uh by moving more aggressively to try to

[20:55] resolve this uncertainty, provide

[20:56] capital to the system, and help get

[20:58] those credit markets flowing again.

[21:00] >> But here again, using forget the word

[21:02] nationalization. Uh what does the

[21:05] government get in exchange from the

[21:07] banks for what they're doing? Do you get

[21:08] stock? Do they get ownership?

[21:10] >> Yeah, the government gets an ownership

[21:11] stake in the company proportionate to

[21:13] the level of assistance we're providing

[21:14] >> just like anybody else would if they

[21:16] bought stock.

[21:16] >> Just like anybody else would get stock.

[21:17] So the government's getting a return on

[21:20] these investments to help compensate for

[21:21] the risk we're taking.

[21:23] >> But the ultimate test of course is what

[21:26] we're doing to help solve our crisis and

[21:29] get recovery back. That is the ultimate

[21:32] return of these investments for the

[21:35] taxpayer. It's not just the financial

[21:36] terms that our conditions come with

[21:38] ownership in the companies at whatever

[21:40] level is necessary with whatever terms.

[21:42] It's the benefit to the overall economy

[21:44] that you see when you see confidence

[21:46] return and credits start to flow again.

[21:49] >> So when that happens, when the

[21:50] confidence returns and and and money

[21:52] starts flowing again, what happens to

[21:54] the stock that is now owned by the

[21:56] federal government?

[21:57] >> Well, then they will have will they will

[21:59] have they will be able to repay that at

[22:02] appropriate benefit to the to the

[22:04] country as a whole and replace that

[22:06] stock with stock from private investors.

[22:09] What is your uh explanation for the uh

[22:13] one of a better term the kind of thud

[22:15] that happened in Wall Street when you

[22:17] first announced this plan a couple of

[22:19] weeks ago. What what what is it that

[22:22] Wall Street was reacting to in such a

[22:24] negative way? We I think it's important

[22:26] to see this happened against the

[22:28] backdrop of a deepening recession here

[22:32] and around the world. And that is the

[22:35] fundamental cause of the uncertainty

[22:36] you're seeing in markets everywhere. and

[22:38] uh fragile competence we see generally

[22:41] and people want to know that we're going

[22:44] to move quickly to address this and they

[22:45] want to see what we're going to do and

[22:47] they want to see the details of our of

[22:48] our proposals and our strategies and

[22:51] what we did Jim was to lay out early the

[22:55] broad principles and objectives that

[22:56] would guide our approach because we

[22:58] wanted people to understand what was

[23:00] going to change and that we were going

[23:02] to bring a comprehensive approach try to

[23:04] move more aggressively and that we would

[23:05] follow that broad framework with a

[23:08] detail to the programs in each of these

[23:09] areas. So week one, we move president

[23:12] announced a comprehensive strategy on

[23:14] the housing crisis as we said we would.

[23:16] >> We're now in week two, we've laid out

[23:18] the terms of this program to provide a

[23:20] form of capital insurance, a buffer

[23:22] against the more adverse uh downturn in

[23:25] the United States and we're going to

[23:26] move forward relatively quickly to lay

[23:27] out these very large aggressive dramatic

[23:30] direct lending programs to get credit

[23:32] markets flowing again. So you expect now

[23:36] a positive reaction to what you've just

[23:38] laid out. Correct.

[23:39] >> Well, this is going to take time to

[23:40] work, Jim. It's going to take time to

[23:41] work. And um

[23:43] >> the plan itself though, you don't think

[23:45] will be greeted in a positive way.

[23:47] >> Well, you know, we're doing something

[23:48] that is going to be tough and it's going

[23:50] to take some time to work. Uh and you're

[23:54] not going to see traction immediately,

[23:56] but the basic judgment the president's

[23:58] made is the necessary thing for the

[24:00] country is to try to move aggressively.

[24:03] not just to get a recovery investment

[24:04] plan in place, working with resources

[24:08] and incentives moving very quickly, but

[24:10] that we move aggressively to try to

[24:12] clean up and strengthen our financial

[24:13] system as we move on housing. But that

[24:16] process is going to take some time and

[24:18] uh

[24:20] but and that you know the test of uh

[24:23] effective confidence is going to come

[24:24] over time as the pace of declining

[24:26] growth slows

[24:28] >> and as uh credit starts to flow again.

