This is a rush transcript from "FOX News Watch," September 20, 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," Wall Street's woes spark fear as the fallout from the financial crisis deepens. Should the media have seen this coming?
The candidates spar over the best way to fix the financial mess. Did the plans get equal time from the press?
General Petraeus hands over the reins in Iraq and the surge is called a success. Did the media give this military man his due?
Plus, Cindy McCain blasts the ladies of "The View" after she and her husband get grilled on the daytime talk show.
And Wall Street's rough week brings out the late night laughs.
On the panel this week, Jane Hall of the American University; Rich Lowry of the "National Review;" Jim Pinkerton, contributing editor and writer for "The American Conservative" magazine; and Patricia Murphy, founder and editor of citizenjanepolitics.com, a nonpartisan web site.
I'm Jon Scott. "FOX News Watch" is on right now.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: America's financial system is intricate and complex. But behind all of the technical terminology and statistics is a critical human factor, confidence. Confidence in our financial system and in its institutions is essential to the smooth operation of our economy and recently that confidence has been shaken.
(END VIDEO CLIP)
SCOTT: President Bush there speaking on Friday. It has been obviously a wild week on Wall Street.
Rich, you have been watching it. Should the media have seen it coming?
RICH LOWRY, EDITOR, THE NATIONAL REVIEW: I think in some respects they did. There have been various eruptions of this financial trouble the last six months of so. Every time we've had a break out, Bear Stearns or something, there is heavy suggestion in the media that the worse is to come, and it was. They were right. SCOTT: But at the same time you don't see the same kinds of coverage of the economy or economic issues. Is that boring news until someone loses their job? Is that what it is?
JANE HALL, AMERICAN UNIVERSITY: There is too much focus on Wall Street. It's kind of a glorification of wealth. It's fun to read that someone is making $24 million and they have a great condo in Manhattan.
I think that certain publications were telling people to buy Lehman Brothers — "Forbes," "Fortune," "Business Week". But the bigger issue is the impact on the American worker, which is pretty much lost, people's pension plans, people — we're just now seeing the wave of stories. The bubble burst on the housing market and you saw a lot of stories about that. What is the impact and what to do about it? Those stories you haven't seen that much on.
JIM PINKERTON, CONTRIBUTING EDITOR, WRITER, THE AMERICAN CONSERVATIVE MAGAZINE: I agree with Jane here. I think there is a basic split between Wall Street and Main Street, producers versus financers. and the reporters in the journalistic identify with Wall Street. It is like Steve Rattner, used to work at "The New York Times". He went to Lehman and started his own hedge fund. Reporters have been in love with the Tom Friedman, global vision of planetary cash flows and financial flows and so on. Where as, manufacturer and jobs and middle class people are boring, boring, boring. So reporters were so enthralled with the vision of the stock market and George Soros going on forever that they completely neglected the fundaments were genuinely rotten.
SCOTT: Patricia, Jane is right. There is main stream investment advice magazines that were telling people to very recently to buy AIG and Merrill Lynch. Is that going to shake people's confident in the media?
PATRICIA MURPHY, FOUNDER & EDITOR, CITIZENJANEPOLITICS.COM: I think to a certain extent. But one problem here, because of a lot of these hedge funds are not regulated at all, there is no public reporting on what they are doing. It is impossible to find out. There is formal no request, there's no way to find out exactly what they are doing. How can you, as a reporter, know what is going on if they're not reporting it publicly?
SCOTT: It is not just coverage of the hedge fund.
PINKERTON: It's covering what they do. It is covering the fact that they shut down a factory in Indiana and moved it to China and then send the intellectual property to China as well. That is knowable. But reporters don't care.
MURPHY: But that is not moving markets. Hedge funds are moving markets and speculators are moving markets. Nobody knows what they are doing.
PINKERTON: But usually it is the journalism covering the story accurately and that includes the impact on the ordinary American?
LOWRY: I've seen front page stories in major newspapers about what the impact of this is on ordinary people. On TV last week, all sorts of those stories. I think the coverage has been excellent. If you just want to know what is going on and you haven't been paying attention and you've watching the nightly news and reading the newspapers, you are getting up to speed on a way — on it in a way you haven't been before.
HALL: Only when we reached the biggest bail out and the biggest failure in Wall Street in 30 years.
LOWRY: Well, was the media supposed to be onto this when the regulators weren't, when chairmen of companies weren't, when...
HALL: But the media might have been covering the Securities and Exchange Commission.
LOWRY: How was the media suppose to know this week it was going to blow up and...
