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Transcript: 'FOX News Watch,' October 4, 2008

This is a rush transcript from "FOX News Watch," October 4, 2008. This copy may not be in its final form and may be updated.

JON SCOTT, FOX NEWS ANCHOR: This week on FOX "News Watch,"...showdown in St. Louis. How did the press react to the vice presidential debate?

Palin and the press. Is the governor getting a fair shake from the mainstream media?

Nashville's next. What might we expect from coverage for the second presidential debate?

The House approves a historic bailout package. Are the media helping or hurting in the financial mess?

And David Letterman still steamed at John McCain. Could his feud fuel a voter revolt?

On our panel this week, Jane Hall of the American University; Rich Lowry, editor of the "National Review;" Jim Pinkerton, contributing editor and writer for the "American Conservative" magazine; and Patricia Murphy, founder and editor of citizenjanepolitics.com. That's a nonpartisan web site.

I'm Jon Scott. FOX "News Watch" is on right now.

(BEGIN VIDEO CLIP)

SEN. JOE BIDEN, (D), VICE PRESIDENTIAL CANDIDATE: He's not been a maverick on the war. He's not been a maverick on virtually anything that generally affects the things that people really talk about around their kitchen table. Can we send -- can get mom's MRI? Can we send Mary back to school next semester? We can't make it. How are we going to heat the house this winter? He voted against even providing for what they call LIHEAP, for assistance to people with oil prices going through the roof in the winter. So Maverick, he is not.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

GWEN IFILL, DEBATE MODERATOR: Was it the greedy lenders? Was it the risky home buyers who shouldn't buy a home in the first place? And what should we be doing about it?

GOV. SARAH PALIN, (R), VICE PRESIDENTIAL CANDIDATE: Darn right, it was the predator lenders trying to talk Americans into thinking it was smart to buy a $300,000 house if you could only afford a $100,000 house. There was deception and there's greed and there is corruption on Wall Street. We need to stop that.

(END VIDEO CLIP)

SCOTT: All right. Let's talk about the coverage of Thursday night's debate.

Patricia, a lot of people were predicting a train wreck for Sarah Palin. She came across are the reviews pretty positive, folksy, very genial. Did the press underestimate her?

PATRICIA MURPHY, FOUNDER & EDITOR, CITIZENJANEPOLITICS.COM: I don't think because she gave them so much reason to underestimate her. Her interviews with Katie Couric and Charlie Gibson were just so cringing. she wasn't performing the way an elected governor should. She was not even performing the way a school board member should. It was not the look or comportment of somebody who should be on a national ticket. I won't say she changed that with the debate.

SCOTT: You agree, Jane?

JANE HALL, AMERICAN UNIVERSITY: I agree. I think she was very winning, engaging. I fault the media, certainly the media -- if I heard one more time how low the expectations for her were, I probably was going to throw a shoe at the television. Everybody said that. Then right beforehand, people started to look at these 2006 debates, people in the media. Politico wrote a piece about it. Other people looked at it and said, wait a minute, she took on an older guy. She was disarming. It is like how come we never knew this the day before the debate.

SCOTT: Those were the Alaska governor debates.

Rich, what with about Joe Biden? He was described as a one-man gaffe machine and he didn't seem to shoot himself in the foot?

RICH LOWRY, EDITOR, THE NATIONAL REVIEW: He was fine. He made some mistakes. There's a double standard where Biden's mistakes hadn't played in the way you think they would, which is kind of odd because the narrative about Joe Biden is that he makes gaffs and exaggerates. He's done that consistently throughout the campaign. In that debate, he made the more glaring errors and referenced a restaurant that he goes to that proves he's a man of the people that apparently no longer exists.

(CROSSTALK)

SCOTT: What about -- she sort of, Jim, really captured the camera at the end of the debate. She was just talking straight to the people. Is that why her performance was perceived as effective?

JIM PINKERTON, CONTRIBUTING EDITOR & WRITER, THE AMERICAN CONSERVATIVE MAGAZINE: I think it was. Just in that clip we showed, Biden was looking at Gwen Ifill or whoever, and Governor Palin was staring straight at the camera and as many people -- sort of winking and twinkling her eyes. I think the best comment on her performance was Tom Shaels (ph), a critic from "The Washington Post" who said she out-Tina Feyed Tina Fey.

(LAUGHTER)

Charm, winning and that sort of stuff.

SCOTT: Talk about that Tina Fey interpretation. Is it going to help or hurt when it comes to voters?

HALL: It's interesting. "Saturday Night Live" has played a real role. Tina Fey, the first time around, when she was on with the Hillary Clinton impersonator, I thought it was so brilliant. After she had such difficult interviews and Tina Fey was actually quoting her incoherents, I think that was bad. It wasn't even funny. It was another train wreck.

