Paul Krugman and Arianna Huffington v. Roger Ailes

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Fox News creator Roger Ailes, the patron saint of red blooded conservative victim hood, made a rare appearance in front of the camera Sunday, on ABC’s This Week, where he introduced himself by offering to pose nude for $100 (if it was still 1982 and he was Scott Brown), went on to defend Glenn Beck against the critique of Paul Krugman and Arianna Huffington, and finished by offering President Obama some political advice. Barbara Walters asked the questions:

WALTERS: What advice would you give to Barack Obama?

AILES: I think he’s in a very tough spot. He is enormously likable and I think despite what everybody says, people would like him to succeed. But he came in with the belief that the radical change he wanted or what some people say is a radical change that he wanted would be widely accepted.

WALTERS: But give him some advice, boom, boom, boom now.

AILES: The first advice I’d give him is listen to everybody and then go in a dark room by yourself, because in the end, it’s all going to happen in your brain. If you actually believe all these things that you’re for, and Richard Neustadt in “Presidential Power” explains that the only real presidential power is the power to persuade the people, to be open, to go out to them and say this is the reason I believe this, this is the direction I believe the American people should go. If he doesn’t do that and I don’t think he can sell some of his programs. I think he has to become president of all the people and I think he’s got to go to transparency and I think you’d be surprised. People who are willing to give him the benefit of the doubt, but you can’t do this in back rooms surrounded entirely by political consultants.

As good a media exec as he is, there is no doubt that Ailes, an old Nixon hand, also knows his politics. At another point, he broke the reigning consensus at the table:

AILES: Jobs is the second issue, in my view.

WALTERS: What’s the first?

AILES: Safety and sovereignty of the United States

The full roundtable transcript after the jump.

WALTERS: Well, now let’s bring in our roundtable. George Will, Arianna Huffington from “The Huffington Post,” Paul Krugman, Nobel Prize winning economist and columnist for the “New York Times,” and Roger Ailes. And this is rather unusual for us and I think for him because Mr. Ailes is the CEO and president of FOX News and this is his first visit with ABC News on “This Week.”

AILES: I was waiting for HD. I look so much better.

WALTERS: I also — you just said that when Scott Brown for $1,000 for the cosmopolitan nude photograph, you would have done it for less.

AILES: 1982, the guy’s getting out of college and someone gives him $1,000 and he can cover himself up. I don’t know, $100, I’d do it.

WALTERS: We’re not going to ask you today. OK, so here we go, George. Scott Brown. What do you think of him? How influential do you think he’s going to be?

WILL: He is one percent of one-half of one of our three branches of government. That is he’s one senator in an institution where like most institutions, 80 percent of the work is done by about 20 percent of the people. Most of them senior senators.

Furthermore, as he said in his interview, every Republican senator is the 41st senator, therefore every one of them is a potential obstructionist or extortionist, depending on what you say. So in that sense, I think he will be of modest historic importance.

WALTERS: So why the fuss, Paul?

KRUGMAN: Well because we have a super majority system. Because we have a system in which you cannot at this point get anything done without 60 points in the Senate. I mean, what I’ve been thinking about right now is at this point, the House of Representatives has passed a health care bill and has passed a strong financial reform bill. It has passed a strong climate change bill. In any other advanced democracy, that would mean that all of these things would have happened. But in the U.S. system, it takes 60 votes in the Senate to accomplish anything and because the Democrats nominated somebody in Massachusetts who didn’t know her Red Sox, that entire agenda has run aground — incredible. WALTERS: That was his opponent.

KRUGMAN: And it’s important. Let me just say on health care, that was the most evasive answer. If you think this is a straightforward guy, that was an incredibly evasive answer on health care because the Senate bill, which has now stalled, is identical to the Massachusetts health care plan, the same thing. Only in the finest of fine print is there any difference. He voted for the Massachusetts plan. A majority of voters in Massachusetts who voted for him approve of the Massachusetts health care plan. Nonetheless, their plan is dead.

WALTERS: And he’s going to kill this.

