This is a rush transcript from "The Beltway Boys", July 19, 2008, that has been edited for clarity.
FRED BARNES, FOX CO-HOST: Coming up on the "The Beltway Boys," Barack Obama takes the world stage on a major overseas trip. We'll take a look at the possible risks and rewards.
MORT KONDRACKE, FOX CO-HOST: John McCain says Obama's globetrotting is too little, too late, and he hammers his foreign policy credentials.
BARNES: The economy continues to sputter. What is Congress doing? Nothing. The public is taking notice, big time.
KONDRACKE: After months of saying no way, no how, the U.S. is meeting face-to-face with Iran.
BARNES: "The Beltway Boys" are next, after the headlines.
(FOX NEWS BREAK)
BARNES: I'm Fred Barnes.
KONDRACKE: I'm Mort Kondracke. We're the "The Beltway Boys."
Well, the first top story is road show. That, of course refers to Barack Obama's trip to Iraq, Afghanistan, Jordan, Israel and Europe. And even though he has been to Iraq once two-and-a-half years ago and has never to Afghanistan, this is not what it ought to be, a fact-finding trip, because he's already made up his mind what his solution is to both problem. He's going to -- regardless of what he hears from General Petraeus or Nouri al-Maliki, he is going to pull all American combat troops out of Iraq in 16 months and send them to Afghanistan. We do need troops in Afghanistan. Why would he be doing this? You know, it's only politics anyway.
Here is him explaining. Watch.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA, (D), PRESIDENTIAL CANDIDATE: Iraq's leader has not made the political progress that's the purpose of the search. They have not invested tens of billions of dollars in oil revenues the rebuild the country. They are not resolved the differences or shaped a new political compact.
(END VIDEO CLIP)
KONDRACKE: He cannot admit the surge is working. It's largely because the Democrats don't want to let him.
But here is John McCain beating him up for his prejudgment of what he'll find. Watch.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN, (R), PRESIDENTIAL CANDIDATE: In my experience, fact finding missions usually work best the other way around. First, you assess the facts on the ground and then you present a new strategy.
(END VIDEO CLIP)
KONDRACKE: I think this is a mistake on Obama's part. That's understandable by any voter. You don't make up your mind before learning the facts. Why would he do it? There is a poll that indicates -- a university poll -- that shows that 51 percent of the American people are against a specific timetable to withdrawal troops from Iraq, which is Obama's position. But if you break it down by political parties, 79 percent of Republicans favor keeping troops there, which he doesn't care about obviously, but 64 percent of Democrats want either immediate withdrawal or a timetable. I think he's scared of his base.
BARNES: He won't buck the base.
BARNES: Let me start. I disagree with what you said, but let me start with what Obama said about the surge a year ago. Watch.
(BEGIN VIDEO CLIP)
OBAMA: The surge clearly has not worked. It appears that the president will be reporting that not one of the benchmarks that were laid out by the administration for the Iraqi government will have been met.
(END VIDEO CLIP)
BARNES: There is an answer from the administration and I think it was done by our embassy in Iraq. 15 of the 18 benchmarks have been satisfied. How much further wrong can Obama have been?
The truth is the surge has worked. It's worked militarily and politically. He said one thing about the surge, when I think in the months after it was announced in January of 2007, he said -- and one of its aims was to quell the horrible sectarian violence. He said it would make sectarian violence worse. Now we know, in the last six to eight weeks, the sectarian killings are down to zero. None. The civil war is over. There is not -- there are problems in Iraq, but sectarian violence is not one of them. That's been one of the great achievements.
Mort, I think he can't continue to be at odds with reality in Iraq for the next three and a halve month of the campaign. It's not like the surge and the progress there militarily and politically is something that popped on the scene and he hasn't caught up with it yet. It been building for the last year. And now we have a leader there who is -- the Sunnis and Shia have come together. The Sunni militias have been crushed. Yet, Obama can't come to grips with it.
KONDRACKE: I know...
BARNES: If he keeps it up, he may be at peace with the base, but at war with the troops.
KONDRACKE: Right. Unless he figures out how to solve the problem, and it's a huge problem, he could conceivably be rescued by a catastrophe that happened in Iraq, if al-Qaeda can mount an attack on the Green Zone or something, it would tend to confirm what he has to say.
