PBS NewsHour; July 6, 2012 6:00pm-7:00pm PDT

Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS

>> Woodruff: ANOTHER MONTH OF WEAK JOB GROWTH SHOWS THE COUNTRY'S ECONOMIC RECOVERY IS STILL FALTERING. GOOD EVENING. I'M JUDY WOODRUFF.

>> Suarez: AND I'M RAY SUAREZ. ON THE NEWSHOUR TONIGHT, WE'LL ASK SUPPORTERS OF BOTH PRESIDENTIAL CANDIDATES TO EXPLAIN WHY TODAY'S DISAPPOINTING NUMBERS MEAN THEIR MAN IS THE BEST CHOICE TO FIX THE PROBLEM.

>> Woodruff: MARGARET WARNER HAS THE LATEST ON AN INVESTIGATION ROCKING THE BANKING INDUSTRY, AS FINANCE GIANT BARCLAY'S COMES UNDER FIRE FOR LENDING RATE FIXING.

>> Suarez: LINDSEY HILSUM OF INDEPENDENT TELEVISION NEWS REPORTS FROM LIBYA WHERE EXCITEMENT AND ANXIETY BUILD IN ADVANCE OF SATURDAY'S HISTORIC ELECTION.

>> FOR FOUR DECADES ONLY ONE WAS ALLOWED. NOW THOUSANDS OF FACES LOOK OUT FROM BILLBOARDS ACROSS LIBYA. IT'S ALMOST TOO MUCH TO BELIEVE.

>> Woodruff: DAVID BROOKS AND E.J. DIONNE ANALYZE THE WEEK'S NEWS. ♪ ♪

>> Suarez: PLUS, JEFFREY BROWN VISITS A MUSIC FESTIVAL WHERE UP AND COMING MUSICIANS AND OPERA SINGERS STUDY WITH THE GREATS.

>> IT'S NOT ABOUT YOU, IT'S ABOUT THE FULL PROGRAM. IT'S ABOUT GETTING AUDIENCES TO ENJOY THIS, TO LOVE THIS AS MUCH AS WE DO.

>> Woodruff: THAT'S ALL AHEAD ON TONIGHT'S NEWSHOUR. MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY: ♪ ♪ ♪ ♪ ♪

>> MOVING OUR ECONOMY FOR 160 YEARS. BNSF, THE ENGINE THAT CONNECTS US.

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>> 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.

>> Suarez: FOR THE THIRD STRAIGHT MONTH, JOB GROWTH FELL SHORT OF EXPECTATIONS, CALLING INTO QUESTION WHAT CAN BE DONE TO JUMPSTART THE ECONOMY. THE WEAK NUMBERS WERE YET ANOTHER SIGN THE RECOVERY MAY BE STALLING. EMPLOYERS ADDED JUST 80,000 JOBS IN JUNE, BELOW THE 90,000 TO 100,000 ECONOMISTS HAD PREDICTED. THAT LEAVES THE THREE-MONTH AVERAGE AT JUST 75,000 JOBS PER MONTH, A THIRD THE PACE OF THIS YEAR'S FIRST QUARTER. THE UNEMPLOYMENT RATE REMAINS UNCHANGED AT 8.2%. THIS MORNING, MITT ROMNEY TOOK A BREAK FROM HIS VACATION IN WOLFEBORO, NEW HAMPSHIRE, TOTOTO PRESIDENT OBAMA HAS HAD HIS CHANCE.

>> IN THE CASE OF PRESIDENT OBAMA, THIS IS NOT A MONTHLY STATISTIC OR EVEN A HALF-YEARLY STATISTIC. WE'VE LOOKED AT NOW ALMOST FOUR YEARS OF POLICIES THAT HAVEN'T GOTTEN AMERICA WORKING AGAIN. THIS IS THE TIME FOR AMERICANS TO CHOOSE WHETHER THEY WANT MORE OF THE SAME, WHETHER UNEMPLOYMENT ABOVE 8% MONTH AFTER MONTH AFTER MONTH IS SATISFACTORY OR NOT. IT DOESN'T HAVE TO BE THIS WAY. AMERICA CAN DO BETTER AND THIS KICK IN THE GUT HAS GOT TO END.

>> Suarez: AN HOUR LATER. THE PRESIDENT-- AT A STOP IN POLAND, OHIO, WHILE ON A TWO-DAY BUS TOUR-- ATTEMPTED TO MAKE THE MOST OF THE WEAK REPORT.

>> BUSINESSES HAVE CREATED 4.4 MILLION NEW JOBS OVER THE PAST 28 MONTHS, INCLUDING 500,000 NEW MANUFACTURING JOBS. THAT'S A STEP IN THE RIGHT DIRECTION. ( APPLAUSE ) THAT'S A STEP IN THE RIGHT DIRECTION, BUT WE CAN'T BE SATISFIED BECAUSE OUR GOAL WAS NEVER TO JUST KEEP ON WORKING TO GET BACK TO WHERE WE WERE BACK IN 2007. I WANT TO GET BACK TO A TIME WHEN MIDDLE CLASS FAMILIES AND THOSE WORKING TO GET INTO THE MIDDLE CLASS HAD SOME BASIC SECURITY. THAT'S OUR GOAL.

>> Suarez: THE PRESIDENT SAID THE BELOW-EXPECTATIONS NUMBERS ARE EVIDENCE THAT CONGRESS NEEDS TO ACT. THE REPORT DID SHOW SOME GAINS-- THOSE CAME IN INCREASED DEMAND FOR TEMPORARY WORKERS, AS WELL AS IN THE FIELDS OF HEALTH CARE AND MANUFACTURING. THE NUMBER OF LONG-TERM UNEMPLOYED-- THOSE SEEKING WORK FOR MORE THAN 27 WEEKS-- STAYED STEADY AT MAY'S COUNT OF 5.4 MILLION. THE JOBS REPORT SENT WALL STREET REELING. THE DOW JONES INDUSTRIAL AVERAGE LOST 124 POINTS TO CLOSE AT 12,772. THE NASDAQ FELL NEARLY 39 POINTS TO CLOSE AT 2,937. FOR THE WEEK, THE DOW FELL 0.8%; THE NASDAQ ENDED UP LESS THAN 0.1%.

>> FOR MORE REACTION TO THE JOBS REPORT, WE TURN TO LONG CHEN, POLICY DIRECTOR FOR MITT ROMNEY'S PRESIDENTOL CAMPAIGN. WELL COULD THE TO PROGRAM. OBAMA ADMINISTRATION POINTED OUT THAT BUSINESSES HAVE CREATED 4.4 MILLION NEW JOBS INCLUDING 500,000 IN MANUFACTURING ALONE OVER THE PAST TWO-PLUS YEARS. THEY CALLED IT A STEP IN THE RIGHT DIRECTION. WHAT'S THE REACTION FROM THE ROMNEY CAMPAIGN?

>> WELL, RAY, THANKS FOR HAVING ME ON. I THINK THAT THAT REACTION IS REMARKABLY DEVOID FROM REALITY. THIS IS A DISAPPOINTING JOBS REPORT. THERE ARE STILL OVER 23 MILLION AMERICANS WHO ARE STRUGGLING FOR WORK. THIS REPORT SIGNALS SOME REAL WEAKNESS IN THE ECONOMY AND IT SIGNALS THE NEED FOR FUNDAMENTAL CHANGE TO GET THIS ECONOMY GROWING AGAIN, TO GET THE RECOVERY TRULY JUMP-STARTED AND TO GET THE JOBS CREATED THAT SO MANY AMERICANS STILL DESPERATELY NEED.

>> EARLIER TODAY GOVERNOR ROMNEY SAID THE PRESIDENT SHOULD HAVE DONE BETTER AND THAT HE WOULD DO BETTER, HOW, WHAT WOULD A PRESIDENT ROMNEY DO TO GET COMPANIES AND INDIVIDUALS TO HIRE MORE PEOPLE?

>> WELL, IT STARTS AS POLICIES GOING FORWARD ECONOMIC GROWTH. POLICIES THAT WOULD REMOVE A LOT OF THE POLICY UNCERTAINTY THAT THERE IS RIGHT NOW. HONESTLY RAY THE PROBLEM IS A LOT OF JOB CREATORS DON'T KNOW WHAT THE ENVIRONMENT IS GOING TO LOOK LIKE, WHAT THE POLICY ENVIRONMENT IS GOING TO LOOK LIKE. AND THERE PRESIDENT HASN'T GIVEN THE CERTAINTY THEY NEED TO CREATE JOBS AND TO GROW THEIR BUSINESSES. SO IT STARTS LIKE THINGS LIKE ENSURING WE HAVE A CHEAP AND RELIABLE SOURCE OF ENERGY, BUILDING THE KEYSTONE PIPELINE IT STARTS WITH EXPANDING OUR TRADING RELATIONSHIP AS BROAD AND CRACKING DOWN ON CHEATERS LIKE CHINA THAT DON'T PLAY BY THE RULES. IT STARTS WITH RETURNING SOME BALANCE TO THE RELATIONSHIP BETWEEN LABOR AND MANAGEMENT AND IT STARTS BY REDUCING TAX BURDENS ON SMALL BUSINESSES AND LARGE BUSINESSES A ACHE LOO. THERE ARE A NUMBER OF DIFFERENT CHANGES THAT CAN RESTORE CERTAINTY AND GET ENTREPRENEURS AND JOB CREATORS GOING AGAIN. UNFORTUNATELY, THIS PRESIDENT HAS DONE NONE OF THOSE THINGS.

>> .

>> Suarez: ISN'T THERE A LOT A PRESIDENT CAN'T CONTROL, DURING MONTHS OF STRONG JOB GROWTH IN THE PAST TWO YEARS, SHOCKS HAVE COME FROM OUTSIDE THE U.S., JITTERS OVER THE ARAB SPRING, THE SHOCK OF THE POSSIBILITY OF THE COULD LAPTS OF THE EURO, AREN'T THERE EXTERNAL FORCES THAT ARE BEYOND THE REACH OF AN AMERICAN PRESIDENT?

>> OF COURSE THERE ARE SOME FACTORS THAT ARE BEYOND THE CONTROL AND REACH OF ANY ADMINISTRATION. BUT YOU HAVE TO LOOK AT THOSE POLICIES AND FEATURES THAT ARE WITHIN REACH OF THIS ADMINISTRATION. AND INSTEAD OF FOCUSING ON JOB CREATION AND GROWING THE ECONOMY THIS ADMINISTRATION CHOSE TO FOCUS ON OBAMA CARE, WHICH IS A JOB KILLING PIECE OF LEGISLATION THAT WILL CONTINUE TO HARM THE ECONOMY. THEY FOCUS ON DODD FRANK WHICH IS CHOKING OFF THE ABILITY OF SMALL BANKS TO LEND THE CAPITAL TO SMALL BUSINESSES THAT ARE NEEDED TO GET THE ECONOMY GOING. THEY FOCUSED ON CAP AND TRADE AND THE NRB CRACKING DOWN ON BOEING THERE ARE A LOT OF THINGS THE ADMINISTRATION CAN CONTROL AND THOSE ARE THE THINGS THAT MITT ROMNEY WILL FOCUS ON TO GET THIS ECONOMY GOING AGAIN IF HE IS ELECTED PRESIDENT.

