This is a rush transcript of "Special Report With Brit Hume" from July 10, 2008. This copy may not be in its final form and may be updated.


REVEREND JESSE JACKSON, CIVIL RIGHTS LEADER: His policy is to teach us some responsibility, whether they are black or white or brown. But the perception is that if black people would just behave better and differently, they would have jobs, healthcare, education. And so that interpretation is the troubling one.


BRIT HUME, HOST: And that is the source, obviously, of a disagreement between Jesse Jackson and certain other black thinkers, and apparently now between him and Barack Obama.

Some thoughts on this controversy and the underlying issue from Fred Barnes, Executive Editor of The Weekly Standard, Mara Liasson, National Political Correspondent of National Public Radio, and the syndicated columnist Charles Krauthammer, FOX News contributors all three.

Well, Fred, what about all this? First of all, there does appear to be a real philosophical disagreement here.

FRED BARNES, WEEKLY STANDARD: I think there is both a generational one and philosophical one, as well. Obviously Jesse Jackson has been the leading black political figure in America now for a couple of decades, anyway, and now he has been superseded by a guy, Barack Obama, who is 20 years younger. And that makes Jesse Jackson uncomfortable, as you might expect and understandably so.

I think the ideological division is also a very great one. Reverend Jackson was talking about that in the bite we just saw, and Barack Obama, who is not running largely as a racial candidate like Jesse Jackson did in the two times he ran for president in 1984 and 1998, and the difference is in the way I think they view their own people, African- Americans.

Jesse Jackson sees them mostly as victims, and Barack Obama sees them mostly as individuals who are largely responsible folks who can do a lot to improve their status in life on their own if they act responsibly.

And this is a debate that has been going on in the black community for more than a century in the black community, going back to Booker T. Washington versus W.B. Dubois, and here we see it again.

MARA LIASSON, NATIONAL PUBLIC RADIO: What Jesse Jackson is giving voice to are these fears in the black community that the only use that Barack Obama has for black voters is to use them as a foil and to show white voters that he is going to deliver this Bill Cosby-esque message of responsibility.

I think the kind of passing of the torch of black leaders happened long before today. I mean, I think that that was completely underscored by—

HUME: But before it was passed to Obama, who was it passed to?

LIASSON: No, I'm saying before this moment it was passed to Obama, it was passed to people like Jesse Jackson, Jr. and Corey Booker and Adrian Fenty.

Today I think what underscored was the blistering comments of Jesse Jackson's son Jesse Jackson Jr., who issued the statement the Reverend Jackson, not even mentioning in the first paragraph that it was his father, saying that he should, basically, keep hope alive and keep his insults to himself. That was really something.

I don't think this, obviously, hurts Barack Obama one bit. Whether it helps him a lot, I don't know.

HUME: Is Barack Obama really a true advocate of the idea that we don't need these social programs so much, because, a, faith-based programs can do a lot of the work, and, b, individual self-sufficiency, parental responsibility, and better moral conduct will get the job done? Is he really an advocate of that?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: No, but he doesn't advocate that as a substitute. He's a liberal, he's a social democrat and Lyndon Johnson tradition who believes in both. You have to have the government helping. The government establishes certain rungs on the ladder, which are now open to you. That's government work.

And then the individual initiative is what gets you up the ladder with your own effort. So it's a combination. And I think that was the general position held among the liberals, that you can't have the one without the other.

Jackson, of course, emphasizes the government role, and I think Obama is emphasizing the individual role. He is in a general election.

But I think what is going on here is not really a policy dispute. As you were indicated, there is a lot of oedipal stuff happening here, and it is not just on the part of Jesse Jackson, Jr.

Jesse Jackson, Sr. is furious. He's been superseded. It's true it didn't happen today, but Obama represents somebody who transcends him and the brand of politics that he created, the politics of grievance.

Obama is not running as a grievance candidate, and he's marginalized Jackson. And I think Obama benefits here. I mean, he is the luckiest man on earth.

McCain, as we are going to see in the next segment, has an advisor who creates a gaffe, and it hurts him. And her Obama has a supporter who creates a gaffe, and it's a gift. It distances him from the brand of black, angry, resentful, grievance politics which has alienated a large majority Americans.

Clinton distanced himself when he had the Sista Soulja moment, and Obama is handed his Sista Soulja moment, he doesn't even have to go out and do it. He is given it as a gift.

He is traveling around the country. Jackson does this, and the distinction between them is highlighted. Obama wins.

HUME: So Obama is helped. How bad is Jackson damaged, in your view?

LIASSON: I think Jackson is damaged. Anytime you make a crude comment like that, when you want to castrate somebody, that is hurtful to your reputation and your image, no two ways about it.

HUME: He survived other things. Remember the love child?

BARNES: "Hymie Town."

HUME: "Hymie Town, love child."

LIASSON: His time has passed.

