The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I`m Jim Lehrer.

On the NewsHour tonight: the news of this Friday; then, the latest on the fires still burning in Southern California; a look at why oil prices have skyrocketed; a one-month later update on the crackdown in Myanmar, the country formerly known as Burma; and the weekly analysis of Mark Shields and David Brooks.

(BREAK)

JIM LEHRER: Fire crews gained the advantage today across much of Southern California. They made steady progress with the aid of better weather on day six of the wildfire war. Fires were still burning from Los Angeles County to the Mexican border, but some were largely contained.

This afternoon, Governor Arnold Schwarzenegger said the hard work is just beginning.

GOV. ARNOLD SCHWARZENEGGER (R), California: I think this is a very important phase, the next step. As I`ve always said, this first week was like a sprint, but the next phase is the marathon. Follow-through is extremely important. And our top priority must always be to help rebuild the people`s lives and to get them back on their feet as quickly as possible.

JIM LEHRER: We`ll have more on the story right after the news summary.

Crude oil prices surged again today to a new record. The price in New York gained $1.40 to finish near $92 a barrel. It had been above that mark in overnight trading. The surge was driven again by falling U.S. inventories and rising tensions with Turkey and Iran.

At the White House today, spokeswoman Dana Perino would not say directly if imposing sanctions on Iran aggravated the situation. She did say this.

DANA PERINO, White House Spokeswoman: Well, I`m not going to comment on market conditions or market movements. And there`s a lot of different factors that go into that. Part of what we have in the world is very high demand and not enough supply. And so finding alternatives to traditional oil use is what the president has focused on. Look, the problem here isn`t the United States. It`s not the international community. The problem is Iran.

JIM LEHRER: We`ll have more on the oil story later in the program tonight.

Iran stepped up its attack on the new sanctions today. The foreign ministry called them "worthless and ineffective" and "doomed to fail." And the head of the Revolutionary Guards dismissed the possibility of a U.S. military strike on Iran. He warned his forces would answer with an "even more decisive strike."

Turkey promised today to hold off launching a ground offensive into northern Iraq for now. The target would be Kurdish rebels, known as the PKK. But Turkey`s top military commander said the decision will wait until Prime Minister Erdogan meets with President Bush in Washington on November 5th.

Delegations from the U.S. and Iraq met with Turkish officials in Ankara today. The Turks demanded Iraq hand over leaders of the PKK.

The U.S. commander for northern Iraq insisted today he has no role in stopping Kurdish rebel attacks into Turkey. Army Major General Benjamin Mixon took questions in Tikrit from reporters at the Pentagon.

JOURNALIST: Are you planning to do anything to take any steps to counter the PKK movement and activities in the north?

MAJ. GEN. BENJAMIN MIXON, U.S. Army: Absolutely nothing. I mean, I haven`t studied it; I haven`t been given any instructions that would even vaguely resemble what you just mentioned. So I don`t see any sense in talking about it.

JIM LEHRER: General Mixon also said he has seen no evidence that Kurdish authorities are doing anything about the rebel attacks. The United States has relatively few troops in the border region, but it does have substantial air power close by.

Iraq`s top Shiite cleric appealed today for the government to stop violence in the south. A spokesman for Grand Ayatollah al-Sistani said Iraqis have the right to security and stability. He said, "If these aspirations are not met, who will guarantee that citizens will continue supporting the political process?"

Also today, the U.S. military announced an American soldier was killed in a roadside bombing on Thursday. For October, so far, the U.S. toll is 29 dead, much lower than in previous months.

Russian President Putin fired a new barrage today at U.S. plans for a missile defense shield in Europe. He called it a threat on Russia`s borders and compared it to the days of the Cuban missile crisis. He spoke in Portugal.

VLADIMIR PUTIN, President of Russia (through translator): I would like to remind you how the relationship between Russia and the U.S. became more tense in the mid-1960s. Analogous actions by the Soviet Union, when it deployed missiles in Cuba, prompted the Caribbean crisis.

For us today, this situation technically is very similar. We have moved our last bases from Cuba and Vietnam and totally left these places, while the same threats are being created close to the borders of our country.

JIM LEHRER: In Washington, a State Department spokesman insisted again the shield is aimed at Iran, not Russia. As for comparing it with the Cuban missile crisis, he said, "I don`t think they are historically analogous in any way, shape or form."

The Georgia State Supreme Court today ordered the release of a young man whose case gained national attention. Genarlow Wilson was jailed for having consensual oral sex with another teenager. At the time, he was 17; the girl was 15. Wilson had served two years of a 10-year sentence. But today, the court ruled the sentence amounted to cruel and unusual punishment.

The nation`s largest mortgage lender offered an upbeat outlook today, despite taking a beating in the third quarter. Countrywide Financial reported it lost $1.2 billion, its first quarterly loss in 25 years. But the company insisted the worst of a nationwide housing downturn is over. It forecast a return to profit in the fourth quarter and in 2008.

That news from Countrywide went down well on Wall Street. The Dow Jones Industrial Average today gained more than 134 points to close at 13,806. The Nasdaq rose 53 points to close at 2,804. For the week, the Dow gained 2 percent; the Nasdaq rose nearly 3 percent.

And that`s it for the news summary tonight. Now: a California update; the rising price of oil; a Burma follow-up, one month later; and Shields and Brooks.

(BREAK)

JIM LEHRER: The latest on the fires disaster. NewsHour correspondent Jeffrey Kaye of KCET Los Angeles reports from San Diego County.

JEFFREY KAYE, NewsHour Correspondent: Firefighters wearily moved into a second weekend of work, but with renewed hope. Cooler weather helped ground and air assaults against the massive fires, which are mostly away from residential areas.

