The MacNeil/Lehrer NewsHour (PBS) - 1992-07-31

Channel: malgent

Transcript

Language: English (YouTube automatic captions)

[0:06] Good evening. I'm Jim Lara in Washington

[0:08] >> and I'm Charlene Hunter G in New York.

[0:11] After the news summary, we zero in on

[0:13] one of the hottest items on the campaign

[0:15] trail this week, foreign policy. Then

[0:18] half of our regular Gurgen and Shields

[0:20] team, David Gergen and guest Wendy

[0:23] Sherman weigh in on that and other

[0:25] political hot potatoes. Next,

[0:27] correspondent Paul Salman reports on the

[0:29] culprit behind the recession. And we

[0:32] close with a can we all get along

[0:34] conversation. Tonight, the view of

[0:36] AsianAmerican Evelyn Hart.

[0:40] Part of helping the world live and

[0:42] communicate better is keeping it well

[0:45] informed.

[0:47] That's why funding for the McNeel Lair

[0:49] NewsHour is provided by AT&T

[0:54] and by PepsiCo.

[1:02] PepsiCo

[1:04] and by the Corporation for Public

[1:06] Broadcasting

[1:07] and viewers like you.

[1:09] >> Two more major reports on the economy

[1:12] were released today and they sent

[1:13] different signals. The Commerce

[1:15] Department reported factory orders

[1:17] jumped 2.3% in June. That was the best

[1:20] performance in almost a year and the

[1:22] fifth gain in the past 6 months. But a

[1:25] separate report from the Commerce

[1:26] Department showed no growth in personal

[1:28] income last month and a personal and

[1:30] that personal spending was up only.5%.

[1:34] President Bush said again today he would

[1:36] step up his attacks on the Democratic

[1:38] ticket after the Republican convention.

[1:40] He spoke at a campaign rally in

[1:42] Riverside, California.

[1:44] you wait because uh I uh

[1:49] I've been going through a little javelin

[1:52] catching for about 10 months from the

[1:56] political opposition and I cannot wait

[1:59] for our convention to roll up my sleeves

[2:01] and go after them and tell the American

[2:04] people what's really going on.

[2:09] and

[2:12] and they've been dishing it out for

[2:14] about 10 months, helped by some on the

[2:17] editorial pages, and let's see if they

[2:19] can take it starting two weeks from now.

[2:21] That's the way I feel about it.

[2:23] >> Bill Clinton today responded to earlier

[2:25] attacks from the president. Yesterday,

[2:27] Mr. Bush charged Clinton would gut the

[2:29] defense budget, wiping out a million

[2:31] jobs and jeopardizing the nation's

[2:33] security. In Little Rock, Clinton told a

[2:36] youth group, "A weak economy was a

[2:38] greater danger." He said cutting some

[2:40] defense programs would free up money to

[2:42] revive the economy. He said, "We'll

[2:44] still have the strongest defense in the

[2:46] world." Charlane, a Thai Airways

[2:49] jetliner crashed into the side of a

[2:51] mountain in Nepal today. 113 people were

[2:54] on board, including 11 Americans. There

[2:57] was no word on survivors. The crash

[2:59] happened about 60 mi south of Nepal's

[3:02] capital, Catmandeue. Flight controllers

[3:04] said they had warned the pilots of poor

[3:06] visibility due to monsoon rains. In

[3:09] China, at least 100 people were killed

[3:11] when an airplane crashed while taking

[3:13] off from the Nanjing airport. The

[3:16] Chinese airliner burst into flames about

[3:18] 600 yards from the runway. 26 people

[3:21] reportedly survived. Back in this

[3:24] country, federal investigators began

[3:26] searching the wreckage of a TWWA jet,

[3:28] which burst into flames yesterday at JFK

[3:31] airport in New York. The plane was about

[3:33] to take off when a fire in the tail

[3:35] engine broke out. The takeoff was

[3:37] aborted and all 292 people on board

[3:40] managed to escape. There was a report

[3:43] today that investigators are looking at

[3:45] the possibility of a ruptured fuel line.

[3:48] A list of 39 American civilians believed

[3:52] jailed in the Soviet Union at the end of

[3:54] World War II was released in Moscow

[3:56] today. James Mates of Independent

[3:58] Television News reports from Moscow.

[4:02] A Russian general reveals for the first

[4:04] time a list of 39 Americans imprisoned

[4:06] in the Soviet Gulag and still thought to

[4:08] be alive. A month after President Yelin

[4:11] first raised the possibility, there is

[4:14] now proof from the KGB's own files that

[4:16] American prisoners may have survived

[4:18] decades in captivity. American

[4:21] investigators in Moscow are excited by

[4:23] the news, but uncertain what to make of

[4:25] it.

[4:25] >> I really can't say with certainty just

[4:28] what it is we've got. You know, we've

[4:30] got some information and it it looks

[4:31] promising, but exactly what it is and

[4:33] how well documented it is, I can't say

[4:35] right now.

[4:36] >> Last month, Colonel Saxs had led a team

[4:38] of officials to a Siberian prison camp

[4:40] north of the Arctic Circle. They were

[4:43] searching for an American airman shot

[4:45] down during the Korean War and

[4:46] reportedly seen here by a fellow

[4:48] prisoner. They didn't find him, but

[4:51] promised the search would go on in the

[4:53] belief the KGB had held many Americans

[4:55] after the war, particularly those whose

[4:58] ancestors had once immigrated from

[4:59] Russia. The Russian general said the

[5:02] Americans were subjected to pressure to

[5:04] renounce their citizenship. He said

[5:07] those who didn't were sentenced along

[5:08] prison terms. A relative of one person

[5:11] on the list came forward today to say

[5:13] she was alive and living in a nursing

[5:16] home near Pittsburgh. The brother of

[5:18] Pennsylvania born Arena Burko said she

[5:20] spent about 20 years in a Soviet

[5:22] psychiatric hospital. He said their

[5:24] mother brought her back to the United

[5:26] States in 1961.

[5:29] The humanitarian airlift to Bosnia was

[5:31] temporarily suspended today because of

[5:34] heavy fighting in the capital. Some of

[5:36] the heaviest took place overnight as

[5:38] Serb and Bosnian forces traded fire near

[5:41] the Sieo airport. At least eight people

[5:44] were reported killed and 63 wounded.

[5:47] Among them, five United Nations

[5:49] peacekeepers. They were protecting a UN

[5:52] radar installation when their position

[5:54] came under fire. The UN is investigating

[5:57] the incident.

[5:59] >> The space shuttle Atlantis blasted into

[6:01] space this morning from Cape Canaveral,

[6:03] Florida. It and its seven astronauts are

[6:06] on a 7-day mission. The primary work is

[6:09] to reel out a satellite on a 12m long

[6:12] cable and then drag it through space at

[6:15] 17,000 mph. The experiment is designed

[6:18] to generate electricity. It is a joint

[6:21] US Italian enterprise. And that's it for

[6:24] the news summary tonight. Now it's on to

[6:26] foreign policy, politics, Gergen and

[6:29] Sherman, economic recovery, and can we

[6:32] all get along?

[6:42] Some foreign matters finally came up in

[6:44] the 1992 race for president the last few

[6:47] days. Matters such as Yugoslavia and

[6:50] Iraq. President Bush and Governor

[6:52] Clinton plus their various spokespeople

[6:54] and surrogates exchanged blasts over the

[6:57] Bush quail record and the Clinton Gore

[7:00] prospects for handling international

[7:02] crises and problems. A Republican

[7:04] senator and Democratic congressman will

[7:06] continue that exchange here after this

[7:09] backgrounder byWami Hullman.

[7:12] >> Last Sunday during a campaign swing

[7:14] through Western states, Bill Clinton

[7:16] blamed Serbia for the ongoing ethnic

[7:18] violence in Yugoslavia.

[7:20] In a written statement, he said the US

[7:23] should take the lead in seeking UN

[7:25] Security Council authorization for air

[7:27] strikes against Serbian targets if

[7:30] relief efforts continue to be disrupted.