(CROSSTALK)
HALL: And the media might have been covering deregulation of every security industry.
(CROSSTALK)
PINKERTON: They would have won prior to this for knowing in advance. I mean the Watergate investigators, the S&L investigators, the Michael Milken investigators, if they knew in advance, they were rewarded for knowing. Obviously, they didn't know.
You're right, Rich.
(CROSSTALK)
LOWRY: There's been plenty of coverage of the financial mess up to this point. It has been going on for a long time. But to say they were supposed to know that it was going to blow up in this particular way right now is unfair.
PINKERTON: Lehman goes from making $4.2 billion in 2007 to going bankrupt in 2008, there should have been more reporting on that before a week ago.
MURPHY: But even if the CEOs have not understood the risk they were taking, how can reporters be expected to know that? I don't think there's any way you could know when even they themselves have been on the titanic and they don't know even have a lifeboat.
SCOTT: OK, we are going to have to take a break. And we are going to obviously continue this discussion during that break. If you want to hear what we are talking about during the commercial, check out our web site, foxnews.com/foxnewswatch. We will be back in two minutes with this.
ANNOUNCER: A stormy week on Wall Street gives the candidates a chance to chime in. But did the news media give McCain and Obama's plans a fair shake? That's next, on "News Watch."
(COMMERCIAL BREAK)
(FOX NEWS BREAK)
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA, (D), PRESIDENTIAL CANDIDATE: In the coming days, I'll work closely to examine the details of the Treasury and the Fed proposal. As I do, I'll work to insure that it provides an effective emergency response by including four basic principles that my economic advisors and I discussed this morning. First, we cannot only have a plan for Wall Street. We must help Main Street.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN, (R), PRESIDENTIAL CANDIDATE: I have proposed and would sign into law an economic recovery plan for working Americans that is directed to the middle class. It will grow this economy, create millions of jobs and bring opportunity back to Americans. You will get a tax policy that creates family prosperity and allows you to save for the future.
(END VIDEO CLIP)
SCOTT: There is the two presidential candidates, John McCain and Barack Obama.
Patricia, earlier in the week John McCain said the fundamentals are strong but reversed himself. What do you think about the coverage of his economic policy?
MURPHY: I think the coverage of his policies and Obama's policies has fallen to the back pages because it doesn't feel as relevant as to what is going on. The problem I see with the candidates is they are not connecting their plan to real working American lives. They are not connecting. They are getting coverage but I don't think either one is really saying anything that will make a difference. They're not telling us who will be on their economic team. They're not giving us solutions as big as the problem.
PINKERTON: I agree the details of the two economic plans are massed in people's minds. However, Chris Matthews, on a rival network, asked the Democrat, listening to Obama, saying where's the passion in this guy. This is Chris Matthews who loves Obama, saying how come Obama can't seem to get above a monotone on the discussion, whereas McCain — I guess this is a lesson in television — has a hot personality, says Chris Cox, the FCC chairman — who I think is kind of innocent actually — betrayed America. That is hot language that punches through. McCain is showing more of a populous side than the Democrats.
LOWRY: The coverage of this on the political side was dominated by the McCain statement on Monday — the fundamentals of the economy are strong, which was really a stupid thing to have a debate about because he is right. The economy the last quarter grew 3.3 percent. The default rate, though it's terrible, the level it was in 1985. The fundamentals of the economy are strong. It's the financial system that has a huge problem. If it is not fixed, it could eventually affect those fundamentals. But John McCain was right.
SCOTT: What about the coverage of Barack Obama's position on the economy? Has that been adequately sort of sussed out?
HALL: I think there have been a few articles that say here are Obama's advisors, here are McCain's advisors. I have seen a few stories that say their plans for remedying this are not that different. What is unfortunate is they are sniping at each other. McCain taking out ads about how Obama is a tax and spend liberal. There seems more passion around the attack and counterattacks. and I have to say, the candidates seem more passionate. Nobody knows what to do with this.
SCOTT: The interesting thing that has happened this week is we are not talking about lip stick on a pig anymore, right? I mean, we have moved...
(CROSSTALK)
MURPHY: It has focused people's attention as any crisis will. But the problem with these candidates — I mean, most people go into politics because of an aversion to business. They just don't like business. They end up in politics.
SCOTT: They want to get a real paycheck.
MURPHY: I don't think either one of them understands the problem. They don't understand the solution. And we are left to report on what is out there. Not a lot to work with.
PINKERTON: Journalists are not exempt either. The average reporter would much prefer to talk about lip sticks on a pig and the merits back and forth than all of this complicated stuff, which some PhD has to explain to them.