>> WHEN GOVERNOR ROMNEY WAS IN OFFICE IN MASSACHUSETTS, DID HIS UNIVERSAL CARE PLAN CUT OFF JOB CREATION IN HI HIS-- BECAUSE THE PRESIDENT NOTED TODAY THAT THE GUY I'M RUNNING THIS TRIED THIS IN MASSACHUSETTS AND IT'S WORKING JUST FINE, EVEN THOUGH HE DENIES IT.

>> OBAMACARE IS VERY DIFFERENT FROM THE APPROACH THAT MITT ROMNEY PURSUED. MITT ROMNEY DIDN'T RAISE TAX. OBAMACARE RAISES OVER 20 SEPARATE TAX BY SOME ACCOUNTS. MITT ROMNEY DID NOT IMPOSE A ONE SIDE-- ONE SIZE FITS ALL FEDERAL PAN DATE AS OBAMACARE DOES. MITT ROMNEY DIDN'T DRAMATICALLY INCREASE SPENDING. OBAMACARE CALLS FOR $2 TRILLION IN NEW SPENDING. THE TWO PROGRAMS ARE DIFFERENT. MITT ROMNEY PUT IN PLACE A PROGRAM TO BE EXPAND ACCESS TO AFFORDABLE HEALTH INSURANCE FOR THE CITIZENS OF MASSACHUSETTS. IT WAS TAILORED FOR THE NEEDS OF HIS STATE AND WAS VERY DIFFERENT FROM WHAT THE PRESIDENT PURSUED AT THE FEDERAL LEVEL.

>> Suarez: AND HAS ANYONE IN THE OBAMA ADMINISTRATION SAID THE WORDS CAP AND TRADE IN YEARS. YOU CITE THAT AS SOMETHING THAT'S CREATING UNCERTAINTY. IT HASN'T BEEN MENTIONED THAT-- I HAVE SEEN IN THE NEWS ANY TIME RECENTLY.

>> WELL, RAY, THE FACT THAT IT HASN'T BEEN MENTIONED AS A SPECIFIC PIECE OF LEGISLATION DOESN'T MEAN FIRST OF ALL THE ADMINISTRATION HASN'T PURSUED IT ADMINISTRATIVELY THROUGH THE EPA. AND SECOND OF ALL THE SPECTER THAT THE ADMINISTRATION COULD PURSUE CAP AND TRADE LEGISLATION AS THEY ATTEMPTED TO TO DO DURING THE FIRST TWO YEARS OF THE PRESIDENT'S TERM CREATES THE KIND OF UNCERTAINTY JOB CREATORS DON'T NEED. WE DON'T NEED JOB KILLING LEGISLATION OR EVEN ANY KIND OF OVERTURES TOWARDS JOB KILLING LEGISLATION AT A TIME WHEN THE ECONOMY AND THIS RECOVERY ARE FRAGILE AT BEST.

>> GOVERNOR ROMNEY DURING THE CAMPAIGN HAS CITED THE NEED TO SHRINK THE SIZE OF THE GOVERNMENT'S PAYROLL. AT ALL LEVELS. STATE, FEDERAL AND LOCAL. THAT HATS BEEN SOMETHING THAT'S BEEN PULLING DOWN JOB CREATION NUMBERS, EVEN AS THERE'S BEEN IN SOME MONTHS QUITE ROBUST PRIVATE SECTOR HIRING. THE PUBLIC SECTOR HAS BEEN SHEDDING JOBS IN A TREMENDOUS RATE IN SOME PLACES.

>> WELL, THE ONLY WAY TO CREATE A SUSTAINABLE, LONG-TERM ECONOMIC RECOVERY IS TO ENSURE THAT WE'RE DOING EVERYTHING WE CAN TO HAVE ROBUST JOB GROWTH IN THE PRIVATE SECTOR. AND UNFORTUNATELY THAT IS SOMETHING THAT PRESIDENT OBAMA AND HIS ADMINISTRATION JUST HASN'T FOCUSED ON. AND FOR THIS ECONOMY TO REALLY BE HEALTHY, FOR THIS RECOVERY TO REALLY BE ONE THAT CREATES THE JOBS THAT SO MANY AMERICANS NEED, WE'VE GOT TO DO MORE TO ENSURE THE PRIVATE SECTOR IS CREATING JOBS. THE PRIVATE SECTOR IS NOT DOING FINE AS PRESIDENT OBAMA SAID LAST MONTH. WHAT NEEDS TO HAPPEN AS I SAID EARLIER, POLICIES THAT ARE SUCH THAT MITT ROMNEY WILL PUT IN PLACE BEGIN ON DAY ONE, TO REALLY GET THE PRIVATE SECTOR GOING AGAIN. BECAUSE ULTIMATELY THAT WILL BE THE BASIS OF A BUNCHONNING MIDDLE CLASS AND GROWING ECONOMY.

>> Suarez: LON CHEN SAY POLICY DIRECTOR FOR THE ROMNEY CAMPAIGN. THANKS FOR JOININGS US.

>> THANK YOU, RAY

>> Suarez: AND WE GET A DIFFERENT TAKE NOW FROM JARED BERNSTEIN, SENIOR FELLOW AT THE CENTER ON BUDGET AND POLICY PRIORITIES. FROM 2009 TO 2011, HE WAS AN ECONOMIC ADVISER TO VICE- PRESIDENT JOE BIDEN. YOU HEARD LONG BOND CHEN SAY THAT THE PRESIDENT'S-- LON CHEN THAT THE PRESIDENT-- IS IN HIS WORD ITS REMARKABLY DEVOID OF REALITY.

>> WELL THAT IS THE REALITY. IT'S JUST TOO SMALL A STEP IT IS A MISTAKE, I THINK, AS MANY IN THE ROMNEY CAMP HAVE IMPLIED TODAY, TO SUGGEST THAT SHOWER'S LOSING JOBS OR THE ECONOMY IS IN A RECESSION. IT'S NOT. IN FACT, THE ECONOMY LEFT RECESSION IN GDP TERMS AT THE SECOND HALF OF 2009, A LOT MORE QUICKLY THAN ANY ECONOMISTS THOUGHT THEY WOULD GIVEN HOW BADLY THINGS WERE CRATERING BACK THENMENT AND A LOT OF THAT HAS THE PRESIDENT'S POLICIES ON IT. THE PROBLEM IS NOT THAT WE ARE NOT ADDING JOBS. THE PROBLEMS ARE TWOFOLD. ONE, WE ARE NOT ADDING THEM QUICKLY ENOUGH IN THE PRIVATE SECTOR. THEY ARE GROWING, BUT NOT QUICKLY ENOUGH. AS YOU SAID, 75,000 PER MONTH ON AVERAGE OVER THE LAST QUARTER, OVER 4 MILLION SINCE EMPLOYMENT BEGAN TO GROW AND THEN THE PUBLIC SECTOR PROGRAM WHICH YOU ALSO TOUCHED ON. WE'VE BEEN SHEDDING JOBS IN THAT PART OF THE ECONOMY CONSISTENTLY NOW MONTH IN AND MONTH OUT.

>> Suarez: BUT WE'RE NOW SEVERAL YEARS DEEP INTO A RECOVERY. SHUNTED THE ECONOMY BE DOING BETTER. AND ISN'T IT TOUGH TO RUN FOR PRESIDENT WHEN IT'S NOT, WHEN NEW JOBS ARE COMING ONSTREAM AT A RATE ABOUT HALF OF WHAT WE NEED JUST TO ACCOMMODATE NEW WORKERS.

>> WELL, THE ANSWER TO THE SECOND PART OF YOUR QUESTION S IT TOUGH FOR A PRESIDENT TO RUN IN THAT KIND OF A CLIMATE? SURE IT. BUT SHOULD THE ECONOMY BE DOING BETTER? WELL, I THINK TO ANSWER THAT, RAY, YOU HAVE TO THINK ABOUT JUST HOW DAMAGED THE ECONOMY WAS WHEN PRESIDENT OBAMA GOT HERE. NOW IN THE POLITICS IN KIND OF THE HURLEY BURLEIGH OF THE CAMPAIGN THIS BECOMES A DEFENSIVE POSTURE TO SAY LOOK BACK AT HOW BAD THINGS WERE. BUT AS AN ECONOMIST, I CAN TELL YOU I'VE NEVER SEEN ANYTHING LIKE IT. GDP WAS HEMORRHAGING AT A 9% RATE, A QUARTER BEFORE THE PRESIDENT TOOK OFFICE, CRASHING-- WE LOST OVER 2 MILLION JO IN ITS FIRST QUARTER. SO WHAT, THE MEASURES THAT THE PRESIDENT TOOK DID WAS TO BREAK THE BACK OF THAT GREAT RECESSION A LOT SOONER THAN OTHERWISE WOULD HAVE OCCURRED. THE ECONOMY BAN TO EXPAND AND STARTING IN THE SPRING OF 2010 WE BEGAN TO GET JOB GROWTH AND THE PRIVATE SECTOR HAS CONSISTENTLY, TOO SLOWLY BUT CONSISTENTLY ADDING JOBS. IF YOU LOOK AT THE AUTO, MANUFACTURING, THE PRESIDENT MADE THAT POINT TODAY. WE'RE ACTUALLY DOING BETTER IN THAT SECTOR THAN ANYONE HAD A RIGHT TO EXPECT GIVEN HOW DAMAGED THINGS WERE. SHOULD THE ECONOMY BE DOING BETTER? IT WOULD BE GREAT IF IT WERE BUT I THINK REALISTICALLY GIVEN WHERE WE WERE AND GIVEN THE POLITICAL GRIDLOCK THIS PRESIDENT HAS FACE, IT IS A TOUGH CALL.

>> Suarez: BUT GIVEN ALL OF THESE THINGS THAT YOU JUST SAID, HE'S GOT TO MAKE THE CASE THAT THE NEXT FOUR YEARS WOULD BE MATERIALLY DIFFERENT FROM THE LAST THREE. AND IS HE MAKING THAT CASE, CAN HE SAY THAT YES, IF YOU CHOOSE ME AGAIN IT'S GOING TO BE VERY DIFFERENT FROM THE WAY IT IS NOW WHEN I'M ALREADY PRESIDENT.