[7:33] On Monday, in an off- camerara briefing,

[7:35] White House spokesman Marlon Fitzwwater

[7:37] attacked Clinton's recommendations on

[7:39] the Yugoslavia crisis as a reckless

[7:42] approach to foreign policy. Fitzwater

[7:44] went on to say Clinton and running mate

[7:46] Al Gore were a long way from being

[7:49] qualified to lead the country. Later

[7:52] Monday, President Bush in Detroit for a

[7:54] campaign appearance made a point of

[7:56] touting his own experience in

[7:58] international matters. Many times in the

[8:01] White House late at night, the phone

[8:02] rings and usually at some young aid

[8:06] double-checking on the next day's

[8:07] schedule. But occasionally, it's another

[8:10] voice, more serious,

[8:13] more solemn,

[8:15] carrying news of a coup in a powerful

[8:17] country

[8:19] or asking we how we should stand up to a

[8:21] bully halfway around the world. And the

[8:25] American people need to know that the

[8:28] man who answers that phone has the

[8:31] experience,

[8:32] the seasoning,

[8:35] the guts to do the right thing.

[8:38] >> On Tuesday, the Democrats fired back,

[8:41] signaling they were not going to see the

[8:43] administration the edge in foreign

[8:45] policy. President, if President Bush and

[8:48] Vice President Quail are such whizzes in

[8:52] foreign policy, why is it that Saddam

[8:56] Hussein is thumbming his nose at the

[8:59] entire world?

[9:01] >> It is, I think, a very uh sad mistake

[9:06] and an unacceptable precedent. if the

[9:10] Secretary of State does step down from

[9:12] his uh role and assume the role of a

[9:15] political campaign manager and and I

[9:18] think this is u indicative of the

[9:22] superficiality with which the foreign

[9:24] policy issues in this campaign are

[9:27] likely to be addressed. When he returned

[9:29] to the campaign trail toward the end of

[9:31] the week, President Bush continued the

[9:33] attack on Clinton's foreign affairs

[9:35] experience. Yesterday in Anaheim,

[9:38] California, the president talked about

[9:40] Bill Clinton's acceptance speech at the

[9:42] Democratic National Convention.

[9:43] >> He went on about the future of the

[9:45] country, I'm told, for about an hour.

[9:46] And out of all that time, that speech

[9:50] spent about one minute on the national

[9:52] security of this nation.

[9:53] >> But Clinton has continued to challenge

[9:56] Bush's foreign affairs strong suit.

[9:58] Yesterday in Little Rock, he talked

[10:00] about his statements prior to the Gulf

[10:02] War about sanctions versus the use of

[10:04] force in Iraq.

[10:05] >> We'll never know whether the sanctions

[10:07] would have worked at some point in the

[10:09] future. My instinct is that they would

[10:11] not have, and I think we now know more

[10:14] than we did at the time about how

[10:17] ineffective they are with a person like

[10:19] Saddam Hussein, who apparently has the

[10:20] capacity to break embargos for the elite

[10:23] in Iraq and doesn't mind how much his

[10:26] own people suffer. Now, the views of

[10:28] Senator John McCain, Republican of

[10:30] Arizona and a member of the Senate Armed

[10:32] Services Committee and the Select

[10:34] Committee on PMIA affairs, and

[10:37] Congressman Dave McCertie, Democrat of

[10:39] Oklahoma, chairman of the House

[10:40] Intelligence Committee, and a member of

[10:42] the House Armed Services Committee.

[10:44] Senator McCain, Marlon Fitzwater accused

[10:46] Governor Clinton of having a reckless

[10:49] approach to foreign policy. Do you agree

[10:51] with that? Uh if we are talking about

[10:54] air strikes into on quote Serbian

[10:57] positions I have to I'd be curious where

[10:59] those positions are that he wants to

[11:01] strike. How many civilians live around

[11:03] there as you know it's a very heavil he

[11:05] heavily populated country and whether

[11:06] we're prepared in those quote air

[11:08] strikes on Serbian positions to

[11:10] sacrifice the lives of innocent

[11:12] civilians. I so I'd say yes. And I'd

[11:14] also like to comment on the on the quote

[11:17] that you the clip you had of Governor

[11:19] Clinton where he said he suspected that

[11:21] the sanctions wouldn't work in January

[11:23] 1991. He said, I quote, I agree with the

[11:26] arguments of the people in the minority

[11:28] on the resolution that we should give

[11:30] sanctions more time and maybe even

[11:32] explore a full-scale embargo before we

[11:35] go to war. I think that's how you get

[11:37] the reputation for equivocation.

[11:40] Congressman Mccertie, what do you think

[11:42] about the reckless charge against

[11:44] Governor Clinton? Is there validity to

[11:45] that?

[11:46] >> Not at all. As a matter of fact, I

[11:48] assume Senator McCain's going to say

[11:49] that Senator Luger has been guilty of

[11:53] recklessness as well because he and a

[11:55] number of prominent Republicans as long

[11:57] as as well as a number of other

[11:58] Democrats have said that in order to

[12:01] stop the uh manslaughter and the

[12:05] genocide against innocent civilians in

[12:09] former Yugoslavia in Bosnia that uh the

[12:12] UN should consider the use of force.

[12:15] Now, they've not outlined exactly what

[12:17] that force may be, but I think it's

[12:19] clear that for us to uh stand by on the

[12:23] sidelines as thousands and thousands of

[12:25] people are slaughtered and millions of

[12:28] people turn into refugees uh is uh and

[12:32] perhaps that is more reckless than

[12:34] saying that we'll put the integrity of

[12:36] the United States and working with the

[12:38] United Nations to see if we can put a

[12:39] halt to that.

[12:40] >> Well, Senator, what about that point?

[12:42] Senator Luger, who is a prominent

[12:44] Republican member of the of the uh uh

[12:47] Senate Foreign Affairs Foreign Relations

[12:49] Committee, and other Republicans have

[12:51] said almost exactly what uh Governor

[12:54] Clinton said. Why is it different when

[12:56] he said,

[12:56] >> Jim, they haven't said that, my friend.

[12:58] So, you're wrong there.

[13:00] Please read it to me because he didn't

[13:02] say they were wanted to launch air

[13:03] strikes onto Serbian. So, go ahead and

[13:06] read what you want, but he didn't say

[13:08] launch air strikes into Serbian

[13:09] positions. It's one thing to use the

[13:12] force if necessary in a uh in a measured

[13:16] and and calculated way so that we're not

[13:18] going to send American young men and

[13:21] women into a meat grinder. There's a

[13:22] very there's a very significant

[13:24] difference. We started the Vietnam War,

[13:26] Jim, with air strikes that we're going

[13:28] to settle the problem with the Vietkong.

[13:30] >> So you you do not favor you and and

[13:33] President Bush and the Republican party

[13:35] do not favor the use of any kind of

[13:37] force.

[13:38] >> No, I didn't say that. I I didn't say

[13:39] that at all. I What do you favor, sir?

[13:41] >> What what we favor is a United Nations

[13:44] mandate and and all of the uh support

[13:48] like we like the president successfully

[13:50] garnered during the Persian Gulf War if

[13:52] necessary. But we also believe that the

[13:54] Europeans should lead in this since it's

[13:56] primarily a European problem. And don't

[13:59] let the Persian Gulf War make you

[14:01] believe that the United States can be

[14:02] the world's policeman. because frankly I

[14:04] don't know if our soldiers know Serbians

[14:06] from Croatians from Bosnians from others

[14:09] and so if we have to use force it has to

[14:12] be United Nations effort and I would

[14:13] suggest that it probably has to be

[14:15] something on the ground to start with

[14:17] like clearing the path between the

[14:18] airfield and the people who are

[14:20] belleaguered in Sievo.

[14:22] >> Well, I find that full of contradictions

[14:24] because uh in fact what you have is an

[14:26] effort by the Serbians for ethnic

[14:28] cleansing. They're driving out the

[14:30] ethnic minorities within that region. uh

[14:33] which amounts to genocide. And what

[14:35] Governor Clinton has been saying is that

[14:37] the UN should lead, but that there

[14:39] should be forces including the United

[14:41] States in support of that UN effort,

[14:44] including the those mandates, and that

[14:46] it should be collective. But the sad

[14:48] reality is that uh President Bush thinks

[14:52] now that he can seed foreign policy to

[14:54] the Europeans who've shown no interest

[14:57] in providing leadership on something of

[14:59] this importance. what Governor Clinton

[15:01] is saying, he wants to use the power of

[15:03] the United States to maintain our

[15:05] position as the leader of the world, not

[15:07] the world's policeman, but remain

[15:09] engaged in efforts to provide moral

[15:12] leadership as well as uh support for

[15:15] dictators around the world, which is

[15:16] seems to be the case in the Bush

[15:18] scenario.

