The NewsHour With Jim Lehrer : WETA : August 21, 2009 7:00pm-8:00pm EDT; The NewsHour With Jim Lehrer

Captioning onsored by MacNE/LEHRER PRODUCTIONS

>> Lehrer: GOOD EVENING, I JIM LEHRER. ON THE NEWSHOURHIS FRIDAY, THE AD STORY IS SIGNS OF AN ECONOMIC COMEBACK AS FERAL RESERVE CHAIAN BERNANKE SAYS E RECESSION IS LEVELING OFF. THEN, COME THETHER NEWS OF THE Y: A PAUL SOLMAN REPORT ABOU INFLATION FEAR THE STORY OF A HOSPITAL INOUTHERN AFGHANISTAN COPINWITH CIVILIAN CASUALTIES FROM THE R; AND MARCUS AND THE ANALYSIS OF DAVID BRKS AND RUTH MARCUSFILLING IN FOR MARK SHIELDS. MAJOR FUNDINGOR THE NEWSHOUR TH JIM LEHR IS PROVIDED BY: ♪ ( HARD ROCKUITAR RIFF PLAYING )

>> WE ARE INTEL, SPONSORS OF TORROW.

>> WHAT THEORLD NEEDS NOW IS ENERGY. THE ENER TO GET E ECONOMY HUMMING AGAIN. THE ENGY TO TACKLE CHALLENGES LIKE CLIMATE CHANGE. WHATS THAT ENERGY CAME FROM AN ENERGY CPANY? EVYDAY, CHEVRON INVESTS $62 MILLION IN PEOPLE, IIDEAS-- SEEKINGTEACHING, BUILDING. FUELI GROWTH AROUND THE WORLD TO MOVE US ALL AHEAD. THISS THE POWER OF HUMAN ENERGY. CHEVRO AND THE WILLM AND FLORA HEWLT FOUNDATION, WORKING TO SOLVE SOCIAL AND ENVIRMENTAL PROBLEMS AHOME AND AROUND THE WORLD. AND WITHHE ONGOING SUPPORT OF THESE INSTITUTIONS AND FOUNDATIONS. AN... THIS OGRAM WAS MADE POSSIBLE BY THE CORPORATION FOR PUBLIC BROADCASTIN AND BY CONIBUTIONS TO YOUR PBS STATION FROM VIEWERS LIKEOU. THANK YOU. >>Lehrer: THE CHAIRMAN OF THE FEDERAL RESERVE HAHOPEFUL WORDS ONHE U.S. ECONOMY TODAY. BEN BERNANKE SA THE COUNTRY WA STARTING TO EMERGE FROM RECESSION, AND AT AGGRESSIVE INTERVENTION BY THE GOVERNNT WAS WORKING. JEFFREY BROWN HAS OUR LD STORY REPORT.

>> Reporter: THE FED CHAIRM GAVE HIS OPTIMISC ASSESSMENT AAN ANNUAL FEDERAL RESERVE SYMPIUM HELD IN THE HIGH MOUNTAIN COUNTRY OF JASON HOLE, WYOMIN

>> Reporter: MR. BERNANKE SD, IN PART: HE DID TEMPER THAT ENTHUSSM WITH A NOTE OFAUTION, SAYING PRLEMS PERSIST IN BOTH THE CREDIT AND JOB MARKETS BUT STOCK MARKETS JUMPEON BERNANKE'S MARKS, THE DOW GAED NEARLY 156 POINTS, TO 9506. THE NASD WAS UP 31, ENDING THE DAY JUST UNDER 2021. FOR THE WEEK THE DOW W UP 2%; THE NASDAQ, 1%. DA FROM THE HOUSING MARKET PROVIDED AN ADDED BOOS THE NATIONAL ASSOCIATI OF REALTORS SAISALES OF EXISTING HOMES WERE UP FORHE FOURTH CONSECIVE MONTH. JULYALES WERE UP 7.2 % FROM JUNE, THE LARGEST MONTY GAIN IN A DECAD LOWRICES AND INTEREST RATES, AND GEROUS FEDERAL TAX CREDITS CONTRIBUTED TO THE GNS. MEDIAN HOME PRICES CONTINUETO DROP, ASELLERS FLOODED MARKETS GLUTTED PART WITH FORECLOSED HOMES. ATHE WHITE HOUSE, SPOKESMAN ROBERT GIBBS NOTED T POSITIVE HOUSING NEWS, BUT HE SAITHERE IS STILL MH WORK TO DO.

>> IT DOESPPEAR THAT THE HOUNG MARKET IS BOTTOMING OUT A BIT, WHH OBVIOUSLY WAS ONE OF THE REASONS WE G INTO THE SEVERI OF THE ECONOMIC WNTURN THAT WE'RE IN NOW. THE PRESIDENT IS PLEED WITH THE FA THAT IT APPEARS WE'RE MAKING SOME PROGRS IN ABILIZING THAT ECONOMY, AS I'VE TKED ABOUT, BUT WON'T BE SATISFIED UNTIL WE GETHE ECOMY FULLY BACK ON TRACK AND THAT WE'RE GROWING THE ECOMY IN A WAY THACREATES JOBS FOR E MILLIONS OF AMERICANS WHO CONTINUE TO LOOK F WORK AND THUS F CAN'T FIND IT.

>> Reporter: INDEED, THWEEKLY JOBLESS NUMBERS LEASED YESTERDAY OWED AN UNEXPECTED RISIN NEW CLAIMS FOR UNEMPLOYMENT ASSISTANCE. FIGURES OUT TODAY SHOW THAT6 STATES SAW THEIR JOBSS RATES CLIMB LA MONTH. BUT 17 STAT AND THE DISTRICT OF COLUMBIA REPORD BETTER- THAN-EXPECTED UNEMPLOYNT FIGURES FOR JULY, DUE IN PARTO SEASONAL HIRINAND THE EFFECTS THE FEDERAL STIMULUS. THERE S ANOTHER MAJOR PIECE OF ECONOMIC NEWS THAT WASELEASED A SHORT TIME AGO AFCTING THE LONG TM PICTURE. >>HE WHITE HOUSE IS NOW ESTIMATING THEFEDERAL BUDGET DEFICITWILL BE $2 TRILLION HIER THAN PREVIOLY ANTICIPATED OVER THE COMING DECADE. TAKE A LOOK AT ALL THIS NOW WITHWO ECONOMISTS, DEAN BAR, DIRECTOR OF THE TER FOR EONOMICS AND POLICY RESEARCH IN WASHINGTON D.C. AND PHILIP JEFFERSON OF SWARTHMORE COLLEGE. HE SERVED AS AN ECONOMIST THE FED'S BOARD OF GOVERNORS. PHILIP JEFFERSON, START WITH BEN BEANKE HE ASSESSMENT OF THE ECOMY. IS THERE A GOOD CASE FOR TIMISM.

>> I THI THERE A GOOD CASE FOR OPTISM. IN ADDITION THE HOUSING DATA THATOUMENTIONED IN THE LEAD IN, WE

>> OVR THE BANKS, RNANKE, BEN BERNANK S THEY STILL FACE ADDITIONAL LOSSES.

>> WELL IT CONTINUES TOBE LARGE LOSS. WEKNOW FORECLOSURESRE STILL RUNNING AT NEARECORD LEVELS. THAT IS TO THE GOI CHANGE SOON. ALSO THEY WILL TAKE BIG HITS FROM COMMEIAL REAL ESTATE BECAUSE THERE IS A HUGE AMOUNT OF DEBT IN COMMERCIAL REAL ESTATEHAT GOING TO BE COMING DUE OVE THE REST OF THIS YEAR, INCES YEAR, 2011. MUCH WILL BE VERDIFFICULT TO REFINANCE BECAUSE THERE IS A HUGE OVERCAPACITY IN COMMERCIAL REAESTATE SO TT IS GOING TO BE A BIG HIT. T ALSO WE HAVE TO KEEP IN MIND WHAT WE'RE TALKG ABOUT WH WE SAY OPTIMIS BECAUSE IT'S TR, THE ECONOMY WAS FALLING VE PIDLY IN THE FOURTH QUARTER. THE FIRST QUARTER OF THIS YEAR. NOW IT'S PROBABLY EVEN GROWING MEWHAT. BUT THERE IS REALLY NOT MU DISPUTE. WE'RE GOING TO CONTUE TO LOSE JOBS. WE'RE LIKELY TO LOSE ANOTHER 3 OR 400,000 JOBS IN THE MONTH OF AUGUST. THE UNEMPLOYMEN RATE IS GOING TO CONTIN TO RISEME IF YOU LOOK AT THE PJECTIONS, EVEN THE FED'S N PROJECTIONS, LOOKING AT ANNEMPLOYMENT RATE OF AROUND 10 FOR 210. I WOULD BE MOREPESSIMISTIC BUT THAT NUMBER IS NOT VERY GOOD AND THEYRE NO PROJECTING A MORE NORMAL UNEMPLOYMENT RATE UIL 2013 OR 201 SO THAT IS- IS A GD REMINDER T ALWAYS COMPARED TO WHAT?

>> YEAH, I MEAN IS CERTAINLY, I MEAN AGAIN I THINK PRESIDENT OBAMA HAS NOT GOTTEN T CREDIT HE DESERVES FOR THE STIMULUS PACKAGE. ONE OF THE IN REASONS TH ECONOMY HAS TURN AROUND THE STIMUS PACKAGE HAS WORKED. WE OPPED 9 FREEFALL. WE SEE SOME SIGNS OF GROWTH. WETILL HAVEOTS OF BIG PROBLEMS BUT I GIVE PRESIDENT AMA CREDIT. WE WERE TALKING ABOUTHE CASFOR CLUNKER PRRAM, THAT WAS A BOOST TOHE ECONOY. THE HOME BUYERS TAX CREDIT. THAT WAA BOOST TO THE ONOMY. IMPORTT TO KEEP IN MIND, THOSARE TEMPORARY. SO WE ARE IN EFFECT BOOWING GROWTH FROM THE FUTURE WITH THOSE.

