The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight: A summary of the news; an Afghan campaign update; including the latest on the first U.S. military casualty; a regional look at the state of the U.S. economy; analysis by Mark Shields and David Brooks; a report on an effort to detect anthrax in the air; and a new year foreign affairs conversation; with Andres Oppenheimer of the "Miami Herald."

NEWS SUMMARY

JIM LEHRER: An American soldier was killed today in eastern Afghanistan. It was the first U.S. military loss of life in the war to hostile fire. A CIA officer was killed last November in a prison revolt. Officials said the man who died today was a member of the Army Special Forces. Wire service reports said a CIA Officer was wounded in the same shootout. It happened near the city of Khost. In that same region today, U.S. planes bombed a suspected al-Qaida base for the second time in two days. In Kabul, the interim government and a British general formally signed an agreement allowing peacekeepers to deploy there. Britain will lead the force of up to 5,000 troops. We'll have more on this story in a moment. In Malaysia today, police arrested 13 alleged Islamic militants. Investigators were checking their possible ties to Zacarias Moussaoui. He's the first person directly charged in the September 11th attacks, and is awaiting trial in Virginia. The head of Malaysia's police said Moussaoui visited Malaysia twice in the fall of 2000. The U.S. unemployment rate rose to 5.8% in December, the highest in more than six years. Today's Labor Department report said businesses cut another 124,000 jobs, but that figure was far less than in previous months. Democrats today opened a new assault on Republican economic policies. In a Washington speech, Senate Majority Leader Daschle said President Bush's tax cut last year wiped out the federal surplus and made the recession worse.

SEN. TOM DASCHLE: At a time when we need to fight both a car and I a war and a recession, when our nation has urgent needs on all fronts, the tax cut has taken away our flexibility and left us with only two choices: Both of them bad. We can shortchange critical needs such as homeland defense, or we can raid the Social Security surplus. Even run deficits to pay for those critical needs. We should not be in this position.

JIM LEHRER: Daschle did not propose repealing any of the tax cut, but he did call for a tax credit for companies that create new jobs, among other things. In response, Republican House Speaker Hastert defended the tax cut as the most important economic action Congress took last year. Argentina's new leader said today he will devalue the peso to help end a four-year recession. President Duhalde said devaluation is a given, but he did not say by how much. In Buenos Aires, thousands of people lined up to withdraw money from banks, hoping to spend it before its value falls. Israel announced today it seized a ship carrying 50 tons of weapons to the Palestinians. Commandos raided the vessel 300 miles off Israel's Red Sea Coast. The military said it carried Iranian-made mines, mortars and missiles, and wasowned by the Palestinian authority. The Palestinians denied any involvement. The incident came as U.S. Envoy Anthony Zinni met separately with Israeli and Palestinian leaders.

Pakistan today announced the arrests of more than 130 Islamic militants. They reportedly included leaders of two groups India blames for a suicide attack on its parliament last month. There was no immediate reaction from India to the arrests. Leaders of both countries attended a regional summit today in Nepal, but did not meet. A crime writer was released from a Houston jail today. Vanessa Leggett had been imprisoned five months, the longest ever for an American journalist protecting sources. She refused to let a federal Grand Jury see her notes for a planned book on a murder case. She was freed when the Grand Jury's term ended.

FOCUS - MILITARY UPDATE

JIM LEHRER: More on today's update of the Afghan campaign; Terence Smith reports.

TERENCE SMITH: At his headquarters in Tampa, Florida, the commander of the U.S. campaign in Afghanistan, General Tommy Franks, had only fragmentary information about the firefight that caused the first U.S. death by enemy fire.

GEN. TOMMY FRANKS: What we know right now is that the mission that he was on as a part of a team was to coordinate with some local tribal elements in the vicinity of Gardez - in order to facilitate cooperation between our forces in the region and the local tribal elements in that region. The specifics of the incident that caused the loss of life have not been fully developed yet, and so I'll hold those until we're a bit more sure of what happened. Were bad guys shot or were terrorists shot as a part of this small-arms exchange that took the life of one of our people? I simply don't know. I know that there was an exchange of fire. I don't know if any of the bad guys were killed or wounded in that action.

TERENCE SMITH: So far, six other Americans have died from friendly fire or other accidents in the military operation. Meanwhile in Afghanistan, confusion continued today as to the whereabouts of Taliban Supreme Leader Mullah Mohammed Omar. Afghanistan's foreign minister said Mullah Omar may be trapped near the southern city of Baghran.

ABDULLAH ABDULLAH, Interim Foreign Minister, Afghanistan: He is somewhere in southern Afghanistan. There are reports that he had been under siege, and the area is under siege already. But there have been reports that Mullah Omar is in that area but that situation will be clear today or the day after tomorrow.

TERENCE SMITH: Nonetheless, Prime Minister Hamid Karzai said in a television interview he didn't think Omar had been found.

HAMID KARZAI, Interim Prime Minister, Afghanistan: I don't have exact information about Mullah Omar's arrest or capture. I spoke to the local commander of the province last night at about 11:00 PM. He informed me of the activities there, of the movement around the area where we presume Mullah Omar could be - also about the surrender of the local Taliban man who lives there. And we are looking for him, for Mullah Omar, and the surrender of the Taliban is continuing.

TERENCE SMITH: General Franks conceded that U.S. forces don't know where either Omar or Osama bin Laden is, but he confirmed that some Taliban troops near Baghran have given up their weapons.