[15:19] >> I find it curious I find it curious that

[15:21] he wanted to use force wants to use air

[15:23] strikes into Serbia, but he did not want

[15:25] to use force in the Persian Gulf.

[15:26] >> That's not true. The quote is right

[15:28] there. But but the the time of the quote

[15:30] itself uh

[15:31] >> January 1991 when we were

[15:33] >> deciding no you actually look at the the

[15:36] dates of the vote and and Governor

[15:38] Clinton and Governor and Senator Gore

[15:41] supported the Gulf War as did I. Uh it's

[15:44] ironic that today many uh Republicans

[15:47] are saying well it appears that Governor

[15:50] Clinton's going to support a foreign

[15:52] policy directed by George Bush. They

[15:56] didn't accuse us of bipartisan support

[15:58] uh when we were actually working to

[16:00] provide force in

[16:02] >> we got very little bipartisan support in

[16:03] the United States Senate Dave if if

[16:06] there was about five or six demand

[16:09] number thank thank goodness that Al Gore

[16:12] and and myself and others provided

[16:14] leadership there was a majority that

[16:16] provided that what we see majority of 52

[16:19] to 47

[16:20] >> what we see now though is a a spokesman

[16:22] for the Democratic party the clear

[16:25] spokesman now saying he wants to use

[16:28] foreign policy one of engagement, one of

[16:31] support for democracies and it's not

[16:34] just using a rolodex to be on firstname

[16:37] basis with dictators around the world

[16:38] but to actually use as force for good

[16:41] and he also understands a very important

[16:42] point which George Bush obviously has

[16:44] not understood and that is he

[16:46] understands the connection between a

[16:48] strong domestic economy at home and our

[16:52] engagement in foreign policy abroad. uh

[16:55] if George Bush had said that right after

[16:57] the Gulf War he was going to use the

[16:58] momentum uh and the unity that was

[17:01] achieved during the Gulf War to address

[17:04] our pressing problems here then perhaps

[17:06] he would be in the lead in the polls

[17:08] today.

[17:08] >> Let's go to the more general issue on

[17:10] foreign policy. Senator McCain and uh

[17:12] the president may we used it in the clip

[17:14] a moment ago, a clip of the of the

[17:16] president and it's been used already by

[17:18] other Republicans against Governor

[17:20] Clinton and that is the experience point

[17:23] that uh that President Bush has much

[17:25] more has tremendous amount of experience

[17:27] in foreign affairs, Governor Clinton has

[17:30] none. Is that important?

[17:31] >> Oh, I think it's quite important. Uh the

[17:34] uh foreign policy experience that I know

[17:36] of that uh Governor Clinton has was as

[17:39] working for Senator Fulbright as an

[17:40] intern and leading anti-war

[17:42] demonstrations during the Vietnam War

[17:44] outside the US embassy in London. Yes,

[17:47] clearly he has very little but he's but

[17:49] I must give some credit. He is using a

[17:52] strategy a carell strategy which I think

[17:54] is very intelligent and that is

[17:56] >> carell as one of his advisers

[17:59] >> just agree basically with everything

[18:00] that uh that President Bush is saying

[18:03] with with minor modifications. The fact

[18:05] is that if you cut the defense budget by

[18:07] 100 billion uh of the his 90 seconds

[18:10] that he devoted to foreign policy and

[18:13] none to uh veterans by the way uh that

[18:16] is clearly he has very little experience

[18:18] and he's very uncomfortable with it but

[18:19] he is handling it I think in a way which

[18:22] focuses a lot on our economy and I but

[18:25] lately I'm very concerned as the Wall

[18:28] Street Journal was this morning and

[18:29] others about his apparent abrogation of

[18:32] the his commitment to the North American

[18:34] Free trade agreement which I think is

[18:36] vital to the economic future of this

[18:39] country.

[18:39] >> Congressman Mccertie, speak to the

[18:41] experience probably.

[18:42] >> Let me talk about this. Experience does

[18:45] not always canote judgment and

[18:47] experience didn't help uh George Bush

[18:50] and his pre-war assessment of Saddam

[18:52] Hussein and his ability to work with him

[18:53] or even provide assistance. It didn't uh

[18:56] experience didn't uh indicate that he

[18:59] should stop supporting the oxygenarian

[19:01] leadership of China, the communist

[19:03] dictators. and as opposed to working

[19:05] with pro-democracy movement, the

[19:07] experience didn't tell him that he

[19:09] should uh work to support Boris Yelson

[19:11] instead of clinging to Gorbachoff right

[19:13] up to the very end. And and let me tell

[19:15] you something, John McCain has just said

[19:17] that uh it's reckless to cut a hundred

[19:20] billion dollars out of defense budget.

[19:22] However, with his experience, Senator

[19:24] McCain has made a proposal to cut the

[19:26] defense budget by $130 billion over the

[19:29] same time frame.

[19:30] >> That's false.

[19:30] >> No, it's false, John. You can look at

[19:33] Senate Armed Services Committee

[19:34] >> November November 9 November 26, 1991.

[19:37] Senator McCain says cut the defense

[19:39] budget 6% a year for a total of $130

[19:43] billion and he's talking about force

[19:45] levels in Europe less than Bill Clinton.

[19:47] He's talking about major terminations of

[19:49] programs more than what Bill Clinton has

[19:51] said. So I don't think uh it's it's

[19:54] experience in judgment being uh being

[19:56] able to selectively take these

[19:58] arguments. The fact of the matter is the

[20:00] Bush candidacy, the Bush campaign is

[20:02] desperate. They're behind. They're going

[20:05] back to the old booaboos of trying to uh

[20:08] cast dispersion, go after character,

[20:10] talk about experience, but experience

[20:12] has not paid off. They're the

[20:13] international landscape is littered with

[20:16] po foreign policy failures of the Bush

[20:18] administration. Jim, I supported the

[20:21] elimination of the Seawolf submarine

[20:23] which Governor Clinton who wants to

[20:25] reduce spending supported that piece of

[20:27] pork and at the same time he and his

[20:28] friends and Congressman Mccertie want to

[20:31] throw thousands of young men and women

[20:32] out of the military and for sake of

[20:34] keeping that $6 billion worth of pork. I

[20:37] want less number of troops in Europe

[20:39] than I than uh than the administration

[20:42] calls for. Yes, I think that's perfectly

[20:44] appropriate. If you look at my exact

[20:45] numbers, they're around $50 billion and

[20:47] they're not that much different from the

[20:49] Bush proposal. That's a fact.

[20:51] >> That's not the record. And I'm expecting

[21:01] my position on it. Gentlemen, thank you.

[21:03] Thank you very much. And don't go away.

[21:05] We want to bring into this mixed house

[21:07] of analysis of this and other political

[21:09] matters of the week from Gurgen and

[21:10] Sherman. Gurgen is David Gurgen, editor

[21:13] at large of US News and World Report.

[21:14] Sherman is Wendy Sherman, a Democratic

[21:16] strategist, frequent guest on this

[21:19] program. She's sitting in this week for

[21:20] Mark Shields, who is on vacation. David,

[21:24] how important is this argument and the

[21:26] argument that that we just heard uh

[21:29] between the senator and the congressman,

[21:30] the one that Clinton and Bush are

[21:32] involved in, and the one we're going to

[21:33] hear between now and election day.

[21:35] >> It's not as important as the economy.

[21:37] It's not as important as the performance

[21:39] of the economy in the next 90 days. It

[21:40] is important. I think from the Clinton

[21:43] point of view, if he can go in and

[21:45] counter punch the way Dave McCertie was

[21:46] just counter punching and and and hold

[21:49] even through this through the campaign,

[21:51] it could help to neutralize President

[21:53] Bush's big advantage, which is national

[21:55] security affairs. There's no question

[21:56] the president has more experience. On

[21:58] the other hand, if the Republicans can

[22:00] push the points that Senator McCain was

[22:02] was just pushing about the equivocation

[22:05] of Bill Clinton on the Gulf War and the

[22:07] more recent equiv equivocation that

[22:09] Republicans are claiming that that

[22:10] Clinton is doing on the Mexican to the

[22:12] national the the North American Free

[22:14] Trade Agreement, if they can push those

[22:16] points successfully, it will help and in

[22:19] delineating Bill Clinton as an

[22:20] accommodation is one who doesn't have a

[22:22] backbone. And that that would be a

[22:24] strong Republican argument. each side is

[22:25] trying to make some arguments that if

[22:27] they succeed in pushing those arguments

[22:28] through uh could help the campaign.

