The NewsHour with Jim Lehrer

I'm Jim Lara. Today's news, say, market update, the advertising war campaign, shields and larry and the McDowell colony. All tonight on the news hour. Good evening, I'm Jim Lara. On the news hour tonight, the news of this Friday, then a fall

out report from another week of economic and stock market ups and downs. A look at the multi-million dollar television ad campaigns for and against the Iraq War. The analysis of mark shields and rich larry substituting for David Brooks and a 100th birthday celebration for the McDowell colony in New Hampshire, a creation nest for artists. Major funding for the news hour with Jim Lara is provided by. Now headquarters is wherever you are. With AT&T data, video voice and now wireless,

all working together to create a new world of mobility. Welcome to the new AT&T, the world delivered. Pacific Life, Chevron, the National Science Foundation, 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. An American military commander in Iraq spoke today against a U.S. senator's call to bring some troops home by Christmas. Yesterday, Republican Senator John Warner of Virginia asked President Bush to announce he'll begin withdrawing troops starting with 5,000. But today,

the commander of U.S. troops out the Baghdad Major General Rick Lynch said that would be a giant step backward. In my battles, this is a detailed, complicated operation. You know, when we started operations back in June, there were four enemy sanctuaries, and we fought hard with major cost of human life to deny the enemy of those sanctuaries. Now we're sitting on those sanctuaries. And only when the Iraqi security forces can come forward and say, OK, here I am, I'm trained in a clip. I'm ready. I'm the Iraqi Army. I'm the Iraqi police. Can I turn those sanctuaries over? And that's not going to happen between now and Christmas. There was also a word today. Marine General Peter Pays will recommend cutting the number of U.S. forces in Iraq by half over the next year. The Los Angeles Times reported the outgoing chairman of the Joint Chiefs believes keeping more than 100,000 troops would strain the military. Pays was expected to offer the recommendation to President Bush privately and not in a report. The article cites senior military and administration officials.

In Iraq today, more than 60 suspected al-Qaeda militants launched a coordinated attack on Iraqi police. The clashes lasted for two hours across Samara. At least three people died. Also, in the North today, a U.S. soldier was killed in an explosion. And in Baghdad, U.S. forces engaged in heavy fighting on the ground and from the air in a Shiite neighborhood, the U.S. military reported eight Iraqis were killed. A friendly fire incident in Afghanistan prompted Britain to launch an investigation today. Three British soldiers were killed, two wounded overnight in a U.S. air strike. It happened in Helmand Province. British troops on patrol called in U.S. air support to help target Taliban fighters. Speaking from Scotland today, British Defense Secretary Des Brown said the incident was likely a mistake. Many ladies, hundreds of lives have been said by the sort of support, but the nature of this air, the nature of this war fighting is such that there are comparatively small

margins of air involved in it. And occasionally, something just as simple, you know, as an air which is explained by the nature of the environment can cause this to happen. Thankfully, these events are very rare, compared to the number of times that we deploy your support. Since the war in Afghanistan began in 2001, 73 British troops have been killed. Pro football player Michael Vick filed a plea agreement in federal court today in a dogfighting case. He pleaded guilty on one count of conspiracy, and he admitted to running a dogfighting ring in which some of the dogs were killed. But he denied ever personally betting on the fights. Late today, the NFL suspended Vic indefinitely. Vicasette de formally entered his plea in U.S. District Court in Richmond, Virginia on Monday. Severe weather continued to batter the central U.S. today. Flood warnings were posted from Missouri to Michigan, and up to a foot of rain fell in parts of Iowa overnight.

And then around the Chicago area, cleanup crews were out in force after a sudden and powerful thunderstorm rolled through last evening, winds stopped 70 miles an hour, and left some 300,000 homes without electricity. There was some relief for flooded northern Ohio today, as waters receded slightly. In economic news today, the Commerce Department reported sales of new homes rose unexpectedly in July. They were up 2.8 percent last month, reversing recent trends in the housing market. At boosted stocks on Wall Street today, the Dow Jones Industrial Average gained almost 143 points to close above 13,378. The Nasdaq rose almost 35 points to close above 25 76. For the week, the Dow gained more than 2 percent, the Nasdaq nearly 3 percent, while I'm more on this story right after the news summary. Also ahead, fighting the Ed War, Shields and Lowry, and a creative 100th anniversary.