GEN. TOMMY FRANKS: There has been some discussion of surrender of a remaining pocket of Taliban up in that area. This coincides with information which we have also received, which indicates the possibility-- and I think you have all seen the reporting-- that Omar and perhaps some of his leadership may be up in this area. And so the action that's going on up there right now, as a matter of fact, is the collecting of arms from these people who, in fact, have crossed over or turned themselves in to the forces up north of Kandahar. And so we're interested in activities in that area, and so that sort of is where we stand, where we stand today on Omar. But I'll reinforce the point by saying either inside Afghanistan or as he attempts to leave Afghanistan or in someplace else we certainly will get him, Omar.

TERENCE SMITH: Franks said U.S Special Forces have searched seven out of eight cave complexes in the Tora Bora area.

GEN. TOMMY FRANKS: What we have found as we have gotten into these complexes is evidence of considerable loss of life, obviously, in there. We have found intelligence information that indicates that al-Qaida was in fact using that very heavily in that area. We have found larger weapons. In some cases we have found, I think, one or two tanks in some of these cave areas. We have found large quantities of ammunition. And the specifics of exactly what the intelligence take from this area looks like, I think I'll stay away from.

TERENCE SMITH: The General was also asked about reports that U.S. aircraft are flying surveillance flights over Somalia looking for evidence of terrorists.

GEN. TOMMY FRANKS: What we're interested in doing is looking at all the places where we believe we may see terrorist organizations of the type we're interested in-- that being those with global reach-- being harbored. And so, as we... as we identify that, we go to work with intelligence, surveillance reconnaissance, and so forth. Somalia, as a failed state, is an area where we believe in the past, certainly, there has been some terrorist activity, and I think we'll take a hard look at it to be sure that that's not the case today. And if that becomes the case, then we'll look at it the same way we look at other harbors for terrorists globally.

TERENCE SMITH: General Franks said he believed that some al-Qaida forces may have escaped from Afghanistan and sought refuge in Somalia or other countries.

FOCUS - ECONOMIC SNAPSHOT

JIM LEHRER: Now, as the New Year begins taking the pulse of the American economy. Ray Suarez has that.

RAY SUAREZ: A year ago, as 2001 began, the nation's unemployment rate stood at 4.2%. Today, that number rose to 5.8%. During all of last year, some 2.6 million Americans lost their job. To put those numbers in some historical perspective, over the last decade, the jobless number hit a high of 7.8% in 1992 and, more recently, a low of 3.9% in April, 2000, but the recent news has not been all bad. There were strong signs of a manufacturing rebound this week, home sales remain brisk, and the closely watched Consumer Confidence Index had its biggest point gain in December since February 1998. Here to help us understand the numbers and the current health of the economy are mark Vitner, vice president and senior economist at Wachovia Securities, a consumer bank and brokerage based on the East Coast; Diane Swonk, chief economist at Bank One Corporation in Chicago; and William Conerly, an economist and principal of Conerly Consulting, an economic consulting firm based in Portland, Oregon. Well, I'd like to go around the country and get first a look at the numbers overall what the national numbers are telling you and then break it down by your own regions. Mark Vitner.

MARK VITNER, Wachovia Securities: Yes, here in the, along the East Coast, the recession has hit pretty hard. If you look at the national numbers, we've lost about a million 40,000 private sector jobs over the last three months. About 40 to 50% of that loss has been in manufacturing, 25% has been in tourism. And the remainder has been a mixture of retailing and other services, a lot of it being in temporary help. Well, if you look at those components, a lot of the components are important to the economies along the East Coast. Manufacturing in particular is very important to the Southeast. And we have a lot of very labor-intensive operations, such as textiles, apparel, furniture manufacturing, and they've all lost in excess of 10% of their employment base in the last year. And then of course the weakness in tourism really hit the Florida economy hard. And that was one of the economies along the East Coast that was holding up really, really well.

RAY SUAREZ: And William Conerly, first the national scene as you look at the numbers and then break it out for your region.

P Conerly Consulting: Well, all of the news has been gloomy the last few months, but reading the tea leaves, I don't think this is going to be quite as bad a recession as it may feel in the gut. I think there's a turnaround coming in the next couple of months, and it's not going to be a miserable doom and gloom time for the next year. Here in the West Coast, the good news is in Southern California where they're seeing a little bit of the recession, but they're not feeling it really badly, however, as you start to move North, things are really in trouble. Silicon Valley has been hard hit with the technology decline, and then Oregon, which has shifted its economy from wood products into high technology; Oregon is paying the price for having high technology now with the highest unemployment rate in the country and the biggest increase in the unemployment rate over the last 12 months. Farther North, Washington State, is number two in unemployment, has also seen a significant increase. But when you get into the mountain states like Idaho and Montana, not much change.

RAY SUAREZ: And, finally, Diane Swonk.

