This is a rush transcript from "FOX News Watch," August 2, 2008. This copy may not be in its final form and may be updated.

E.D. HILL, FOX HOST: This week on "FOX News Watch," the McCain campaign compares Obama to a celebutant and claims he's playing the race card. How does the media respond?

John Edwards caught in a sex scandal. Why the silence from the mainstream media about allegations of an affair and a love child?

Plus, a toddler missing in Florida. Are the media to blame for the twist and turns in the search for little Caylee Anthony?

"Dubya" — it's Oliver Stone's new movie about President Bush. Will the press embrace the message?

And, does L.A. have a paparazzi problem? The police chief says no.

On the panel this week, Jane Hall of the American University; syndicated columnist Cal Thomas; Jim Pinkerton, contributing editor and writer for the "American Conservative" magazine; and Joe Strupp, senior editor at "Editor and Publisher" magazine.

And I'm E.D. Hill. "FOX News Watch" is on right now.

(BEGIN VIDEO CLIP)

CAMPAIGN AD ANNOUNCER: He's the biggest celebrity in the world. But is he ready to lead?

SEN. BARACK OBAMA, (D), PRESIDENTIAL CANDIDATE: I don't pay attention to John McCain's ads. Although, I do notice that he doesn't seem to have anything very positive to say about himself, does he? He is only talking about me. Ask John McCain what he's for, not just what he's against.

(END VIDEO CLIP)

HILL: Well, Cal Thomas, let's start with you. This ad comes out. The media starts talking about it. Do you think the media agree with the message that he is getting a celebrity status, that he is famous for being famous?

CAL THOMAS, SYNDICATED COLUMNIST: Yes. I think this gets to the heart, E.D., of what Dana Novak wrote this week in the "Washington Post" that Obama graduated from the presumptive Democratic nominee to the presumptuous Democratic nominee.

Americans don't like exalted celebrity status in their politicians. They like to see a little humility, even if it is faked, salted in. And this man has been described as messianic, walking on water. There was another piece in the "Washington Post" this week, tongue in cheek, comparing him to neo of the "Matrix," the one. So I think that the media now see the possibility of bringing him down to size and cutting him down to size. And this is the opening salvo in that I think.

HILL: Joe, isn't it the media, though, that built him up to the celebrity status? That, followed him around in droves, almost like groupies, wherever he went. John McCain certainly not getting the same treatment that way. So do you think now the media feels, oh, it's time to make sure we show where we stand, which is in the middle.

JOE STRUPP, SENIOR EDITOR, EDITOR AND PUBLISHER MAGAZINE/WEB SITE: To be surprised there are negative ads coming out, is to not know politics. This is when it will start. We're nearing the convention. If you remember, the Swift Boat ads came out in August. It's a low news time in a lot of newsrooms. This is when it will start. And John McCain has a right to take on Obama's lack of experience, lack of time in the Senate, and new face. A lot of his background in the know, as people know. There could be things popping up, whether fair or unfair.

But to paint him as a Britney Spears and only an entertainment type I think goes far, insults the voter a little bit. But it's the way they'll go. Obama is smart to shoot back as he did. But this won't be the end of this.

And as far as the press painting Obama as sort of messianic, he's gotten a lot of positive press, but as we get closer to Election Day, the issues — gas prices, economy, housing — is really going to come up. And the meat of the issues will have to come out. And it's not going to be just negative back and forth. We'll have to see ideas.

HILL: Barack Obama shot back after the ad aired. Let's look at a bit of that.

(BEGIN VIDEO CLIP)

OBAMA: Nobody really thinks that Bush or McCain have a real answer for the challenges we face. What they will try and do is make you scared of me. You know, he's — he's not patriotic enough. He's got a funny name. He doesn't look like all those other presidents on those dollar bills, you know?

(END VIDEO CLIP)

HILL: Bringing up the race card. So, Jane, does that play? The McCain campaign says that is the race card. Obama brought it up.

JANE HALL, AMERICAN UNIVERSITY: Well, I think that we are now going to have race injected explicitly in the campaign from here on. Obama's tried to...

HILL: Let me stop you there. Why?

