PBS NewsHour - 2008-10-02

Channel: malgent

Transcript

Language: English (original, YouTube automatic captions)

[0:10] Good evening. I'm Jim Lara. On the

[0:12] NewsHour Tonight, the news of this

[0:14] Thursday. Then the latest on the

[0:16] campaigns of Sarah Palin and Joe Biden

[0:19] as a preview to their vice presidential

[0:21] debate tonight in St. Louis. Three views

[0:24] on how well the Senate passed rescue

[0:26] plan addresses the financial crisis. an

[0:30] encore of a health unit report on

[0:32] treating a serious sleep disorder and

[0:35] the analysis of Mark Shields and David

[0:37] Brooks.

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[2:25] >> The vice presidential candidates debate

[2:27] tonight at Washington University in St.

[2:29] Louis. It will be the only faceoff

[2:31] between Democrat Joe Biden and

[2:33] Republican Sarah Palin. And it comes as

[2:36] polls show rising doubts about Palin's

[2:39] readiness to be vice president. The

[2:41] 90minute debate will be moderated by the

[2:43] NewsHour's Gwen Eiffel and will air on

[2:46] most PBS stations and all other networks

[2:49] starting at 9:00 p.m. Eastern time.

[2:51] We'll have more on this story right

[2:53] after the news summary. The presidential

[2:55] candidates returned to campaigning after

[2:57] late night votes in the Senate on the

[2:59] financial rescue plan. Republican John

[3:02] McCain headed to Denver. He insisted his

[3:05] campaign is doing fine despite falling

[3:07] in the polls. Democrat Barack Obama

[3:10] stumped in Michigan, the state with the

[3:12] highest unemployment. He charged again.

[3:14] McCain is out of touch on the economy.

[3:17] The push to pass an economic rescue plan

[3:20] shifted back to the House today. The

[3:22] $700 billion plan easily passed the

[3:24] Senate last night, 74 to25. This

[3:28] morning, President Bush met with

[3:29] business owners. He urged the House to

[3:32] act and he said a lot of people are

[3:34] watching. This issue has gone way beyond

[3:38] uh New York and Wall Street. This is an

[3:41] issue that's affecting uh hardworking

[3:44] people. They're worried about their

[3:46] savings. They're worried about their

[3:48] jobs. They're worried about the houses.

[3:52] They're worried about their small

[3:53] businesses. And the House of

[3:55] Representatives must listen to these

[3:57] voices

[3:59] and get this bill passed so we can get

[4:01] about the business of restoring

[4:02] confidence. The House vote was set for

[4:05] tomorrow. Leaders on both sides

[4:07] cautiously predicted the bill would pass

[4:09] this time after the Senate added $150

[4:12] billion in tax breaks. House Speaker

[4:15] Pelosi said Republicans and Democrats

[4:17] are working together to put together a

[4:19] majority.

[4:21] >> Members like to see the bill before they

[4:23] give you an answer. And they saw what

[4:25] happened in the Senate last night, but

[4:26] now they're getting a closer look and

[4:29] and as they review it, uh then we can go

[4:31] forward uh to see what the vote will be.

[4:34] I mean, we're not going to take a bill

[4:36] to the floor that doesn't have the

[4:37] votes. I'm optimistic that we will take

[4:39] a bill to the floor. But a number of

[4:42] lawmakers on both sides remained

[4:44] opposed. A group of conservative

[4:46] Republicans complained the Senate added

[4:48] pork barrel projects to the bill to win

[4:50] votes. One of the things that we I think

[4:53] Democrats and Republicans are in

[4:55] agreement about are things arriving at

[4:57] midnight and being dumped into bill.

[5:00] That's what we've got here and that's

[5:02] what I'm outraged about and that's why I

[5:04] hope other people who voted yes may be

[5:07] reconsidering where they are. We'll have

[5:10] more on this story later in the program.

[5:12] Wall Street was rocked again today by

[5:14] bleak economic data. Government reports

[5:17] showed claims for unemployment hit a

[5:19] 7-year high last week and factory orders

[5:22] plunged in August. The news sent the Dow

[5:24] Jones Industrial Average down 348 points

[5:28] to close below 10,483.

[5:31] The Nasdaq fell more than 92 points to

[5:34] close at 1976.

[5:36] The price of oil also plunged 4% and New

[5:40] York trading to finish just under $94 a

[5:43] barrel. Overseas markets also fared

[5:46] poorly today. Stocks were mostly down in

[5:49] European and Asian trading despite the

[5:52] vote in the US Senate. Still, the

[5:54] president of the European Commission

[5:56] praised the Senate action.

[5:58] >> It is a very good step in the direction

[6:02] in the right direction.

[6:05] We need global efforts to um inject uh

[6:10] confidence in the financial market and

[6:14] uh um United States of course have a

[6:17] major responsibility on this. The

[6:20] nations with the four largest economies

[6:23] in Europe agreed today to hold a summit

[6:25] on Saturday. The office of French

[6:28] President Sarusi said leaders from

[6:30] Britain, Italy, and Germany will gather

[6:32] in Paris. In Iraq today, suicide

[6:35] bombings in Baghdad killed at least 24

[6:38] Iraqis and injured 50 more. The two

[6:41] attacks struck outside Shiite mosques as

[6:44] worshippers ended the Muslim holy month

[6:46] of Ramadan. Last Sunday, another series

[6:49] of bombings killed 32 people in Shiite

[6:51] parts of the city. A US soldier pleaded

[6:54] guilty today in the killing of four

[6:56] Iraqi prisoners last year. The four were

[6:59] tied up, blindfolded, and shot. Their

[7:01] bodies were dumped in a Baghdad canal.

[7:04] The soldier admitted he stood guard

[7:06] while three other soldiers carried out

[7:08] the killings. He was sentenced to 8

[7:10] months in prison at a court marshal in

[7:12] Germany. He also agreed to testify

[7:15] against the other suspects. Authorities

[7:18] in California confirmed today they found

[7:20] the wreckage of Steve Faucet's airplane.

[7:22] The millionaire adventurer disappeared a

[7:25] year ago in a single engine plane.

[7:27] Search teams found the wreckage last

[7:29] night near Mammoth Lake, California in

[7:32] the rugged Sierra, Nevada mountains.

[7:34] There was no sign of human remains.

[7:37] Based on photos of the site, safety

[7:39] investigators said it was unlikely

[7:41] Faucet survived. The local sheriff said

[7:44] it appeared the plane flew into a

[7:46] mountain side.

[7:47] It appeared to me just looking at the

[7:50] pictures that it was a head-on crash

[7:52] into the side of a mountain into a rock.

[7:54] The plane moved up in an upward

[7:57] direction for 100 ft or so uh and

[8:01] disintegrated. The engine was found

[8:03] about 300 ft farther than the fuselage

[8:06] and the and the wings. On Monday, a

[8:08] hiker found ID cards belonging to Faucet

[8:11] that was about a/4 mile from where the

[8:13] wreckage was found. Faucet was declared

[8:16] dead last February. He was 63 years old.

[8:19] The federal corruption trial of Senator

[8:21] Ted Stevens was suspended today as the

[8:24] defense demanded a mistrial. The judge

[8:26] considered whether prosecutors withheld

[8:28] evidence that might help the Alaska

[8:31] Republican. Later, he rejected the

[8:33] motion and allowed the trial to

[8:34] continue. Stevens is accused of

[8:37] concealing more than a4 million dollars

[8:39] in home renovations and other gifts. And

[8:42] that's it for the news summary tonight.

[8:43] Now, the Biden Palin debate, the

[8:46] Senate's rescue version, sleep problems,

[8:49] and Shields and Brooks.

[8:58] The two vice presidential nominees and

[9:00] their role in the campaign. Judy

[9:02] Woodruff reports.

[9:04] >> The past month has been a study in

[9:06] contrast when it comes to the two vice

[9:08] presidential nominees.