>> I THINK HE DOES HAVE TO MAKE THAT CASE. AND I THINK HE CAN. BUT HE CAN'T DO IT ALONE. ONE OF THE THINGS THE PRESIDENT SAID TODAY IN A SPEECH HE GAVE IN OHIO STRUCK ME. HE SAID WE'VE GOT GOOD ANSWERS. BUT WE'RE FACING A STALEMATE IN CONGRESS. EVEN RIGHT NOW AS WE SPEAK THERE ARE GOOD IDEAS THAT WOULD HELP OFFSET, FOR EXAMPLE, THAT PUBLIC SECTOR JOB CONTRACTION. 14,000 JOBS LAST MONTH IN JUNE, EDUCATORS LOST THEIR JOBS AT THE LOCAL LEVEL. A LOT OF THOSE FOLKS ARE TEACHERS. AND WHEN PEOPLE SHOW UP FOR THEIR CLASSROOMS THOSE CLASSROOM GRSING TO BE TOO BIG IN MANY CASES. THIS IS A PROBLEM WE COULD FIX. BORROWING COSTS ARE VERY LOW. THESE ARE PLANS THAT THE PRESIDENT AND HIS TEAM HAVE PUT TOGETHER. BUT BECAUSE OF CONGRESSIONAL GRIDLOCK, BLOCKING SOME OF WHOM ARE SAYING LOOK OUR MAIN GOAL RIGHT NOW IS TO GET THE PRESIDENT OUT OF OFFICE, NOT TO ADDRESS THE ECONOMIC PROBLEMS, THEY'RE NOT COOPERATING. BUT I THINK, I THINK WITH HIS IDEAS ON CLEAN ENERGY, WITH HIS IDEAS ON NEAR TERM JOB CREATION, WITH HIS MANUFACTURING IDEAS, YEAH, ABSOLUTELY.

>> Suarez: DEM YATSIC CRITICS WERE VERY TOUGH ON GEORGE W. BUSH IN THE MONTHS FOLLOWING THE RECOVERY THAT BEGAN AFTER 9/11. TOO FEW JOBS, RECOVERY TOO SLOW, JOB CREATION TOO SHALLOW. ARE WE IN A DIFFERENT ECONOMIC WORLD NOW? ISN'T IT JUST AS FAIR A CRITICISM AS BARACK OBAMA AS IT WAS OF GEORGE WORK BUSH IN THE EARLY PART OF THIS CENTURY?

>> I THINK THE DIFFERENCE THERE IS THAT IT'S WHAT I WAS JUST TALK APPROXIMATING ABOUT. I MEAN IT'S ONE THING FOR A PRESIDENT TO NOT HAVE A SET OF PLANS TO GET YOU FROM HERE TO THERE, AND HERE I THOUGHT MR. CHEN'S DISCUSSION A SECOND OKAY WAS VERY MISLEADING. I DON'T THINK GOVERNO GOVERNOR-- GOVERNOR ROMNEY HAS ANY PLANS VIS-A-VIS JOB GROWTHnd CAY GO THROUGH THAT IN A SECOND. THE THING THE PRESIDENT CAN SAY THAT IS DIFFERENT IS I, IN FACT, HAVE A SET OF MEASURES THAT INDEPENDENT PEOPLE, YOU DON'T HAVE TO LISTEN TO ME, LISTEN THE CONGRESSIONAL BUDGET OFFICE, TO INDEPENDENT ECONOMISTS WHO SCORED THIS ARE SAYING, YEAH, AND IT'S ACTUALLY NOT THAT COMPLICATED, IF YOU PROVIDE SOME FISCAL RELIEF TO STATE WAS HAVE TO BALANCE THEIR BUDGET, WHO ARE FACING BUDGET SHORTFALLS IN THE TENS OF BILLIONS, IF YOU PROVIDE THEM SOME RELIEF THEY WILL STOP LAYING OFF TEACHERS. IF YOU GET SOME WORKERS BACK ON THE JOB LAYING INFRASTRUCTURE, WHETHER IT'S PUBLIC SCHOOLS, LATELY I'VE BEEN THINKING WE PROBABLY SHOULD BURRY SOME OF THESE POWER LINES, SO THERE'S A LOT TO BE DONE. HE HAS GOT THE PLAN.

>> Suarez: AND WE WILL OVER THE COURSE OF THE CAMPAIGN HEAR THEM POINT BY POINT, JARED BERNSTEIN, THANKS FOR JOINING US.

>> MY PLEASURE, RAY.

>> Woodruff: STILL TO COME ON THE NEWSHOUR: THE BARCLAY'S BANK SCANDAL OVER RIGGED LENDING RATES; JOY AMID CHAOS AS LIBYA PREPARES FOR HISTORIC ELECTIONS; BROOKS AND DIONNE; PLUS, BEAUTIFUL MUSIC IN A BEAUTIFUL SETTING. BUT FIRST, THE OTHER NEWS OF THE DAY. HERE'S HARI SREENIVASAN.

>> Sreenivasan: A LARGE SWATH OF THE MIDWEST AND MID-ATLANTIC WERE UNDER EXCESSIVE HEAT WARNINGS TODAY, AS 100-PLUS DEGREE TEMPERATURES PERSISTED. OVER THE PAST 30 DAYS, THE NATIONAL WEATHER SERVICE HAS TALLIED MORE THAN 4,000 RECORD HIGHS ACROSS THE COUNTRY. EVEN LOW TEMPERATURES ARE SETTING RECORD HIGHS. THE HEAT HAS SPAWNED A NUMBER OF VIOLENT STORMS, INCLUDING ONE IN TENNESSEE LAST NIGHT. FOUR PEOPLE WERE KILLED, TWO OF THEM IN THE GREAT SMOKY MOUNTAINS NATIONAL PARK. THE CHIEF RANGER SAID IT AFFECTED ALL 500,000 ACRES OF THE PARK.

>> TO HAVE SUCH A WIDE SWATHE OF THE PARK AT A VERY BUSY TIME OF THE YEAR TO BE IMPACTED BY SUCH SEVERE STORMS IS HIGHLY UNUSUAL. CERTAINLY STRESSED OUR ABILITIES TO PROVIDE EMERGENCY CARE AS IT DID THE OUTSIDE AGENCIES.

>> Sreenivasan: ANOTHER ROUND OF BAD STORMS IN THE MID-ATLANTIC LAST WEEK IS STILL WREAKING HAVOC. MORE THAN 400,000 PEOPLE ARE STILL WITHOUT POWER, AND ROUGHLY HALF OF THOSE ARE IN WEST VIRGINIA. A MEMBER OF SYRIAN PRESIDENT BASHAR ASSAD'S INNER CIRCLE HAS DEFECTED TO FRANCE. BRIGADIER GENERAL MANAF TLASS WAS THE MOST SENIOR DEFECTOR OF THE REGIME TO DATE. WE HAVE A REPORT FROM JONATHAN RUGMAN OF INDEPENDENT TELEVISION NEWS. IS THE GENERAL HOMETOWN-- THESE SOLDIERS ALSO FROM LASTAN ANNOUNCED THAT THEY TOO ARE DEFECTING TO THE REBEL CAUSE. BUT A RENOWNED WOMANIZER AND PLAYBOY WAS FROM ASSAD'S INNERCIRCLE, FROM A WELL-KNOWN SUNNI FAMILY WHICH HAD SERVED ASSAD'S DOMINATED DYNASTY FOR DECADES. HIS FATHER MUSS TAVI WAS SYRIA'S DEFENSE MINISTER FOR OVER 30 YEARS. HERE HE IS VISITING ACID -- ASSAD'S ALLIES IN 1991. HE IS NOW BELIEVED TO BE IN PARIS AWAITING HIS DEFECTING SON'S ARRIVAL. THE DEFECTION IS THE LATEST EVIDENCE THAT SYRIA'S UNRELENTING VIOLENCE IS SPLITTING ITS ARMED FORCES ALONG SECTARIAN LINES. HIS DEPAR TURE WAS WELCOMED BY HILLARY CLINTON IN PARIS WHO SPOKE OF SYRIA'S MILITARY ESTABLISHMENT, STARTING TO VOTE WITH ITS FEET.

>> THE SO-CALLED FRIENDS OF SYRIA, AROUND 100 NATIONS, CALLED FOR MORE SANCTIONS. BUT THE RUSSIANS AND CHINESE DID NOT TURN UP. AND WITHOUT THEM CLINTON'S HOPE OF A U.N. RESOLUTION IMPOSING SANCTIONS WILL GET NOWHERE.

>> NOW WHAT CAN EVERY NATION AND GROUP REPRESENTED HERE DO? I ASK YOU TO REACH OUT TO RUSSIA AND CHINA AND TO NOT ONLY URGE BUT DEMAND THAT THEY GET OFF THE SIDELINES AND BEGIN TO SUPPORT THE LEGIT MASS ASPIRATIONS OF THE SYRIAN PEOPLE.

>> AND WILE DIPLOMACY IS PROVING SLOW AND INCREASINGLY BITTER, THE DIPLOMATS CAN ONLY HOPE THAT TODAY'S CRACK INSIDE THE REGIME WILL DO MORE TO SPEED ITS DOWNFALL.

>> Sreenivasan: MEANWHILE, THE VIOLENCE IN SYRIA CONTINUED. GOVERNMENT FORCES WENT ON A RAMPAGE TO TAKE BACK A NORTHERN CITY FROM REBELS, KILLING 25 PEOPLE AND TORCHING 100 HOMES AS THEY WENT. IN FLORIDA TODAY, THE MAN ACCUSED OF KILLING TRAYVON MARTIN WAS RELEASED FROM JAIL ON A $1 MILLION BOND. GEORGE ZIMMERMAN WALKED OUT OF THE SEMINOLE COUNTY JAIL UNDER A SET OF STRICT CONDITIONS-- HE MUST BE ELECTRONICALLY MONITORED, CAN'T OPEN A BANK ACCOUNT, GET A PASSPORT, OR GO TO THE AIRPORT. ZIMMERMAN HAS ADMITTED TO SHOOTING MARTIN, BUT INSISTS HE ACTED IN SELF-DEFENSE AFTER THE 17-YEAR-OLD ATTACKED HIM. HIS PREVIOUS BOND WAS REVOKED AFTER IT EMERGED ZIMMERMAN WAS NOT HONEST ABOUT HIS FINANCES. TWO MORE STATES NO LONGER HAVE TO FOLLOW MANY OF THE REQUIREMENTS OF THE "NO CHILD LEFT BEHIND" EDUCATION LAW. THE OBAMA ADMINISTRATION GAVE WAIVERS TO WASHINGTON AND WISCONSIN, BRINGING THE TOTAL NUMBER OF EXEMPTED STATES TO 26. THE TEN-YEAR-OLD LAW REQUIRES STUDENTS TO REACH PROFICIENCY IN MATH AND READING SCORES BY 2014. MANY EDUCATORS BELIEVE THAT IS IMPOSSIBLE. THE ADMINISTRATION HAS SAID THE WAIVERS ARE A TEMPORARY MEASURE WHILE THE EDUCATION SECRETARY WORKS WITH CONGRESS TO REWRITE THE LAW. 250,000 COMPUTERS AROUND THE WORLD ARE IN DANGER OF LOSING INTERNET ACCESS ON MONDAY. IT'S ALL THE RESULT OF MALICIOUS SOFTWARE DUBBED THE "INTERNET DOOMSDAY" VIRUS. BACK IN NOVEMBER, IT INFECTED MORE THAN FOUR MILLION COMPUTERS, DIRECTING USERS TO FALSE WEB SITES TO STEAL INFORMATION. THE FBI SET UP CLEAN INTERNET SERVERS TO TAKE OVER FROM THE MALICIOUS ONES, BUT THE CLEAN SERVERS ARE BEING SHUT DOWN ON MONDAY. THE FBI WEB SITE HAS INFORMATION ON HOW TO CHECK IF INDIVIDUAL COMPUTERS ARE INFECTED. THOSE ARE SOME OF THE DAY'S MAJOR STORIES. NOW, BACK TO JUDY.