I think Palin did herself more good than anything else. She was running against the Tina Feyness of her image and the incoherents of the previous interviews. By that standard she hit it out of the park.

LOWRY: Jim was right. Palin was fine on the substance. What stood her in great stead in this debate was sheer TV talent. An executive at FOX explained to me, the key to TV isprojecting through that screen. She does it just so naturally. The first wink, it was like, she's winking at me! -- Males all across America probably had the same reaction.

(LAUGHTER)

(CROSSTALK)

PINKERTON: In crushing the elusive TV news though, nobody votes for any of us for high office. But Frank Capra was making movies about Palinesque characters who go to Washington and show up all the smug, high-hat hypocrites in D.C. Those people in real life actually never got elected to anything.

HALL: Well, except people are comparing her to Ronald Reagan which I think is a bit of a stretch, but that humor, folkiness and TV talent, I think are all there.

One thing I just want to say, I thought it was wonderful that we had whether he was going to be mean to her, whether Biden would be mean to her. Again, the media I think were more guilty of the sexism of that than the debaters were.

SCOTT: Patricia, there was a lot more concern I guess in the media about whether one of these two would goof up. Why are we so much more worried about the stumble rather than the substance of what these two people say?

MURPHY: I think when we're talking about what Sarah Palin achieved, it really was on the style. Even her style went down the tubes in the last two weeks. She did what she needed to do to reassure people that she is a confident person. She still has to convince Americans she can run this country. That's the ultimate test. I think she's started down that road but she's not there yet even with the debate.

LOWRY: There's a big double standard built into the coverage. If she had not done well, there would have been Armageddon. We would have heard about it for days and days, the ends of the McCain campaign. Then when she did well, the consensus in the media was it's a one-day story. It's going to go away and have no impact.

PINKERTON: That goes to the point you're saying, John, about the question of will she make a mistake or not. Let's face it, we all know they're working from talking points and scripts. The only thing interesting is if they do make a mistake, slip on a banana peel. That's what we're waiting for. In this case, neither of those events happened to either candidate. Probably, this debate will fritter away, as Rich says. Nothing bad happened, so let's move on.

SCOTT: Let's not forget about the two guys at the top of the ticket. They're getting ready for their second debate this coming week.

We will be back with that. But first...

ANNOUNCER: Are the media spending too much time talking with Sarah Palin? Did they give Joe Biden a pass?

Plus, how were the presidential candidates covered? All next, on "News Watch."

(COMMERCIAL BREAK)

(FOX NEWS BREAK)

(BEGIN VIDEO CLIP)

KATIE COURIC, ABC NEWS ANCHOR: What newspapers and magazines did you regularly read before you were cast for this to stay informed and to understand the world?

PALIN: I read most of them, again with a great appreciation for the press, for the media.

COURIC: But like what specifically, I'm curious, that you...

PALIN: All of them, any of them that have been in front of me over all these years.

COURIC: Can you name a few?

PALIN: I have a vast variety of sources where we get our news...

(END VIDEOTAPE)

SCOTT: Well, some people call that cringe inducing. That was a segment of the interview that Katie Couric did with Governor Sarah Palin of Alaska.

Rich, she seemed to have trouble with that question. Is that a fair characterization? And, if so was it a gotcha question as the McCain campaign claims?

LOWRY: My theory is that she was embarrassed to admit she's been a subscriber to "National Review" for years.

(LAUGHTER)

That's what she was trying to cover up. But john, I think these interviews are obviously mishandled by the McCain campaign. They should have eased her in to interviews with talk radio guys or local and regional outlets before giving these network anchors days, literally days to curve things, that never end. They seem to go on all month.

The biggest problem was that she was under prepared. They should have taken more time to brief her the way they did prior to this debate and it would have made a big difference.

MURPHY: I disagree with that. I think she was over prepared. I think she was stuffed so full of information that she was not thinking. She was trying to remember. And so when she was asked particularly about the Supreme Court question, what decision do you disagree with? I saw her in January in D.C., this past January. She was there the day before the Supreme Court heard the Exxon-Valdez case that the state of Alaska had taken to the court. That was a case she could have known about, she did know about. She even interviewed about it.

SCOTT: The Supreme Court ruled against the state.

MURPHY: And she was just seizing up, I think, because of this heavy, heavy management. Finally, she seems to have broken away from that.

SCOTT: Yes, because asking you which papers you read doesn't seem like it should illicit so much trouble.

HALL: In a weird way, I think it's sort of heartening -- the credence she gives the netted work anchors and the campaign, it boomeranged on her. She looked like a student who had been asked a question in front of the class and clutched. She clutched. Surely, she reads something. She subsequently told Karl Cameron on this network that she reads various other things like the "Wall Street Journal," "New York Times. And she's annoyed at the question.

SCOTT: "The Economist."

HALL: I don't know I buy that, as a viewer, but I think she was clutching because she felt so on trial.