HUFFINGTON: But there were many symbolic things why his election was important. He’s a manifestation of the mistrust of both political parties. He ran as an outsider. He ran as a Scott Brown Republican, as he told you. Of course, that’s selfish. He’s already morphing into a conscious politician and both in his answer to health care and his answer to Don’t Ask/Don’t Tell, when he wouldn’t tell you which way he would go. So what is fascinating is to see really how much distrust there is, the president called it the deficit of trust in his State of Union. And he really capitalized on that. And now when he comes to Washington, let’s see how quickly he becomes an insider. This happened to Obama. Remember he was a fresh face who was going to change things and the special interests have won, at least for round one.

KRUGMAN: Can I say just one more thing? Voters still think they’re voting for individuals. They voted for Scott Brown because they felt they liked Scott Brown, but in fact, they’re voting for parties. The only thing that matters about a candidate right now is whether it’s a “D” or an “R” after his or her name. But voters haven’t caught onto that. And that’s part of what just happened.

WALTERS: That’s why he’s also saying, “I’m a Scott Brown Republican.”

KRUGMAN: But he is, he’s a Republican Republican.

AILES: That’s partly true, but I think people are misinterpreting elections, I think President Obama misinterpreted his election. I think people could misinterpret this election, conservatives getting too excited about this guy being with them and I doubt he’s really a moderate. People tend to misinterpret elections. The president brought that radical change to the United States as to what it was about, and it was actually about we’re tired of watching George Bush on television for eight years. He hasn’t gotten the positive article in seven years and we’ve got two wars on, it’s time to fix it and I think that Obama ran very carefully against George Bush and the beach was already softened up in those old World War II movies that the Navy goes in and softens up the beach and then somebody comes along and lands.

So I think that we tend to overinterpret these things. I think he’s a very soft-spoken, interesting guy. Let’s see what he does. WILL: Let me respond a bit to Paul’s disapproval of the 60-vote supermajority. The Republicans didn’t invent it. The Democrats have used it with great vigor, and will probably want to do so again when the Republicans control the Senate.

Yes, the Senate is different from the House. The founders planned it that way.

I know of nothing, Paul, that the American people have wanted intensely and protractedly that they didn’t eventually get. What the Senate does is slow things down, and we have more to fear from government haste than from government tardiness.

KRUGMAN: Well, I would say if you look at the charts, it’s just not true. The filibuster has vastly increased in importance. It was not always thus. What you think of as a time immemorial institution is actually something that came into existence only in the last 15 years or so. And it was never as intense as it is now.

WILL: It came into existence in the ’90s.

WALTERS: We’re going to come back, and we have much more time to talk about this, but we’re going to have to pause. But before we do, in the interest of full disclosure, that Cosmopolitan picture that you saw of Scott Brown, well, to my amazement, in the same issue, is…

(UNKNOWN): Barbara Walters. There we go.

WALTERS: But (inaudible) dressed. There we go. There we are. OK? So much for that.

Now, when we come back, back to more serious subjects with all of you. We’ll be right back.



OBAMA: They didn’t send us to Washington to fight each other in some sort of political steel cage match.

(UNKNOWN): From your administration, there have come statements that Republicans have no ideas and no solutions.

OBAMA: If you were to listen to the debate, you’d think that this thing was some Bolshevik plot.

(UNKNOWN): Will that new budget, like your old budget, triple the national debt?

OBAMA: It’s very hard to have the kind of bipartisan work that we’re going to do, because the whole question was structured as a talking point for running — running a campaign.

(END VIDEO CLIP) WALTERS: That was President Obama appearing before House Republicans at their annual retreat on Friday, an unusually open and honest back-and-forth, and we’ll talk more about that with our roundtable. George Will, Arianna Huffington, Paul Krugman, and Roger Ailes, who is chairman and CEO of Fox News.

Roger, just let me begin with you. You have had your own back- and-forth with the White House. They were not very happy with you, banned you for a while. Have you kissed and made up? Is it hunky- dory?

AILES: Well, they tried to ban us. They tried to break the pool, but the other networks stepped up and protected Fox on it, because it was tortuous (ph) interference with a contractual relationship and sort of tramping around on the Constitution…

WALTERS: But now you’re OK.