[24:31] Is the confidence uh uh deficit let's

[24:35] put it put it in all kinds of weird

[24:37] terms but is it the confidence def

[24:40] deficit that bothers you the most that

[24:42] is there now among those who must invest

[24:44] in banks other words that's the people

[24:46] who do who are not really yeah that's

[24:48] what we get this yet that's what we have

[24:50] to fix because right now this has been

[24:53] true for the last 18 months 12 months 6

[24:56] months 3 months one month is true today

[24:58] right now there is this cloud of

[24:59] uncertainty over the financial system

[25:02] that's making it hard for banks to raise

[25:04] equity

[25:05] >> because of concern about the losses

[25:06] ahead. And the only way to arrest that

[25:11] is to try to bring a more

[25:12] forward-looking, realistic, honest

[25:14] approach to assessing relative strength

[25:17] and weakness and to make sure again that

[25:19] there's going to be resources to support

[25:20] them with this additional insurance or

[25:22] buffer for confidence. That's the only

[25:24] way to do it. The alternative strategy

[25:26] would be to just say let's hope it gets

[25:28] better. Let's let that uncertainty

[25:30] persist. And that would feel easier to

[25:33] some people, but it would be the wrong

[25:34] strategy. And it would leave a system

[25:35] that's still being defensive and pulling

[25:38] back on credit working against the

[25:41] stimulus plan and recovery. And it will

[25:43] leave us with a deeper, longer

[25:44] recession.

[25:46] Do you have to also fight at this point

[25:48] uh the fact as you mentioned the first

[25:51] go at this and the other administration

[25:53] didn't work and there is a lack of

[25:57] there's a skepticism there. What is it

[25:59] in general that you can say as the

[26:01] secretary, this secretary of the

[26:03] treasury, hey, we got a better idea here

[26:05] and what is and give some level of your

[26:07] own confidence that these things are

[26:09] actually going to work.

[26:10] >> They're absolutely going to work and

[26:11] we're going to keep at it.

[26:12] >> Absolutely going to work.

[26:13] >> Absolutely. And we're going to keep at

[26:14] it until we fix it. We're going to make

[26:15] sure we do enough soon enough to resolve

[26:17] it because the cost of the economy of

[26:20] stretching it out and taking a more

[26:22] tentative approach will ultimately cause

[26:24] much more damage to the economy. So,

[26:26] we're going to keep at it and we're

[26:28] going to move on all fronts

[26:30] comprehensively to address all the

[26:31] underlying sources of weakness in our

[26:33] financial system and try to bring begin

[26:35] bring a you know a more aggressive

[26:37] frankly forceful approach to do it. And

[26:40] our judgment is it's going to be hard.

[26:42] Our judgment is that that's the only way

[26:45] to get the system strong enough soon

[26:47] enough that you get recovery this

[26:49] economy back on track more quickly. So I

[26:51] take it without a question that you

[26:53] you're 100% in agreement with what the

[26:55] president said last night that it takes

[26:57] all of these things.

[26:58] >> Absolutely right. It's not just your

[27:00] this plan or the banking plan or the

[27:01] housing plan or the stimulus package.

[27:04] They all have to work.

[27:04] >> Right. The president's economic agenda

[27:06] and the American economic imperative. It

[27:08] is to move very aggressively to get

[27:11] people back to work, support private

[27:13] investment, to get credit flowing again,

[27:16] to try to arrest this damaging housing

[27:18] crisis. At the same time, we're

[27:20] beginning to make these critical

[27:22] long-term investments in reducing health

[27:23] care costs, in reducing our dependence

[27:26] on foreign oil, improving energy

[27:27] efficacy, in helping improve the basic

[27:30] outcomes our education system provides.

[27:32] And at the same time, and this is what's

[27:34] terrifically hard but important, that we

[27:36] make people understand that when we get

[27:38] recovery firmly established, we're going

[27:40] to bring our fiscal position back to a

[27:43] more sustainable position to bring our

[27:45] resources and expenditures more into

[27:47] balance. So people know that we will be

[27:49] living within our means. But that

[27:51] ultimate objective depends on moving

[27:54] very aggressively on all these fronts to

[27:56] try to arrest this crisis we face in the

[27:59] economy that's already caused so much

[28:00] damage. And and what we're not prepared

[28:03] to do is to

[28:06] stretch this out to be tentative to do

[28:10] too little because it feels easier.

[28:12] We're not prepared to do that because

[28:14] ultimately we think that would be more

[28:15] costly. Are you going to do it big and

[28:17] you going to do it soon?

[28:18] >> We are and it's and it's and it's uh

[28:20] it's going to be hard and it's going to

[28:22] be tough, but there's no other way to do

[28:23] it.

[28:24] >> Finally, Mr. Secretary, on the banks, is

[28:27] the banking are the bankers and the

[28:29] banking industry, have they gotten your

[28:30] message now? Do they realize there's a

[28:32] new world here for them?

[28:34] >> Uh uh they will, Jim. I hope they do. I

[28:36] want you to know that I spent my life in

[28:38] public service. I am deeply offended by

[28:42] the quality of judgments we've seen in

[28:44] the leadership of our nation's financial

[28:46] institutions. They've caused a very

[28:48] damaging loss of confidence. Financial

[28:50] systems are require confidence. They're

[28:51] built on confidence. They've created a

[28:54] deep hole of public distrust and anger

[28:56] which is enormously damaging. And they

[29:00] have a huge obligation to try to restore

[29:03] that basic trust and confidence. And

[29:04] we're going to make sure they do it by

[29:06] making sure that our assistance comes

[29:07] with conditions that'll help restore

[29:09] confidence in the American people that

[29:11] we're going to do things that are going

[29:12] to help get credit flowing. Again,

[29:15] nothing we do for banks is for banks.

