This is a rush transcript of "Special Report With Brit Hume" from November 21, 2008. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

DAVID AXELROD, OBAMA SENIOR ADVISOR: And, obviously, I think the markets and the world are interested in who will be leading economic policy in the Obama administration, who will work with them on these issues. And so it's important to send that signal.

(END VIDEO CLIP)

BRET BAIER, HOST: There you see David Axelrod, who will be a senior advisor in the Obama White House, reacting to a question about the markets that went up some 500 points after word that Timothy Geithner, the current president of the New York Federal Reserve Bank will be named as Obama's Treasury Secretary.

This comes on a day where sources are also confirming that Hillary Clinton will accept the job of Secretary of State, that coming from Democratic sources.

However, her senior advisor gave us this quote — "We're still in discussions, which are very much on track. Any reports beyond that are premature."

So, what about these big moves? Some analytical observations about the transition from Fred Barnes, Executive Editor of The Weekly Standard, Mort Kondracke, Executive Editor of Roll Call, and syndicated columnist Charles Krauthammer, FOX News contributors all.

Fred, we understand there will be a rollout Monday of the president-elect's economic team, including Geithner at treasury, possibly Paul Volcker and Larry Summers. What about these folks, and what about this announcement?

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: Look, I think it will be a great announcement. But the important thing is it will be reassuring to Wall Street and to markets all over the world.

You know, this is not like FDR back in the early 30's where he could move slowly before he got around to his 100 days, and so on. There's not time to do that. There is a financial crisis here in the U.S. and in the world, and, if anything, Obama is overdue.

But you can see what happened when they put out the word that he is going to pick Tim Geithner as Treasury Secretary. The markets responded extremely favorably.

And if they find that Larry Summers, who had been Treasury Secretary, I think, in the last year or two of the Clinton administration, is going to have, say, the national economic advisor post at the White House, a very important post, I think markets will be even more reassured.

Because, look, the markets are looking at the future. They don't care about George W. Bush anymore and what he does. They want to know what Obama is going to do. And there has been great uncertainty.

Moving to Geithner, that deals with the uncertainty —

(CROSSTALK)

BARNES: — and Larry Summers and Paul Volcker —

(CROSSTALK)

BARNES: Sure. And I think Obama at some point before January 20 is going to have to give some indication at least of what he is going to do in his first year or so on taxes, trade, and even what he thinks about the auto industry.

BAIER: Mort, you have been saying this was an important pick to make and you were surprised that all of these other picks were being talked about before this one. What about the Geithner choice?

MORT KONDRAKE, EXECUTIVE EDITOR, ROLL CALL: Look, the first thing he should have done, I think, way back when the names started popping up, was to name the Treasury Secretary for the very reason that David Axelrod said, this uncertainty in the markets. He didn't know whether we were going to go left or right or how we're going to go.

Now it's clear we're going center. These are market people. They're capitalists. They are not the left-wing of the Democratic Party. And so it is reassuring to the markets.

Now, the next thing he ought to do is, as Fred suggests, he ought to say during a recession you do not raise taxes. That would have a profound effect on the markets, that we're not going to have that kind of cannon shot at the markets.

And, also, it would be good to say that he's in favor of the Colombia Free Trade Agreement. That would assure the world that this is going to be a trading country and we're not going to go protectionist. And that, I think, would improve conditions.

BAIER: Charles, about Hillary Clinton, some people are saying now this whole thing has been kind of ham-handed how it has been rolled out. Is she taking it? Isn't she taking it?

Now sources are saying she is definitely going to accept it, but the rollout won't come until after Thanksgiving according to what we're hearing.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: It's exactly what you would expect with the Clintons. It's drama, drawn out, back stories, front stories, rumors and whispers.

I think it is a hint of what the risk is in appointing her, because it's complicated by the presence of her husband. He has all kinds of ties with foreign leaders, and businessmen in Kazakhstan and elsewhere.

But I think all of that will be cleared away. It's clear that Bill is prepared to do anything required to clear the slate, and he will do that.

And look, at this point, after it's been so rolled out, there's no way Obama will withdraw it. It would cause a crisis.

So it's up to her, and I can't see any way in which she would turn it down.

KONDRACKE: The stories about Jim Jones, the former Marine Corps Commandant being national security advisor are fascinating for this reason — what is Jim Jones right now? He is at the U.S. chamber of commerce heading up their energy program.