With the discovery of four charred bodies on this hillside near the Mexican border, the death toll related to the California fires neared 20 by this afternoon, and officials expect to find more victims.

Nearly half-a-million acres have been scorched by the fires; that`s twice the size of New York City. At least 1,800 homes have been destroyed, 80 percent of them in San Diego County. Five fires continue to burn in the San Diego area, one near Camp Pendleton Marine Base, two others fires farther east, and two more to the south.

More than 10,000 firefighters are still on the front lines. The main firefighting efforts have moved from the suburbs to the backcountry, where crews are still struggling to contain the blazes.

Using muscles and chainsaws, fire crews from around the west are trying to prevent remote fires from getting to structures in the more sparsely populated neighborhoods.

Perhaps counterintuitively, these firefighters set fires. Bobby Willis heads a 22-member hotshot crew from Northern California. There are dozens of these federally funded teams which specialize in fighting wildfires here from around the country to combat these blazes.

Why do you want to consume this brush? What`s the point?

CHIEF BOBBY WILLIS, Hotshot Crew: To create a fire break, because the black line is the best fire break, because once it`s already burned, it`s not going to come up through here again.

JEFFREY KAYE: Willis and his crew worked the edge of the Harris Fire, southeast of San Diego, not far from the Mexican border. That fire has consumed nearly 85,000 acres and destroyed 97 homes. By this morning, the fire was only 20 percent contained. These so-called mop-up operations are as carefully coordinated as the more sensational assaults on the dramatic wildfires.

Twice a day, firefighter commanders assemble their teams for briefings. This morning, just after daylight, crew leaders assigned to the Harris Fire began their meeting with a sober reminder about the dangers: a remembrance for the five firefighters killed one year ago today combating wildfires not far from here in nearby Riverside County.

FIREFIGHTER: Stay engaged. Remember what`s important to you. And please take a moment today to get in touch with your families.

JEFFREY KAYE: As commanders went through the day`s assignments, the chief concern was the highly combustible brush dried by the drought and the humidity.

FIREFIGHTER: So even though you`re not seeing high-intensity fire behavior, just be aware that, at any second, you know, if you get the right conditions, things can change very rapidly.

JEFFREY KAYE: From sensitive archeological sites to communications frequencies, weather forecasts, and public relations, the team leaders cover a catalogue of concerns that they`ll communicate to their crews.

In most places now, there is little drama to the fire suppression efforts. In the Lake Hodges community, 17 structures have been destroyed. To the untrained eye, it appears that the firefight here is over, but we caught a ride with a crew from San Francisco who explained that, even if the flames have been extinguished, the danger has not.

RON JOHANSEN, San Francisco Fire Department: Before you know it, with erratic winds, no humidity, high temperatures, you have a new fire started all over again.

JEFFREY KAYE: As evacuation orders are lifted, shelters continue to empty. The largest, Qualcomm Stadium, which held more than 10,000 evacuees earlier in the week, closed at noon today. Players for the San Diego Chargers football team, forced by the fires from their own homes, as well as from their practice fields, will now be able to play there on Sunday afternoon.

JAY REED: We don`t know when we`re going to be able to get back home. We`re hoping that it`s going to be before the weekend. It`s just a wait- and-see, day by day.

JEFFREY KAYE: As thousands more residents returned to see what was left of their homes, more details emerged about how some fires were sparked.

CHIEF CHIP PRATHER, Orange County Fire Authority: There was evidence found at the scene that resulted in my investigators concluding quickly that this was an intentionally set fire.

JEFFREY KAYE: Investigators suspect many blazes were set by downed power lines, but at least three of the fires -- including the 26,000-acre one that ravaged Orange County -- are considered suspicious.

HERB BROWN, Federal Bureau of Investigation: The FBI will bring to bear all its national resources with ATF, the Orange County Fire Authority, as well as the Orange County Sheriff`s Department, to make sure that we track, apprehend and put this person or persons behind bars where they belong.

JEFFREY KAYE: Five people in San Bernardino, Los Angeles, and San Diego Counties have been arrested on suspicion of arson, but none has been linked to any of the major fires. That`s little consolation for those who lost everything.

SOUTHERN CALIFORNIA RESIDENT: If it was natural, then that would be different, but the fact that somebody did this on purpose, it hurts.

JEFFREY KAYE: There were also complaints from some local officials, including two Southern California members of Congress, that some water- dropping helicopters and cargo planes were delayed in participating in the firefighting efforts because of government rules and bureaucracy.

But state officials, including Governor Arnold Schwarzenegger, have insisted any delay was due to the strong Santa Ana winds.

JIM LEHRER: Our correspondent, Jeffrey Kaye, has been on the scene covering the fire story all week. He and forestry and wildfire expert, Tom Bonnicksen, will answer questions on an Insider Forum on our Web site. You can ask about the fires, the forest conditions that helped fuel the flames, and the response effort by firefighters and others. To participate, just go to our Web site at PBS.org.

(BREAK)

JIM LEHRER: Now, a look behind those rises in oil prices. Margaret Warner is in charge.

MARGARET WARNER: Oil prices have been rising steadily all year amid growing demand, but the cost of crude oil jumped sharply in recent days, above $90, closing today at more than $91 a barrel. That`s just under $10 shy of the inflation-adjusted record high set in 1980 during the Iranian hostage crisis.

This week`s price hike comes amid more tensions in the Middle East, including new, expanded U.S. economic sanctions on Iran, and hostilities along the border between Turkey and Kurdish northern Iraq.

