The NewsHour with Jim Lehrer; November 23, 2007

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. .. .. .. .. .. .. .. .. . . . . . . . . . . . . . . . . . funding for the news hour with Jim Lehrer is provided by. Every day, it seems, talk of oil, energy, the environment. Where are the answers?

Right now, we're producing clean, renewable, geothermal energy. Generating enough energy to power 7 million homes. Imagine that, an oil company as part of the solution. This is the power of human energy. The new AT&T, Pacific Life, the Atlantic Philanthropies, and with the ongoing support of these institutions and foundations. And this program was made possible by the Corporation for Public Broadcasting and by contributions to your PBS station from viewers like you. Thank you. The holiday shopping season has officially begun.

This day after Thanksgiving is known as Black Friday to retailers when they hope to begin turning a profit. Shoppers stood in pre-don lines and raced into stores to snag bargains. Many on electronics, consumers were expected to tighten spending this year, faced with a slumping housing market, a credit crunch, and rising gas costs. We'll have more on the U.S. economy right after this news summary. Fox rose today on the holiday shopping kickoff in a shortened day of trading. The Dow Jones industrial average gained almost 182 points to close just below 12,981. The Nasdaq rose 34 points to close above 2596. For the week, the Dow and the Nasdaq both lost 1.5%. Lebanon fell into political turmoil today, just hours before the pro-Syrian President's term expired. President A. Miele LaHood ordered the army to take over security and declared a state

of emergency. But Prime Minister Fuad Sanyora rejected LaHood's orders, saying that he had no authority to make the declaration. Earlier today, a divided parliament failed to elect a new president. Both United States and United Nations officials called for all parties to maintain calm. Saudi Arabia and other Arab League nations agreed to attend a Middle East Peace Conference in Annapolis, Maryland, next Tuesday. They will send attendees at the ministerial level. Syria is a member of the Arab League, but it was unclear if the foreign minister would attend. The U.S. is hoping that this conference will launch a new round of Israeli-Palestinian peace talks, the first in seven years. Two bombs went off in Iraq today, killing at least 28 people. The first hit a busy pet market in the central part of the capital. It has been a target in the past.

In Mosul, a suicide car bomber hit a police checkpoint, killing three policemen and 10 civilians. The government of Pakistan today denounced a move by the British Commonwealth to suspend its membership. The Commonwealth is a 53-nation group, made up mainly of Britain and its former colonies. It handed down the suspension yesterday after President Musharraf missed a deadline to lift emergency rule. Also today, Pakistan's attorney general said that Musharraf would step down as army chief by December 1st, later than previously stated. We'll have more on Pakistan later in the program tonight. All of the passengers and crew on a Canadian cruise ship in the Antarctic had to be rescued today. The ship hit submerged ice just off the tip of the Antarctic peninsula. All those on board, including at least 13 Americans, escaped unharmed. We have a report narrated by Paul Davies of independent television news.

Captured in a dramatic series of photographs, a stricken cruise line are hold and taking in water in a sea full of icebergs. Its passengers and crew take to the lifeboats, though with 154 people on board the MS Explorer, happily every single one of them was to be rescued safe and well. The first officer on the Explorer described the moment the ship was hold and the painful decision to abandon it. We were passing through ice, as usual, due to that every day, and this time something was hit the hole and we got a little leakage downstairs, so we decided to put the passengers and crew in the lifeboats, because if we get too close to the ice, then we can't lower the lifeboats. At first, the crew tried to pump out the in-rushing sea water, but when all power on board failed, that had to be abandoned, and the ship's company joined the passengers in their small boats, waiting six hours for help to arrive.

This was the happy ending as they were taken on board another liner, the Nord Nordge, which had hurried to their rescue. This video, taken on a previous voyage, shows the seas the explorer was built to withstand. It has been taking adventurous tourists to the spectacular but potentially dangerous waters of Antarctica for 40 years now, the company that operates the tours says there's never been an incident like this before. The ship has been going down to those waters for 40 years and is double strengthened hull, but occasionally there are things in the water that can cause some damage and once that occurred this morning, we obviously took the decision to make sure that the passengers, his safety is of paramount importance, were safe and well. Early hopes that the damage ship could be salvaged are now fading. The survivors will be taken to an air force base in southern Chile before flying home. American track star Marion Jones received new penalties today, connected to our admitted use of steroids.