>> PHILIP JEFFERSON HAT ABOUT THIS NEWS WE JUST MENTIONED ABOUT THE BUDGET DEFICIT BEING HIGR THAN ANTICIPATED. THAT WOULD, D WE'RE STILL WAIT ON DETAILS ON THAT SHOULD SAY. BUTF THAT IS THE CASE, THAT WOULD CLEARLY POTENTIALLY CRIMP ECONOMIC ACTIVITY GOING FORWD, WOULDN'T IT? WE THAT SUGGESTS TO ME HAT THERE WILL BE NEEDOR FISCAL STRAINT IN THE FUTURE. HOWEVE NOW IS NOT THE TIME FOR FISCAL RESTRAINT ONHE PART OF THE GOVERNMENT MYCOLLEAGUE ALSO MENTIONED THAT THE STIMULUS PACKAGE. WE'RE GOG TO EXPECT SOME MORE GRTH AS A RESU OF MOE THE STIMULUSFROM THAT PACKAGE COMI ON-LINE OVER THE NEXTIX MONT. AND TH'S GOING TO BE A VERY POSITIVE DELOPMENT FOR THE ECONO. IN TERMSOF THE NG-TERM FISCAL PICTURE, THE NEWS THAT JU CAME OU DOES ARGUE R MORE RESTRAINT IN THEFUTURE. T GOVERNMENT IS GOING TO HAVE TO CURTAIL SPENDNG BUT NOW I DON'T THK IS THE TI TO BEGIN TO IMPLEMENT THAT FISCAL RESTRAINT BECAUSE THERE IS STILL MUCH MORE RECOVERY THAT NEEDS TO TA PLACE. ANDWE NEED THE JOBS. WE NEED TH DEMAND BECAUSE THE CSUMER IS NOT PLAYING HIS OR HERRADITIONAL ROLE. BUSINESSEARE STILL NO COMING ON-LINE IN THE STRONG WAY WITH RESPECT TO INVESTMENTS. WE'RE GOING TO T SOME HELP ROM THE INTERNATIAL ECONOMY AS TDINGARTNERS START TO RECOVER. SO WEREALLY ND THE GOVERNMENT TO CONTIE PROVIDE DEMAND WHICH IS A FUNDAMENTAL DRIVER F THE ECONOMY. DEAN BAKER, WHAT ISTHIS NEWS ABOUT THE DFICIT TELL NEW.

>> WELL, I WISHWE HAD MORE DETAILS ON IT. BUT WHAT I WORRYS THE MAIN REASON FOR THIS INCREE IN THE DEFIIT PROJECTIO IS THEY ARE PROJTING WORSE ECONOMIC GROWTH. BECAUSE THE LASTSET OF PROJECTIONS, THOSE LOOK RELAVELY OPTIMISTIC COMPARED TO T PICTU WE'RE LOOKING AT TODAY. AND IN THAT CASE WE CERTALY WON'T WANT TO BE CUTTING BAC SPENDING, RAISING TAXES BECAE THE POINT WOULD BE THECONOMY IS EVEN WEAKERHAN WHAT WE HAD PREVIOUSLY ANTICIPATED.

>> IT DOES P U A LOOK AT A CRYAL BALL THAT LOOKS WORSE THAN WE THOUGHT

>> THAT'S RIGHT. AND AGAIN TO MY MINDE TEND TO FOCUS THE DEFIT VERY OFTEN WHICH WE CE ABOUT BUT FIRST AND FOREMOST, IS THE ECOMY ITSELF. AND THE DEFICIT IS GETTING BIGGER BECAUSTHE ECONO IS WEAKER, WELL THE ANSWER WE HAVE TO TRY TO BOOST THE ECONO FIRST AND FOREMOST. >I WANT TO ASK YOU BOTH ABOUT E QUESTION OF PSYCHOLOGY. BECAUSE BACK IN LAST YR WE TALKED ABOUT THIS SO MUCH, FOR MANY MONTHS. AND I NOTICED BEN BENANKE SAID TODAY, TS IS A QUOTE, THEVENTS OF LT SEPTEMBER AND OCTOBE EXHIBITED SOME FEATUREOF A CLASSIC PANIC. KINOF THING WE TAED A LOT ABOUT BK THEN. DOES IT MAKE MORE SENSE N OR IS ERE AN IMPACT IN SORT OF TALKING UP THE ECONOMY WHICH SEEMS BE HAPNING NOW OR IS IT WISER FOR Mr. BERNANKE AND THE ADMINISTRATION TO CONTINU WITHHE CAUTION. DEAN BAKER, YOU FIRST. > I THINK THERE AREWO DIFFENT ISSUES. ONE THERE IS THIS PANIC GOING BACK TO LAST FALL WH FINANCIAL MARKETS AND FINANCIAL INSTITUTIONS,HAT PEOPLE WERELMOST THROWING -- LIKE THE DEPRESSIONME PEOPLE WANTED O CASH INNDER THEIR MATTRESS. NO ONE TRUSTED ANYONE. THAT THANKFULLYAS SETTLED DOWN, THAT WE WAN TOSTAY SETTLED DOWN THE OTHER PART OTHE STORY, OPLE KEEP TALKING ABOUT THIS WITH CONSUMERS, THE PROBLEM IS THEY ARE NOT OPTIMISM OPTIMISTIC ENOU. COSUMERS AREN'T SPENDING FOR THE SAMEEASON HOMELESS PELE DON'T SPEND. THEY DON'T HAVE THE MEY. EOPLE HAVE LOST AUGE AMOUNT OF WEALTH WITH TH COLLAPSE OF THE HOUSING BUBBLE. SO T IDEA THAT SOMEHOW IF WE COULD JUST GETONSUMERS TO BE HAPPY THEY WOULD GO OUT AND SPEND. TT'S NOT TRUE. THEY ARE RECOGNIZING TH DON'T HAVTHE WEALTH IN THR HOME THAT THEYHOUGHT THEY HA ANDHEY ARE ADJUSTING ACCORDINGLY. AND THAT'S PROBABLTHE RIGHT THING FOR THEMO DO. WE CAN'T TELL TM HERWISE.

>> WHAT DO U MAKE OF THE PSHOLOGY QUESTION, PROFESSOR JEFFERSON.

>> WELL, I DON'T DISAGREE WITHHAT YOUR GUE SAID JUST NOW IN THAT TH HOUSING SECTOR IS VERY IMPORTANT TERMS OF PSYCHOLOGY. THERE HAS BEEN A LOTOF DAMAGE DE TO HOUSEHOLDS' BALANCE SHEETS BUT I THINK AS WE E THE HOUSING MARKET STABILIZE, THE AMERICAN HOUHOLDS REALIZE THAT THEIR HOMES ARE NOT LOSING AS MH VALUE. I THNK THEY WILLSTARTTO EL A LEVEL OFOMFORT THAT LL MAKE THEM MORE ABLE AND MORE WILLING TO ENDGOING FORWARD. SO IO THINK WE'RE DEALING WITH PSYCHOLOGYERE. AND I THINK IT' VERY IMPORTANT FOR THE SPENDING DESIONS, PARTICULARLY O BIG TICKE ITEMS. B I THINK THATAS PEOPLE, HOUSOLDS SEE THE ENVIRONMT AROUND THEM STABILIZE, THE UNEMPLOYMENT TES STOP RISING AS SERELY. AND THEY BECOME MO OPTIMISTIC ABOUTHE VALUE OF THIR HOMES, TH THEY WILL BE WILLING TO BY.

>> AND JUST IN OUR LAST MINUTE, DEAN BKER, WE BOTH TALKED ABOUTHE STIMULUS PACKAGE. THONE THAT WE ALREADY HAVE, AS YOU KNOW THERE IS MORE TALK AUT WHETHER THERE SHOULD BE OTHER ONE. THERE IS ALSO TALK ABOUT WHETHER THE FED MHT START UNWANDING ME OF THOSE PROGRAMS. WHAT DO YOU LOO FOR IN THE COMING MONTHS TO TELL YOU WHETHER THOSE THINGS SHOULD HAEN?

>> WELL, I INK THE BIGGEST THINGS WHAT GOES ON IN THE ABOR MARKET. IF WE CTINUE TO LOSE JOBS AT A RELATIVELY RAP RATE F THE UNEMPLOENT HITS 10% AND GOES SOMEWHAT HIGHER AS I THINK IS LIKELY, I THINK THRE WILL BE A REALIG CRY FOR ANOTHER SMULUS. PEOPLE ARE NOTOING PUT UP WITH THAT.

>> PROFESSOJEFFERSON, WHAT YOU THINK?

>> I THINK THE FED WILL CONTINUE TO SUPPORT THE FINANCIAL SECR. I THINK THAT UNWINDG THAT WE'RE TALKI ABOUT WILL BE VERY DEBERATE. AND I THINK AS LONG AS THE LABOR MARKET IS NOT BACK TO FU STEAM, I WOULD EXPECT TO SEE SOME PUSH FOR FURTHER STIMULUS.

>> ALL RIGHT, PHIP JEFFERSON AND DEAN BAKER, THANK YOU BOTH VERY MH.

>> Lehrer: WE'LL HAVE MORE O THE ECONOMY LATEON IN THE PROGRA

>> Lehrer:N OTHER NEWS TODAY, ESIDENT KARZAI AND HIS MAIN CHALLENGER ABDUAH ABDULLAH BOTHLAIMED VICTORY IN AFGHANISTAN'S PRESIDENTL ELECTION. BUT THE OFFICIAL VE COUNT IS ONGOG, WITH ONLY PARTIAL RESULTS EXPECTED NEXT TUESY. WE HAVE A RORT FROM NICK PAON WALSH OF INDEPENDENT TELEVISION NEWS.