DIANE SWONK, Bank One: Well, the overall economic outlook I think is fairly bullish going forward. We have a couple lumpy months to go through as we give back some of the auto sales that were sold on 0% financing -- went to record sales. Whenever we have a recession, we have record home sales and record vehicle sales in the midst of it -- just doesn't happen - and here I am in the heart of the industrial Midwest, the heart of auto manufacturing territory and one of the things we're finding here is vehicle production is actually on the upswing again. In the first quarter vehicle production is picking up. Even now we know sales are going to fall off the cliff. This is very important. It's because inventories are so bone dry, we actually are getting a bounce back in production. We finally overshot on inventories. We probably had the largest drain in inventories of the post-World War II era in the fourth quarter, and that's just music to an economist's ears, because it means no matter what, you've got to replenish those bare cupboards out there. Also, interestingly, in the middle of the Midwest, it's been extremely mild, unusually mild winter weather. It was warmer in Chicago in early December than it was in Phoenix on a trip I made, and that had a real effect on grounding snowbirds. In addition to 9/11 the tourism business has been hurt, and all those snowbirds that tend to fly South for the summer - or South for the winter are not flying South. They're staying closer to home, they're driving in their brand-new cars, buying large screen TVs, and spending more in neighborhood shops. In fact, Michigan Avenue, which is a real destination in the industrial Midwest for shopping, did unexpectedly well during the holiday season despite the fact that Chicago is a convention center that got hit of course by the loss in convention business after September 11. So we've actually seen some offsets. Our unemployment rate, which should be usually at this stage of the game much higher than the national average, is actually below the national average. We've lost more manufacturing jobs in Illinois than any other state, yet we're weathering the situation extremely well. And part of that is because of the weather. The other part is we've got a record number of manufacturing workers retiring out, and with the golden handshakes the UAW gave them in their last round of negotiations with the big three automakers, it is a much more kinder and gentler form of downsizing than we've seen in the past.

RAY SUAREZ: During the last big recovery it was said that California was the last to the table to enjoy the run-up in jobs. Could the Midwest just be out of cycle?

DIANE SWONK: Actually Midwest was the recovery Phoenix story of the 1990s. The Midwest was the fastest growing region during the bulk of the 1990s, and as a result had lower unemployment rates than most regions in the country by the end of the 90s and beginning of this economic slowdown. That acted as a real shock absorber even as the unemployment rate was risings in this region, which really put us out of sync. The 1991 recession was different for us than most had been in the past because exports kept us afloat. This time around, the fact that we already had such good economic times helped to cushion the blow once economic times slowed.

RAY SUAREZ: Mark Vitner, there is a lot of diversity in the economy of roughly Eastern Time in the United States. Did that diversification help keep this from being an even worse job loss period, or did it just mean that a more interesting array of people were losing their jobs?

MIKE VITNER: Well, there are parts of the East Coast that are doing exceptionally well. The Washington, DC area, the Baltimore area, even Philadelphia and southern New Jersey are holding up exceptionally well. But New York City has lost more jobs than any other metro area in the country. And Atlanta is number two. And that is a huge reversal for both of those markets. They had been very, very strong throughout the 1990s. In fact Atlanta added more jobs than any other metro area in the country. And now they're sitting there with the second biggest loss. The big turnaround was primarily high-tech, something you would associate with the West Coast. But on the East Coast, both New York and Atlanta really saw a huge boom in the technology sector and in the telecom sector. Telecom employment accounts for twice as large a share of Atlanta's work force as it does with the nation's, and while it's relatively tiny, there have been some huge layoffs there.

RAY SUAREZ: Are we still seeing fallout from the terrorist attacks of the fall; particularly in the New York metropolitan area?

MIKE VITNER: We certainly are. I know that tourism has come back and it's really hard to gauge how much it's come back in New York from where it was years ago, but we know that spending has not gotten back to the level that we had previously. And really all along the East Coast, and for the country for that matter, we haven't regained the pre-September 11 levels. We think that we will in the first-- sometime in the firstquarter, that we'll come back off the bottom and be in the recovery but there is still a world of difference in New York and New Jersey between now and just prior to September 11 when it looked like that part of the country would miss the recession.

RAY SUAREZ: William Conerly, we talk about unemployment as a lagging indicator all the time. But are there things that you can see in current numbers that give you some hope -- the fact that the average work week got a little longer -- the fact that the average waging rose a little bit? Does that give you any sign of what's coming down the road?

WILLIAM CONERLY: Yeah, there are some positive signs, as Diane was saying, the low level of inventories is very positive. Out in the Northwest, actually in the whole country, if you have got high-tech, you're in trouble because this was a high-tech recession. If you have consumer goods like the upper Midwest, things aren't so bad. So we're looking for signs of a rebound in technology, and we're actually starting to get it even though we just had one semiconductor plant announce a shutdown here recently. We're seeing signs of the semiconductor industry coming back. They're reporting their orders are a little bit better, and if the technology industries will come back moderately, they don't have to come back like the big boom of, you know, two years ago but if they'll come back moderately, then those areas that have been so hard hit are going to rebound, and then we get the diffusion effect where the dollars spread through the whole economy.

RAY SUAREZ: Well, during the 1990s, it was often said the West Coast bore the brunt of the transition to a post-Cold War economy because of the contraction of the military. We're at war now. Does government spending on the military, on acquiring material, paying soldiers salaries, does that give a disproportionate shot in the arm to the West?

WILLIAM CONERLY: To some parts of the West. The Los Angeles area is going to benefit from some defense spending. Washington State has a lot of bases and they're gearing up activity. But Oregon and northern California are not going to see a lot of benefit. There will be some. There are some businesses that are selling security devices, but generally you have to look more community-by-community to understand the impact of the defense buildup rather than painting with a broad brush across the whole region.

RAY SUAREZ: Diane Swonk, when we talk about some place as vast as the Midwest and with so many people in it, can we overlook some real bright spots or in the case of the Midwest where you painted a pretty good picture, some real employment black spots places that both didn't enjoy the recovery of the 90s and are likely to get it in the chops during this downturn?