[22:30] >> Wendy, you agree?

[22:31] >> Uh I I do agree. I think though what

[22:33] we're going to see from Bill Clinton is

[22:35] he's pushing back very hard on the

[22:36] economy and there's certainly a lot of

[22:38] data out to do that. And I think we'll

[22:40] hear him say that uh uh George Bush

[22:43] said, "Well, will Bill Clinton be able

[22:44] to pick up the red phone in the middle

[22:46] of the night and be able to handle a

[22:47] crisis?" And I think we'll hear Bill

[22:48] Clinton say, "Well, what about the

[22:50] economic crisis? Does George Bush even

[22:52] know where the telephone is?" Uh, and I

[22:54] think that's going to be the real nex uh

[22:56] uh nexus of this uh discussion.

[22:58] >> One difference here, Jim, from the

[23:00] Democratic campaigns of the past, I

[23:02] think Wendy and I would agree on is the

[23:03] Democrats are better at counter punching

[23:05] in this campaign than I've seen them in

[23:07] recent years. They've been coming back

[23:08] more swiftly. They've had their

[23:09] arguments marshaled that, you know, on

[23:11] as Wendy was saying, we saw that clip of

[23:13] George Bush saying and and a very good

[23:15] point the president was making, you

[23:16] know, who's there to answer the phone at

[23:18] night when there's a crisis in the

[23:19] world. And then yesterday when the

[23:20] economic numbers came out showing a

[23:21] slowdown in the second quarter of the

[23:23] year, Bill Clinton came right back

[23:24] counter punching saying, "What about the

[23:26] phone that's ringing, Mr. President,

[23:27] right here in America?"

[23:28] >> Well, Congresswoman Mccertie just made

[23:29] uh just made the same point. And and and

[23:32] of course uh well, we're talking about

[23:34] foreign just in the last 24 hours. Uh we

[23:37] reported them tonight. There were some

[23:38] economic numbers. There were some

[23:39] economic numbers uh last night. Is uh

[23:43] how is that? Nothing's changed on that,

[23:45] has it, Wendy? That's still the single

[23:47] most important issue. I think it's the

[23:48] single most important issue and I think

[23:50] it's it's uh uh a little bit of me, just

[23:53] a little bit of me feels for the

[23:54] president because first Dan Quayle goes

[23:56] to Arkansas to take on Bill Clinton and

[23:58] the unemployment statistics come out and

[24:00] they're dismal and then George Bush goes

[24:02] to Texas to sort of hit uh Bill Clinton

[24:05] on his economic plans about not having

[24:08] judgment about defense cuts. Uh and

[24:10] General Dynamics announces it's going to

[24:12] lay off 5,800 workers over two years. It

[24:14] is very tough. And so going out to meet

[24:17] the people is to meet the problem head

[24:19] on. Uh and I have yet to see what the

[24:21] strategy is on the Republican side.

[24:22] >> I agree with that.

[24:23] >> David, what about the the the point that

[24:26] well actually Leon Petta and the House

[24:30] Budget Committee chairman and Clinton

[24:31] himself have all jumped on Darm, Dick

[24:34] Darman, the president's budget director

[24:36] for some testimony on the Hill where he

[24:38] said the president had not any

[24:40] responsibility at all for the po for the

[24:43] performance of the economy. It was the

[24:44] Congress's fault. Saddam Hussein went

[24:46] through a long list, but he never that

[24:48] the president has no responsibility at

[24:50] all. Is that going to work?

[24:52] >> Well, the Darmman argument, and we're

[24:54] hearing this from others in the

[24:55] administration, is there are a lot of

[24:57] reasons why the economy is in trouble,

[24:58] and most of the reasons have nothing to

[25:00] do with George Bush, as it turns out, on

[25:01] the Republican list, obviously. Now, I

[25:04] don't think that's going to fly very

[25:05] long. I frankly think that uh the

[25:07] president has got to change the subject.

[25:09] He's got to change it from a defense of

[25:11] his p of the past economic performance

[25:13] to a to go on the offense about what he

[25:15] wants to do for the country in the in

[25:17] the next four years. That is the

[25:19] critical element that's missing now from

[25:20] the Republican argument in this

[25:22] campaign. As long as the issue, Jim, is

[25:25] on George Bush, George Bush's past

[25:27] performance, president will lose this

[25:29] election. He has to change the argument.

[25:31] He has to change the argument the way

[25:32] John McCain was just trying to do it

[25:34] onto the equivocation on the Clinton

[25:35] side and much much more importantly

[25:38] launch an economic offensive. He has to

[25:40] show where he wants to take the country

[25:42] in a second term. But Wendy, isn't there

[25:44] still some really good meat there for

[25:46] the president to go after Congress just

[25:48] like Harry Truman did in 1948. And

[25:50] Darmman began that in a very articulate,

[25:53] strong way, went right up there and

[25:55] said, "Hey guys, it's your fault what

[25:56] happened." I think they'll try to do

[25:58] that, but I think some of the

[25:59] president's own words may come back to

[26:00] him. If you remember when he made his

[26:02] speech at uh uh the convention when he

[26:04] was nominated, he talked about missions

[26:06] defined and missions completed. He

[26:08] talked about taking personal

[26:09] responsibility. So, I think if he goes

[26:11] down that route uh and and all of the

[26:14] debate and discussion about family

[26:16] values and going forward with what you

[26:18] believe in, he's going to have some of

[26:20] fly back in his own face. And I think

[26:21] you're going to see the Congress also is

[26:24] coming at him as well. And one of the

[26:26] things that's going on that I think is

[26:27] very difficult for the president is his

[26:29] own coalition is falling apart. The

[26:31] members of Congress who of course care

[26:33] about their own reelection are worried

[26:35] about where are the co cattails going to

[26:38] be and so they're coming after the

[26:39] president and turning on him as well. I

[26:42] think so I think this argument will be

[26:43] tougher for him. And what about David?

[26:45] Uh the columnists George Will yesterday

[26:48] or earlier Monday I think it was in the

[26:50] Washington Post syndicated column. A

[26:52] Rosenthal today in the New York Times

[26:54] both conservative colonists calling on

[26:56] President Bush to step aside.

[26:58] >> Well Jim I think the people who are

[27:00] calling on President Bush to step aside

[27:01] are basically the same people who never

[27:02] wanted George Bush to be president. I I

[27:05] think they represent a very tiny

[27:06] minority. I think Wendy's point I I I

[27:09] disagree about this. I think the

[27:10] president in order to rally his troops

[27:11] is probably going to have to go against

[27:13] the Congress. I think he's going to have

[27:14] to go into a much more confrontational

[27:15] stance in order to get the Republican

[27:17] moving. There is there the Republicans

[27:19] on the Hill, many of them have moved

[27:21] from a state of nervousness to a state

[27:22] of panic in the past few weeks as we've

[27:24] seen a reversal of fortunes for the

[27:26] president. I think the president can

[27:27] still rally the troops. Strikingly, Jim,

[27:29] it's going back to the the Truman point.

[27:31] Strikingly, the president had David

[27:33] McCulla, the author of the superb new

[27:35] biography of Truman into the White House

[27:37] this week. gave a terrific book and it's

[27:39] a terrific book,

[27:39] >> right? We all have to plug that book and

[27:41] and and George Bush has started reading

[27:42] this book now and I think I think you're

[27:44] going to see a lot of echoes of the

[27:47] Truman 1948 campaign in the next few

[27:48] weeks in the Bush camp.