SCOTT: It is true, Jim, in this day and age -- you've worked with campaigns and politicians. You know the media like nothing better than to catch somebody in a moment of -- I don't know, gotcha moment.

PINKERTON: Right. As I said in a previous segment, they're all so scripted, the only thing that's really interesting is when they fall off their script. When you come up with a question that the briefers and handlers didn't prepare for.

I give Palin a pass on this one. I think she could have been torn between saying, look, I read the Anchorage papers to see the gossip about me and the Wasilla local paper. She was afraid that would make her look too parochial. She didn't want to offend the Alaska papers by saying I read "The New York Times" and LaMond (ph)."

(LAUGHTER)

But obviously, they should have given her something like I need to know what I need to know. I've been governing the state. I have an 80 percent approval rating. Obviously, I'm on top of the facts that matter to Alaska and America. That would have been a decent answer.

MURPHY: It's only a gotcha because she didn't have the answers. Otherwise, it's a time to shine. And these were gotcha because she didn't know the answers. So she didn't have the answers at hand.

SCOTT: Let's talk about her running mate, John McCain. He dropped out or suspended his campaign, he said, to try to go back to Washington and solve his financial -- solve the nation's financial crisis. He was pretty widely panned in the media for that. Was that fair?

HALL: Well, you know, I think it depends how you feel about John McCain. I mean, he did dramatically say I'm suspending my campaign. He rushed home. There are a lot of what we call, in my line of work, tick tocks, sequences of what happened that said he wasn't that involved. That he was grandstanding. Obama took the tack of not being that present. And who was identified with the failure, I think McCain was more identified with the failure than Obama.

SCOTT: Smart move by McCain?

LOWRY: Well, it didn't work out so well. McCain is a constant position of hitting restart on this race. It's such an uphill climb for him.

My beef with the way the media covered that episode was I think they went too far in buying the Democrat spin that there was a deal the morning before John McCain got there and just magically, by John McCain showing up, the whole thing blew up, which was not true, because the House Republicans fundamentally were never on board to begin with.

MURPHY: And the Democrats right now are trying to paint John McCain as out of touch. If he had stayed out on the campaign trail and gone on, going to visit little towns and doing his big speeches, that would have been out of touch. I think coming back was the right thing to do. He wasn't on any relevant committee. It didn't matter if he came back, except for House Republicans. I think it was the right thing to do.

SCOTT: Now that Sarah Palin and Joe Biden are off the stage, Jim, is anybody going to pay attention to the next presidential debate? Those are the guys we're elected onto hold the Oval Office.

PINKERTON: I think most likely the first debate between them will be the most watched. But again, just because that immediacy is -- you just don't know what's going to happen. You're still kind of curious. This race is certainly holding our interest.

SCOTT: All right, it is time for another break. We will be back in two minutes with this.

ANNOUNCER: The markets meltdown. And Wall Street turns to Washington. But has coverage of the financial crisis helped or hurt on Main Street? Next, on "News Watch."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI, (D), SPEAKER OF THE HOUSE: The eye now is to the future to shine the bright light of accountability on what is happening in our financial markets so that it doesn't happen again.

(END VIDEO CLIP)

SCOTT: Ah, the bright light of accountability, that will fix everything, right?

Jim, you wrote a piece for foxnews.com. You said, don't let the bankers blackmail us. I guess the bankers got what they wanted. The House has passed and the Senate passed this financial bailout bill. Did the press do its job?

PINKERTON: I think the press totally failed. I think the press was so obviously on the side of the bailout. They just got up and said you have to pass this. It's horrible if you don't. And the naked self- interest of people who have $3 million apartments in New York City, who don't want the real estate values to collapse underneath them, and therefore wanted the rest of the country to bail out Wall Street was just short of criminal.

SCOTT: Jane, you agree?

HALL: I agree to the sense that they identify with the people they cover, who are people on Wall Street. At least, I think that is true.

I think we didn't really realize and it was reframed. It was sold badly from a media standpoint. President Bush didn't do such a hot job. Neither did Paulson.

I think the media were surprised people voted this down and should not have been surprised. That shows we don't know what's going on out there in the rest of this country.

SCOTT: Out of touch with the voters.

What do you think, Rich? It seems like a lot of reporters don't know about the complicated economics that led us to this point.

LOWRY: I think there was a lot of simplistic focusing on the Dow. That's the big easy number for people to understand.

PINKERTON: But watch those green letters.

LOWRY: This is the credit crisis and you've got to look at these complex indicators that nobody really understands, LIBOR and T-bills, what are the basis points for short-term T-bills. That's the story that didn't get told so much. But it began generally to seep through.

We had a crisis in commercial paper. No one knew what that is. That's short-term loans that businesses throughout America rely on. The person with the $3 million apartment in New York is going to be fine one way or the other. It's the person, the entrepreneur who needs a loan or a business that needs short-term paper to meet payroll. They were getting hurt and that's why this vote turned around.