Ray Suarez has our market story. It's been a turbulent time on Wall Street the past few weeks, as investors tried to gauge whether turmoil in the financial markets was a passing storm or might have more far-reaching effects. Fall out from the surge of defaults in subprime mortgages, led to a general tightening of money in all lending markets and eventually to a so-called liquidity freeze, where even borrowers with good credit histories find it difficult to secure loans. That trick would wild swings in the stock markets. But this week, that volatility cooled, following last Friday's announcement that the Federal Reserve Board had cut its interest rates on loans to banks, an effort to inject money into the financial markets. A further calming signal came Wednesday, when Bank of America invested $2 billion in country-wide financial corporation, a company that funds roughly one in every six mortgages

in the U.S. Those actions seem to have had the desired effect, with the Dow holding steadily above 13,000 throughout the week. For more on the Fed's move and its effects on U.S. stock and financial markets, I'm joined by James Angel, associate professor of finance at Georgetown University. He's a specialist in financial markets and Nicholas Ritzenas, director of Harvard University's Joint Center for Housing Studies. In Professor Angel, it's been a week since the Fed intervened in the mortgage meltdown and the stock markets. Did it work? Yes. Even though it's been quite a jittery week, we see the volatility is starting to fall and markets seem to be getting back to normal. And so this means the worst is, oh, what does it mean? Well, we don't know. We never know exactly what's going to happen in the future, but the Fed did exactly what they were supposed to do. They saw a credit crunch starting to happen. And it's their job to make sure that there's just enough money

in the U.S. economy, not too much, not too little. And they saw the credit crunch happening and so they said to the banks, hey, we want you to lend money. We're going to make it easy for you. We're cutting our interest rates. And the banks made a very public show of coming in and borrowing from the Fed, to making it quite clear that they have the money available to lend. Professor Ritzenius, today, the new home sales number unexpectedly jumped for July. And the number of months of supply of new houses went down, which signals a little bit of tightening, was this as unexpected as all that? And might this mean good news for months out from here? Well, it was good news today. Anytime that there are more sales of new homes, that means that inventories are reduced. And you start to get some stabilizing in the market. Monthly figures, however, are notoriously volatile. So I think it's a little too early to take out the balloons. I think we're in for a long recovery

period. And we're really just at the beginning of that. Well, Professor Angel, this has veryously been called a credit crunch, a credit crisis. Are there signs that money is not moving in the way that it was through the economy? And who should be worried about it? Well, anybody who wants to get a loan should be worried about it. Whereas for anything, not just for us, but for a car and other businesses. That's what a credit crunch means. A credit crunch means that even people with good credit have trouble qualifying for loans on reasonable terms. Because what happens is the banks don't want to lend unless they're pretty sure they're going to get paid back. And in a time of uncertainty, when they don't really know what's happening, they're going to stand in the sidelines and not want to lend to anybody. And how does that syndrome, Professor Martinez, express itself specifically in housing? If you want to buy a house, if you want to sell a house, if you already own a house and simply want to refinance your mortgage? Well, for some people, credit crunch probably

understates it. If you are a borrower who has one of these subprime mortgages and is having difficulty paying it, almost by definition, you are credited peer as you wouldn't have been a subprime borrower. It's going to be especially difficult to find your way out of it to another mortgage. If you're a borrower trying to buy a home that has loan limits higher than the loans that can be purchased by Freddie Mac or Fannie Mae, you're going to pay a lot more. All of this is going to continue to slow and lengthen the recovery. It's going to, in the housing market, it's all about housing finance and this credit crunch is squeezing housing finance. Well, Professor Angel, why does it happen this way when the Fed intervened, when Bank of America, a very big institution, made a vote of confidence in country-wide? Why aren't the nervous reassured by big movements like that? Well, I think many of the nervous people had been reassured, but it takes time for people

to regain their confidence. So they want to find out, okay, who has lost money in this subprime problem and what is going to happen? So it takes a little bit of time for people to come back into the markets. Even with risk, spread the way we're told that it was spread more widely now, that people bundling mortgages may have been exposed to a few more foreclosures, but because the paper went here and there and was held in a lot of different ways, no one actor could be hurt too terribly if a lot of people couldn't pay their mortgages anymore. Well, if no one actor concentrated themselves on subprime paper, but what has happened is that, and we will find out who very shortly, there are some people who said, wow, we can make a lot of money on this subprime paper because it has a really high interest rate. So if somebody got too greedy and loaded up on too much subprime, then their credit is going to be impaired as a result.

Professor Ritziness, you talked about people wanting to refinance, maybe facing a very tough time. It may have been six months, nine months a year before we even know how badly this bit the economy because people miss a payment one by one, people panic in front of a balloon payment one by one, and we can't really see them all at once. Well, it will be time before we assess the overall and lasting impact on the economy, but unlike the investor side of the equation at this end of the pipe at the bar aside, risk is very concentrated. There are literally thousands of people who are losing their homes today, and they're not able to spread this risk. There in a sense, left on shore after this credit crunch, even after this credit crunch starts to ease, that's going to be the challenge. Is how do we minimize that impact at the same time trying to restore some sort of fundamental sense to lending in this country? Politicians have already started to talk about those thousands of people that you're talking

about who've had their exposure and their risk visited on them in a very substantial way. Do you expect that the federal government will come up with a response that banks that don't want to be landlords, that don't want to be real estate brokers will come up with a response? Well, I think we're more likely to see the federal government come up with a response that talks about this never happening again, trying to put controls on lending. I think it's going to be very difficult and in part very expensive for the federal government to intervene as a be seen as bailing out. Now saying that, there are a handful of states that are trying to raise pools of money, but even then, they're faced with a challenge. Are they helping people temporarily or are they helping people who probably never should have got alone in the first place? Well, what's the effect though in the wider economy if a lot of people lose their homes in a very short period? You talked about those people having this crisis visited on them, but what do they mean in the aggregate or in a town where a lot of it happens at once?