>> Woodruff: BANKS AND THE WAY SOME HAVE OPERATED WERE BACK AT THE CENTER OF ATTENTION AGAIN THIS WEEK. THE FOCUS THIS TIME IS ON THE BRITISH BANK BARCLAYS, AND HOW IT AND OTHERS ALTERED LENDING RATES FOR PROFITS. MARGARET WARNER HAS THE STORY.

>> Warner: THE SCANDAL VENTURES ON A KEY INTEREST RATE CALLED LIBOR AND ATTEMPTS TO MANIPULATE. LAST WEEK BARCLAYS PAID $450 MILLION IN FINES TO SUBTLE ACCUSATION BY BRITISH AND U.S. REGULATORS THAT HELPED RIG THE LIBOR RATE IN A WAY THAT BENEFITTED ITS BUSINESS. LAY BORE IS THE ACRONYM FOR THE LONDON INTERBANK OFFERED RATE IT IS DETERMINED BY WHAT BANKS REPORT THEY ARE PAYING TO BORROW FROM OTHER BANKS. THE RATE HAS HUGE SIGNIFICANCE. IT'S USED TO SET INTEREST RATES IN MORE THAN 350 TRILLION DOLLARS OF CONTRACTS GLOBALLY RANGING FROM HOME MORTGAGES TO COMPLICATED FINANCIAL SWAPS. THE SETTLEMENT SET UP A FIRESTORM LEADING TO THE RESIGNATION THIS WEEK OF BARCLAYS C.E.O. ROBERT DIAMON AND HEARINGS IN PARLIAMENT. REGULATORS ARE LOOKING AT OTHER GLOBAL BANKS AS WELL. FOR MORE WE TURN TO DAVID ENRICH, EUROPEAN BANKING EDITOR FOR THE "THE WALL STREET JOURNAL". THANKS FOR JOINING US. EXPLAIN LIBOR A LITTLE MORE FOR US, FIRST OF ALL. HOW IMPORTANT IS IT AND HOW IS IT SET. HOW ARE BANKS EVEN IN A POSITION TO MANIPULATE IF.

>> FIRST OF TALL IS IMMENSELY IMPORTANT. AS YOU MENTIONED IT'S THE BENCHMARK FOR INTEREST RATES ON TRILLIONS AND TRILLIONS OF DOLLARS OF LOANS AROUND THE WORLD. IT IS SET IN A FAIRLY CONTROVERSIAL MANNER, ACTUALLY. IT'S ARRANGED BY A TRADE GROUP OF BANKS IN LONDON. EVERY DAY AROUND LUNCHTIME IN LONDON ABOUT 16 BANKS SUBMIT TO THE BRITISH BANKERS ASSOCIATION DATA THAT IS AN ESTIMATE OF HOW MUCH IT WOULD COST THOSE BANKS TO BORROW FROM EACH OTHER. SO THERE'S NOT VERY MUCH OVERSIGHT OVER HOW THE BANKS SUBMIT THAT DATA. AND WHAT WE'RE SEEING NOW, AND THERE HAVE BEEN SUSPICIONS ABOUT THIS FOR SEVERAL YEARS NOW BUT WHAT WE ARE NOW SEEING VERY CONCRETE EVIDENCE OF IS THAT THE BANKS DELIBERATELY AND KNOWINGLY SUBMITTED FALSE DATA TO BENEFIT THEMSELVES.

>> SO EXPLAIN HOW THE SCHEME THAT BARCLAYS HAS ADMITTED TO, HOW IT WORKED. THIS IS TEEN 2005 AND 2009, RIGHT.

>> YES. AND IT'S JUST AT THE OUTSET IT'S VERY IMPORTANT TO MENTION THAT THIS IS BARCLAYS HAD SETTLED THESE CHARGES THIS WEEK BUT THERE IS EVERY REASON TO BELIEVE THAT THIS IS A WIDE SPREAD INDUSTRY PRACTICE. AND THERE IS CLEAR EVIDENCE OF COLLUSION. BARCLAYS IS GETTING ALOT OF THE BLAME FOR THIS RIGHT NOW BUT EVERYONE WAS DOING THIS. BASICALLY THERE WERE TWO THINGS THAT WERE GOING ON. FIRST OF ALL, BANKS IN GENERAL WERE SUBMITTING DATA TO REFLECT, THAT SUGGESTED THAT THEY HAD LOWERED THE COSTS, THAT IS IMPORTANT BECAUSE THE DEGREE THAT BANKS-- GO UP IS A WARNING SIGN ABOUT THE BANK'S HEALTH. THE SLIGHTLY MORE NEFARIOUS THING THAT WAS HAPPENING IS THAT TRADERS AT BANKS LIKE BARCLAYS WERE ESSENTIALLY CONSPIRING TO FUDGE THIS DATA TO BOOST THEIR OWN TRADING PROFIT. SO ONE PART OF BARCLAYS WOULD SAY TO ANOTHER PART, CAN YOU PLEASE SUBMIT DATA THAT MAKES US LOOK-- THAT EITHER IS HIGHER OR LOWER THAN IT REALLY IS IN ORDER TO BOOST OUR PROFIT OS OR THEY WERE GETTING REQUESTS FROM TRADERS AT HEDGE FUNDS AND OTHER BANKS, EVEN, TRADERS E-MAILING EACH EAR SAYING HEY T WOULD BE REALLY HELPFUL IF YOU COULD GOOSE YOUR NUMBERS ONE WAY OR ANOTHER AND THE BANKERS WERE ALL TOO HAPPY TO ACCEDE TO THESE REQUESTS.

>> Warner: THE TRADING OPERATIONS ARE BETTING ON THE LIBOR RATE IN ONE WAY OR ANOTHER, RIGHT?

>> YEAH, THAT'S EXACTLY RIGHT. THEY ARE BET ON THE LIBOR RATE AND THEY WERE BETTING ON THE INDIVIDUAL SUBMISSIONS THAT DIFFERENT BANK WAS MAKE. SO FOR INSTANCE IN BARCLAYS CASE, BARCLAYS IS GOING TO SUBMIT A NUMBER EVERY DAY. AND TRADERS HAD BET-- KEYED TO THAT NUMBER SO THEY HAD A DIRECT FINANCIAL SET EITHER IN THAT NUMBER BEING HIGHER OR LOWER ON ANY GIVEN DAY.

>> SO GIVE US A FLAVOR OF SOME OF THESE INCRIMINATING E-MAILS THAT WERE RELEASE ADD LONG WITH THE SETTLEMENT.

>> YEAH THERE IS REALLY COLOURFUL STUFF THERE. AND TRADERS E-MAILING EACH OTHER SAYING HEY, I REALLY NEED YOU TO, I REALLY NEED MY RATES TO COME IN AT A CERTAIN RATE. IF IT DOESN'T HAPPEN I'M GOING GET KILLED. THE BARCLAYS TRADER RESPOND TO THINGS LIKE FOR YOU, BIG BOY, ANYTHING. AND THE TRADER ON THE OTHER SIDE OF IT RESPONDS SAYING I OWE YOU BIG TIME, COME OVER TO MY HOUSE TIME AND WE'LL CRACK OPEN AN EXPENSIVE BOTTLE OF CHAMPAGNE. SO UNEQUIVOCAL FLAGRANT STUFF. NOT A LOT OF NUANCE ABOUT IT. IT'S REALLY CLEARLY BLATANT DISREGARD FOR THE LAW AND ALSO A CLEAR UNDERSTANDING OF WHAT THEY WERE DOING AND THAT THEY WERE MANIPULATING THIS VERY IMPORTANT BENCHMARK.

>> Warner: NOW WHAT IS THE EFFECT ON OTHERS OF THIS, IN OTHER WORDS, WHO WAS HURT BY THIS.

>> THAT IS KIND OF AT THE CRUX OF THIS RIGHT NOW. AS YOU SAID AT THE OUTSET 9 LIBOR RATE IS THE BENCHMARK FOR TRILLIONS OF DOLLARS OF LOANS TO ANYONE FROM INDIVIDUAL HOMEOWNERS TO BIG CORPORATIONS. AND THERE'S NOT EVIDENCE AT THE MOMENT THAT THOSE PEOPLE WERE HURT. AND IF ANYTHING, ACTUALLY, THE WAY THE BANKS WERE MANIPULATING T HAD THE EFFECT OF AT LEAST MARGINALLY REDUCING THE INTEREST RATES THAT THESE PEOPLE WERE PAYING. BUT AS WITH ANYTHING IN TRADING, FOR ANY TIME THERE IS A WINNER IN A TRADE THERE'S ALSO A LOSER IT IS BASICALLY A ZERO SUM GAME SO TO THEEGREE THAT THE TRADER ITS AT BARCLAYS AND HEDGE FUNDS IN OTHER BANKS THAT BARCLAYS WAS COLE UDING WITH TO-- COLLUDING WITH TO ARTIFICIALLY SET THIS RATE, THERE INEVITABLY WERE TRADERS ON THE OTHER SIDE OF THOSE TRANSACTIONS THAT WERE GETTING HURT. NOW IT IS, THE ARGUMENT THAT THE BANKS ARE GOING TO MAKE IS WELL, THIS REALLY WAS BASICALLY A VICTIMLESS CRIME BECAUSE YOU KNOW, THE INDIVIDUALS AND BUSINESSES THAT HAVE LOANS PEGGED TO LIBOR WERE ACTUALLY SEEING THEIR INTEREST RATE GOES DOWN. BUT PROBABLY THE BIGGEST VICTIM OF THIS IS ACTUALLY THE FINANCIAL SYSTEM AS A WHOLE AND THE INTEGRITY OF THE FINANCIAL SYSTEM. IT'S JUST THE LATEST EXAMPLE IN THE PAST SEVERAL YEARS OF BANKS CLEARLY ACTING IN NOBODY'S INTEREST OTHER THAN THEIR OWN TO BASICALLY DECEIVE PEOPLE AND LIE. AND IT'S REALLY INCREDIBLY DAMAGING TO THE FAITH THAT PEOPLE HAVE, WEATHER IT'S REGULATORS, OTHER BANKS OR THE PRESS OR JUST THE PUBLIC, THE FAITH THEY HAVE IN THE SANCTITY AND INTEGRITY OF THE FINANCIAL SYSTEM.