>> Reporter: THE COUNTING CONTINUES, THE QUESTIONARE MORE ABOUT HOW MANY VOTED, THAN WHO FOR. BRITI SOLDIERS HERE UNLOAD VOTES FROM THE DTRICT OF NADEI, FOR SECURE STORAGE AND COUNTING. THEND OF THEIR PUSH TO MAKE YESTERDAY'S VOTE HAPPEN. DAY THAT WAS MARKED BY VIOLENCE, POLLING STATNS HIT. 7B8TION THE FIRST INCATIONS OF VOTING IN HELMAND, ONE SENI ELECTION OFFICIAL TELLING US TURNOUT WAS JUST 8%. THIS M.P. FOR HELMAND WANT BRITISH AND AMERAN TROOPS THERE,UT TOLD US TOO MANY LIVES HAD BEEN SACRIFICED PEOPLE HAD THE CNCE TO VOTE.

>> ( transled ): MY HEART GOES TO OUT THE FAMILIES OF SDIERS KILLED THE. NO, EY ARE WORTH MORE THAN THAT. WHAT'S 10% TURNOUT? FOREIGNERS LOST LOTSF LIVES, MORE PEOE SHOULD HAVE VOTED. Reporter: IN KABUL, OFFICIA TODAY OFFERED VE FEW NUMBERS, HINTI THERE WAS PERHAPS A 40% TURNOUT NATIONWIDE. ALL THE SAME, BOTH E PRESIDENT AND HIS MAIN CHALLENG CLAIMED OUTRIGHTICTORY IN THIS FIRST ROUND.

>> OUOWN ASSUMPTION BASED ON ALL WE HAVE HEARD IS A RECVED AND WHAT WE HAVE SEEN, SO FAR WE ARE WELL AAD IN THE ELECTIS. SO FAR AS FAR AS MY CAMPAIG IS CONCERNED, I IN THE LEAD AND WILL SEE.

>> Reporter: HERE ITHE CAPITAL'S CEER, THE COUNTS WE SAW TOLD A DIFFERENT STORY. THIS MAIN POING STATION WAS UNDER TIGHT CURITY YESTERDAY, BUT HAD A TURNOUT OF JUST A THIRD. AND HERE, AT ANOER SCHOOL IN THE NTER OF THE CAPITAL, THE CALM PROCESS OF PACKINUP CONTINUED. BUT RESULTS SHOWED AT VERY FEW VOTE HAD TURNED UP. THE COUNTING AND TRANSPORTING THETO THE CENTR ELECTION COMMISSION, BUT E CONTINUEOUT HERE IN WHASHOULD BE ONE OF THE SAST, MOST PITICALLY ACTIVE RTS OF THE CAPITAL, INDEED AFGHANISTAN WAS ONLY A FIH. SO IT GIVES YOU AN IDEA AS TO HOW VOTERS M HAVE FELT AND WHAT THE TURNOUT MAY HAVE BE IN SOME OF THE MORE DANGEROUS PARTS O THE OUNTRY LIKEELMAND WHERE TROOPS ARE ACTIV THE LEADING CANDIDATES SUREF VICTORY. BUT OFFICIALS NOW SAY FIT RESULTS WON'T ME TOMORROW, BUT ESDAY.

>> Lehrer: THE FINAL OFFICIA RESULTS ARE DUE EARLY SEPTEMBER. PRESIDT OBAMA CALLED THE SCENE HAT GREETED THE LOCKERBIE BOMBER ILIBYA "HIGHLY OBCTIONABLE". LAST NIGHT, E ONLY MAN CONVICTEIN THE BOMBING OF PAN AM FLIGHT 103 OVEROCKERBIE, SCOTLAND RERNED HOME LAST NIGHT TO HERO'S WELCOME. T SCOTTISH GOVERNMENT RELEASED ABDEL BAHSET AMEGRAHE ON COMPAIONATE GROUNDS. HE ISYING OF PROSTATE CANCER AND HAS LESS THATHREE MONTHS TO LE. TOAY, THE HEAD OF THE SCOTTISH GOVERNMENT WEIGHEDN.

>> I DON'T AGREE THAT Mr. GRAHI WAS -- IHINK IT WASINCENSED, CERTAINLY POORLY ADVISED BUT CAN'T CONTROLHAT THE LIBYAN GOVERNMENT, THE LIBYAN PEOPLE DO. LL WE ARE IN CONTROL OF IS WHAT THE SCOTTISH GOVNMENT AND THE SCOTTISH JUSTICE SYSTEM CAN DO. >>Lehrer: BRITISH PRIME MINISTER GORDON BROWN HAASKED LIBYA TO HDLE THE HOMECOMING WITH SENSITIVITY. TODAY, MEGRAHE WAS KEPT OUOF THE SPOTLIGHT TH NO OFFICIAL COENT ON HIS WHEREABOUTS, OR COVERAGE ON STATE TEVISION. NORTH KOREAN OFFICIALS SENT KIM JONG-IL ARRID IN SOUTH KOREA DAY. THEY WERE THERE TMOURN THE FORMEROUTH KOREAN PRESIDENT KIM DAY JHUNG. THE GRP OF HIGH-LEVEL OFFICIALS LAID A WREATH AT MEMORIAL FOR THE FORME PRESIDENT, WHO DIEDN TUESDAY. KIM BROKERED THE FIRST MMIT BETWEEN THE O KOREAS IN 2000. THE NORTH KOREAN DELATION WILL NOT STAY FOKIM'S FUNERAL ON NDAY. BUT THEY LL MEET WITH THE UTH'S UNIFICATION MINISTER. THSEASON'S FIRST ATLANTIC HURRICANE LOST STEAM AIT MOVED CLOSER TBERMUDA. HURRICE BILL WITH WINDS OF 110 MILES R HOUR WAS ON TRACK TO MOVBETWEEN THE ATLANTIC ISLAND AND E EAST COAST OF THE U.S. TOMORROW. HIGH WAVES BATRED BERMUDA'S COASTLINE AND ISLANDERSTOCKED UP ON SULIES. THE STORM IS NOT EXPTED TO HIT THU.S. BUT FORECASTERS WARNED OF DANGEROUS RIPTIDES AND WAS ALONG THE EASTN SEABOARD.

>> Lehrer: AND STILL TO ME ON THE WSHOUR TONIGHT: CIVILIAN CASUALTIES IN AFGHANISTAN; A BROOKS AND MARCU TT FOLLOWS OUR SECOND ECONOMY STORY. WE HEARD, FEDERAL RESERVE CHAIRMAN BEN BERNANKDEFENDED SOME MAJ GOVERNMENT INTEENTIONS OF THE PAST YEAR. BUT THOSE ACONS HAVE STOKED ARS OF INFLATION. THAT'S E SUBJECT OF A REPORT BY NEWSHOUR ECONOMICS CORRESPONDENT PAUL SMAN. IT'S PART OF HIS ONGOI SERIES ON MAKINSENSE OF FINANCIAL NEWS.

>> Reporter:N ITALIAN AMERICAN SENIOR CENTER IN NEW HAVEN, CONNECTICUT, JUST YEAR AGO. E DAY AFTER LEHMAN BROTHERS WENT UP IN SMOKE. BUT WHAT HAD FOLKS COME HEREO TALK TO US ABO? INFLATION!

>> THE COST OF LIVI IS SO HIGH. I EEDED TO GO BACK TO WORK TO SURVIVE.

>> FOOD GOES UP, GAS GOING UP.

>> IT'S HDER THAN IT WAS LAST YEAR. I USED TO GET A POUND, O DIDDELINI MACARI. IT WAS 50 CEN. IT'S A DOLLA ONE DOLLAR NOW.

>> THAT DIDDINI SHE'S TAKING OUT, I'VE SEEN IT $1.39.

>> WHOA! >>ES.

>> Reporter: $1.?

>> I WOULDN'T Y THAT.

>> Reporr: THAT VERY SAME NIGHT, ON BOTH THE NEW YORK TIMES WEB PAGE ANDURS, POSTS ENTITL "IS IT THE END OF THE WORLD AS WE KNOW IT?" ♪ IT'S THE END OF THE WORLD WE KNOW IT.

>> Reporter: WERE TUMBLING INTO AINANCIAL CRISIS OF GREAT DEPSSION-LIKE PROPORTIONS WITH PLUNGING PRICES IN STOC AND HOUSING ALREADY HING FORCED GOVERNMT BAILOUTS OF BEAR STEARNS, FANNIE MAE AND FREDE MAC? YET DESPITE ALLHIS, RISING PRICES WERE STILL PARAMOUNT THE MINDS OF MOSFOLKS HERE.

>> WE WERE PLANNING TRIP TO ITY WITH MY WIFE SO WE DECIDED WE HAD TO CUT WN A BIT SO I LE HER HOME. ( LAUGHTER )

>> Reporter: THE MOR HERE, FROM MARONI TO MATRIMONY, SUGGEST THAT OIL & FOOD PRICE HIKES AND A RISING BUDG DEFICIT HAD FOLKS MORE OOKED ABOUT A DECLING DOLLAR THAN ALST ANYTHING ELSE. IN OLAND, CALIFORNIA, GLOOM AND DOOM ECONOMIST JOHN WILLMS WAS SO AFID OF THE BUCKLING BUCK.

>> I BUGOLD COINS AS A HEDGE AGAINST INFLATION.

>> THESARE CALLED GOLD EAGLES.

>> Reporter: WILLIAMS HADAKEN US TO HIS LOCAL GOLDEALER, CHARLIE MMOSER. A LOT OFEOPLE LIKE HIM, LIE?