[29:18] It's all for the benefit of the people

[29:19] that depend on banks, the businesses,

[29:22] the families, the students,

[29:25] uh, that require credit in order to do

[29:27] things that are important to their

[29:29] future. Mr. Secretary, thank you very

[29:31] much. Thank you, Jim.

[29:41] Next tonight, reaction to last night's

[29:43] presidential address. When Eiffel has

[29:45] that story.

[29:48] >> Under the Capitol Dome. Last night,

[29:50] members of Congress attempted to gauge

[29:52] how their constituents would react to

[29:54] President Obama's first major address.

[29:57] Lawmakers spoke with the NewsHour'sWami

[29:59] Hullman.

[30:00] >> He set out some very bold strokes here.

[30:02] big call to action. This was about big

[30:04] things because we face a big crisis here

[30:06] at home.

[30:07] >> The devil's always in the details, but

[30:08] Americans are hurting. I was in small

[30:10] business for 21 years. It's a huge

[30:12] unpredictable cost for all of us and

[30:15] clearly reform's necessary.

[30:16] >> Look, I want to be very clear. He's got

[30:19] the outline and a blueprint, a good

[30:21] beginning. The first five years of what

[30:23] he's proposing, uh, I'm encouraged by.

[30:26] But the broader question for me is what

[30:29] happens the second five years? We know

[30:31] that people are losing their jobs and

[30:32] that people have faced foreclosures and

[30:36] we need to help people stay in their

[30:37] homes and do all they can to have a good

[30:39] paying job. So, it's just going to be

[30:41] working through those issues, finding

[30:43] common ground when we can. Newspapers

[30:46] across the country splashed the

[30:48] president's speech across the front

[30:49] pages today, reaching constituents more

[30:52] directly and on editorial pages,

[30:55] declaring the substance of the

[30:56] president's proposals as sound or off

[30:59] the mark.

[31:00] So, how did the president's speech and

[31:02] the Republican response resonate as they

[31:04] say outside the beltway? For that, we

[31:07] are turn we are joined by four editorial

[31:09] page editors. Nolan Finley of the

[31:11] Detroit News, Carol Jackson of the

[31:13] Philadelphia Inquirer, J.R. Labby of the

[31:16] Fort Worth Star Telegram, and Carol

[31:18] Hunter of the De Mo Register. Starting

[31:22] with tone, uh, I want to start with you,

[31:23] Nolan Finley. Uh, how do you think the

[31:26] president pulled off the balance just on

[31:28] tone last night?

[31:30] >> Well, on tone, I was encouraged that he

[31:32] sounded more hopeful than he has the

[31:34] first few weeks of his admin

[31:35] administration. I know former President

[31:37] Clinton advised him last week that he

[31:40] needed to be a little perkier. He needed

[31:42] to exude more confidence that consumers

[31:45] are scared and they need to see and they

[31:47] need to hear a president say that things

[31:50] are going to get better. And I think he

[31:51] pulled that off last night.

[31:53] >> J.R. Abby, how did it sound to you?

[31:55] >> Well, he definitely gets points on style

[31:57] and delivery. Without question, this

[32:00] president is a gifted aator. He sounded

[32:03] extremely determined and passionate. So,

[32:06] if you were looking at the the showman

[32:08] that he was last night, I think he hit

[32:11] on the points and the style of being

[32:14] confident and determined and hopeful and

[32:17] yet realistic, at least in how he was

[32:20] trying to deliver his words in what the

[32:22] tough road is ahead. I think when you

[32:24] start to drill down in some of the

[32:26] substance, that's where the worry part

[32:28] of our hope and worry headline came in.

[32:31] >> Well, we're going to come right back to

[32:32] that. I want to ask Carol Jackson first

[32:34] what he thought about the tone last

[32:35] night.

[32:36] >> Well, I think it was about more than

[32:37] tone. I think there was quite a bit of

[32:39] substance in what the president had to

[32:40] say. It wasn't simply style. If you

[32:43] evaluate his speech, if you look at it

[32:45] closely, you see that he clearly set an

[32:47] agenda for America to move beyond

[32:49] economic crisis on not just the banking

[32:51] and mortgage is mortgage issues, but on

[32:54] a number of other areas where this

[32:56] country has been lagging in dealing with

[32:58] situations that affect our economy,

[32:59] including healthcare and energy policy.

[33:02] >> Carol Hunter, you know, people did talk

[33:04] earlier this week and last week about

[33:06] whether uh the president was to doom and

[33:08] gloom. What did you hear last night?