Here to tell us more about what`s happening with oil prices are Robert Lieber, professor of government and foreign service at Georgetown University. He is the author of "The Oil Decade." And John Kilduff, energy analyst at MF Global, a brokerage firm.

Welcome to you both, gentlemen.

John Kilduff, what do you attribute -- to what do you attribute this spike we`re seeing in oil prices, just close to 8 percent in the last 48 hours? Do you think it`s being driven, as many have speculated today, by the combination of the Iranian situation and the Turkey-Iraq situation?

JOHN KILDUFF, Energy Analyst, MF Global: Most certainly. Good evening. It`s clearly those two elements. Those are sort of the sizzle that`s in this market right now that are causing various investors, speculators, and even those in the oil industry who use the tools of the New York Mercantile Exchange and other facets to hedge their exposure to buy up crude oil on paper right in advance of what are some very serious threats to major supply outlets in Iran and northern Iraq and, for that matter, the cross-Turkey pipeline. That`s another 700,000 barrels of crude oil for the Western markets.

MARGARET WARNER: Professor Lieber, what do you attribute this to?

ROBERT LIEBER, Georgetown University: It`s a combination of politics and markets. On the market and economic side, the supply-demand balance is tight, but there is very little surplus capacity in the event that some of the existing supplies are somehow interrupted.

In the past, when there`s been a political crisis or even a war, as long as there were available shut-in capacity that could be brought online, then it tended to tamp down the increase in prices. But in this case, because the market is so tight, any rumor, anxiety and someone can drive prices up in a great hurry.

MARGARET WARNER: So, in other words, the tight global supply-demand picture is inextricably linked to the political tensions?

ROBERT LIEBER: That`s right. That`s why I mentioned it`s a combination of politics and markets. You can`t get a handle on this unless you combine both elements, and a lot of people don`t and go off in the wrong direction, trying to make sense of something like what we`re seeing now.

MARGARET WARNER: Do you agree, John Kilduff, that it is the relationship between the two phenomena?

JOHN KILDUFF: No question. There`s zero room for error. I would agree with the professor totally. I`m not sure there`s any spare capacity left at this point.

We saw OPEC, for example, suspend individual country quota limits last month because there`s so many countries now having trouble meeting their actual quotas. And we see threats to supply really from all quarters, by choice or by circumstance.

In Venezuela, Nigeria -- I know on your program, you talk about it all the time, the unrest there in the Niger Delta that`s knocking off millions of barrels of crude oil every day. We see President Putin threatening at times to use oil as a weapon. So we`re seeing speculators and hedgers bid up the price because of the uncertainty of future supplies, in particular.

MARGARET WARNER: So, Professor, let`s take the Iran situation, the U.S.-Iran tensions. What specifically are oil traders worried about? What do they think might happen?

ROBERT LIEBER: Well, it`s wild speculation. The reality is, there ain`t going to be an attack on Iran anytime soon.

MARGARET WARNER: That`s a bold prediction.

ROBERT LIEBER: Trust me.

MARGARET WARNER: Anytime soon.

ROBERT LIEBER: Trust me, anytime soon. It could happen eventually, if the Iranians continue to pursue their program. But in the coming months, it`s just not going to happen.

Nonetheless, there are anxieties about it. If a conflict of some sort broke out, it`s certainly conceivable it could interrupt the Iranian oil shipments, it could affect the oil coming out of southern Iran. You could get the Iranians trying to retaliate against oil facilities on the other side of the gulf.

Anything that would suddenly reduce oil coming out of the Middle East would trigger an explosive increase in world oil prices. So I think that is affecting the markets at the present time.

MARGARET WARNER: So, John Kilduff, if it`s true that there would not be an attack on Iran in the next several months, would you consider the scenarios that have been sketched out to be excessive, or is this prudent, as you described it, hedging or anticipation on the part of oil traders?

JOHN KILDUFF: Well, I think at this point, the problem we have, despite the professor`s assertions, is statements from the president and the vice president, almost on a daily basis lately, really raising the rhetoric, raising the temperature on the situation. And, of course, President Ahmadinejad in Iran does not shrink from these verbal battles anyway.

And this is the mother of all supply fears, the mother of all supply threats. Not only the Iranian oil, but the Strait of Hormuz, where 25 percent of the world`s oil flows, that`s 100 percent Western-friendly, could easily be blocked by the Iranians.

So, I mean, yes, there could be an overreaction right now, but we in the oil markets have to call them as we see them and take what we get in terms of rhetoric and worry.

So, for now, I think the reaction is actually fairly modulated. And if we wake up in the morning, one of these mornings, where there is a U.S. air strike of some kind on Iran, we are easily looking at prices approaching $130; $150 a barrel wouldn`t be out of the question.

MARGARET WARNER: And, Mr. Kilduff, speaking of strikes, go now to the Turkey-Iraq border. How much oil is really at stake there? Or is this a function of, even if not a lot of oil is at stake, again, because there`s no elasticity in the market, any potential threat roils the whole situation?

JOHN KILDUFF: Well, any potential threat, and even if you try to anticipate everything, there was word out of the Iraqi government that they would shut off their oil flow through Turkey if Turkey invaded. So now we have the Iraqis threatening that, the Kurdish Workers Party, of course, threatening that same oil infrastructure if there`s an attack, also threatening the trans-Turkey pipeline that runs from Ceyhan out to the Caspian Sea, as well as, of course, the Turks threatening an attack in that region.

So the calculus there is myriad, in terms of our worries and pricing this in. So that`s, again, what the market is worried about.

On that trans-Turkey pipeline, we`re talking about 700,000 barrels a day. The northern Iraq infrastructure, it`s around 1.2 million barrels a day when it`s on. It hasn`t really been working operationally since the war, so that is really not oil that`s in any kind of part of our calculus at this point.