AILES: We’re fine. I mean, we were — it was not as bad as it was played, and things are not as great (ph) as they should be, but we have a good dialogue. And I saw the president and his wife at the media Christmas party. They were very gracious, very nice, both of them. And we have a dialogue every day with them.

WALTERS: Aw, shucks. It was more fun the other way.

AILES: Well, I’ll pick a fight if you want. I mean, I’ll be happy to get into one.


AILES: But I think there will be others. We have differences, but…

HUFFINGTON: Well, Roger, it’s not a question of picking a fight. And aren’t you concerned about the language that Glenn Beck is using, which is, after all, inciting the American people? There is a lot of suffering out there, as you know, and when he talks about people being slaughtered, about who is going to be the next in the killing spree…


AILES: Well, he was talking about Hitler and Stalin slaughtering people. So I think he was probably accurate. Also, I’m a little….

HUFFINGTON: No, no, he was talking about this administration.

AILES: I don’t — I think he speaks English. I don’t know, but I mean, I don’t misinterpret any of his words. He did say one unfortunate thing, which he apologized for, but that happens in live television. So I don’t think it’s — I think if we start going around as the word police in this business, it will be…

HUFFINGTON: It’s not about the word police. It’s about something deeper. It’s about the fact that there is a tradition as the historian Richard Hofstetter said, in American politics, of the paranoid style. And the paranoid style is dangerous when there is real pain out there. I mean, with…

AILES: I agree with you. I read something on your blog that said I looked like J. Edgar Hoover, I had a face like a fist, and I was essentially a malignant tumor…

HUFFINGTON: Well, that’s…

AILES: And I thought — and then it got nasty after that…

HUFFINGTON: … that was never by anybody that we had…


AILES: Then it really went nasty, and I thought, gee, maybe Arianna ought to cut this out, but…


WALTERS: While we are talking about that, the president — I’m just going to talk to you about this a little later, but this — if — the president has said in the state of the union and when he was talking to the Republicans that there is a cynicism about the media, that he calls it slash and burn, and that we are to blame for a lot of the discontent and the rage in this country. Are you to blame?

WILL: I don’t think so. There is cynicism and there is rage, but the vast swath of the American people are temperate, good-natured people who aren’t actually thinking about us in Washington as much as we wish they were. But the president himself, when he gets up in front of the Congress and delivers a sermonette on the deficit of trust in Washington, should not, A, flagrantly mischaracterize the Supreme Court decision. I don’t know whey he thought it was in his interest to pick a fight with the most prestigious institution in Washington. He should not in the same sermon on trust say he has proposed to freeze on government spending when he has proposed a selective freeze on one-sixth of the federal budget. He should not say I’m all for expanding trade with South Korea, Panama and Colombia when he won’t move the existing agreements to ratify trade with them.

So I don’t think that when a man gets up and gives a speech full of cognitive dissonance, saying Washington is corrupt, Washington is annoying (ph), Washington is tiresome, Washington is dysfunctional, and Washington should have a much bigger role in American life, I think that — that breeds, you might say, a kind of distrust and cynicism.

WALTERS: (inaudible) slash and burn….

KRUGMAN: If I can just — you know, what bothers me is not the nasty language. Glenn Beck doesn’t, you know, it’s not — what bothers me is the fact that people are not getting informed, that we are going through major debates on crucial policy issues; the public is not learning about them. And you know, you can say, well, they can read the New York Times, which will tell them what they need to know, but you know, most people don’t. They don’t read it thoroughly. They get — on this health care thing, I’m a little obsessed with it, because it’s a key issue for me. People did not know what was in the plan, and some of that was just poor reporting, some of it was deliberate misinformation. I have here in front of me when President Obama said, you know, why — he said rhetorically, why aren’t we going to do a health care plan like the Europeans have, with a government- run program, and then proceeds to explain whey he’s different. On Fox News, what appeared was a clipped quote, “why don’t we have a European-style health care plan?” Right, deliberate misinformation.

