This is a rush transcript of "Special Report With Brit Hume" from November 17, 2008. This copy may not be in its final form and may be updated.


BARACK OBAMA, (D) U.S. PRESIDENT-ELECT: I think that we have to restore a sense of trust, transparency, openness in our financial system.

And the answer is not heavy-handed regulations that crush the entrepreneurial spirit and risk-taking of American capitalism. That's what has made our economy great.

It's my belief that we need to provide assistance to the auto industry, but I think that it can't be a blank check, so that we are creating a bridge loan to somewhere as opposed to a bridge loan to nowhere.


BRIT HUME, HOST: Sentiments that one would find a lot of acceptance for on the other side of the political aisle, spoken last night on "60 Minutes" by none other than Barack Obama.

Some thoughts on this now from Mort Kondracke, the Executive Editor of Roll Call, Nina Easton, Washington Bureau Chief from Fortune magazine, and the syndicated columnist Charles Krauthammer, FOX News contributors all.

Well, we get what we imagined to be or expect might be increasing clues about just what sort of president and what sort of steward of the economy Barack Obama will be. What about these clues I just showed here, Mort?

MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: Well, regulation, but not too much regulation, not a straight bailout of the auto industry —

HUME: But the thought that struck me was the entrepreneurial spirit is what made our economy great.

KONDRACKE: There has always been —

HUME: You always wonder whether Democrats think that sometimes.

KONDRACKE: He has always identified himself as a believer in free markets, and so on, and then there was a "but." Then he was attacking greed and corruption on Wall Street, and stuff like that.

I think that he has shown by his campaign that he is a pragmatist, even a realist, to the extreme of — well, to the extent at least of promising one thing and doing another in the case of accepting public funding. When it suited his purposes, he didn't accept public funding, got all of his money together, and blew McCain away.

So, you know, he's flexible. That's for sure. What we don't know is what exactly all this pragmatism means. For example, is he going to be a tree trader, or is he going to be a protectionist. Is he going to go for card check as an early matter and get himself into a big pickle.

Is he going to try to close down the carpet economy to satisfy the enviros, or is he going to fight the recession first? I think that he probably will.

HUME: You mean fight the recession first?

KONDRACKE: Yes. And we don't know.

HUME: Nina, your thoughts?

NINA EASTON, FOX NEWS CONTRIBUTOR: I spent time with him this summer. I had a one-on-one interview with him, and he sounded exactly like he sounded the other night with CBS.

He insisted that he is a pragmatist, not a ideologue. He believes in a strong feedback look that if something is not working, he says, I'm going to change it.

It was in my interview where he backed off his NAFTA rhetoric, and he said "Look, it was overblown during the primary." And that was when he was the most ideological, I think, during the primary, was on free trade when he was battling Hillary Clinton in the manufacturing states.

With me, he said the rhetoric was a little overblown. I'm a free trader.

Mort's right. He has got to prove it. But I do think much was made of his associations during the campaign, his radical associations in Chicago, fairly so.

However, if you look at his associations, his economic associations during the campaign, these are very pragmatic choices. Paul Volcker was the guy who helped him with the financial regulations speech at Cooper Union last march.

He turned to people like Warren Buffet, Bob Rubin, Larry Summers, a former treasury secretary who has been very critical of Fannie Mae and Freddie Mac. That is someone who is very integral to his team.

So I think he does want to be a pragmatist. I do think there is going to be political pressures. I think probably on free trade he's going to give enough to the union, which will probably mean card check, so that he can go forward on free trade agreements, at least that's what I'm told on by his advisors.

On the auto industry, he made clear in that interview. I thought it was a very interesting insight into him, where he is worried about the short-term implications of the auto industry failing.

He just doesn't want — and he is behaving much like Hank Paulson is behaving — possible long-term bad consequences, but the short-term, they want to stabilize things and first do no harm.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: The fact is that we don't know what he thinks deep inside, but it really hardly matters, because if you watch him, he does have these radical associations in the past, and he had in the Senate a fairly left liberal record.

But if you watch him and the way he moves to the center, as Nina indicated he did after he defeated Hillary, he moved at almost whiplash speed, changing on half a dozen positions, in a way saying that he can succeed without the left.

And the way he is speaking now as president-elect indicates as well that it looks as if he may throw a bone or two at left at the beginning. I suspect on inauguration day he will issue an executive order on Guantanamo, shutting it down. He will do one on torture, outlawing it, even though it is already outlawed, but it will look good.