DIANE SWONK: We certainly saw Gary, Indiana, was sort of one of the last ones to enjoy a resurgence in the Midwest. It's not very far from Chicago here. And the steel industry, let's face it, is not, even with record years of steel consumption in our history, the last couple years the steel industry has been hit hard by imports. And they show they're gaining the U.S. economy. The steel industry is working hard for protectionism, working trying toe get anti-dumping standards out there but this is a very difficult thing to do when much of the steel that we're seeing coming into the country now is coming in from former Eastern Bloc Soviet Union countries where the price of trying to calculate how much it costs to produce that steel is very difficult. So it is hard to argue they're actually dumping. So this has been the one spot that certainly is the Achilles heel of the steel industry and in the industrial Midwest. Ironically in one of the states, with one of the lowest unemployment rates in the industrial Midwest - and that is Indiana. Indiana is a very interesting state in that it has a lot of production, some of the highest investment in Japanese transplants in the Midwest are in Indiana, the state of Indiana. At the same time - and those plants are ramping up on production -- at the same time it has been hit hard by the steel industry and continues to be hit hard by what's going on in the steel industry. The good news is not that many people work in the steel industry anymore so it is not showing up in the aggregate numbers as it once did.

RAY SUAREZ: Mark Vitner, you yourself in your remark talked a lot about the big metropolitan areas, places like Atlanta and New York -- are they having a particularly tough time in non-metropolitan areas, places like rural New England, the Adirondacks, away from the coast and the Southeast?

MIKE VITNER: Well, there's actually a smaller metro area just a little ways from Charlotte, Hickory, North Carolina, which has seen the second largest increase in the unemployment rate of any area in the country. A year ago the unemployment rate there was just 2.1%. Now it's 7.9. And what has happened there is they have just been hit very hard by layoffs in the furniture industry, the textile industry and fiber-optic industry, what they hoped would be the industry of the future for them and still may be, really crushed them this past year -- about 60% of the world's fiber-optic cable is made within 100 miles of Hickory. Now recently we have seen some positive developments there. Corning announced today that they will be reopening a plant, one of their larger fiber-optic cable plants in about two weeks. It's one of the first bright signs that we've seen in that industry for sometime.

RAY SUAREZ: Mark Vitner, Diane Swonk, William Conerly, thank you all.

JIM LEHRER: Still to come on the NewsHour tonight: Shields and Brooks; detecting anthrax; and Oppenheimer of the "Herald."

FOCUS - POLITICAL WRAP

JIM LEHRER: Shields and Brooks are syndicated columnist Mark Shields, David Brooks of the "Weekly Standard."

Mark, the economy. Senate Majority Leader Daschle spoke about the economy today. What did you think of what he said?

MARK SHIELDS: Well, Jim, first of all, it was fascinating in the sense that Tom Daschle, Democratic, highest elected Democrat in the country, majority leader, for the first time mentioned by the great mentioner, as a potential Presidential candidate in 2004, this speech took on greater impact and importance because George Bush, the President, will own the month of January. He is going to give the State of the Union. The President will set that down as the first post-September 11 State of the Union and so forth. So Tom Daschle tried to frame against a President 85% favorable--.

JIM LEHRER: How did he do?

MARK SHIELDS: I think it's a tough sell quite frankly. I thought Daschle did well. I thought Daschle's analysis of where we are and how we got here was interesting. When you make the case for fiscal sanity and fiscal responsibility, which political scientists and all sorts of good citizens nod in agreement, it doesn't have great political traction. For 40 years in the wilderness, the Republican Party talked to FDR and Harry Truman of the Democrats they were fiscally irresponsible, my God Almighty, and the American people said you're right and voted Democrat. Ronald Reagan came alongin 1980 and said fiscal responsibility be damned, went from a $1 trillion national debt to $4 trillion in the space of eight years and Ronald Reagan won two landslides and the economy improved. So Tom Daschle is trying to make the case that you're going to have to make a choice on the tough budget decisions of 2002. Are you for cutting into Social Security surplus, absolutely eliminating it to meet the budget because the money is not there for the budget -- and the Secretary of the Treasury has already requested, which is needed, to raise the debt limit -- that has to be done statutorily. Or do you want to freeze the tax cuts in the future on the richest 1% of the country? That's how he wants the debate to be phrased. I think that's going to be a tough sell.

JIM LEHRER: Tough sell?

DAVID BROOKS: I would say he wants the appearance of tough choices. I thought it was a smoothly thoughtfully delivered speech and at the same time was an insult to our intelligence. He spent the first half of the speech saying these Bush tax cuts were fiscally irresponsible; they took the surpluses and created deficits. The last half did he want to repeal the Bush tax cuts? No, he does not want to repeal or is not calling for a repeal. Instead he has got another list of other tax cuts that he wants, other spending programs. So he says we have to have a balanced budget but he is going to take the deficit we have and saddle on more tax cuts, more spending programs. It's an insult to voodoo economics. It just takes it out, you know, makes Reagan look like a piker. So until the Democrats grasp the mettle, which is do you want to repeal the Bush tax cuts, they just won't be serious.

JIM LEHRER: Isn't it kind of more of the same, David? I mean the Republicans want to cut taxes, the Democrats don't want to cut taxes but nobody talks about the details in between? I mean it's the same rhetoric, is it not?

DAVID BROOKS: Well, Diogenes is not going to stop at either party's headquarters because it is bogus on both sides. He doesn't quite walk into the buzz saw of the Republicans quite as much as the previous Democrats because he bragged today that 75% of his stimulant ideas are tax cuts. So he has tax cuts of his own. So it's not quite the old spending versus tax cuts debate.