SCOTT: I took economics in college and I guess sort it was sort of my minor. And I didn't put it to use after I got out of college.
LOWRY: You are right about neither of these candidates being motivated by the economy. Had McCain one day saying, no, let's not bail out AIG, that would be terrible. Then the next day, saying, OK, let's bail them out. And then you had Obama, for a long stretch, not saying one way or the other whether he supported the bail out. So this is not in either of these candidates'...
SCOTT: Voting present.
LOWRY: Yes. And it's not in either of their wheel house.
SCOTT: And so President Bush stayed in the background this week. He cancelled a fund raising trip to Florida to deal with the process. Has that helped John McCain?
MURPHY: I don't think it is a great week for McCain. And I don't think that anything George Bush has done would be helpful to him. What was most concerning to me is that on Friday, the president came out and released a statement and took no questions. There is no transparency about what's happening at these meetings between Secretary Paulson and Wall Street at 9:00 and 10:00 at night, over the weekend. There's no transparency in these solutions but the taxpayers are paying the bill. And that is wrong.
PINKERTON: The media stars are Hank Paulson, the Treasury secretary, Bernanke, the Federal Reserve chairman. Those are the people we want to get to. And I agree. You only see them walking into a meeting and then the door closes and we left to kind of wonder what's going on.
SCOTT: They are not answerable to the voters directly.
HALL: That was one point that was buried in a lot of stories that people in Congress are going, wait a minute, hey can do $800 bazillion's worth of bail this one, don't bail this one and there's no accountability? Who knew? There's a lot we haven't known about this situation.
LOWRY: We seeing another sign of the diminishment of George W. Bush. General Petraeus was the president of the Iraq war for a long time and Henry Paulson has been the president of the financial crisis.
SCOTT: We're going to talking about General Petraeus in just a bit.
But first, it's time for another break. We're going to be back with this.
ANNOUNCER: Our country's top soldier in Iraq gets a Pentagon promotion for a job well done. Do the media agree? Cindy McCain gives her view of the unfair treatment by the girls of ABC's gab fest. All next, on "News Watch."
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
PRESIDENT GEORGE W. BUSH: I want to thank General Petraeus and his family for being so dedicated to our great country.
Thank you.
GEN. DAVID PETREAUS, FORMER U.S. COALITION MULTI-NATIONAL COMMANDER IN IRAQ: Mr. President, it is great to be home, sir. It was a great privilege to serve there with our young men and women.
(END VIDEO CLIP)
SCOTT: General David Petraeus at the White House on Tuesday as he takes over CENTCOM, Central Command, and leaves the day-to-day running of the Iraq war to General Odierno.
You have been to Iraq, Rich. What do you think about the job General Petraeus did over there? And has it been covered?
LOWRY: It hasn't been covered the way it should have been. It's been an incredible job. He turned around the war. But the media temperature on this thing went down as soon as the war started to get better and it disappeared off of the front page with some exceptions. Michael Gordon of the "New York Times" has been fantastic throughout this thing and has stuck with the story. But media has just lost interest once we started wining.
SCOTT: Why is that?
PINKERTON: A year ago it was General Betrayus. That was MoveOn, a left wing fringe of the media contacts. Then the media were deeply skeptical that the war wouldn't work. The new narrative of a year today, according to the Woodward book, for example, well, it was Petraeus. He's a great guy. He's fine. Bush is a nitwit. They transfer the positive feelings about the war and surge away from Bush to Petraeus, who is conveniently not running for anything.
SCOTT: But may be running for something soon.
I was thinking about this and I remember when I heard about Petraeus and the handbook he had written for using soft power to take over. He was welcomed until he was politicized and very associated with Bush. And then he was seen more as a political than a military figure by the media.
SCOTT: Because his success — his success...
HALL: His success and he became the front person for the surge. He's the guy who went to Congress and took the hits and he's the guy that, in many ways, has gotten the credit.
SCOTT: All right.
(LAUGHTER)
MURPHY: One quick thing on that. Something I would like to see further reported is, now that the surge worked and violence went down, my biggest question is what is going on with Muqtada al-Sadr and what are his plans. I don't see any reporting on it. I have concerns just as a regular citizen from little pieces that we're seeing reported on that. I think the reporters need to stay on this story, even though it has gotten quieter.
SCOTT: Here's another story that made headlines. Cindy McCain speaking out about her experience when she and her husband appeared on "The View." Take a look.