Well, it is concentrated in certain areas, that is, it's not evenly distributed. And there are certain neighborhoods where you can see sign after sign of sort of foreclosures going up. That can be devastating on a neighborhood in terms of the broader economy, one of the important parts of families' wealth, particularly for moderate income families, is their home. If they start getting nervous about the value of that home, that's going to have a deleterious effect, and it's certainly going to temper any consumer spending they do. So I guess Professor Angel, even people who aren't in danger of losing their homes, may start feeling poorer at the same time and feel less inclined to spend money as well? Exactly. When we also saw housing prices going up during the housing bubble, we all had a feeling of, ah, I'm wealthier now. And so there's more of a temptation to think that, ah, yes, more is coming this way. We can spend more, take out a home equity loan, take out some of the equity in the house, and spend it on something.

But with housing prices stable or falling, we no longer have that feeling of euphoria. Instead, there's a feeling of, oh my, what's going to happen? How low will prices go? And so there's a little bit of fear there, and when people are afraid they tend to cut it back, the real question is, what's going to happen is this ripples through the economy? Would banks rather avoid taking a foreclosed property if there are a lot of people in foreclosure at the same time? Do they really want to hold foreclosed houses? Banks don't want a foreclosed. Banks are not in the real estate business. The last thing they really want to do is be stuck with a house, because when somebody loses their house, chances are if they haven't had the money to pay their mortgage, they haven't had the money to maintain the house, they haven't taken good care of it. So by the time it's foreclosed upon, it's probably in pretty bad condition. And then they have to deal with all the costs of holding it, carrying it on the books, selling it. They know that whenever they foreclose on a property, they've lost money.

So generally speaking, they don't want a foreclosed, but they do it because they have to. It's their one stick to make sure they get paid back. But if it's happening, a lot, very brief answer. Yeah, if it's happening a lot, will that change the relationship between the borrow and the lender? Will there be banks who are more willing to recast loans? Well, the problem is the loans are no longer with your local banker. The local banker may have originated the loan, but then sold the loan. And yes, we've done a great job of spreading the risk all over. But then you find that the person who actually has the decision of what to do about that mortgage is located 3,000 miles away and generally doesn't have the flexibility or the insight to figure out an appropriate workout for that loan. Jim Angel, Nicholas Ritzenas, gentlemen, thank you both. Thank you, Jim. I'm honored to be here. Thank you. Now, a different kind of Iraq war and a Judy Woodruff. The much anticipated progress report from Army General David Petraeus won't be released

for several weeks. But pro and anti-war groups in the United States are busy framing the debate in their own terms regardless of what Petraeus report says. This week, a group calling itself freedoms watch, made up of former White House aides and Republican fundraisers, launched a $15 million five-week advertising campaign. It targets lawmakers whose support of President Bush's war strategy may be wavering. The ads on local and cable TV, radio and the internet, will run in at least 20 states, many featuring wounded war veterans calling for Congress to stay the course in Iraq. According to media reports, those being pressured include three senators, Republican leader Mitch McConnell of Kentucky, Pete Domenici of New Mexico, and George Voynovich of Ohio. Many of the elected officials targeted by freedoms watch have been singled out for months by anti-war interests as well.

After the president announced his surge strategy back in January, the group Americans against escalation in Iraq launched a $12 million ad campaign, running over 50 ads in almost 35 states. This month, they recruited field organizers in 15 states to set up public protests of the war, targeting 40 Republicans in the House and the Senate. To start, we are joined by Brad Blakeman, President of Freedom's Watch, the newly formed group running ads in support of the war. Brad Blakeman, thank you very much for joining us. Thank you. You are spending what $15 million on 20 states because you're worried that Republican support for the war is falling away? No, not at all. What we're doing is we're giving voice to those people, ordinary people, Americans who have either lost somebody in the war or have served and been injured themselves. There's no editorializing in our advertising. It's their own words.

And the only mention of freedom's watch, Judy, is to tell the American people who paid for it. And to urge people, if you agree with the advertisements, then to call your Congressperson, we're not singling out in our ads. Anyone by name, that is not our intent. These ads are what they are and they're for everyone to see. And we hope that this will be a way of adding something to the debate instead of cutting and running. We're not saying stay the course, what we're saying is surrender is not an option. And moreover, Judy, don't switch your votes for political reasons. This is too important. But your goal then, isn't it, to influence Republican, especially Republican members of Congress, to stick with the President on the war? Judy, we are running these ads nationwide. They're running in Republican and Democratic districts. And a fair reading of these ads by anyone will see we're not targeting anyone by name. We haven't seen without anybody. But what we will do is we'll give the American people the facts that there's another side of this story. And that is that Americans should not cut and run. We don't surrender in America.