He will do one expanding stem cell research. That is a cheapy. There is large majority who support that. And he may have a restriction or two on oil drilling.

But I think he will see that as bones, as a way to insulate himself, and then he will end up in the center. He knows he was elected with a mandate, with coattails, and with incredible freedom of action as a result of the fact that he is coming into office in a crisis like FDR, and that if he governs sensibly, he could be historic in the way FDR was.

HUME: So what was accomplished during the big international economic summit over the weekend? The all-stars weigh in on that, next.



GEORGE BUSH, PRESIDENT OF THE UNITED STATES OF AMERICA: Our nations agreed that we must make the markets, the financial markets more transparent and accountable.

GORDON BROWN, U.K. PRIME MINISTER: We also agreed on the importance of rejecting protectionism. And this was a very big theme of the meeting, not turning inwards in terms of financial uncertainty.

KEVIN RUDD, AUSTRALIAN PRIME MINSTER: The summit has not only rejected protectionism, but has agreed to an objective of reaching a new global free trade agreement by the end of 2008.


HUME: To hear that from those three leaders — of course, they're all allies and friends and pretty much free market economy, representing free market economies, you would think that the global economic summit was a big push forward for the free market system worldwide.

The question is, was it, and if it was, what did they accomplish — Charles?

KRAUTHAMMER: Not much. No harm, but some good. For example, the declarations against the protectionism. It's only words, but it's still words, pledges that no one would raise tariffs in the coming years.

You also had some compromises. The Europeans had wanted an international regulator of the financial markets, which was a non-starter, because the countries aren't going to cede sovereignty that much, and, secondly, there is no one omniscient enough that could be a regulator of all the markets. It's hard enough to regulate a national market.

But I love the substitute, which was announced, a "college of regulators." I love that term. It recalls the College of Cardinals deliberating with divine inspiration. I expect that when they issue a particular important report, it will be proceeded by a puff of white smoke.

But it is going to be a committee that will look at things, develop information, share information, and be an early warning system.

So I think overall it helped. And there was one other aspect. It expanded what used to be the G7 to include India, China, Brazil, Russia, and other emerging economies, and Saudi Arabia and the Gulf States, who have a lot of extra capital which could help if the IMF needs it.

So I think expanding the base and including them was an inevitable step and a good one.

EASTON: Divine inspiration it wasn't, but I agree with Charles, it was a step in the right direction.

But, also, it was fairly remarkable that you had a compromise from the right, which is free marketers like President Bush agreeing to an international regulatory cooperation. And he even looked a little shaken today when he was talking about it. That's where things have come.

And then from the left, you saw a compromise on the left. You said, a stab against protectionism, and also a willingness to kick off the Doha Round again.

HUME: The Doha Round is?

EASTON: The Doha round is the latest World Trade Organization talks, which would bring down barriers from around the world.

HUME: That's the free trade agreement by the end of next year that Rudd of Australia was mentioning?

EASTON: Right.

And the point of that is, and what is interesting about it now is that some of the middle-sized countries like India and Brazil were the ones who were behind the downfall of it in the first place.

So the fact that they were willing to say, look, we are going to try this again, was a good thing.

It was a short time period. There wasn't a lot they could do. But, you know, there was broad agreement. And this wasn't just the G7 countries. It is important to remember the fact that 20 countries were in agreement to this, and who don't have the same interests.

KONDRACKE: All of that is correct. And what's more, it did not turn into an America-bashing session, which is what I expected, frankly, that the Europeans were going to blame it all on us, and that everybody was going to rant and rave about that.

Instead, they did agree to a cooperation on general principles. They haven't actually established any institutions yet, but they're on the way to doing it. They're going to meet again in April with Barack Obama present, which is what counts, because George Bush can't do anything.

HUME: What kind of message will he take on free trade? You do you think this would move him, perhaps, that you have all these countries will to align on that, that would be at least on paper bucking most of the rest of the world?

KONDRACKE: My guess is that agreeing in principle on free trade will be easy for him. The rubber will hit the road when a free trade agreement has to be negotiated —

HUME: Colombia could be signed now.

EASTON: Exactly.

KRAUTHAMMER: But he won't renegotiate NAFTA.

HUME: Let's hope not.

That's it for the panel.

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