[33:12] We heard general optimism. We think he

[33:15] pulled this tricky balancing act off

[33:17] pretty well. I mean, on the one hand, he

[33:20] has to be realistic. That's what he said

[33:22] he would do throughout his campaign with

[33:24] the American people. And he did have

[33:26] some tough medicine in there saying that

[33:29] what has been spent so far may not be

[33:31] enough and there may need to be more set

[33:33] aside. Um yet there were almost

[33:37] Churchillian um overtones to this

[33:39] speech. um he really called the nation

[33:41] to action and really did set forth a

[33:44] vision on reducing oil dependence,

[33:47] reforming health care and improving our

[33:49] education system. Okay, J.R. Lab, you

[33:51] mentioned the hope versus the worry uh

[33:53] headline when the president tries to

[33:56] talk about all these solutions, these

[33:58] expensive solutions that we just heard

[33:59] Jim talking to Timothy Gitener about for

[34:01] the nation's financial system, for

[34:03] instance, or the housing crisis, and yet

[34:05] he's at the same time talking about

[34:07] fiscal discipline and cutting the

[34:08] deficit. How do you see that balance

[34:10] playing out?

[34:11] >> Well, I think for our readership in this

[34:13] very conservative part of the country,

[34:16] they heard a real disconnect as they

[34:18] were listening to the president say this

[34:21] budget will do this for energy and we

[34:24] will do that for health care and we will

[34:26] do this for education. Our readers were

[34:29] hoping to hear and how do you expect to

[34:32] pay for that? uh we have he didn't

[34:34] address at all the two shooting wars

[34:37] that we're still very much engaged in

[34:39] except to say we are going to increase

[34:42] pay and benefits for our men and women

[34:43] in uniform which was a very positive

[34:46] message for our readers to hear but

[34:49] there was some real concerns we don't

[34:51] think that you can separate a domestic

[34:54] agenda of energy healthcare and

[34:56] education from our foreign policy and

[34:59] what's going on with our military so I

[35:02] think our readers ers were uplifted

[35:05] perhaps by his style as I said earlier

[35:08] and Harold took took some uh umbrage

[35:11] with but they weren't very impressed

[35:13] with the substance and how you pay for

[35:16] all of this.

[35:17] >> Okay, Harold Jackson, what about that

[35:19] disconnect? Did you hear it or see it or

[35:20] do your view your readers hear it or see

[35:22] it?

[35:22] >> Yeah, of course our part of the country

[35:24] is much different. Uh we're here in

[35:26] Philadelphia, the Pennsylvania region.

[35:28] Uh we serve the states of Delaware,

[35:29] Pennsylvania and New Jersey where the

[35:31] president is quite popular. We do know

[35:32] that the president's budget will come

[35:34] out tomorrow and we expect to see more

[35:36] details on spending. What I'm saying

[35:38] though is that the president clearly

[35:39] said that we have to address these

[35:40] issues, education, health, and energy

[35:43] policy if we're going to do something

[35:45] about the long range economic future of

[35:46] this country. And I think that's a

[35:48] message that should resonate with

[35:49] people.

[35:49] >> Can I just follow up on that with you?

[35:51] He he said that these are things to be

[35:53] addressed. Were you satisfied that they

[35:55] were addressed in that speech last

[35:56] night?

[35:56] >> Not in that speech. I didn't expect

[35:58] everything to be addressed in one

[35:59] speech. The de the devil is in the

[36:01] details as they say. I would agree with

[36:02] uh the audi auditorial page editor on

[36:06] that and we look forward to seeing the

[36:07] details to see if he can actually

[36:08] accomplish what he has set out as his

[36:10] agenda for the future.

[36:11] >> Carol Hunter, did he go as far as you

[36:13] would have liked to see him go on the

[36:14] issues you care about?

[36:17] >> Uh certainly not for any editorial page

[36:19] editor. Um I think there is an extreme

[36:22] reservoir of goodwill in Iowa uh among

[36:25] Democrats especially. um they take a

[36:28] great deal of pride of launching u

[36:30] Barack Obama in a way with giving him

[36:32] the win in the caucuses. Um but

[36:34] Republicans too, I think everyone wants

[36:36] our president uh to succeed. Um everyone

[36:40] is waiting for that budget uh that will

[36:43] be released uh tomorrow. Um many of the

[36:46] things he said for example on health

[36:48] care, he didn't really go into at all

[36:51] how he would pay for that. He seemed to

[36:54] um hint that just through efficiencies,

[36:57] through things like medical records, you

[36:59] could get much of the savings and then

[37:00] said that that would help with the

[37:02] Medicare deficit. But that's a much

[37:04] bigger problem than electronic medical

[37:06] records will solve. Nolan Finley, is

[37:08] President Obama in some respects more

[37:10] popular than his policies, especially in

[37:12] the area of the country where you are

[37:14] where the rubber is really hitting the

[37:15] road?

