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CNN CAPITAL GANG

Gary Bauer Discusses Mideast Policy; Michael Powell Outlines His Role as FCC Chairman; Jim Jones Talks About U.S.-Mexico Relations

Aired September 1, 2001 - 19:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: From Washington: the CAPITAL GANG.

MARK SHIELDS, HOST: Welcome to CAPITAL GANG. I'm Mark Shields with Al Hunt, Robert Novak, and in New York Margaret Carlson.

Our guest is former Republican presidential candidate Gary Bauer. It's great to have you back, Gary.

GARY BAUER, CHAIRMAN, CAMPAIGN FOR WORKING FAMILIES: Thank you, good to be here.

SHIELDS: Thank you.

Israeli defense forces continuing to target suspected Palestinian terrorists leaders assassinated their most prominent target so far, Mustafa Zubari, the chief of the radical Front for the Liberation of Palestine.

(BEGIN VIDEO CLIP)

RA'ANAN GISSIN, SHARON SPOKESMAN: This is not the law of the jungle, this is pure act of self-defense.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SAEB ERAKAT, CHIEF PALESTINIAN NEGOTIATOR: I think it just reflects that the government of Israel is out of control. It's a train without brakes.

(END VIDEO CLIP)

SHIELDS: The U.S. State Department stressed it's disapproval.

(BEGIN VIDEO CLIP)

RICHARD BOUCHER, ASSISTANT SECRETARY OF STATE: We remain opposed to targeted killings. We think Israel needs to understand that targeted killings of Palestinians don't end the violence, but are only inflaming an already volatile situation and making it much harder to restore calm.

(END VIDEO CLIP)

SHIELDS: Secretary of State Colin Powell later protested the armed Israeli movement into a Palestinian-ruled zone to Israeli Prime Minister Ariel Sharon.

Al Hunt, does this look a real break by the U.S. with Israeli policy?

AL HUNT, "THE WALL STREET JOURNAL": No, Mark, the problem is there is no Bush policy in the Middle East. It's ad-hock, it's ABC -- Anything But Clinton. And that's not sufficient.

Colin Powell, the secretary of state, has been there one time in eight months. One diplomat said it was more like a drive-by schmooz rather than a real trip.

Every secretary of state wants to avoid the Middle East because it will suck you in. It's time-consuming, it's a quagmire. Jim Baker wanted to avoid it, Madeline Albright did. But you can't. It's inevitable. It's the guts of American foreign policy.

The current situation -- I think you can say two things: The Oslo peace process is dead, and there is no moral equivalency, but the Palestinians are doing random terror and murder of innocents. But without a U.S. involvement actively prodding and pressuring both sides, it is only going to get worse. Sometimes -- at some point soon, the president has to appoint a special envoy to replace the nearly indispensable Dennis Ross, but first he's got to get a policy.

Bob Novak, is there a policy? Is Al Hunt right?

ROBERT NOVAK, "CHICAGO SUN-TIMES": I think there's a divided policy. I think Al Hunt is wrong in that he's mouthing the conventional wisdom of Washington and the Clinton holdovers, as he -- you know, do the same thing we did -- well, they ended up with General Sharon in charge, and that what the disaster is.

In the first place you have, on the one hand, the president and the vice-president, Mr. Bush and Mr. Cheney, who almost are saying, "That a boy" to the Israelis -- go get them, go get those Arabs.

On the other hand, Secretary of State Powell and the State Department are saying, this is terrible. You're never going to win this war with targeted assignations.

Now the problem is that Mr. Boucher, the spokesman, reading in a monotone off a sheet of paper, is not giving the proper level of indignation that the Secretary of State would give, or better even still, the president would give. I don't think it's time now, Al, to have a negotiation. But for goodness sake, it's time for the United States of America to say that we do not in any way condone targeted assassinations. It's against the law in this country, ought to be against the law in Israel.

SHIELDS: Gary Bauer. BAUER: Mark, look, the State Department for 30 years has had a foreign policy that goes on whoever is president. And it's generally been an anti-Israeli foreign policy, and nothing has changed with Secretary of State Powell being there.

If the State Department wants to condemn targeted killings, they can do -- they can condemn the targeted killings of women and children, which is happening regularly of Israeli women and children by Palestinian terrorists.

That's why a dance hall was blown up, because they wanted to kill -- and they celebrated the fact that women of child-bearing age, Jewish women were killed in that bombing. That's why a pizzeria was blown-up, because they knew families with young Jewish children would be killed in that bomb.

The United States ought to stick by it's ally Israel, and they ought to have an even-handed policy at the State Department and at the White House, standing with the only Democracy in the Middle East.