If nothing like that happens and the progress continues to be good, the McCain campaign will clobber him with two arguments. One is, just think of what would have happened if Barack Obama's position on the surge had been followed through, that there had been no surge and we pulled out by March of this year. Al-Qaeda would have dominated the Sunni areas of the country. The militias assisted by Iran would dominate the Shiite areas. We might have had a genocide on our hands. And the United States would have suffered a horrific strategic loss.
The other argument is, just think of what we're on our way to achieving that would not have happened if Obama continued. Namely, a quasi democracy in the heart of the Middle East among a major oil producer that's allied with the United States and where we might be able to maintain a long-term military arrangement if possible. I just think that Obama is behind the curve on this.
The other part of the trip. You've just been to England. I'm sure the European end of this thing will be a lovefest and covered by all three network anchors.
BARNES: I think it'll be something we've never seen with an American presidential candidate going over there. John Kennedy, when he was president -- remember afterwards, he went to France and they loved him. Obama's going to get this now.
When I was in England, the Guardian" newspaper had a poll and found five of six Brits are for Obama for president. That is 84 percent, 83 percent. That is a landslide for Obama. The love affair is really in full bloom. He will receive adulation wherever he goes. He's going to Germany -- is it Germany, France and England? But he doesn't need it.
Here's what I think is a mistake on the trip, not that he's taking it or going to these countries, but he taking the anchors with him, the television anchors with him. He doesn't need adulation. He gets plenty of that. What he needs is to be taken seriously as a leader, ready to step in as president. He should say, look, anchors stay home. I'm taking minimal press. This is a serious trip. I'm fact finding and getting to know and learn about foreign leaders. He should say, I'm not Bruce Springsteen and this is not my summer rock tour. But it is going to be a summer rock tour.
KONDRACKE: I think he thinks he can get both. Gordon Brown and Sarkozy and Angela Merkel even will come out and say this is a very bright young man. Meanwhile, the public response is so over the top, it will send a message to people in the United States that we can be liked as a world again if we elect Obama.
BARNES: On the other hand, the risk is any mistake he makes will be blown way out of proportion. So he better be flawless.
Coming up, America's about-face on Iran and the Fed chief delivers a sobering assessment of the economic troubles ahead. Hot story number two is up next.
BARNES: Welcome back to "The Beltway Boys."
Hot story number two, economic jitters. Mort, I wouldn't say I had the jitters, but maybe the blues when I follow the stock market which is always a bet on the future. When the stock market is falling below 11,000 on the Dow, which it did this week, it's too bad.
Anyway, all this talk about a crisis, a depression, just listen to the Democrats.
(BEGIN VIDEO CLIP)
REP. NANCY PELOSI, (D), SPEAKER OF THE HOUSE: We are having a crisis in the country. Whether the president knows it or not, there is an emergency in the country.
STENY HOYER, (D), HOUSE MAJORITY LEADER: It's crystal clear that this administration's economic policies are demonstratively, evidently not working.
(END VIDEO CLIP)
BARNES: Well, so what do they propose? Higher taxes, more government. Strictly, you know, let's break up some of the trade deals. Strictly, Herbert Hoover stuff.
In any case, we're having a serious slow down. It's not an emergency, not a crisis. It's a slow and economic slowdown, which is -- that's no day at the beach, no question about that. We have a housing bust and extremely high oil and gasoline prices that are probably not going to get a lot lower in the short run or maybe ever. We have a big threat of inflation.
Look, what we need is no more interest rate cuts because it will only spur the inflation. We need a stronger dollar for sure, which is a part of the reason the gas prices are so high. I think we need a willingness, which I don't see on the part of the Bush administration or Congress, to let, wherever possible, the free market work its will.
I particularly think that $300,000 housing bill is exactly what we don't need. We need to let the housing market to hit bottom. All that housing bill -- I take back -- a lot of what it does is just bails out the lenders and bail out people who speculating. We don't need that. The simple thing is the market almost always does better than government can. And it doesn't have these horrible consequences, unforeseen consequences for years to come.
KONDRACKE: Bear Stearns and Fannie Mae too, let them sink?
BARNES: We probably should have. Looking back, once you -- here's what happened, Mort -- I defended the Bear Stearns thing at the time. But once you start, you can't stop. You know, it's this. It's Bear Stearns and here and there. And then we have a government-run economy.