[37:16] >> Yeah, I heard a commentator say that

[37:17] last night and I think that's very apt.

[37:20] There's a lot of skepticism about this

[37:22] rapid expansion of government and there

[37:24] were a lot of contradictions in that

[37:26] speech last last night. Uh we're going

[37:28] to expand government at at every level

[37:31] and in every way and yet we're going to

[37:33] cut the deficit in half. Well, you think

[37:35] about that and if you're going to do all

[37:37] of this spending and still cut the

[37:39] deficit, people understand that that

[37:41] means higher taxes. And whether you're

[37:43] in Michigan or anywhere, higher higher

[37:45] taxes in a time of an economic downturn

[37:47] scare you to death. Um he also said you

[37:50] know he's going to create jobs in the

[37:52] private spec sector and then introduced

[37:54] a lot of new initiatives that will kill

[37:56] jobs most notably cap and trade. So I

[37:59] think there's a lot of skepticism about

[38:01] this rapid pace he's headed on to expand

[38:04] the the scope and size of government.

[38:06] >> If he spoke I'm going stay with you for

[38:08] a moment. If he spoke focused last night

[38:09] mostly on economics, energy, education

[38:12] and healthcare. Any of that resonated or

[38:14] did it seem like putting too much on the

[38:16] plate all at once to you? What I would

[38:18] like to see him do is is focus his

[38:20] immediate attention, all of his

[38:21] attention on solving this this

[38:23] recession, get us through this this

[38:25] crisis and then deal with the other

[38:27] issues and then take these things,

[38:29] energy, education, take them one at a

[38:31] time and see how much support he can get

[38:33] for a bigger government role in those

[38:35] areas. But right now, the entire focus

[38:37] ought to be on getting this this through

[38:39] the recession. And I thought, you know,

[38:41] I felt for for at points last night that

[38:43] he was using the economic crisis as an

[38:45] opportunity to press a much larger

[38:47] agenda that has nothing to do with

[38:49] stimulus.

[38:50] >> What do you think about that, Jr. Lobby?

[38:51] Is there a much larger agenda there,

[38:53] which is not what should be front and

[38:54] center right now?

[38:55] >> Well, I think you have to look at the

[38:57] context in which this speech was given.

[38:58] While it was not an official State of

[39:00] the Union address, in all intents and

[39:03] purposes, it was. The president has been

[39:05] out on the stump for the last week and a

[39:07] half or so talking about the stimulus

[39:09] package. I think it was important that

[39:12] he expand on that with some additional

[39:15] initiatives to give some picture to the

[39:18] Americans American public as a whole as

[39:20] to where he's going beyond that. It is a

[39:23] multiaceted job and the economy is not

[39:26] the only issue we're facing. Although it

[39:28] is by far the biggest crisis, it has

[39:31] national security implications in it as

[39:34] well as what it's doing to the average

[39:36] Joe and Jo and Jane who are faced with

[39:40] foreclosure and losing their work and

[39:42] the issues there. But I was actually

[39:45] pleased that he didn't go beyond the

[39:48] three additional initiatives of energy,

[39:50] education, and healthcare because

[39:52] sometimes those speeches can just get

[39:54] crammed with all kinds of initiatives.

[39:57] Did you expect him to speak at all about

[39:59] uh Afghanistan or foreign policy?

[40:02] >> I had hoped, frankly, and I believe our

[40:04] readers had as well that he would have

[40:06] made more comment about the 17,000

[40:08] troops that he has announced we will be

[40:11] s sending to that country. And from what

[40:14] we can see with no discernable vision or

[40:16] plan or strategy for what they're going

[40:18] to do once they get there, um it's it's

[40:22] troubling to us. We have a huge number

[40:24] of military veterans in our area. Of

[40:27] course, the defense industry is an

[40:30] economic engine for us. And so, we were

[40:33] listening for some kind of signal as to

[40:35] what was happening in Afghanistan

[40:37] specifically and didn't get what we were

[40:40] were hoping we'd hear last night. Carol

[40:42] Hunter, were there any signals that you

[40:43] were listening for?

[40:46] Well, of course, Iowa is the number one

[40:47] ethanol producer and is number two as

[40:50] far as installed wind generation

[40:52] capacity. So, his comments about

[40:55] renewable en renewable energy certainly

[40:58] uh uh found an a welcome audience here

[41:01] in Iowa. Um also, um all of our polling

[41:05] going back several years now does show

[41:08] an awful big interest in um uh reforming

[41:12] the health care system. Uh there are so

[41:14] many Ians that do not have health

[41:16] insurance that has consistently rated as

[41:19] a high interest. I think a lot of uh our

[41:22] readers were encouraged to hear him

[41:24] return to those topics that they heard

[41:26] so often on the campaign trail that this

[41:30] bad um hand of cards that he's been

[41:33] dealt at the first of his presidency

[41:35] hasn't derailed him from some of those

[41:37] things that he's been talking about for

[41:38] a couple of years now. Before we go, I

[41:40] want to ask each of you about the

[41:41] Republican response last night that

[41:43] followed the president's speech from the

[41:44] governor of Louisiana, Bobby Jindel.

