This is a rush transcript from "Fox News Watch," June 36, 2010. This copy is may not be in its final form and may be updated.

JON SCOTT, HOST: On "Fox News Watch," Rolling Stone topples a general. The magazine's profile of General Stanley McChrystal and his inner circle gets big attention from the press and more attention from an angry president —

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: The magnitude and graveness of the mistake here are profound.

(END VIDEO CLIP)

SCOTT: — leading to a change in command in Afghanistan.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: Today, I accepted General Stanley McChrystal's resignation.

(END VIDEO CLIP)

SCOTT: But was the real message lost in the headlines?

And what damage has been done to the relationship between the Pentagon and the press?

(BEGIN VIDEO CLIP)

GERALDO RIVERA, FOX NEWS HOST: Putting that reporter with those soldiers in that context allowed a rat to be in an eagle's nest.

(END VIDEO CLIP)

SCOTT: Will a media blackout limit coverage of the war?

The oil keeps spilling into the Gulf as media coverage of the disaster grows.

And CNN casts journalism aside to put on an oil spill telethon.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: People are calling from all over the country, making donations.

(END VIDEO CLIP)

SCOTT: The National Enquirer breaks news about claims of an Al Gore sex scandal. Are the media playing it safe or turning a deaf ear?

A disgraced ex-governor with a passion for prostitutes hooks up with CNN in a new role.

And in a battle to control the media, it's cowboy versus cowgirl in Times Square.

On the panel this week, writer and Fox News contributor, Judy Miller; syndicated columnist, Cal Thomas; Jim Pinkerton, fellow, New American Foundation; and New York Post columnist, Kirsten Powers.

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

(BEGIN VIDEO CLIP)

OBAMA: Today, I accepted General Stanley McChrystal's resignation as commander of the International Security Assistance Force in Afghanistan.

I'm also pleased to nominate General David Petraeus to take command in Afghanistan, which will allow us to maintain the momentum and leadership that we need to succeed.

I welcome debate among my team, but I won't tolerate division.

(END VIDEO CLIP)

SCOTT: That action taken by the president, the result an article in "Rolling Stone" magazine about General Stanley McChrystal and his team, Obama's top commander in Afghanistan. It was titled, "The Runaway General." The article describes McChrystal and his inner circle as being at odds with pretty much every administration official involved in the Afghan war effort.

Judy, this article, to put it mildly, caused a firestorm in Washington and all over the world. Michael Hastings, the guy who wrote it, free-lance reporter for Rolling Stone in this case. Given everything that happened, the fallout, was it right to publish this?

JUDY MILLER, WRITER & FOX NEWS CONTRIBUTOR: Of course, it was right to publish it. What's amazing is that Michael Hastings was apparently given many of the quotes that brought General McChrystal down in the first 24 hours he spent with the general and aides. I don't know how much Scotch they drank. Those comments, mostly from the aides, by the way, were stunning. Of course, it was an amazing story.

SCOTT: The reaction, Jim, has mostly been about those comments, as Judy put it. Will Dana, managing editor, told Don Imus that the media's focus was a bit off. Take a listen to what he had to say.

(BEGIN VIDEO CLIP)

WILL DANA, MANAGING EDITOR, ROLLING STONE: I think what the story does do though is it looks at the policy in greater much detail and points out some of the flaws and assumptions of the counterinsurgency strategy. And I think that's what we should be discussing. If — the standard questions that raises about our effort in Afghanistan, you know, are huge and disquieting and, I thought, were depressing, and probably much more substantial than the entertaining quotes that the general and his people gave.

(END VIDEO CLIP)

SCOTT: Given all of that, did the media miss the story here?

JIM PINKERTON, FELLOW, NEW AMERICA FOUNDATION: No, I mean, when General Petraeus, who is now back in the news, ahead of testimony on Capitol Hill a couple of weeks ago, and he fainted, that was the big story, not his testimony. That's not right, but it's what is called sort of the orchestra-pit theory of news, when the orchestra conductor falls in the pit, that's the news, and everything else, including the symphony, is sort of secondary. That's just the way the media ball bounces.