MARK SHIELDS: No. It isn't. And I think that if you listen to Ray's discussion, when you look at unemployment up 48% I mean over what it was a year ago. I mean at the same time, if you're sitting there, Jim, and you say this is what has happened to the country. The country had paid off $400 billion in debt just a year ago. I mean the economy was humming. Here's George Bush with an increase of 48% in the unemployment rate since he has been there and yet the country is saying he's been doing a hell of a job and 70% say headed in the right direction. It has to be enormously frustrating to be the out party because ordinarily in that situation the out party would be in clover.

JIM LEHRER: So, we're talking about September 11 and is that still the force here driving all of this regardless of what anybody says about the numbers?

DAVID BROOKS: It is certainly the Republicans' line. This is Osama bin Laden's deficit. And the polls seem to show that the public buys that -- 68% of the people according to one poll say yes, the problem with the recession is we had a recession, the problem with the deficit is the recession, September 11. We understand to fight this war we're going to have to sacrifice other priorities. We agree, we want to do that; therefore we know it is not Bush's fault, we know it's not the Republicans' fault. It may be just a halo effect. But if you ask people do you support Republican economic policies or Democratic economic policies, right now 9% more support Republican policies.

MARK SHIELDS: They do except general agreement versus specifics. If in fact, and I think that's what Daschle was trying to start the debate on today, if you get back to let's debate what President Bush promised in the campaign of 2000. Privatize Social Security. And there was no question he was going to provide a Medicare prescription drug benefit under Medicare and say okay, who is for that and who is against that? And is it worth keeping that tax cut for the richest 1% of the country to deny the Medicare prescription benefit to the elderly? I think that's where the Democrats want to frame the issue. They want to return to those questions.

JIM LEHRER: But isn't that going to be a hard return?

MARK SHIELDS: I think it is a hard return. I think President Bush is going to give his policy. The White House is nervous about Daschle. I mean they've had a sanctioned crusade against him by Frank Luntz and others to put him--.

JIM LEHRER: Explain who Frank Luntz is.

MARK SHIELDS: Frank Luntz is a Republican pollster, very wired to the Republican leadership who is making the pitch that what the Republicans must do to Tom Daschle is turn him into Newt Gingrich, that is a radioactive political figure that the rest of the party moves away from.

JIM LEHRER: Let's move on to the more general thing here. We talked about the specifics of the economy right now and Daschle said what he said today, the President is going to do his thing. As you say, this is the President's month, Mark. But David, you've talked here and we've all talked about this idea that September 11 was going to change the political discourse in this country. There was going to be new words and new ideas and there is going to be a whole new ball game. Have we seen it?

DAVID BROOKS: That's clear to everybody in the country except for the people running the two political parties. To them Daschle's speech and Bush's comments that Karl Rove his political advisor and Bush himself have made treat domestic policy as if it's hermetically sealed from what is happening overseas, from the big story of the year. You know we can go through this national trauma. Bush can rise to will 87%, stay there for four months, and somehow the domestic debate is completely unaffected by that. That's what, you know, the pollsters say specifically when you ask them. Is that really so? They say yes, we're just going to see continuity on the domestic front despite the fact that in history this has never happened. The Oklahoma City bombing had a tremendous effect on the Gingrich revolution, really sucked the air out of it. The JFK assassination meant the '60s would not be like the '50s. The Iran hostage crisis meant the political crime in the 80s would be different from the '70s. Traumas always affect domestic politics but the political pollsters and political professionals who take a look at these little polls that say what are your priorities, they see health care, education and jobs on the top three, they think nothing has changed. I think they're completely wrong. That's why I think this election will have nothing to do with these issues. But then that's what they believe.

MARK SHIELDS: I don't think the new agenda, the new language, the call to a higher purpose, a national mission has been heard. I don't think it has been spoken by any leader.

JIM LEHRER: That's the point, isn't it?

MARK SHIELDS: That's exactly it. I mean, absent that, people are obviously going to respond that which is on their minds and on their lives. I mean people are still concerned about the things they were concerned about before September 11.

JIM LEHRER: So it's up to the leadership to replace that and they haven't done it.

MARK SHIELDS: I think what the Republicans want is the Republicans look at it and they say George W. Bush is at 87% popularity. He is going to give the State of the Union address. Boy oh, boy we want photo-ops, we want to be seen with him, we want to be standing with him. We want him drawing the lines between the two parties rather than any summoned to high national purpose. They'd just like to get this gone, and they're talking about survival of the Republicans in 2002 and the Democrats are talking about grabbing power.

JIM LEHRER: But, Mark --

DAVID BROOKS: That's a recipe for the sense that we've squandered the moment -- because there is a great sense of national self-confidence like a teenager aware of his muscles, what can I do. If he does nothing, it would be--.

JIM LEHRER: You have been observing the political animal -- animals for many-- why have they not picked up on this? You would think there would be - everybody would be standing in line with new ideas, with something new to say, follow me as we go up this new avenue. I've got a new proposal. I've got a new way to think about the way we do things, fill in the blank of what the things are.

MARK SHIELDS: I honestly don't know, Jim. I mean I really don't. I think part of the reason is that things are so close that we had a 50-50 election in 2,000. You're thinking if we could tweak--.

JIM LEHRER: All we need is 1%.