(BEGIN VIDEO CLIP)
BARBARA WALTERS, CO-HOST, "THE VIEW": We are not talking about the economy. We're not talking about house or anything. She was chosen to reform the government.
MCCAIN: That's what she's done.
WALTERS: Who is she going to reform?
MCCAIN: That's why she's done.
WALTERS: Who is — you chose her just to reform?
(CROSSTALK)
MCCAIN: ... the Democratic and even the independent. She will reform all of Washington.
WALTERS: How?
(END VIDEO CLIP)
(LAUGHTER)
SCOTT: John McCain grilled by Barbara Walters. his wife had this to say about that experience: "In spite of the what you see on the newspaper and shows like "The View" — I don't know if any of you saw "The View" yesterday. They picked our bones clean. In spite of what you see, that's not what the American people are saying and what they are believing."
Now, contrast their experience to what Barack Obama had to say on his visit to the ladies of "The View."
(BEGIN VIDEO CLIP)
UNIDENTIFIED HOST: How are you related to Brad Pitt?
OBAMA: I guess we are ninth cousins removed.
UNIDENTIFIED HOST: That's fascinating.
OBAMA: I think you got — he got the better looking side of the gene pool.
(CROSSTALK)
WALTERS: She was saying, just before you came out — maybe we shouldn't say this. But we thought you were very sexy looking.
Don't you think so?
(END VIDEO CLIP)
(LAUGHTER)
SCOTT: All right. That's the kind of treatment he got.
What about this grilling that the McCain's got, Patricia? Out of bounds?
MURPHY: If the McCains were surprised by it they have not watched "The View." That is a very political bunch. They do hot topics and it is always politics. They're always complaining about the people they like, the people they don't like.
SCOTT: But is it fair?
MURPHY: I think it's fair. They came on and it is a free country. It's a very free forum and they asked questions that people want to do want to know.
I will say Megan McCain, his daughter, was on and she got a warm welcome.
LOWRY: At least the daughter they leave alone.
PINKERTON: And I am mystified by why people go on to get clobbered like that, especially, as Patricia says, since they knew in advance. It is interesting that "The View," in 2008, is like "Larry King Live" back in 1982. It's sort of the talk show that everyone goes — Ross Perot and Bill Clinton back then. And for whatever reason, this has become part of the campaign stops.
SCOTT: You have to sit with Barbara and the ladies.
HALL: It is a double standard clearly between the two ways they treated the two candidates. But a lot of people in the media were trying to ask the question of whether McCain's attack ads were wise. They asked him. and they got headlines out it. Nobody else that I saw would say, are these lies and do dishonor this or do you support this.
SCOTT: We have to take one more break. When we come back...
ANNOUNCER: Is there anything funny about this week's Wall Street woes? Some think so. That's next, on "News Watch."
(COMMERCIAL BREAK)
SCOTT: Wall Street this week, not exactly a laughing matter, unless your job title is host of a late-night TV show. take a look.
(BEGIN VIDEO CLIP)
JON STEWART, HOST, "THE DAILY SHOW": If I may, a sincere congratulations to everybody out there, who pays taxes in the United States. We just bought an insurance company. Congratulations. AIG — we owned 80 percent of the world's biggest insurance company now. They were on the brink of collapse in the mortgage crisis, so yesterday George W. Bush and the Federal Reserve effectively nationalized the company, causing day three of the nationwide outbreak of huge banner newspaper headlines nobody understands. Oh, my god, the giant number's attacking the three letter acronym.
And it only cost us — and this is the best news — $85 billion. Well, if it keeps our government from socializing healthcare, I'm all for it.
JAY LENO, HOST, "THE TONIGHT SHOW": The stock market crashed this week. But market analysts are not calling it a crash. They're calling a correction. Oh, shut up, correction. You never here that at NASCAR. Oh, we had a fiery correction on turn three, four men are dead.
Another day another federal bailout. This is unbelievable to me. The Federal Reserve has just loaned the AIG insurance company $85 billion. $85 billion. That is almost as much money as Barack Obama raised last night in Beverly Hills. That's ridiculous.
Let me ask you, why are we bailing out an insurance company? What's the first thing insurance company does when you have a loss? They cancel your policy. Right. That's what we should do, cancel their policy. Sorry, you are too much of a risk.
(END VIDEO CLIP)
SCOTT: Food for thought.
That's going to do it for us this week.
I want to thank Jane Hall, Jim Pinkerton, Rich Lowry and Patricia Murphy.
I'm Jon Scott. Thank you for watching. Keep it here on FOX News channel. The "FOX Report" is up next.
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