[41:46] Starting with you, Harold Jackson. Do

[41:48] you think it was effective?

[41:49] >> Well, I'm not sure that it was. He's

[41:51] getting uh some mixed reviews, not very

[41:53] good reviews. I think that America is

[41:55] looking for something beyond

[41:56] partisanship, and they didn't find that

[41:58] in the Republican answer. This is a

[42:00] crisis situation and just as what

[42:02] happened after 911, America's looking

[42:04] for its leaders to go beyond their party

[42:07] affiliation and show where they can find

[42:09] common ground and the Republican

[42:10] response included very little of that.

[42:13] >> Nolan Finley, what did you think?

[42:14] >> Well, I think people understand that

[42:16] Republicans aren't driving this train.

[42:18] I'm not sure what Jindal could have said

[42:20] that would have had an impact here.

[42:22] They're going to have to find where they

[42:24] can where they can make an impact and

[42:26] where they have to dig in and fight. And

[42:28] I think they're really struggling to get

[42:29] to that point.

[42:31] >> JR Labby, what did you think about last

[42:32] night's Republican response? And is

[42:34] there anything more that that as Nolan

[42:36] Finley suggests, there's not much more

[42:37] that could have been done? What what

[42:39] would you have liked to see? Well, I

[42:41] think that that the governor was sort of

[42:42] set up to fail last night. There was so

[42:45] much expectation on him to be brilliant

[42:48] and unfortunately

[42:50] he he wasn't. Um he he looked nervous.

[42:53] He's young. He's It was a national stage

[42:56] that I don't believe he was ready for.

[42:58] And beyond that, if Bobby Jindel and

[43:00] Sarah Palin is the best that the

[43:02] Republican party can do for their

[43:05] future, they've got some rough years

[43:06] ahead.

[43:07] >> Carol Hunter, did you have any

[43:08] expectations from the Republican

[43:10] response or or do they did they exceed

[43:12] or match your other colleagues here?

[43:15] >> Well, you were looking for some new

[43:17] ideas and it tended to be what we've

[43:20] heard from Republicans for a while. I do

[43:22] think the party is struggling. It needs

[43:24] to come up with both new messages as

[43:27] well as new messengers.

[43:28] >> And who would that be? Who do you see as

[43:30] a possible new messenger? Is this a part

[43:33] was this just no room for a Republican

[43:35] response? Is that what you're saying?

[43:39] >> No, it's it's that um uh the bright new

[43:42] faces that you would expect to see sh um

[43:46] lining up to um to run again in uh 2012.

[43:51] Jindel certainly is was poised to be

[43:54] that kind of uh spokesman and new star

[43:57] for the party. Uh didn't show himself

[44:00] too well in his one of his first big

[44:03] stages, but the Republican party needs

[44:06] that kind of bright new face, but also a

[44:09] message with that face uh to get a new

[44:11] audience.

[44:12] >> Well, when those faces surface, they'll

[44:13] be showing up in Iowa. Thank you all

[44:15] very much. Nolan Finley of the Detroit

[44:17] News, Harold Jackson of the Philadelphia

[44:19] Inquirer, J.R. Labby of the Fort Worth

[44:21] Star Telegram and Carol Hunter of the De

[44:23] Mo Register.

[44:31] And finally tonight, Pakistan under

[44:33] review in Washington. Margaret Warner

[44:36] has that story.

[44:38] >> Senior national security officials from

[44:40] Pakistan and Afghanistan came to

[44:42] Washington this week to take part in the

[44:45] Obama administration's reassessment of

[44:47] US policy toward both countries. This

[44:50] strategic review is exploring how to

[44:52] carry out President Obama's vow to

[44:55] intensify US efforts against al-Qaeda

[44:57] and Taliban militants in the Afghanistan

[45:00] Pakistan region. Pakistani officials

[45:02] were invited to contribute their ideas

[45:04] earlier this month even as the Pakistani

[45:07] government was reaching a deal that US

[45:09] officials find disturbing. to get

[45:12] Taliban militants to agree to stop

[45:14] attacking Pakistan government forces in

[45:16] the Swat Valley. Pakistan agreed to let

[45:19] the Taliban bring Islamic rule to the

[45:21] former tourist region. Pakistan's

[45:24] delegation here is headed by foreign

[45:26] minister Sha Mahmud Kareshi and he joins

[45:29] me now. And Minister Koreshi, welcome.

[45:31] >> Thank you.

[45:32] >> As you've been in these talks with the

[45:33] Obama officials, are you starting from

[45:36] the same page in terms of how dire the

[45:38] situation is? These are the the growing

[45:41] strength of al-Qaeda and Taliban

[45:42] militants in that western region.

