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MR. MCLAUGHLIN: Issue One: The Most Dangerous Nation in the World -- Pakistan.

So says Newsweek this week in an informative, on-the-ground account. Pakistan has borders with China, India, Afghanistan, Iran. It's one-half the size of California; population, 164 million; Muslim, 97 percent.

Pakistan and India continue to fight over the Kashmir region. Pakistan's president is 64-year-old General Pervez Musharraf. He's been a U.S. ally since the late '90s. Islamic jihad militants hate Musharraf. They see him as a U.S. pawn. He has survived three assassination attempts. Today the general and president appears to be losing his grip on power. Onto this scene comes Benazir Bhutto, a former prime minister, Harvard- and Oxford-educated. She spent eight years in political exile. Her homecoming last week turned into bloody carnage that killed 136 Pakistanis and wounded another 250.

Benazir Bhutto says high-level government insiders in Pakistan were involved in the assassination attempt on her.

BENAZIR BHUTTO (former prime minister of Pakistan): (From videotape.) I'm simply saying that there are individuals who could have abused their individual positions to do this. And the threat is still there.

MR. MCLAUGHLIN: Like Musharraf, 54-year-old Bhutto is an ally of the United States. So the jihadists hate her too. They see Bhutto's homecoming as a U.S.-orchestrated coup against Islamists.

The Bhutto return was engineered largely by the U.S. to subdue Musharraf's enemies. Bhutto and Musharraf agreed to share control of Pakistan. He stays on as head of state. She becomes the head of government. He is the president. She is the prime minister.

Now, as militant jihadists continue to threaten Bhutto's life, she remains under heavy security in virtual house arrest. Jihadists are gaining ground throughout the nation. They have moved into cities and suburbs, where they recruit young suicide bombers for the war against NATO and U.S. forces in Afghanistan.

For Osama bin Laden, Pakistan is a dream come true. He's got a trusted network of radical Islamists. He's got access to state-of- the-art technology. He's got regular air travel to the West. Bin Laden is likely taking refuge in Pakistan's northern and western tribal territories, not far from the Afghanistan border. This is where Musharraf's army has suffered humiliating losses.

Instability in Pakistan is a nightmare for the White House, a nuclear nightmare. Unlike Iran, Pakistan has the bomb. If Musharraf loses power and the country tips towards Islamic fundamentalism, Osama wins. Osama gets the bomb.

The death number from the assassination attempt of Benazir Bhutto last week has climbed to 143 and the wounded to 450.

Question: Is Pakistan at the crossroads? Pat Buchanan.

MR. BUCHANAN: It certainly is, John. And you're exactly right in that introduction. Pakistan is about one bullet away from an Islamic republic with nuclear weapons. Musharraf has been attacked twice by his elite army units, or aspects of them, who tried to assassinate him; Mrs. Bhutto, the attempt on her life. You've got North and South Waziristan are very heavily infiltrated by al Qaeda. You've got al Qaeda and Taliban sympathizers deep into the army, and -- especially among younger officers, and also in the intelligence services.

This is -- Newsweek is exactly right. This is the most dangerous country in the world, and I'm not sure how much control we have over it. The deal between Bhutto and Musharraf has about it the aspect of the famous corrupt bargain in American politics where, by the two of them getting together, they have antagonized the enemies of both, and they may have united them.

So this is -- the situation is -- I mean, I don't think anybody's got a solution for it. It is the most dangerous situation, I think, on earth.

MR. MCLAUGHLIN: You think that this administration's deflection of focus, if that's what it is, on Iran, that focus should really be on Pakistan, because Pakistan has the bomb, and the bomb for Iran is hypothetical.

MS. CLIFT: Well, the CIA, for a long time, has said the most dangerous place in the world is Pakistan because of the nuclear standoff with India over Kashmir. And it's not Baghdad and it's not Tehran. It is Pakistan we have to worry about. And it took extraordinary courage for Benazir Bhutto to go back. And she does have a party that has grassroots popularity, and she's now got to figure out how to campaign if she can't go out on the streets and have these mass rallies.

I understand she is going to venture out of Karachi this weekend, and she's asking the government to give her security on the level of the president and the prime minister. And let's see if they deliver.

President Bush has a lot invested in Musharraf, and Musharraf has convinced Bush that he's the only thing standing between that country falling into the hands of extremists with a nuclear bomb. I don't know if that's necessarily true. The extremist parties have never gotten more than 11 percent of the vote.