[9:13] Sarah Palin has campaigned mostly with

[9:15] John McCain, drawn large enthusiastic

[9:19] crowds, and received considerable

[9:21] attention from the national news media.

[9:24] However, she has done just three

[9:26] extended television interviews. Most

[9:28] recently, she sat down with CBS Evening

[9:31] News anchor Katie Kurrick and appeared

[9:33] to struggle with some questions,

[9:36] including one about McCain's record on

[9:38] regulating financial markets. You said,

[9:41] quote, "John McCain will reform the way

[9:43] Wall Street does business other than

[9:45] supporting stricter regulations of Fanny

[9:47] May and Freddy Mack two years ago. Can

[9:50] you give us any more examples of his

[9:52] leading the charge for more oversight?"

[9:55] >> I think that the example that you just

[9:57] cited with his warnings two years ago

[9:59] about Fanny and Freddy, that that's

[10:02] paramount. That's more than a heck of a

[10:04] lot of other senators and

[10:07] representatives did for us. I'm just

[10:08] going to ask you one more time not to

[10:10] belabor the point. Specific examples in

[10:12] his 26 years of pushing for more

[10:14] regulations.

[10:15] >> I'll try to find you some and I'll bring

[10:18] them to you.

[10:19] >> Such responses have drawn criticism from

[10:21] political writers and commentators on

[10:24] both the left and the right. And a new

[10:27] poll by ABC News and the Washington Post

[10:30] shows six in 10 voters believe Palin

[10:33] lacks the experience to be an effective

[10:36] president. The few times Biden has been

[10:38] thrust into the spotlight have been for

[10:41] misstatements or gaps, like this one

[10:44] during his own interview with Kurrick in

[10:46] September.

[10:47] >> Part of what a leader does is to instill

[10:50] confidence is demonstrate that he or she

[10:52] knows what they're talking about and

[10:53] communicates to people, if you listen to

[10:55] me and follow what I'm suggesting, we

[10:57] can fix this. When the stock market

[10:59] crashed, Franklin Roosevelt got on

[11:00] television and didn't just talk about

[11:02] the, you know, the the princes of

[11:04] Greece. Roosevelt was not president when

[11:06] the market collapsed and television was

[11:09] still years away from becoming a

[11:11] mainstream medium. For the past week,

[11:14] both Palin and Biden have been preparing

[11:17] for tonight's debate. Palin at McCain's

[11:20] home in Arizona, Biden near his home in

[11:23] Delaware. But in the past day or so,

[11:26] some attention has shifted to the

[11:28] moderator, NewsHour senior correspondent

[11:31] Gwen Eiffel. Wednesday morning, blogger

[11:34] Matt Drudge linked to an article on

[11:36] WorldNet Daily, a conservative news and

[11:39] opinion website, which called into

[11:42] question Eiffel's objectivity as

[11:44] moderator, citing the release of her

[11:46] upcoming book on a new generation of

[11:49] African-American political leaders. The

[11:52] title of the yettobe completed work is

[11:55] The Breakthrough: Politics and Race in

[11:57] the Age of Obama. It includes profiles

[12:00] of Massachusetts Governor Dval Patrick,

[12:03] Newark Mayor Cy Booker, and Alabama

[12:06] Congressman Archer Davis. Some

[12:09] commentators have suggested it's a

[12:11] conflict of interest since Eiffel stands

[12:13] to gain from book sales. Yesterday,

[12:16] syndicated columnist Michelle Malcin

[12:19] wrote about Eiffel, quote, "She's so far

[12:22] in the tank for the Democrat

[12:23] presidential candidate, her oxygen

[12:26] delivery line is running out. Eiffel's

[12:29] response, quote, I've got a pretty long

[12:31] track record covering politics and news.

[12:34] So, I'm not particularly worried that

[12:36] one day blog chatter is going to destroy

[12:39] my reputation. The proof is in the

[12:42] pudding. They can watch the debate and

[12:44] make their own decisions about whether

[12:46] or not I've done my job. A number of

[12:49] journalists came to Eiffel's defense

[12:51] today, and so did former McCain aid John

[12:54] Weaver, who was quoted by the New York

[12:56] Times. Gwen Eiffel is as honorable and

[12:59] fair a journalist as there is, and all

[13:02] of us in our business know that. McCain

[13:05] himself addressed the issue in an

[13:07] appearance on Fox News this morning,

[13:10] saying, quote, "Frankly, I wish that

[13:12] they had picked a moderator that isn't

[13:14] writing a book favorable to Barack

[13:16] Obama, but I have to have confidence

[13:18] that Gwen Eiffel will treat this as a

[13:21] professional journalist as she is. In

[13:24] the end, tonight's debate will not be

[13:26] about the moderator, but about the two

[13:29] vice presidential candidates facing each

[13:31] other for the only time in this

[13:33] election.

[13:35] For a closer look at the roles that

[13:37] Sarah Palin and Joe Biden have been

[13:39] playing in the presidential campaign, we

[13:41] turn to Washington Post reporter Perry

[13:44] Bacon. He's been covering Biden on the

[13:46] campaign trail. And New York Times

[13:49] reporter Kate Xernicki. She's been on

[13:51] the trail with Palin. But let's talk

[13:53] about these nominees and Joe Biden

[13:55] first. Perry Bacon to you. How has he

[13:58] been used on uh on the trail?

[14:01] >> He's been uh targeting a lot of states.

[14:03] He's in a lot of times a lot of times in

[14:05] Ohio and Pennsylvania and Michigan.

[14:07] These are three big swing states. And

[14:09] he's to some extent become the sort of

[14:10] ambassador to what you might call like,

[14:12] you know, Hillary Clinton land in some

[14:13] ways. the people who sort of didn't vote

[14:15] for Obama in the primary, people in sort

[14:17] of rural towns and smaller towns and and

[14:20] sort of workingclass voters without

[14:22] college educations often. Biden spent a

[14:24] lot of time in those groups and talked

[14:25] about his sort of middle class

[14:27] background, talked about the fact that

[14:28] he's Catholic and try to sort of really

[14:30] connect with those audiences and maybe

[14:31] and try to sell Obama and validate him

[14:33] to those audiences as well as sort of

[14:34] criticize Senator McCain's economic

[14:36] plans for not doing enough for those

[14:38] audiences.

[14:39] >> What now? what states, what communities,

[14:41] and how are these crowds receiving him?

[14:44] >> Uh, it depends on where you are, but I

[14:46] think in Pennsylvania, he seems to be

[14:47] much more wellknown. Delaware is much

[14:49] closer, of course, to Delaware where

[14:51] he's from is much closer to

[14:52] Pennsylvania. So, he seems that people

[14:54] in Pennsylvania seem to know who he is

[14:55] and really like applaud him a lot. When

[14:57] I travel with him in Ohio and Michigan,

[14:59] is a little less when you talk to

[15:00] people, they there people at the crowds,

[15:02] they're already sort of Obama supporters

[15:03] a lot of times anyway. But people are

[15:05] less familiar with Biden. They still

[15:07] respond to him well though because he's

[15:09] he has a very fiery message and a strong

[15:11] tone in which he sort of praises Obama

[15:13] and takes on McCain.

[15:15] >> So uh so mostly a witness for for

[15:18] Senator Obama

[15:19] >> or he described himself when I talked to

[15:20] him as a sort of a validator. He said he

[15:23] described he said you know he and to

[15:24] some extent Bill and Hillary Clinton as

[15:26] they campaign as sort of validators for

[15:28] Obama. You know maybe someone who seems

[15:30] more like you was a validator for Obama

[15:32] I guess the way he sort of phrased it.

[15:34] Kate Zernicki, let's talk about Sarah

[15:36] Palin. You've been on the road with her.

[15:38] Where has she been? And and we know that

[15:40] she's mostly been with John McCain. Is

[15:42] that right?