[45:45] >> In my view, the strength of al-Qaeda is

[45:48] not the same what it was perhaps a few

[45:51] years ago. In my view, they're weaker.

[45:54] Uh al-Qaeda is weaker. Uh Taliban has

[45:59] been on the run because of the military

[46:01] operations are being carried out in

[46:04] Pakistan and the tribal belt. uh we were

[46:07] able to take out some very important

[46:09] people uh and u uh regain uh areas that

[46:14] they had uh established a foothold in.

[46:17] So my view is quite different from

[46:20] yours.

[46:21] >> But no, I'm asking if your view is the

[46:22] same as the Obama administrations

[46:24] because senior officials within the

[46:26] administration feel the situation has

[46:28] grown worse, more threatening to your

[46:30] government and to the Afghan government

[46:32] and NATO forces in Afghanistan. You see

[46:34] the situation in Afghanistan uh is uh I

[46:38] would say of concern. Uh there have been

[46:43] more incidents in Afghanistan in the

[46:45] last one year. There have been serious

[46:48] governance issues over there and

[46:50] obviously they have a spillover. They

[46:52] have an effect on us as well because you

[46:54] know we share a common border. uh and

[46:58] there are concerns, you know, you spent

[47:00] uh almost 7 years there and billions of

[47:02] dollars and uh perhaps uh not been able

[47:06] to achieve what you were uh starting to

[47:10] achieve, you know, when you diverted

[47:13] your attention from Afghanistan away to

[47:16] Iraq.

[47:17] >> Well, let me ask you this. You were

[47:18] here, you're invited here to weigh in

[47:20] essentially on the administration's

[47:21] review. What changes is Pakistan asking

[47:25] or suggesting the US make in its policy

[47:27] there?

[47:28] >> What we saying is you've got to have a

[47:31] fresh look at how things need to be

[47:34] done. What we saying is uh greater

[47:37] coordination

[47:39] between NATO forces

[47:42] Pakistan and Afghanistan will give early

[47:47] and more effective results. What we are

[47:50] saying is a holistic approach as opposed

[47:53] to a military solution is required. What

[47:56] we saying is a regional approach is what

[47:59] is required as opposed to just being

[48:02] focused on Pakistan and Afghanistan.

[48:04] >> Well, that is of course what special

[48:06] representative Hullbrook has been

[48:07] talking about as a regional approach.

[48:09] Specifically, for instance, is Pakistan

[48:11] asking for any changes in the frequency

[48:15] or way these predator drone attacks are

[48:17] being carried out now by the US into the

[48:20] western regions of Pakistan.

[48:22] >> Yes, we have an issue with the uh drones

[48:25] and I have uh flagged that issue in the

[48:28] talks yesterday. Uh we are in

[48:31] discussions so I don't want to

[48:33] >> What are you asking for?

[48:36] What I'm asking for is that they have to

[48:39] review the strategy vary drones. They

[48:42] feel that they are advantageous because

[48:45] they have a tactical advantage and they

[48:47] have carried out uh some successful uh

[48:50] uh strikes and taken out some high value

[48:54] targets. That is correct. At the same

[48:57] time there is a collateral damage there

[49:00] that is linked to the drones and that

[49:03] has alienated uh people there. Our

[49:06] approach our government the

[49:08] democratically elected government of

[49:09] Pakistan is trying to approach the

[49:11] problem uh differently. We want to carry

[49:14] the people along because we feel if we

[49:17] want to win this fight we cannot do it

[49:20] by military means alone. We've got to

[49:22] have the people of that area, the people

[49:24] of Pakistan with us and these drones

[49:27] alienate the people.

[49:28] >> So there are reports today that you are

[49:30] suggesting that Pakistan ought to be

[49:32] able to carry out those drones attack

[49:34] drone attacks with US help that that

[49:36] would be less inflammatory with the

[49:38] population. Is that the case? Is that

[49:40] what you're suggesting? But if they are

[49:41] a necessary uh if they are a necessity

[49:45] then uh I think uh we are suggesting

[49:48] that technology should be transferred to

[49:50] Pakistan and that will resolve quite a

[49:53] few issues with the people of Pakistan.

[49:55] >> What answer did you get from the

[49:57] administration on that suggestion?

[49:59] >> Well, I'm sure they will consider it. I

[50:01] don't know what the answer is yet.

[50:04] Let me ask you now about the deal in the

[50:06] Swat Valley because uh Ambassador

[50:08] Hullbrook called it very hard to

[50:09] understand.

[50:11] Why has the Pakistan government entered

[50:13] this arrangement with the Taliban

[50:14] militants?

[50:16] First of all uh let me correct you. The

[50:18] arrangement is not with the Taliban. The

[50:21] arrangement is with the local people of

[50:24] uh Swat.