All of that has contributed to a situation where the public…

AILES: Wait a minute, wait a minute…

KRUGMAN: I can show you the clip, and you can…


AILES: The American people are not stupid…

KRUGMAN: No, they’re not stupid. They are uninformed.

AILES: If you say — if (inaudible) words are in the Constitution, if the founding fathers managed — they didn’t need 2,000 pages of lawyers to hide things, then tell, then tell…

KRUGMAN: Oh, come on. Legislation always is long.

AILES: … then tell people it’s an emergency that we get it, but it won’t go into effect for three years. So you don’t have time to read it, you…


KRUGMAN: People, again, this was a plan that is — it’s actually a Republican plan. It’s Mitt Romney’s health care plan. People were led to believe that it was socialism. That’s — and that was deliberate. That wasn’t just poor reporting.


HUFFINGTON: There are two separate problems…

AILES: Let me ask you a question, just as an example…


HUFFINGTON: … let me just answer that, because there is a problem in the fact that there wasn’t a plan. There wasn’t a plan that people could understand. There were (inaudible) plans with a lot of differences. But there is also a problem when it comes to the words being used. Words matter. And words that are actually being used by people we hire are different than the words that are being used by commenters on our sites, like you mentioned.


AILES: But there are 300 million people who have a health care plan that they are happy with. There are about 30 million people who don’t have a health care plan. So as an executive, what do you do? You go fix the 30 million. You don’t go over here and upset the apple cart for 300 million…

KRUGMAN: Which is exactly what the plan was.

AILES: No, no, no…

KRUGMAN: It was trying (ph) to leave the employer-based health care…


AILES: … $500 billion away from old people.


WALTERS: OK, let me ask you, because (inaudible). Is the health plan that took the president 34 minutes to get to the issue he spent all his past year on, he says he’s not giving up on health care. Is it dead?

WILL: Well, Chuck Schumer, who is a legitimate representative of the mainstream of the Democratic caucus in the Senate, says his three priorities, and the Democratic Party’s three priorities this year, are jobs, jobs and jobs. Rahm Emanuel, who is not always quoted accurately, is quoted, however, as saying top three priorities are jobs, deficit reduction, and financial regulation. What don’t we hear? We don’t hear health care.

KRUGMAN: It couldn’t have been. I mean, remember, both houses of Congress have passed quite similar health care plans. There are ways to make this thing happen. We know there’s a legislative strategy, but it doesn’t work unless Obama gets behind it. In the 10 days after the Massachusetts election were totally disheartening. That was the moment when we needed some leadership from Obama and he just seemed to wander off.

WALTERS: Paul, dead?

KRUGMAN: You know, it’s just possible, not completely dead. It could be saved if the president wakes up. If just possibly Nancy Pelosi and Harry Reid can make a way for this to happen, but it’s not very likely.

HUFFINGTON: The only way it can be saved is if the Democrats decide to follow Senator Harkin with his reconciliation sidecar. That’s the only way this could be saved. But to George’s point, they’re all saying it’s jobs, jobs, jobs. But when it comes to the State of the Union, the professors are not serious in terms of dealing with the jobs crisis. I mean, all this little initiatives a la Bill Clinton in the ’90s are not going to work because this is not the ’90s. This is a 17.5 percent real unemployment.

WALTERS: Small business hiring someone new, and the tax cuts…


KRUGMAN: … that is a good plan, but it is a $30 billion plan and might create a couple hundred thousand jobs in the situation. We have a 8 million, 10 million job deficit. It is a very small plan. It is a micro-policy.

WILL: It’s also easily gamed, as you know by people will hire people they wouldn’t hire otherwise and get rid of them as soon as the tax credit is gone.

HUFFINGTON: But most important, people have not really focused on the crisis on the middle class. When Lehman Brothers collapsed, everybody focused and they did unprecedented things. The middle class is in real trouble. I mean, if you look at the latest Brookings report about the rise of poverty in the suburb, about the fact now that we have one in eight people whose mortgages are under water, who can’t pay their credit card bills, this is a major, major problem that the administration is not seriously addressing it.