SHIELDS: Margaret Carlson, sticking with Israel is one thing, but doesn't it sometimes require a friend to speak candidly to another friend? And isn't the Sharon policy basically a dead-end?

MARGARET CARLSON, "TIME" MAGAZINE: Well, condemning a targeted assassination is not to go against Israel; it's that this is the -- it creates a blood debt, and just makes the spiral up in violence even worse. The tit-for-tat that's going on here looks like it has no end because both sides are hardening.

Al is right, Oslo is dead. The intervention by Powell just to get Israeli forces to pull out last week got us nowhere except back to some kind of way where you can say, "Listen, we have to have a cease- fire before we can go forward."

Appointing an envoy is the best thing the U.S. could do right now, and it should probably be George Mitchell, whose report lays down a framework to go forward.

(CROSSTALK)

SHIELDS: Let me -- just one thing.

Dan Ilana (ph), the Sharon adviser this week, here in Washington said, A, that the Sharon government was delighted, or was not at all resistant. The United States played no role there, and that they had heard very little in the way of criticism from the United States government of Israeli policy.

And, you know, I just feel Israel has lost the high moral ground that it had. I'm not in any way justifying terrorist acts or blowing up children or any of the sort. But I mean, I think this is a dead end. And I'll tell you what the cost is going to be: It's going to be in the moderate Arab states.

HUNT: Mark, you're absolutely right. And Bob, I don't think that we can go back to Oslo. I don't think you can even have negotiations now. But there has to be an active American presence there. That's the only thing -- I mean, however you do it.

And there's some on the right in this country, some pro-Israeli types, who've said basically the Israelis ought to militarily crush them, they ought to escalate, build a wall around the country. I mean, that may be viscerally satisfying, there may be some moral justification for it, but it won't work. Five million Palestinians and 95 million Arabs won't disappear.

NOVAK: Well, listening to people like my friend Gary and my fellow -- some of my brother columnists, Israel, if they take that advice, they are in danger of becoming a rogue nation.

HUNT: That's ridiculous.

(CROSSTALK)

BAUER: Bob, that is ridiculous.

Look, if the United States was routinely suffering civilian casualties of women and children, there is not a president, Republican or Democrat, who would not seek to find the terrorist leaders in charge of those sorts of bombings. For us to sit here in Washington in our nice comfortable surroundings and second-guess what a country under siege should or shouldn't be doing is outrageous.

NOVAK: Have four times as many Palestinians been killed in this situation than Israelis? Have they?

BAUER: When you engage in an uprising in which you're attempting to kill Israeli soldiers, you can expect to be shot at.

SHIELDS: Last word, Gary Bauer. Gary Bauer and the GANG will be back with a failing economy. And later, George W. Bush wooing labor.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

The Congressional Budget Office agreed with the Office of Management and Budget on a 1.7 percent economic growth rate for this year.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Our economy began slowing down last year, and that's bad news. And I'm deeply worried about the working families all across the country. According to today's GDP figures the recovery is very slow in coming.

(END VIDEO CLIP)

SHIELDS: Democratic leaders in the Senate and House wrote the president, expressing, quote, "our serious concerns about the deteriorating condition of the federal budget and the nation's economy," end quote.

Bob, what is the political impact of the failing economy?

NOVAK: Well, it's really bad news for President Bush and the Republicans. If you subtract the growth of government -- government is growing fine all over the country -- local, state and federal. Subtract that, we're in a recession now.

We're in a private sector recession. We have a negative growth rate if you take away the government spending. And there's nothing being done to help it because we are still in a tight money policy at the Fed. The kind of tax plan they passed didn't do much to help.

And on the Hill -- I've been in this town for 40 years, and they always debate the wrong things on the Hill when the economy's in trouble. They're talking about these scholastic arguments about how many angels can dance on the head of a budget. I am really worried that we're entering the same kind of period Japan's been in, where they have had 11 lean years.

SHIELDS: Margaret Carlson, what's you assessment politically of the bad economic news?

CARLSON: Well, let me tell you from up here in New York, people think there is a recession which Bush, by the way, calls, quote, "incredibly positive news." And then at the same time, he says, but next year's going to be fine because we're going to bottom out and corporate earnings are going to come back and the economy will revive.

He likes the straitjacket because it puts a hold on spending, so he thinks. But you know, it's a straitjacket for him as well. He hasn't explained where he's going to find the money for the things he wants to do. And I knew that we were really in a recession when I was making an airline reservation and it turns out that the airlines have pulled back on their draconian policy of seven-day advance purchase, Saturday night stayovers because their business is so far down.