[50:26] It is a local solution to a local

[50:30] problem. You have to understand what the

[50:33] problem is. The problem is quick

[50:36] dispensation of justice.

[50:38] Swat was a princely state before it was

[50:41] amalgamated into Pakistan in 1969.

[50:44] They had local courts and a kind of a

[50:47] jury system of their own and they uh

[50:51] gave quick and cheap justice. Now under

[50:54] the new system that was the you know

[50:56] when they came into the into the into

[50:57] the national uh mainstream the system

[51:00] that was introduced was cumbersome. it

[51:01] was costly and it resistant. So they

[51:04] want a popular demand to go back to the

[51:07] original uh system.

[51:09] >> But Mr. Minister, 250,000 people have

[51:12] been driven out of there. 1,200 people

[51:14] have been killed. Talking to people

[51:16] who've been up there, they say there are

[51:17] foreign fighters up there. They're local

[51:19] Taliban fighters and they have

[51:21] terrorized that area. They've burned

[51:23] police stations. They've closed all the

[51:25] DVD stores and the video stores. They're

[51:27] trying to keep girls from going to

[51:29] school. I mean, is your government ready

[51:30] to accept that as a price for peace?

[51:34] >> No, we will not. What we have said is we

[51:38] will only talk to people

[51:41] if they lay down arms and restore peace

[51:45] and establish the rest of the

[51:46] government. We want the schools

[51:48] reopened. We want the girls to go back

[51:51] to school. We want all government

[51:53] offices to function smoothly. And that

[51:57] is the understanding given to us.

[51:59] >> And how the Taliban the Taliban I am not

[52:02] denying that there have been incidents

[52:04] of uh you know attacking police

[52:06] stations. Uh they have been uh trying to

[52:09] shut down uh you know CD shops and so on

[52:11] so forth but the whole of SWAT is not

[52:15] under their control. There are two

[52:17] pockets of Swat. You know, there's two

[52:19] pockets of SWAT where yes, some

[52:22] miscreants did enter and we used

[52:25] military operations and we used military

[52:27] force to flush them out.

[52:28] >> How do you prevent, if this happens, how

[52:31] do you prevent that valley, pretty well

[52:33] protected valley from becoming another

[52:35] sanctuary for al-Qaeda and Taliban

[52:38] militants from which they can launch

[52:39] further attacks on your country, on

[52:41] Afghanistan or even potentially here.

[52:44] First of all, the presence of al-Qaeda

[52:47] in SWAT

[52:50] is negligible if any.

[52:53] >> But once the Taliban's in charge, that's

[52:54] the danger.

[52:55] >> The Taliban will not be in charge there.

[52:57] The government of Pakistan is going to

[52:58] be in charge there. We are not

[53:01] compromising with the Taliban.

[53:03] What people have not understood is that

[53:06] we have taken the wind out of the sail

[53:09] of the extremists by introducing uh this

[53:13] uh quick dispensation of justice uh you

[53:15] know what is called nazami other you

[53:17] know uh quick justice system

[53:21] >> and they're not different from uh the

[53:24] law of the land you know the

[53:27] constitution of Pakistan says that there

[53:29] will be no laws formulated in Pakistan

[53:32] which are not in conformity with Islam

[53:35] and Sharia. So it's no different from uh

[53:38] you know from the rest.

[53:40] >> So you think you can keep the situation

[53:43] under control there and that somehow

[53:45] this is not going to become another

[53:47] essentially hideout.

[53:48] >> Not only we will control the situation

[53:50] over there. We are going to drive them

[53:52] out. We are going to push them out.

[53:55] We're going to push them out from SWAT

[53:57] and we are going to drive them out of

[53:59] the tribal belt because we feel we will

[54:03] not compromise with extremists and

[54:05] terrorists for our own sake.

[54:07] >> Mr. Minister, we have to leave it there.

[54:09] Thank you so much.

[54:09] >> Thank you.

[54:18] And again, the major developments of

[54:19] this day. President Obama followed up on

[54:22] his address to the nation with a call

[54:24] for new financial regulation. The

[54:26] president also nominated former

[54:28] Washington state governor Gary Lockach

[54:30] to be commerce secretary and federal.

[54:33] >> Nobody was hurt, but grandpa, as you

[54:34] well imagine, is in big trouble tonight.

[54:36] >> Sorry, but she's going to be traumatized

[54:38] for a long time because of that.

[54:39] >> Let's hope not.

[54:40] >> Yeah, let's hope not, Deborah. Hi, Joe.

[54:42] >> Let's hope there's not too much trouble

[54:43] tomorrow morning. And here's what you

[54:44] can expect around Portland to Vancouver.

[54:46] A mixture of rain and snow showers

[54:48] coming down, but really no accumulation

[54:50] to the valley floor. Temperatures just

[54:51] staying too warm overnight. Thanks for

[54:53] watching.

[54:54] >> Good night.

[54:57] >> Fisher Communications,

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