MARGARET WARNER: So, Professor Lieber, what about the role of speculation in this? You read about so much money, investment money, pouring into the energy sector. How much of this is "speculation," quote, unquote?

ROBERT LIEBER: They`re only wild guesses. People on Wall Street would probably have a better take on it, but some of the guesses suggest that somewhere between $5 and $15 a barrel might be either a speculative premium or a risk premium or represent investment.

But it`s worth noting that prices are set at the margins. Prices have escalated very sharply, as you mentioned at the beginning of this piece, but it`s also possible, as tensions ease, that prices could drop just as swiftly as they`ve risen.

MARGARET WARNER: And then, Professor, let`s talk about how this is going to affect consumers. At what point does this really translate at the gas pump, and in terms of what it will cost to heat your home this winter?

ROBERT LIEBER: It`s going to have its effect at the gas pump and home heating oil. It`s going to be painful. But it`s worth noting that, compared to a generation ago, oil is only half as important to our economy as it was then.

For every dollar of gross domestic product now, we only use half as much oil as we did then. So the run-up in prices, which is getting close to the inflation-adjusted high, doesn`t have the same kind of impact it had during the two shocks of the 1970s.

MARGARET WARNER: But if it hits $100 a barrel?

JOHN KILDUFF: A hundred dollars a barrel now would equal right about what it was in the spring of 1980. But the difference is, because you only use half as much oil per unit of GDP, the overall effect on the economy will be less, even though it can be very painful for individual homeowners and drivers.

MARGARET WARNER: John Kilduff, how concerned do you think consumers should be about the months ahead?

JOHN KILDUFF: I think they should be concerned. I agree with the professor that the real numbers do break along $130, $140 oil before we`ve replicated the real pain of that 1980 spring.

However, I think, psychologically, consumer sentiment would be badly damaged by just $100 oil. There is a significant price spike coming to the gasoline pump over the next couple of weeks, upwards of 20 cents or 30 cents a gallon. If we continue to see rising oil prices as we have, that will quickly go to 50 cents, 60 cents a gallon.

Home heating oil consumers are seeing the worst of it. They`re going to be paying upwards of 50 percent more than they did last year. And they`re paying record price as we sit here.

So I think, again, psychologically, consumer sentiment that`s already been beat up by the mortgage situation, by the unemployment picture that`s been worsening to a relative degree, badly damaged.

MARGARET WARNER: And, John Kilduff, brief final prediction, actually from both of you, where do you think prices will settle by year`s end?

JOHN KILDUFF: Well, I`ve been forecasting now for some time that we`re going to see $100 oil before the end of the year. Whether or not that will be enough to wring out some of the speculative angst, get some profit-taking going in the market where people actually sell and say, "I`ve had enough of this," and get out, it remains to be seen.

But I`m looking for $100 before the end of the year, with likely lower prices in `08 after some of the economic damage is wrought.

MARGARET WARNER: And Professor Lieber?

ROBERT LIEBER: If I knew the answer, I would make a fortune speculation. What I will say is there`s not going to be an attack on Iran before the end of this calendar year.

MARGARET WARNER: We`ll keep that in mind. Professor Robert Lieber and John Kilduff, thank you both.

ROBERT LIEBER: Thank you.

JOHN KILDUFF: Thank you.

(BREAK)

JIM LEHRER: Meanwhile, what has been going on in the 30 days since the crackdown in Myanmar, also known as Burma? Judy Woodruff reports.

JUDY WOODRUFF: The streets of Yangon, the capital of Myanmar, have been largely quiet since the violent government crackdown on pro-democracy protesters late last month. Nevertheless, the military rulers of the Southeast Asian nation deployed troops in the streets today, a show of force intended to deter any protests marking the one-month anniversary of a pivotal day in the uprising.

Yesterday, the government released 70 prisoners detained during the unrest, 50 of whom are members of the pro-democracy party led by the dissident Aung San Suu Kyi, the Nobel Peace laureate who has spent 12 of the last 18 years under house arrest. The release represents a fraction of the estimated 6,000 Burmese detained amid the protests.

Also yesterday, Suu Kyi met in public with a newly appointed government official. The government has been under pressure from the United Nations to foster reconciliation with Suu Kyi and her party. The U.N.`s lead envoy to Myanmar, Ibrahim Gambari, said there is much left for the government to do.

IBRAHIM GAMBARI, U.N. Envoy to Myanmar: Clearly, we welcome that, but we see it as only the first step. And so this should lead to the early resumption of the dialogue that will lead to concrete and tangible results.

JUDY WOODRUFF: The demonstrations began in August, initially to protest high fuel prices, but the protests evolved into a challenge to the ruling military junta, which has controlled Myanmar, also known as Burma, for the last 20 years.

The protests were led by thousands of Buddhist monks and spread to other Burmese cities. The generals who control the country crushed the protests in a bloody crackdown over the course of several days. The government claimed only 10 people were killed; independent estimates place the toll in the hundreds.

Reports from refugees leaving the country have begun to emerge, and they paint a picture of carnage and chaos. This monk, who requested anonymity even outside his native land, was interviewed in Thailand by a Burmese pro-democracy dissident group.

BURMESE DISSIDENT (through translator): Some of the injured were so bloody that you couldn`t tell where blood was coming from. Some of the monks lost the top part of their robes. I saw civilians helping the injured monks; most of their injuries were head injuries. The riot police were aiming for the head.