It's interesting. This editor there who had a great story, as Judy says, is being a little disingenuous saying, oh, I wish they'd covered the substance.

(LAUGHTER)

He was delighted they covered the quotes.

SCOTT: We have some video of General Petraeus, who obviously has taken over for General McChrystal, assuming he gets confirmed by the Senate, and he will. MoveOn.org, you remember that famous ad three years ago, they called him General Betray Us, because he was, at the time, working for the Bush White House.

Is there a different feeling now that he is going to be working for a Democratic leader in the White House?

KIRSTEN POWERS, COLUMNIST, NEW YORK POST: Well, I think they have to remember that was a MoveOn thing, mostly. That was not something really reflected in the mainstream media. The mainstream media has had a love affair with Petraeus for as long as I can remember. They pretty much swoon whenever he's around and continue to swoon. He really can do no wrong in their eyes. But if MoveOn.org does something, that doesn't mean what the media thinks per se.

SCOTT: So he is a champion of left leaning media as well as right leaning media, do you think? Petraeus?

POWERS: Yes. I think both sides tend to like General Petraeus.

PINKERTON: But hats off to David Mark at "Politico, who made the point, there is a double standard here. The media — MoveOn pounded Petraeus for working for Bush and they were silent, they even eliminated that Betray-Us thing from the web site because they like Obama.

SCOTT: The comment that Geraldo made a little bit earlier in that clip that was played, Cal, if this reporter was telling the truth — and the general never disputed any of the quotes. If the reporter was telling the truth, can the reporter be blamed?

CAL THOMAS, SYNDICATED COLUMNIST: No, but it has the fallout benefit of putting Afghanistan back in the public mind again. A nine-year war, longer than any we've ever been a part of is now being discussed again.

But going back to something that Kirsten just alluded to a moment ago, the media reaction to General Petraeus is rather amusing. When Senator Hillary Rodham Clinton, before she became secretary of state, and all of these other Democrats, including Joe Biden and Senator Obama, were pounding away at Petraeus, at hearings, saying that basically he was a liar, the media was all over this. Even Chris Mathews and others were affirming that and doing the usual rah-rah for the Democratic politician friends. Now that he's working for Obama, everything is fine, and he's not a liar at all.

(CROSSTALK)

POWERS: There's a big difference between Chris Mathews saying something though and "The New York Times" writing something.

MILLER: Right.

POWERS: And if we're going to talk about how most reporters cover —

THOMAS: Not ideology, there isn't.

POWERS: — how most reporters cover General Petraeus, it is very respectfully. I think it borders on worship, hero worship.

(CROSSTALK)

SCOTT: Isn't that though because his controversial surge strategy succeeded?

MILLER: Exactly. It's not just a question of which president he's working for. This is a war winner. This is a man whose theory was initially just pounced upon, it was stupid, it wouldn't work. It did work, so now you're dealing with someone who's —

THOMAS: Yes, but he was called a liar when he was implementing it.

MILLER: Not after the surge.

THOMAS: After it worked, it's OK.

MILLER: Not after the surge.

SCOTT: What about — what about though — you know, and Geraldo alluded to this earlier — loose lips sink ships. and it could be a long time now before another reporter gets allowed this kind of access to military leaders in the field. Is that a good thing?

POWERS: It's not a good thing, but it's actually surprising that the reporter ever got this kind of access in the first place. And that's the - - what's behind the story-story that I would love to hear, is how this actually happened. It's already moved into an area where it's such a war between the media and the people that are covering them that nobody gets this kind of access anymore.

THOMAS: The Pentagon consultant who set this up has already resigned, but I'd like to know how it came to be approved in the first place.

SCOTT: I wonder what General Petraeus thought he'd get out of it.

POWERS: It's crazy.

PINKERTON: You know, you —

THOMAS: Early retirement.