And switching votes for political reasons is not the way to go. And only embolden our enemies to do us further harm and our allies. Does something like the announcement by Senator John Warner yesterday, the veteran Republican Senator urging the President to begin to pull troops out this fall, does that hurt your cause? Well, it hurts the cause of freedom and giving the Iraqis the opportunity to stand on their feet. General Petraeus was almost unanimously confirmed. So why prejudge what he's going to say on September 11th? Give him the opportunity to give his views, to tell the American people the way it is. This is not a politician. This is a general who Congress gave the authority to lead this war. Brad Lightman, I want to ask you now to take a look at an ad that's been running by the group, paid for by the group Americans against escalation in Iraq. This is a group supported by labor unions and some liberal groups. Let's take a look. Mitch McConnell has supported Bush's endless war in Iraq for four years. Now Bush's general says we have to stay there for Canada.

The average counterinsurgency is somewhere around a nine or 10 year endeavor. Where are we going to get the troops to stay that long? The draft. I think it makes sense to certainly consider it this has always been an option on the table. Tell Mitch McConnell to end this war, paid for by the campaign to defend America. Now that's what the other side is saying. What do you say to that? I say that a fair reading of that ad is a scare tactic. It's there to scare the American people that somehow we don't have the wherewithal, the stay power, and we don't have the men and women to prosecute this war. And that's just plain false. They try and scare the American people that they'll be a draft. That's not so. The president is not thinking of a draft. Nor is Congress and certainly not the Pentagon. And by a Pentagon official saying that all options are on the table, of course all options are on the table. What if we were attacked again? What if the war was escalated? What if they went and attacked another country? So the military is telling you the way it is.

Of course every option is on the table. Why wouldn't it be in defense of this country? Before you are spending your group, we're told what $15 million? Over the next five weeks, yes. So are you roughly, do you believe on a par with those who want to see the war come to an end in terms of what they're spending? Well Judy, the enemy, our opposition, has told you that there's going to be in a rocky summer. The summer's almost over. There hasn't been the opposition they threatened, and I'll tell you this, they're not spending the money that they initially told you they would spend because they don't have it. How much do you think they are spending? Well, they're spending a lot less than the $12 million that they alleged to have spent so far and what they told you they were going to spend in this a rocky summer that never developed. Well, we are going to hear from spokesman for their group from moveon.org. And by the way, I want to ask you Brad Blake, when we had asked you to appear with Tom Matsy of moveon.org and you declined to do so and I'm just curious about why that is. Well, first of all, I don't put our organization on a par and we don't have anything in

common with moveon.org or their affiliates. Certainly don't believe that they are a credible group as we are. So I am not going to share a discussion with a group that I quite frankly don't take seriously and I think the American people and a fair reading of their information will say that they are incredible. Well, we had hoped at this moment to hear the other side from Tom Matsy, but I'm told that the signal is not good right now and we're not able to go there. So our apologies to Mr. Matsy and Brad Blakeman, I guess we'll wrap it up with that. Thank you. Thank you very much. Jim? Yes, we hope we won't wrap it up. We're going to continue trying to work on a problem to St. Paul and do the other half of this discussion. We're going to give it our best shot at least. For now, we're going to go to the analysis of shields and Lowry, syndicated columnist Mark Shields National Review Editor Rich Lowry, David Brooks' off tonight.

I will not ask you to take each other side on this, but we are sorry about the technical problems. We'll come back to that. Mark, how important a development was, Senator Warner's 5,000 troops out by Christmas announcement yesterday? Well, it's less important for what was said than for who said it. His resume is his history, a man who was an enlisted man in World War II in the Navy at an officer in the Marine Corps in Korea, Secretary of the Navy, most recent chairman of the Senator Armed Services Committee, and a strong supporter of the president. He's, well, not a dramatic challenge, or I shouldn't say a threat to the White House. It was a direct challenge to the White House, and I think in that sense it cannot be dismissed lately. Do you agree?

Was it direct challenge, Rich? Well, I'm going to dismiss it lightly, Mark. I hope you're not offended. I don't think it was particularly important. One, he's already shown he's uncomfortable with the president's direction on this war. He co-sponsored legislation with Dick Luger back just in June or July, advocating a change of course. And I think the real key thing here, the thing to keep the ball that we need to keep our eyes on, is the only thing that's going to force President Bush's hand is if Congress passes a law mandating a date for withdrawal or cuts off funds. And that's not going to happen unless 10 or 12 Republican senators go there. And what was most significant about Warner's comments to me, he didn't go there. And earlier this year, it seemed as though it was quite possible a bunch of Republicans would be going there. And if you looked at Warner's interview on your era last night with Judy Woodruff, he kept on saying it's up to the president and consultation with the generals. And as long as that's what Republican moderates who are wavering on the war are saying, President Bush is going to be able to continue to wage the war the way he likes.

