This is a rush transcript from "Your World with Neil Cavuto," April 30, 2008. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: Well, that good news not stopping Hillary Clinton today from slamming the economy during a stop in Indiana.

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON, D-N.Y., PRESIDENTIAL CANDIDATE: Now, in order to support our businesses, we have got to have an economy that actually produces good jobs and rising incomes.

(END VIDEO CLIP)

CAVUTO: All right, well, news flash: It has.

Video:Watch the interview

Now, we are not taking sides here. We are offering some clear numbers here. More than five million jobs have been created since the president first took office. Incomes are up nearly 19 percent in that time. There is no doubt that things are slowing, and we are well off our highs. But part of covering and discussing the economy is discussing the good with the bad. Are these comments doing more harm than good?

With us now, former White House counsel under Bill Clinton Lanny Davis, a Clinton supporter.

Lanny, always good having you.

I don't know wise it is, though, for any candidate to talk down an economy, though. You are a good numbers guy, too, Lanny. And you have to see the balance in what I am saying, do you not?

LANNY DAVIS, FORMER WHITE HOUSE COUNSEL: You can always say that you disagree with somebody stating a fact and say that they are emphasizing half-empty vs. half-full. That is a fair debate, Neil.

But the fact is, this economy, certainly in the last year, has not done very well. There has been a net loss of jobs. And compared to two terms of Bill Clinton, where we had 24 million new jobs, and you are talking about five million, if you are the average American and go out into mainstream America, you will find that most people feel that they're not ahead, that they're falling behind, that they are losing their houses or that the price are going up that they can't afford.

(CROSSTALK)

CAVUTO: Lanny, you are a smart guy. You know that, in the end of the Clinton presidency, we had a recession just starting. You also know that the Internet went bust. You also know that along the way came this thing called 9/11.

DAVIS: Sure.

CAVUTO: Now, I am not dismissing any of the things you're talking about. I am stressing, though, that part of being fair in assessing the overall economy during seven or eight years is to see the overall economy.

DAVIS: Well, I can certainly validate everything you just said. It is not necessarily all George Bush's fault, or even a majority. And if that is the point you are making, there were some things, like 9/11, that made it difficult.

But I would also say to you that there are things that I attribute to President Bush. He says the Iraq war is important, yet, he used a credit card to pay for it, all debt, all borrowing to pay for the Iraq war. We went from a surplus to a trillion dollar deficit. And don't tell me that is because of big spending by the Congress, because the president just vetoed for the first time in the last year any spending bills.

(CROSSTALK)

CAVUTO: Well, but, Lanny, Lanny, I don't want go and revisit history. I know what you're trying to do here. And you're obviously going to agree with Senator Clinton...

DAVIS: Just facts.

CAVUTO: ... who says that we are going to hell in a handbasket.

DAVIS: No.

CAVUTO: I will say that, when Wall Street imploded, a third of the revenue the government was getting all of a sudden dried up. I am not here to debate that.

I am here, though, to simply say, what is the wisdom of a political candidate of either party bashing the economy, when she talks about a global economic crisis, when her opponent says we are in shambles? And either one of those folks can become the president of the United States, on who really the world depends, to get sort of like a cerebral sort of hang on this.

DAVIS: Well...

CAVUTO: And, yet, they are crying fire in a crowded theater. Now we know, technical — and I know these definitions mean little to the campaigns — technically, it is not a fire. Then, is it doing anyone any good saying it is?

DAVIS: Well, first of all, your characterizations are — you are entitled to call things bashing and fire. And those are characterizing words.

CAVUTO: Global crisis. Global crisis. Global crisis. Global crisis. Just that.

(CROSSTALK)

DAVIS: We are in a housing crisis where people are losing their homes at record numbers. That is a fact. We're in Middle America, where people are feeling huge economic pain. That is a fact.

(CROSSTALK)

CAVUTO: How many do you think are losing their homes, Lanny? How many do you think are losing their homes?

DAVIS: I don't know. I don't know the number, but I know that I just come from Pennsylvania, where there are neighborhoods with foreclosure signs up and where certainly the record number of foreclosures.

CAVUTO: Lanny, would you be surprised, would you be surprised if I told you that close to 96 percent of mortgages in this country are being paid on time month in and month out?

DAVIS: Not at all. Nor am I surprised that you are focusing on 96 percent and I am focusing on 4 percent.

(CROSSTALK)

CAVUTO: No, Lanny, here's the difference. Here's the difference. I report both. I am not accentuating one over the other. I'm reporting both. I'm telling you both.