You can't ignore the signs. Consumer spending is still going, but who knows for how long. And Bush is going to regret this straitjacket as soon as Congress gets back and he's trying to pass his defense spending.

SHIELDS: Gary Bauer, I think it shows George W. Bush is enormously flexible ideologically. He was for a tax cut because we had this cascading surplus, and we had to get this money back to the taxpayers and the productive element of our society, led by Bob Novak. And now the tax cut is the case because the economy's gone south on him and it's sour.

I mean, either way he's for a tax cut and there's not much left for anything else.

BAUER: Well now look, Mark, the idea of running a surplus when the economy is plummeting is a silly idea. The reason we wanted to have a surplus during good times is so that we would have money available on a rainy day. This is a rainy day.

I agree with Bob that we need lower interest rates. We also need, quite frankly, to use some of the $150 billion that's left, get that money back in circulation, return it to American families, American investors, American business. And that will give us the growing economy everybody wants.

SHIELDS: Al, I mean Gary says you've got to get this in circulation, but my goodness, every Republican leader on the Hill -- and the House stood up there and said, we're not going to touch a single gray hair on the sacred head of Social Security.

(CROSSTALK)

HUNT: Now they're going to do what Governor Earl Long did in Louisiana. They're going to say, "I lied."

(LAUGHTER)

HUNT: Mark, look, a failing economy always hurts the party in the White House. We all know that. That's always the case.

So the debate here really is an alphabetical one: Will it be a U- shaped downturn -- gradually down a little bit, then gradually up; or will it be V-shaped -- dramatically down, dramatically up?

The politics are interesting, those two. If it is V-shaped -- if it goes down sharply and then bounces back sharply in a couple years, it will hurt the Republicans in 2002, probably cost them the House, and then help Bush in 2004, a-la Ronald Reagan. If it's U-shaped, it will have much less effect.

By the way, you've got to look at the global economy. And Bob Novak, I think, has very unfairly criticized Alan Greenspan, who seven times has cut interest rates by a total of 3 percentage points -- the Fed fund rate is down a full 3 percentage points this year. The central bank of Europe has only made one cut. The Bank of Japan is fumbling, as always. Those are two of the villains in this story.

NOVAK: Since my name was mentioned...

SHIELDS: Your name was mentioned, Bob.

NOVAK: Gary, you were wrong, it isn't just cutting interest rates. What we have to do is we have to start targeting -- we have a deflation -- we have to start targeting commodities. We have to have a whole different monetary policy because we're in great trouble. Japan got its interest rate down to zero, and they still have a recession.

BAUER: Right. You misheard me, Bob, I agree that it's got to be more than cutting interest rates. We also have to get the economy moving with capital gains tax cuts and other things.

NOVAK: And I'll tell you this: If we go into a real recession, the idea of -- they talk about, you know, one difference -- a one-seat gain, one seat loss -- we're talking about 30 seats lost by the Republicans. This could be a Republican disaster, and I don't see the urgency at the Bush administration when they talk about this nonsense of 3.2 percent growth rate next year.

(CROSSTALK)

BAUER: Nobody believes it's going to be 3.2 percent.

SHIELDS: No, you just heard it from Bob Novak, and let's be clear about one thing, Al: that is, George W. Bush isn't up until 2004, but there's a lot of Republicans that are up next November.

HUNT: Sure are.

SHIELDS: Next on CAPITAL GANG: Labor Day, Republican-style.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

Continuous pursuit of selected labor unions, President Bush attended a steelworkers picnic in Pittsburgh.

(BEGIN VIDEO CLIP)

BUSH: Makes sense, common sense, not to be heavily reliant upon materials such as steel. You're worried about the security of the country, and you become over-reliant upon foreign sources of steel, it could easily affect the capacity of our military to be well-supplied.

(END VIDEO CLIP)

SHIELDS: The president plans to attend Labor Day gatherings in Detroit, Michigan and Green Bay, Wisconsin. But in advance of the holiday, the AFL-CIO's president said, working people are worried.

(BEGIN VIDEO CLIP)

JOHN J. SWEENEY, PRESIDENT, AFL-CIO: People are concerned. They're concerned about their jobs. They're concerned about what's happening. They see business being favored, in terms of many of the policies of the new administration.

(END VIDEO CLIP)

SHIELDS: Margaret Carlson in New York, does George W. Bush have a chance in this courtship of labor?