All right. What John Warner is talking about is which is understood by virtually everybody in the military. And who cares about the military. And that is that by the early 2008, we are going to be forced to withdraw from Iraq, cut back our troops for the two following reasons. The strain on the army itself, which is rich at the breaking point, acknowledged by just about everybody in a position of authority. And secondly, the troop rotation schedule that the army itself has laid down. We don't have the troops to stay there. So we're going to withdraw and the question, Rick puts his finger right on it. I think this whole debate, Jim, is a question of who passes legislation or the legislation passed. This is a fight and a debate and it's going to be for the next three months between the two parties over who lost Iraq. That's what the debate is. And the predicate being laid down by the president and his supporters is we were just on the cusp of victory.

We were just there. And nobody, I know, in a rational condition, believes the United States is going to have any kind of a military victory in Iraq. There's not going to be any surrender capitulation by the other sides. And you were right. We were wrong. You were strong. That's not going to happen. The idea is going to be we were on the cusp of victory and the rug was pulled out from under us by these willy, nilly, neat, neat, nervous nellies back home, namely Democrats who let down our troops. You see it that way? No, I don't. It's very sincere in trying to achieve a kind of success. So obviously it's going to be a stripped down success if he does succeed in Iraq. But that's what it looked like the debate was going to be six months ago. And the fact is that the surge has achieved military success on the ground. And I would also argue an important element of political success because we haven't seen this turnaround in Anbar province that even Hillary Clinton and others are acknowledging because we killed all our enemies. Significant element of the uncertainty came our way. That is a political development. And you've seen in Anbar and other parts of Iraq, the political and military elements interacting.

It's not purely a military solution. It's not purely a political solution. It has to be both. And why when we're seeing progress? I can understand a council of despair if we sent 30,000 more troops there for a new strategy and nothing happened. Well, the fact we have seen progress, even the NIE says we've seen progress and if we went to the Democrat strategy of pulling down all that military progress would go away. You know, I use the national intelligence estimate. But it also said that it had been military success, but very little political success. Do you have to have both in order for this to be a success? You do have to have both. But let's remember when we talk about political success in those terms, we're talking about these benchmarks that President Bush endorsed in January, legislation to be passed at the federal level in Iraq. And why was that legislation so important? It was oil laws and other things. Because we care so much about the distribution of oil revenues in Iraq, no. Because the theory was if you pass that kind of legislation, it would promote reconciliation

between the sex and you would pull the Sunnis away from the insurgency. That was the ultimate political effect you were hoping to have. Against all expectations and predictions, you didn't pass the legislation, but you've had the Sunnis pull away from the insurgency anyway. That is a major development and that Democrats are having to acknowledge it as a big change in its debate. Speaking of success, we have successfully re-established our connection to St. Paul. So we're going to interrupt this discussion, go back to Judy, and we'll come back to you too. Judy. Thank you, Jim. That's right. We understand there's been a thunderstorm with a lot of lightning over our site in St. Paul. We are delighted that we now can go to Tom Matsey. He is the leader of the coalition running the ads against the war in Iraq. He's Washington director of move on. Tom Matsey, thank you for being with us and, again, our apologies to you for the hold-up and to the audience. We had just been talking with Brad Blakeman of Freedom's Watch. We asked him to look at one of the ads being run by the group in your coalition arguing that the war should stop.

He called this ad a scare tactic. He said, you say things in there that are not true, such as pointing out, claiming that there's going to be a draft. How do you answer him? Those were the words of President Bush's own wars are general loot. Those were not our words. We merely took the audio of General Loot and put it on the ad. One thing I'll say very specifically right now, Brad Blakeman should be held to account for not coming in public and debating the war. And I'll challenge him to a debate right now. I'm a taxpayer citizen, the 3.4 million members of moveon.org are taxpayers and citizens of this country, and there should be an open public debate about the war in Iraq. Let me also just come back to the point about what you say in your ad about the draft. There's a nonprofit, nonpartisan group called FactCheck.org. They also concluded in their words that it was misleading, that you were twisting the words

of a general when you talk about a draft in your ad. How do you comment? What do you say to that? Well, the general's words stand on their own. I don't think we need to interpret them for anybody. I'll say regarding scare tactics, this new group of Mr. Blakemans has a picture of the airplane flying into the 9-Eleven, the twin towers. And to talk about that in the context of the Iraq debate is outrageous. Iraq did not attack us on 9-Eleven. There were no Iraqis who were hijacking those airplanes on 9-Eleven. And you know, we've gone through this debate before in this country and those sorts of scare tactics should not be on the table. Tom Matzi, let me ask you to have a look at one of those ads and I think it includes the one you're referring to. This is one of the ads being run starting this week by the group Freedoms Watch. Let's take a look. Nancy died the week before the Iraqi election and he sacrificed for our freedom and for

their freedom. For Congress to switch votes for political reasons, while we're making progress in Iraq, to me is unthinkable. If we surrender now, it's giving the message to terrorists that they can do what they want and get away with it. We're starting to see results. The price is being paid. Don't give up. We've already had one 9-Eleven. We don't need another. These ads and ads similar to those using Iraq veterans, some of whom have lost limbs in Iraq are being run in many parts of the country. What do you have to say to the message in those ads? I think it's a very, you know, compelling story that the woman is telling and I sympathize with her greatly and my heart goes out to her for her loss. I think though you could find any one family and it tells it one story, but you know, already we see in the new CBS New York Times poll, for example, that two-thirds of veterans and military families think that the surge is not going well in Iraq, and that's an indicator