KONDRACKE: This $300 billion program for housing is not $300 billion bailout. It's the creation of a federal guarantee authority to buy up mortgages where the lenders have got to take a hair cut in order to have the loan refinance.
BARNES: Mort, just use the words bail-out.
KONDRACKE: No, it's not a bail out.
It's very interesting what's happened. This second Bush administration is a lot less ideological late on, on economics, than it was in the first administration.
BARNES: That's true.
KONDRACKE: And Hank Paulson is a guy creating confidence in the country. If Bush had been wise to have had the team of Paulson and especially Josh Bolton in the first administration, what could he have done?
BARNES: What confidence are you talking about? I see no confidence out there. There is certainly not consumer confidence.
KONDRACKE: Well, if...
BARNES: When you have the country going in the right direction.
KONDRACKE: Believe me, if his polls are bad now -- if he said let's let everything flop, it would be even worse. If Bush had been smart, what he would have done on energy, for example, is to have imposed a gasoline tax way back in 2001 to encourage conservation and alternative energies. He would have paid for the war in Iraq, somehow. He would have vetoed all these earmarks that the Republican Congress passed. He would have paid for the Medicare Prescription Drug Bill. He would have regulated this go-go mortgage finance industry that created these securities that nobody understands. All of that kind of stuff could have prevented this.
Guess what? Bush -- this is Bush's watch. This recession or whatever it is, is Bush's responsibility.
BARNES: Yes, it is.
KONDRACKE: Republicans are getting the blame for it.
BARNES: It's also Mort's watch. I was looking at these things and how many you were in favor of then. I'll give you credit for wanting to veto earmarks. You've always been against earmarks, and correctly. Regulate the go-go housing market.
Who has been out there yelling and screaming for years about you're not lending to the poor people, you're not lending to minorities? And what happens when you do and when you give them these subprime loans? Well, there's been a big problem because a lot of them couldn't pay them back. The people who advocated that need to take -- need to accept responsibility for it and they haven't.
KONDRACKE: George Bush was one of them saying by saying that he had expanded homeownership.
BARNES: It was mainly Democrats, so the wrong people.
KONDRACKE: Coming up, political satire or political suicide? The "New Yorker" is feeling the heat. And Congress is as popular as a root canal. Why are its approval ratings hovering near single digits? We have a guess.
BARNES: Welcome back to the "The Beltway Boys." Time for the "Ups and Downs."
Down, Congress. It still can't get its act together on key issues like energy and housing and the August recess is coming fast. A new Gallop poll shows only 14 percent of Americans -- Mort, I want to repeat that number -- 14 percent of Americans still have confidence in their congressional leaders. The lowest ever since Gallop began polling 34 years ago. That's 14 percent lowest ever public view of Congress now controlled by Democrats.
KONDRACKE: You want to say it's Democrats. Do you know...
BARNES: Well, I do...
KONDRACKE: Whoa, whoa, whoa. The preference on the generic congressional ballot is a 9-point lead on part of the Democrats. Right?
BARNES: So if the -- I don't know what the relative approval rating of the Democrats and the Republican is, but I bet the Republican congressional poll is a lot lower than the Democratic one. After all, they were in charge up until two years ago. But look, the reason...
BARNES: Mort, the last two years, the number has dropped and dropped and dropped and dropped.
KONDRACKE: You're right.
BARNES: For the simple reason, they've done nothing. You can say it's the Republicans' fault, they're impeding it. Of course they are. But their rule has been we won't agree with them on anything.
KONDRACKE: OK. What we need, what we obviously need is an across- the-board energy plan which does it all -- nuclear, drilling and all of that on a temporary basis. The Democrats won't agree to that. We need wind, solar and other stuff, alternatives and conservations. The Republicans don't like that. They don't want CAFE standards.
BARNES: We got CAFE standards.
KONDRACKE: Finally, grudgingly.
BARNES: Wait a minute.If you put in wind with lifting the moratorium on offshore drilling and on federal lands, the Republicans would take that. The Democrats won't.
KONDRACKE: Do you realize that when the greatest development of wind power in the united states where and was? Texas, under George Bush's governorship. He got to Washington and became an oil man again.