>> JUST BRIEFLY BEFORE WE GO. ARE SOME OF THE OTHER BIG BANKS IN THE SIGHTS NOW OF THE REGULATORS. AND SINCE IT'S UNFAIR TO ASK YOU THESE TWO TOGETHER BUT WHERE WERE THE REGULATORS ALL THIS TIME WHILE THIS WAS GOING ON?

>> THAT'S A REALLY GOOD QUESTION. A QUESTION WE ASKED IN "THE WALL STREET JOURNAL" THIS MORNING. THERE, THE REGULATORS HAD AMPLE EVIDENCE THIS IS GOING ON. "THE WALL STREET JOURNAL" WROTE ABOUT THIS BACK MORE THAN FOUR YEARS AGO. IT FELL LARGELY ON DEAF EARS. AND THERE IS CLEAR EVIDENCE IN THESE SETTLEMENT DOCUMENTS THAT CAME OUT LAST WEEK, THERE IS EVIDENCE OF A NUMBER OF BANKS ACTUALLY TRYING TO ALERT THE REGULATESERS TO THESE WIDESPREAD PROBLEMS AND THE SUSPICIONS OUT THERE. THERE IS NO EVIDENCE, WITH SOME EXCEPTIONS. THERE IS VERY LITTLE EVIDENCE THE REGULATORS DID ANYTHING TO STOP THIS UNTIL VERY RECENTLY.

>> Warner: BUT OTHER BANKS ARE NOW IN THEIR SIGHTS?

>> OH, ABSOLUTELY, YES THERE ARE AT LEAST A DOZEN OTHER BANKS INCLUDING SOME BIG U.S. BANKS THAT ARE UNDER SERIOUS SCRUTINY AND INCLUDES BANKS LIKE CITIGROUP, JPMORGAN, AND BANKS ALL OVER THE WORLD. I THINK IT IS HIGHLY LIKELY WE WILL SEE A LOT MORE DAMNING E-MAILS AND EMBARRASSING STUFF COMING OUT IN THE COMING MONTHS.

>> Warner: DAVID ENRICH OF THE "THE WALL STREET JOURNAL," THANK YOU SO MUCH.

>> MY PLEASURE.

>> Suarez: LIBYA WILL HOLD ITS FIRST FREE ELECTION IN OVER 50 YEARS TOMORROW, NINE MONTHS AFTER THE DEATH OF MOAMMAR QADDAFI. THE ELECTION FOR THE 200-MEMBER TRANSITIONAL PARLIAMENT COMES AS THE WEAK SECURITY SITUATION ENABLES ARMED CONFLICTS IN SOME REGIONS. THAT HASN'T STOPPED THE MOUNTING EXCITEMENT, AS WE SEE IN THIS REPORT BY ITN'S LINDSEY HILSUM.

>> Reporter: FOR FOUR DECADES, ONLY ONE MAN'S IMAGE WAS ALLOWED. NOW, THOUSANDS OF FACES LOOK OUT FROM BILLBOARDS ACROSS LIBYA. IT'S ALMOST TOO MUCH TO BELIEVE. LAMIA ABUSIDRA IS CANVASSING VOTES ON THE CORNICHE IN BENGHAZI. HER PARTY, SHE SAYS, WANTS TO UNITE LIBYANS. IT'S LED BY AN ISLAMIST, BUT SHE'S SOMETHING OF A LIBERAL.

>> PEOPLE THAT THOUGHT THAT THE HOMELAND PARTY IS AN ISLAMIST PARTY WERE SHOCKED BY SOMEONE LEAVING THE BENGHAZI LIST WHO IS UNVEILED. AND THAT SHOCK MADE THEM THINK MORE AND MADE A DIALOGUE, A STRONG DIALOGUE OPEN IN THE COMMUNITY.

>> IT'S ALL A BIT CONFUSING.

>> EVERY DAY WE THINK WE LIKE ONE CANDIDATE THEN THE NEXT DAY WE SEE ANOTHER. I CAN'T MAKE MY DECISION UNTIL ELECTION DAY.

>> NONE OF WHICH MEANS ANYTHING TO THIS MAN. HE HAS NO FAITH THAT AN ELECTED GOVERNMENT WILL REIN IN THE ARMED MEN WHO KIDNAPPED HIM IN TRIPOLI LAST WEEK AND TORTURED HIS SON TO DEATH. THE FAMILY SUPPORTED QADDAFI BUT THIS WASN'T REVENGE, HE SAY, THE MURDERERS SIMPLY WANTED TO STEAL THE FAMILY FARM.

>> FOR THIS REASON THEY KILLED MY SON. FOR THIS REASON TRY TO KILL ME. FOR THIS REASON THEY ARE GOING TO KILL ME AGAIN. THEY WILL TRY, I KNOW IT.

>> Reporter: DEMOCRACY WON'T CURB THE MILITIA MEN WHO SPEARHEADED THE REVOLUTION AND NOW RUN RIOT, HE SAYS.

>> THERE IS NO FUTURE, I DON'T THINK. THE PROBLEM DESTROY THE COUNTRY.

>> Reporter: EVEN IN EASTERN LIBYA CRADLE OF THE REVOLUTION NOT EVERYONE SUPPORTS THE ELECTION. IN FACT, THEY'RE SABOTAGING IT. THEY SAY WESTERN LIBYA IS BEING GIVEN TOO MANY PARLIAMENTARY SEATS. THE EAST IS BEING NEGLECTED AS IT WAS UNDER QADDAFI. IN THE EASTERN TOWN I CAME ACROSS A SMALL DEMONSTRATION OF MEN CALLING FOR THE BOYCOTT. THE EAST DESERVES MORE POWER, THEY SAID.

>> THE WEST STOLE OUR REVOLUTION. WE STARTED THE REVOLUTION HERE.

>> Reporter: SO ON SATURDAY.

>> NO, NO VOTING.

>> NO VOTING.

>> A CANDIDATE CAME BY TRYING TO RESCUE HER POSTERS.

>> I'M VERY SAD TO SEE MY PEOPLE WITH THIS MENTALITY. LIBYA IS FREE BUT WE WANT AN ELECTION AND A NEW GOVERNMENT. IT'S OKAY THIS IS FREEDOM, BUT THEY SHOULDN'T TEAR DOWN POSTERS. WE WANT LIFE TO GET BETTER. WHY DAMAGE THINGS. WE WANT TO SETTLE DOWN AND REBUILD THE COUNTRY.

>> SUDDENLY EVERYONE WANTS A SAY.

>> Reporter: ANYONE WAY POSTER IS A TRAITOR SAYS ONE MAN. THE ELECTION IS A AS FAR AS SAYS ANOTHER. NO IT'S FREEDOM SAYS A THIRD. IT'S CHAOS. JUST THINK, UNTIL LAST YEAR NO ONE IN LIBYA WAS ALLOWED TO HAVE ANY OPINIONS AT ALL.

>> Reporter: THE LINE BETWEEN DISCUSSION AND DISRUPTION IS NOT WELL UNDERSTOOD. YESTERDAY SUSPECTED EASTERN FEDERALISTS BURNED A WAREHOUSE WITH BALANCE OLTS AND SLIPS.

>> DEMOCRACY IS NEW IN LIBYA AND STILL MANY RESORT TO VIOLENCE IF THEY CAN'T GET THEIR OWN WAY. THE POLL WILL GO AHEAD ON SATURDAY. BUT THE QUESTION IS WILL LIBYANS ACCEPT THE RESULTS.

>> WE HAVE MORE ABOUT LIBYA ON OUR WEB SITE.

>> Suarez: WE HAVE MORE ABOUT LIBYA ON OUR WEB SITE, INCLUDING A REPORT ON LIBYAN HOPES THAT PEACEFUL ELECTIONS WILL ENCOURAGE MORE FOREIGN INVESTMENT IN THEIR OIL INDUSTRY.

>> Woodruff: AND TO THE ANALYSIS OF BROOKS AND DIONNE-- "NEW YORK TIMES" COLUMNIST DAVID BROOKS AND "WASHINGTON POST" COLUMNIST E.J. DIONNE, FILLING IN FOR MARK SHIELDS. HELLO, GENTLEMEN, GOOD TO SEE YOU BOTH.

>> GOOD TO SEE YOU.

>> Woodruff: SO IT'S THE FIRST FRIDAY OF THE MONTHS. WE HAVE JOBS NUMBERS, DAVID, DISAPPOINTING. IS THERE WAS JOB GROWTH IN THE PRIVATE SECTOR BUT NOT AS MUCH AS PREDICTED. WHAT IS THUS FOR THE CAME ANNE. >>IT IS BAD FOR OBAMA. THE RULE OF THUMB WAS 150,000 JOBS A MONTH, THE BREAK EVEN POINT, YOU WANT TO BE ABOVE THAT IF YOU ARE THE INCUMBENT. WE HAVE HAD THREE MONTHS IN A ROW OF BAD NUMBERS SO NOW TO CATCH UP TO GET TO THE POINT WHERE THE 34RI9 CALL SCIENCE MODELS OR MANY SAY IT IS AN ADVANTAGE FOR HIM OR AT LEAST NOT A COMPLETE NEGATIVE HE HAS TO HAVE A QUARTER MILLION JOB GROWTH FOR THE REST OF THE YEAR. THAT SEEMS UNLIKELY. SO YOU GO NOT ELECTION THINKING THAT THE ECONOMY WILL BE A PRETTY STRONG FLEING FIV.

>> Woodruff: PRETTY STRONG NEGATIVE.

>> YEAH, I WOULD THINK SO AND I HAVE TO SAY THE DONE I HAD-- DOWNSIDE RISKS ARE BETTER THAN THE UPSIDE RISKS. IT IS LARD TO SEE THE ECONOMY PICKING UP. IT IS EASY TO SEE EUROPE HAVING SOMETHING REALLY NEGATIVE HAPPEN. IF EUROPE COLLAPSE, IF THE EURO COULDS LAS, MORE THAN A GREECE WITHDRAWAL I THINK IS EXTREMELY HARD FOR THE PRESIDENT TO GET REELECTED. IT IS SORT OF OUT OF HIS HANDS. BUT UP UNTIL NOW, IT'S A NEGATIVE WITH A EURO COLLAPSE.