>> YEAH, THERE'S - QUITE LOT OF THEM ACTUALLY, EECIALLY THE WAY, YOU KNOWTHE ECONOMY'S BE GOING, AND THE DOLLARS BEEN DOW AND OILS BEEN UP, AND GOLD'S BEEN RUNNING CRAZ

>> Reporter: WHAT WAS GOLD A THE TIME, PER OUE?

>> RIGHT NOW GOLD IS VEN-FIFTY D TEN CENTS.

>> Reporter: THE PRE HAD ACTUALLY BN HIGHER, BUT WIIAMS WAS UNFAZED.

>> WHETHER YOU BUYT AT $750, $700, $1000, IT'S GOING TO BA BUY OVERHE LONG-TERM, BECAUSE LONG-TERM, WE HAVE A TERRIB INFLATION PROBLEAHEAD OF US.

>> Repter: MIND YOU AT THAT VERMOMENT, THE FEAR GRIPPING GOVNMENT WAS OF JUST THE OPPOSITE: DE-FLATION. IN FAC WITHIN A WEEK, WE LLED THE INFLATION REPORT WHICH TOOK US TO NEWAVEN AND OAKLAND,ECAUSE INFLATION JUST WASN'T A STORY ANYMORE. CONMERS HAD SUDDENLFROZEN THEIR SPENNG. O HAD BUSINESSES. PRCES WERE PLUMMETING; BANKS, FAILING. THECONOMIC STORY IN THE INTERIM HAS BEEN GOVERNME AVING THE SYSTEM FROM DEFLATION, ESPECIALLY FED RESERVE CHAIRMANEN BERNANKE, OUR NDER OF LAST RESORT.

>> OVER THE PAST YEAR, E FEDERAL RESERVHAS ACTIVELY USED ALL ITS PERS AND AUTHORITIES TO TRYO HELP THIS ECONOMTHROUGH THIS DIFFICULT TIME.

>> porter: BERNANKE EVEN VOWED TO FIGHT DEFTION BY THREATENG TO DROP NEY FROM A HELICOER IF NEED BE. TO HISTORIAN HAROLD JAM, IT WAS BERNANKE WAY OF SAYING: WE KNOW WHAT WE CAN DO TO STOP DEFLATION, THERIS SOMETHING THATAN BE DONE. WE DON'T NEED TO SETHOSE MONETARY CTRACTIONS. IF THE WORSCOMES TO THE WORST YOU CAN GET INTO THE HELICOPR AND SPREAD THEONEY.

>> Repoer: JUST DROP IT ON PEOPLE? RIGHT. THAT'S RIGHT.

>> Repter: THE FED NEV WENT THAT FAR. BUT IT SURE BEGAN REEVING ICKLY BANKS OF THEIR TOXIC DEBTS FAST, ICKLY TRANFUSING VAST AMOUNTS OF MON IT CREATED - ELECTRONIC FEDERAL RESERVE- TREFLATE THE FINANCIAL SYSTEM EVENT BANK RUNS AND BANKRUPTCIES. FORR FED VICE-CHAIR ALAN BLINDER.

>> THE FED HASAD TO PUT HUNDRE OF BILLIONS OF DOLLARS OF EXCESS RESERVES IN THE SYSTEM WHICH IN NORL TIMES IT WOULD T HAVE TO DO.

>> Reporter: MOST ABNORL OF AL THOSE HUNDREDS OF BILLIONS, WHILE PLAUSIBLY SHORINGP THE BANKS AND THUS SAVING THEM FM COLAPSE, DIDN'T ACTUALLY MAKE IT BACK OUTNTO THE ECONOMY. >>WHAT NORMALLY HAPPENS, BANKS GET MONEY, BUT THEDON'T WANT TO SITN THE MONEY. THEY USE THAT AS THE BAS FOR LOANS AND AT'S WHAT MAKES THE ECONOMY GROW, BUT YOU CAN OP THAT PROCESS AT STAGE O IF YOU HAVE PAC STRICKEN BANKS WHICH WE DID HAVE FOR WHILE AND TO SOMEXTENT STILL HAVE. NOW THEY GET THE MONEY A THEY JUST SIT ON IT, TY DON'T LEND IT TANYBODY.

>> Reporter: WHY?

>> WHY? BECSE THEY'RE AFRAID THEY WONT GET PAID BACK.

>> Reporter: SO WHAT'S HAPPED TO THE NELY ONE TRILLION NEW DOLLARS THE FEDEL RESERVE HAS CREATED OUT OTHIN AIR, MORE THAN DOUBLING ITS BANCE SHEET AND CEAINLY SUGGESTING GOOD OLD INFLATION.

>> IF YOU ASK WHE IN THE WORLD ARTHESE RESERVES? THEY'REITTING IN THE BANK ACCOUNTS OF CMERCIAL BANKS THAT HAVE BANK ACCOUNTS AT E FED JUST AS IF YOU AND I WE JUST HOLDING MONEY IN OUR CHECKING ACCOUNTS. >>Reporter: AND JUST LIKE OUR CHECKING ACCNTS, THE FED PAYS A BIT OF INTEREST, A QUARTERF A PER CENT F RE-DEPOSITS AT E FED. BUT, WE ASKED BRIAN SAC WHO RUNS THE FED TRADINGESK IN NEW YORK, N'T THE POINT OF PUMPING RESERVESNTO THE BANKS TO GET THMONEY LOANED OUT AND MOVING THROUGH THE ECONOMY?

>> WE'RE TRYING TONCOURAGE THAT PROSS OF BOOSTING THE FLOW OF CDIT AND MAKING CREDIT AVAILABLE ON MORE ACCOMMATIVE TERMS.

>> Reporte AND THAT HASN'T YET HAPPENED TO THE EXTENT THAYOU HOPE IT WILL WELL IT HAS HAPPENED TO SOM EXTENT. I THINK WERE SEEING PROVEMENTS IN A L OF PRIVATE ASSET MARKETS. MORTGAGE RATES AREELATIVELY LOW. CERTAIN TYPES OF NSUMER CREDIT MAETS SEEM TO BE COMING BACK. SO I THINK WERE EING SOME EFFECTBUT OVERALL CREDIT CONDIONS ARE STILL QUITE TIGHT ANWED LIKE TO SEE FURTHER IMPROVEMENTSN ORDER TO ENCOURE ECONOMIC GROWTH.

>> Report: SO THE FED HAS ANNOUED ANOTHER $1.75 TRILLION OF NEPURCHASES OF ASSETS FROM THE BANKING SYSTEM, TRSURIES, MORTGAGE-BACKED SECURITIES FANNIE MAE ANDREDDIE MAC LOANS REPLACING THEM WITH FEDAL RESERVES, ELECONIC MONEY. IT'S AT THEY WERE DOING THE DAY OUR CAMERAS WERE THE.

>> THEDEA IS OVER TIME THOSE RESERVES WILL BE T TO WORK IN TERMS BUYING SECURITIES OR MAKING LOANS. BUT CURRENT A LOT OF THEM ARE RESTING AT THE BANKS.

>> Reporter: NOT CIRCULATI, THAT IS. T CAUSING INFLATION. BUTO MUCH MONEY CREATION ALSO RAISES THE SPECTER OINFLATION IN THE FUTUR FORR FED ECONOMIST NICK PERNA.

>> BETWEEN MYOU AND THE LAMPST, IT SHIFTS THE FOCUS AWAY FROM WORRNG ABOUT DEFTION TO WORRYING ABOUT INFLATION WHICH I THINK IS A GREAT THING TO WORRIED ABOUT RAER THAN DEFLATION.

>> Repter: A "GREAT THING" IN A TIME OF DANGEROUSLY VING PRICES. BUT NOW THBIG QUESTION: IS THE NEXT FEAR AGAIN INFLATION: PRICES RISING TOO ST? SOHAT HAPPENS WHEN THE BANKS START LENDING AGAIN? ANDF THE NEW TRILLION DOLLARS OR MORE THAT THE FEDAS CREATED ACTUAL FLOWS THROUGH THE ECONOMY? WON'T TH INFLATE PRICES? GETTING PEANUTIN INTEREST FROM DEPOSITING THE FEDS N MONEY BACK AT THE FED, E BANKS WILL WANTO LEND IT OUT TO BORROWERS WHO'LL PAY A LOT MOR AND THEN?

>> THEN THE FED HAS TO STA PULLING IT OUT. ITS A VERY, VERY,ERY DIFFICULT TA.

>> Reporter: CHAIRMAN RNANKE ACKNOWLEDG AS MUCH IN HIS WSHOUR FORUM IN KANSAS CITY.

>> ONCE THE ECONOMY STAR TO GROWND BEGINS TO MOVE AHEAD, THEN IT WILL BE VERY PORTANT FOR THE FED TO UNWIN RAISE INTEREST RATESBRING THAT CREDIBACK, BRING THE MONEY BACK, SO THAT WE DON'T HE AN INFLATION PRLEM DOWN THE ROAD.

>> Reporter: IN SHO, THE FED GHT ACTUALLY OFFER BANKS A HIER INTEREST RATE TO HOLD ONTO FED MONEY, KEEP IOUT OF CIRCULATIO OR SUCK UP THE MONEY SELLING BANKS L THOSE SECURITIES IT BOUGHT DURING THE CRISIS BUT NONE OF IT WILBE EASY, SAYS MIT SIMON JOHNSON.