The governing body for track and field annulled all of her race results dating back to September 2000. That included her Olympic and world championship titles. She retired last month after acknowledging the steroid use. She must also give back nearly $700,000 in prize money from the same time period. That's it for the new summary tonight, now consumers concerns about the economy. The view on the street in Pakistan, the schools in New Orleans and Shields and Brooks. Jeffrey Brown has our story on economic worries surrounding this holiday season. Is the credit crunch translating into a consumer crunch? Will American shop amid the subprime mortgage crisis, rising oil prices, a volatile stock market, and signs galore of an economic slowdown as the holiday's shopping season begins. These are some of the questions worrying retailers, manufacturers, the Federal Reserve and

economy watchers like our two guests tonight, David Wies, Chief Economist for Standard and Pores, and Michael Mandel, Chief Economist of Business Week Magazine. Will David Wies starting with you? What are we seeing right now? Are Americans still spending? Well, Americans are still spending. I think we're seeing some early signs that they're starting to slow down though. They're getting squeezed by falling home prices, rising gasoline prices, and that's going to leave less to spend at the shopping mall than they were able to spend a year ago. And what do you see staying with you? What do you see in terms of retailers responding as we begin the holiday season? I think we're seeing a lot more discounting than we did a year ago, and I think we'll continue to see that. Also, when you get these kinds of periods, it tends to create a late Christmas because people know that retailers will get more desperate as Christmas approaches, and the discounts will get better. Michael Mandel, what do you see right now? I think that retailers may be surprised this weekend that they may not get as much shoppers out there buying as they expected, and I agree with David that the retailers are going

to end up panicking after this weekend. They're going to end up panicking. I mean, where are we going to see it and what particular sectors or businesses or what kind of retail? I think you're going to see it across the board. One interesting question about is whether or not things like consumer electronics are going to stay as strong as they've been in the past. Are people going to be out there buying those big screen TVs? That's going to be a big question. Michael, I ticked off in our introduction some of the economic worries out there. What most translates into an impact on consumer spending? Well, I think in the short term, consumer spending is most impacted by things like jobs and prices, and David mentioned the high gasoline prices, which is taking away buying power from the consumers. Going forward, if we're looking into sort of the end of this year and next year, what might be taking away is difficulty getting credit, which is something that Americans have never seen, having, they haven't seen in the last 20 years, companies have always been linked

to send out credit cards and give people basically as much credit as they wanted. But if we start seeing a credit squeeze, I think we're going to see Americans cut back on spending quite a bit. Well, before we go that far ahead, David, we shall tell us more about the importance of the consumer right now. We're always talking about the consumer propping up the economy, is that still the case right now? Well, the consumer in the U.S. dominates the economy. Consumer spending accounts for 70% of GDP. What happens with the consumer really affects almost completely what happens with the overall economy? If you stand a dropping housing, that's only 6% of GDP, but 70% any significant decline and you're looking something that looks an awful lot like a recession. Can I jump in here for just one second, which is that, I mean, David is right in one sense, the consumer is a 70% of the economy, but what's true now that wasn't true in

the past is that a lot of what consumers buy is made overseas so that even if Americans cut back, it doesn't necessarily translate into jobs here in factories because the factories are now in other places. What that means is that we're better suited than we were in the past to absorb a consumer slowdown. David, will you come on back? Yeah, though there's some truth to that. The fact is that over 60% of what we buy are services, not goods. So even though he's right, Mike's right, a majority of the stuff we import comes from overseas, a majority of what we buy are services, and those services pretty much by definition are produced here. David, before we go on to the longer term consumer crunch question, the drop in the dollar, how is that, what kind of play or impact does that have on the kind of economic worries we're talking about? There probably doesn't affect this Christmas very much, but I think it will start to

affect next year because as the dollar goes down, prices have imported goods are going to be going up, that's going to add cost pressure, it's going to make it a little more expensive to buy those things. One caveat there, most of the decline in the dollar we're seeing is against Europe. Most of the stuff we import tends to come from Asia and South America, where currencies are pretty much stable against the dollar. Of course, Michael Mandel, one of the groups of consumers, happy about the dollar, and there are a number of stories today, is foreign tourists visiting the US. Oh, that's right, and they're out there. They were out there shopping in the middle of New York City today. I want to add something to what David said about the dollar, which is that he's right, it doesn't have any direct effect now, but I do wonder if the falling dollar has a psychological effect on Americans, if they see, if they're forever seeing that the dollar is weak. I think on some level, it gets to people and it sort of makes them think that there's something wrong and it adds to the pressure to pull back. Well, David, Luis, that's interesting.

What do you think? Well, I think that's more than offset by the pressure not to visit Paris. The amount we'll save on foreign trips and the amount that foreigners will bring into the US, I think, more than compensate for any psychological worry. Now, Michael Mandel, flesh out what you are starting to tell us about what you call a consumer crunch looking ahead to the end of next year and into next year. Well, one of the things that we could depend on the most and the American economy over the last 20 years has been the fact that Americans would spend and spend, and they'd keep spending, even if they didn't have money, they would, they'd borrow with, they'd borrow off their homes, they'd borrow on credit cards, they'd borrow auto loans. So it was basically a borrow and spend economy. What I kind of wonder is whether or not we've come to the end of that, not because the American consumer wants to stop borrowing, but because banks and other financial institutions are now going to have to stop lending. And this is where it ties into the subprime problems that everybody's heard about.