[15:44] >> She has been unlike as Perry was saying

[15:46] where the Obama Obama and Biden are t

[15:48] targeting more of the country and sort

[15:49] of splitting the work. McCain and Palin

[15:52] have been together largely because she

[15:53] just draws these enormous crowds and

[15:55] that's really boosted his numbers at

[15:56] these big rallies. So, in places like

[15:58] Ohio where they're really fighting hard

[16:00] to win, she's killed these huge crowds

[16:02] and and uh how what role does she play

[16:05] in these events? I mean, what generally

[16:07] is her message alongside his?

[16:11] She really just backs up what he says,

[16:12] but she, you know, she manages to play a

[16:14] really effective attack dog, which is of

[16:15] course the traditional vice presidential

[16:17] role, but she manages to say it with a

[16:19] smile. She injects a little humor into

[16:21] it. She really raises sort of the the

[16:23] energy and the exuberance of the crowd.

[16:25] I mean, I was at a rally with them in

[16:27] Ohio, I guess it was last week or two

[16:29] weeks ago, and people started, it was

[16:31] almost uh it almost hurt McCain because

[16:33] people started to stream out of the

[16:34] audience when she was done speaking. A

[16:36] lot of them said, "Well, we really came

[16:37] to see Sarah." They just had this

[16:39] tremendous personal connection with her.

[16:41] Why do you think Kate Xernicki they

[16:43] decided to restrict the press access to

[16:45] her?

[16:47] >> Well, I mean, I think probably the

[16:49] evidence is in the the interviews that

[16:50] we have seen. She's really stumbled for

[16:52] answers. she's not been able to provide,

[16:54] for instance, with Katie Kirk, I believe

[16:56] it was last night, she couldn't provide

[16:57] an answer um to Supreme Court decisions

[17:00] that she disagreed with. I think they're

[17:02] very nervous that she doesn't have a lot

[17:03] of experience on the national stage. And

[17:05] they don't know what she's going to say.

[17:06] And it's not just the press really.

[17:08] She's not done a lot of fundraisers so

[17:09] far. She did one in Ohio early on and

[17:12] did not take questions from the

[17:13] audience. So, they've really tried to

[17:15] just keep her to scripted events where

[17:16] they know they can have a better handle

[17:18] on what she's saying. And Perry Bacon,

[17:20] back to you. What about Biden? How how

[17:22] often does he talk to the press?

[17:24] >> Uh Biden does a lot of interviews. I

[17:26] think his staff when they've criticized

[17:28] Pala and they've talked about I think

[17:29] he's done something in the order of 90

[17:31] interviews. He also does a lot of do a

[17:33] lot of press conferences with the

[17:34] reporters who follow him around. It

[17:35] seems to be more sort of like interviews

[17:37] on like a network show or on sort of a

[17:40] local television station where he's

[17:42] campaigning. He's done I think there's

[17:43] something like 90 interviews overall.

[17:45] He's actually talked a lot.

[17:47] >> How much is he talking about Governor

[17:50] Palin? uh almost never. I mean, he sort

[17:53] of uh avoided or talking he he's very

[17:56] early on he he made a joke about how she

[17:58] was good-looking in his words and then

[18:00] appeared in a McCain ad that sort of

[18:01] suggested the Democrats were being

[18:03] demeaning to her and pretty much after

[18:04] that he's said almost nothing about it's

[18:07] part of the Obama strategy. It's been

[18:08] Obama and and uh and Biden decided

[18:11] they're going to talk about Palin very

[18:12] little and make sure to focus on McCain

[18:14] as much as possible. So, you hear very

[18:16] very little from Biden about Palin

[18:18] >> and Kate Zernicki. What about Governor

[18:20] Palin? How much is she bringing up Joe

[18:22] Biden? We know that there was a comment

[18:24] the other day where she said she'd been

[18:25] watching him on television since she was

[18:27] in second grade.

[18:29] >> Right. Right. But that's really the only

[18:31] reference she's made to him and that was

[18:32] sort of to set the expectations high to

[18:34] they've been trying to set the

[18:35] expectations low for her for tonight so

[18:37] that anything she does is going to

[18:38] appear um like a great performance.

[18:41] They've they've tried to say that Joe

[18:42] Biden has all this experience debating

[18:45] so of course he should win and she's

[18:46] really in a uphill fight here. She talks

[18:48] about Obama a bit, but more, you know,

[18:50] our opponent, not never by name, and

[18:52] really very little about Biden.

[18:53] >> What has she been doing to to prepare?

[18:56] What have they what how much is known

[18:58] about that?

[19:00] >> Well, they were out, as you as you said

[19:01] earlier, they were in Sedona for um for

[19:03] a large part of this week. Campaign

[19:05] released very little information about

[19:07] it. They wouldn't even say who was

[19:08] playing Biden in the in the debate prep

[19:10] and the mock debates. Um they did

[19:11] release a photo of her in a statement

[19:13] saying that they had been doing debate

[19:15] prep in a relaxed setting by the by the

[19:17] river. It was sort of, you know, you can

[19:19] imagine debate spa instead of debate

[19:20] boot camp. Um but they really didn't say

[19:22] very much about what she was doing, but

[19:23] I'm sure it involved boning up on both

[19:26] foreign policy and the economy, which is

[19:27] where she's really struggled in these

[19:28] these interviews. And that's been over

[19:30] the last several days.

[19:32] >> Yeah. Yeah. Perry Bacon, what about

[19:35] Biden? He's been uh back in Delaware.

[19:38] What has he been doing to prepare? uh

[19:40] they they his staff has been sure to

[19:42] sort of look over the tapes. They don't

[19:43] know much about Palin or they didn't

[19:44] before. So they've looked over the tapes

[19:46] of her gubernatorial debate in 2006 and

[19:48] sort of talked to them about that. um

[19:50] Jennifer Granholm the Michigan the

[19:52] governor of Michigan who is also a

[19:55] younish you know female governor and

[19:57] sort of came came to Delaware to work

[19:59] with Biden because they the staff

[20:01] doesn't want to overstate that but they

[20:02] are sort of aware of the gender factor

[20:04] involved here and sort of they practice

[20:06] so they made sure Biden has talked to

[20:07] some other um female senators including

[20:09] Hillary Clinton about the debate as well

[20:11] so they're aware of that factor but he's

[20:13] you know he knows his policy views

[20:14] pretty well I think so they mainly been

[20:16] going over sort of a little you know

[20:18] sort of reviewing those and also

[20:19] thinking about tactics and trying to

[20:20] make sure that he focuses more on McCain

[20:22] and Obama than Palin.

[20:24] >> And Perry, what are they saying about

[20:26] their expectations in terms of what are

[20:28] they worried about? What are they

[20:30] confident about?

[20:31] >> Well, they're trying to play the same

[20:32] game, which is to suggest that PO is the

[20:34] world's greatest debator. They're

[20:35] talking about how I mean the thing they

[20:37] seem to be aware of is that she's good

[20:39] at sort of you know Biden himself at one

[20:41] point that Palin is very Palin's RNC

[20:44] speech at the convention a few months

[20:45] ago showed she was really good at sort

[20:47] of being punchy and having some tough

[20:49] oneliners. So they are trying to make

[20:50] sure Biden is prepared for how to deal

[20:52] with it if she comes directly at him

[20:54] because Biden is sort of admit himself

[20:56] he's he's sort of known for being

[20:57] long-winded. He sort of acknowledges if

[20:59] the debate is about who has the best

[21:00] oneliner he said I'm not going to do

[21:02] very well. But that's something they're

[21:04] sort of aware of.

[21:05] >> And Kate Kate Zernicki, what are the uh

[21:07] the McCain people saying about their

[21:10] expectations for Governor Palin and what

[21:12] they're worried about, what they're

[21:13] confident about?