>> ITS A VERY TCKY GAME THEY'RE AYING. THEY'RE WORRIED ABOUTHE MONEY GETTING T OF CONTROL. IF YOU PUMP NEY INTO ANY ECONOMY EVEN THIS ECONOMY, WITHOUT LIMITS, YODON'T QUITE KNOWHAT'S GOING TO HAPPEN TO THE PRICE LEVEL. THE PRICES COULD JUMP UP

>> Reporter: ANDHAT, SIMON SAYS, WOULD BE INFLATION: PRICES JUMPIN DOLLARS WORTH LESS AND LESS. BUT LT QUESTION: IS THERE ANY REAL EVIDENCE TO BACK THE FEARS OF YESRYEAR? WELL, THE TRADIONAL MEASURE OF INFLATION, THE CONSUMER PRE INDEX, IS DOWN OVER THE LA YEARWHICH MAY HAVE SENIORS ELING A BIT MORE FLUSH, UNT THEY FIND OUT THEIR SOCIA SERITY CHECKS ARE ALSO ABOUT TO DOWN, REFLECTING THE LOWER C.P.I. BUT THE C.P.I. MOVED UALMOST 1% AT THE BEGINNINGF THE SUMMER, NOA GOOD SIGN FOR DDELINI PRICES.

>> LONTERM, GOLD WOULD BE MY BEST BET.

>> Reporr: MEANWHILE, IN THE YEAR SINCE WE WERE LAST IN OAKLAN THE PRICE OF GOLD, THAT OTHEINDICATOR OF INFLATION, HAS RISEN SOME 00 AN OUNCE, AN ANAL INCREASE OF MORE THAN 25%, THE PROBLEM FACI THE FED, THEN, ITS ABILITY TO WITHDRAW ITS EXCESS RESERVES INIME. AND IF IT HAS TOY SELLING OFF THE TROLED ASSETS IT'S BEEN BUYING WI ITS NEWLY MINTED MONEY, WILTHAT DRIVE THE ECOMY DOWN ONCE MORE?

>> WELL O KNOWS WHAT WILL HAPPEN? WE ARE ICOMPLETELY UNCHARTED TERRITORY HERE.

>> Reporter: STAY TUNED.

>> hrer: ON OUR WEBSITE, NEWSHOUR.PBS.ORG YOU CAN U AN INFLATION CALCULATOR TO DISCOVER E BUYING POWEOF A DOLLAR FOR ERY YEAR SINCE 1913. FI THE LINK ON OUR MAKING SENSE PAGE. > Lehrer: NOW A LOOK AT THE TOLL OF THE AHAN WAR ON CIVILIS. SPECIAL CORRESNDENT NEMA ELBAGIR SPENT A WEEK AT A 0- BED HOSPITAL IKANDAHAR. SERVES ALL OF SOUTHERN AFGHANISTAN INCLUDING E WAR- TORN HELMA PROVINCE. ELBAGIR HAS REPTED FOR INDEPENDT TELEVISION NEWS AMONG OTHER ORGANIZATIONS. A WARNI: SOME VIEWERS MAY FIND THE IMAGESN THIS STORY DISTBING.

>> IT'S THURSDAY D THE MORNING RU HAS STARTED, ALREADY SEVERAL CARS HAVE PULLEDP OUTSE MIRWAIS HOSPITALS EMRGENCY UNIT HERE IN KANDAHAR THIS ONBROUGHT HASEENA AND HER SISTER, THEY WERE AYING OUIDE THEIR HOME WHEN THEY WERE HIT BY A DRIVER SRVING TO AVOID A ALITION CONVOY. E CONVOY NEVER STOPPED. PASSERS-BY BROUGHT THEHERE. IN THE WEEK WE'VSPENT HERE THERE'BEEN A CONANT FLOOD OF CIVILIAN CASUALES, AND NOT JUST HERE BUT THROUOUT AFGHANISTAN, THIS SUMMER IS SHAPING UPS THE DEADLIEST SINCE THE CONICT BEGAN. WHILE OPERATION PTHERS CLAW HAS BEEN TRYING TO PU THE TALIBAN OUT OF THEIR STRONGHDS IN SOUTHERN AFGHASTAN THE INJURED VILIANS HAVE BEEN FLOONG HERE.

>> WE CAME TO RWAIS IN THE LAST WEEK OF JUL A MONTH INTO THE OFFENSIV TO SEE WHAT LIFE HAS BEEN LIKE FOR THE PEOPLE CAUGHT IN THE CROSFIRE. THIS IS THENTENSIVE CARE UNIT, THE I.C.U., WHERE THE MOST CRITIL PATIENTS ARE BROUGHT. THEY ARE MAINLY WAR WODED.

>> HE IS IN FROM YESTERDAY, FROM GUNSHOT WOUND, FROM E OF THE DISTRICTS OF KANDAHARQ IT Reporter: IS IT ALWAYS THIS FULL?

>> ALWAYS D IS FULL

>> Rerter: CIVILIAN CASUALTIES IN AFGHANISTAN HAVE COME THE MAJOR OPATIONAL ISSUE FOR BRITISH AND US FORCES. SOLDIERS HAVE BEEN ORDER TO SHOW RESTRAI IF "THERE IS EVEN THE SLIGHTEST RISK OF A CIVIAN PRESENCE." BUT TELL THAT TO THIS MAN. ON T NIGHT OF JULY 16TH HAJJ NAIMUTALH SAYS HE AND HIS FAMILY WERE ASLEEP IN EIR HOME IN SHAWILIKODISTRICT, NORTH OF KANDAHAR CITY, THEY RE WOKEN BY A COATION ATTACK ON HIS VILLAGE.

>> ( translated ): IWAS 10 O'CLOCK ATIGHT WHEN I WOKE UP AND THE HELICOPTERS WERE BOMBARDING. SO THE ILDREN AND MY WIFE RAN OUTSIDE THEIR ROOMS ANDHEY WERE FIRED OBY THE HELICOPTER AND I WAS NOT WITH MY FAMILYT THE TIME AND TH IS WHY I SURVIV.RH WHEN I REACD THEM EVERYONE HAD BEEN INJURED. AND THEN THE HELICOPTERS RED ANOTHER BOMB DURING E LAST STRIKE I WAS ALSO INJURED.

>> THISEAR FOR THE FIRST TIME OVER 50% OF CIVILIAN DEATHS RECORDEDY THE U.N. WERE CAUSED BY TALIBAN ROADSIDE BOM AND SUICID ATTACKS.

>> E INJURED MAN ON THE STRETCHERAS SLEEPING -- SWEEPING FORLD SOVIET ERA NES WHEN A RIDESIDE BOMB WENT OF AN AFGHAN ARMYMBULANCE WAS NEAR AND THE PARAMEDICS BEG TREATMENT BUT IT WASN'T ENOUGH. HE HAD LOSTTOO MUCH BLOOD. THEY ARRID TOO LATE.

>> MOHAED WAS ALSO THE HAMMED ANWAR WAS ALSO THE VICTIM OF A TALIBAN TACK, THE 11 YEAOLD FRUIT SELLER LOST HIS GS TO A ROADSIDE BOMB. BUHE SEEMED TO TAKE A LOOF JOY IN HIS NEWODE OF TRANSPORT,ND FOR HIS ELDERS IN THE FA OF THEIR LOSS HE BECAME AN UNOFFICIAL MASCOT.

>> WE SPEND MORNINGS BY E ERGENCY ENTRANCE WATCHI DOZENS OF WARICTIMS ARRIVING, MANY ESCAPING FRO THE HEAROF THE CONFLICT I HELMAND TIENTS BROUGHT BY AMBULANCE ARE RARE HERE. PEOPLE ARRIVE IN WHATEVER THEY CANIND, AND WHAT THEY CAN AFFORD. OFTEN THEY HAVE TO HELP THEMSELVES IN TO THE HOSPITAL. BUT IN ADDITION TO THE AERIAL BOMBS AND THE MORTAR BLAS, THERE IS ANOTHER LENCE -- SILENT THREAT, FEAR.

>> THIS BOY HAS EN BROUGHT IN BY HIS FATHEAFTER FFERING DEHYDRATION AFER DAYS OFDIARRHEA. THE DOORS CROWD AROUND THE TODDLERS BED. HIS FATHER LOO ON AS THEY TRY TO REVIVE HIM. BUT IT'S TOOLATE. THE PARENTS WERE TOO AFRAID TO RISK THE JRNEY, WITH THE EVER-PRESENT THREAT OF VIOLENCE. THEY WAITEDN THE HOPE THEIR CHD WOULD RECOVER. IT'S A STORY W HEAR ER ANDVER FROM PARENTS HERE IS IS THE GENERAL PAEDIATRIC WARD AND COMING HE YOU CAN SEE HOW ERCROWDED IT IS, THERE ARE THREE OR FOUR CHILDR TO EVERY BED. THROUGHT OUR TIME HERE THE PEDIATC WARD WAS WHERE WE LWAYS SAW THE MOST HARROWING SCENES. EVERY MORNING THE HOSPIL RUNS A FEEDING INIC AND MALNOURIED CHILDREN ARE BROUGHT IN, OFTEN BY EQUALL MALNOURISHED MOTRS. DESPITE THE BILLIONS OFOLLARS POURING INTO AFGHANISTAN THE COUNTRYANKS NUMBER TWO IN THE WORLD FOR INFANTEATHS, THE SAME NKING AS IN 1990 AT TH END OF THE WAR WH SOVIETS. AFTER EIGHT YEARS, THERE LITTLE EVIDENCE THE MASSIVE DEVEPMENT SPEND. >>> THIS HAS BEEN SUPRTED BY THE RED CSS SINCE 1996 SONLIKE MANY OF THE COUNTRS OTHER HOSPITALS THE MEDICINES AT THE INTERNATIONAL ANDARD AND 9 AGAIN RITTER DOEST RUN OUT OF FUEL. THIS JULY, THE HOSPITAL REGISTERED 50% JUMP I VILIAN CASUALTIES.

>> WE ARE SEEING AROD 700 INPATIENTS DAY, 600 HAVE BE DISCHARGED SO WE HAVE 100 PATIENTS STAYING AT THE HPITAL THERE ARE SOME - THERE ARE SOME WARDS THAT E AROUND 140, 15EVEN 175% OF THE D OCCUPANCY SO WERE REALLY HAVING A LOT OF INPAENTS.