[27:50] >> We just saw a little of his, you know,

[27:51] sort of give him hell Harry, you know, I

[27:53] can't wait for the convention and I just

[27:55] can't wait to take the gloves off. And

[27:57] as I said to David earlier, I wish he'd

[27:59] put on some gloves and take on the

[28:01] fight. I don't think he's done either

[28:02] one and I think it's his own

[28:04] equivocation. It's a problem. Senator

[28:05] McCain, uh, how would you describe your

[28:08] state as being nervous or or panic at

[28:10] this point as a Republican in the

[28:12] Congress?

[28:12] >> I I think nervous. Uh, clearly we're

[28:14] behind in the polls. We can see those

[28:16] things. I would like to make one

[28:18] additional comment about this foreign

[28:19] policy, which I think we start out as

[28:21] the United States. Our one of our

[28:23] messages is going to be the United

[28:24] States's number one superpower. We were

[28:26] not in 1981 when Ronald Reagan came to

[28:29] office. Practically every one of our

[28:30] successes was over the opposition of

[28:32] people like Congressman McCertie, such

[28:34] as aid to the freedom fighters, such as

[28:36] aid to governments of El Salvador, such

[28:38] as deployment of Persian missile,

[28:40] support for strong defense, and we have

[28:43] emerged as the number one superpower in

[28:45] the world. And the world has changed and

[28:47] the children of all of us will not have

[28:48] to go to sleep at night worrying about

[28:50] the chances of a nuclear confrontation

[28:53] or exchange. And I think that that's a

[28:55] dramatic achievement and one that we

[28:56] have to highlight and highlight very

[28:58] strongly. Congresswoman Mccertie, would

[29:00] you not agree with Senator McCain?

[29:01] That's a text message you guys are g for

[29:03] the Democrats to fight, is it not? If

[29:05] it's well delivered,

[29:06] >> you know, John's really frustrated as

[29:08] well as most of the Bush administration

[29:10] because those blows don't land. I

[29:12] supported all those programs he just

[29:13] talked about to the country. You opposed

[29:16] it.

[29:16] >> No, actually I

[29:19] voted against it every time. I came back

[29:21] with a bipartisan plan that passed if

[29:23] you'll remember. They keep going back to

[29:25] the Reagan years because that that's

[29:27] where they the nostalgia really rests.

[29:29] They're frustrated that they don't have

[29:31] an isolationist and protectionist

[29:33] candidate to run against because Bill

[29:35] Clinton does support a free trade

[29:36] agreement. Now, he wants to make sure

[29:38] that it as it's negotiated, which any

[29:41] president should instead of giving a

[29:42] blank check, that it has adequate

[29:44] protection for the environment, then it

[29:46] has adequate labor standards for the

[29:48] people involved. And it's also ironic

[29:51] that George Bush is now saying, "Well,

[29:53] I'm going to California and talk to this

[29:54] company and say,"We're going to help you

[29:56] in this transition out of the defense

[29:58] cuts." It was Democrats, myself,

[30:00] actually I chaired the panel on the

[30:01] Armed Services Committee that came up

[30:03] with a proposal to allow the transition

[30:06] to occur and help provide technology for

[30:08] defense conversion.

[30:09] >> But Congressman McCertie, specifics

[30:11] aside, which we could argue for a long

[30:13] time, I think. Oh, I agree. I agree.

[30:17] Okay. But I I would have to would you

[30:18] not have to agree that the president

[30:20] isn't doing very well in the polls, but

[30:22] neither are the Democrats in Congress. I

[30:24] mean, you all are a big target and there

[30:26] is some meat there for the president, is

[30:27] there not?

[30:28] >> Well, I think that the president will

[30:30] try to to blame Congress, but again,

[30:32] he's always trying to blame someone

[30:33] else. He's trying to blame uh someone

[30:36] else over overseas that the economy is

[30:38] not working. He's trying to blame the

[30:39] Democrats. He does sit at the White

[30:41] House. I hope he does read the Truman

[30:43] biography because of the plaque that was

[30:44] on the president's desk that said the

[30:46] buck stops here. George Bush and he

[30:49] wants to talk about character. Let's

[30:51] remind George Bush about his speech

[30:53] where he lied to the American public

[30:55] when he said read my lips. He better get

[30:57] those stories straight if he's going to

[30:59] win back the support of the American

[31:00] Senator McCain.

[31:01] >> Well, as I said, we are the world's

[31:04] number one superpower. We respect it all

[31:06] over the world. You see that in

[31:08] Teneamman Square the students erected a

[31:10] statue of liberty. You saw an Albanian

[31:12] incredible scene uh that we they looked

[31:15] to us for guidance. They looked to us

[31:17] for leadership. It was our strength. It

[31:19] was every major decision was opposed by

[31:22] the Democrats that brought about the

[31:24] success including the defense buildup,

[31:26] including the deployment of Persian

[31:28] missile, including all of the things

[31:29] that happened.

[31:30] >> We had good preview, David. Good preview

[31:32] right when George Statue of Liberty and

[31:34] the students.

[31:35] >> Thank you all very much. Thank you.

[31:38] >> Still ahead, the culprit behind the

[31:40] recession and can we all get along.

[31:52] This week's gloomy economic news prompts

[31:54] our next focus. Business correspondent

[31:57] Paul Salman reports on the culprit

[31:59] behind it.

[32:01] >> The promise of economic recovery. It's

[32:03] been in the media for a very long time,

[32:06] but there's skepticism out on the

[32:08] street.

[32:08] >> Well, I haven't seen anything happening

[32:10] as far as jobs increasing or coming

[32:12] around. I haven't seen uh retail sales

[32:15] going up. I haven't noticed any of those

[32:17] things happening.

[32:18] >> I don't see it. Still no jobs for

[32:20] anybody. A lot of people are laid off

[32:22] and more and more digital going to be

[32:24] laying off, but I don't see it.

[32:26] >> Do you think that we're in the midst of

[32:29] a recovery, economic recovery?

[32:31] >> No. Why not?

[32:35] >> We're still broke.

[32:36] >> Now, if the economy isn't recovering as

[32:38] quickly as people expected, and it sure

[32:40] doesn't seem to be, one question is why

[32:42] not? Well, there's the budget deficit,

[32:44] which is thought to discourage

[32:46] investment and prevent the government

[32:48] from spending enough money to drive a

[32:49] recovery. In the political arena, the

[32:52] Republican White House blames the

[32:54] Democratic Congress. The Democrats blame

[32:56] the Republicans. But beyond the

[32:58] fingerpointing, at least two other

[33:00] culprits are commonly blamed for the

[33:02] economy's continued weakness. First, the

[33:04] fumbling Fed. That is the Federal

[33:07] Reserve Bank criticized for being too

[33:10] slow in stimulating the economy. Second,

[33:13] the SNL thieves. Bankers like Charles

[33:16] Keading, for example, of Lincoln Savings

[33:18] and Loan, who it's argued simply robbed

[33:20] the economy, thus setting it back for

[33:22] years. Are these the culprits? Let's

[33:25] look at them quickly.

[33:28] Hello.

[33:28] >> Once the very picture of piety, Keading

[33:31] is now doing time. He and his ilk built

[33:35] billions of deposits to buy tropical

[33:37] hideaways for themselves to sink into

[33:39] preposterous ventures like the planned

[33:41] desert community of Estraa. Instead,

[33:44] that money could have gone into

[33:46] productive investments that might now be

[33:47] taking off and lifting the economy in

[33:50] the process. How much blame do SNL

[33:52] thieves deserve for robbing the recovery

[33:54] of its strength? We put the question to

[33:56] economist Carl Casease of Welssley

[33:58] College. Well,

[33:59] >> there's absolutely no question that

[34:00] there was a lot of fraud. There was a

[34:02] lot of money stolen. On the other hand,

[34:04] you cannot explain the savings and loan

[34:06] crisis or the banking problems in this

[34:07] country uh with fraud and abuse. In

[34:09] fact, there have been some serious

[34:11] studies, some serious academic studies

[34:12] that have been done that suggest it

[34:14] accounts for about 10 to 15% of the

[34:16] money that was lost uh during the

[34:18] crisis. But even if fraud accounts for

[34:20] 15%, that's still a small part of the

[34:22] total. So the SNL scams of the past may

[34:25] have robbed the economy to pay Keading,

[34:27] thus retarding recovery. But in hard

[34:29] numbers, stolen money seems a modest

[34:31] contributor to the problem. Okay, what

[34:33] about a more recent culprit, the

[34:35] fumbling Fed? Senator Donald Regal made

[34:38] the case against the Fed's Allen

[34:39] Greenspan in mid July when the chairman

[34:42] appeared before Regal's banking

[34:43] committee. I think the record now

[34:45] clearly shows that the Fed monetary

[34:48] policy moves have been too little and

[34:51] too late and that despite reassurances

[34:54] that you have repeatedly given this

[34:56] committee, the economy remains wounded

[34:59] and struggling today. Now, in fairness,

[35:02] the Fed has been pushing down short-term

[35:04] interest rates to their lowest level in

[35:06] 29 years, but a great many observers

[35:08] think the Fed simply didn't start soon

[35:10] enough. So to what extent have the Fed's

[35:13] slow reflexes slowed the recovery?