>> Woodruff: WE HEARD EARLIER IN THE PROGRAM FROM TWO SPOKESPEOPLE FOR THE TWO CAMPAIGNS. IS THERE SOMETHING DIFFERENT THE PRESIDENT COULD BE SAYING OR DOING THAT WOULD MAKE A DIFFERENCE AT THIS POINT?

>> WELL, FIRST OF ALL I THINK WHAT IS STRIKING IS THAT YOU HAD SLUGGISH GROWTH FOR THE LAST THREE MONTHS, 90,000 JOBS. AND THE PRESIDENT HAS MAINTAINED IT IN THE SWING STATES, EXPANDED HIS LEAD OVER ROMNEY. SO YOU ARE STARTING TO WONDER. CAN LIVE WITH SLUGGISH GROWTH. I AGREE WITH DAVID, OBVIOUSLY IF EUROPE BLOWS UP, IF SOMETHING HORRIBLE HAPPENS THEN HE'S GOING TO BE IN TROUBLE. I THINK IT'S REMARKABLE HE HAS HELD UP AS WELL AS HE HAS. AND ARE SOME UNDERLYING NUMBERS THAT ARE HELPING HIM. ONE IS WAGES WERE UP. HOURS WORKED ARE UP. THE NUMBERS ARE BETTER IN THE SWING STATES AND WHILE DAVID IS RIGHT IN ONE SENSE THAT YES, THE OVERALL NUMBER MATTERS, THERE ARE A LOT OF STUDIES THAT SHOW THAT VOTERS VOTE THEIR OWN SUBJECTSIVE-- OF HOW THEY ARE DOING. PEOPLE IN THE SWING STATE FEELS THE ENVIRONMENT MAKES THEM FEEL BETTER. THE PRESIDENT DIDN'T HAVE MUCH CHOICE AT THIS POINT. HE HAS HIS POLICIES IN PLACE. HE'S GOING TO SAY THAT HE HAS MORE POLICIES THERE THAN ITS CONGRESS WON'T ENACT. AND WE'RE GOING TO HEAR THAT A LOT. AND WILL SAY THAT WE HAVE HAD, YOU KNOW, STUDY BUT SLOW JOB GROWTH BUT HAVE ADDED ABOUT 4.5 MILLION JOBS. I THINK HE CAN PROBABLY LIVE WITH THE NUMBERS AS LONG AS THERE IS A PLUS IN FRONT OF HIM. HE CAN'T LIVE WITH A MINUS.

>> Woodruff: WE HEARD CHEN SAY THERE IS THIS POLICY UNCERTAINTY OUT THERE THAT IS KEEPING PEOPLE FROM HIRING. IS THERE ANYTHING THE PRESIDENT CAN DO?

>> WELL, NOT IN THE SHORT TERM. I THINK HISTORICALLY IF YOU LOOK BACK JUST IN THE BIGGEST POSSIBLE PICTURE OF HOW HE DID. I THINK YOU WOULD HAVE TO SAY VIS-A-VIS EUROPE, THE STUFF TIM GEITHNER DID WITH THE BANKS, IT WAS SUPERIOR TO WHAT EUROPE Z WE ACTED TO SHORE UP OUR FINANCIAL SYSTEM IN A SUPERIOR WAY THAN ACROSS THE ATLANTIC. THE THING THAT WILL BAFF THEY WILL STORY AND THIS IS A CRITICISM TO BOTH PARTIES. THERE WAS A REASONABLY BROAD CONSENSUS. YOU COULD HAVE DONE AN EASY DEAL, SHORT TERM STIMULUS FOR LONG-TERM STRUCTURAL REFORM. WE WILL SPEND A LOT OF MONEY NOW BUT PUT SOMETHING IN PLACE, GUARANTEES THAT ENTITLEMENT SPENDING ON OTHER THINGS WILL GO DOWN. WHY DIDN'T YOU PUT THOSE THINGS TOGETHER.

>> Woodruff: YOU MEAN LAST AREA.

>> OR ANY OF THE LAST THREE YEARS OR TODAY. TO ME IT IS A VAST MYSTERY WHY THAT DEALS WITH NOT STRUCK. AND THE SECRETARY THING TO BE SAID T HAS BEEN UNDERSTOOD BY A LOT OF PEOPLE FROM THE FIRST DAY THERE 2008 THIS WAS GOING TO BE A 7 OR 8 YEAR PROCESS. WHY DIDN'T WE TAKE LONG STRUCTURAL THINGS TO TAKE CARE OF THE DEEP STRUCTURAL PROBLEMS THAT AFFLICT US TODAY.

>> I THINK IT IS EASY, IT WASN'T AN EASY DEAL, I THINK IT IS EASY TO UNDERSTAND WHY THOSE THINGS DIDN'T HAPPEN, BECAUSE THE REPUBLICANS WERE GOING TO RESISTANT-- RESIST ANY LONG-TERM BUDGET SOLUTION THAT INVOLVED TAX INCREASES. AND I DON'T SEE HOW YOU CAN SOLVE THE LONG-TERM BUDGET PROBLEM THROUGH TAX INCREASES.

>> Woodruff: YOU ARE SAYING IT COULDN'T HAVE HAPPENED.

>> WHAT DAVID IS SIING IS IN THE A BAD DAY IT JUST COULDN'T HAVE HAPPENED. I THINK THE ORIGINAL STIMULUS SHOULD HAVE BEEN BIGGER AND LONGER ACTOR. PEOPLE IN THE OBAMA ADMINISTRATION THOUGHT THAT AT THE TIME. THEY WERE CAUTIOUS BECAUSE SHE DIDN'T THINK IT COULD GET THROUGH CONGRESS. AND INDEED WHEN THEY DID PROPOSE A LARGEST STIMULUS THEY HAD TO CUT IT BACK TO GET THE LAST THREE VOTES IN THE SENATE. SO I DON'T THINK IT WAS AN EASY PATH FOR THE PRESIDENT. I DON'T THINK THE REPUBLICANS WERE PREPARED TO GIVE HIM THE KIND OF STIMULUS, SHORT TERM OR BUDGET DEAL LONG TERM THAT MIGHT HAVE BEEN BETTER THAN WHAT WE HAD.

>> WELL, IF HE HAD, WHEN HE PROPOSED THE STIMULUS PACKAGE IF HE HAD SAID LISTEN, WE HAVE TO SPEND NOW BUT I UNDERSTAND WE HAVE TO WORRY ABOUT THE LONG-TERM DEBT SITUATION, WE CAN'T SCARE THE MARKET. HERE ARE THE THINGS LONG-TERM, I THINK THAT SAY MARRIAGE THAT WOULD HAVE CERTAINLY BEEN OPEN.

>> Woodruff: I THINK REPUBLICANS.

>> 2009 WAS A MUCH MORE FLUID SITUATION THAN IT HAS BECOME.

>> I DISAGREE BASED ON THE VOTES AND THE STIMULUS HE GAVE. THE STIMULUS WAS TAX CUTS WHICH WEREN'T EFFECT ANY BOOST THE ECONOMY THAT WAS AN EFFORT TO GET REPUBLICAN VOTES BUT SO I'M LESS OPTIMISTIC THAN DAVID ABOUT WHAT REPUBLICANS WOULD HAVE DONE FOR THE PRESIDENT.

>> Woodruff: MEANWHILE "THE WALL STREET JOURNAL" IS OUT EDITORIALIZING SAYING IF ONLY MITT ROMNEY WOULD PUT OUT SOME POLICIES OF HIS OWN IT IS NOT ENOUGH TO REMIND EVERYBODY THAT THE PRESIDENT'S POLICIES ARE WORK. THEY SAID SOMETHING EVERYONE KNOWS PRESIDENT'S POLICIES AREN'T WORKING, WE WANT TO KNOW WHAT HIS PRESCRIPTION WITNESS THAT IS WHAT WE PUNDIT DOES. WE WANT DETAILS. WE WANT SOMETHING TO WRITE ABOUT. AND SO I BELIEVE THAT TOO. THERE HE IS A BIG DEBATE.

>> Woodruff: THE JOURNAL IS CONSERVATIVE.

>> WHY THE JOURNAL AND RUPERT MURDOCH HAVE BEEN CRITICAL AND THEY ARE SHARING A LOT OF CRITICISM FLOATING IN THE-- WHICH IS THAT THE ROMNEY CAMPAIGN HAS NOT BEEN SURE FOOTED, DOES NOT HAVE THE A REPUBLICAN TEAM ON BOARD. THEY ARE JUST LESS THAN AGGRESSIVE. AND SO I SORT OF AGREE WITH SOME OF THAT. BUT THERE'S A DIFFERENCE BETWEEN CAMPAIGN PEOPLE AND PUNDITS. AND WE ALWAYS WANT THE SUBSTANCE, SOMETHING TO DEBATE AND THEIR STRATEGY WHETHER RIGHT OR WRONG, THEIR STRATEGY LET'S LAY LOW. LET'S FOCUS ALL THE ATTENTION ON OBAMA. JUST LAY LOW, BE AS BORING AS POSSIBLE. THE COUNTRY LIKES BORING RIGHT NOW, LET'S FOCUS ON THAT GUY. THAT IS THEIR STRATEGY. IT'S REALLY BAD FOR US. AND MAYBE IF YOU WERE RUNNING A CAMPAIGN IT MAY BE WHAT YOU OPT FOR TOO.

>> Woodruff: WHAT DOW MAKE OF THE CRITICISM.

>> IS A REALLY BAD DAY IN A REPUBLICAN CAMPAIGN WHEN THERE IS A LONG "THE WALL STREET JOURNAL" EDITORIAL CRITICIZING YOUR CAMPAIGN. I THINK ON THE ONE HAND CONSERVATIVES HAVE A POINT BECAUSE WITH 8.2% UNEMPLOYMENT, THE INCUMBENT IS NOT SUPPOSED TO BE AHEAD OF THE CHALLENGER BY 8 POINTS IN SWING STATES WHICH IS WHAT SOME OF THE RECENT POLLS SHOW. SO THERE IS SOMETHING TO THAT. I THINK THE PROBLEM FOR CONSERVATIVES IS WHAT THEY WANT ROMNEY TO DO IS TO GO OUT AND DEFEND VERY, VERY CONSERVATIVE POLICIES. THE ROMNEY CAMPAIGN KNOWS THAT A LOT OF THESE POLICIES WILL NOT BE POPULAR. BUT ROMNEY ALSO DOESN'T WANT TO BREAK WITH THE CONSERVATIVES. SO THEY'RE STUCK IN THIS NETHER WORLD. I THINK IF ROMNEY DID WHAT THE CONSERVATIVES WANT HIM TO DO IT WOULDN'T HELP. BUT IN THE MEANTIME IT'S NOT CLEAR WHAT HIS CONVICTIONS ARE.