of what really is the truth about what's going on in the ground. So the story about progress needs to be not just told by the Pentagon and White House spin operation, but by the facts, the bloodiest summer yet in Iraq, 17 of 38 parliament, excuse me of cabinet members in the Iraqi cabinet are boycotting the government and the parliaments on vacation right now. This is not progress. Your ads, which have been running for a number of months, and when I say your ads, the ads that have been paid for by a coalition, including move on.org, have been running for some time around the country. You spent millions of dollars. You've been targeting whom, Republican members of Congress, have you changed any votes? Well, September is going to be a telling time for that question, but ultimately it's not just how people change their votes. It's things like John Warner yesterday telling the president that needs to start with drawing troops.

It's Peter Pace, the president's chairman of the Joint Chiefs, saying that next year we need to draw down as many as half of our troops in Iraq. Right now the White House is an absolute meltdown over Iraq. Their generals are telling them they need to bring troops home, you have Republican senators saying they need to do the same thing. This is a desperate, desperate move by the White House with an ad campaign attacking swift voting Republicans who are saying enough is enough. Well, we've heard two sides of this now. Tom Matzi with move on.org. We thank you, and again apologies for that difficulty we had earlier. Thank you very much. Thank you, Judy. And to Jim. Yes, and back to Mark Shields and Rich Lowery. Mark picking up on the political side of the Iraq situation. This has been a bad week, or at least an up and down week for Prime Minister Malakid, at least what's been said. How do you read the final, what is the U.S. position now on Malakid as you understand it? You're doing a heck of a job, Brownie.

I mean, that seemed to be the president's joint in this week. It was up to them to make a choice, he seemed to be inviting on Tuesday. The Republicans, the insurgents, the dissidents in Iraq to replace Mr. Malakid. And then he's a great guy, a neat guy, a good guy. What do you think happened? I think that the president was probably speaking candidly and directly, without talking points when he said it at the outset. And I think there was a backlash within the establishment, within the party. What do you think is going on? I think what happened there is Bush, we was speaking off the cuff, and he was responding to the comments by Senator Eleven, saying, I think we may need to replace Malakid. And Bush was just saying, if he's going to be replaced, the Iraqis have to do it. And the administration, they have a keen appreciation of the limits of Al Malakid. So he was an exile for years, he's not used to democratic politics, he's not a charismatic

or particularly strong leader. But the question is, who do you replace him with? And that's the question no one has an answer to necessarily. But I do think these Iraqi politicians, they are feeling pressure from below. And that's a very key thing, if they do eventually from the Iraqis, not from Iraqi society. And I don't want to have a roast in a glass, because you don't know how this is going to play out. But it does often happen, and society is driven by civil war and violence, that there's a point where the population just becomes fed up with it. And some sort of political leader or force rises up to express that sentiment. And I wouldn't rule that out happening here. Well, to return to one of the President's favorite analogies of the week, Vietnam, I mean, we went through a succession. Every administration from Johnson on in Vietnam said, well, our Kennedy actually began with Kennedy. Well, what we really need is a better administration in Saigon. And we were part and part of the coupes.

We encouraged coupes. We withdrew support elsewhere, and it didn't change the outcome at all. We dropped more bombs on Vietnam than we did in all of World War II and Germany and Japan. We had half a million troops in a country just over half the size of Iraq. We could not affect the outcome, and I'm sadly, I think that's the reality of Iraq. In general, what did you think of the President's use? Not only mentioned Vietnam, he mentioned other wars as well in his statement today in comparison, in comparing them with what's happening in Iraq. What did you think of that? Well, I returned to my basic premise, I mean, in 1968, the Democratic Party was the party that led the opposition, the anti-war opposition in the country. The country was turning against the war. The Democrats were then blamed very, very effectively, politically, by Richard Nixon and others in the Republican side for having lost that war. And it's no accident that the Democrats have only held the White House 12 years since 1968.

I mean, that is a theme that has worked effectively in the past. I mean, the President, in Japan, Jim, yes, we've had troops in Japan for half a century. In that half a century, not a single American troop has been assassinated by any militant dissident in Japan, and secondly, not a single contract was awarded in the entire reconstruction of Japan to any American company. That's where the analogy really starts to limp. Well, the speech played as a Vietnam speech, but it was really an Asia speech. My understanding as the President has been eager to make this Asia analogy for a long time, because if you look at the broad sweep of history in Asia in the 20th century, 50 or 60 years ago, you had two democracies, and now you have lots of them. And you wanted to talk about how regions change, obviously, analogizing to the Middle East. Now, no historical analogy is perfect. And obviously, you can't give an Asian speech without mentioning Vietnam, and as soon as you mentioned Vietnam, everyone blows up. But I think if you look at the speech, the claims about Vietnam were fairly modest. You're saying, look, I'm not going to re-litigate this long argument, National argument

