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7 DAYS PANEL w/ ARIANNA HUFFINGTON, BOB SHRUM, JAMIE GALBRAITH & MARK GREEN, September 27, 2008

MARK GREEN: Bob, you speak often about Obama having to pass the JFK "commander in chief" test. What do you mean and did he do it Friday night?

BOB SHRUM: Nixon ran on the slogan "Experience Counts". People watched the debate and then said, well, Nixon has more experience, but Kennedy has enough, I can vote for him. Commander of Chief threshold questions are not binary questions when these pollsters go out and say who would be a better as Commander of Chief. McCain can have a lead. The real question is -- can Obama be a Commander of Chief? After last night, I do not think there is much doubt.

GREEN: How do you measure that? Or you just know it when you see it?

SHRUM: Look, the whole thesis on the McCain campaign on Commander in Chief basically has been that McCain is so much stronger, more knowledgeable and so much better prepared to do this job. But people who watched the debate saw that Obama was as least as knowledgeable. I think more knowledgeable. And he had a calmness and a presidential quality that I think enable him to pass that test and he was going to pass the test unless he made some big mistake. That is why questions like experience don't work as an argument in presidential debates. In fact the last three times we had a candidate accused of being inexperience compared to their opponent -- in 1960 with John Kennedy, 1976 with Jimmy Carter, 1980 with Ron Reagan -- the so-called inexperienced candidate has won.

GREEN: Most analysis have said that, isolating national security aspects, McCain won on points because he seemed relatively more comfortable then on the economic issues. Arianna, do you agree with that?

ARIANNA HUFFINGTON: Yes, I think McCain won primarily he stopped the bleeding of that week. This has been a terrible week for him. He gambit trying to concentrate on the debate, flying to Washington, all that stuff did not work. It made his campaign seemed in free fall. The greatest gain for him was the debate. It put an end to that impression. The greatest problem with Obama he did not make the clear distinctions between the two of them. This is the moment to really draw a very clear distinction between two philosophies of government. In a sense it's what Jamie is writing in his book on the free market, on how Ron Reagan said that government is not the solution, it is the problem. That philosophy is completely bankrupt and Obama did not take the opportunity to point it out yesterday.

GREEN: Who thought McCain came off well because he was on offense on foreign policy issues? Like on the exchange on whether Obama would meet with hostile foreign leaders without preconditions -- did McCain succeed in making Obama seem weak, as Hillary tried to do on this point in the primaries?

SHRUM: It did not work in the primaries and did not work last night. Because the country is pretty sensible about this. There has been actual some polling about this. You can go off and negotiate with these people. This does not mean you are giving into these people. Actually I think this will not be the first time Arianna and I disagree. I think Obama sees this as a dynamic process. The first stop in the process was to pass this threshold in terms of being commander in chief. That was his principal aim.

GREEN: As for the first 40 minutes on the economy, it struck me that Obama really cleaned up. While he bluntly asserted in his first answer that the financial collapse this week was a 'final verdict" on the failure of Bush's and McCain's anti-regulatory economics, McCain answered with irrelevant platitudes about earmarks and "greed" -- and somehow never mentioned the middle class. Did he flunk his exam on the biggest issue of 2008?

SHRUM: Yes, I think people will be very doubtful that McCain even seemed to care that much about the economy; he talked about earmarks four times, and never talked about the middle class once!. I thought Obama, today, by the way, in his appearance in North Carolina after the debate, was really smart. He said '[McCain] railed against the study of bears in Montana, but had nothing to say about Americans who can't afford to go to college!' I mean, I think that sums up what the country saw when he talked about economics last night.

JAMIE GALBRAITH: It's clear that John McCain doesn't have an economic program; what he has is a slogan, which is 'cut spending.' And cut spending on everything, except for Pentagon veterans, and maybe one other thing, like entitlements. Which would mean that there would be no effective response to the recession that we're in, there would be no program to bring us out of it. His administration would see a long period of economic stagnation and rising unemployment and wouldn't have the slightest clue about what to do about it. So it's very plain, in fact, that there's really no credible economic component to this campaign.

GREEN: You had a significant Washington Post piece this week on Congressional action on the credit crisis. What's the current state of play?

GALBRAITH: The situation is really very serious, and action is absolutely required. The action I propose is to lift the FDIC insurance cap, but to make that work would require a huge re-regulation of the banking industry; those two things are two sides of the same coin. But I suspect that we will not be able to change the direction of the legislation presently moving through Congress. We started with a three-page Paulson bill; we now have a 102-page bill which is a vast improvement, with many more protections for the public interest than the original one did. To come back to the presidential campaign, John McCain is in a difficult spot that he is the least equipped to handle. You have to be able to condense and express very clearly the differences between these various proposals -- differences between blank checks and oversight, differences between proposals that have a reasonable chance of working and proposals that probably would not work at all, differences between proposals that would waste a lot of resources and those that would seriously try to limit waste.

GREEN: Can you synthesize what bill is mostly likely to be enacted and to be agreed to by both nominees?

GALBRAITH: I think we will get a bill that will have some safeguards in it, and that will get us through the campaign season, possibly as far as next year. We will not get a bill that resolves this issue in a definitive way because I think that there are such basic problems with the original Treasury idea that you’re going to go out and basically buy up the bad assets in the open market.