MARK SHIELDS: Between Missoula and Salt Lake City, we can win the House seat. That's part of what is holding it back -- not to make any mistakes. I think that's it rather than what can we do and it's just missing. That will be the test, I think, the President in the state of the union address. Can he say this is what we're about? We should have greater confidence as a people. David is absolutely right. We should have a greater optimism about the future and a sense of what we can do but it has been sadly missing up to now.

JIM LEHRER: Is it possible David that the political people, the political leaders are too dependent on the political professionals, the people who look at-- the consultants I'm talking about and the pollsters, and anybody who has a big idea, oh, no, no no, no, you can't do that because all we need is as you said Missoula and Salt Lake City or something - is that the problem?

DAVID BROOKS: And the pollsters are so good, they figured out the one or two issues that if you tweak that or tweak this, then that's supposedly going to give you the next election by this little amount. The closeness should be a spur to say okay, let's seize the moment and seize the majority, a permanent governing majority. Basically what we have on Capitol Hill, we have the Democrats who want to spend say 22% of GDP on the federal government, and the Republicans who want to spend 21%. That's really the margin we are debating here. So we're going to start the 21st century having this debate 22 or 21, or I might be off by a few points.

JIM LEHRER: The candidates are not saying I want 100%-- I have an idea for everybody.

MARK SHIELDS: Let me just say one word in defense of the pollsters and the consultants. I've never found a candidate in 40 years around this business who did anything that he or she didn't want to do. I mean you know, theydon't walk in - the Svengalis and Rasputins and say these are the three things you should stand for, boss. I mean it comes from them. If it doesn't come from within them, then they turn to the pollster, the blueprint -- what are people concerned about - which is a natural thing to do.

JIM LEHRER: Along this high note, I would like to say Happy New Year to both of you.

MARK SHIELDS: Happy New Year to you, Jim.

FOCUS - DETECTING ANTHRAX

JIM LEHRER: Yesterday, the FBI extended its high alert against possible new terrorism assaults. The agency told police forces nationwide the alert would remain in effect through March 11. While that security effort goes on, a scientific effort is under way as well. Elizabeth Brackett of WTTW-Chicago reports. Detection devices became obvious

ELIZABETH BRACKETT: The need for anthrax detection devices became obvious with the first anthrax cases in this country. There are devices that can be taken into this field like this machine used by the Chicago firefighter's hazardous material team. HAZMAT technician Sylvester Hudson says a sample of a suspicious substance is placed on a slide then inserted into the machine. Positive or negative results are available within two minutes. But the results are not 100% accurate.

SYLVESTER HUDSON, Chicago Fire Department: There is always that margin of error, maybe a false positive. Since I'm not a chemist it's not for me to determine. If it shows up positive on here, then we make the proper notifications with the federal agencies and then they step in and do a more accurate test.

ELIZABETH BRACKETT: That more accurate test means having the sample cultured in a lab. It takes at least three days to determine if it contains the bacteria that causes anthrax. But now, scientists at the Mayo Clinic in Minnesota, say they have developed a much more rapid antrhax detection test. Physician and scientist Franklin Cockerill:

DR. FRANK COCKERILL, Mayo Clinic: It is a very reliable test but it can be done rather quickly and people who think they have been exposed, who open up an envelope that has material in it that might be anthrax, they'll be able to find out much more quickly if they have been exposed.

ELIZABETH BRACKETT: The new test uses PCR, or polymerse chain reaction technology, to detect the DNA of anthrax bacteria. Multiple copies of the DNA can then be made from an extremely small sample. Molecular probes are used to determine if the DNA matches that of the anthrax organism.

DR. FRANK COCERILL: We want to provide this test to every qualified laboratory as soon as possible and we're doing that at no cost.

ELIZABETH BRACKETT: At Argonne National Laboratory west of Chicago microbiologist Harvey Drucker has been developing an even more advanced method of using DNA analysis to detect biological threats. This small biochip works by essentially speed reading an organism's DNA.

SPOKESMAN: This a biochip. You can see all those squares contain hundreds, indeed in some cases, thousands of little gel elements. Each one of these little squares you've got maybe 1,500 or so little dots containing DNA That are meant to react with other DNAS. Eventually we'll have the chips set up to look for things like anthrax, the organism that causes anthrax.

ELIZABETH BRACKETT: Unlike the Mayo detection device that identifies just anthrax, the Argonne bio chip can be programed to identify any biological organ simple that causes disease from smallpox to the Ebola virus. The rapid diagnostic capabilities of the my biochip works the same way on any organism with DNA.

ELIZABETH BRACKETT: We have the substance they found in Florida, say on a computer key. What could do you with it?

SPOKESMAN: You would take a swab, or would you take the substance itself. You would put it into something that would be like this black box, if we had it available. You would close it. The device would do all of the various extractions that are needed to get the sample prepared. It would expose the slide to the camp. -- To the sample. The sample would then, after an appropriate amount of time in order to get reaction, would then glow or not glow.

ELIZABETH BRACKETT: The DNA Information can then be read on a computer. The way the dots glow will identify the anthrax or other organism. Drucker says the pressure to get the device ready has increased since September 11.

HARVEY DRUCKER, Argonne National Laboratory: What is... What we were working on was a battlefield detector, okay, which would make a very limited number of copies, you know, that you don't really care about the expense. And now clearly either for clinical analyzers or for field detectors that can be used in airports or waiting rooms or subway tunnels or whatever, or buildings in general.