What's happened is that all of a sudden, Wall Street firms are losing lots of money on lending to consumers. And what I think is going to happen over the next few months, I think we're going to see a pullback, we're going to, you know, it's been already been a pullback in mortgages, we're going to start seeing a pullback in credit cards, they're going to have lower limits, companies are going to tighten up, there'll be fewer of them. And all of a sudden, this borrow and spend the economy will start going in reverse a bit, and Americans are going to pull back. We're going to see that pullback by lenders, are there any clues already that we're seeing it, that less credits available to consumers? We've seen it on the mortgages, okay, and we're starting to see a bit on the auto loans. We haven't seen it yet on the credit cards, but I think it's only a matter of time. I think that the financial institutions have taken such big hits on the subprime stuff with more hits to come, that they may be forced to pull back and adjust for their own self

preservation. David, what do you, what do you see, what do you think about this thesis? Well, I don't think there's much sign that they're pulling back and actually loss rates on credit cards remain amazingly low, much lower than we thought they'd be at this point, about 4.5% by our numbers. But I mean, Mike's right fundamentally, because certainly home equity loans are going to be a lot harder to get, and people last year took $260 billion, sorry, $640 billion out of their homes, and home equity loans cash out refies. That money's not going to be there this year. So what are you, David, staying with you? What are you looking at most carefully over the coming three to six months, eh? Well, obviously, the next couple of months, the whole story is going to be retail sales. How many people show up at the shopping mall, and how much do they buy? And Michael Vandell, what's your answer to that? Well, I think that this holiday season may be the last good times before the bad times come. People are going to keep shopping, they're going to keep shopping out to the end of December,

and then in January, early next year, I think we're going to start seeing the credit squeeze really start to hit for the first time. This is one place, I mean, David's absolutely right. You don't see it in the numbers yet. But this is something that's gone on for a long time, this borrowing splurge, and it's almost has the feeling of a bubble to it, and I think the bubble's about to pop. But you can't, you never know when the bubble's about to pop, right? I'm going to, I'm willing to sort of bet that this is the moment, that this is the moment when the bubble's about to pop, not from the consumer side, but from the lender side. And David, we, so you're just going to take a wait and see approach. I think we're underestimating the ability of the American consumer to keep spending. I do think they've got to pull back. I worry that us baby boomers are rapidly approaching that cliff of retirement without much of a parachute. We should be starting to save, but I'm not as convinced as Mike that we're going to. All right, David Wees, Michael Mandel, thanks both very much. Now the Pakistan story, Margaret Warner, is there for us, and today we hear the reactions

of Pakistani citizens to the events of recent weeks. President Parvez Musharraf has clamped a state of emergency on Pakistan, but for journalists coming near the show goes on. The popular talk show host, whose geo-news network has been yanked from the air, today produced his program, Capital Talk, for a live audience on the streets of the Capitol. Along his guests, Imran Khan, the opposition leader and former cricket superstar, recently released from a weekend jail. So why did you come all the way to do this program? To show solidarity with the media, because this is the genuine media in Pakistan, as opposed to the control media by the government to show solidarity with them, and actually to get our views across to the civil society, which is desperate at the moment to fight this dictatorship. The crowd that gathered for the taping in front of the Islamabad press club was small, but vocal.

A large police force came too, but stayed on the fringes, despite the crowd's call for Musharraf to go. Three weeks after Musharraf declared the state of emergency, Pakistanis had had time to reflect on its impact. At the Epara market in the center of town, the immediate challenge today was uprooting the stump of a fallen 60-year-old tree. But while the routines of daily life continue here, the artisans and traders working in the market say they've noticed a big drop-off in business since emergency rule was imposed. Kaiser Waseem says his electrical goods store is suffering, and so is Pakistan. It is a great collapse of the business. And why? Why aren't people coming to buy what you sell here? People, because people were thinking insecure, he was thinking that they are insecure in this country, they're not going to spend more money rather than spending, they are going to keep in reserve, and they do not want to keep for the bad moment that money.

Musharraf insists his state of emergency is aimed at preventing any black moment from engulfing Pakistan, especially from terrorists, but under pressure at home and from abroad, he has pledged to abandon his army uniform when he takes the oath for a new five-year term as president. But by weeks end, that still hadn't happened. There are nagging doubts here about whether it will, and whether Musharraf will have the same power if it does. I think it is not convincing me that he can generate a gene without a uniform. He is not a politician, he is not a civil politician, he is an army man, also, he is not a uniform, how he gives orders, how he implements the policies, it is very hard not to click for him. There are still Pakistanis who admire the president, and we found some of them today at an upscale bakery.

Four friends, all primary school teachers, were choosing a birthday cake, and no Vera Rashid expressed her confidence in the president's recent moves. I think that whatever he feels, in his circumstances, he is right, whatever he is doing, he is quite right, because he can feel the things, he can see the things through that thing, which we don't know, we are being the common people, we cannot think the way he thinks, he knows the things, so whatever he is doing, he is right. Her colleague, Dia Mustafa, also supports Musharraf, but she is worried about what will happen if he abandons his uniform. I am with him. I think if he is a president, he needs to be covered, and Pakistan is at a point where it needs a very powerful president. If he is there without uniform, I don't think people are going to, you know, he could control things like he used to. But opinion at the bakery didn't all go Musharraf's way. College lecturer Yawar Abbas approached us to express his anger over emergency role, and over the failure of millions of his fellow citizens to speak out against it.