[21:15] >> Well, I think what they're trying to do

[21:16] is set this up as um Sarah Palin who has

[21:20] executive experience and as Joe Sixpack

[21:22] as she's been describing herself lately

[21:23] and Joe Biden spent 30 years in the

[21:26] halls of the Senate. of, you know, he's

[21:28] he's all twisted up in this arcane

[21:30] policy detail, but she's really one of

[21:31] the people and she's going to appeal to

[21:33] people on that level and people will see

[21:35] her and make the kind of connection that

[21:36] they've been making at these big

[21:37] rallies.

[21:39] >> All right. Well, we are going to leave

[21:40] it there. Uh Kate Bernicki with the New

[21:42] York Times, Perry Bacon with the

[21:44] Washington Post. Thank you both.

[21:46] >> Thank you, Judy.

[21:54] Next tonight, does the financial rescue

[21:57] plan fix what needs to be fixed? Ray

[22:00] Suarez gets an assessment. If lawmakers

[22:03] approve the bill tomorrow, the package

[22:05] would be the largest government

[22:06] intervention in history. The government

[22:09] would be allowed to buy up to $700

[22:11] billion of bad debt in phases. Congress

[22:14] could deny Treasury's request for half

[22:16] the money. It could raise the amount of

[22:19] bank deposit insured by the FDIC from

[22:22] $100,000 a person to $250,000.

[22:26] And the government could allow the FDIC

[22:28] to temporarily borrow money as much as

[22:31] needed from the Treasury. And it could

[22:33] encourage the Treasury Secretary to

[22:36] restructure any mortgages brought by

[22:38] bought by government that may be in

[22:40] danger of foreclosure. To what extent

[22:42] does this plan help solve the problem?

[22:44] We get three perspectives. They come

[22:46] from Shaherzad Raymon who's written

[22:48] about financial crisis and advised a

[22:50] number of institutions including the

[22:52] World Bank and central banks. She's a

[22:54] professor of international finance and

[22:56] business at the George Washington

[22:57] University. John Cochran is a professor

[23:00] of finance at the University of Chicago.

[23:02] He helped organize a letter signed by

[23:04] 200 economists questioning the design of

[23:07] the Pollson plan. And Ken Rogoff is a

[23:09] former chief economist for the IMF. He's

[23:12] now a professor of public policy and

[23:14] economics at Harvard University. And

[23:16] Professor Cochran, in your view, does

[23:19] the U modified bill, the one that's

[23:22] going to head up for a vote tomorrow,

[23:25] address some of the underlying problems

[23:27] in the securities and credit market?

[23:30] >> Uh, no. I think the modified bill is in

[23:33] fact worse than the original bill. Uh

[23:35] many of the modifications are either

[23:37] counterproductive, hugely expensive, or

[23:40] a piñata full of ridiculousness.

[23:42] >> And explain that. A pinñata full of

[23:45] ridiculousness. Uh are you referring to

[23:47] the things that were added in order to

[23:48] get those extra votes?

[23:50] >> Yes. Uh for example, deep in there

[23:52] there's a subsidy for bicycle uh bicycle

[23:56] commuting. Uh but more importantly, as

[23:58] the parts that are going to be

[23:59] counterproductive are very expensive.

[24:01] Professor Raymon, uh, do you think this

[24:04] gets at the fundamental problems that

[24:06] this bill was meant to solve?

[24:08] >> Well, I think at Pinata or No Pinñata,

[24:10] uh, we are in a fullblown financial

[24:12] crisis. There's a panic out there. There

[24:15] is a crisis of confidence. We are

[24:17] hemorrhaging not only in terms of

[24:19] confidence, but capital. And we have now

[24:22] a couple of nights ago hit the belly of

[24:24] economic America, which is middle class

[24:26] wealth. Um whether it addresses all the

[24:30] technical details, no. Uh but it does

[24:33] stop the hemorrhaging and that is a

[24:35] critical aspect right now to stop the

[24:37] panic.

[24:38] >> Professor Rogoff, where do you come

[24:39] down?

[24:40] >> Well, it's a very imperfect bill, but

[24:43] there I totally agree. There's a

[24:45] wholesale panic going out there. It's a

[24:47] good old-fashioned bank run on money

[24:49] funds, on commercial paper, on

[24:52] everything. And I think if Congress says

[24:54] to the credit markets, drop dead, it

[24:57] it's just going to be chaos out there.

[24:59] So, as much as I don't like it, I think

[25:01] the bill's better than the one that we

[25:04] had on Friday. I think it sort of pulls

[25:06] back a lot some of the giveaway to the

[25:08] financial sector. And okay, I wouldn't

[25:11] have written it, but we've got to do it.

[25:14] Imperfect, you say. But what about the

[25:16] biggest part of it? the one that gets

[25:17] the most attention and that is the up to

[25:20] $700 billion of money made available to

[25:23] the Treasury Secretary to stabilize the

[25:26] markets by buying up troubled debt.

[25:30] Well, first I say the part I think is

[25:33] the best is the part they've added of

[25:35] raising the deposit insurance because

[25:37] there's a bank run going on that's

[25:40] driving a lot of the problems in credit

[25:42] markets. But I certainly agree with John

[25:45] that it's a very uh complicated

[25:48] financial engineering. They have have to

[25:51] have lots of legions of investment

[25:54] bankers figure out what these securities

[25:56] are worth. The same investment bankers

[25:58] who were when they were in the private

[26:00] sector couldn't figure out what the

[26:01] securities are worth. It's a mess. But I

[26:04] think we have to move forward. There is

[26:06] some takeback so that the final cost is

[26:09] not as great as it would have been.

[26:10] Professor Cochran, you hear your two

[26:12] colleagues talking about having to do

[26:14] something to avoid a full-blown panic.

[26:17] What would you suggest instead?

[26:20] >> Well, uh, there's lots of things we can

[26:21] do instead, but neither of them said how

[26:24] this is going to work. Every story I've

[26:26] heard involves at some point magic steps

[26:28] in. Um, the argument so far was, well,

[26:32] we have to do something to restore

[26:33] confidence. That's just magic. uh if

[26:36] this bill is going to pass, let's hear

[26:38] how in fact it is going to restore that

[26:40] confidence. There's plenty we can do

[26:42] instead. Um basically banks need more

[26:46] capital and before that can happen, the

[26:48] old capital, stockholders and some

[26:49] long-term debt are going to have to lose

[26:51] a lot of money and they're crying that

[26:53] they don't want to do that. Restoration

[26:55] of confidence is magic.

[26:58] >> And no, but it is absolutely critical. a

[26:59] car accident victim and bleeding, we

[27:02] have to stop the hemorrhaging first and

[27:03] then debate about how to stitch him up,

[27:05] what bandage to use, which hospital to

[27:07] take him and which specialized doctor to

[27:09] use. And I think that there is going to

[27:12] be some very technical detailed

[27:14] discussions following this. But if the

[27:16] panic is not stopped, middle America

[27:18] gets hit again on Friday if there is a

[27:20] no vote.

[27:21] >> Well, reassurance is hard to quantify on

[27:24] a balance sheet. What does confidence do

[27:27] that stops that hemorrhaging? that stops

[27:29] that pan.

[27:30] >> I I think as the previous speaker said,

[27:31] the $250,000

[27:33] limit now, FDIC has eased fears of banks

[27:38] and their customers that perhaps we are

[27:40] covered a little bit more. And so that

[27:41] builds up confidence. Uh the the amount

[27:44] could be 600 million, 600 billion or 900

[27:47] billion. It doesn't matter. It's

[27:48] restoring the confidence that somebody's

[27:50] in there, the federal government to bail

[27:52] these companies out. rightly or wrongly,

[27:55] >> Professor Conquer, what about the raise

[27:56] in the FDIC covered amount in uh in

[28:00] accounts? Do you favor that?

[28:02] >> I'm I'm all for it. Yes, I'm all for

[28:03] that. And your viewers need to

[28:04] understand uh there is no need for

[28:07] anyone to run to the bank and empty

[28:09] their bank insured bank accounts. Uh

[28:11] ordinary depositors are not at risk

[28:13] here. And that that's a very good part

[28:15] of this bill. The one good part has this

[28:19] well a tepid praise there, Ken Rogoff.