JUDY WOODRUFF: The crackdown, which reportedly continues, sparked widespread international outrage. Economic sanctions already in place were strengthened by the United Nations and other bodies. And President Bush announced that the U.S. would impose additional economic penalties on the ruling junta.

GEORGE W. BUSH, President of the United States: Burma`s rulers continue to defy the world`s just demands to stop their vicious persecution. They continue to dismiss calls to begin peaceful dialogue aimed at national reconciliation. Most of all, they continue to reject the clear will of the Burmese people to live in freedom under leaders of their own choosing.

JUDY WOODRUFF: The U.S. is encouraging its Asian allies to bolster their sanctions against Myanmar.

For more, we talk to Tin Maung Thaw, a Burmese exile and board member of the U.S. Campaign for Burma. Now a U.S. citizen, he fled Burma in 1978 to avoid political persecution.

And Tom Malinowski, Washington director of Human Rights Watch, he served in the State Department and on the National Security Council staff in the Clinton administration.

Thank you both for being here.

Mr. Thaw, I`m going to begin with you. What do you know right now about what`s going on inside your country?

TIN MAUNG THAW, U.S. Campaign for Burma: Currently inside Burma, the situation is very murky. Nobody knows exactly what is going on. But according to those people fled to Thai-Burma border, including monks and other regular people, according to the accounts, there`s a lot of crackdown is still going on.

The government shut down all those monasteries in Rangoon. And those monasteries used to have hundreds of monks, but now they have only two or three monks. Nobody knows where they`ve gone, and they disappeared. That`s my main concern.

I think they`re under arrest and sent into prison and subject to torture. And we don`t know exactly how many were arrested or how many were killed. Usually, Burmese military government never tells the truth, so we don`t know the exact number. But some people from border area estimated they arrested about 21,000 people, and about 1,900 people were killed.

JUDY WOODRUFF: Twenty one thousand arrests, and how many killed?

TIN MAUNG THAW: Nineteen hundred, 1,900, yes.

JUDY WOODRUFF: And these are estimates?

TIN MAUNG THAW: Yes, these are estimates.

JUDY WOODRUFF: Now, Tom Malinowski, you were telling us you have somewhat different numbers you`re getting. What`s the picture you`re getting?

TOM MALINOWSKI, Human Rights Watch: Well, it`s a stage of siege in Burma. There`s no question about that. We don`t know what the numbers are, because the country is closed. No one has access to the prisons. There`s no way of getting a true picture of the death toll right now.

But it is a state of siege: The monasteries are occupied by the military; the troops are in the streets; there are nighttime raids in which security forces go neighborhood by neighborhood, pull people out of their homes who they believe, based on their video footage, participated in these demonstrations. People are very, very much afraid.

But I think it`s interesting the government is also afraid and has some reason to fear what might happen next.

JUDY WOODRUFF: When you say looking at videos, you mean they`re matching the faces on videos that were shot during the protests?

TOM MALINOWSKI: Yes, that`s what they say they`re doing. They`ll go into a neighborhood and say on the loud speaker, "We have your pictures. We know who you are. You might as well turn yourselves in." So that`s used to scare people, and also I think they are doing some of that matching.

JUDY WOODRUFF: And, Mr. Thaw, you`re hearing this is going on even until right now, continuing?

TIN MAUNG THAW: Yes, even right now. After 11:00 at night -- they impose a curfew from 11:00 to 4:00 in the morning, so nobody can get out of their house, but the military can go around and pick up, as Tom said. They`re stalking at night all those dissidents or whoever participated in the demonstration in the past 30 days, and also they arrested all those monks and took away in military trucks.

So now they either have to use -- they`re going to those refugees in the Thai-Burma border area. They have to use Rangoon University old buildings as a detention center, because the Insein prison, which is notorious for this, political prisoner holding cells, they are full. So the prison, as far as we know, is large enough to hold 10,000 people. So it must be more than 10,000 people were held.

JUDY WOODRUFF: So, Tom Malinowski, when we hear today that they`ve freed 70 people, how significant is that?

TOM MALINOWSKI: I don`t think it`s very significant. There is still a political impasse inside Burma between this military government -- which is hold up in this bizarre, isolated capital in the jungle, just completely disconnected from its society -- and the vast majority of, virtually everybody else in the country who supports the opposition, Aung San Suu Kyi. There is not yet a dialogue between the two parties. There is this very, very tense standoff, and no one quite knows what`s going to happen next.

JUDY WOODRUFF: So to describe it, I mean, a pervasive atmosphere of fear throughout the country?

TOM MALINOWSKI: Yes. Yes. But I think, you know, as I mentioned, I think the government is also afraid. They`re losing control of the situation. They`re disconnected from their people.

Internally, they face this problem of, what do you do with the Buddhist monasteries? They can`t eliminate Buddhism from the country anymore than Italy could eliminate the Catholic Church. At some point, these monasteries reopen. The monks with their red robes come back, and dissent re-emerges.

Outside of the country, they`ve lost their sources of support, from their neighbors, from their former allies, and they`re now suffering these very, very targeted sanctions.

JUDY WOODRUFF: You mentioned the sanctions. Do you know what effect the sanctions are having? The Bush administration announced some sanctions last month, more sanctions in the last week.

TIN MAUNG THAW: So far, I saw one impact to the Burma airline called Air Bagan, which was owned by General Than Shwe`s wife. And...

JUDY WOODRUFF: This is the general...

TIN MAUNG THAW: General Than Shwe, the butcher of Burma, who killed those monks, number-one man of the power in Burma. And his wife owned this Air Bagan since three years ago. Now Air Bagan issued a statement yesterday. They said, because of the U.S. sanctions and other financial controls, they can no longer operate the airline, so they`re going to shut down on November 4th. And they offered who already bought ticket, they`re going to give a refund.