We have no courage to speak, to stand up, to speak out that whatever is happening is completely wrong. And I am not afraid. I am saying it again, this whatever is happening, whatever is happening, in last few weeks, especially, it's completely wrong. The opposition politicians and activists who gather for today's TV show Taping did express that sentiment, and there was criticism also of the United States for failing to press Musharraf hard enough for full restoration of the Constitution and every institution, including an independent judiciary. The biggest crime is committed by him, is against the Supreme Court, and we want the Bush Administration to stand with the Supreme Court. And forget about everything else. Once the Supreme Court is restored, they will restore the rights of the people of this country. Is it possible to have free, fair, incredible elections under a state of emergency? It's a joke. It's a contradiction in terms.

That issue seemed far from the concerns of members of the Lahore Polo Club when we visited last weekend, founded by the British in 1886, it occupies a lush 64-acre site in Pakistan's cultural capital. It's a place where members of Pakistan's money delete come to relax and play, and many of them, as retired military, have known Parvez Musharraf personally. This man, and retired major Jared Maywaz, watching his 12-year-old grandson play Polo, expressed bewilderment about what he considers Musharraf's erratic behavior of late, and concerned that it is undermining Musharraf's standing among his countrymen. I see him in the delivery, and my friends see him in the delivery. We don't see him around anymore. The way he looks, the way he, you know, a expression that he's giving is like he's becoming Mussolini or Hitler or something, you know, the way we can see that. And I'll come again, I'll say again, this is the best man we have, I wish somebody can put

sense into his head. And with that, the Polo players carried on, a scene of serenity in a nation that is boiling with debate and doubt about how the current political drama will be resolved. I talked with Margaret earlier today after she prepared that report. Margaret, hello, you've been there a week now. The British Commonwealth has suspended Pakistan as a member, elections are coming in early January. What is President Musharraf standing with the Pakistani people today? Well, Judy, when we got here a week ago, the big question in Washington and here was whether he could even ride out the outrage that had greeted his imposition of emergency rule, I have to say that after a week, it's a week of us being here, it appears as if at least in the short to medium term, he very much has the Supreme Court today cleared the way for him to be certified, reelected as president. That is expected to happen in a couple of days, two or three days.

And then, in his aid's promise, he will doth his uniform and take the oath of office as a civilian president. In the meantime, though, he has amended the constitution further to make sure that he would retain the sole power to lift emergency rule and also that whatever he did under emergency rule would not be subject to review by the courts. Then in response to some of this pressure, especially from abroad, he has taken steps to lift some, but not all of the elements of emergency rule. So, for example, he's freed thousands of the activists that were put in jail, but not all of them. Most of the private media channels are back up on the air, but only after signing a code of conduct and in some cases, canceling the shows of particularly offensive hosts in the eyes of the government, was telling me he has done nothing to restore any judges who had refused to take a new oath under this provisional constitution that he imposed on November 3.

Perhaps, best for him is the fact that we're just looking down Constitution Avenue here. The president's house is behind me. There are not thousands of demonstrators out in the streets. Now, this street is barricaded off with barbed wire, but they are not here. And so, in the eyes of many observers and people who know the military, well, they say the military has no incentive right now to move against him. Margaret, your piece mentioned criticism of the U.S. for being too soft on Musharraf. With so much at stake, Pakistan's role in fighting the extremists, the fact that they have nuclear weapons, how do the people there see the U.S. role in all this? Well, the perception, Judy, has been for a long time here and probably with good reason that the United States has a lot of influence over what goes on here. And it was no secret that the U.S. belatedly recognized that Musharraf had damage to standing with the public here when he tried to fire the Chief Justice the first time in the spring.

But the U.S. had moved to try to facilitate a power-sharing deal with Benazir Bhutto, the former prime minister in which she would come back and run for Prime Minister again. He could stay on this president and give a kind of loss of democratic civilian governments to his continued role. And in the United States, that was desirable because they do regard him as fighting against terrorists in Islamic terrorists, both on the border with Afghanistan and also in the northern part of Pakistan. But the public is not crazy about this, they see the U.S. as trying to prop up Musharraf. Now this week, it's been a bit of a rollercoaster because when John Negroponte, the deputy secretary of state, came over the weekend, he did have some very tough words. You know, he said, I told President Musharraf his to lift the state of emergency and free those in prison and free the restrictions on the media. I went to a student rally in the, I think it was Monday or Tuesday and several students

spoke approvingly of that and came up to me and asked, was he, you know, was he really that tough? But then at midweek, President Bush gave an interview in which he said something about how he thought that Musharraf really did believe in democracy that was widely noted here. And by weeks and as you saw in the piece, activists were questioning why the White House was not insisting that Musharraf lift all aspects of emergency will particularly the number one source of accountability that judiciary. So I would say that the United States role by weeks and is still seen as, as the U.S. trying to prop Musharraf up. And I have to say in talking to Musharraf aides, it's quite clear that they don't feel any huge pressure from Washington, including they don't fear the suspension of the millions and millions of dollars in military aid. If in fact, all Musharraf does before the elections is given half a load. And Margaret, thank you very much for your reporting all this week from Islamabad.