[28:23] Well, I mean, I certainly don't think

[28:25] this is the end. This is a step. It is

[28:27] not going to work. It is not going to be

[28:30] enough. Eventually, we have to do

[28:32] something like Professor Cochran

[28:33] suggests of injecting capital into the

[28:36] banks in return for senior

[28:39] equity, putting the taxpayer first. We

[28:42] got to close a lot of the banking

[28:43] system. The banking system still

[28:45] bloated. They have to get auditors in

[28:47] there to choose which banks close. It's

[28:49] going to take much firmer intervention.

[28:51] There are other plans. There are some

[28:53] involving helping the homeowners

[28:54] directly. This is not the last word. The

[28:57] final cost is actually going to be much

[28:59] greater than what's projected from this

[29:01] bill. But we're in paralysis here. The

[29:04] the uh spreads are exploding. Uh

[29:06] companies are having trouble meeting

[29:08] their payrolls if we don't get the

[29:10] credit markets moving. You can't just,

[29:12] you know, talk about theoretically

[29:13] what's the best thing to do. You you

[29:15] have to stop the bleeding. The CBO,

[29:17] incidentally, the Congressional Budget

[29:19] Office has scored this as saying it may

[29:21] cost significantly less than the 700

[29:23] billion. You're saying it's going to

[29:25] cost more. Oh, no. I think this will

[29:27] cost a lot less than 700 billion, but it

[29:30] won't do the job. This is going to cost

[29:32] maybe a couple hundred billion. We might

[29:34] even make a couple hundred billion. But

[29:35] the trouble is, I mean, it's complicated

[29:37] piece of financial engineering, but it

[29:39] just doesn't do enough. The banks don't

[29:41] have enough capital. We have to close

[29:44] the banks that are insolvent. We have to

[29:46] inject capital into the banks that uh

[29:49] are going to be strong in return for

[29:52] getting stock equity something for the

[29:56] taxpayer get some of their money back.

[29:58] But there's there's important point.

[30:00] You've got to close the insolvent bank.

[30:02] You can't just re money on everyone.

[30:04] That was really the problem with the

[30:06] first bill and there's problems in this

[30:08] bill that it could be some of the weaker

[30:09] banks take the money. But this is a

[30:11] step. This is a process. Every big

[30:14] financial bailout works this way. It's

[30:16] very hard to hit it, you know, in one

[30:18] shot. We've got to show we're moving. I

[30:21] It's very painful, but the credit market

[30:24] situation is simply once in a century

[30:26] right now. Professor Conquer, before we

[30:28] move on to what happens down the road, I

[30:30] want to get one more shot at what it is

[30:33] that won't work in your view about this.

[30:35] We know that you think it's a bad idea.

[30:37] We know that you're very critical of the

[30:39] solution. Uh but why wouldn't the

[30:42] injection of this kind of capital into

[30:45] the system through shoring up some of

[30:47] this debt work? Well, the plan is to try

[30:51] to raise the value of all mortgages in

[30:54] the country so that the assets on banks

[30:56] books uh look larger than are larger

[30:59] than they are right now. Um there's some

[31:02] magic about liquidity, but fundamentally

[31:03] you have to buy a lot of mortgages to do

[31:05] that. And the Senate added that at the

[31:07] same time we're not going to make people

[31:09] pay back their mortgages. That's going

[31:11] to that may be the right thing to do,

[31:12] but that's going to add tremendously to

[31:14] the cost along with the Senate said the

[31:16] purchases now have to guarantee the

[31:19] level of retirement savings in 403b

[31:21] plans. Cost is going to really explode

[31:23] here. Skepticism that raising the value

[31:27] of everyone's mortgage is something that

[31:29] the government can really do.

[31:30] >> Uh you know, we we I don't know. Uh I

[31:33] think that uh hopefully if they can do

[31:35] it that'll be great. But I think the

[31:37] $700 billion cost uh no one can predict

[31:40] if it's going to be a little bit less a

[31:42] little bit more it has to get done. Uh

[31:45] and and the devil is in the details

[31:46] here. But I think the Treasury Secretary

[31:49] uh has enough confidence in in in

[31:52] professionals around him that these will

[31:54] be managed clearly not by the Treasury

[31:56] itself but there will be professional

[31:58] help in managing these assets and then

[32:00] deciding what to do with them down the

[32:01] road. And this is a long process.

[32:03] >> Professor Raymon talked about

[32:05] stabilizing the patient in effect and

[32:07] then perhaps making some fixes down the

[32:10] road. What would you like to see done

[32:12] after this first wave of measures is

[32:16] taken to either refine or repair this

[32:19] bill?

[32:21] >> Well, I mean, we come back to the point

[32:23] that a lot of banks have to get closed

[32:25] in order to really let the government

[32:27] move in some way to help the other

[32:30] banks. We have to allow banks to to

[32:32] fail. We need some tough love in the

[32:34] banking system to get through this. And

[32:37] there's no real way around that. There

[32:38] are various ways. Injecting capital is

[32:40] the cheapest. We could go at the outside

[32:43] and help the homeowners directly. That

[32:45] would be a lot more uh expensive. There

[32:47] just isn't a pretty way to do this. But

[32:49] understand this is simply an epic crisis

[32:53] and the damage this will cause. We're in

[32:55] a recession. There's really no bottom to

[32:58] this unless we stop this. You can't just

[33:01] say, "Well, the market will sort it out.

[33:03] The government's deeply intervened in

[33:05] this market already." And you can't just

[33:07] back off and say it'll work out. They've

[33:09] done a We've done a good job of having a

[33:11] lot of banks closed. Washington Mutual's

[33:13] gone. Wakovia is gone. There no more

[33:16] investment banks. I mean, a lot of

[33:18] actions happen. This has not been a case

[33:20] of soft pedaling like Japan where we

[33:22] hold up the whole system. We've been

[33:24] tough, but I mean, we have to step in at

[33:26] this point and and and really stop this

[33:29] full-blown financial panic. It's not

[33:31] just the insured accounts. It's money

[33:33] funds. It's commercial paper. It's big

[33:36] institutions. They're all pouring their

[33:38] money into treasuries and clearing out

[33:40] of everything. And somebody has to put a

[33:43] stop. Professor Conchink, is this uh

[33:45] something that can be repaired down the

[33:47] road? If can your objections to it be

[33:51] addressed down the road? um well this

[33:54] plan I think will end up just doing

[33:55] nothing and uh wasting a lot of money

[33:58] and then down the road we'll be doing

[33:59] exactly the kind of things that Ken was

[34:01] talking about um namely letting banks

[34:04] close and I I would remind you the

[34:07] important thing is not to keep

[34:08] individual banks alive the one thing

[34:10] that counts is that the banking system

[34:12] can continue to make loans so if one

[34:14] bank goes under so long as there's

[34:16] another bank around that can make loans

[34:18] we'll be okay

[34:19] >> and you suggested at the outset that

[34:22] this is just the holding measure. What's

[34:24] the top thing that you'd like to see

[34:25] fixed in this after it gets the

[34:28] stability that you're looking for first?

[34:30] >> I think assessing out the assets, which

[34:32] assets to actually acquire because you

[34:34] know banks can slide in some pretty

[34:36] nasty assets that could you can do

[34:38] nothing with. And so I think that would

[34:40] be a very critical step. Which assets to

[34:42] buy, how long to hold them, and that

[34:44] does require some professional help uh

[34:46] in terms of intervening and and managing

[34:48] these assets. I think that um if we do

[34:52] nothing uh then we have a much more

[34:54] serious storm down the road because of

[34:56] middle America.

[34:57] >> Professors Cochran, Raymon, and Rogoff,

[34:59] thank you all.

[35:00] >> Thank you.

[35:00] >> Thank you. Thank you very much.