SCOTT: So when people write into citizenjanepolitics.com, are they a villains and heroes in this story?

MURPHY: Everyone in Washington and everyone is New York is a villain. And people are writing into me -- and I'm feeling it myself. People are saying, I didn't do anything wrong. I stayed out of the market because I couldn't afford a home. And I knew I could so that's why I stayed out of it.

One thing that has been so frustrating to me in the coverage of this, particularly -- no offense to anybody in this room, but the cable news coverage of this to have the House vote transposed right next to the Dow falling, created this moment of hysteria where people saw the House didn't pass this, the Dow went down. If the House passes this, it will go back up. The causation is not the same thing as correlation. And to me, it's created a runaway train that there's no way any House member that wanted to keep his seat could get in front of.

PINKERTON: All the alternatives, all the other ideas about how to deal with this crisis was swept off the table in the urgency to do this. In terms of one journalist, who covered herself with glory, Gretchen Morganson, of "The New York Times," has the story that when the Treasury Department and the Federal Reserve were happy to let Lehman Brothers go bankrupt, but AIG, they couldn't let go bankrupt because, according to Morganson, of "The New York Times," Goldman Sachs', Secretary Paulson's old firm, had a $20 million investment in Goldman Sachs, so they bailed that out. That's Teapot Dome, a big scandal.

SCOTT: Secretary Paulson was on the Sunday shows. He made the rounds. We heard a lot from him the beginning of the week and then he sort of disappeared. Was he helping or hurting?

HALL: Well, I think he delivered a three-page proposal that didn't pass. There were a lot of questions about -- most feel, I thought, in the coverage, were respectful and said, we don't think he's going to do anything wrong. I didn't see that many people talk about how much money he made when he was at Goldman Sachs.

PINKERTON: $500 million.

HALL: Thank you, $500 million. He's a populist now. It's really interesting.

(LAUGHTER)

The thing that I think also was not considered was, what if we don't do anything. Do we need this? It's sort of like a rush to war. This was a rush to the bailout. I agree with what Jim said.

LOWRY: This goes to Patricia's point. One thing the media loves and is going to hype is a crisis. It doesn't matter what it is or whether it's a crisis -- and I do think this is a crisis. But they love that crisis atmosphere.

SCOTT: To listen to Washington last weekend, last Friday, we had to get this done or the sky was going to fall.

LOWRY: This is something people don't understand. They let Lehman go down. They let it go defunk, calculated risk. It didn't play out so well because there was a run on money market funds. That was affecting the commercial paper market. And that was affecting the small businesses all over the country.

SCOTT: All right.

We have to take one more break. When we come back...

ANNOUNCER: David Letterman still steamed at John McCain. When will this feud be over? Next, on "News Watch."

(COMMERCIAL BREAK)

SCOTT: Yes, there are feuds and then there are major feuds. In the media world, there is no bigger feud right now than that between David Letterman and John McCain. The late night talk show host still has not forgiven the senator and presidential candidate for bailing out of a guest appearance on his show recently. Here is how it all began.

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, HOST, "LATE NIGHT": Senator John McCain, Republican candidate for president, was supposed to be on the program tonight. Were you aware of that? Yeah? But he had to cancel the show because he's suspending his campaign because the economy is exploding. And you know who John McCain is? He's the running mate of Sarah Palin. You're aware of that?

I don't mean to cut into your time and your generous visit, but when John McCain -- and he was nice enough to call me on the phone and said he was racing back to Washington. And there are people here told, it's so serious he's getting on a plane immediately and racing back to Washington. Now we've just within told -- do we have it on the thing? This is going live. There he is right there. Doesn't seem to be racing to the airport, does he?

This just gets uglier and uglier. I'm feeling bad for the man to have participated in this. First of all, the road to the White House runs right through me.

PAUL SHAFFER, MUSICIAN: That always happens. That always happens. Always will. (APPLAUSE).

LETTERMAN: Let's punch up Katie curie's interview and see if you can go back to wherever you came from. Let's see what he has to say here. This will be interesting. I wonder it he'll mention me?

Hey, John, I have a question! Do you need a ride to the airport?

(LAUGHTER)

(END VIDEO CLIP)

SCOTT: And Letterman has been slamming the McCain-Palin ticket on his show ever since. Now, we're not sure how all of this is going to end, but there are all kinds of feuds that can influence the mainstream media's political coverage. And you will be sure we'll keep an eye on this one for you.

That's all the time we have for this week.

Thanks to Jane Hall, Jim Pinkerton, Patricia Murphy and Rich Lowry.

I'm Jon Scott. Thank you for joining us. Keep it right here on the FOX News Channel. The "FOX Report" is up next.

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