HUME: In other words, you think his time was already over?


HUME: Do you agree with that, Fred?

BARNES: Look, the ascendance of Obama meant the decline of Jesse Jackson. It has happened.

HUME: Jackson made a gaffe. He called a news conference. He was carried live on some cable channels. He is was on again today, much of the day, again and again.

BARNES: He will be on tomorrow.

LIASSON: It doesn't mean he doesn't want attention. He fits the criteria of his just getting attention. He can still do that, but influence is something different.

HUME: As Charles just suggested, one of John McCain's top advisors went off the reservation today, and we'll talk about that next.



SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: One of his top economic advisors, former Senator Phil Gramm, said that we're merely in a mental recession. That's what he said.

SEN. JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: I don't agree with Senator Gramm. I believe that the person here in Michigan that just lost his job isn't suffering from a mental recession. Phil Gramm does not speak for me.


HUME: Well, in fact, at The Wall Street Journal today at an editorial board meeting, former Senator Gramm was there, and he was specifically there to speak for Senator McCain.

What is it exactly that Gramm said? Barack Obama didn't get it far wrong, if he got it wrong at all—quote, "You have heard of mental depression. This is a mental recession. We may have a recession. We haven't had one yet. We have sort of become a nation of whiners, and you just hear this constant whining, complaining about a loss of competitiveness."

Gramm would like everyone to know that when he was talking about a nation of whiners, he didn't mean the people, you see, he meant the leaders.

Let's try to sort this all out. Fred, McCain—

LIASSON: He probably is saying he should have said "a nation of winners"!

HUME: McCain has now pretty thoroughly tossed this guy out of the bus as a spokesman, but he remains cochairman of his campaign and his chief economic advisor and old friend.


HUME: So it was impolitic, maybe, but was he wrong to say that?

BARNES: He wasn't wrong to say that. You know what this was? This was straight talk that McCain always says he's giving it, and this is exactly what Phil Gramm did. He gave straight talk.

We haven't had a recession. People think we're in a recession. They claim about how bad the economy is—and it's weak, no question about that, although I see now they have record sales at Costco and Wal-Mart, people are out there right through this down turn, spending like mad.

And the other part was — what was the other part, besides a mental recession?

HUME: A nation of whiners.

BARNES: I rest my case on that. America has become a nation of whiners.

He shouldn't have tried to correct it. He clearly meant the people and not just a few leaders.

But there it was, straight talk. And to see McCain react the way he did, I thought that was unfriendly toward a guy who has supported him greatly.

Look, this is going to be a one-day wonder—

HUME: But you can't win an election accusing the electorate of being a bunch of whiners.

BARNES: It was very impolitic. It was also true.

LIASSON: The nation of whiners part is not necessarily true. Americans aren't whining. They're trying to do the best they can.

BARNES: They're whining all the way through it.


HUME: Hold it a second, Mara. Hold it a second. We're not in a recession, unless we've entered one now—

LIASSON: No, that is correct. But to say we're a nation of whiners—

HUME: But if you ask people if we are, they say yes, we are. Isn't that whining?

LIASSON: What they say is we're having economic troubles. People aren't saying, yes, I believe there have been two quarters of negative growth.

HUME: So, in other words, you don't think they're whiners. You just think they're ignorant of what the word means?

LIASSON: Look, I think it is always a big mistake to insult the American people from whom you are trying to get support.

Now, the other thing about Phil Gramm—this is a separate thing, although John McCain did have a very good solution for him. He said that he would appoint him to be the ambassador to Belarus, but he didn't know if the people in Minsk would take him.

But McCain's campaign has been driven by these two economic camps. Phil Gramm, deficit cutter, versus the Jack Kemp growth school. And McCain has yet to really reconcile those two. He wants to have a hopeful growth message, but then he's got Phil Gramm saying if you just pull up your socks and stop whining, everything would be fine.

KRAUTHAMMER: As Mara indicated the first rule of show business politics, don't insult your audience. They aren't going to come back if you do.

Gramm, of course, what he said is true about a recession, but you don't say that in Michigan, or anywhere. People are hurting, and they don't want to hear that. You're running for the presidency.

There is a reason when Gramm ran for the presidency in 1996, he spent $20 million and got ten delegates. He came in behind Alan Keyes, who is the senator of the twilight zone. So he is not exactly the most adept politician.

He is a great economist, and, of course, he's right on. We don't remember, because we haven't had a serious recession in 27 years, what a real recession is. And in that recession, unemployment was almost 11 percent, twice what it is today. And instead of having a one percent growth rate, as we have now, we had a contraction in the last quarter of 1981 of almost five percent negative growth. Now, that's a recession.

But it's been a long time, and people don't remember. Their experience is of good times, and this isn't a good time. But you don't use words like "mental recession" or "whining." That's not how you win elections.

HUME: That's it for the panel.

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