we've had about Vietnam, but there was a consequence, a terrible and horrific consequence to defeat, and there will be one if we just give up and lose in Iraq as well. Let me just say in response, I think that the terrible consequences, the human tragedy, is just sad tragic. But I will say this, Jim. I think the consequence of the United States is staying there too long, rather than too short. The President makes it suggest that 10 years was not long enough, that we should have stayed there in Vietnam, believe you somehow we should have stayed longer. I think historians, even conservative scholars, agree that because of the United States incursions and invasions into Cambodia and Laos and surrounding countries, that it actually encouraged, nurtured, and developed all part of it. No one agrees about anything about Vietnam, but I think the destabilizing factor in Cambodia was that North Vietnamese were using it as a base, and at the end, we would not support the government of Cambodia through the air to try to beat back the Khmer Rouge.

I think their revisionist historians have gained ground who argue in 1972, South Vietnam had reached a basically sustainable position if we continue air support and aid and material. They beat back the Easter offensive in 1972, and I just think it's where I really disagree with Mark, is Mark, you kind of arguing that there's nothing we can do in Iraq. It's futile. Well, we've seen with the surge, and the NIE says it over and over again, we've made significant progress against al-Qaeda, and whatever happens in Iraq, whether it's a division of the country into three parts, whether it's a withdrawal, whether there's ultimately a stable central government, you do want to route al-Qaeda, and we have begun to do that because and only because of the surge. The surge was intended as a means, not an end, as it provided an improved security, no question about it, and that's a very positive. But it was to create a society where people were supposed to be of some reconciliation.

What we see now is a greater re-segregation on the religious lines geographically, residentially, the city of Baghdad, which had been a place where people were integrated between Sunni and Shia, is no longer, and the tragedy is that the respite bought by the security and the surge has not led to the political changes that the United States and everybody else seems to agree with necessary. We are no longer. Thank you both very much. Thank you. And finally tonight, a creative retreat turns 100. Jeffrey Brown has our report. The sounds of Samba in the woods and mountains of the Manatnok region of southern New Hampshire. Billy Newman, a jazz and Brazilian music performer and composer, grew up and still lives

in Brooklyn. These days he's taking advantage of a month of solitude at the McDowell colony to work on new compositions. Working a lot when I'm back in on New York, I'm teaching, I'm playing, jamming, I'm rehearsing, and the time for writing is just hard to clear the time to actually write. It's a lot of things and here basically the focus is on composing. Newman is one of 29 people currently in residence in McDowell. The nation's oldest haven for writers, composers, visual and other artists. Now celebrating its 100th anniversary. Red around 450 acres in the town of Peterborough, 32 studios housed the so-called colonists for residencies from two weeks to two months. Applicants are chosen by a panel of their peers, and once selected they live in cabins

without TVs, internet access, or phones, though cell phones have put a dent in that old tradition. Is this pretty much like the way you work at home? I mean, you got this kind of set up? Yeah. So what's the difference here? What's the difference here? The difference here is I can work all day and night, all day, I can wake up in the middle of the night, I can wake up early in the morning and start working. Through the years, more than 6,000 artists have worked here, walked through the woods and your bound to come upon a piece of American cultural history. In this cabin in 1937, Thornton Wilder wrote his play, Our Town, based on the small town life of Peterborough. Aaron Copeland came often beginning in the 1920s, among much else he worked on the music for his ballet Billy the Kid. James Baldwin wrote notes of a native son here in 1954.

More recently, Alice Walker wrote her first two novels, and Michael Chabin worked on his Pulitzer Prize winner, The Amazing Adventures of Cavalier and Clay. History has seen some unusual turns here as well. Alvin Singleton is now a highly regarded classical music composer based in Atlanta. But as a young man studying music in New York, he worked as an usher for the Philharmonic. He would take its then-music director Leonard Bernstein up and down the elevator before performances. In 1987, they met again at McDowell. This time has fellow professionals. I hadn't seen him in many years and in all of a sudden we have face to face here at McDowell Colony in a huge embrace and that was really exciting. And now you're here in a room that he himself worked in.

Oh, yes, this studio has been worked in by Bernstein as well as Aaron Copeland and many others. Those are some high-level ghosts you had here. Yes, but I tried to not to notice that they're there, it's a lot of pressure. I mean, these are such giants in our culture. And I'm thrilled that I could work it where they worked, but I have to do like they did. I have to do what I do, just continue working and what you're working on and you don't know what history we'll say about what you've done. We have no control over that. You just have to love every moment that you're on this earth and that you can create, in my case, composed music. It was, in fact, a composer, Edward McDowell, who started all this, an important musical figure at the end of the 19th century, McDowell and his wife, Marion, who was herself a fine pianist, bought a summer home in Peterborough.