(LAUGHTER)

POWERS: But there are reporters that talked about how it used to be. There used to be much more coverage about what happened behind the scenes. You know, people being in the Oval Office, watching what the president does that we don't have anymore because of this kind of stuff. And if the "Rolling Stone" editor is so concerned about us talking about Afghanistan, he could have kept the quotes out of the story. I mean, there —

MILLER: No, there were two — look, there were no ground rules set. That's what was amazing. Nobody said anything you hear at the bar with these guys is off the record. Nobody actually said that.

PINKERTON: You hire civilian press aides, you ought to get competent civilian press aides.

MILLER: Right. Exactly.

(LAUGHTER)

SCOTT: It is time now for a break.

If you don't want to miss what we talk about during the break, something you won't see on TV, check out FOXnews.com/FOXnewswatch after the program. You can eavesdrop on our conversation.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You know, you have to do what you can. And unfortunately, I wish there was another option besides working for B.P.

(END VIDEO CLIP)

ANNOUNCER: Tension and frustration build as the Gulf oil disaster keeps growing and news media's coverage grows too.

And did CNN do damage to their journalistic credibility by posting an oil spill telethon? Answers next, on "News Watch."

(COMMERCIAL BREAK)

SCOTT: An iconic image a mile beneath the surface of the Gulf of Mexico — oil continuing to gush as the disaster only gets worse.

We are in week ten of it now, Cal, and the coverage only seems to have grown. Until the McChrystal story broke, this was the most covered story. Is that going to continue?

THOMAS: Well, I think it is. and I think it should. I think one of the problems the media are contending with right now is, with having put so much faith in government to fix things, they're confronted with the situation where it is not being fixed. and they're looking around for somebody to blame. I think Paul Ruben, writing in the "Wall Street Journal," had one of the best takes that I've read on this. I haven't read it anywhere else. He, in comparing Katrina to the B.P. oil spill, he said, Katrina was largely, especially initially, a failure of state and local government to work. And now this is a failure of the federal government.

I think it's a good wakeup call, to employ a cliche, to a lot of people that the federal government is limited or ought to be limited. And now we're seeing its limits and that's not a bad thing.

SCOTT: CNN advertises itself as a hard news source but they turned the hard news off on Monday evening in order to do a telethon for residents of the Gulf coast. Is that an appropriate use of the medium or is it just sort of a naked grab for ratings?

PINKERTON: Again, when Eliot Spitzer looks good to you as a new hire, then sure, why not.

(LAUGHTER)

(CROSSTALK)

PINKERTON: I mean, I think — look, it's a shame to say that the telethon on behalf of the people in the Gulf bombed, but it did.

SCOTT: Well, so maybe it wasn't a naked grab for ratings, but at least it wasn't a success attempt?

(LAUGHTER)

MILLER: No, it was. Right.

PINKERTON: There's successful attempts and failed attempts.

MILLER: It was. It didn't work.

(LAUGHTER)

SCOTT: Alex Castellanos and Hilary Rosen are two CNN contributors. They work for B.P.'s lobbying and, you know, public relations effort inside the beltway. CNN says they are not going to be used in conjunction with this oil spill. But it raises the question, you know, should people who do that, should people who lobby, should they ever be used as news contributors?

MILLER: Look, I think as long as they're identified as the people they work for and, you know, that they say this is not going to be fair and balanced, ladies and gentlemen, this is going to be a spokesman for B.P., there's nothing wrong with it. Because B.P. is going to have its say, too. Now that its own chairman and former president have been eliminated as a credible spokesman, they have to put somebody up there.

THOMAS: But it does bothers me a little more that people like Wolf Blitzer are sitting there taking the phone, "Yes, we have a $10 contribution from Ms. Jones in Keokuc, Iowa."

(LAUGHTER)

Come on. Save that for the Jerry Lewis Telethon.

SCOTT: Then there was the federal judge who threw out the moratorium that the Obama administration had posed on the deepwater drilling in the Gulf. Martin Feldman is his name. He has been hammered in the mainstream media for making that ruling. Is that fair?