Thanks, Judy. And now another in our series on two public school leaders facing tough challenges. On Monday, John Marrow reported on the ongoing efforts to reform the Washington D.C. school system, tonight, he updates how the new head of the New Orleans schools is doing. Says, because she said that bar high. And if you said the bar high, the higher you said it, the higher your children are going to perform. Ever since arriving in New Orleans in July, school superintendent Paul Vallis has been on the move. He spends a good part of each day building support in the community. We are currently trying to secure enough money to, in effect, do 40 renovations over the next couple of years. And making sweeping changes in the classroom. Well, let's think about how we do math. Kids who struggle in reading often move much faster math.

It's a whirlwind schedule for the 53-year-old Vallis. My day will usually begin about 7-30 in the morning, particularly if I'm doing a school visit. And my day will usually end about an early day for me is 6-30. The late day for me is 9-30, kind of clock. After successful, if controversial appointments running the much larger Chicago and Philadelphia school systems, Paul Vallis was brought in to rescue the state-run recovery school district, 60 schools, 12,000 students. The people of New Orleans expect a lot from him. We know that key to rebuilding our community is getting great schools in our neighborhood. New Orleans parent Karen Harper Royal serves on the Recovery School District Advisory Committee. I know many people who have not come home to New Orleans yet because the schools are not up and running, and many of our most devastated neighborhoods. If you build a wonderful school, bricks and mortar, great program, community supporting it, people will begin to come back.

Building strong schools is at the heart of Vallis' plan. He's working with a budget of almost $250 million, a mix of state funding and federal restart monies. We did a great job preparing those buildings to the best of our bill. I mean, the buildings are clean and painted, and the bathrooms have been repaired, and the hot ones has not that. The technology and the classrooms, the new textbooks, the modern furniture. I think all these things are making for a better learning environment. How is the mattering? Being boldened by his earlier accomplishments, Vallis is feeling confident. If within two years, this district has not significantly improved. If I have not achieved 90% of what I've promised, then, you know, by right, you know, they should put me on the Amtrak and send me back home to Chicago. While many of Paul Vallis' initiatives got off to a smooth start, there have been bumps along the way. Some schools have been having problems since day one. At Rob Wynn High School, Vallis' largest school, glitches in the district's new computerized

scheduling system led to chaos on opening day. We kind of came on the first day, and we found out that morning that they're just in a huge problem. Get your classes! Literally, everyone kept coming in and saying, I have your class. I have your class. I have your class. And I'm thinking, how in the world do I have 40 kids that have biology, fifth period? A solution was slow in coming. At this time, I need any student that has not received a schedule to the artist for you. Revise schedules did little to remedy the situation, and problems continued well into October. The problem came from poor record keeping, on behalf of whomever, however, there's no schedules.

There's kids running all over. When do you have another student in the next day you don't? And it's frustrating for any teacher. I think we're even doing my theory. I think we've had more problems that Rob went in part because of what was not done last year. Last year, there was no effort made to update the student records. We have such a large number of children who are in this system, or who have this return to this system, and yet if there are records, and that's a big if, those records are out of date, those records are not accurate. The scheduling confusion aggravated another problem, one with deep roots in the community. It's kind of ingrained in New Orleans School's system that, you know, attendance is not a huge priority. Four days a week is a good week. Wamisha, Patricia, Bernard, and that's it. So that's a total of 10 out of 30. You have kids who don't think that education is important. You have kids who come from families who, you know, don't push the issue about getting

to school all the time, or even getting to school at all. So I think it's the apathy in the home slash community environment. Let's go back to your folks here, class. Many students who did come to school seem to spend much of the day wandering the halls and reporting late to class. Hey, folks, I'm just going to be here to be a folks here at class. All of you have passed geometry. The administration focused on scheduling problems, teachers were on their own. Right now, handling students that are acting out is a little bit difficult, since we're still sorting through the schedules, our school wide discipline hasn't been as concrete and solid as it should be. Elsewhere in the district, Bella said, his initiatives were helping to control discipline problems. I think schools have been very calm, you know, we've had, you know, we've had a couple of fights, couple of boy fights, girl fights. But I think the fact that the schools are relatively small, and the fact that the class sizes are so small, it's made the school management much easier.

Although many classes at Roblin were meeting, Valus' 25-1 student teacher ratio, that wasn't enough to solve the discipline problem. There was too much confusion yesterday. Total chaos. Well, me bananas yesterday, Principal Adrian L. Boyd had to take action. This morning, I had to crack down on the number of tardy students. I crack down every day. With the day yesterday, I really put my foot down because I had 87 tardy students. Well, we have to keep tardy records. We wrote down the names of each student and they will be assigned an after-school detention. After three tardys, they will face a one day out of school suspension. But Valus would rather see students punished on school grounds. Students are chronically, tardy or chronically absent, sending them home for four or five other days. Four or five more days is not going to solve the problem. In fact, Valus hopes that by keeping students in school longer, discipline problems will begin to decrease.