Marion had this log cabin built as a place for her husband to work and he wanted to do the same for others. Edward died in 1908 at age 48. I am so glad to be here. He was Marion, who turned the artist colony into a reality and remained deeply involved until her death in 1956. Among the long traditions here is the care and feeding of the resident artists. Meals are elaborately prepared in the kitchen. Lunch has always been packed up and delivered in picnic baskets. For many years now, that's been the task of Blake Tooksbury, himself, McDowell Institution, who makes his daily rounds, leaving his offering, no knocking or interruptions, at each artist, doorstep. Breakfast and dinner served at Colony Hall are the only set times that people here can interact with fellow artists if they choose. Poet Jean Valentine has been at McDowell nine times. I usually don't have breakfast, but I always have supper.

I like to rub elbows with my client, you know, once in a while. You do. I go for supper every night. You mean, you mean, not just poets. No, I just mean humans. You mean occasionally you like to have contact with other humans. It caught me crazy. You have a whole history. Of course, for Valentine and the other writers and artists here over the years, who signed the so-called tombstones in each cabin in which they've worked, there is a serious side to the experience. Poets, you know, we're pretty no count in this culture, as you know. And I think anybody here, not just the poets, but you just not in words, but you feel that it's a place that respects people who are doing the kind of thing we're doing. I didn't get it for years, as I said. I just thought, well, gosh, my kids were little. It gave me a couple of weeks of quiet and things like that. And then slowly I realized they think we're worth it, you know. One day a year, McDowell opens itself to the outside world for its metal day celebration.

Our celebrations this year have a serious purpose to guarantee that we're healthy and vital for another century, that everyone we can reach understands what the arts mean to America and what McDowell uniquely means to the arts. This year, the festivities, including honoring documentary filmmaker, Les Blank, were led by a man well-known to news our viewers. Robert McNeil, our longtime co-anchor and executive editor, has served his chairman of the McDowell Colony for 15 years. He says the role of McDowell and other artist colonies goes well beyond the nourishing of individual arts. The real importance of art is that it is the greatest expression of American ideal freedom. Artists are intellectually and creatively freer than anybody. I mean, it's the essence of art to do what your inner demon or angel tells you to do regardless of what other people think about it.

And so these colonies and McDowell, especially I think, provide a shelter and an atmosphere with that kind of freedom that's available. And your sense is that that understanding of the role of art as expressing American freedom has been lost, diminished. I don't know whether it's seen as acutely in the public consciousness. Winston Churchill said back in the late 40s, the empires of the future are going to be empires of the mind and so much of what this country, the face that this country presents to the world, is the face that expresses its ideas and its ideals. On metal day, McDowell's residents opened their studios to some 1,500 visitors from photographs from sketches from my imagination.

Morgan Craig, an artist from Philadelphia, showed his large paintings of abandoned industrial buildings and institutions. This is his grandfather, Bobby Neal Adams has been photographing residents of Petersburg, then combining shots of immediate family members here of father and son into one portrait. For all the emphasis on privacy and individual work, in fact, everyone we met, young artists and veterans like Alvin Singleton spoke of the communal experience here, the interaction with other creative people. One of the most important things is that you come into contact with other artists. I thought that I was the only one having difficulty starting a work. Everyone has difficulty starting a work, regardless whether they're composers or they're painters or not, they said, that is the most difficult thing. Whether a start is made and whether the work done amounts to anything is up to the talents and tenacity of the artist, of course.

The opportunity here is to go into the woods and see what one can do. Robert McNio will be answering your questions on the McDow colony on an online forum to participate. Go to PBS.org. And again, the major developments of this day, an American military commander in Iraq spoke against a senator's call to bring home some troops by Christmas. Major General Rick Lynch said it would be a giant step backward. Prof. Paul Player, Michael Vick, filed a plea agreement and federal court, admitting his involvement in a dogfighting case late today. The NFL suspended him indefinitely without pay. And flood warnings were posted from Missouri to Michigan as severe weather continued to batter the central U.S.

Washington Week can be seen later this evening, almost PBS stations. We'll see you online and again here Monday evening. Have a nice weekend. I'm Jim Lehrer. Thank you and good night. Major funding for the news hour with Jim Lehrer is provided by. Some say that by 2020, we'll have used up half the world's oil. Some say we already have. During the other half last longer, we'll take innovation, conservation and collaboration. Will you join us? The new AT&T, Pacific Life, the William and Flora Hewlett Foundation working to solve social and environmental problems at home and around the world.

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Thank you. Thank you. Thank you. Thank you. Thank you. Good evening, I'm Jim Lehrer.

On the news hour tonight, the news of this Friday, then a fallout report from another week of economic and stock market ups and downs. A look at the multi-million dollar television ad campaigns for and against the Iraq war. The analysis of Mark Shields and Rich Lowry substituting for David Brooks and a 100th birthday celebration for the McDow colony in New Hampshire, a creation nest for artists. Major funding for the news hour with Jim Lehrer is provided by. Now headquarters is wherever you are, with AT&T data, video voice and now wireless, all

working together to create a new world of mobility. Welcome to the new AT&T, the world delivered. Pacific Life. Chevron. The National Science Foundation. And with the ongoing support of these institutions and foundations.