CARLSON: I don't think he does. That mill that he was standing in front of at this picnic was running at full capacity in the Clinton administration. It's at 40 percent now. The steelworkers president said after the picnic, "Well, he gave the impression that he was friendly to steel, but he made no commitments," and he's not really going to. The International Trade Commission is against dumping, but Bush didn't really come out and say -- make any commitments that are lasting. If he wanted to be friendly to labor -- I mean, labor has, ever since the Florida recount, been the enemy that Bush has been trying to get back at. So there's just no picnic for labor in the Bush administration. And he might start by inviting John Sweeney over for some hot dogs and hamburgers at the White House if he wanted to make nice.

SHIELDS: Gary Bauer, the president did say something, though, that Bill Clinton hadn't said, and that is, he's willing to take on foreign manufacturers and steel companies that dump in the United States. I mean, that was music to a lot of steelworkers here.

BAUER: Absolutely. It was music to my ears.

Quite frankly, look, I think that a lot of working-class people in this country have cultural values that are very close to my wing of the Republican Party on a whole host of issues. There's no reason why they can't be in the Republican Party, but we've got to give them some economic policies that address their concerns.

And quite frankly, the bottom line is that foreign steel companies have been dumping subsidized steel in this country in an unfair competition, costing Americans their jobs. I think the president needs to follow up on that visit, put some restrictions on that steel and protect the American steel industry.

SHIELDS: Does Gary Bauer make good sense to you, Bob?

NOVAK: No. That wasn't music to my ears. That was a dissonance...

BAUER: Why am I not surprised, Bob?

NOVAK: Because I'm a free trade...

SHIELDS: Name that tune, Bob.

NOVAK: I'm a free trader, and I don't like this -- I mean, if we can't compete in the world with steel, it's just tough on the steelworkers, that doesn't bother me.

But I will tell you this, that the -- Margaret has got it all wrong -- the idea of having John -- John Sweeney hates the Republicans. He hates Bush.

BAUER: Of course he does. You don't have to get John Sweeney's vote, but those guys that are working in those steel mills, we can get their votes.

(CROSSTALK)

NOVAK: I wasn't -- but she wanted to have John Sweeney over to the White House. I wouldn't have him over there anymore than I'd have Al Hunt over to the White House. It's very interesting...

(CROSSTALK) NOVAK: ... on Labor Day the president is going to Green Bay...

SHIELDS: Green Bay, Wisconsin.

NOVAK: ... for the Carpenters Union.

(CROSSTALK)

NOVAK: The Carpenters Union has dropped out of the AFL-CIO -- big message. On Detroit...

SHIELDS: Teamsters.

NOVAK: After that, he's going to the Teamsters in Detroit, a guy named Brandan (ph) who supported him for president.

Al and I interviewed Elaine Chao, the secretary of labor...

SHIELDS: "EVANS, NOVAK, HUNT AND SHIELDS."

NOVAK: "EVANS, NOVAK, HUNT & SHIELDS" -- and she was very clear that they are going to deal with the labor leaders who are friendly to them, and that doesn't include John Sweeney.

I think it's a good strategy. It's not a grand strategy, but it's a good strategy.

SHIELDS: You just don't like the policy; you like the reach-out, but you don't like the policy.

NOVAK: Yes.

SHIELDS: Al Hunt?

HUNT: Mark -- Bob, I'm a little hurt that he doesn't want me invited to the White House. I hope they do invite Bob Novak, starting with the state dinner next week. Bob, let's hope they get you to this White House and show some appreciation.

It's interesting, Gary talked about his wing of the party, not George Bush's wing of the party earlier. In the present...

(CROSSTALK)

HUNT: I cannot tell you how uncomfortably aligned I am with Bob Novak on the steel -- on the steel issue. For the president to claim there's a military justification for that...

NOVAK: It's ridiculous.

HUNT: ... is absolutely disingenuous.

What's at work here, Mark, is what really scares this White House is the perception that they're in the tank to corporate interests. And that's what this is about, to go out and have a picnic with a worker here and there and hope they'll somehow minimize that. They're not going to change any policies because they are in the tank to a lot of corporate interests.

SHIELDS: The test will be two-fold: patients' bill of rights and minimum wage. We'll see if they endorse those.

We'll be back with a "CAPITAL GANG Classic": beginning Mideast peace talks last summer at Camp David.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

Last summer President Bill Clinton brought Ehud Barak and Yasser Arafat to Camp David to seek peace between the Israelis and Palestinians. This is what your CAPITAL GANG said on July 15, 2000.

(BEGIN VIDEOTAPE, JULY 15, 2000)

SHIELDS: Al Hunt, would failure at Camp David really mean a return to violence in the Middle East?