The challenge for us is to try to compensate for what's missing at home. And that means you keep the schools open longer. You provide the children with three meals a day. You expand the number of social services that you can provide the children at the local level. Now, what you can do is to take this. The faculty and staff at Rob Nguyen are already trying to make their school a place students want to be. Even with facilities still under repair, after-school activities are being brought back. And they've invited parents and families to potluck dinners at the school. This year, for the first time the school has a football team, other sports are being introduced as well. Remember when I said, don't get, don't go for contact. Tim Batch is the athletic director and the school's disciplinary. What these sports do is give these kids an alternative to negative behavior. We have a couple of students that were problems last year, and this year, they're involved

in the basketball as well as the football. And absolutely, we have had no problems out of those students, and as a matter of, I think some of their grades have actually gone up. I thought I was going to wind up dropping up, but I like it right now. I got more than basketball team on doing good, making good grades, mom proud of them. That's how I'm trying to do the right thing. But it will take more than sports to improve academic performance. Most of the districts first set of benchmark tests, measuring student proficiency, recently came in. About 80% of students perform below grade level. The slotted time for extended day will be 335, right? Paul Vallis has a plan for that, too. Well, the next big challenge is extended day. For children who are underperforming, they'll be in school, beyond the five o'clock hour, and they'll be in school through July. Most children, when you include after-school extended day programs, will be spending over four hours a day on reading language arts, writing, reading comprehension, vocabulary, and

they'll be spending up to two hours a day on mathematics. There's an absolute direct correlation between the amount of instructional time on task and student progress. Six weeks into the school year, Rob when scheduling problems were finally resolved. You have A, B, and C, right? And teachers could turn their attention to the job at hand, teaching. That week also saw the beginning of one of Paul Vallis' biggest initiatives for raising test scores. All 4,400 high school students in the district received their own laptop computers free. That simple act, putting that computer in the hands of that child, and allowing that child to take that computer home, was our statement of confidence and optimism about the potential of that child. That's what it's about. That's what it's about. Speaking to the city's religious leaders, Paul Vallis couldn't help boasting a bit. You can't really use the computer to access the internet or whatever it is.

It's really kind of protected and things like that. You know? It took the kids 20 minutes to hack into the computers. 20 minutes. Don't tell me that our inner city kids are not the brightest kids on the block, because they are. Small steps keep Vallis upbeat. By mid-November, the voluntary extended day program was in place at all schools in the district. Although test scores show that 80 percent of students need the extra help, so far only one-third have enrolled. At Robwyn High School, the percentage is even lower. You can watch all of John's reports on the New Orleans and Washington DC schools on our website at PBS.org. And the analysis of Shields and Brooks syndicated columnist Mark Shields and New York Times columnist David Brooks, who joins us tonight from Philadelphia.

Gentlemen, good to see you both, some new polls, presidential polls in Iowa, Mark, especially the Washington Post, ABC. What do they tell us, if anything, about this contest, especially on the start with the Democrats? Well, I think first a caveat, all right? Mark Melman, who was John Kerry's poster in 2004, reminds us that two-thirds of the voters in Iowa and the Democratic side in 2004 decided in the last month, and 40 percent of them decided in the last week. So this is an enormously fluid situation, who's ahead by four points to down by four points. Probably doesn't mean much. So the fact that Obama's up by four or four and Clinton's down by four and one or they're even another. And the other thing we have to remember, Judy, is there's never a straight path in these primary fights. There's always a pairpin curve, a dead end, whatever, that surprised us, and we continue to be surprised that we're surprised, but we will be surprised again this time. That said, I just add that the internals in the poll, that is the sense of what voters'

judgments on the strengths and weaknesses of the respective candidates, are a topic of major conversation among many Democrats. And that is that Senator Clinton is seen as less honest, forthright, candid, direct than is Senator Obama or even Senator Edwards, her two principal opponents. And I think it can make the case that Democrats lost two presidential elections to George W. Bush, where their nominees, John Kerry and Al Gore, were both seen as more intelligent, knowledgeable, and an Al Gore's case far more experienced than George W. Bush. But George W. Bush won, I believe, in both cases, because he was seen as more steadfast in his beliefs and convictions, more honest and more likable. And I think Democrats, there's a certain sense among some that they've seen this movie before, where their candidate failing on the likeability, honesty straightforward question becomes a problem.

So, David, how much worry should that be to Hillary Clinton? I think significant worry, obviously there's been some movement here, as Mark said, Obama has a two-to-one advantage on honesty. And to me, equally amazing was that Obama is even with Hillary Clinton in women, with women. So that shows some vulnerability. And the third thing that I think should cause her some worry is that Obama actually is doing some things right that he wasn't doing right earlier before. He gave a speech a couple weeks ago now that Jefferson Jackson Day dinner, which could be seen as a turning point if this momentum continues. And the essence of what he said was that don't vote at a fear. Don't vote because you're afraid of what, of the Republicans afraid to not vote for Clinton. Think higher, dream higher, and vote for something that'll offer real change. And that was quite a good speech. He hasn't followed it up with tremendous substance, but it was a fantastic speech. And he could ride that speech, that sort of message quite a long way, I think. There's also some interesting maybe movement going on on the Republican side. Mike Huckabee moved into a clear, strong, second position in Iowa. I will say that matters.