>> IF I WERE ROMNEY I WOULD PROBABLY ERR ON THE SIDES OF, I AM GEEING SAY SOMETHING UNPOPULAR BUT THIS IS WHAT I BELIEVE. I THINK HIS PRIMARY CHALLENGE RIGHT NOW IS TO SHOW THE COUNTRY THAT HE ACTUALLY BELIEVES IN STUFF, HE'S CONSISTANT.

>> YOU THINK HE'S BEING TOO CAUTIOUS BY DOING WHAT YOU ARE DESCRIBING TO.

>> RIGHT. SO AFTER THE HEALTH CARE DECISION, ROMNEY COULD HAVE COME OUT THERE HE HAS A HEALTH-CARE PLAN. AND IT'S PRETTY DETAILED. AT LEAST WITHIN, I WOULD SAY THIS LITTLE BOX HE KEEPS IN THE SUBBASEMENT OF HIS 12 CAR GARAGE IN DEEP SECRET. THIS IS A SECRET PLAN AND A PRETTY GOOD PLAN. AND I WOULD LIKE HIM TO SAY WHAT IT IS IN PART SO HE CAN SAY THIS IS WHAT I BELIEVE.

>> YOU KNOW THAT HE HAS A PLAN BUT YOU ARE SAYING.

>> HE HAS ANNOUNCED THE OUTLINES OF HIS PLAN. THAT'S PUBLIC. I ALSO KNOW THAT HE HAS THE PRIVATE DETAILS OF THE PLAN WHICH IS IN SECRETARY ET. BUT IT'S JUST FLESHING OUT THE PLAN HE IS ANNOUNCED.

>> THE PROBLEM IS IT LOOKS LIKE THE PLAN THAT JOHN McCAIN PUT ON THE TABLE FOUR YEARS AGO WHICH PRESIDENT OBAMA, THEN SENATOR OBAMA TRASHED TO GREAT EFFECT IN THE ELECTION. I DON'T THINK THE PLAN WOULD BE POPULAR IF HE PUT IT OUT THERE. WHICH IS WHY IT IS IN THE SUBBASEMENT.

>> IT HAPPENS TO BE POPULAR WITH PEOPLE LIKE ME.

>> NASS'S DIFFERENT.

>> Woodruff: YOU ARE A MINORITY, ARE YOU A COLUMNIST.

>> HE LEAVES IT TO YOU BUT NOT THE PUBLIC.

>> I LIKE BEING A PART OF THE REALITY PRINCIPLES.

>> Woodruff: IN ONE PART OF THE HEALTH CARE STORY WAS THAT HIS ADVISOR CAME OUT A FEW DAYS AGO AND SAID WE DISAGREE WITH ITS SUPREME COURT, THAT WE THINK THIS MANDATE IS A PENALTY. IT'S NOT A TAX. THE COURT UPHELD THE HEALTH-CARE REFORM LAW BUT SAID ONLY ON THE BASE THAS THE MANDATE WAS ATTACKED. ERIC FERNSTROM WHO ADVISES MITT ROMNEY SAID NO WE ANY IT IS A PENALTY. A DAY LATER THE GOVERNOR CAME OUT AND SAID NO IT'S A TAX. SO WHAT HAPPENED IN THERE.

>> THIS WAS A TERRIBLE MESS. I THINK ROMNEY LOST IN SEVERAL DIFFERENT WAYS. I THINK FEHRNSTROM WAS SPEAK FOR ROMNEY AND THE CAMPAIGN THAT WAS QUITE CLEAR. WHERE ROMNEY DIDN'T WANT TO HAVE TO ADMIT THAT HE RAISED A TAX IN MASSACHUSETTS. SO ROMNEY WAS DEFENDING HIS OWN POSITION. MEANWHILE REPUBLICANS ARE OUT THERE CALLING IT A TAX AND THEY SAY TO ROMNEY YOU CAN'T TAKE THIS POSITION. YOU GOT TO GO WITH US ON THIS. SO A COUPLE DAYS LATER ROMNEY SWITCHES. SOW GETS STUCK WITH THE FLIP-FLOP. HE LOOKS LIKE HE IS CAVING TO PRESSURE FROM CONGRESSIONAL REPUBLICANS AND THE RIGHT WING OF THE PARTY AND IT LOOKS LIKE THE CAMPAIGN IS NOT COMPETENT. BECAUSE YOU WOULD HAVE THOUGHT T WAS KNOWN FOR A LONG TIME THAT THE SUPREME COURT WAS COMING DOWN WITH A DECISION. THERE WERE A LOT OF DIFFERENT POSSIBILITIES. WOULD YOU HAVE THOUGHT THEY WOULD HAVE WORKED THIS OUT IN ADVANCE. I THINK IT WAS A LOSER A CROSSING THE BOARD FOR HIM.

>> WHICH IS WHY HE SHOULD ANNOUNCE A PLAN. SO IT'S LESS ABOUT TALKING ABOUT THE PAST, THE MASSACHUSETTS PRETZEL HE'S STUCK IN AND MOSTLY TALKING ABOUT HERE'S MY OPPOSITE, HERE IS OBAMA'S OPTION, YOU DECIDE.

>> Woodruff: HOW MUCH IS HE HURT IF AT ALL, DAVID, BY THAT LITTLE KERFLUFFLE.

>> NOTHING.

>> Woodruff: PENALTY, TAX, PENALTY.

>> EBB AND FLOW OF THE CAMPAIGN. THE POLLS I DON'T THINK THE POLLS ARE SERIOUS NOW. IN OCTOBER SOMETHING WILL HAPPEN AND THEN PEOPLE WILL DECIDE. BUT THE PEOPLE WHO WILL DECIDE THIS ELECTION BELIEVE ME ARE NOT PAYING ANY ATTENTION NOW. AND THEY'RE THE ONES WHO TUNE IN LATE AND THERE WILL BE A BUNCH OF ADS AIMED AT THEM AND THE LAST WEEK OR SO THEY WILL MAKE A DECISION.

>> I THINK THE PENALTY TAX THING DOESN'T MATTER TO A LOT OF PEOPLE. I THINK ROMNEY IS IN DANGER OF CROSSING INTO TERRITORY WHERE A, HE JUST DOESN'T LOOK LIKE HE HAS ANY CLEAR PRINCIPLESES ON ANYTHING OR HE IS WILLING TO ADJUST THEM. AND B, I THINK OT BAMA PEOPLE REALLY ARE GOING TO PLAY THIS WILL ALWAYS CAVE TO THE REPUBLICAN WRITER. WILL ALWAYS CAVE TO THE REPUBLICAN CONGRESS. AND I THINK THAT IS DANGEROUS FOR HIM. NOT THIS PARTICULAR THING BUT THE WAY HE SEES THIS NARRATIVE.

>> ONE GOOD PIECE OF NEWS HE GOT THIS WEEK WAS A HUNDRED MILLION DOLLARS IN THE MONTH OF JUNE, DAVID. IS MONEY GOING TO BE THE DECISIVE THING IN THIS ELECTION? WINCE DON'T THINK SO I THINK IF YOU ARE RUNNING FOR CONGRESSMAN, IF YOU ARE RUNG FOR SENATOR F YOU ARE RUNNING FOR GOVERNOR, MONEY CAN MATTER A LOT OR STATE LEGISLATOR. AND THE PRESIDENCY THERE'S SOME OF FREE MEDIA I'M VERY DUBIOUS THAT MONEY MAKES A BIG DEAL. BOTH WILL HAVE PLENTY OF MONEY, ENOUGH TO WIN THIS WEEK.

>> BECAUSE OT BAMA PEOPLE CAME RIGHT OUT AND SAID HEY, WE'VE GOT A CATCH-UP IN AN APPEAL.

>> AND IN THE BROAD SENSE MONEY IN A PRESIDENTIAL CAMPAIGN, PEOPLE KNOW BOTH CANDIDATES AND PARTICULARLY KNOW THE INCUMBENT. BUT THIS GIVES ROMNEY A LOT MORE ROOM TO MANEUVER. BARACK OBAMA VASTLY OUTSPENT JOHN McCAIN IN THE LAST CAMPAIGN THAT A YOU LAD OBAMA TO PLAY IN STATES THAT DEMOCRATS DON'T USUALLY PLAY AT. PART OF WHY HE CARRIED INDIANA. PART OF WHY HE CARRIED NORTH CAROLINA. THIS TIME BY BEING OUTSPENT BY ROMNEY HE DOESN'T HAVE THAT ADVANTAGE. AND I THINK IT'S GOING TO INCREASE PRESSURE ON THE BIG DONORS WHO HAVE BEEN VERY RELUCTANT SO FOR TO GIVE TO THE SUPER PAC WHO THEY DON'T LIKE THE IDEA OF A SUPER PAC. THEY HAVE STARTED TO GIVE MONEY. I THINK THIS WILL RAISE THE PRESSURE ON THEM TO GIVE MORE.

>> WE DON'T LIKE TO START TALKING ABOUT JOBS, END TALKING ON MONEY, BUT THAT'S THE WAY IT IS.

>> THAT IS THE WAY OF THE WORLD.

>> EJ DIONNE, DAVID BROOK, THANK YOU VERY MUCH.

>> THANK YOU.

>> Suarez: FINALLY TONIGHT, MUSIC AND MENTORING IN THE MOUNTAINS OF VIRGINIA. JEFFREY BROWN HAS THIS LOOK AT A GROWING TRADITION.

>> Brown: IN CENTRAL VIRGINIA'S RAPPAHANOCK COUNTY, THE FOUR- YEAR OLD CASTLETON FESTIVAL IS PART TRADITIONAL SUMMER MUSIC FESTIVAL-- THIS YEAR FEATURING "BARBER OF SEVILLE" AND MUCH MORE-- AND PART MUSIC TRAINING PROGRAM, WHERE YOUNG PERFORMERS HAVE A CHANCE TO WORK WITH THE LIKES OF STAR MEZZO-SOPRANO DENYCE GRAVES.

>> MAESTRO, THERE IS A CUT...

>> Brown: IT'S THE VISION OF RENOWNED CONDUCTOR LORIN MAAZEL, WHO FIRST CAME HERE BY ACCIDENT AS A YOUNG MAN WHEN HE TOOK A WRONG EXIT OFF THE TURNPIKE, AND FOUND A BEAUTIFUL SETTING THAT STAYED WITH HIM.

>> 25 YEARS LATER, WHEN I WAS COURTING MY WIFE, I BROUGHT HER HERE, AND SHE SAID, "IT'S THE MOST BEAUTIFUL PLACE I'VE EVER BEEN."