And we've poured a lot of money, $10 billion, into Pakistan. And what have we got? We've got Osama bin Laden basically being safe, finding safe harbor in the tribal area of Pakistan. You've got al Qaeda and Taliban reviving and thriving. It seems to me we haven't gotten a great deal out of Mr. Musharraf.

MR. MCLAUGHLIN: On the positive side as far as the situation is concerned, the Pakistani military is generally a moderate organization and will not permit a radical takeover. Do you think that's part of what is potential stabilizing news out of Pakistan?

MR. BLANKLEY: Well, if there's a stabilizing influence, it's the army, which has been the most effective institution in Pakistan since the founding of the country. But as Pat says, they have real troubles with their junior ranks, many of whom are Islamists, and some of whom are fundamentalists. You had General Zia before who himself was a fundamentalist. So the army, from top to bottom, is not as secular as you and I might like it to be.

Everything -- everybody is broadly correct about Pakistan except for the proposition that Bush has somehow taken his eye off the ball. This is an intractable problem. He focused on Pakistan immediately after September 11th, turned Pakistan from a supporter of the Taliban to an ally of ours. It's been our base of operation in Afghanistan. Yes, he's relied on Musharraf. I'm not sure there's anybody who would have figured out another thing to do.

Now, at this point, late in the day, with Musharraf's capacity to govern being seriously reduced, with Bhutto -- yes, she has a popular following, but I think the corrupt-bargain analogy is a good one. I don't think that alone she and Musharraf can manage this thing.

I think we need to start looking at negotiating directly with the different tribes and groups and all the ways that we're, by the way, now finally doing in Iraq; worry less about the federal government, because the central government in Pakistan, I think, is in a bad way, and hope to be able to protect ourselves. But you're right; this is the most dangerous place in the world, and I don't know that anybody has come up with a good reliable formula for making it less dangerous.

MR. MCLAUGHLIN: Bush focuses on Musharraf because he believes in personal diplomacy and he has a good personal relationship with Musharraf. That's okay as a doctrine unless somebody leaves power who has been a head of state, like Blair, unless they change course, as did Putin, or unless they're weak, as is Musharraf. Would you not agree?

MR. PAGE: Well, Musharraf is weak because the central government is weak, as Tony mentioned. But Musharraf is with the military, which is stronger than the central government.

Pakistan's problem is that you've got this weak central government and you've got at least three regions that want to break away, including the one that is housing the Taliban now up there in the mountains. And many of them are now moving to Karachi, the biggest city in the country, the port city. And that is causing a real division of the enemies there and makes the country less stable and less predictable.

I think that if Musharraf were to be toppled or replaced, we would try to deal with whoever replaced him. But largely Pakistan is really Afghanistan with nukes, which means it's a very --

(Cross talk.)

MR. MCLAUGHLIN: And Afghanistan, as we know, is unraveling.

MS. CLIFT: Benazir Bhutto is not asking to be installed. She's asking for free and fair elections. The expectation is that she would win, but there's no guarantee. And I think it's also interesting that you have a woman in Pakistan. You also have a woman in Burma, Myanmar. Now she's in exile in her own country. But you have these female leaders who really do inspire the moderate forces in these countries. And I think, you know, our administration has to do more to bolster those moderate forces.

MR. BUCHANAN: All right, but, look, it's unfair to fault Bush, I believe, for this reason. Look, Musharraf and the Pakistanis were behind the Taliban, and after 9/11 they sent the deputy secretary of State over there to talk turkey with Musharraf, and they spun him and they brought him around on our side to support the overthrow of the Taliban.

He's the guy you got in there, and he was a loyal ally, and has been, until, I guess, he's in trouble. The Pakistani troops are being cut off and kidnapped and shot over in Waziristan, and they cut a deal with the Taliban. And it looks like a devil's bargain, and it's not working. But I don't think you can fault Bush, John. I think he did the best he could with what he had.

MR. MCLAUGHLIN: Don't you think that Osama bin Laden has a dream come true in the situation that he's now in?

MR. BUCHANAN: Look, I think there's a real possibility this thing could collapse, and he's in far better shape. They've re- established themselves. But I don't think that automatically means the Pakistani army is going to turn an atomic bomb over to this guy, even if Musharraf goes down. I think the best we could hope for, frankly, is a military dictatorship.

MR. MCLAUGHLIN: Are the safeguards -- is it not true also that the safeguards against a nuclear theft -- they have a nuclear arsenal, though; it's more than one bomb.