JUDY WOODRUFF: Is that a significant move?

TOM MALINOWSKI: It`s a small sign of something that`s going to be happening increasingly. The Burmese government, Burmese military makes money from various sources. They sell gems, rubies, hardwood, oil and gas. And it`s very hard to cut off all of those sources of income.

But however they`re making money, the money always ends up in one place: in a bank, usually in a country like Singapore, outside of Burma, where it`s vulnerable to pressure from the U.S. Treasury Department, because all of these banks depend on their access to the U.S. financial system to be able to do their own business.

JUDY WOODRUFF: And, in fact, the U.S. asked the countries in the region to put on their own pressure, as well. Is that happening?

TOM MALINOWSKI: The magical thing about these sanctions is the other countries don`t actually have to join in. The banks in Singapore apparently are already freezing accounts held by Burmese leaders, by the companies associated with those leaders, not because their own governments are telling them to, but because those banks, in places like Singapore and Hong Kong, depend on their access to the U.S. financial system.

JUDY WOODRUFF: Which is a new...

TOM MALINOWSKI: It`s a new kind of sanction.

JUDY WOODRUFF: ... kind of sanction.

TOM MALINOWSKI: It`s very targeted, very sophisticated, highly personal. It doesn`t affect the people of the country; it affects the people at the top. And it`s essentially like taking away the credit card of the generals.

JUDY WOODRUFF: Mr. Thaw, how significant a meeting between Aung San Suu Kyi and the government official in the last day?

TIN MAUNG THAW: According to past experience, most of the meeting will take place when international pressure is building up. So military uses it as a defusing method to defuse the situation and to satisfy the international community. "We are doing something."

Actually, they don`t have any sincere intention to do this. They have almost 20 years -- after 1990 election -- 20 years to have a meaningful national reconciliation process. They never did. Instead of doing that, they just tried to crack down on the opposition.

And now they tried to use that method again. They just tried to use as a deceptive method to the international community and Burmese people, and something is going to happen or something like that, false hope.

JUDY WOODRUFF: Do you agree with Mr. Malinowski`s assessment that the government is starting to feel some pressure, though?

TIN MAUNG THAW: Yes, especially because I think now China also -- China is a main backer of the Burmese regime. And China now is also concerned for the 2008 Olympics.

So China says something to Burmese regime, "Keep it in low profile. Don`t kill too many people or something like that." So because of the -- they tried to protect their image, China itself. But I think, after 2008 Olympics, China may do business as usual again.

JUDY WOODRUFF: So we`re talking about pressure from the U.S., pressure from these other economic pressure here. Tom Malinowski, what does it take for there to be a real change in the attitude of this military government towards the people?

TOM MALINOWSKI: Well, the good news is that they`re not being asked to step down. Aung San Suu Kyi, who`s the leader of the opposition, is not a revolutionary. She has said for many years that she believes that the military, despite all it`s done to her and the people of the country, should play a vital political role in the future of the country.

So what they`re being asked to do is to compromise, to share power, and gradual transition. As easy as that sounds, I don`t think they`re going to do that until the pain of not doing it exceeds the pain, in their minds, of taking that step. And that`s where the pressure from regional countries, from China, from India, from ASEAN, the regional association of countries, comes in, and particularly this pressure on the banks and on their finances.

Because, you know, when they can no longer draw money from their bank accounts, and their credit cards are canceled, and their kids come to them and say, "Dad, what have you done? We`re broke," that`s the point where I think they feel they may need a way out. And, fortunately, the way out is not that hard for them.

JUDY WOODRUFF: All right, Tom Malinowski, Human Rights Watch, we thank you very much. And, Tin Maung Thaw, we thank you. Gentlemen, we appreciate it.

TIN MAUNG THAW: Thank you for having me.

TOM MALINOWSKI: Thank you.

(BREAK)

JIM LEHRER: And to the analysis of Shields and Brooks, syndicated columnist Mark Shields, New York Times columnist David Brooks.

Mark, the California fires. People are drawing analogies between what happened at Katrina and what happened now. Is that valid?

MARK SHIELDS, Syndicated Columnist: Well, it`s certainly welcome to the administration, Jim. I mean, after the fires in Southern California, except where personal and community and public tragedy, but they were a great political gift to the administration, to show that they had learned from the disastrous experience of Katrina and the failed response of FEMA, that they could respond quickly.

The president was given a Republican governor there, whom he`d never been particularly close with, but they could be in mutual admiration. The fact that it was California guaranteed that it was going to get greater public attention than the Gulf region and greater federal response.

And they did. And, you know, I think that there was federal -- there were troops there to prevent looting. There were all of the things that were learned. There was quick settlement on insurance claims.

JIM LEHRER: What do you think about that, David? Just legitimate to make these comparisons?

DAVID BROOKS, Columnist, New York Times: I think so. I mean, it`s most important for the country. When you looked at the images we saw at the top of the show, there`s people planning. The authorities are taking control of the situation.

And if you look at public polling across the country, people are reasonably happy with their own life. If you`re asked, "Are you happy with your own life?" you get very high numbers, 80 percent, 90 percent. "Are you happy with the state of the country as a whole?" is very low numbers.

There`s incredible disjunction between private happiness and public anxiety. And that`s based on the fact that a lot of people don`t think we`re in control, that the authorities in this country are in control of situations, that there are all of these threats coming in, and we can`t do anything about them.