>> Reporter: THERE E 20 RED CROSS TRNED SURGEONS HERE ABLE TO PERFORM 700 OPERATIONEVERY MONTH. THEYE CURRENTLY RUNNING AT CAPACI, WITH THE MAJORITY OF SURGEES PERFORMED ON THOSE INJURED IN THE FIGHNG. AND THEY'RE STILL COMI.

>> Lehrer: AND THE ANALYSIS OFROOKS AND MARCUS. "NEW YORK TIMES" LUMNIST DAVID BRKS AND "WASHINGT POST" COLUMNIST RUTH MAUS. MARK SHIELDSS AWAY. DAVID, SPEAKING OF AFGHANISTAN, PUBLIC OPINION POLLS ITHE UNITED STAT SHOW SUPPORT FORTHAT WAR IS MINISHING. TH'S GOING ON. >>RIGHT,OLITICALLY HERE AT HOMEHIS IS GOING TO BE QUITE A FLASHPOINT ISSUE. RIT NOW THE MAJORITY DEMOCRATS THINK THEAR IS TO THE WOR FIGHTING. THE MAJORITY OF REPUBLANS THINTHE WAR STILL IS WOTH FIGHTING. BUT EN YOU GET INTO A POTICAL TUSSLE WHAT IS GOING TO HAPPEN, WI YOU GET THE LEFT OF THE DEMOCRATIC PARTY NTING TO PULL BACK. YOU ARE GOING TO T THE RIGHT THE REPUBLICAN PARTY NOT WANTING TO SUPPO BACK OBAMA'S WAR ANDRE OU GOING HAVE A LEFT-RIG COALITION AGAINST PEOP KE JACK REID, SENATOR JACK REID FRORHODE ISLAND, JOHN McCAIN LINDSEY GRAHAM FROM SOH CAROLINA, AENTER GROUP THAT WILL SUPPORT TH PRESIDENT. BUT THIS WILL BE VERY THT. AND I THINK UNWITH OF THE BIG FLASHPOINTS FROM THE FALL.

>> Lehrer: DO YOUGREE?

>> I THINIT COULD BE A BIG FLASHPOINT OF THFALL. IT DENDS ON W THINGS DEVELOP TRE. BUT IF IT DOSE BADLY, IF THE TROOP LEVELS TUR OUT NOT TO BE ADEQUATE. IF THEY ASK FOR MORE TROS, THIS COULD RELY BE A FLASHPOINT ON THE LEFT BECAUSE WHAT YOUAVEOW IS HAPPINESS WI MUCH OF THE AINISTRATION'S POLICYS FROM THE LEFT IN TERMS OF GUAANAMO, DETAIES, THE CIVIL LIBERTIES ISSUESF E WAR ON TERROR. YOHAVE UNHAPNESS WITH THE WAY THE HEALTH CARE FIGHT HAS UNFOLDED, WITH ABANDONMEN OR SEEMING ABAN NEMENT OF THE PUBLIC OPTION. AND NOW TO HAVE OUSED FROM THPOINT OF VIEW O THE EFT ONE PRESIDENT AND DEALT WITH HIS WAR ONLY TO HAV ANOTHER, AND PRESIDENT OMA IS DOING EXACTLY WHAT HE ID HE WAS GOING TO DO DURING THE CAMPAN IN AFGHANISTAN. BUT I THINK THERE'S NOT A LOT OF PATIENCE FORHAT ON T LEFT.

>> AND GENAL McCHRYSTAL IS ING TO COME BACK IN A FEW WEEKSND MAYBE NOT OFFICIALLY PUOT BA ADINISTRATION OR CORNER BY LISTING TROOP THAT HE WANTS BUT IT'SLEAR THEY ARE GOING ASK FOR AN INCREA OF EITHER 12,0 TROOPS ARE UP T 4500 TROOPS IN ADDITION TO THE 6000 THERE. HAT WILL BE A VERY TOUGH CALL.

>> Lehrer: WHAT ABOUT RICRD HOSS, THE OED PAGE PIECE TODA A FORMER BUSH ADMINISTRION OFFICIAL, NOW HEAD THE COUNCIL ON FOREIGN RELATIONS. HE SA AFGHANIST IS NOT A WAROF NECESSITY. DO Y AGREE WITH H?

>> YEAH, I DON'T KNOW WHAT THE JARG WAR OF CHOICE, WAR OF NECESSITY. TO SOME EXTENT ABRAHAM LICOLN HAD A CHOICE BEFORE THE CIVIL WAR. THAT IS WT THEY HAD AN ELECTIONBOUT. SO THERE IALWAYS WAR OF CHOICES. AND BUT HE IS RIGHT IN THAT OP ED PIECE TO POINT OUT THAT IT IS A TOUGH CALL. BECSE IT GOING TO BE EXTRELY EXPENSIVE. THE MILITARYEOPLE WANT TO STAY THERE LONG TIME. ON THE OTHER HAND HE COM DN ON THE SIDE THAT IS STILL WORTH A CHOICWORTH MAKING BECAUSE WE A DAN -- ABANDONFGHANISTAN ONCE, A HIGH LIKELIHOOD THAT THE B WOD TAKE OVER BECAUSE THEY ARE SO RICH NOW, IF WE LEFT NOW. AND WT WOULD BE THE REPERCUSSIONSF THAT. SO IT'S WORTH REMINDING US THAT WE HAVE A CHOICE. T TO ME THE CHOICE IS STILL ONE WORTH MAKING.

>> I THINKT WAS A WAR OF NESSITY THAT HAS NOW MORPHED INTO A WAR --

>> GOING BACKO9/11.

>> YS, EXACTLY. IT WAS NECESSARYOUST THE TALIBAN IT WAS NECESSARYTO RESPOND TO THE ATTACK. THINK THE QUIESSENTIAL WAR OF NECESSY IS THE SECOND WORLD WAR WHERE WHATEVER IT TAKES TO FEAT THAT MEMBERAS IS RUIRED. HERE'S A -- THAT MENACE IS REQUIRED. HE IT IS A MUCH, MUCH TOUGHER CHOICE AFGHANISTAN HAS NSUMED MA, MANY DIFFERENT INVADERS,OCCUPYERS, LIBERATERS, WHATEVER YOU WANT TO CALLHEM. AND PUBLIC PATIENT WITH I ULD BE RUNNING QUITE THIN. YET THE RISK O ANDONING IT ONCE AGN IS ALSO VER -- IT IS A VERY ULEASANT SET OF CHOICES THAT ARE GOING TO CONFRONT THE PRESIDENT.

>> SPEAKINGF T PRESINT, TO CK UP YOUR BROADER POINT. THEOLLS SHOW OVERVIEW -- OVERALL APPROVAL RATEREI FOR THE PRESENT IS GOING DO. HOW DO YO EXPLAIN THAT. IS IT L THE THING YOU MENTIONED BEFORER MORE TO IT THAN THAT.

>> I TNK THERE MORE TO TH THAT. BECSE I WAS TALKING ABOUT THEONCERNS THAT PEOPLE ON HE LEFT HAVE. I INK WHERE HE IS REALLY LOSING PEOPLE --

>> Lehrer: AND PLIC OPINI POLLS IS ACROSS-THBOARD, NOT JUST A LEFT.

>> ACROSS THE BOARAND EVEN MORE AMONG THE INPENDENTS WHO HAD FORMED THE CORE -- AN IMPORTANT PART OF HIS VICRY AMONG RPUBLICANS, WHO HADIVEN HIM SOM MORE OF THE BENEFITF THE DOUBT. I THINK SO OF THIS DECLINE WASNEVITABLE AER THE EUPHORIA THERE GOING TO BE A LETDOWN. PEOPLYEARN FOR CHANGE AND THEN THEY BECOME UNSETTLED BY . IT'S HUMAN NATURE. AND BARACK OBAMA'SVISION OF A SO OF POST PARTISAN, POST SPECIAL INTEREST WASHINGTON WAS NER GOING TO BE SEEN IN THE REALITY OF GOVERNING IN PROCES. AND SO SOME OF IS WAS INEVITAE. IN ADDITION T THAT, THEY MADE THE DECISION TO TA ON, TO USEHEIR CAPITA, TO SPEND IF NOT ALOF IT, A BIG, BIG UNK OF IT NOT ONLY WITH THE BIG TIMUS PACKAGE W T BIG BAILUT PACKAE TO DO HEALTH CARE A LGE RATHER THAN A MORE CONTAINED VERSION OFEALTH CARE. AND I THINK THEY UNDERESTIMATED AND THEN MISPYED THE REPUBLAN OPPOSITIONO ALL OF THIS.

>> WHAT WOULD YOU ADD TO THAT OR SUBTRACT. >>I'M NOT SURE IT WAS INEVITABLE

>> YOU DON'T THI IT IS INEVITABLE.

>> NO, HE LOST THE INDEPENDENCE, THAT I DON'T THINK HE HAD TO LOSE. IF HEAD TAKEN A STIMULUS PACKAGE OF 00 BILLION INSTEAD OF $787, I INK HE WOULD HAVEELD THE INDEPENDENCE, HELD A LOT OF REPUBLICS. IF HE HAD TAKEN A SORT OF A MOR MODERATE VERSION OF HEALTH-CARREFORM, I THINK HE COULD HAVEELD ON TO THERE WIDENED BENEFIT PLA I INK WE HAVE HELD ON TO SOME OF THOSE INDENDENCE. THE MAJOR REASON HES FALLI DOWNNOW, THE SECONDARYEASON IS THE ONOMY IS STILL NOT, YOU KNOW -- BUT THE MAJO REASON IS HEALTH-CARE REFORM. HIS MAJOR DOMESTIC INITIATIVE UNPOPULAR. THE SLIGHT MAJITY OF THE AMERICAN OPLE DISAPPROVE OF IT. AND THERE'S NO SI THAT AT HAS LET UP. AND SO HE REALL IS IN A SORT OF NOT FR-FALL BUT A SERIOUS IDE, CHARLIE COOK KNOWS MORE ABOUT CONGRESSIONAL ELEIONS THAN JUST OUT ANYBODY HAS A MEMO OUT TODAY SAYING THERE IS AS MUCH OF A CHANCE THE DEMOCRATS WI LOSE MORE AN 20 SEATS IN THE NEXT HOUSE ELECTIONSHAN FEWER THAN 20 SEATS. ANDHAT'S A PRETTY RIOUS ING. THAT'S A TERRIBLELIMATE IN WHICH TO ENACT IT.