MR. BUCHANAN: They've got a number of bombs.

MS. CLIFT: Like 70.

MR. MCLAUGHLIN: They have a number of bombs. But the precautions being taken to safeguard it are about the same as we have in our own country.

MR. BUCHANAN: I would think the United States itself is in there helping those guys with safeguards on these weapons. It would be insane if they weren't.

MR. BLANKLEY: Let me make a point on this. I think I know something on this, because I raised that prospect that we may have -- and I was told from a pretty good source that we do not have the technical knowledge of all the places where the system is being -- where their nuclear technology is being kept. So if it's secure, it's secure because the Pakistani military is making it secure, not because we are. We were surprised, in a flyover at some point, to find out where something was.

MR. MCLAUGHLIN: Are you not embarrassed by your own position in emboldening the president to focus on Iran instead of focusing on Pakistan?

MR. BLANKLEY: No, I believe, in this dangerous world, we have to focus on more than one thing at a time.

MR. MCLAUGHLIN: Well, apparently when you've got the bomb, that deserves special attention. There's no bomb in Iran. MR. BLANKLEY: And when a lunatic is trying to get the bomb, you've got to focus on that too and not wait until he's got it.

MS. CLIFT: Whether it's --

MR. BUCHANAN: We've got B-52s. We've got a B-52 flying from the Dakotas down to Louisiana with six nuclear bombs on one wing.

MR. MCLAUGHLIN: You mean, we don't know how to control our own.

MR. BUCHANAN: We don't know how to control our nukes. (Laughter.)

MR. MCLAUGHLIN: Exit question: On an implosion scale, zero to 10, zero meaning zero likelihood of implosion, 10 meaning metaphysically certain implosion, rate the danger of Pakistan imploding.

MR. BUCHANAN: I think it's a six or seven.


MR. BUCHANAN: Well, listen, they tried to murder the lady. They tried to murder the president. And they're all over the place, and she can't go out. It's a very difficult situation, John.

MR. MCLAUGHLIN: Well, it's one thing to effect a riot or an insurrection. It's another --

MR. BUCHANAN: It's not a riot. There's been two assassination attempts on Musharraf and one on her.


MS. CLIFT: Her father was murdered there, so assassination is not --

MR. BLANKLEY: He was executed.

MR. BUCHANAN: He was hanged.

MS. CLIFT: Executed. Well, it's not exactly new to that part of the world. I think it's a four or a five, because I do think the military is a stable institution. I do think there's a military dictatorship now under General Musharraf. So I don't think there's an immediate danger here, but it's growing.

MR. BLANKLEY: It depends on your definition of implode. I think --

MR. MCLAUGHLIN: That's a Harvard trick. You know that. MR. BLANKLEY: I know. I think --

MR. MCLAUGHLIN: It's how you define your terms.

MR. BLANKLEY: I think the danger of bin Laden or his people getting hold of the Pakistani bomb is about a half or a one. I think the chance of this government failing and having very little managing capacity in a good part of the country is about a six or seven.

MR. PAGE: Well, yeah, right now it has very little managing capacity in a lot of parts of the country. I think Eleanor is right that the military is a destabilizing force in the country. At the same time, out in the tribal areas, so are the tribal chiefs as well.

I give it 50-50, John. And that's not great odds, 50-50, you know.

MR. MCLAUGHLIN: Well, you're one off. You're usually right on the money, but you're one off there. The answer is it's a four. And you've got to remember that Musharraf is cunning.

Issue Two: Follow the Money -- Iraq's Money.

The U.S. inspector general for Iraq reconstruction did follow Iraq's new money given to us by the U.S. He gave us a report this week; $1.2 billion cannot be accounted for. Invoices were not reviewed. Payments were made in duplicate. An x-ray machine costs -- get this -- $2 million; has never been used.

Stuart Bowen, the special inspector general, says his audit uncovered extreme lack of Iraqi government and U.S. government oversight.

STUART BOWEN (special inspector general for Iraq reconstruction): (From videotape.) Only one or two persons were assigned to manage a billion-dollar program.

MR. MCLAUGHLIN: This 2007 review of wasteful and irresponsible spending in Iraq echoes the result of Bowen's earlier audit and amount, like $9 billion unaccounted for in '05, most of which had been embezzled, if not stolen outright.

One former Iraqi defense minister himself embezzled at least -- get this -- $1 billion himself, In '06, Bowen reported that one U.S. soldier gambled away $20,000 in U.S. reconstruction money for Iraq.