And the fact that we seem to have been able to respond effectively to the fires at least forestalls another period of national depression and maybe shows that some authority figures can actually work and maybe begin to restore some sense of authority. And then I think it`s partly learning from Katrina, it`s partly from pretty good local response, and it`s partly because the area it struck had much higher degrees of social capital than the area in New Orleans.

JIM LEHRER: The government action -- that`s a segue, Mark --the U.S. government issued new sanctions on Iran. Are they going to work?

MARK SHIELDS: We don`t know, Jim. And the question right now for most people here in town is whether they`re a further commitment to diplomatic efforts to resolve this or a prelude to military action.

JIM LEHRER: But how do you see it?

MARK SHIELDS: Well, given the track record of the administration, I think, right now, there`s a major cleavage within the administration. I don`t think there`s any question where the vice president is on this and whether he...

JIM LEHRER: Do you think -- he`s ready to take a military strike, if need be?

MARK SHIELDS: I think that`s certainly his inclination. And I think it`s fair to say that, based upon the experience of Iraq, where on flimsy evidence and faulty intelligence the nation was taken into war, and the mission was totally botched, there`s an apprehension...

JIM LEHRER: But it could be...

MARK SHIELDS: ... about the willingness to do it, their ability to do it, as well as there`s an apprehension about Iran and its intentions.

JIM LEHRER: Does it add up that way for you, David?

DAVID BROOKS: No. No. I am reasonably confident there`s going to be no military...

JIM LEHRER: You agree with the professor who talked a moment ago...

DAVID BROOKS: Yes, and I`ll tell you the basis for my agreement. And this is an argument that the president should give more interviews. He gives interviews to some columnists. It`s not a broad ideological stretch. I`m sort of the Fidel Castro of the group. I`m on the far left. But he does give interviews to...

JIM LEHRER: Excuse me. You`re on the far left of...

DAVID BROOKS: Of this particular group.

JIM LEHRER: Of the group of people, columnists, OK, got it.

DAVID BROOKS: Right. And we get together with the president periodically. And there are two of my colleagues who, every time they ask about Iran, and the president knows the questions are coming, it`s sort of a joke between us, and we see his body language and response to these questions. Some of it is on the record; some of it is off the record.

But if you look, read his language, if you look at his body language, you see a man that`s totally different than before Iraq. He is preparing the way for the next administration to have some means to deal with the situation. He believes in the diplomacy. But unless I totally misread him, I think he has no inclination to launch a military action.

JIM LEHRER: Then why all the anxiety?

DAVID BROOKS: Well, because the vice president has been making noise, and because the White House for totally legitimate reason has been ratcheting up the pressure on these people.

First of all, you know, we look at the faces of the dead at the end of the programs here, 70 percent of those people are killed indirectly or directly from Iranian influence. So there`s a reason to be suspicious and hostile toward this regime.

Second, they are behaving more and more militant. They now have this pact or talks with Russia. They`re more and more flagrantly in violation of the Security Council resolutions. They are behaving aggressively. And so it`s perfectly legitimate to want to do something about what is a tremendous global problem, but that doesn`t mean I think we`re about to send the planes.

MARK SHIELDS: Jim, I`d say this. When you start talking about World War III, which the president did this week, when you start tossing around the Hitler...

JIM LEHRER: He said, if Iran gets a nuclear weapon, that could be -- we`re talking about World War III.

MARK SHIELDS: World War III, right. And, quite realistically, I don`t know how the United States is going to stop Iran from getting nuclear technology. I really don`t, and I don`t think there`s any realistic way.

JIM LEHRER: You mean diplomatically.

MARK SHIELDS: Diplomatically. And I don`t think they...

JIM LEHRER: They`re not going to talk them out of it.

MARK SHIELDS: ... can do it economically. I don`t think so. I think it`s not just the crazies. I think there`s a commitment in the country itself.

But I`d point out, you know, that they`re talking about Iran the same way they talked about Nazi Germany or the Soviet empire. And David`s point about the weapons, I`m not questioning that Iran is fomenting trouble in Iraq, contributing to it, and providing arms.

We fought an entire war, the longest war in American history in Vietnam, when it was supplied, the North Vietnamese and the Viet Cong, were supplied by the Chinese and the Russians. We didn`t go to war with the Russians and the Chinese. I mean, if that were the case, Korea would have been the United States against China.

JIM LEHRER: That would have been World War III.

MARK SHIELDS: It would have been World War III. So they toss around these terms in a way, and they`ve done it in the past. I mean, they inflated the importance and the terror posed by Saddam Hussein before that war, which turned out to be a paper tiger. And now they`re talking about a country that has 1/68th the size of the United States` economy and spends 1/110th as much as we do on defense and has an economy the size of Finland.

JIM LEHRER: In Margaret`s discussion earlier, the expert on the oil markets said, well, the rhetoric is exciting people to think that there could be military action, and that`s what`s causing anxiety and all of that...

DAVID BROOKS: There has been some rhetoric that`s -- the World War III...

JIM LEHRER: What about the World War III?

DAVID BROOKS: That was probably over the top. There have been periods when the administration is trying to make clear how serious the threat is, and I think it`s a serious threat.

JIM LEHRER: Do you think it`s a World War III-type threat?

DAVID BROOKS: Well, no, I wouldn`t necessarily say that. But Ahmadinejad -- and we don`t know how much he has control or doesn`t have control, obviously. But nonetheless, a president who threatens to wipe Israel or whatever off the face of the map, you have to be worried. I don`t care if you`re a Democrat or a Republican. You have to be worried about those people having nuclear weapons.

God knows the Saudis are worried. God knows the Europeans are worried. The French are worried. There`s a legitimate reason to be worried. And there`s a legitimate reason to think it`s completely unacceptable for them to get a nuclear weapon. The Security Council agreed with that.