ELIZABETH BRACKETT: The biochip would be particularly useful in subway systems where chemical or biological agents could spread quickly both below and above the ground. Argonne scientists have been working on computer models to deal with an attack on the nation's subways. Tom Wolsko heads the Decision Information Sciences Division at Argonne.

TOM WOLSKO, Argonne National Laboratory: Models that predict, once a sensor determines there's an agent in that area, where that agent might go within the subway system or the ventilation systems, and then to communicate to appropriate command centers and first responders what might be the best course of action.

ELIZABETH BRACKETT: The Washington D.C. Metro system is testing Argonne's model. Sensors are in place and plumes of smoke have been tracked through the system.

TOM WOLSKO: Once we know or can predict where the plume will go in a certain time frame, then we can take corrective actions in the subway systems to either shut down the trains, close ventilation systems. So it's all the things you would do in the operation of the subway system in order to minimize exposure to the agent on the part of the population.

ELIZABETH BRACKETT: This Argonne computer model of a fictional town shows the impact of an unnamed biological agent. The plume spreads first through the subway system and above ground from the various entrances and exits with no detection system in place for an hour. This worst-case scenario model predicts 7795 people would die. With the detection system in place, subway trains would be shut down within 15 minutes, lessening the spread and cutting the death toll to 1544. And if those exposed were treated, Argonne says the death toll could drop to as low as 300. The detector used in subways and other public places would ultimately be about the size of a smoke detector and cost around $100. Drucker says the basic science on the chip is done, but there is still work to do on the collection and computer analysis parts of the device. Argonne has received new funding with the promise of more to come since September 11. But right now they say none of these new systems could be in place for one to two years.

SERIES - THE SHAPE OF THE WORLD

JIM LEHRER: Finally tonight, another of our New Year conversations on the United States in the world, with American commentators on international affairs. Margaret warner has tonight's.

MARGARET WARNER: And joining me is Andres Oppenheimer, a syndicated foreign affairs columnist for the "miami herald," focusing primarily on the U.S. and Latin America. His most recent book, "Ojos Vendados," or "Blindfolded eyes," about corruption in Latin America, will be published in English later this year.

Welcome Andres. Good to have you here.

ANDRES OPPENHEIMER, The Miami Herald: Thank you.

MARGARET WARNER: Very shortly after the September 11 attacks, you started writing about the fears that Latin Americans had about what impact that would have on the U.S.-Latin America relationship. Describe those for us.

ANDRES OPPENHEIMER: Well, there were many Margaret. The biggest fear of Latin America was once again forgotten and neglected by the U.S.. Latin Americans were hopeful about this President. This was the first President in many years who showed a genuine really, you know, personal interest in Latin America. He had been governor of Texas. He didn't know much about foreign affairs, but this was the one region of the world he claimed to know something about. So he went around saying, I'm an expert on Mexico. He said he speaks some Spanish. He does babble some Spanish. He tries at least. When he was campaigning, he said he would make Latin America a primary focus of his presidency. Once he was elected, he made his first trip to Mexico. This was unheard of. All the other Presidents made their first official trip to Canada or somewhere else. And once he was inaugurated, his first official visit to the White House was the President of Mexico. This was a big change. Latin Americans were really hopeful that once, you know, for once they had a President who really cared about the region.

MARGARET WARNER: So they feared that the focus would shift.

ANDRES OPPENHEIMER: On September 11, you know, they feared and rightly so, that all of a sudden the U.S. would put all its attention on the war in Afghanistan and totally forget about Latin America.

MARGARET WARNER: So, do you think the fears have been borne out so far?

ANDRES OPPENHEIMER: Yes, they definitely have. Needless to say Washington is a one-issue town since September 11 -- national attention and Washington's attention, rightly so. But unfortunately this has been at the expense of minding our backyard. And the danger of all this is that we may win the war in Afghanistan, and we may lose the war on drugs. We may lose the war on immigration. We may lose the war on trade, on free trade. We may lose the war on the environment. We may lose a lot of other wars that affect our day-to-day life in the U.S. and they're being waginged right here in our backyard.

MARGARET WARNER: Do you see this sort of inattention being responsible for the fairly hands-off attitude, for example, that the U.S. is taking toward the crisis in Argentina?

ANDRES OPPENHEIMER: This is a new approach they tried. The Bush Administration tried sort of a tough love approach to Argentina. They told Argentina, listen, we're tired of putting money into bottomless pit. You've got to get your act together and then we'll help you, and in a sense it was the right thing to do, but now there are a lot of people who are saying that we may pay a very heavy price. Why? Because Argentina has been our best ally for all these years, for the past ten years. And Argentina is a trendsetter, is a country that has an influence that goes far beyond its economy in the region. It is the third largest economy, but, you know, Chez Guevara was an Argentine. Argentina has a history of political influence in the region, and this collapse of the Argentine economy, this collapse of the Argentina political system may have a political contagion in the region.

MARGARET WARNER: Now also you've written a lot about how the new emphasis on security, border controls, on custom control is one, hurting the cross border economy, and two, really runs counter to certainly the whole thrust of Vincente Fox, the President of Mexico, the kind of open relationship he wanted.

ANDRES OPPENHEIMER: I was in Chihuahua on the border with Mexico, the Mexican side of the border a few weeks ago. They've lost 60,000 jobs in the Mexican state just because of the downturn in the U.S. economy and September 11. So what do you have? You have huge lines trying to cross the border, the trucks, they usually whiz by have, to wait for two or three hours. That is costing the truckers and exporters a lot of money. So trade is going down. People are losing their jobs. These whole security measures are costing them a lot. And tourism -- the Mexicans fear that all these security measures and the U.S. Anti-Terrorism Act will have, as a result, that Americans who travel within the U.S. Where they now feel the airports are taking security measures but will not venture outside the U.S.. They're very concerned about a huge drop in tourism to Mexico.