This week, in his 2008 war-funding request to Congress, President Bush called for an additional $46 billion to be added to the $150 billion base request for the '07-'08 fiscal year. So the current one- year price tag for Iraq and Afghanistan is $196 billion.

Mr. Bush, by the way, advanced his war budget as he was concurrently vetoing SCHIP, a bill for children's insurance. How much will those denied children have to pay for their share of the current year's $196 billion war budget? Well, a nonpartisan Congressional Budget Office estimate this week fixed the cost for Iraq and Afghanistan over the next 10 years as $2,400,000,000,000.

Americans generally appear fed up. Seventy percent want to see President Bush's $196 billion war budget cut back. More than half of that 70 percent want the $196 billion figure cut drastically or cut completely.

Question: The inspector general continues to expose immense waste and corruption in Iraq. About one in four Americans still think the Iraq war has some redeeming quality. The rest of Americans believe or are beginning to believe that Iraq is one single big rotten and corrupt enterprise, with only Halliburton and Blackwater reaping any benefit.

Is that statement true or false?

MS. CLIFT: That is mostly true. For a Republican Party, Republican government that has always campaigned on ridding us of waste, fraud and abuse, it is obscene the way they have thrown away -- thrown money down the rat hole and enriched themselves and their corporate entities on the war in Iraq.

And you're going to hear the phrase "opportunity costs" soon, because it's not only the cost of the war that taxpayers are bearing, it's all of the money that would be spent on national needs, opportunity costs. And people are going to begin to notice that.

MR. MCLAUGHLIN: Okay, let's review the bidding on the effects of Iraq on the U.S.; first, military. It will take hundreds of billions of dollars in new defense spending to replace the equipment. As for manpower, deployments have depleted it.

Financial status: The U.S. dollar has tanked against other currencies. High gas prices are due to the dollar's decline in the world. All Americans are 40 percent worse off than they were six years ago with global purchasing power. Under Clinton, it took 82 cents to equal one Euro. Now you need $1.43 to equal one Euro. The dollar is an international laughingstock.

Manufacturing outsourced; jobs have been sent offshore to China. U.S. industries are targets for easy foreign takeovers. We owe China hundreds of billions of dollars.

Exit question: Has America's decline as a superpower begun? Pat.

MR. BUCHANAN: John, that sounds like a speech by Pat Buchanan a few years ago. (Laughter.) Look, let me say this.

MR. MCLAUGHLIN: Two years ago?

MR. BUCHANAN: No, a few years ago. Let me say this. America remains a superpower, but the Pax Americana that lasted from 1991 to 2006 is over.

MR. MCLAUGHLIN: What did you think of those statistics?

MR. BUCHANAN: Listen, I've got them in my forthcoming book. Look, the dollar --

MR. MCLAUGHLIN: How can you possibly then have any sense of continuing optimism?

MR. BUCHANAN: Look, America is a superpower because we've got 30 percent of the world's economy and we spend more on defense than the next 10 nations combined. We're the only global power. We're a superpower, but there's no longer the Pax Americana we had where we made the decision for the world. That is over.

MS. CLIFT: Right. I'm not giving up on America. Look at all the people who want to come here that Pat doesn't want to come here. We're still the beacon of freedom in the world. But we are not going to be the sole superpower for much longer.

(Cross talk.)

MR. MCLAUGHLIN: If we're not installing a Pax Americana, who's going to take that over?

MR. BLANKLEY: Wait. Can I get into this?

MR. MCLAUGHLIN: China? China?

MR. BUCHANAN: Who will inherit the earth? A number of people are competing and we are competing.

MR. MCLAUGHLIN: We're talking about the era after America.

MR. BLANKLEY: Let me just get in on this. You managed to throw in every negative thing you could say about Bush, every negative thing you could say about Iraq, and every argument that Pat has about the changing world. This is obviously no time to deal with oil. I disagree with your polling data. I disagree with --

MR. MCLAUGHLIN: Who sets the cost of oil?

MR. BLANKLEY: The world market.


MR. BLANKLEY: No, OPEC doesn't.


MR. BLANKLEY: No, the world --

MR. MCLAUGHLIN: -- and they see the dollar decline in value, so they want more dollars, and that depreciates the value of the dollar.

MR. BLANKLEY: I understand --

MS. CLIFT: If OPEC started to trade in Euros, we'd really be in trouble.

MR. BLANKLEY: We've got plenty of problems.

MR. MCLAUGHLIN: What's the point? Get to the point.