And I was on a panel with him, actually, last week in which he said — he rolled out a transition agenda making it clear that energy is national security, and that we got to do it all. He is a do it all guy. We have to build more transmission lines, build nuclear power, drill offshore in addition to doing all the conservation stuff.

And he says you cannot go to a non-carbon economy until those technologies are ready, which is quite different than the enviros in the Democratic Party.

KRAUTHAMMER: One of the reasons in appointing Joe, if he is, he would be a weight for David Petraeus. Petraeus has incredible authority as essentially the victor of Iraq, and he will make recommendations, which we would all assume would be a slowdown of withdrawal out of Iraq.

Jones has a chest full of medals as well. He would be a guy who would at least be able to counteract any such influence over Obama.

BARNES: Yes, but there's not really going — as long as troops are withdrawn, I don't think there will be pressure to make it in 16 months, as Obama had said earlier, and I bet he doesn't push for that.

BAIER: We should also point out, Bill Richardson, current New Mexico governor, said to be heading to the Commerce Department.

So, is the bailout dead for this congress? We'll talk about that after the break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI, (D-CA) HOUSE SPEAKER: Some of the issues that relate to the workforce have to be part of the consideration. But that isn't any reason why these auto companies have not innovated.

They may say, well, we have legacy and healthcare costs. Yes, and so we'll deal with that. But you still have to innovate. That's no excuse not to innovate and compete and have people want to buy your cars.

SEN. DICK DURBIN, (D) ILLINOIS: Where is your business plan? What are you going to do with this money? The American taxpayers deserve no less. They are entitled to a business plan from the big three automakers before we send the first dollar in.

(END VIDEO CLIP)

BAIER: Well, two top Democrats talking about what the Big Three have to do to get the money from congress. We heard from GM today about this thought of a business plan. A quote from a spokesperson there — "We're all competitors," he said of the Big Three. "We have different strategies.

To the rest of the country, Detroit seems just seems like Detroit, but there are limits to how much information we can share with each other and how much we can tell everyone about what we're going to be doing in 2011 and 2012."

So there you hear from the big three. Mort, what about the prospects of money for the Big Three?

KONDRACKE: I cannot believe that the American political system is going to let the auto companies go bust without a plan. But it may happen. They are at the precipice right now. Three to five million jobs hang on it in the midst of a deepening recession. That is terrible. And all the politicians will be to blame if something doesn't happen.

But they have completely different ideas about what the plan ought to be. The Republicans think, quite rightly, that the restructuring should consist of the UAW, which now is making $75 per worker — United Autoworkers, should go down to Toyota levels, which is $40 something dollars, whereas what the Democrats want, they don't care about the UAW part of it, Nancy Pelosi notwithstanding, they just want the auto companies to go green, green, green.

And so they have completely different ideas about what this restructuring plan is going to be. They come back in December, at the rate things are going now, and the bottom is going to drop out, and it's going to drop out of the economy, and they're going to be to blame.

BAIER: Fred?

BARNES: OK. They'll go bankrupt. That doesn't mean they go out of existence. They become bankrupt companies, and then somebody can come in, a special master or somebody, who will take charge, who can open those contracts, who can force the auto companies to get rid of so many dealerships and so many different lines, and really adopt a model that we see with Toyota and Honda and companies like that that are profitable in the United States that hire thousands and thousands of people.

One of the reasons the auto companies aren't so strong anymore is because — this is not seen as national crisis because in so many states, like South Carolina and Georgia, Alabama, Mississippi, Tennessee, Kentucky, where their auto companies, the transplants are doing quite well.

Why should those senators and congressmen there reward the competitors who have done a terrible job in Detroit?

KRAUTHAMMER: That's why the auto companies, the American ones, were shocked by their reaction, the reaction of the Congress when they held up the tin cup. It was extremely negative and hostile, which they hadn't expected.

I think, in the end, there has to be a bankruptcy. But what you probably will get if Obama has his way is a precooked one in which it doesn't officially happen in court. All the conditions, all the concessions happen in advance.

That way a consumer looks at it and thinks it will be a company that will actually be in existence in a couple of years and won't cause a precipitous decline in purchases.

But Mort is right. If the Democrats force a green agenda on an industry in retreat, it will kill it.

BAIER: Last word for the panel.

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