HALL: Well...

HALL: Why, at this point in our nation's history do we still have race as an issue?

HILL: Well, I think because if you are opposed to Obama, you may think people will be prejudiced against him when they get into the voting booth. And if you can spread a lot of stuff about him and raise a lot of questions, apart from whether he experienced enough. This week the rap singer, Ludacris, had an ugly rap song, trashing Hillary Clinton and John McCain. And Obama had to distance himself from it. And part of the lyric is, "We're going to make the white house black. I think there will certainly be a stealth campaign about race.

And Rick Davis, McCain's manager, said this week that Obama was playing the race card. I think Obama's trying to get out front and say they're going to try and scare you about me. But now, it is in play. I think this could get ugly.

HILL: Jim, do you think that the media has been fair in the coverage of this, of the whole campaign?

JIM PINKERTON, CONTRIBUTING EDITOR & WRITER, THE AMERICAN CONSERVATIVE MAGAZINE: I certainly think they built Obama up when they all fell in love with him. And, of course, I think the Reverend Wright stuff, speaking of the racial issue, changed the perception of Obama. He was no longer Colin Powell or Tiger Woods or Oprah. He was much more of a traditional black figure in American politics, like Jesse Jackson or Al Sharpton. And he has associations with Ludacris and all these people. It's hurt him badly. It took out a lot of hate (inaudible).

I think the ad by the McCain campaign was brilliant. It captured something about the way the media go like a trout after a dragon fly, after any reference of Paris Hilton or Britney Spears. They love it. The press — this ad is run like nine times on television. John McCain paid for it. And it ran a thousand times on cable news and the Internet. They have captured not only something about the media, they've also clearly captured something about Obama. He is a God-like figure in his own mind at least, as Cal said.

And by the way, if Obama ever wanted to stop this, he could accept McCain's challenge and do the town hall debates.

THOMAS: Exactly.

PINKERTON: And he won't, which is revealing about how thin the Obama campaign must think their candidate really is.

HALL: Possibly, but at the same time Obama says he's about change. He is relatively new in Washington. He is younger. He's not young but he's younger than McCain. And he certainly is a different kind of candidate than we have seen for a long time. People go back to Kennedy.

Cal, do you think that the media does sort of follow whatever people do? When Hillary Clinton cried, I'm being treated unfairly, you saw a flurry of stories about, yeah, maybe she is being treated unfairly. Do you think the media is kind of being played?

THOMAS: Look it works both ways. I think you see the different kind of candidate. He's a different in terms of externals — the look, youth, race and the rest. In that sense, he's a different kind of presidential candidate. But here's a guy who came up through the ranks in Chicago politics. There is nothing more rough and tumble than Chicago politics. The media only begun to plumb the depths of that and some of the other relationships and what is driving that. the mainstream media would never touch this, the Tony Rezko and Reverend Wright. what is driving that are the talk radio hosts, like Rush Limbaugh and Sean Hannity, and alternative media and the bloggers. This is the only reason we know about these sorts of things.

HILL: Time for a break. If you want to hear what we talk about during the commercial break, go to our web site, foxnews.com/foxnewswatch. We'll be back in two minutes.

ANNOUNCER: John Edwards, first running for president, now running from the press in reports about a mistress. And where is the mainstream media on the story? Details next on "News Watch."

(COMMERCIAL BREAK)

(NEWS BREAK)

(BEGIN VIDEO CLIP)

JOHN EDWARDS, FORMER PRESIDENTIAL CANDIDATE: (Inaudible) on fire so I don't talk about these tabloids and the tabloid trash. It's full of lies. I'm here to talk about helping people.

(END VIDEO CLIP)

HALL: Is that tabloid story a lie? Is that tabloid story a lie? Didn't quite answer that. Former Democratic presidential candidate, John Edwards, this week shrugging off a story reported by the "National Inquirer" two weeks ago about a meeting in an L.A. hotel room last month with that woman, Rielle Hunter. She is Edwards' alleged mistress and reportedly they have had a child together, a daughter born in February.