HUNT: Mark, it very well could, but the pattern here is there usually is a last-minute, face-saving compromise to avoid that. Ehud Barak, the Israeli prime minister, really has laid the groundwork among his constituents for a sweeping final agreement on the West Bank, on refugees, even on Jerusalem. And the Likudites would yell, but I think 60 percent of the Israeli public would support it.

Arafat has not, however. And so what he wants is just some sort of partial agreement right now.

SHIELDS: Bob Novak, Mr. Barak is really rolling the dice, isn't he, politically?

NOVAK: He sure is.

SHIELDS: I mean, this is -- this is big-time casino fame.

NOVAK: He is getting a lot of praise -- I think just -- stopped, just probably just by a loss of a vote of confidence in the Knesset -- for taking this risk. And saying, boy, look at all the concessions that he makes, and Arafat won't give up a thing.

SHIELDS: Yes.

NOVAK: If Arafat would agree to Barak's concessions, he'd be finished. What he would be saying is that the half of the Palestinian nation that lives in exile would continue in exile forever; the Muslim claim to Jerusalem would be gone. It's an unacceptable situation.

KATE O'BEIRNE, "NATIONAL REVIEW": The majority of people on both sides desperately want peace, but the definition of peace is different between them.

SHIELDS: Right. Right. CARLSON: And a awful lot of observers think both sides are getting ready for a resumption of an armed conflict, come September. So the stakes are terribly high, but the expectations are pretty low for these talks, I think.

(END VIDEOTAPE)

SHIELDS: Bob Novak, was the GANG right for once in seeing violence ahead in the Middle East?

NOVAK: I don't think anybody there thought this was going to work. I think the only person in the world who thought it was Bill Clinton.

But I thought I was very perceptive, for once, in saying that this was an unacceptable demand on Arafat, and the fact that Barak just wouldn't go far enough meant there was violence ahead.

SHIELDS: Margaret, what's your take?

CARLSON: Well, the GANG never goes wrong in predicting, sadly, violence in the Middle East. I mean, we've gone from land for peace to land for cease-fire to nothing in sight but more and more violence. And Arafat will never get more than he had in July of 2000.

SHIELDS: Al Hunt?

HUNT: Margaret's right, and Bob's wrong. Ehud Barak gave him a deal that they should've taken. It's sad that they didn't.

SHIELDS: Ehud Barak gave his political career, his public career, for peace, and Yitzhak Rabin gave his life, if you think about it.

BAUER: Absolutely. There will be no peace in the Middle East until many of the thugs in the area accept the right of the state of Israel to exist. That is the only time there will be peace.

SHIELDS: Don't you agree there has to be a homeland for Palestine?

HUNT: Well, there does, but let's not carve it out of the smallest country in the area.

NOVAK: Put it in New Jersey, huh?

HUNT: What do you have against New Jersey, Bob?

(LAUGHTER)

SHIELDS: Gary Bauer, thank you for being with us.

We'll be back with the second half of the CAPITAL GANG. The "Newsmaker of the Week": Federal Communications Commission Chairman Michael Powell. "Beyond the Beltway" looks at President Vicente Fox of Mexico. And our "Outrages of the Week." That's all after a check of the hour's top news.

(COMMERCIAL BREAK)

ANNOUNCER: From Washington: the CAPITAL GANG.

SHIELDS: Welcome back to the second half of the CAPITAL GANG. I'm Mark Shields with Al Hunt, Robert Novak and, in New York, Margaret Carlson.

Our "Newsmaker of the Week" is Federal Communications Commission Chairman Michael Powell, the son of Secretary of State Colin Powell.

Michael K. Powell: age 38; residence: Fairfax Station, Virginia; religion: Episcopalian; officer, United States Army; graduate, Georgetown University Law Center; chief of staff, Department of Justice Antitrust Division; named to the Federal Communications Commission as a Republican commissioner by President Bill Clinton.

Al Hunt sat down with Chairman Powell at the FCC earlier this week.

(BEGIN VIDEOTAPE)

HUNT: Mr. Chairman, the FCC is a real hot spot -- broadcast, cable, broadband, the nexus of the information superhighways. What is your most important and toughest task?

MICHAEL POWELL, FCC CHAIRMAN: The toughest task in many ways is integrating all of those. This is perhaps the most unique period in communication history, in which basically every sector of the communications base, whether it be television, telephone, satellites, wireless phones, are really in the most profound period of change in history.

HUNT: The general impression is that you are less regulatory oriented, and more market-oriented than you predecessors. Correct?

POWELL: Well, I don't know if that's correct. I am proud to say that I am very much market-oriented in my approach to problems.