BARNES: I'm all for exploring it. Let's see what we can get out of it. Right now, we know it's not at all cost effective. You put all those together, the Republicans will agree. It's the Democrats who want no more new use of fossil fuels because they are terrified the environmental lobby will get mad at them. That's the only reason.
KONDRACKE: Up, Iranian President Mahmoud Ahmadinejad. The Bush administration sent a senior U.S. diplomat to talk to Iran on Saturday. A move it previously would not consider until the country disassembled its nuclear program.
Some see it as a flip-flop on policy but the State Department says not so. Watch.
(BEGIN VIDEO CLIP)
SEAN MCCORMACK, STATE DEPARTMENT SPOKESMAN: Is this a new tactic, if you will? Yes. Does it send a signal? Yes. Is the substance any different? No.
(END VIDEO CLIP)
KONDRACKE: Well, I beg to differ. If one day the answer is no and the next day it's yes, something has changed.
BARNES: There is a name for that.
KONDRACKE: Right, flip-flop.
KONDRACKE: Right. I think it's perfectly legitimate. I think we ought to have been talking to the Iranians. We ought to have an intersection there and flood the joint with not only diplomats but CIA agents, who can get in there and understand exactly who is for what in that country, try to buy people off if necessary, get influence, all that kind of stuff. The fact we're participating in the multi-power talks on Iran, nuclear program, once in a while, doesn't bother me at all.
BARNES: It bothers me at all. Having an intersection there, I'm for it. Good idea. Iran has one in Washington. We should have one there and we might learn a lot. When you say, when Condoleezza Rice, the secretary of state, says and William Burns, who is number three, says and others say over and over again on the record that we will not talk to them unless they stop enriching uranium, we won't do it. We don't do it in 2006 or 2007 or 2008. Then all of a sudden they do it, now what sort of a signal does that send? America is weak.
KONDRACKE: We're trying something new.
BARNES: America is not trustworthy.
KONDRACKE: We're trying something new.
BARNES: Why would you think was new. Why would it be new when we've already had the Europeans talking to them month after month after month, where we've been in the background there? It's not that the U.S. has been -- we haven't known what was going on. Of course, the U.S. was behind that publicly as well as privately. What does this add? It adds a flip-flop on the part of the United States. I think it looks terrible and will get nothing.
KONDRACKE: If it gets something, it's Iran's fault.
BARNES: No, it's not.
KONDRACKE: Of course it is.
BARNES: They're not going to get anything, Mort. How can you say something over and over and over again and then break your word? It doesn't look good. It doesn't.
All right. Up, the "New Yorker." That's the magazine that is catching flak for an attempt at satire gone horribly wrong, but not in the minds of the "The Beltway Boys." I'll tell you why, Mort. It was satire.
You know, you had Obama and his wife dressed up in Muslim garb and the American flag in the fire place and a picture of Usama bin Laden. It was satire, a play on these crazy myths about Obama that have flown around on the Internet. It was good satire.
Now, what is wrong with people in the United States? Are they humorless? Don't they understand satire? Are they people -- you know what it is? It's part of this phenomena in America that I hate. And I think you hate it but not as much as I do. People are always taking offense about something. Although well, they're offended by the "New Yorker" cover. I wasn't.
KONDRACKE: I wasn't offended by it either. I thought it was cute.
BARNES: Yeah, it was.
KONDRACKE: But the minute I saw it, said, uh-oh, this thing is going to come rolling down the hill because of exactly all those people you're talking about.
Stay where you are. "The Buzz" is coming up next.
KONDRACKE: What's "The Buzz," Fred?
BARNES: I spent a few days in London talking to conservatives, Tories and other politicians about how they made this big comeback. And I found out a couple things. One, it takes time. Another, you have to realize it is not your views, it is you yourself that the people don't like. So you have to get them to like you before they will listen to you.
KONDRACKE: Yes, Republicans need to understand that. Our friend, Jim Glassman, was sworn in as secretary of state for public diplomacy. He has his work cut out for him. Do you know who the three most popular figures among Arabs worldwide are? Nasrallah, the thug leader of Hezbollah; Bashir Assad, the leader of Syria; and Ahmadinejad. The only guy that didn't make the list is Usama bin Laden, which is good news.
That's all for "The Beltway Boys" this week. Join us next week when the boys will be back in town.
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