WALTERS: Let me ask you something, Roger, because when you worked for President Nixon, you helped to get him in the White House. You’re credited for doing that.

AILES: Well, I was a television producer, not a politician, but yes. The back light was in the right place.

WALTERS: What advice would you give to Barack Obama?

AILES: I think he’s in a very tough spot. He is enormously likable and I think despite what everybody says, people would like him to succeed. But he came in with the belief that the radical change he wanted or what some people say is a radical change that he wanted would be widely accepted.

WALTERS: But give him some advice, boom, boom, boom now.

AILES: The first advice I’d give him is listen to everybody and then go in a dark room by yourself, because in the end, it’s all going to happen in your brain. If you actually believe all these things that you’re for, and Richard Neustadt in “Presidential Power” explains that the only real presidential power is the power to persuade the people, to be open, to go out to them and say this is the reason I believe this, this is the direction I believe the American people should go. If he doesn’t do that and I don’t think he can sell some of his programs. I think he has to become president of all the people and I think he’s got to go to transparency and I think you’d be surprised. People who are willing to give him the benefit of the doubt, but you can’t do this in back rooms surrounded entirely by political consultants.

HUFFINGTON: Can I give him some advice too? He should go back and listen to his speeches during the campaign because in Denver, he said the greatest risk we can take is to play the same game, surrounded by the people, and he’s doing that. Surrounded by Larry Summers and Tim Geithner and the same people who basically were part of the … (CROSSTALK)

HUFFINGTON: Definitely Geithner should be out and …

KRUGMAN: I don’t think Tim Geithner is the problem. The problem is that Tim Geithner, going back to something earlier, he and the president are soul mates. They both have the view of essentially incrementalist tinkering of the edges and Obama needs to have a view that he’s really going to take on. I think financial reform could be an issue where he can recapture some of the sense of being an outsider, some of the sense of running against business as usual. The Republicans will make that easy for him because they are going to be dead set against any kind of financial reform. They will vote not a single vote for any realistic curbs on Wall Street. But he has to find that fire in himself. It’s not a question of replacing Tim Geithner, it’s a question of replacing his own tendency to think well, you know, let’s just stabilize things a little bit.

WALTERS: What about the freeze, the fear of freeze and the $20 billion in budget cuts? Is that going to work?

KRUGMAN: It’s junk fiscal policy, it is junk economics. We all know that.


KRUGMAN: It’s not all that important. It’s 15 percent of the federal budget. It’s — the Center for American Progress, which is a think tank that is very closely tied to the administration, one week before the State of the Union had an article about how you can tell people who are phony deficit hawks, what they call deficit peacocks. And they advocate things like a freeze on non-defense discretionary spending…

HUFFINGTON: And they called him a deficit peacock.

KRUGMAN: And they called the president — no, it’s pure stunt making, and worse, it’s a Republican talking point. It’s a Republican…


KRUGMAN: … policy.

HUFFINGTON: Actually, it’s one point on which everybody agrees. I just came back from Davos, and everybody, including Niall Ferguson, who doesn’t agree with Paul on anything, called it a joke. I mean, and talking about breeding cynicism — it’s these kind of measures that breed cynicism, that make people feel that politicians are just reading focus group tests and acting on them.

WILL: Paul has been consistent, here and elsewhere, for many months, saying the big danger is 1937, when we got a recession within a depression, because in Paul’s judgment and some others, the government flinched, that it declared victory prematurely.

Now, Paul would like a bigger, better stimulus program. Paul’s administration won’t even use the S word, stimulus is so out of favor.

KRUGMAN: There’s only so much politically that Obama can do to create jobs, because he doesn’t have a political capital now. This is, you know, early on in the administration, I was frantic, saying, you have to go big, because you are going to get one shot at this, and they didn’t. And so that’s — that is where we are now.

But now to buy into the notion that we’re going to start reducing the deficit when the unemployment rate is still at 10 percent, is a very bad thing.

AILES: Jobs is the second issue, in my view.

WALTERS: What’s the first?