[35:09] >> Now, an encore look at a story about

[35:12] treating a sleep problem. Betty Anne

[35:14] Bowser reports for our health unit, a

[35:16] partnership with the Robert Wood Johnson

[35:19] Foundation.

[35:21] >> Nate McGopagel is desperate for a good

[35:23] night's sleep. So the 31-year-old

[35:26] scientist has come to the sleep

[35:28] disorders clinic at John's Hopkins

[35:30] University Hospital in Baltimore. There

[35:33] he was recently diagnosed with

[35:35] obstructive sleep apnea. As shown on the

[35:39] left in this diagram, McGopagle

[35:41] literally stops breathing as he sleeps

[35:43] through the night because his airway

[35:45] collapses, cutting off oxygen to his

[35:48] brain. I've been diagnosed with

[35:50] depression last year. I'm on I'm

[35:52] currently on medication for that. Um,

[35:54] also been diagnosed with uh high blood

[35:56] pressure. I'd be driving in the morning

[35:59] just like after breakfast and I'd be I'd

[36:01] fall asleep at the wheel at the wheel

[36:03] and that's not good.

[36:06] Sleep apnea is one of the most massively

[36:08] underdiagnosed conditions in the US

[36:10] today. The National Institutes of Health

[36:14] estimate 12 to 18 million Americans have

[36:17] it and think that onethird of the entire

[36:20] population could be suffering from the

[36:22] condition or some other kind of sleep

[36:25] disorder.

[36:26] And recent studies show people with

[36:28] untreated sleep apnea may be flirting

[36:31] with death. Michael Twar heads the

[36:34] National Center on Sleep Disorders

[36:36] research in Bethesda, Maryland.

[36:39] >> Having untreated sleep disordered

[36:40] breathing is associated with a two-fold

[36:42] increased risk of stroke, an increased

[36:44] risk of heart failure, um a doubling of

[36:48] the risk of of diabetes in certain

[36:49] categories of patients. A new study

[36:52] published in the August issue of the

[36:53] journal Sleep, one of the most

[36:55] comprehensive ever undertaken, found

[36:58] patients with obstructive sleep apnea,

[37:00] were three times more likely to die from

[37:03] any cause than those with normal

[37:05] breathing. The study was done at the

[37:07] University of Wisconsin on 1522 men and

[37:11] women over an 18-year period. To

[37:14] accurately diagnose obstructive sleep

[37:16] apnnea, patients like Megopical had to

[37:19] undergo a sleep study called nocturnal

[37:23] polysnography.

[37:25] >> Right eye.

[37:26] >> Meopical was hooked up to a series of

[37:28] sensors that monitored his heart, lungs,

[37:31] brain activity.

[37:32] >> This one goes back here.

[37:34] >> Breathing patterns, arm and leg

[37:36] movements, and blood oxygen levels.

[37:38] >> Okay, we can move to the bed now. And

[37:40] like 70% of patients who come to Dr.

[37:43] Nancy Kalop at John's Hopkins, McGople

[37:46] came for treatment because his wife

[37:48] couldn't take his snoring anymore. I

[37:51] think the main reason that many people

[37:53] go undiagnosis because the person that

[37:55] has sleep apnea really has no awareness

[37:58] of the sleep disorder itself. All they

[38:00] know is that their sleep is not

[38:03] restorative. So they wake up in the

[38:05] morning tired and unless they have a bed

[38:07] partner or someone that observes them

[38:10] sleeping, they may never know they have

[38:12] the disorder.

[38:12] >> So it looks like

[38:14] >> that's why specialists like Dr. Kop say

[38:17] 90% of people with obstructive sleep

[38:19] apnea go undiagnosed.

[38:22] And what makes that most disturbing is

[38:24] the growing evidence linking the

[38:26] condition to mortality. Apnea means no

[38:29] air and obstructive means that the

[38:31] airway is actually being obstructed and

[38:33] eventually the uh the brain gets a

[38:36] signal like hey we're not getting enough

[38:38] air and it makes a person wake up

[38:40] >> but the patient isn't aware he's awake.

[38:43] So people can wake up and go back to

[38:44] sleep over and over again all night

[38:46] >> hundreds of times.

[38:48] >> Hundreds of times.

[38:48] >> Hundreds of times. We have people that

[38:50] have, you know, 500 episodes in a night

[38:54] >> and they do are they aware that they

[38:55] have 500 episodes in a night?

[38:57] >> They just know that they don't sleep

[38:59] well.

[39:01] >> A patient with obstructive sleep apnea

[39:04] is never able to get to the deep stages

[39:06] of slumber such as rapid eye movement or

[39:09] REM sleep, which the body needs to

[39:11] replenish itself.

[39:13] >> They smell too. 63-year-old

[39:16] telecommunications manager Dick Pal was

[39:19] diagnosed with obstructive sleep apnea

[39:22] three years ago.

[39:23] >> I would sleep but wake exhausted. That

[39:26] was bad enough. But then I discovered

[39:28] that I really wasn't sleeping at night.

[39:31] I'd wake up, my ribs would be sore

[39:33] because my wife had been punching me to

[39:36] wake me up. Um because I would be

[39:39] gasping for breath. One night I woke up

[39:42] because I just punched my wife and that

[39:45] really tipped that really tipped the

[39:46] scales because

[39:47] >> You mean you literally punched her in

[39:49] the face?

[39:50] >> Just like that. Yeah. I'm glad she

[39:52] didn't kill me, but that made it clear

[39:54] to both of us that there was something

[39:56] going on.

[39:58] >> Studies now show people in middle age

[40:00] are more likely to develop sleep apnea.

[40:03] Another primary risk factor is excessive

[40:06] weight gain. The accumulation of fat on

[40:09] the sides of the upper airway cause it

[40:11] to become narrow and predisposed to

[40:13] closure.

[40:16] But many patients with sleep apnea are

[40:18] not overweight.

[40:20] >> Okay. Here.

[40:21] >> Journalist Ramsay Flynn is a fit

[40:23] 51-year-old man, but he's been diagnosed

[40:26] with obstructive sleep apnea. And

[40:29] recently he came back to the sleep

[40:31] clinic at John's Hopkins to be fitted

[40:33] with a continuous positive airway

[40:35] pressure machine known as a CPAP. And he

[40:39] didn't like it one bit.

[40:40] >> There's no reading in bed.

[40:43] >> CPAP machines are considered the gold

[40:46] standard for treating obstructive sleep

[40:48] apnea, but only about 25% of patients

[40:52] are able to get used to them. And even

[40:55] though monitoring showed Flynn did sleep

[40:57] well about 6 hours with the mask

[41:01] in the morning, he was convinced it

[41:03] hadn't been effective.

[41:05] >> I did not perceive that I was sleeping

[41:07] better. It was I did not experience the

[41:10] sensation that this is this is a more

[41:13] this is going to help you. So to me,

[41:16] it's still jury out. You think it's

[41:18] because you're still feeling

[41:19] apprehension about the mask or

[41:22] >> I certainly didn't like the mask, you

[41:24] know. Um it was it's a tough thing to

[41:26] get used to. I just don't like the idea

[41:28] of taking a fancy apparatus and hooking

[41:31] it up every night and having another

[41:34] thing that where I need I need to use to

[41:36] maintain health. Um that's that's what

[41:40] that's my that's what I don't like about

[41:43] the idea of the mask. Across the hall,

[41:45] Nate McGopel was also trying his first

[41:48] night on the CPAP machine. He was

[41:51] extremely eager to have it work. He

[41:54] seemed to be having difficulty.

[41:56] >> Yet, in spite of Maggapicole's positive

[41:58] attitude, he had trouble.

[42:00] >> In the beginning, it was a little tough.

[42:02] The the the the air was pushing um

[42:07] against my expiration, so it was like

[42:10] breathing under water, but I got used to

[42:12] it after a while. Good morning.

[42:14] >> And McGople is determined. It's been

[42:17] years since his wife has been able to

[42:19] sleep through the entire night with him

[42:21] because of his snoring.