HUNT: In that context, I've talked to a couple top communications executives in the past couple of days, and they say the signal from the FCC these days is pretty much anything goes, especially as it relates to mergers and expansions, to push the limit. Is that a good signal?

POWELL: My own advice to them would be that would be a grave miscalculation. Being market-oriented is also one committed to making sure the conditions of functioning and healthy markets exist. Just because you're market-oriented is not the same thing as anything goes.

HUNT: You recently were instrumental in Rupert Murdoch being able to buy another television station in New York. He already owns one; owns a newspaper there. But critics say what that does is it gives -- there will be consolidations, job losses. It will give Murdoch more leverage over advertisers and enhance his already considerable clout in the political community in New York.

Are those worries that are legitimate?

POWELL: Some of what you said are, some of what you said aren't, from my perspective. We don't evaluate what political power or lack of political power is accrued by a particular individual or not. The truth of that situation is New York is, without question, the most diverse media market in America. It was our informed judgment that based on the facts and the nature of the market there wasn't a strong case for complete denial.

HUNT: Well, let's talk also about AOL-Time Warner, which owns this network and also is the nation's second-largest cable operator. There have been talks with AT&T broadband, the largest cable operator, as has Comcast, the third largest. Is there any concern here that if any of these very big cable operations were to merge, and you end up with three or four cable companies controlling the whole market, that that would stifle or limit content for consumers?

POWELL: Yes, that's absolutely one of the things we consider on a case-specific basis. One of the things you learn is it's very difficult to over-generalize about whether a particular combination is bad or is good. One that I think is misunderstood is that cable operates in regional franchises and local franchises. Your local county is your franchising authority.

HUNT: You, as you know, got a lot of flak recently when you seemed to dismiss worries about the digital divide. One-hundred-fifty million Americans are connected to the Internet, but about 125 million are not. They are disproportionately poor and minorities. Should government have an obligation to do something about that divide?

POWELL: I think that the comment I was trying to make is that if you're going to have a substantive debate about whether the conditions exist for justifying government intervention, you have to drill down to some level of granularity, truly examine what are the causes of gaps and divides and see whether they are really failures in the market.

I am not one who is hesitant to embrace targeted government action if the case can be made as to why there's a breakdown in market's ability to deliver that to consumers. I just think that I'm not sure we've seen the evidence persistent enough to justify massive intervention on the scale that some advocate.

HUNT: Final question, Mr. Chairman. When you and your dad get together, does the talk, other than grandchildren and children, turn more to politics and diplomacy or to communications and technology?

POWELL: Neither, usually. Both of us are usually desperate to put the office behind us. I openly confess that I know very little about what he does for a living. He knows very little about what I do for a living. But we're both deeply and mutually proud of each other's careers and accomplishments.

(END VIDEOTAPE) SHIELDS: Al Hunt, did you come away from your talk with Chairman Powell seeing him as a regulator, an activist?

HUNT: No, Mark. In fact, I think he's a bit more conservative than his father. I think the danger for a free marketeer in that job right now is the perception among some companies that anything goes, and the big guys can get away with anything, and that's why I think he said that that would be a big mistake.

Let me just say a word about Michael Powell. He may have gotten ahead to begin with because of family connections, but this is a fellow who has his father's and his mother's charm. One consumer activist who disagrees with Powell on almost all the issues says he just lights up a room when he comes in. And if you want to buy political futures, you might invest in Michael Powell. This is a guy either for a bigger job in this administration, or a Republican governor or senator some day.

SHIELDS: Margaret Carlson in New York, we talk about deregulation. We deregulated the Communications Act, and since then cable rates have gone up over 30 percent nationally. Is the case for deregulation there? Or has it past?

CARLSON: I wonder if people feel that government off our backs is good when they get the cable bill every month and it seems to go up every month, besides being unable to figure out what you're paying for.

I agree with Al. Michael Powell is an up-and-coming politician. He's got all the attributes of his father, and I think he's more Republican than his father. He's more of a free marketeer, so he'll appeal to the Bush people perhaps even more.

But one day we're all going to be working for Rupert Murdoch if government doesn't start regulating again. You know, I disagree. I think there are three or four huge companies, and somebody ought to step in and start to fix that.

SHIELDS: Bob Novak?

NOVAK: Mark, I love Margaret whining about cable rates. It's just really impressive.

(LAUGHTER)

NOVAK: I really feel...

(CROSSTALK)

SHIELDS: It's a monopoly, Bob. It's a monopoly.

NOVAK: I really hope that Chairman Powell is less of a regulationist. I think he looked in Al's eyes and he couldn't really say, "I am a free-marketer and I hate regulation."