>> Brown: MAAZEL AND HIS WIFE, GERMAN ACTRESS DIETLINDE TURBAN MAAZEL, BOUGHT THE HOUSE, WHICH HAD ONCE SERVED AS A HOSPITAL FOR BOTH SIDES IN THE CIVIL WAR, AND THEN OTHER FARMS AROUND IT. THEY RAISED THREE CHILDREN HERE, AND NOW USE THE LAND FOR AN ECLECTIC MIX OF ANIMALS, INCLUDING EMUS, ZEBRAS, AND A ZONKEY-- PART ZEBRA, PART DONKEY. AND, COME SUMMER, TO TRAIN AND NURTURE YOUNG SINGERS AND MUSICIANS FROM THE U.S. AND 14 OTHER COUNTRIES. DIETLINDE TEACHES GERMAN CLASSES AND ACTING FOR OPERA SINGERS, SOMETIMES USING HUMOROUS IMPROVISATIONAL PROMPTS.

>> I WON'T EAT THE BROCCOLI...

>> Brown: MAESTRO MAAZEL CONDUCTS AND COACHES THE MUSICIANS.

>> BOTH OF US CARE VERY MUCH ABOUT YOUNG PEOPLE, AND FEEL THAT THERE IS A KIND OF BASIC MISUNDERSTANDING, ESPECIALLY IN THE UNITED STATES, THAT YOUNG PEOPLE DON'T CARE ABOUT CLASSICAL MUSIC OR THEATER OR OPERA OR WHATEVER.

>> Brown: YOU THINK THERE IS A MISUNDERSTANDING?

>> WELL, OF COURSE. I MEAN, JUST LOOK AT OUR FESTIVAL. WE HAVE ALMOST 200 PEOPLE BETWEEN THE AGES OF 17 AND 26 SINGING THEIR HEARTS OUT, PLAYING THEIR HEARTS OUT, AND AT THE HIGHEST POSSIBLE LEVEL.

>> Brown: MAAZEL HIMSELF WAS A CHILD PHENOMENON, FIRST A VIOLINIST, AND THEN MAKING HIS CONDUCTING DEBUT AT AGE EIGHT. HE TOURED THE COUNTRY AS A GUEST CONDUCTOR OF MAJOR ORCHESTRAS AS A TEENAGER, AND WENT ON TO HEAD SOME OF THE WORLD'S LEADING ORCHESTRAS, INCLUDING IN CLEVELAND, VIENNA, PITTSBURGH, AND NEW YORK, AND HAS TRAVELED THE WORLD FOR SEVEN DECADES. AT CASTLETON, THE YOUNG ARTISTS LIVE IN HOMES ON THE MAAZEL PROPERTY, EAT COMMUNALLY IN A LOCAL FIREHOUSE, AND SPEND HOURS FINE-TUNING THEIR CRAFT. THE CASTLETON ARTISTS IN TRAINING SEMINAR, OR "CATS", IS FOR SINGERS. MOST ARE IN THEIR 20s, JUST AT THE BEGINNING OF THEIR CAREERS. ♪ ♪ THEY PAY AS MUCH AS $3,000 FOR A SEVEN-WEEK EXPERIENCE THAT 26- YEAR-OLD MEGAN GILLESPIE OF LOS ANGELES CALLS "LIFE CHANGING."

>> IT IS NOT COMPETITIVE IN ANY WAY, SHAPE OR FORM. IT'S NOT ABOUT YOU, IT'S ABOUT THE WHOLE PROGRAM AND GETTING AUDIENCES TO ENJOY THIS AND LOVE THIS AS MUCH AS WE DO.

>> I'VE SUNG ALL OVER THE WORLD AS A RESULT OF THE RELATIONSHIP THAT I'VE STARTED WITH MAESTRO MAAZEL.

>> Brown: OTHER PARTICIPANTS ARE ALREADY FURTHER ALONG. CASTLETON PROVIDED 35-YEAR-OLD COREY CRIDER WITH HOUSING AND A STIPEND, ALLOWING HIM TO BRING HIS WIFE AND THEIR THREE YOUNG CHILDREN TO THE FARM. THIS IS HIS THIRD SUMMER HERE. AND HE KNOWS THAT, WHILE CASTLETON MAY NOT BE COMPETITIVE, MAKING IT IN THE OUTSIDE WORLD CERTAINLY IS. CRIDER'S BEEN GRADUALLY BUILDING HIS CAREER, BEGINNING IN COLLEGE IN KENTUCKY, THROUGH SEVERAL YOUNG ARTIST TRAINING PROGRAMS, AND NOW ON VARIOUS INTERNATIONAL STAGES.

>> TO REALLY SUCCEED, I THINK YOU HAVE TO CONTINUALLY BE ACCUMULATING THIS FULL TOOL BOX, THIS FULL SKILL SET OF EVERYTHING THAT THIS CAREER DEMANDS, AND SPIN THOSE PLATES AND ALWAYS BE DOING IT. I DON'T THINK IT'S A DYING ART FORM. I SEE IT EVOLVING, CHANGING, AND WHEN I COME TO PLACES LIKE CASTLETON, I SEE THESE YOUNG PEOPLE COMING IN HERE WITH EXTRAORDINARY TALENT AND CRAFT AT 21, 22, 23.

>> Brown: ALL OF THIS TRAINING PAYS OFF MOST IMMEDIATELY IN CASTLETON'S OTHER ROLE-- AS A SUMMER MUSIC FESTIVAL, WHERE PATRONS CAN PICNIC AMID THE BEAUTIFUL SCENERY, AND TAKE IN OPERA, SYMPHONIC PERFORMANCES, AND THIS YEAR, EVEN MUSICAL THEATER, A PRODUCTION OF "A LITTLE NIGHT MUSIC". CASTLETON, IN FACT, IS STILL IN ITS INFANCY, A FORMIDABLE CHALLENGE TO CREATE AND NOW TO KEEP RUNNING. THIS YEAR'S OPERATING BUDGET WAS JUST UNDER $3 MILLION, AND MAAZEL AND HIS FAMILY KICK IN ABOUT A THIRD OF THAT. HE EVEN RECENTLY AUCTIONED OFF A PRIZED POSSESSION, A VIOLIN MADE IN 1783, FOR MORE THAN A MILLION DOLLARS, ALL GOING TO THE FESTIVAL. WHAT WE'RE DOING, I THINK, IS VERY, VERY IMPORTANT, NOT ONLY ARTISTICALLY BUT SOCIALLY. BECAUSE WHAT FOLKS DON'T REALIZE IS THAT YOUNG PEOPLE DESPERATELY NEEDING TO FIND SOME WAY OF EXPRESSING THEMSELVES ARE BLUNTED AND THEIR EFFORTS ARE ABORTED BECAUSE THERE ISN'T THAT KIND OF SUPPORT OUT THERE.

>> Brown: INEVITABLY, OF COURSE, WITH AN INSTITUTION SO IDENTIFIED WITH ONE INDIVIDUAL, THE QUESTION ARISES WHETHER IT CAN SURVIVE WITHOUT HIM, NOT THAT THE 82-YEAR-OLD MAAZEL IS PLANNING ON GOING ANYWHERE SOON.

>> EVERY ONCE IN A WHILE I SAY, "WHY AM I DOING THIS?" YOU KNOW, I GET SORT OF TIRED AT THE END OF THE DAY. BUT I HAVE GOOD GENES, APPARENTLY. MY FATHER PASSED AWAY WHEN HE WAS 106 AND...

>> Brown: 106?

>> 106, AND IN PERFECTLY GOOD HEALTH. I BELIEVE I'M BRINGING A MATURITY, THAT GRASP AND A WIDTH AND A BREADTH TO MUSIC-MAKING THAT PERHAPS I DIDN'T HAVE BEFORE. AND WHETHER OR NOT THAT IS TRUE IS NOT FOR ME TO SAY, IT'S FOR OTHERS TO DETERMINE. BUT I DO KNOW THAT I LOVE WHAT I'M DOING MORE EVERY DAY.

>> Brown: FOR NOW, AND FOR SUMMERS TO COME, MAAZEL SAYS, HIS WORK IS HERE AT CASTLETON. AND HIS MUSIC-MAKING CONTINUES YEAR-ROUND-- IN SEPTEMBER, HE'LL TAKE UP HIS LATEST LEADERSHIP POST AS CHIEF CONDUCTOR OF THE MUNICH PHILHARMONIC ORCHESTRA.

>> Suarez: FOR MORE INTERVIEWS AND MUSIC FROM CASTLETON, YOU CAN GO TO THE "ART BEAT" SECTION OF OUR WEB SITE.

>> Woodruff: AGAIN, THE MAJOR DEVELOPMENTS OF THE DAY: JOB GROWTH FELL SHORT OF EXPECTATIONS FOR A THIRD STRAIGHT MONTH WITH 80,000 JOBS ADDED IN JUNE. EXCESSIVE HEAT WARNINGS WERE POSTED ACROSS A LARGE SWATH OF THE MIDWEST AND MID-ATLANTIC, AS TRIPLE-DIGIT TEMPERATURES PERSISTED. AND A MEMBER OF SYRIAN PRESIDENT BASHAR ASSAD'S INNER CIRCLE DEFECTED TO FRANCE. OUR COVERAGE OF TODAY'S JOBS REPORT CONTINUES ONLINE. HARI SREENIVASAN HAS THE DETAILS.

>> Sreenivasan: PAUL SOLMAN GIVES HIS TAKE ON THE UNEMPLOYMENT FIGURES. CHECK OUT HIS SOLMAN SCALE GRAPHIC ON OUR "MAKING SENSE" PAGE. WE CONTINUE OUR NEWSHOUR/GLOBAL POST SERIES ON H.I.V. WITH A LOOK AT WHY AN EXPENSIVE U.S.- SUPPORTED CIRCUMCISION CAMPAIGN FAILED IN SWAZILAND. THAT'S ON OUR HEALTH PAGE. AND ON OUR WORLD PAGE, WE'VE INTERVIEWED THE AUTHOR OF AN ARTICLE SAYING IRAN SHOULD HAVE A NUCLEAR BOMB. NOW, TELL US WHAT YOU THINK. ALL THAT AND MORE IS ON OUR WEB SITE, newshour.pbs.org. RAY.

>> Suarez: AND THAT'S THE NEWSHOUR FOR TONIGHT. ON MONDAY, WE'LL LOOK AT THE RESULTS OF THE NATIONWIDE ELECTION IN LIBYA, THE FIRST SINCE QADDAFI'S FALL FROM POWER. I'M RAY SUAREZ.

>> Woodruff: AND I'M JUDY WOODRUFF. "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. THANK YOU AND GOOD NIGHT.

>> MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY: NORDIC NATURALS BNSF

>> 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. Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS Captioned by Media Access Group at WGBH access.wgbh.org