You look at how the administration has behaved. They haven`t rushed into anything. We`ve been talking about this forever. They`ve gone through the U.N. They`ve had endless talks with the Europeans. They`ve tried to ratchet up pressure.

And, believe me, this is no major league sanctions. They had some little economic sanctions which they believe had some effect on the Iranian regime. These are more significant sanctions.

And within the administration, one of the things they`ll tell you, and Condi Rice says this all the time, the Iranians are not like the North Koreans. They`re a cosmopolitan people who really want to have a lot of global trade. So if you make it risky to do business in Iran, if you make it harder for their banks to exchange currencies, you may have some effect. And that`s why these sanctions have been chosen.

JIM LEHRER: The politics, the presidential politics of this, Mark, every candidate, whether you`re a Republican or Democrat, everybody has got something to say about Iran. Everybody has got something tough to say about Iran, for all parties. It`s just a case of, what`s going on? Is this a legitimate political issue? And is it going to get worse before it gets better or better than for -- whatever?

MARK SHIELDS: Iran is the new Iraq. I mean, it`s a continuing debate that was begun in Iraq. And, first of all, you take the Republicans. Rudy Giuliani wins the macho, "Let`s go to the mat"...

JIM LEHRER: He`s the far...

MARK SHIELDS: Rudy was asked if he`d seek the permission or concurrence of Congress in order to attack, use military action against Iran. "No," said Rudy. Mitt Romney talks in terms of a bombardment; yet to be defined what bombardment is.

On the Democratic side, it`s a fight over where you were on Iraq and where you are in Iran. And...

JIM LEHRER: Mostly between Barack Obama and Hillary Clinton, right?

MARK SHIELDS: Well, and Senator Biden and Senator Dodd were the point men. They`re both in the Senate. This Kyl-Lieberman amendment came up, which many people who opposed it, including Jim Webb who was on this show last night, Senator Webb of Virginia, opposed it because they thought that it might be the cover of legitimacy for a military retaliation or action on the part of the administration.

JIM LEHRER: Because it designated a particular guards group a terrorist group.

MARK SHIELDS: Correct, and also had language in there about their influence and interference with the Shia in Iraq, that it could be discouraged or denied. And so Senator Clinton voted for it. Senator Dodd, Senator Biden voted against it. Senator Obama missed the vote. He was out campaigning. After Dodd and Biden criticized it, he came back and joined the chorus.

JIM LEHRER: "If I had been there, I would have voted."

MARK SHIELDS: "If I`d been there, I would have voted. In the Senate, I would have voted in 2002." But that`s where the charge has been, back and forth, on the Democratic side, that they`re giving the administration, which you have to understand -- there`s widespread skepticism and distrust, despite of what David says, about the administration, especially among Democrats in Congress.

I mean, there is beyond a "show me" attitude. It`s a "I don`t believe you until you prove it" attitude. And the idea that giving them even the remote legitimacy to do something is -- I think Democrats are, quite frankly, opposed to it.

DAVID BROOKS: I just wish they had an Iran policy and not a Bush policy. When you hear the Democrats talk about Iran, it`s always, "You`re empowering Bush. You`re not empowering Bush. I`m opposing Bush." It`s all about Bush. It`s not actually about Iran and what would happen if Iran got the nuclear weapon or the Saudis got a nuclear weapon, who else would get a nuclear weapon, what would happen to the area.

And if you talk to -- I don`t care who you`re talking to in the area, whether they`re Arab, Israeli, American experts on the Middle East, it would be a bad thing if this Iranian regime became the local hegemon in that region. And you should have a policy about that.

It shouldn`t be about whether you want to give Bush some encouragement about going to war or not give him encouragement. It should actually be a policy about that.

JIM LEHRER: But what about making a choice among candidates, "If you vote for me and I become president, I will do this about Iran." "No, no, no, I will do this." "No, no, no, I will do" -- is it possible to make these kinds of decisions?

DAVID BROOKS: Well, my view -- and whoever becomes president, with the possible exception of Mike Gravel and Ron Paul, will do exactly what we`re doing now. They will try to ratchet up the pressure on economically. They will not do a military strike, because we don`t know how that will wind up. They will do exactly what we`re doing now, and all the rest, I think, is posturing.

JIM LEHRER: Do you agree, a posture, there`s no real magic formula?

MARK SHIELDS: There is no magic formula, Jim. But overlooked in this whole thing is Iran stands alone in that entire region, with Syria and perhaps Iraq on its side. That`s it. I mean, really, they`re isolated. You know, the other -- they don`t have allies. I mean, we ought to be building on that.

JIM LEHRER: Traction as a presidential issue?

MARK SHIELDS: Traction certainly in the primaries. And I think it will be a general election issue.

JIM LEHRER: And who knows after that, yes. Well, you two know, because you -- both of you know everything. Thank you very much.

MARK SHIELDS: Thank you.

(BREAK)

JIM LEHRER: And, again, the major developments of this day.

Fire crews in Southern California made steady progress with the aid of better weather.

Crude oil prices surged again to a new record high, near $92 a barrel. They were driven by falling U.S. inventories and rising tensions with Turkey and Iran.

And Turkey promised to hold off launching a ground offensive into northern Iraq, at least until early November.

(BREAK)

JIM LEHRER: And, again, to our honor roll of American service personnel killed in Iraq and Afghanistan. We add them as their deaths are made official and photographs become available. Here, in silence, are nine more.

"Washington Week" can be seen later this evening on most PBS stations. We`ll see you online and again here Monday evening. Have a nice weekend. I`m Jim Lehrer. Thank you, and good night.