So, Jane, The National Enquirer breaks the story and none of the mainstream media doesn't pick up on it for a long time. And they're starting to dabble in it a little bit. But when the Enquirer broke the Rush Limbaugh, when they broke the Larry Craig stuff, when they broke the Monica stuff, everybody jumped on that. Why is this off limits?

HALL: Well, you know, we could say that they are trying to withhold for more facts or pictures. They haven't really — I mean, they produced reports that they caught John Edwards in the Beverly Hilton Hotel at 2:00 a.m. sneaking out of a room...

HILL: FOX News confirmed...

HALL: ...which FOX News confirmed. And I think partially it is — it may be because the story is painful for people who like Elizabeth Edwards. And I don't think it — I think it is — someone wrote a piece, in (inaudible), saying this does not fit the narrative. This is not Obama, the new guy, versus the old guy. This is sleazy. This is a politician presumably messing up. And I think that you — it looks unseemly to people because of people's affection for her. And that is all I can say.

(CROSSTALK)

HILL: Since when has the media has gotten all fuzzy.

(CROSSTALK)

PINKERTON: I think the media gets fuzzy about liberal Democrats. That's what I think. I think that if this had been a conservative Republican, they would have been all over it and clobbered him.

The New York Times isn't all the news fit to print because they left this out and they still have. This story has — now The Charlotte Observer and other papers are getting into it, but it has been a year and MSN sat on it which is one reason not to trust them.

THOMAS: Well, the...

HILL: Joe, do you agree with that?

STRUPP: Well, first of all, this is a new version of this. This came out late fall. And as you can see, Edwards, even in his non-denial, denial, whatever you call that reaction, it was sort of saying it was tabloid trash and not true, but not really reacting. And the press — I don't give it a liberal versus conservative. I give it sort of an uncertainty on how to react. Although I do believe there should have been more mainstream reaction to this. McClatchy and the Charlotte paper, which they own that paper, finally came through with it on Thursday. And I think we will see more follow.

But even the way — I am surprised Edwards is reacting the way he is. If you really didn't do anything and are clean here, why not come out and basically say it.

HILL: Well, you could say this story is his false, Cal?

STRUPP: Exactly.

THOMAS: Here's the key here. During the campaign, during the primaries, when it was announced Elizabeth Edwards had breast cancer, you recall he suspended campaigning for a while in deference to her, and out of sympathy. And that is fine and all good. But he was clearly using that as a way to, if not actively, then passively gain, if not votes, then certainly sympathy for himself.

And Jim is right. Imagine if it were Mike Huckabee, the former preacher and evangelical Christian, who was caught in bed with a love child. They'd be all over the place as it was with Rush Limbaugh and others. Jimmie Swaggert, James Bakker, the TV evangelist, they had a blast with this. They didn't stop to say is it true or not. It was too good not to be true to the media.

HILL: Well, some has suggested he's sort of a non-player now. Do you buy that?

(LAUGHTER)

THOMAS: How do you mean non-player?

STRUPP: What is a non-player?

PINKERTON: He wasn't a non-player when the story broke. He was still actively running for president.

HILL: Yes.

PINKERTON: Look, there is — the Enquirer, as you mentioned. Actually has a pretty good track record. Now they are alleging that a fat cat friend of Ed is paying her $15,000 a month to keep quiet. Now, that is full of implications for the federal election law, for the IRS for disclosure. and again, The Charlotte Observer went and discovered that the birth certificate, of this baby, who of course is completely innocent in all of this, is blank as to who the father is. And the Edwards people said, the guy is so-and-so. Now they say it is — when it comes to a legal thing, it is empty, which...

(CROSSTALK)

HILL: It's not going in there, yes.

HALL: I do think, in defense of the media, that I think in the Rush Limbaugh story and other stories, they had more facts than they've produced so far. They caught him in a hotel. Now we have a birth certificate with no father listed. It may be that people are saying let's wait until we have more.

HALL: Well, they caught him in a hotel at 2:00 a.m.

(LAUGHTER)

THOMAS: Yes, you catch a guy at 2:00 in the morning in a hotel, and he's not being moonlighting as a chambermaid.

HILL: I'm not saying he's doing anything in there.

THOMAS: Room service.