[42:23] >> There was a reward this morning that,

[42:25] you know, I I was able to get some sleep

[42:27] and and dream.

[42:29] >> How do you feel right now?

[42:31] >> Awake.

[42:33] >> How do you normally feel when you get

[42:34] up?

[42:35] >> Craggy.

[42:36] So, there's a those are much different.

[42:39] Dick Powell thinks most people can get

[42:41] used to this TPAP machine in time. He's

[42:45] been using his for three years.

[42:47] >> My blood pressure has dropped like a

[42:48] stone. Um I hard, you know, my doctor is

[42:51] thinking maybe I don't even need the

[42:52] medication anymore, which is really good

[42:54] because it means my heart is healthier.

[42:56] I'm totally rested. I wake refreshed,

[42:58] energized. I can face anything the day

[43:01] can throw at me. It's just an absolutely

[43:04] miraculous change. Researchers are

[43:07] hoping as studies continue to link

[43:09] obstructive sleep apnea to illness and

[43:12] mortality, more people will realize that

[43:15] when someone sounds like this,

[43:19] it's not just annoying. It may be a cry

[43:22] for help.

[43:31] And finally tonight, some special

[43:33] analysis by Shields and Brooks,

[43:35] syndicated columnist Mark Shields, New

[43:37] York Times columnist David Brooks.

[43:39] First, the Senate vote, Mark. Well, on

[43:41] the financial plan. What happened? Where

[43:42] did those 74 votes suddenly come from?

[43:44] >> Well, Jim, I was up there covering it

[43:47] and I have to say, uh, I don't know the

[43:50] merits of this. I know two things. It

[43:53] was a tough vote to cast this close to

[43:55] an election. You saw that in the house

[43:56] earlier in the week where a lot of

[43:58] people did a Dixie, they went south. Uh

[44:01] you're asking uh people to inconvenience

[44:04] themselves, put themselves at risk. It

[44:06] was enormously unpopular. There was a

[44:07] great populist radio uh organized

[44:10] uprising against it. And uh I I just,

[44:13] you know, as a citizen uh taking off my

[44:16] journalist hat, I felt good watching

[44:18] people quite honestly like John Cunu of

[44:20] New Hampshire was in a tough race for

[44:22] re-election, probably trailing at this

[44:23] point. Jean Shaheen, the Democratic

[44:26] former Democratic governor, and he voted

[44:28] for it. I mean, it would have been easy

[44:29] for him to do it, but I I think there

[44:31] was a acknowledgement. Our inspector

[44:33] said to me, he said,

[44:34] >> Senator from Pennsylvania,

[44:36] Republican who said to me, uh, he said,

[44:38] "Look, we were goated by the House

[44:40] action and 778 points on the Dow Jones."

[44:44] I mean, that that did it.

[44:46] >> Did you think that was it?

[44:47] >> Well, they also added some sweeteners.

[44:49] $150 billion. It used to be $150 billion

[44:51] was like a whole bill. Now it's just a

[44:53] little sweetener off on the side. Uh but

[44:55] but I I agree with Mark. The senate of

[44:57] the the culture of the Senate is is

[44:58] different than the culture of the House.

[45:00] There's less of the populist uh either

[45:02] on the left or the right in the Senate.

[45:04] And listen, you're a senator or even a

[45:06] House member. You know a little about

[45:08] Wall Street, but you don't know a lot.

[45:09] You don't really understand. But you

[45:11] look at the array of expertise that says

[45:14] the same thing. This is not a great

[45:15] bill, but we have to do it. What the two

[45:17] economists here said just now on the

[45:19] program, and you say, "Okay, I trust

[45:21] them. we got to do it. To me, the

[45:23] amazing thing is you have so many House

[45:24] members who say, I may not understand

[45:26] this and all of expert opinion may be on

[45:28] one side saying we got to do it, but I

[45:30] still say no. I mean, that's sort of

[45:31] arrogant and senators have a tendency to

[45:33] be arrogant, but not that arrogant.

[45:35] >> So, what's going to happen with the

[45:36] House now? Well, I don't think twice in

[45:38] the same week the House leadership is

[45:41] going to bring up the bill if they don't

[45:42] have Pelosi said no way we're going to

[45:44] bring it up.

[45:46] >> No, I mean, I think that was that was

[45:47] stunning for all involved. Um, I think

[45:50] they I think they will pass it on Friday

[45:52] and uh I think that uh that'll do the

[45:55] Congress's work for the year and they'll

[45:57] go home and campaign where they've

[45:59] always wanted to be.

[46:00] >> How is this uh this whole financial

[46:02] rescue thing affecting the presidential

[46:04] campaign now and David?

[46:06] >> Well, I I think it's actually been

[46:07] surprisingly uh ineffective in affecting

[46:10] them personally because both of them

[46:12] have been basically saying the same

[46:13] thing and both of them have been pretty

[46:15] responsible. there would have been a

[46:16] great temptation especially for John

[46:17] McCain to come out against this. It was

[46:19] the temporarily popular thing to do but

[46:21] he resisted the demagogic urge I think

[46:23] so in terms of their policy it's had a

[46:25] limited effect but what it has done is

[46:27] has shifted the focus of attention

[46:29] shifted the focus of the attention to

[46:31] two things first the economy and second

[46:33] to the idea that Washington has really

[46:35] screwed up and so those two things even

[46:38] though Barack Obama has not been far up

[46:39] front on this he has benefit benefited

[46:42] from that shift of attention and all you

[46:43] have to do is look at the polls in the

[46:45] last week and there has been a strong

[46:47] current for Obama I'm really I expect

[46:49] there to be a switch to Obama at some

[46:51] point in this month, but that it's

[46:53] happening so early and he's now maybe

[46:54] got a six-point lead that take all the

[46:56] polls. I'm surprised it's happening this

[46:58] early and it has to be because of this

[46:59] crisis.

[47:00] >> I think it I think Jim that it's hurt

[47:02] John McCain in this sense. The doubts

[47:04] about Barack Obama that people have

[47:06] asked all throughout this campaign is am

[47:08] I safe with him? Uh my children, my

[47:11] family safe with him as a

[47:12] commander-in-chief. Uh are his values my

[47:15] values where he comes from? I mean, he's

[47:17] not from Abalene, Kansas or Hope,

[47:19] Arkansas, Hyannisport. I mean, you know,

[47:22] this is Hawaii and Indonesia. And I

[47:24] think um what what John McCain did last

[47:27] week with his material, if not erratic

[47:29] behavior and changing positions and

[47:31] intervening, not intervening, saying he

[47:33] wouldn't do anything until he was going

[47:35] to deliver votes. And the entire Arizona

[47:37] Republican delegation, all of whom are

[47:39] supporting John McCain, every one of

[47:41] them voted against it. Um, I think what

[47:43] he did was he he introduced flappility

[47:46] into his public personality and Barack

[47:48] Obama by simply being sort of cool and

[47:51] diffident and uh unflapable benefited

[47:55] from it. And so all of a sudden John

[47:57] McCain looked a little bit more risky

[47:59] last week than he had before. And I

[48:02] think I think in that sense it's hurt.

[48:03] >> I think he also looked a little more

[48:04] solitary. McCain was alone going to

[48:06] Washington, going here, going there.