HUNT: He did say that, though. NOVAK: This may be the only time we ever talk about the FCC on this program, so I just want to say I just wonder why, if it still has a reason for being, since we don't try to dictate content anymore, I think that would be one of the great agencies to get rid of.

SHIELDS: That's it from Bob Novak.

Next on CAPITAL GANG: "Beyond the Beltway" looks at President Vicente Fox of Mexico.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

"Beyond the Beltway": Vicente Fox, the first member of an opposition party ever to win the Mexican presidency visits Washington next week to be honored at President Bush's first official state dinner.

(BEGIN VIDEO CLIP)

BUSH: It's an important visit because good foreign policy starts in your own neighborhood. And I'm pleased to report we've got good foreign policy with our neighbor to the south.

(END VIDEO CLIP)

SHIELDS: Joining us now is Washington lawyer Jim Jones, a respected long-time Democratic member of the Congress who was United States ambassador to Mexico during President Clinton's first term.

Thanks for coming in.

Jim, what does Vicente Fox mean -- his election, his leadership -- mean for Mexico?

JAMES JONES, FORMER U.S. AMBASSADOR TO MEXICO: Well, I think it means two things inside Mexico. To Mexicans, it means their hopes, their aspirations, their dreams about having real democracy and all the good things that come with that -- transparency, end of corruption, et cetera -- they embody that in Vicente Fox.

To the outside world, including the United States, it means a discovery of the reformation of the revolution that's been taking place in Mexico, and he is the embodiment of the modern Mexico.

SHIELDS: Bob Novak?

NOVAK: Jim, it seems that the visit has been kind of tied up in the perhaps premature announcement by President Bush of trying to open the flow of immigration by starting to legalize the illegal immigrants in this country, and that seems to have fallen off the track.

Doesn't that kind of put a little bit of a pall on this visit by President Fox? JONES: Well, I think the news media and the political leaders in both countries have been talking about immigration, so undoubtedly that's going to be a big part of the meeting. I don't think they're going to come up with a final answer, but I think they can move the ball forward.

Right now you have three categories: You're either a citizen, a legal resident or illegal. And I think what they might do is to come up with some additional categories so that you're in this country, you have certain legal protections under general human rights kind of protections with some possibility of moving toward legal residency.

NOVAK: Is that the big issue between the two countries right now, do you think, immigration?

JONES: Well, it's always a big issue. Right now it's not as big an issue, because Mexico wants some sort of an immigration treaty or some sort of an immigration new status in the United States, because the Hispanics are the largest minority population growth. Both political parties want some sort of immigration normalized, that term. So it's an issue that can be dealt with now.

SHIELDS: Margaret Carlson in New York?

CARLSON: At times it seems that President Bush doesn't have a foreign policy, he has a Mexico policy, and that the Mexico policy is really a domestic policy.

He feels comfortable with President Fox. He knows how to pronounce his name. And he can reach out to Hispanics through him, that that's -- that's the real agenda here. What do you make of that?

JONES: Well, I think when President Bush came into office, his only real foreign policy experience was Mexico. I believe I introduced then-Governor Fox to then-Governor Bush, and they did hit it off well. And President Bush has had an interest in Mexico because of the proximity of Texas.

So I think it happens to be fortuitous for him that Mexico and Mexicans and Hispanics are also a popular political issue in the United States. So I think he's going to play it for all it's worth.

SHIELDS: Al Hunt?

HUNT: Jim, let me ask you a question. I talked to a top member of the Clinton administration who said that one of the great regrets of leaving office was not being able to work with Vicente Fox. He was such a dynamic figure.

But let me ask you about unrealistic expectations. There are some, in fact -- there are some difficult problems, maybe even intractable down there. In particular, can he do much about corruption, which has been a terrible problem, particularly as it relates to drugs in Mexico?

JONES: Well, I think throughout Latin America, and Mexico included, the whole issue of reforming the legal system is the biggest reform and the most difficult reform all of them are going to take on. And that deals with the law enforcement systems, the judicial systems and it goes to the basis of corruption in those societies.

So I think he's going to make a good head start on it. I don't think corruption's going to be totally wiped out, but I think over a period of time you're going to see Mexico as any other first-world country...

HUNT: He can take on the drug lords?

JONES: Oh, I think so. In fact, he's already starting to do it. That's one of the interesting things about Fox's election. He's been able to break the old taboos, the political taboos. So he has been able to just go right through the process and extradite criminals to the United States. He's been able to get training up in the open from the United States for their law enforcement people. And he's been going after the drug cartels rather effectively.