>> BUT ON HEAH CARE, THE REFORM SPECIFALLY, IS IT THE PRESIDENT FAILURE TO SELL IT OR IS IT JUST BAD IDEA TOEGIN WITH THAT HE HAS A LOT -- LATED ON TO.

>> I THINK IT HAS SOME SERIOUS PROBLEMS, SO OF WHICI HAVE ENUMETED. TO ME THE PROBLEM ICARE ABOUT IS COSTS. IT DSN'T CONTROL CTS AND I THINK THERE IS A ELEMENT OF THE AMERICAN PEOPLE AT RE OBJECTING TO THAT. THERE IS A VERY LARGE AMOU, A LARGER ELEMENT OBJECTIN TO THE FACT IT IS GOVERNME TAKE OVER OR AT LEAST PERCEIV GOVERNMENT TAKE OVER ON THE HEELS OF THE TAKEOVER OF AS IG, ONHE HEELS OF THE PCEIVED TAKEOVER OF E AUTO INDUSTRY. AND THE FINAL THIN AND THIS I INK THE ADMINISTTION IS DOING THE RIGHT THING, IS IN SOME OF THE MEDICARE CUTS. AND TAKINGENEFITS AWAY FROM PEOPLE. THERE ARE A LOT OF PEOPLE WHO SAY I DON'T WANT MY MEDICA CUT TO PAY FOR UNIVERSAL HEALTH COVEGE. AND SO THEY ARE DOING THE RIGHT THINGUT IT COSTS THEM.

>> HOW DO YOU SEE THAT? THE HEALTH -- THE WAY T PRESIDT HANDLED THE HEALTH CARE.

>> THINK THAT HE IS ALLOWEDAND ESCIALLY IN AUGUST THEEBATE TO REALLY GET OUT OF HIS CONTROL. FIRST OF ALL, IT BEEN WHAT THE DEMOCRATIC PROPOSAL FIT OF ALL, WE DOT HAVE AN AINISTRATION PROPOSAL SO IT IS SORT OFARD TO ELL SOMETHING WHICH PELE ARE REALLY SURE WHAT' INSIDE THE BOX. SENDS'S BEEN COMPLETELY MISCHARTERIZED BY SOME OF THE OPPONENTS OF IT. ALL THAT WE'VE TALD ABOUT WITH DEATH PA WILL -- PELS AND THINGS LIKE THAT. D IT'S JUST SCARED PEOPLE. ANDHE ADMINISTRATION HAS SNT ALL OF ITS ME RPONDING TO THAT, INSTEAD EXPLAINING WHAT PEOPLE HAVE TO GAIN. AND EN THERE'STHE SORT OF CONUNDR OF THE FACT THAT THE PRESIDENT HAS SPENT MOST OF HIS TIME TELLING PEOPLE THT WITH HEALTH CARE NOTHING THAT THEY LIKE WILL CHANGE. WHICH RAISES THE QUESTION WELL, THEN, WHATS IN IT FOR ME AND WHY DO NEED IT. AND SO -- THERE IS PADOX.

>> ANDO AND I THI THAT THE QUESTION AT YOU RAISE ABOUT MEDICARE AND SENIORS GOING TO COME UP EVEN MORE. IF YOU OK AT THE POLS, THE SENIORS A THE MOST CONCNED ABOUT HEAL CARE CHGES. THERE ARE SO SERIOUS CHANGES,EEDED CHANGES IN MEDICARE BUT TH WILL AFFECT SENIORS, SOME OF TM, IN TERMS O SENIORS ENEFITS. AND I TNK YOU ARE GOING TO SEE BIGEPUBLICAN PUSH ON THAT IN THE MING WEEK

>> SPEAKING OF THE REPUBLICANS. CHARL GRASSLEY, CHUCK GRASSL OF IOWA, VERY MUC INVOLVED IN T BIG BIPARTISAN THING WITHHE ENATE FINANCE COMMITTEE, CHAIRMANAX BAUCUS OF MONTA NOW SUDDENLY 'S NE AWAY, ITEEMS LIKE,OR HAS HE. HOW DO YOU READ THT.

>> THERE ARE T CHUCK GRASSLEYS. THE ONE WITHO PREMIERS WASHINGTONBUT THEN THERE THE ONE WITHOUT WENT HOME. AND I GHER SOME OF THE TOWN HL MEETINGS ARE HAPPING IN IOWA, AND IOWA ARE GOOD ABOUT TS ING, ARE TRIPLE THE SE F NORMAL. HE GOES HOME AND LISTENS AND TS THREATENED WE'RE GOING TO DEFEA NEW 2010. HE'S UP IN TH COMING ELECTION. AND HE DOESN'T WANT TOET DEFEED. AND THAT'SEEN, I THINK, THE OVERALL FECT OF THIS AUGUST. WHICHS A LOT OFPEOPLE AND PARTS OF THE COUNY, THE HEALTH-CARE RORM IS RECENTLY PO POPULAR BUT IN THE MIDWEST IN PARTICULAR AND SOME AREAS THE SOUTH ND PLACES LIKE FLORIDA, IT'S QUE UNPOPULAR. SO HHAS TO FACE THE FCT O I REALLY WANT TOOSE MY SEAT OVERHIS. AND SO I ST THINK IT'S IN SOME SENSE A DEMOCRATIC PROCESS THAT IS CREATING THE OTHER CHUCK GRSLEY.

>> I THINK THERIS EN ANOTHER CCK GRASSLEY WHICH IS --

>> THREE CHUCKRASSLEYS.

>> EXACTLY. YOU KNOW, IT' SOME HORRIBLE IENCE FICTION MOVIE. THE WAY I THINK OF CHUCK GRASSLEY IS LI WHACK A MOLE. HE'S INSIDE THE ROOM WITH MAX BAUCUS AND THE OTHER MEMBERS OF THE GANG OF SIX NEGOTIATING, I THIN IN REASONABLY GOODAITH, AND THEN WHEN HE POPS HIS HEAD UP. FIRST HE GETSWHACKED BYHE REPUBLICAN LEADERSHIP THAT REALLY DON'T WANT HIM TO COME UP WITH A SENSIBLE COMPROMISE. THEY SEE THE OPPTUNITY TO REALLY GO TER THE PRESIDENT ONHIS. SO HE IS GETTING WHACKED THAT WAY. A THEN WHEN HE POPS UP HIS HE, HE'S GTING WHACKED AT E TOWN HALL MEETINGS. AND SO WHILE I THINK THAT WHEN HE SAYS THESE THINGS ABOUT OW WE NEED TO CUT BACK D THE STAFF SENDSHE MESSAGE THATO, HE DIDN'T REALLY AN TO BE SO NATIVE, HE IS STILL REALLY INTERESTEDN GETTING TO AN OUTCOME, IT GETS VE, VERY DIFFICULT.

>> WHERE DO YOU COME DO ON THE QUOTE BOTM LINE THAT IS NOW BEI THROWN OUT THERE. IS IT --T'S GOING TO BE A DEMOCRATIC CKAGE. FORGETHE REPUBLICANS. FORGET, ALL THREE OF THE CHUCK GRASSLEYS WORK WI T DEMOCRATS AND FORGET IT. WHAT DO YOU THINK ABOUT THAT?

>> I THINK THAT'S WHERE THINGS ARE ALMOST CERTAINLY GOING TO BE. WE'RE IN THIS KABUCKI THEATRE WAITING R GA DOT PHE WHERE THEY GO THROUG THE MOTIONS OF WAITING TO SEE IF ERE IS SOMEMAGICAL AGRMENT BUT EVERYDY UNDERSTANDS COME SEPTEMBER th OR PROBABLY BEFORE THAT. IT WILL APPR THAT THERE IS LY A DEMOCRATIC PACKAGE AND THEN WE'REOING TO ALL BE WCHING THE SENATE RLIAMENTARIAN TO FIGURE OUT WHAT CAN AND CAN'TE DONE IN RECONCIATION.

>> YES.

>> AND IT'S GOING BE AWFULLY MESSY.

>> WHAT DOOU THINK? >IT SHOULD ALWAYS BE SAID THAT ONLYN WASHINGTON YOU HAVE THE WORD RECONCILIATION MEAN A POLARIZING RAMMING THROUGH OF SOMETHG WITHOUT ANY RECONCILIATIO BUT THAT THE PHRA WE USE IT WILL BE MOSTLYEMOCRATIC BUT THAT DOE'T SOLVE YOUR PROBLEMS. THE PUBLIC PLAN, THERERE MANY -- THERE AREMANY DEMOCRATS IN THE SEATE AND INHE HOUSE WHO HATE THE IDA OF A STRONG PUIC PL. THERE ARE MANYEMOCRATS WHO LOVE THE EA OF STRONG PUBLIC PLAN. SO THE SPLIT HAS ALWAYS BEEN WITHIN THE DEMOCRATIC PARTY. AND I REALLY FEE WHEN IT'S UNPOPULAR, HOW DO YOUASS THE MAJOR DEMOCRAT, DOMESTIC INITIATIVE WHEN THE ERICAN PEOPLE DON'T WANT IT, EEN IF YOU DO VE0 VOTES? TH JUST A TOUGH THING TO DO, ESPECIALLY WHEN ARE YOU SPLIT SIX DIFFERENT YS. IT'S T AN EASY SPLIT. THERARE A MILLION DIFFENT ISSUES FLOATING AROUND HERE. AND FOR THE FIRST TIME I HAVE REALLY BUN TO THINK IT'S AT BEST A 50/50 PROPOSITION THAT SOTHING PAS SOMETHING MAJOR PASSES.