MR. BLANKLEY: Well, my point was going to be that if you ignore everything you said until the last question -- we don't have time to debate that -- no, America's dominance in the world is not --

MR. MCLAUGHLIN: He wants to dismiss my argument by dismissing its principal part. (Laughter.) MR. BLANKLEY: Well, let me just --

(Cross talk.)

MR. BLANKLEY: Let me finish.

MR. PAGE: I want to say Tony -- I actually agree with Tony to the point that money is fungible. I mean, you know, about the same time we're losing jobs overseas, Caterpillar Tractor back in Illinois is doing better because of more exports --

MR. BLANKLEY: Let me get --

MR. PAGE: -- so to a large degree --

MR. BLANKLEY: I think you sell America short as far as our innovation is concerned, our financial motives, our capacity to be productive. The whole world continues to borrow all of our ideas and our capacities. And I'm not prepared to --

MR. MCLAUGHLIN: You know, this sounds like a baccalaureate address that was delivered to a high school about 10 years ago.

Issue Three: Low Riders.

(Audiotaped segment of "Pull Your Pants Up" by Dewayne "Dooney" Brown.)

MR. MCLAUGHLIN: Rapper Dewayne "Dooney" Brown is not alone in saying sagging pants should be pulled up. Some America cities have decided to outlaw, quote-unquote, "sagging," declaring that skin and underwear exposure creates a public threat. Shreveport, Louisiana recently enacted its, quote-unquote, "sagging pants law." If convicted, buttocks or underwear exposure in public results in a $100 fine plus court-approved community service for the first offense.

Also, in Dallas, Deputy Mayor Dwaine Caraway announced this month a city-wide "Pull up your pants" campaign. But lawyers declared Caraway's ordinance unconstitutional. Caraway backed down.

Question: Is there an issue with prurient interest when it comes to the public exposure of the fanny fissure? (Laughter.) I ask you.

MR. PAGE: Well, I turned to my expert consultant, my 18-year-old son, John, and he says that sagging pants were actually going out of style until this wave of laws came along in Dallas, Atlanta and several other cities. Now, I mean, one sure way to make something popular among teenagers is to tell them they can't do it.

MR. MCLAUGHLIN: Did he say that it was a Venus-and-Mars issue, that it depends on whether you're a man or woman or whether you're looking at a man or a woman as a man?

MR. PAGE: I was waiting for some female rears to show up here, John, maybe a thong or two, but no.

MR. MCLAUGHLIN: Why can't existing statute, like indecent exposure or public nudity, handle this? Why do we need more laws?

MR. BUCHANAN: You don't need any more laws, John, for this thing. This is a matter of bad manners and bad culture and all the rest of it, John.

MR. MCLAUGHLIN: Hey, Pat, you would know the answer to this. MR. BUCHANAN: This is a culture-war issue, John.

MR. MCLAUGHLIN: Did the Puritans, did they have dictates about fashion or style? They dictated some people could wear the silver buttons and others could not, right?

MR. BUCHANAN: Silver buckles, right. And if you were wrong there, John, they put you about six feet underwater and brought you back up. (Laughs.)

MS. CLIFT: Teenagers need to distinguish themselves. I think this fad will burn out, just like everything else. No laws -- ridiculous.

MR. MCLAUGHLIN: You doubtless are harshly opposed to, what --

MR. BLANKLEY: I'm against laws that regulate bad taste.

MR. MCLAUGHLIN: Predictions. Pat.

MR. BUCHANAN: The Israeli-Palestinian meeting in Annapolis in November will be a profound disappointment for President Bush. There will be no real progress whatsoever. Bad times ahead.


MS. CLIFT: Ron Paul, with his antiwar libertarian message, will be the story coming out of New Hampshire for the Republicans.


MR. BLANKLEY: The Democratic-led Congress, despite the fact they're going to get almost nothing done, will keep Congress in session until a day or two before Christmas.

MR. MCLAUGHLIN: Interesting.


MR. PAGE: What Hurricane Katrina did for the issue of poverty, the California fires will do for global warming.

MR. MCLAUGHLIN: Spell that out.

MR. PAGE: Well, take that as you wish. If you think poverty is a bigger issue now -- a more important issue -- and it is for the Democratic Party -- so is global warming now, because the conditions of global warming led to those fires.

MR. MCLAUGHLIN: Today in the U.S. Senate, Democrats lead Republicans by one seat. Thirteen months from now, Democrats will lead Republicans by six seats. Bye-bye.


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