[35:15] >> Certainly if they'd moved sooner, we may

[35:17] have may have had more economic

[35:19] activity. On the other hand, whether Fed

[35:21] policy is effective or not depends on

[35:22] how the economy responds to it, and

[35:24] we've had dramatically lower interest

[35:26] rates over the last year, and the

[35:28] economy hasn't responded very much to

[35:29] it. But most observers still blame the

[35:31] Fed for doing too little too late. Throw

[35:34] in the SNL scams and the federal debt

[35:36] clock which keeps on ticking and some

[35:38] might say you've got pretty much the

[35:40] whole story. Not Professor Casease,

[35:42] however.

[35:42] >> Well, I think there's a big piece of the

[35:44] puzzle that's left out of that story.

[35:46] >> When Case looks around here in Boston or

[35:48] virtually anywhere else in the country,

[35:50] he thinks he sees the real culprit, a

[35:53] real estate boom that basically blew up

[35:55] the American economy by overbuilding

[35:58] like crazy. to case. The problem is the

[36:01] bigger you build, the harder you fall.

[36:04] Normally, when you come out of an

[36:05] economic cycle and monetary policy is

[36:07] the tool you're using to come out, that

[36:09] is lower interest rates. The sector that

[36:11] those lower interest rates stimulate the

[36:13] most is the construction sector. We get

[36:14] new housing, we get new commercial

[36:16] space, we get new office space. And

[36:18] that's how we've gotten out of the

[36:19] recessions of the past. Certainly in

[36:21] 1975 and 198182 part of the recovery was

[36:25] that the construction sector responded

[36:27] and responded dramatically to lower

[36:29] interest rates. Housing starts went from

[36:31] a million to 2 million in the 75 cycle

[36:34] and in the 8182 cycle. Uh we built a lot

[36:36] of new office space and commercial

[36:38] space. That's not going to happen this

[36:40] time. And the reason it's not going to

[36:41] happen this time is we've built tens of

[36:43] millions of square feet of office space

[36:45] and commercial space that's now sitting

[36:47] vacant. Some of it is right across the

[36:49] street in that building which is

[36:51] completely vacant. And in the building

[36:53] that we're sitting in is a magnificent

[36:54] building. Won all kinds of design

[36:56] awards. Beautiful space, very expensive.

[36:58] Uh and it's 50% vacant. In fact, the

[37:01] total vacancy rate in Boston is up

[37:03] around 20%. An astronomical number

[37:06] because there are simply too many

[37:08] buildings. There were 150,000

[37:10] construction jobs in Boston at the

[37:12] boom's peak. Today, there are 60,000.

[37:15] nearly a 100,000 jobs gone and little

[37:18] hope of getting them back to help fuel a

[37:20] recovery. Moreover, besides our labor,

[37:23] we invested our capital, that is our

[37:25] real wealth in these buildings. This

[37:28] building alone is a rehab. This is not a

[37:30] new construction job which would have

[37:31] cost three some $300 per square foot.

[37:33] This cost a lot less than that. You can

[37:35] look at the quality and how much money

[37:36] was sunk into this building.

[37:37] >> Yeah, this is this is rosewood or

[37:38] something, right?

[37:39] >> It's rosewood. Now, think if those

[37:41] dollars had been invested in plant and

[37:42] equipment instead of excess office space

[37:44] that's now not occupied. I mean, it

[37:46] would have had a much more much greater

[37:47] impact on jobs in the long run if we had

[37:50] diverted those dollars into plant and

[37:51] equipment. And we didn't do it. It came

[37:53] into real estate all over Boston, all

[37:55] across the country. The dollars were

[37:57] sunk instead into the finest marble, the

[38:00] most exquisite workmanship. Goodness

[38:02] knows how long it will take before

[38:04] buildings like this fill up with tenants

[38:06] who can pay enough to cover the cost of

[38:08] constructing them. And that's part of

[38:09] the story about why this recovery is

[38:11] slow. We are working off inventory

[38:13] that's hard to work off. I mean, when

[38:15] you have inventory of cars and so forth,

[38:18] you stop building them for a while and

[38:19] people buy them. This space, you need

[38:21] new jobs to fill this space. And we're

[38:23] not getting new jobs and the space isn't

[38:25] being filled and it's acting as a drag

[38:26] on the economy. With a glut of office

[38:29] space, rents have been plummeting pretty

[38:31] much nationwide. Now, if your building

[38:34] is getting lower rents and you still

[38:35] aren't filling it, then you probably

[38:37] aren't taking in enough revenue to meet

[38:39] your expenses, especially the huge

[38:41] interest payments on the money you

[38:43] borrowed for construction. And many

[38:45] owners have defaulted on their payments,

[38:47] forcing the banks to take over their

[38:49] properties. The banks stuck with

[38:51] unprofitable real estate are afraid to

[38:53] make new loans, further stying economic

[38:56] recovery. But the commercial real estate

[38:58] saga is only half of Professor Case's

[39:01] story. The other half is residential

[39:03] real estate for which the professor's

[39:05] case in point brought the matter

[39:07] uncomfortably close to home. In the

[39:10] Boston suburb of Marshfield, our

[39:12] producer Lorie Con and her husband

[39:14] bought their first home as the real

[39:16] estate boom was in full swing.

[39:17] >> We bought the house in 1984 for 725. And

[39:22] at that time we thought, you know, it

[39:24] was the most we could afford and we

[39:26] thought we got a pretty good deal.

[39:27] >> What did what did other people think?

[39:29] Well, our our neighbors that we met

[39:31] after we moved in, they laughed at us

[39:32] because they bought their houses for

[39:34] about 30,000 just about 5 years before

[39:36] we bought ours. They thought we were

[39:38] totally insane to pay 72,000 for this

[39:40] house.

[39:41] >> And what happened to the value of it

[39:44] after that?

[39:44] >> Uh well uh we moved out uh 4 years after

[39:48] we bought it and we sold it for 140,000.

[39:51] So, we doubled our money in four years,

[39:53] made 70,000 from an investment of

[39:55] literally about seven $7,500.

[39:59] Where else in this country could you

[40:01] essentially make almost 10 times that in

[40:03] four years? We thought we made a

[40:05] killing.

[40:06] >> So, is this a good example of what

[40:07] you're talking about?

[40:08] >> It's a perfect example. In fact, it's a

[40:09] conservative example. All up and down

[40:11] the East Coast, across California, at

[40:13] the peak, prices were rising 3% a month,

[40:15] 40% a year. Was an enormous economic

[40:18] event. created enormous amount of

[40:20] assets, billions, hundreds of billions

[40:22] of dollars worth of assets, and it

[40:23] changed behavior.

[40:24] >> For our producer, it meant a new

[40:26] $250,000 home. Cohen and her

[40:29] psychotherapist husband were worth more.

[40:31] The family could thus afford to spend

[40:32] more. They put every penny of their

[40:35] savings into the new home, thinking they

[40:37] could always borrow against the property

[40:38] when they needed the money. In fact,

[40:40] >> we thought we had $100,000 in equity.

[40:43] So, immediately we went out and bought a

[40:45] got a home equity loan for 30,000. We

[40:47] moved into the house. I got pregnant. We

[40:50] had a kid. We needed a family car. We

[40:52] took out 15,000 from our home equity

[40:54] loan. And we bought the car.

[40:56] >> So that's what you're talking about.

[40:57] This run up in asset values makes people

[41:01] spend more. Absolutely correct. I mean,

[41:03] we people spent more money. Some people

[41:05] went out and took home equity loans.