HILL: But when you've got people standing there watching the door.

HALL: I believe with Rush Limbaugh's problems, you had a lady that was ratting him out. They often pay for people to tell them things, which is another reason why they often get good information.

PINKERTON: Right, and all the more reason for the "New York Times" to send the squad of reporters to investigate, which they haven't done.

STRUPP: The proof of this is still very murky. There is some evidence, some non-evidence. But there is a way that the mainstream media — I hate that phrase because there's so many different elements to the media — could have come into it more than they did, and the fact that McClatchy and others are coming into it, shows there is a story here. I don't think it is necessarily a liberal or conservative bent. It's more maybe fumbling the initial play or not knowing how to react. And in the world of bloggers versus newspapers versus cable TV, the line keeps getting changed almost every day.

HILL: All right, well, it's time for another break. We'll be right back with this.

ANNOUNCER: A little girl missing in Florida. The mother, a key suspect. The media caught in the middle. And Oliver Stone's new movie about George W. Will the press jump on board?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CINDY ANTHONY, CAYLEE ANTHONY'S GRANDMOTHER: I will continue to take the abuse, I will continue — I don't care what the media thinks about me. If I had something to hide, I wouldn't make three 911 calls. I wouldn't have allowed the police to come into my house. I would have asked for an attorney. I would have said, no, get some search warrants. And again, this family has nothing to hide. My daughter may have some mistruths out there, or half truths, but she is not a murderer. And that is all I have to say, guys.

(END VIDEO CLIP)

HILL: So what is going on there? And how is the media handling it? Is the media to blame for this in any way?

You know, Jane, People magazine is on there. It is in every single publication. All of the shows are doing it. Do you think the family's strategy of going to the media and — late, but going to the media, and the grandmother, especially making very conflicting statements, has back-fired on them?

HALL: Well, they may not have expected kind of treatment they've gotten and, you know, it is kind of shocking that the story has now — I mean, this is a tragic story, if the little girl has been murdered. But it's again a beautiful child. And, you know, a dial-stopping story. It's a "People" magazine buy in story. And for the grandmother, she has come across as much more sympathetic. And you are airing the jailhouse calls from the daughter, who sounds like she's, A, jealous of the grandmother's media coverage, and saying I saw your cameo, which is bizarre to me. And it sounds as if they are riding a tiger and the tiger is not doing what they want.

HALL: Cal, the thing that struck me is when the media covers this — and I felt this as well when I was doing one of the shows here at FOX. You want — you don't want to blame anybody. Yet at the same time, there are such glaring questions about the veracity of many people's statements that you almost — it's hard not say there's something is smelly here.

THOMAS: It is a human story. I mean, look, as a father and grandfather, when I had two-year-olds, I knew where they were or my wife knew where they were at all times. and how can you say, well, for 30 days — I thought one of the most damning things to come out is when Greta van Susteren of FOX came up with the pictures of the mother out partying. And you don't do that when your child is missing for five second, much less a couple of weeks.

HALL: So, Jim, why isn't the media saying, you're taking that tact. Wait a second. Gone all this time? What do you mean, missing, taken by a baby-sitter, whatever.

PINKERTON: The media are doing that. I think this is a story that the media loves best. It's a riddle. It's a puzzle. We don't know how it will end.

HALL: Is there that much of a riddle to it, when you look at the facts that we do know?

PINKERTON: We can hypothesize a tragic end for the child but that doesn't mean we begin to know who did it. I mean, again, I am — let me — and I remind you, JonBenet Ramsey case, for 12 years, the operative assumption was it was somebody in the family. And now apparently they've all been exculpated and proven innocent of this. So who knows? But you can be sure that, just like the media aren't interested in John Edwards for ideological reasons, they are interested in this story for financial reasons. They will be all over it for eternity.

(CROSSTALK)

HALL: Another — let's move on to the "W" topic. It was making news again this week. It's the release of the trailer for Oliver Stone's new film about President Bush. "Dubya" will hit theatres 18 days before the November election. And we want you to see a little bit of the trailer. Look.

(BEGIN VIDEO CLIP)

UNIDENTIFIED ACTOR: You are a Bush. Act like one.