Mike Huckabee has made a dramatic improvement in his position in Iowa. I argue that Obama's up for or Clinton's down three or vice versa in survey. Mike Huckabee has tripled his vote from the summer in the same survey. And it's impressive performance. Four out of ten Iowa Republican caucus goers are evangelicals, evangelical Christians. And they are an important constituency in that state. And they've been up for grabs. Mike Huckabee has surged among them. He now has 44% in the Washington Post-ABC poll. He leads by two to one over Mitt Romney in that very important group. And I think it's easy coming back to my likability factor. Mike Huckabee, I think, has emerged as the most approachable, the most witty and sort of the compassionate conservative. And I think that he hasn't gotten the adversarial scrutiny that Andali will come now that he's surged into this position.

But I do think that that's a real story. And yet, David, you hear some say that Iowa is not as important for the Republicans as it is for the Democrats. How significant do you see this movement on the GOP side? Well, I do think it is significant. In part because one of the strengths Huckabee has is not only the social, among social conservatives, but he's got economic strengths. He is a populist, not the extension, Edwards is, but a great deal for a Republican. And he actually shows some empathy for the middle class anxiety in the way no other Republican really does. And he's got a lot of opposition among the Republican interest groups. The club for growth, the more pure free market groups for that. But I think it plays in very well for him. Now what he can do is he can really hurt Romney. And then that could begin to spill over to New Hampshire and all the other states and leave openings for Giuliani and John McCain. So I'd say Romney has the most gain or lose in Iowa for the Republicans. One of their factors, I think, is worth emphasizing. The caucus system is a very complicated system and we're never quite sure who's going to come out.

And I always think it's extremely crucial to look at who has already participated in the caucus process. On the Democratic side, it's the Edwards people. They've already been there. So you're pretty confident that they will actually come out on caucus night, unlike the Obama and the Clinton people. On the Republican side, those evangelicals that many of whom are swinging to Huckabee, they've already been through the process. So you're likely to think that they will come out even on the cold January night. I was reading today. I guess it was an AP story that Hillary Clinton has a buddy system going where experience caucus goers can bring a friend. It is rather daunting to go to those caucuses for the first time. Because you have to stand up in front of neighbors, friends, and relatives and declare yourself. I mean, your boss might be on the other side or, you know, your in-laws or whatever. And it's a difficult thing if you haven't been through it before. I just had one thing that Point Davis made about Iowa and the two parties. I think it's more important for the Democratic side because to a considerable degree, the premise of Senator Clinton's candidacy has been the inevitability. Senator campaign trumpets her endorsements and the polls she's leading in state after state

nationally. And if she would stumble there, I think it becomes more important on the Democrat. There's no clear Republican leader. Obviously, Governor Romney is basing his nomination pursuit on winning Iowa at New Hampshire. And if he fails to win Iowa, that's, that's, throws a monkey wrench into his plans. Just one other quick question on the Democratic and the Republican side. You're seeing some real, I guess you could say, intra-party fighting going on. You've got Hillary Clinton, Barack Obama going after each other more openly, you know, she criticizing his foreign policy experience and the Republican side. You've got Romney and Giuliani trying to sort of out anti-immigrant one another. Is this play likely to play well with voters, David? I think so. I think people want their candidates to be a fighter. They're not running for Mr. Rogers neighborhood. And I think Obama did himself enormous credit in the last debate when he really looked coldly at Hillary Clinton. You got the sense they really do not like each other.

And whoever did well in the words of the debate, the body language was frigid. And I think for a lot of people who are suspicious or uncomfortable with Hillary Clinton, but want somebody to really stand up and show how to be uncomfortable with her, he did that with the language. And on the Republican side, I mean, I happen to think there's incredible hypocrisy on this subject of immigration, I think Rudy Giuliani is the most pro-immigration candidate probably running in the past 20 years, and now he's pretending to be something entirely different to his discredit, but people want to see these guys fight. And that's what we've come down to in the last 40 or so days. I would commend which I very rarely do. I don't think I've ever done before, I commend David's column today in the New York Times on the subject of Republicans, particularly Giuliani on immigration. I do think there's a risk, however, on the Democratic side, between Obama and Clinton. If they get into a knockdown drag out, your mother wears army shoes and, you know, you double parked outside the orphanage on Christmas Eve, whatever the charges go back and forth. If that happens, Judy, there's a good chance, I believe, for John Edwards, Bill Richardson

as somebody else, with a positive message to close fast in the last three weeks. I mean, I've seen it happen time and again, we saw it in Iowa in 2004 between Dick Epphart and Howard Dean, we saw it in California, in the primary in 1998 for governor when Gray Davis, who had badly outspent to be Jane Harmon and Al Ceckey, who had millions between them. I do think that there is a chance if they really get into a drag out knockdown, I think that positive message to emerge. David, I want to ask you about something earlier on the show, Jeff Brown, interviewed two economy experts, and we had a pretty gloomy forecast about what's coming that this housing crunch could become a credit crunch. We're already watching the price of oil, go up, you know, we've already watched what's happening. At what point does this become an issue out on the campaign trail? If we hit a recession, I tried to park at the mall today and I was terrified to find that I could park at the mall, and I can't get any parking spaces, but now maybe that's a sign of a major downturn.