[41:07] Many people didn't, but they saved less

[41:08] and spent more.

[41:09] >> We thought the bubble could never burst.

[41:12] We'd paid 250 for it. Next year it' be

[41:13] worth 300. The year after that 350. the

[41:16] market. There was only upside, no

[41:18] downside.

[41:18] >> But you're a producer of economics and

[41:21] business pieces for the McNeel era

[41:23] NewsHour, didn't it? Don't you remember

[41:25] the things about cycles and all?

[41:26] >> Yeah, but you know, it's like it can't

[41:28] happen to us. Uh you just you you're

[41:31] caught in the speculative bubble and you

[41:33] figure it can never burst. At least not

[41:34] on you.

[41:35] >> But at the risk of working a metaphor to

[41:37] death, the very nature of bubbles is

[41:39] their mortality. Our producers house,

[41:41] for example, is now down around 200,000,

[41:44] wiping out half the savings they put up

[41:46] to buy it. As a result, the economy

[41:49] can't count on Lorie Cohen's family or

[41:51] all the millions like it to rev a

[41:53] recovery.

[41:54] >> Did it affect your spending?

[41:55] >> Absolutely. We should get a new roof.

[41:57] We're not going to get a new roof. Uh

[41:59] and uh sure, we had to sort of think

[42:02] about now how we're going to spend money

[42:03] because we don't have a cash cushion.

[42:05] >> Okay, one last stop. international

[42:07] place. The poshest development in town

[42:09] just now being finished. Almost a

[42:11] million feet of new office space that's

[42:13] about to flood the market. Some find it

[42:15] hard to see how revenues here can cover

[42:17] the cost of financing. It's buildings

[42:19] like this financed by banks, insurance

[42:22] companies, even our pension funds that

[42:24] lead Professor Case to believe real

[42:26] estate will be a continuing drag on the

[42:28] economy.

[42:29] >> So, if they can't make the interest

[42:30] payments, then the people who loan the

[42:33] money wind up owning it.

[42:34] >> And that's your pension fund and my

[42:35] pension fund. And that's why we're here.

[42:36] This is literally a building financed by

[42:39] our pension fund, TIAA. Right.

[42:41] >> That's correct.

[42:42] >> But it's only one piece of a huge

[42:44] portfolio of other real estate, bonds,

[42:46] and stuff like that. I mean, this this

[42:48] isn't going to break us, is it?

[42:49] >> It's very small potato. They have $20

[42:51] billion in mortgages, other mortgages.

[42:53] So, this is a very small piece of that.

[42:56] >> In fact, among pension funds, TIAA is

[42:58] still about as highly rated as they

[43:00] come. AAA from Standard and Poors, top

[43:03] rated by Moody's and Bet. Even the

[43:05] toughest raider, Weiss Research, gives

[43:07] them a respectable B minus from A to F

[43:09] and says they have good financial

[43:11] security. Still, losses in real estate

[43:14] could lower the fund's annual interest

[43:15] rate payout, at least a little, at least

[43:18] for a while. On the other hand, I won't

[43:20] be drawing my pension, I hope, for quite

[43:22] some time. But I'm not going to retire

[43:24] for another 17 years, I think, legally,

[43:26] and you few years longer than that. So,

[43:29] as long as we don't take out our money

[43:32] and the real estate market comes back,

[43:34] we'll be okay. That's the argument.

[43:37] That's the argument. But apparently, not

[43:39] everyone buys it. TIAA is my pension

[43:42] fund where my family puts most of its

[43:44] savings. If for some reason TIAA were to

[43:47] lose, oh, I don't know, 10% of its value

[43:49] just on paper, that might put a damper

[43:52] on our spending. By itself, my family

[43:54] isn't likely to spark a strong recovery

[43:56] anyway. But then no single factor is in

[44:00] the end. What's striking about Professor

[44:02] Caseas's focusing on real estate as a

[44:04] factor is that he seems to have

[44:06] identified a drag on the recovery a lot

[44:08] more important than some of us may have

[44:11] realized.

[44:22] Next, another in our series of

[44:24] conversations on race. It's called Can

[44:26] We All Get Along? The words spoken by

[44:29] Rodney King as he pleaded for peace

[44:31] during the riots in Los Angeles. Those

[44:33] disturbances were sparked by the acquitt

[44:36] of four white policemen accused of

[44:38] beating King. But much of the rage

[44:40] unleashed in LA was directed at Korean

[44:43] businesses. Tonight, our conversation

[44:45] moves beyond black and white to discuss

[44:48] some of the new tensions developing over

[44:50] America's fastest growing new population

[44:53] group.

[44:54] Evelyn Hudah Hart is equipped with a

[44:56] special antenna for problems like the

[44:58] ones that surfaced between Koreans and

[45:00] blacks during the Los Angeles uprising.

[45:04] She is an Asian-American born in China.

[45:07] And she is also a college professor

[45:10] specializing in the experiences of

[45:12] Asians in the Western Hemisphere,

[45:14] particularly the United States, where

[45:16] the issue has taken on new urgency as

[45:19] the Asian population has skyrocketed in

[45:22] the past three decades from 1 million to

[45:25] more than 7 million. Hudah Hart's base

[45:28] is a center for studies of ethnicity and

[45:30] race in America at the University of

[45:32] Colorado at Boulder where she is also a

[45:35] scholar in Latin American and Caribbean

[45:37] social history. Mrs. Ludart, how wide do

[45:41] you think the racial divide in America

[45:43] is today? I think race relations and

[45:46] racism are getting in some ways worse

[45:49] and yet more difficult to detect.

[45:52] Something we some of us call new racism.

[45:55] It's difficult to detect because of the

[45:57] new language, because of the more subtle

[45:59] nature, because of the hidden codes that

[46:02] we have yet to recognize.

[46:03] >> New language like what?

[46:05] >> Well, for example, the um word immigrant

[46:08] has become, at least the way some of us

[46:11] hear it, a code word for um a veiled

[46:15] kind of racism. And that is because

[46:18] immigrants to America in the last three

[46:20] decades have been for the first time in

[46:23] American history predominantly

[46:25] non-Europeans.

[46:27] Now the idea of immigrants embedded in

[46:30] American history and American

[46:31] consciousness is that of the European

[46:34] immigrant coming through Ellis Island

[46:36] helping to build America, build this

[46:39] great republic and free society we have

[46:41] and to establish that American culture

[46:44] which we say is western derived. And yet

[46:48] the last three decades has seen a huge

[46:50] influx of a new kind of immigrant. This

[46:53] time 80% of whom are from Asia, Central

[46:57] America, Latin America, the Caribbean.

[46:59] And they're not European derived

[47:01] immigrants. And I don't think America is

[47:03] quite prepared to deal with that. Um we

[47:06] see I call new nivist movements arising

[47:09] in America. Nativism meaning the

[47:11] resistance to new immigrants. That has

[47:12] always been a recurrent pattern in

[47:15] American history. So resistance to new

[47:17] immigrants. Now a good example of

[47:19] nativeism recent one is the English only

[47:22] movement

[47:23] >> because ostensively English mo English

[47:26] only says we must establish English as

[47:28] the official language which has always

[47:30] been the case but some of us feel that

[47:32] the English only movement is really

[47:34] directed at primarily Spanish speakaking

[47:37] Americans some of whom have been in this

[47:40] country for five centuries. What is the

[47:42] problem with language? because you've

[47:44] talked about the divide between Asians

[47:46] and non-Asians and you've talked about

[47:49] the use of the term oriental. Well, if

[47:52] people ask me what is the proper way to

[47:54] address a person of Asian origins, I

[47:57] would say generally um probably uh

[47:59] Asian-American is a good way. Or if you

[48:01] know specifically the person's Asian

[48:04] ethnicity, say Chinese American,

[48:06] Japanese American, that's really even

[48:08] better. But oriental is probably the

[48:11] most objectionable term because oriental

[48:13] conjures up that historical image that

[48:16] we have had to live with. Oriental means

[48:18] that we are exotic, that we are

[48:20] different, that we are mysterious and

[48:23] that we are inscrable. So that what I

[48:26] want to say about the Korean image too

[48:27] in LA is that they are regarded as

[48:30] foreigners. No matter how long Asians

[48:33] have been in this country, and some of

[48:34] us have been here four or five

[48:35] generations,

[48:37] we are still considered foreigners,

[48:39] somehow not American or even unamerican

[48:42] in some ways. And it doesn't uh take

[48:45] long for us to reflect back on the

[48:46] images of Asians in this country, which

[48:49] today um is presented in a somewhat

[48:53] positive way. But

[48:55] >> today, the the model

[48:56] >> the model minority. Well, is that as bad

[48:58] as even the image of oriental?