UNIDENTIFIED ACTOR: You want an ass-whipping?

UNIDENTIFIED ACTOR: Try it, old man.

UNIDENTIFIED ACTOR: Go ahead, take his place.

UNIDENTIFIED ACTOR: Hey, hey, slow it down.

UNIDENTIFIED SINGER: "I see trees of green, red roses, too. I see them bloom for me and you. And I think to myself what a wonderful world..."

(END VIDEO CLIP)

HILL: Nice song. Question is, what will happen with this movie?

Oliver Stone, Joe, has been a media darling. Does he get the same attention for this movie?

STRUPP: Well, yes. He's going to get a lot of attention not only because of the subject and the timing, because of Stone himself. You know, it will come out and get accolades, good acting, if it is well made movie. You're going to get pro-Bush forces saying it is depicting him badly and a lot of attention. And some might say it could end up hurting or helping John McCain depending on who is watching which portion of it.

HILL: Isn't Bush so 2008? You would think...

STRUPP: Isn't it 2008 though?

HILL: But it is late. We are getting late to it.

PINKERTON: It will get some accolades if it hates Bush. And I guarantee it will. I guarantee it will. They used it — a year ago...

STRUPP: Yes...

(CROSSTALK)

PINKERTON: ... the fair minded. It is obviously a total hatchet job on the president. And I really don't think, given how much negative Stone has, I think this will probably end up helping John McCain.

THOMAS: I think it is Oliver Stone's redemption for making the fabulous 9/11 movie in which he showed NYPD and New York Fire Department people as heroes. And he got praise even from me, which I understand caused him to question where he was coming from. So this is his redemption for the left wing, white wine and brie set in Beverly Hills.

HILL: Jane?

HALL: I think you are right. It is so 2008. Bush finally, by his own admission, had a dissolute youth. And they'll portray it accurately and probably much worse. And I don't think it will have the same impact. I think, compared to Michael Moore, whose movies really have had an impact, I don't think this one will have that big of an impact. I really don't.

HILL: We have to take one more break. And when we come back, are the paparazzi a big problem in L.A.? So much so, there should be a law to restrain the photographers? Wait until you hear what the city's police chief thinks of that idea.

(COMMERCIAL BREAK)

HILL: They act like a pack of wolves. That's what L.A. city councilman, Dennis Zine, says about celebrity photographers. He is trying to do something about them to protect starts, stars like Brittany Spears. He is a former police officer with 33 years of experience on the force and he wants to regulate aggressive paparazzi, especially after, he says, it cost police $25,000 to protect her after she was hospitalized.

He wants to enforce personal safety zones around celebrities. He held a three and a half-hour meeting on Thursday to hear all about the problems created by pushy photographers. He heard from police officers that fines are not steep enough to curb aggressive behavior.

Singer, John Mayer, told the meeting he felt real danger from being followed at night by cars without license plates.

The police chief, William Bratton, dismissed the whole thing with this memorable sound bite.

(BEGIN VIDEO CLIP)

WILLIAM BRATTON, L.A. POLICE CHIEF: Did you notice that when Brittany started to wear clothes and behaving, Paris is out of town not bothering anybody anymore, thank God, and evidently Lindsay Lohan has gone gay, we don't seem to have much of an issue.

(END VIDEO CLIP)

HILL: Joe, you look shocked. You have your — that's what I'm saying. This whole think has gone main stream news.

Bratton, not backing down at the press conference, later said, I'm not about to waste my department resources participating in a three ring circus. We will let you know how that turns out.

(LAUGHTER)

Anyone here shocked by that statement?

STRUPP: That Lindsay Lohan is gay or that the chief said it?

HILL: That the chief said it. He's not backing down at all.

(CROSSTALK)

STRUPP: That's good.

HALL: I think the chief is glad to be in L.A. rather than New York. It is more interesting.

HILL: It certainly is.

Well, that is all the time we have for this week.

Thanks to Jane Hall, Cal Thomas, Jim Pinkerton and Joe Strupp.

And I'm E.D. Hill. Thanks for watching. Keep it right here on FOX News channel. The "FOX Report" is up next.

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