MARGARET WARNER: Let's switch it around and talk about something related but almost more from the U.S. perspective, which is people were surprised to hear the ambivalence that many Latin American countries seem to feel or express right after the September 11 attacks. You, for instance, have written that you said Vincente Fox mismanaged Mexico's reaction to the September 11 attacks. How so?

ANDRES OPPENHEIMER: He blew it. He was slow. He was bland. He didn't come strongly across right after the September 11 attack. This was an internal political thing within his cabinet. One side of his cabinet wanted him not to speak out too strongly in favor of the U.S. because he already had the image of being too close to the U.S. and they were trying to pass a law in Congress for which they needed the opposition's vote. So i think he followed bad advice. He was too slow in supporting the U.S., and too bland when he did it. But other than that, i think the response by Latin America was, at the political level, a response of strong and sincere, I think, support. But you're right, there was an ambivalence, and the people, the polls show that the people were not as supportive as the governments.

MARGARET WARNER: Some of the polls are astonishing. 60% in Argentina and Peru didn't want the U.S. to respond militarily and didn't want their governments to support it.

ANDRES OPPENHEIMER: It was sort of a mixed reaction. Of course you had the hard left which said the U.S. brought it on to itself, et cetera. But most people, they're attitude was this is not our war we should not get involved because this is a U.S. war and we should not get involved. That was sort of the general idea. But there was a lot of sympathy for the victims of 9/11.

MARGARET WARNER: But why do you think that is? I mean i think Americans would think of all the people on the planet - I mean the two groups that we are sort of culturally closest to are the europeans and the Latin Americans and that there would be a shared sense of being under threat or a kind of just a feeling of solidarity. And that really isn't there. What does that-- does that go back to the past? Does it go back to fears about U.S. intervention anywhere because of the history?

ANDRES OPPENHEIMER: Well, Margaret, let's be fair. There is one issue that has gotten totally ignored in this country, which is that the Latin American did support at the Organization of American States, which is the regional thing that you know, is here in Washington, they did support something that was exactly the same as what the Europeans did. They did approve a treaty or resolution saying that an attack on one country is an attack on us all and therefore we fully support, they said, the U.S. military retaliation against the attack of 9/11.

MARGARET WARNER: But going into that meeting, you yourself wrote that they faced a big decision whether to approve that or to remain on the sidelines, as if it were a close call or an open question.

ANDRES OPPENHEIMER: Yeah, but they did it. And we have to give them credit because they did it at great political expense to some of the governments. At home that wasn't a popular move.

MARGARET WARNER: Why isn't it popular?

ANDRES OPPENHEIMER: Because a lot of people have a love-hate relationship. You know, most often are the good guys but not always. Let me give you an example. The Argentines, the Brazilians, a lot of South American countries complain that we go around the world preaching free trade, but when it comes to them trying to sell beef, corn, agricultural products, sugar, steel, they find all kinds of obstacles in trying to sell their goods to the U.S. market. So they say we're all for free trade, we're all for the free trade of the Americas, which is the plan of President Bush and President Clinton before him and to create a hemisphere wide free trade by 2005. They're all for that but let's make it a two-way street, and they're right on that.

MARGARET WARNER: So sometimes despite all the talk of the new ties, what you're saying is that there's still a lingering feeling that sometimes the U.S. is kind of too much the big brother or the--

ANDRES OPPENHEIMER: I think that they wouldn't mind the U.S. being the big brother if the U.S. were a good brother. And most often it is but not always. And in this case of free trade, it sort of plays a double--.

MARGARET WARNER: So looking ahead, what do you think the most important things the U.S. and Latin America need to do to prevent these fears from being realized?

ANDRES OPPENHEIMER: I think, Margaret, that Washington, the beltway at least is paying too much attention to the danger of economic contagion. You read a lot of papers and you hear a lot of people saying there is no danger of the Argentine contagion into other markets and from an economic point of view but I think there is a danger of political contagion. We're going to have elections in Brazil, the biggest country in South America, the eighth largest economy in the world now, in October of this year. The front-runner is a leftist, DeSilva who is openly anti-free trade and pretty anti American by many standards. We are going to have elections in Colombia where another populist is in the running ahead in the polls. So we have a very populist anti-American president in Venezuela, former -- Chavez. We have Fidel Castro, of course as usual, President for life in Cuba. So you could have a populist bloc in Latin America that may not be too sympathetic to the U.S..

MARGARET WARNER: So you're saying stay engaged.

ANDRES OPPENHEIMER: Stay engaged and push ahead with free trade.

MARGARET WARNER: All right. Andres Oppenheimer, thanks so much.

ANDRES OPPENHEIMER: Thanks, Margaret.

JIM LEHRER: We'll continue this series Monday night with Jim hoagland of the "Washington Post."

RECAP

JIM LEHRER: Again, the major stories of this Friday: An American soldier was killed in eastern Afghanistan. It was the first U.S. military loss of life in the war to enemy fire. And U.S. unemployment rose to 5.8% in December, the highest in more than six years. A reminder that "Washington Week" can be seen on most PBS stations later this evening. We'll see you online, and again here monday evening. Have a nice weekend. I'm Jim Lehrer. Thank you and good night.