[48:08] Obama the smart thing he did right away

[48:10] he had a press conference surrounded by

[48:12] economic expertise he had Bob Rubin

[48:14] there he had Larry Summers there he had

[48:15] Jean Sperling Paul Vulkar he's spoken to

[48:18] Lauren Buffett Laura Tyson people

[48:21] basically if you pay attention to this

[48:22] you trust those people even if you're

[48:24] not sure who this Obama guy is so he had

[48:26] a team and for all the cultike status

[48:28] around Obama this week and I think in

[48:30] the last couple weeks he seemed more

[48:31] like a guy representing a group and a

[48:33] movement who you basically have some

[48:35] confidence in it's not quite clear has

[48:38] some

[48:38] domestic policy advisers Douglas whole

[48:40] team can but he hasn't projected that

[48:42] same thing sort of I've got a group of

[48:43] people we're going to handle this

[48:44] >> all right tonight the vice presidential

[48:46] debate what's what's at stake

[48:49] >> well what's at stake for each of the

[48:50] individuals unless possibility that one

[48:53] of them becomes president one of the

[48:54] three vice presidents has become

[48:56] president history um is that this is

[48:58] going to be the impression they leave

[49:00] with the American people uh it's going

[49:02] to be this debate tonight and uh if John

[49:04] McCain does lose I'm not by any chance

[49:07] ready to write him off at this point. Uh

[49:09] Sarah Palin's hopes, expectations, which

[49:11] were pretty strong maybe four weeks ago

[49:13] being the leader of the conservative

[49:15] movement are very much at risk. Uh I

[49:18] think going into tonight, uh what's

[49:20] happened, Jim, is that Sarah Palin has

[49:22] had a bad four weeks. And uh it's it's

[49:26] people like her. Uh they think she's

[49:28] natural and authentic and real. They

[49:30] they find her appealing. Um but uh the

[49:33] problem is that of qualification. uh and

[49:36] uh we've gone from a majority in in uh

[49:40] in Andy uh Kohhat's pup pole of thinking

[49:43] she was qualified. Now now we're down to

[49:45] a majority a solid majority who don't

[49:47] think she's qualified. So I I think

[49:49] she's she's got a lot at stake tonight.

[49:51] Joe Biden, by contrast, uh no smiles, no

[49:54] smirk, uh no dimminionives. Uh, I mean,

[49:57] he Joe's got to make up his mind that

[49:59] what he wants voters to come out of this

[50:01] debate with tonight is Joe Biden's a

[50:04] good guy and Barack Obama would be a

[50:06] good president, not Joe Biden's the

[50:08] smartest guy in the room. I mean, and

[50:10] that's I think the temptation. It's

[50:12] Sarah Palin night. There's Sarah Palin

[50:13] speaking and then you can go to the

[50:15] fridge and get a beer. Uh, if she does

[50:17] well, it'll be fine for the McCain

[50:18] campaign, but there's probably

[50:20] relatively little upside. There is a

[50:22] downside. If she speaks uh tonight the

[50:24] way she spoke to Katie Kurrick, there'll

[50:27] just be a collapse for McCain. It'll be

[50:29] just terrible news. So, she's got to

[50:30] show a she can speak in paragraphs, b

[50:33] she can speak with some authority, and c

[50:35] she can be herself. They're trying to

[50:36] turn her into the wonk of the century,

[50:39] and she's never going to be that. But if

[50:41] she can speak as herself, just as a

[50:42] person, uh she'll have some authority

[50:44] because it'll be genuine. But she has

[50:46] been over prepped and overprepared in

[50:47] the last couple weeks. and she's

[50:49] hopefully for her sake going to break

[50:51] out of that and just be herself. But uh

[50:53] there's real danger here I think and

[50:55] Republicans are going to look at this

[50:56] campaign at this debate hands over their

[50:58] eyes nervous.

[51:00] >> But you think the whole shoot match is

[51:02] at stake not just Sarah Palin's future

[51:05] whether

[51:06] >> she has a leader of the Republican

[51:09] right?

[51:09] >> Most vice presidential debates you get

[51:11] two professional politicians. They know

[51:12] how to dodge questions. They know how to

[51:13] answer questions. With Sarah Palin

[51:15] you're not quite sure what you get.

[51:17] She's got two kinds of inexperience.

[51:18] One, I sort of find endearing. She

[51:20] doesn't know how to dodge a question.

[51:21] She's not a very good bluffer. You could

[51:23] ask most politicians about quantum

[51:24] mechanics and they'll fill you with a

[51:26] paragraph even though they don't know

[51:27] what they're talking about. But she's

[51:28] got the bad kind of inexperience, which

[51:29] is there are some policy areas of

[51:31] expertise she doesn't seem to know. And

[51:33] that's when you get into the dark hole.

[51:35] And so, you know, will we fall into that

[51:38] hole tonight? That's the question.

[51:40] >> Yeah. Yeah. The uh the issue of

[51:43] >> the West Coast leader in rugs. Why would

[51:46] a liberal Democrat like me vote for

[51:48] Gordon Smith? Because I've seen Gordon

[51:50] stand by his principles many times

[51:53] against his own party, supporting

[51:55] funding for women's health clinics and

[51:57] gay rights, opposing oil drilling in

[52:00] Alaska, and so important to me, he was

[52:03] one of the first Republicans to break

[52:05] with George Bush and his party to end

[52:07] this awful war. His integrity and

[52:10] honesty are good for Oregon. I'm Gordon

[52:13] Smith and I approve this ad.

[52:16] >> Where do you go for beautiful,

[52:17] affordable fall fashion? The J C Penney

[52:19] grand opening sale. Shop early with

[52:21] StoreBuster Saturday 8:00 a.m. to 1:00

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[52:46] >> You know, it's getting hard to believe

[52:48] in anything anymore. Religion, for

[52:50] example, can seem so arbitrary at times,

[52:52] even mythological. Science, on the other

[52:54] hand, is pure empiricism, and by virtue

[52:57] of its method, it defies metaphysics. I

[52:59] don't think I'd believe in anything at

[53:01] all if it weren't for Steve Dunn and the

[53:03] Circular File.

[53:05] >> Fabulous.

[53:06] >> Oh, boy. Where's Rod tonight? He me he

[53:08] memorized that.

[53:09] >> In tonight's Circular File, remember

[53:10] that story we told you about last night

[53:11] about a man who used his cigarette

[53:13] lighter to shine some light while he was

[53:14] sucking some gasoline? That didn't go

[53:16] too well for him. Well, tonight we go to

[53:17] Rhode Island. That's where police were

[53:19] cruising down the street and found a car

[53:21] smoking in the street. Turns out a guy

[53:23] had a bunch of fireworks in his car and

[53:26] lit a cigarette.

[53:28] Witnesses told police they saw somebody

[53:29] tossing fireworks out shortly before

[53:31] police arrived. Drivers charged with

[53:33] possessing illegal fireworks. I went to

[53:36] college in that great state.

[53:39] >> Maybe the guy from last time, the guy

[53:40] from tonight should get together.

[53:41] >> They probably do know each other.

[53:42] >> We do know each other.

[53:43] >> The same person actually.

[53:45] >> See you tomorrow, folks.

[53:56] >> Fisher Communications.

[53:59] What's happening with Wall Street is

[54:00] really scaring me. I'm extremely worried

[54:03] about it. It really scares the daylights

[54:05] out of me.

[54:06] >> Gordon Smith wanted to privatize social

[54:08] security.

[54:08] >> Gordon Smith wanted to privatize my

[54:11] social security.

[54:12] >> Boy, have a defeat gotten this way.

[54:15] >> I would be on very, very insecure ground

[54:17] as far as my retirement's concerned.

[54:19] >> If Gordon Smith and George Bush had

[54:20] gotten their own way, we'd be in hot

[54:22] water.

[54:23] >> The Democratic Senatorial Campaign

[54:25] Committee is responsible for the content

[54:27] of this advertising.

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[56:15] The Walmart prescription drug program

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[56:29] >> The US Chamber of Commerce is

[56:30] responsible for the content of this

[56:32] advertising. Healthc care is vital.

[56:34] That's why Gordon Smith voted to ensure

[56:37] Oregon seniors have better access to

[56:39] health care and affordable

[56:40] prescriptions. Smith supported funding

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[56:45] scientific research so Oregon families

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[56:49] Smith supports doctors and patients

[56:52] making healthc care decisions, not

[56:54] government bureaucrats. Call Gordon

[56:56] Smith. Tell them to keep working for

[56:58] better healthcare. Tonight's K2 program

[57:00] brought to you by Sofas by Design.