AILES: Safety and sovereignty of the United States, and I think people, when they see a guy get all the way over Detroit to (inaudible) his underpants, but he could have, and now we’re in a situation where we’re going to have to either — we took everybody’s shoes off; now we’re going to have to take everybody’s underpants off. But the fact is, that’s not going to stop. We’ve got to get much tougher. We’ve cut the hands off the CIA. We can’t — it’s the Norwegians that are doing this. We know who it is. We can’t seem to say it. So sooner or later, we’re going to have to toughen up on all this stuff. And the American people know it, they feel it, and they’re worried about it.

WALTERS: Let me just go around for our last moments. The state of the union. Did the president — people seemed to think in general that it was a good speech. Did he get his footing back? Did it make a difference? Yes, no?

WILL: State of the union addresses rarely make a great difference. They have a captive audience, but the audience is usually unmoved.

WALTERS: Arianna?

HUFFINGTON: They focus-group tested it within an inch of its life. You know, there was an applause line for every constituency, and his grand vision, which got him elected, was really missing. As the New York Times call it, it’s the opposite of bold.

KRUGMAN: The give-and-take with the Republicans was what the state of the union should have been. That was where…

WALTERS: Did that make a big difference?

KRUGMAN: It made some difference. The president said that the Republicans of the party have no ideas, and they demonstrated it on the spot, that they are in fact the party of no ideas. That’s where he needs to go.

WALTERS: What do you think?

AILES: I thought he did a pretty good job of delivering his speech. He seemed to get a little bit of his energy back. He’d fallen away over the last few months. You know, he did some dumb things, like take on the Supreme Court. But the media saved him and blamed it all on Alito. But you know, that speech, he’s got to follow it up with his — look, there is an easy way to get it done. I went to the White House one night because I had to meet with Ronald Reagan. And there was a lot of laughter down at the end of the hallway. I waited about 10 minutes, and out came Reagan and Tip O’Neill, arm in arm, with a drink in their hand, telling Irish jokes. In the paper the next day, they kind of trashed each other’s ideas, but they obviously cut some kind of a deal.

And that’s, you know, there are ways. If he wants to invite the four Republicans and four Democrats over to the Super Bowl and say, come on, guys, we’ve got to get some jobs…


HUFFINGTON: He tried to do that. He wasted three months…

AILES: No, that’s the way it gets done.


HUFFINGTON: He wasted three months trying to get Chuck Grassley to agree to what Max Baucus was trying to do. So he’s tried that again and again and again.

AILES: He’s tried to get Republicans to agree with him, there’s no question. And the media will report that — what they say is a Republican is evolving, as if he’s a caveman if he leans towards the president on something.

WILL: In Baltimore, at the meeting that Paul liked, the president said “I read your bills.” To most Americans, it was news that the Republicans had bills. But in fact, he got engaged in a dialogue with Paul Ryan of Wisconsin. If he’d met Paul Ryan halfway, you’d have health care soon.

WALTERS: I just want to ask, in the few seconds we have left, Sarah Palin is now on your payroll. OK? 2012, presidential candidate?

AILES: I have no — no idea, no idea whether she even wants to. I don’t think she — she knows. I mean, everybody hates her who’s ever written a book because they didn’t sell many. She wrote a book and it sold two million in two weeks, and so now they hate her, they have a new reason to hate her. I don’t know…

WALTERS: But you hired her to be a commentator. Do you think — so you must think she has some qualifications? She seems to be very popular with certain groups. Do you think she has the qualifications to be president?

AILES: FOX News is fair and balanced. We had Geraldine Ferraro on for 10 years as the only woman the Democrats ever nominated. Now we have the only woman that the Republicans nominated. I’m not in politics, I’m in ratings. We’re willing.

HUFFINGTON: Roger, you clearly are in ratings, but if you are in ratings, can you explain to me why FOX went away from the meeting the president was having in — why did you go away, 20 minutes before the end?

AILES: Because we’re the most trusted name in news.

HUFFINGTON: OK and on that note…

WALTERS: I thought we were the most trusted name in news.

AILES: And we believe two liberal polls have now proven it.