GREEN: So there will be a round 2 for the 44th president to look at after January 20?

GALBRAITH: With luck you’d get that far, yes, with luck.

GREEN: Without luck?

GALBRAITH: Without luck you could be back in the soup before Christmas. It’s extremely hard to tell at this point.

GREEN: Anyone disagree that Obama won the debate on the economy?

SHRUM: No.

GREEN: That’s a good succinct answer, Bob.

GALBRAITH: Well I thought that the worst part of the debate was Jim Leherer’s effort to impose an economic choice on the candidates at the very beginning, by demanding to know what Obama would give up from his positive agenda in order to pay for this bailout...The needs of the economy are going to be greater, and the requirements for action are going to be stronger, and the case for Obama’s program gets stronger, and not weaker, as you go down this path of the dissolution of the previous financial system that supported our economy.

SHRUM: Look, this is the classic establishment Beltway view, it happens every four years. Republicans don’t care about it; they just say ‘oh, our tax cuts add up, and they’ll add more revenue than they lose,’ which is now demonstrably untrue. And it’s a kind of one-way ratchet that pushes against programs like healthcare reform. I think Obama handled it exactly right last night.

GALBRAITH: I think Obama pushed back very hard, but I think it was really in many ways improper for Leherer to try and frame these issues in those terms, it was economically illiterate.

GREEN: Finally, some style questions. Remember Gore’s sighing in debates in 2004. Who thinks that McCain’s repetition of ‘you don’t understand’ and Obama’s repetition of ‘John’s right’ combined to help McCain appear to be on the offensive?

HUFFINGTON: I think it helped him. I was watching the debate with two people, one who was looking at from the point of view of a director and what’s working in stylistic and dramatic terms, and Cory Booker, the Mayor of Newark, was looking at it from the point of view from what the people he represents would want to hear. And they both thought there was something missing, in the fact that Obama did not give voice to the outrage that so many Americans, middle class and poor, are feeling. He basically was trying to be too much in the club, he was trying to be one of the boys, as opposed to being somebody who wanted to change the club’s rules. And so the ‘you are right’ [riff] was the sort of senatorial politesse that seemed out of place with the crisis the country is going through.

GREEN: Or is his accomodating approach both authentic to him and an effective antidote for nervous white voters?

SHRUM: Well, he hasn’t done badly by sticking to that style, which I think is authentically who he is. The constant repetition of ‘you don’t understand’ from McCain, to someone who evidently understood, and was demonstrating over and over again that he understood, didn't do McCain any good at all.

GREEN: Did it contribute to McCain coming across as condescending and grumpy?

SHRUM: I think he came across as grumpy and graceless. But look, the fundamental point here, which we just can’t lose sight of, is that the one thing I think Obama didn’t want to do was come across as arrogant or angry. He didn’t do that: he came across as presidential, he came across as in command of foreign policy, he came across as in command on the economy. He came across as someone who did have an economic plan, does have an economic vision. And maybe he does need to get grittier, maybe he will get grittier. But right now, he’s beating McCain by miles on this issue.

GALBRAITH: Lincoln used to say that his courtroom strategy was to give away six points to the other side, and then turn the jury on the seventh. I got the impression that Barack Obama is a student of Abraham Lincoln on that, and it worked pretty well for him last night.

HUFFINGTON: But this is a point, Bob, that is being made by many people who are in touch, much more than we are, with people who are hurting on a daily basis. And they are hearing their voices, and they are longing for someone on the national stage to give voice to their own pain about what they are going through; that’s something that is being felt by many people throughout the country.

SHRUM: My disagreement is that I believe Obama is giving voice to those folks, maybe not in exactly the way you would want him to do it, but I think he’s doing it in a way that will get him elected President of the United States so that he can actually help them.

GREEN: How would you advise McCain to learn from this debate before the next one?

SHRUM: Well, he’s not going to call Jamie, but he could at least call Steve Forbes, Larry Kudlow, any number of the conservative economists who have signed on with him, and say ‘give me some coherent plan, some argument I could make, about what I’m going to do about the economy, how I’m going to respond to the problems of the middle class and the pressures that the people are feeling.’ And remember, that debate will come after this rescue bill passes and when we’re headed into a recession. This issue is going to get bigger, not smaller.

GREEN: So overall, who won this debate politically?

HUFFINGTON: I think it was a draw. I think that it basically did something good for Obama, which was clearing the threshold for Commander-in-Chief, and it did something good for McCain in that it staunched his bleeding of the week.

GALBRAITH: McCain needed a very strong victory in this debate, because it was on his strong subject, and he didn’t get that. The issues are clearly moving toward the economic crisis, and McCain doesn’t have the credentials in that area, he simply doesn’t have the credibility on that. And even if he did call Steve Forbes and Larry Kudlow, I think he’d be hard-pressed to overcome that.

GREEN: There's a consensus that while Obama passed his 'commander-in-chief' test, McCain didn't pass his "economist in chief' test and didn't alter the arc of the campaign which Boama is now winning. So short of a gaffe or a surprise, do we know who the next president will be?

SHRUM: Short of a gaffe or some unexpected development, to paraphrase Tim Russert’s line, we now have a pretty good idea, in fact we know who the next President will be. Because the fundamental forces within this election move toward a Democratic victory. And there were some tests that Obama had to pass, and he’s passed those tests.