>> 50/50?

>> I THINK MORE THAN /50. AND THINK IT DEPENDSON HAT YOUR DEFINITION OF MAJOR IS. THE REALITY IS, IS THAT THERE IS A BRO CONSENSUS HAT INSURANCE REFORMS, GETTING RID OF THE BANñí ON PREEXISTING CONDIONS, REQUING INSURANCE COMPIES TO COVER EVEBODY, STOPPING THEM FM DROPPING YOU WHEN YOU GET --.

>> Lehrer: CCK THAT OFF AND ON.

>> ALL OFHAT. IF ONLY THAT PASSED, PLUS AN EXPANSION, SAY, OF HEALTH CARE FOR CHILDREN, PLUS AN EX -- SOME EXPANSION OF MEDIID WITHOUT A HUGE TRILLION DOAR PLAN, TT WOULD BE A HUGE ACHIEVEMENT. BUT IT'S NOW BEENEFINED AT A HUGE LOSS WITHOUT A PUBLIC OPTION.

>> OKAY. SO IT'S ETNAM ALL OVER AGAN. SOMEBODY HAS TO DECLARE VICTORY OR DEFEAT AT SOME TIME. THANK OU BOTH VERY MUCH. GOOTO SEE YOU, RUTH.

>> THANK

>> Lehrer: FINALLY TOGHT, FROM OUR SEES ON POETS AND POETRY, A SECOND LOOK AT MIAMIOET AND ART CRIT RICARDO PAU-LLOSA, AUTHOR OF SIX VUMES OF VERSE. PABLE HUNTER HIS LATEST COLLECTION ICALLED "PARABLE NTER."

>> I LIVIN FLORIDA AND I A POTE AND AN ART CRITIC, PRIMARILY. AND A SMOKER OF CIGS. IT IS NOT A POPULAR THI ANY ME BUT I LOVE TEM. I SURROUND MYSELF WITH LATIN AMERIN ART AND A L OF CUBAN ART BUT OTH PARTS OF LATIN AERICA. MY HEALTHS AN EXPRESSION OF MY MIND. ART HASELPED EDUCATEY WAYF SEEI THINGS. BACK IN THE EARLY 80s, LATE '70s,HERE WAS VRY LITTLE KNOWLEDGE ABOUT LATIN AMERICAN ART EVEN IN AMERICAN ART CRCLES. ARICA WAS BASICALLY INVICEABLE. SO I FOUND IT VERY CHALLENGI AND INTERESTING TO, YOU KNOW, T WRITE ABOUT LATIN AMERICA, GOING TO LATIN AMICA TO DISCOVER THE ART AND WRI ABOUT IT IN AMERAN AND EUROPE ART JOURNALS. HODOES AN ARTIST TAKE APART THE VISUAL WORLD AND RECONFIGURE IT TOAKE IT HIS OWN OR HER OWN. YOIN A WORK OF ART THAT SOMETHING THATELPED ME A LOT AS A PO. MY PTRY IS VERY VISUAL AS A RESULT OF THAT. I WAS BORN IN CUA. AND ALTHOUGH I CE AT THE AGE SIX, MY FAMILYND I CAME AFTER THE COUNIST TAKEOVER IN CUBA. WE ARRIVED DECBER OF 1960, FIRST ING TO CHICAGO ANDVENTUALLY MOVING TO TAMPA. AND THEN TO MIAMI. BUT WHEN A RIFED IN MIAMI IN THE '60s AND THEN GROWI UP HERE FROTHAT POINT ON, MIAMI WAA PLACE WHERE ARTISTWERE CREATING, WERE MUSICIANS WERELAYING, WHERE WRITERS WERE WRITING. AND I CAME INTO CONTACT WITH THOSE OPLE. AND IT BEME A LIVING, VIBNT, BREATHING THING. IT WA'T JUST A TRAGIX, HORRIBLE HISTY IT WAS NOW AL A --HICH I COULD BELONG AND DERIVE IPIRATION. GROWING UPN MIAMI ANY TROPICAL FRUIT I ATE COULD ONLY BE AAD COPY OF THE REAL FRUIT OF CUBA. EXILE MEANTAVING TO CONSUME FALSE FO AND KNOWING IT IN ADVANCE. WITH JOY MY PARENTS AND GRANDMOTHER WOULD ENCOUNTER FLORA-GROW MAMIZ AT THE MARKET. ATHOME THEY WOULD KE THEM OUT OF THEMERICAN BAG AND DESCRIBE THE TASTE THAT I AND MY OLDER SISTER WOULD, IN A FEW SECONDS, BE PRIVILEGED TO EXPERIENCE FOR THE FIRST TIME. WE ALL T AROUND THE TABLE, TO WELCOME INTO OUR LIVES THIS FOOTBALL SHAPED BROWN FRUIT WITH THE SALMON COLOUREDFLESH ENCIRCLING AN EBONY SE. MAM, MY GRANDMOER WOULD SAY WITH A CONFIRMG NOD, AS IF REPATRIATING LOST AND RUIN NAME. THEN SHE BENT OVER THELATE, SLIPPED A LARGE SLICE IN HER MOUTH AND STRAIGHTENED IN HER CHAIR AND EYES SHUT, LOST HERSELIN COARISON AND MEMORY. I WAED FOR HER FACE RETURN WITH A JUDGEMENT. NO, NOT EVEN THE SHADOW OF THE ONES BACK HOME. SHEEPT EATING, MORE CAMLY. AND IEGAN TASTING THE SWEET AND CREAMY PULP TRYING TO RAISE THE VOLUME OF ITS FLOR SO THAT IT MHT BECOME AUBAN MAMAI. THE GO CUB MAMAA DIDN'T HAVE PRIMAVERAS SHE SAID. AFTER SECOND LGE GULP, KNOCKING HER OON AGAINST A LUMP IN THE FRUIT AND WINKING. SOT ONCE RACED E LUMPS IN MY MENTAL MAMAI. I ASKEHER HOW THE WO FOR SPRING CAME TO SIGNIFICANT LUMP IN A MAMAI. E SHRUGGED. NEXT YOU WILL WAT TO KNOW HOW WE LOST E COUNTRY.

>> Y CAN HEAR Lehrer: YOU CAN HEAR PAU- LLOSA' READ MORE OHIS POEMS AND SEPROFILES OF OTHER POETS, ON OUR WEBSITE AT NEWSHOUR.PBS.ORG.

>> Lehrer: AGAINTHE MAJOR DEVELOENTS OF THE DAY. FEDERAL RESERVE CIRMAN BERNANKE SAID THE UWAS STARTING TO ERGE FROM RECESSION DUNG A SPEECH IN JASON HOLE, WYOMING. BUT HE CITED CONTINUING CHALLENS, INCLUDING ACCESS TO CREDIT AND UNEMPLOYMENT. AND GHAN PRESIDENT KARZAI AND HIS MAIN CHALLENGERBDULLAH ABDULLAH BOTH CLAIMED VICRY IN THE COUNTRY PRESIDENTIAL ELTION. ON NEWSHOUPBS.ORG AN ONLINE- ONLY FEATURE TONIGHT. A JEFFR BROWN CONVERSATION WITH JAMES GAVIN, AUTHOR OA NEW BIOGRAPHY ABOUT PERRMER LENA HORNE. IN THIS EXCER, GAVIN TALKS AUT HOW HORNE HELPED BREAK TH COLOR BARER IN HOLLYWOOD AND BEYOND.

>> EVERY PHE OF THE JOURNEY ROUGH LIFE SOMEHOW MIRORS THE DEVELOPMENT OF THE CIVIL RIGHTS MOVEMENT AND ALL KINDS OF CULTUR CHANS IN THIS COUNTRY. AND I THINK THAT THIS IS THE STORY O EVERYTHING TH LEAD UP TO TIS LAST PRESIDENTIAL ELECTIO THIS -- HER STORY THE STORY OF THE PEOP WHO SAIFICED ANDTRUGGLED IN ORDER TO MAK THIS KIND OF MOR CHANGE.

>> Lehrer: YOU N FIND THE CONVERTION WITH JAMES GAVIN ON OUR ART BEAT PAGE.

>> Lehrer: "WASHINGTON EK" CAN BE SEEN TER THIS EVENING ON MOST PBS STATIONS. TONIGHT, SPECIAL HEALTH CARE ROUNDTABLE ANSWERING VIEWE' QUESTIONS. WE'LL SEE YOU ON-LINE, AND AIN HERE MONDAY ENING. HAVE A NICE WEEKEND. I'M JIM LEHRER, THANK U AND GOOD NIGHT MAJOR FUNDING FOR THE NEWSHO WITH JIM LEHRER PROVIDED BY: CHEVRON. INTEL. SUPPORTING MATH AND IENCE EDUCATION R TOMORROW'S INNOTORS. THE NATIONAL SCIENCE FOUNDION. SUPPORTING ECATION AND RESEAR ACROSS ALL FIELDS OF SCIENCE AND ENGINEERING. AND WITTHE ONGOING SUPPORT OF THESE INSTITUTIONS AND FOUNDATIONS. AND... THIS PGRAM WAS MADE POSSIBLE BY THE CORPORATION FOR PUBLIC BROADCASTING. ND BY CONTRIBUTIONS TO YOUR S STATION FROM VWERS LIKE YOU. THK YOU. Captioning spsored by MacNEILEHRER PRODUCTIONS Captioned b Media Access Group at WGB access.wgbh.org