POWERS: Well, it's not unfair. I mean, I think it's probably, after what we've witnessed happen with the oil spill, the explosion, it's somewhat shocking to hear something like that. And I think it deserves a lot of media attention. And I think it's not — there's nothing wrong with saying —

MILLER: But he now has FBI around him, protecting him, because he's gotten death threats. And that, I think, is very worrisome.

PINKERTON: I think — this has become a soap opera, this has become like the Iran hostage crisis in the 70's or the O.J. trial in the '90s. The media have gotten comfortable just — we're in New Orleans, in Louisiana, we're interviewing Bill Nungesser, we're seeing Bobby Jindal railing against the government, the oil is still gushing. It's just a comfortable story where the assignment editors can say, OK, we're already down there, we've got the hotel rooms, why not another story.

POWERS: It's also something that — in most surveys and polls, people who are identifying as the top one or two issues that they're interested in, so I think the media is covering something that people are actually interested in.

SCOTT: It's time for another break.

But if you come across a story that you think drips with media bias, send it to us at newswatch@foxnews.com.

So, who do you have to sleep with in order to get your own show on CNN? Ask Eliot Spitzer.

(BEGIN VIDEO CLIP)

ELIOT SPITZER, FORMER GOVERNOR OF NEW YORK: The remorse I feel will always be with me.

(END VIDEO CLIP)

ANNOUNCER: From sex-pot governor with a hankering for hookers to CNN host? Eliot Spitzer lands a gig at the failing cable channel. Is this their last gasp?

And reports of an Al Gore sex scandal surface, but is the media playing it safe or playing a part in the cover-up? Details next, on "News Watch."

(COMMERCIAL BREAK)

SCOTT: Well, remember this? First came the kiss at the Democratic convention and then separation after 40 years of marriage, now, accusations of an Al Gore sex scandal. The National Enquirer broke a story this week that former Vice President Al Gore was accused of a sex crime by a woman who claimed he repeatedly touched her inappropriately. The complaint, filed by a licensed massage therapist, called to a hotel to provide a massage to Mr. Gore, and that's when the situation reportedly turned ugly. Apparently, "The Portland Tribune" had a lead on the story, but never printed it.

Judy, you know, the National Enquirer has broken some pretty big stories. They are standing behind this one. The mainstream media isn't touching it, why?

MILLER: Well, I'm going to take away the Pulitzer Prize that Jim awarded the National Enquirer for this one.

(LAUGHTER)

This one just smells. I mean, great dialog, accusing him of being — saying she called him a big lummox —

(LAUGHTER)

THOMAS: Sex cruel (ph), I like it.

MILLER: And a crazed — sex cruel (ph) but, come on, come on. It's not a story because it probably didn't happen. That's what the police concluded.

THOMAS: You just don't believe that Al Gore is capable of sex. That's your problem.

(LAUGHTER)

PINKERTON: I award the Enquirer the Pulitzer for the John Edwards story, which is demonstrably true.

THOMAS: That's right.

PINKERTON: This one is I — I — I agree if a little iffier. Mark Garber, who is the editor of "The Portland Tribune — it's a little independent newspaper there. They apparently had the story two or three years ago and they didn't see the value in this. I call this iffy. Although it is true, and even Gore has admitted, he had a masseur come to his hotel room at 11 p.m. by himself.

THOMAS: "The New York Post" reported on Friday that the woman is willing to tell her story a million dollars.

(LAUGHTER)

Well, I was on a book tour once with Al Gore and I'd be willing to tell that story for $500,000.

(LAUGHTER)

SCOTT: Let's move on to a questionable new move by the cable news network. Ex New York Governor Eliot Spitzer, who was forced to resign in disgrace in 2008, after getting caught in a prostitution scandal, has a new gig. He's hooked up with CNN to co-host a new show.

(LAUGHTER)

Media reaction has been interesting. This, from "The New York Times," "Television has been home to all kinds of comebacks, Oliver North, Rod Blagojevich, and Sonny and Cher, but the hiring of a former governor, who admitted to soliciting expensive prostitutes, makes this a particularly risky move for CNN."