[49:01] >> Yes, it is just another version of

[49:04] orientalizing

[49:06] Asian-Americans because once again, it

[49:09] sets us apart from others.

[49:11] >> But you've seen all the stories about

[49:12] Asians who come to this country, don't

[49:15] speak the language, and within a very

[49:17] short time, they become the

[49:18] validictorians of their class and all of

[49:21] that. I mean, is that just feeding the

[49:23] wrong idea? I think in and of itself,

[49:28] one of the things the American public

[49:30] and the media must do is to present

[49:33] positive images of all peoples of color.

[49:36] So in that respect, it's not bad. But

[49:38] when one group is singled out for such

[49:41] inordinate attention, then we must

[49:44] question what is the motive behind that

[49:47] inordinate attention paid to any one

[49:49] group among the communities of color.

[49:52] And what we're suspecting is that there

[49:55] is an intention to set up a divide and

[49:58] conquer. Who would set that up? This

[50:00] society is big enough that I don't think

[50:03] we need a group of uh uh people sitting

[50:07] around at conference table plotting and

[50:09] planning um you know a scheme. It has

[50:13] been generated over a number of years. I

[50:16] think America became quite desperate in

[50:19] the 60s and in the 70s as and the heels

[50:22] of the civil rights movement and its

[50:24] aftermath when we saw that dismantling

[50:26] the laws that discriminated did not

[50:30] result in immediate improvement. In

[50:32] fact, the the record would show that

[50:34] things have gotten worse for many people

[50:35] of color, not better. Certainly, the

[50:38] progress that many of us expected has

[50:39] not come about. So in that desperation,

[50:43] America cast it it its net to find a

[50:47] minority group that somehow contradicts

[50:50] that dismal picture. And they thought

[50:52] they found it in the Asian-Americans.

[50:55] They are simply a model for other

[50:57] minorities to take note of, to emulate.

[51:00] And at the same time, it is used to say

[51:03] to other minorities, you can do it, and

[51:06] if you don't do it, it's only your own

[51:08] fault. You see, the American system does

[51:10] work for one group of people of color.

[51:13] Therefore, it must work for all. So,

[51:15] it's used to discipline. You see, it's

[51:17] used to to discipline other minority

[51:20] groups who somehow are not perceived as

[51:24] as having been uh as having moving ahead

[51:26] as moving ahead as they rightly should.

[51:29] Since you came here at 12 years old from

[51:31] China, how have things changed in your

[51:33] life for Asians? I remember in high

[51:36] school in Palo Alto, California, the few

[51:39] other Asian-Americans in my high school

[51:42] who were second, third generation,

[51:44] mostly Japanese Americans, talked about

[51:46] what they would do when they started

[51:48] earning money and that what they would

[51:50] do was to have plastic surgery, cosmetic

[51:52] surgery, to change their eyes and their

[51:54] nose and to pad their chest and their

[51:57] and their uh derriès because they felt

[52:00] that they were unattractive since they

[52:02] did not conform to the standards of

[52:04] beauty.

[52:05] that again um was so widespread

[52:10] and I uh even as a young child because

[52:12] of my more recent immigrant arrival did

[52:16] not have those kind of conflict that

[52:18] they experienced. Well, to the Rodney

[52:20] King question, can we all get along?

[52:23] What do we do now with all of these

[52:25] different ethnic groups with their

[52:28] different cultures with their different

[52:30] perceptions and misperceptions? Can we

[52:33] all get along?

[52:35] Well, you know, I don't think what

[52:37] really divides America is this pluralism

[52:40] that seems to some people to be at the

[52:44] root of our problem. What is different

[52:46] about America is that even as this

[52:48] country has always been ethnically,

[52:51] racially, culturally diverse. We have

[52:53] not conceded power to these people. We

[52:56] have constructed this country as a white

[52:58] country. I'm a professor at a major

[53:00] public institution.

[53:02] Out of a thousand or so full-time

[53:05] faculty members in that major public

[53:07] institution,

[53:09] there are less than 10% faculty of

[53:12] color. Fewer than 10% of faculty of

[53:14] color. And of that, I am the only one I

[53:18] believe who is a full professor, woman

[53:20] and person of color. One out of a

[53:23] thousand. Now, is that progress? I don't

[53:26] think anyone would say that's progress.

[53:28] What impact do you think that's having

[53:30] on this divide? Racism

[53:33] has always been a part of American

[53:35] history. I mean, and continues to be,

[53:38] but it is also a very dynamic phenomenon

[53:40] that takes shapes and forms that change

[53:43] according to the the context and history

[53:47] and time. Now, if I may recall the

[53:51] recent uprising in Los Angeles,

[53:54] all America knows now that the immediate

[53:56] confrontation

[53:58] in that incident was not between white

[54:01] America and black America. At least the

[54:04] immediate confrontation seems to have

[54:06] been between Asian-Americans and black

[54:10] Americans. in particular, a group of

[54:12] Asian-Americans called KoreanAmericans

[54:14] or Koreans who were the shopkeepers and

[54:18] small business owners in that same

[54:20] neighborhood in which the uprising took

[54:22] place. Now, I think that's the immediate

[54:24] level of the racial conflict.

[54:27] >> And that in itself is important to take

[54:28] note of because that reminds us that

[54:31] America is far more diverse than black

[54:33] and white. But at the same time, I think

[54:36] it also clouds the issue too because who

[54:39] are these Koreans and why were they on

[54:42] the front line of this conflict and why

[54:44] did they become apparently the blunt of

[54:47] the rage of the black community? Why

[54:49] this society has I think constructed

[54:52] itself as a white society in a white

[54:55] image meaning a European image but not

[54:58] just in a cultural or ideological sense

[55:00] is white but in the way the power

[55:02] structure or power is distributed it is

[55:05] still very much what historians call a

[55:07] white supremacist social structure. Now

[55:11] this white supremacist social structure

[55:13] has become more complex with time. So

[55:15] that those who are out front confronting

[55:18] the poor communities may not be white

[55:21] themselves. In the case of Los Angeles,

[55:23] they are the Koreans. But the Koreans

[55:26] are not responsible for having created

[55:28] that larger situation in the first place

[55:31] that relegated in such an intense way

[55:34] poor folks and primarily people of color

[55:36] in one small neighborhood and denied

[55:39] them educational and economic

[55:41] opportunities that resulted in this

[55:44] rage. Therefore, the Korean-Americans

[55:46] also cannot be expected to find the

[55:48] solutions to this problem. So I say we

[55:51] cannot focus simply on the immediate

[55:53] conflict. The solution lies

[55:56] >> the solution lies in the larger social

[55:59] structure that has yet to yield

[56:02] significant ground. Well, Evelyn Hudy

[56:05] heart. Thank you. Thank you

[56:14] >> again. The major stories of this Friday.

[56:16] New government reports gave different

[56:18] economic signals. Factory orders jumped

[56:21] 2.3% in June. Personal income remained

[56:24] unchanged and personal spending was up

[56:26] only slightly. A Thai Airways jetliner

[56:29] crashed in Nepal, 113 people were on

[56:32] board, including 11 Americans. There was

[56:35] no word on survivors. And in China, at

[56:38] least 100 people were killed when an

[56:40] airliner crashed while taking off in the

[56:42] Nanjing airport. 26 people reportedly

[56:45] survived. Good night, Charlene.

[56:47] >> Good night, Jim. That's our NewsHour for

[56:49] tonight. We'll be back on Monday. Have a

[56:51] good weekend. I'm Charlene Hunter Ga.

[56:53] Good night.

[56:54] >> Funding for the McNeel NewsHour has been

[56:56] provided by PepsiCo.

[57:10] Let's

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[57:17] That's why funding for the NewsHour is

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[57:31] >> This is PBS.