DAVIS: All right.

CAVUTO: I am not dismissing the record number of foreclosures. You are quite right. In sheer number, they are. I am just saying, if you're going to bash that and have at it, I'm just saying, then, don't give the American people the impression that everything is melting down, that their homes are in lava, and that it's the end of the world, and, if you have got a razor blade, please get one. I think that is overdoing it, right?

(CROSSTALK)

DAVIS: My turn.

It is not overdoing it if you, Neil Cavuto, when out into Middle America and asked people about their fears and their anxieties, about their income and their discretionary income, and fears of losing their homes, and what is — in fact appears to be a serious recession or about to be declared one. Those are facts.

If you are upset that there is too much emphasis by Democrats on negative facts vs. positive facts, that is a fair point. And Republicans will debate that it's more positive than negative. But that is no different than if the Democrats were in charge and there was a pending recession. It would be the Republicans emphasizing the negative. That is about political debate. But it's a fair debating point.

(CROSSTALK)

CAVUTO: Lanny, I have got to tell you this, this is not about politics.

In the height of the Clinton administration, when your guy was in office, when a lot of Republicans on this very network were bashing the economy and saying we were going to hell in a hand basket, I reminded them of the numbers. I reminded them of the surpluses. I reminded them of the good news.

I have no political aspersions here. I do — because I am the FOX nerd on this stuff, I do look at this stuff. And I do...

DAVIS: You know...

CAVUTO: But, Lanny, here's what I'm saying, my friend, that it is incumbent upon anyone running for office in the land to get the lay of the entire land, to report that bad news, obviously, but to look at it in context, and say, for those homeowners who are suffering, a reminder. I want you to join the 95 percent who are not. That is all.

DAVIS: All right.

And I just think we need to look at facts and then let everyone interpret the emphasis on the facts.

For any Democrat or Republican to campaign in America and not talk about the suffering and the anxiety that a lot of Americans feel about the economy, about gas taxes and gas prices — you know, Hillary Clinton and John McCain agree on giving a holiday on gas taxes...

CAVUTO: Right.

DAVIS: ... and reducing taxes. And Barack Obama wants to keep those gasoline taxes high. That is because McCain and Hillary Clinton believe that there are people who are in need of some relief, even if it is 50 bucks.

CAVUTO: No doubt. And, by the way, even the president of the United States has indicated he would be open to that.

Again, Lanny, I am not dismissing anything you just said. And I have enormous respect for you, so this is not a badgering session.

DAVIS: Thank you.

CAVUTO: I'm just saying, part of being fair on this stuff, Lanny — and you, as an excellent lawyer, should know this — is, present both sides. I am here talking to people who have been foreclosing on homes.

I am here talking to people who have affected by the run-up in gas prices. But I am also here talking to people who, in the aggregate, say, things could be a hell of a lot worse.

There are people on the campaign trail, Lanny, who have been saying, we're in a depression. I had survivors of the Depression tell me, Neil, if 5 percent unemployment is a depression, sign me up, because I remember when it was 25 percent. I remember when there were no hirings going on. So, all I am saying is perspective, my friend, perspective.

(CROSSTALK)

DAVIS: Everything is relative. And you make a fair point.

I would say that I was struck when I was knocking on doors and talking to people around the Philadelphia area right before the Pennsylvania primary the gamut of people who have economic concerns and anxieties about their homes, their jobs, about rising prices, about gasoline.

And you know that recessionary mentality is often the reality. Politicians are not talking to them to convince them of that. They are reflecting what they are hearing from the American people.

CAVUTO: Oh, Lanny, now, that is where we disagree. It is all in here, my friend. You say it enough, and, all of a sudden, it is the end of the world.

(CROSSTALK)

DAVIS: You have got to go door knocking with me, Neil. Maybe you will change your mind. How about next week in Indiana, you and me?

(CROSSTALK)

CAVUTO: I have been to a lot of the same doors you have been to.

(CROSSTALK)

DAVIS: I know those doors. I know those neighborhoods. And I tell you, I don't dismiss what is going on there.

Lanny, the only difference between you and I is, I have stepped back. I have stepped back, and I have looked at the whole picture. And I think it would be incumbent upon you and your candidate, all candidates, to do the same. That is all I am saying.

DAVIS: Well, it is a fair point. There's real anxiety out there. And we have to be balanced in the way we present that anxiety. And I would agree with you on that.

CAVUTO: All right, Lanny, I always loving having you here, debate or no.

DAVIS: Thank you, Neil.

CAVUTO: Good seeing you, Lanny Davis, in D.C.

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