What strikes me about the politics of it is, if we do hit a recession, say, in six months or so, the candidates are going to have to come with some sort of stimulus package, and normally for Republicans, that's tax cuts, for Democrats, it's like to be spending increases in jobs programs with the fiscal situation, the way that is both those courses are extremely risky, and I think voters will be very intolerant to them. So you could have candidates who really are powerless in the face of this sort of recession, which would be interesting. I think the Republicans are a real disadvantage on the economy. The Republican prescriptions, David's right, I mean, have been tax cuts, and there's a growing sense in the country of the disparity between those who are quite well off, the very field at the very top, and the rest of people who are feeling that their own economic status is not improving its factory rating. Then secondly, I would say the Republican prescription of deregulation. Now, when you go to Toys R Us, and they ask you whether you want to go to the letter

to unleaded Toys Section, I mean, that's not a case to be made for less regulation, less involvement of government, and just leave it to the free market. So I really do think that the Republicans of this advantage, David's right, the Democrats will have to come up with some prescription, and the fiscal restraints are serious. A very quick different subject, David, former White House Press Secretary Scott McClellan, has written a book. It's not coming out until the spring, but we learn in the last few days that, among other things, he says, President Bush may have been one of those who misled him about what the White House was doing in this CIA-Leak case, Joe Wilson, Valerie Plain, how significant. I don't think it's particularly significant. I've always thought the plain scandal was a scandal that obsessed a lot of us who knew all the participants, but I've never seen it resonate out in the country. I've never heard a candidate asked about it on a town meeting, so I've always thought this was a minor thing, and this campaign will not be about George Bush. It won't be about George Bush.

Republicans have their way. I mean, the past eight years, you better off than you were eight years ago, I think what struck me, I mean, he's pardons himself, that Scott McClellan, and says that he was misled, and he sounds in the brief excerpts in a couple of interviews. It's been a little bitter, and understandably so, if anybody sent out to lie, and obviously most Libby and Roe, according to his testimony, and the testimony of others, did lie to him about their own involvement in trying to get the identity of Valerie Plain public and her association with Joe Wilson. I do think it raises just further questions about the lack of curiosity on the part of the President, and I think that's just an aspect. I mean, at what point did he become angry, or did he become angry that Libby and Roe and Vice President and his chief of staff were involved, but maybe he didn't? Very quick, well, we may not even have time to do this. Middle East Peace Conference coming up next week in Apple us just very quick from both of you, stakes for the administration, David.

Well, I think it could be quite significant. The key issue there is Syria, this is about trying to build a coalition against Iran. If they can turn Syria, make it more anti-Iranian, that would be a big win. The price might be steep though. Stakes of high expectations alone. I mean, I think prayers and hopes are there, but a realistic expectation of success is pretty limited. Mark Shields, David Brooks and Philadelphia, thank you both for being here on this day after Thanksgiving. Thank you, we appreciate it. Again, the major developments of the day, shoppers stood in pre-dawn lines and raced into stores to snag bargains on the opening day of the holiday shopping season. And Lebanon fell into political turmoil, when the President ordered the Army to take over security just hours before his term expired. Washington Week can be seen later this evening on most PBS stations. We'll see you online and again here Monday evening.

Have a nice weekend. I'm Judy Woodruff, thank you and good night. The major funding for the news hour with Jim Lehrer is provided by. Chevron, the new AT&T, the Atlantic Philanthropies, and with the ongoing support of these institutions and foundations.

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Thank you.

Good evening, I'm Judy Woodruff. On the news hour tonight, the news of this Friday, then a Black Friday look at economic worries and their impact on the American consumer.

A Margaret Warner report from Islamabad on what ordinary Pakistanis are saying about the three-week long state of emergency. A John Mero update on challenges facing the new school superintendent in New Orleans and the weekly analysis of Mark Shields and David Brooks. Major funding for the news hour with Jim Lehrer is provided by. Every day, it seems, talk of oil, energy, the environment, where are the answers? Right now, we're producing clean, renewable geothermal energy, generating enough energy to power 7 million homes, imagine that, an oil company as part of the solution. This is the power of human energy. The new AT&T, Pacific Life, the Atlantic Philanthropies, and with the ongoing support of these

institutions and foundations. And this program was made possible by the Corporation for Public Broadcasting and by contributions to your PBS station from viewers like you. Thank you.