Kirsten, is anybody going to watch?

POWERS: You know, I was very critical of Eliot Spitzer when all the news came out about the prostitution. And I think it was completely despicable. But I have to say, I watched him when he was hosting on MSNBC, and I thought he was excellent. He is very, very smart. He has that prosecutorial way of asking questions. And I think that he'll probably do a really good job. And I don't think, in this day and age, frankly, that people will be scared off by the so-called ick factor.

SCOTT: Is CNN grasping at straws here or is he really good television?

PINKERTON: You mean CNN, the client 9 network?

(LAUGHTER)

THOMAS: That's very good. Very good.

(LAUGHTER)

MILLER: Or, as David Letterman said, somebody is going to be paying him for an hour.

(LAUGHTER)

THOMAS: Look, he wasn't hired because of his brilliance or how well he did on MSNBC.

And I'm glad to know you were the one viewer of that network.

(LAUGHTER)

He was hired because he made headlines with hookers. That's the only reason. And as Eric Burns pointed out, the former host of this show, to "The New York Times," the really bad deal here is that, you get hired now for celebrity, and not really competence. That's the first thing.

(CROSSTALK)

THOMAS: If he hadn't slept with prostitutes, he wouldn't have been hired.

POWERS: Everyone is saying that, but I'm sorry, I just don't see CNN as the, hey, "we hire people who slept with prostitutes" network. That's just really isn't their brand.

(LAUGHTER)

PINKERTON: It is now. They did it.

MILLER: I see them as desperate. That's what this smacks of.

SCOTT: But talking about fame and how it will get you somewhere, I mean, the "New York Post," which is owned by the parent company of this network, hired the call girl, Ashley Dupre, to write an advice column. Is that the same kind of thing?

MILLER: Well, I wouldn't have done that either. I mean, look, it just —

POWERS: There are plenty of people on television who have done lots of things they shouldn't have done, including seeing prostitutes. So I think that, you know, it's not —

MILLER: But this is less than a year, Kirsten, since the scandal. Less than a year.

POWERS: Actually, though, I think you can be judgmental about that if you want to be, but it's separate from whether or not he's going to do a good job in this capacity. And I think that — I think that he will.

PINKERTON: There aren't many people on TV who aren't likeable, and Eliot Spitzer is not likeable.

(LAUGHTER)

Mark my words.

THOMAS: Particularly with women.

SCOTT: We'll see.

We have to take one more break. When we come back, it's cowboy versus cowgirl in the Big Apple.

ANNOUNCER: The naked cowboy has his tightie-whities in a bunch over her. Find out why next, on "News Watch."

(COMMERCIAL BREAK)

SCOTT: He is a fixture in New York City's Times Square, an icon known around the world as the naked cowboy. wearing just his cowboy hat and boots and tightie-whities, playing his guitar, the naked cowboy, A/K/A Robert Burck, braves the tourists of Times Square in the heat of summer and chill of winter right here in the Big Apple. He's turned himself in a media magnate of sorts. I mean, shouldn't every city have a nearly naked guy playing guitar and posing for pictures in public?

(LAUGHTER)

The naked cowboy has lassoed himself his own little naked empire. He even trademarked his image. But now, a showdown in the square. He has competition or maybe a copycat. The naked cowgirl rode into town to cash in on his image, he says, with hers. A former stripper, Sandy Kane, dons a red, white and blue cowboy hat and a matching bikini. The cowboy though he crying foul. He wants this aging cowgirl to get out of town or sign a naked cowboy franchise agreement.

It's not his first battle. A few years back, he sued Mars Corporation for having a naked cowboy M&M appear in a commercial. That was settled quickly.

(LAUGHTER)

No worries about competition from me or any one on our panel.

(LAUGHTER)

And that is a wrap on "News Watch" this week.

Thanks to Judy Miller, Jim Pinkerton, Cal Thomas and Kirsten Powers.

I'm Jon Scott. Thanks for watching. We'll see you again next week.

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