SHIELDS: Jim Jones, you undoubtedly saw the movie "Traffic," I'm sure, that focused on Mexico and the United States and drugs...

JONES: I knew the real life...

SHIELDS: I know you did, and I'm just asking it. But I mean, there are real fears about the Colombia-zation of Mexico in failing the success of President Fox's efforts on law enforcement. Isn't that a real risk we run?

JONES: I would say five years ago that was a very big risk. President Zedillo started an effort against it, Fox has accelerated that effort. I think it is a much less significant risk now.

SHIELDS: And just the only other thing, Senator Phil Gramm of Texas points out that, you know, this sort of modified system of amnesty for people -- undocumented workers being in the United States from Mexico leads to the open exploitation of workers who really have no legal rights, have no political rights, and can be exploited by fairly ruthless employers in this country.

JONES: See, I think that's what's not going to be discussed -- amnesty as per se is not going to be discussed. What President Fox wants -- those who are here and are working and are paying taxes and doing all the things citizens should do, should also have the rights to organize, should have the rights to be able to complain about their employer who's unscrupulous, et cetera.

Those are the kinds of categories that I think that they might be talking about in changing our immigration laws.

NOVAK: Jim, the Congress has voted to put restrictions on trucks from Mexico going north of the border. I think that is a totally phony issue, but I'm going to ask you, as somebody who knows something about it: Do you think that is just a form of protectionism, or do you think there really is a safety factor with the Mexican trucks? JONES: Well, I think it's bogus, a phony issue, as you say because, No. 1, we should enforce our safety laws, but that can be done. The state of California says they can do it. At the time Governor Bush was governor of Texas he said they could do it.

You know, it's a matter of our treaty, it's a matter of law. And if we don't live up to it, how can we go preaching to the rest of the world, "Follow the rule of law," when we don't do it ourselves?

NOVAK: Is it difficult to just have the Canadians coming down free and not the Mexicans?

JONES: Yes.

SHIELDS: What do you say to conservatives and law-and-order folks on Capitol Hill who say we're rewarding law-breakers by this amnesty plan on undocumented immigrants?

JONES: Well, I -- probably the same kinds of arguments that were made in 1986 and before when we had an amnesty program.

But that's not really what they're asking for this time. What they're asking for, those who are here and are acting as good citizens even though they're not citizens, they ought to have certain protections of the law. It's a matter of human rights. And if they continue to be, there ought to be a process that allows them to become citizens.

SHIELDS: Jim Jones, thank you so much for being with us.

JONES: Thank you.

SHIELDS: Appreciate it.

The GANG will be back with the "Outrage of the Week."

(COMMERCIAL BREAK)

SHIELDS: Now for the "Outrage of the Week."

Working men and women get Labor Day off and an average raise this last decade of just 3 percent. During that same period, pay for American CEOs jumped 571 percent. Today's CEO is paid 531 times more than is the average American worker.

But here's the real outrage: According to a study by United for a Fair Economy and the Institute for Policy Studies, the CEOs of companies that laid off at least 1,000 workers this year were paid an average of $23.7 million a year. That's 80 percent more than those CEOs who did not fire at least 1,000 workers.

Million-dollar bonuses for job cutters is an outrage.

Bob Novak?

NOVAK: The Reverend Jesse Jackson resurfaced in a way that made his long seclusion seem a blessing. He did not merely attack Secretary of State Colin Powell for not attending the International Racism Conference, which intends to revive the "Zionism is racism" theme. Jackson said of Powell, quote: "His being denied the permission to go isolates the nation and diminishes his stature," end quote.

That fits the pattern of black demagogues slandering any African- American Republican as a pathetic tool of the white man. That in itself sounds racist to me.

SHIELDS: Margaret Carlson in New York.

CARLSON: Mark, last week's Powerball was the ultimate fools' tax. By rolling unclaimed jackpots into bigger and bigger prices, Powerball lowers the odds of winning, but raises the heights. Sales skyrocketed -- 204 million tickets were sold in the three days after Powerball's last winner-less drawing. The biggest players are disproportionately poor, spending an average of $4 per day, and one in every 11 players is a compulsive gambler. The state shouldn't sanction this and the press shouldn't hype it. The government is turning the country into one big casino, and too many Americans into chumps.

SHIELDS: Al Hunt.

HUNT: Mark, former Ironworkers President Jake West was charged with embezzling union funds for personal use. I have no idea if the 73-year-old West is guilty or not, but surely he was no risk to flee. That makes it outrageous that the FBI staged a dramatic arrest of West this week while he was having dinner with friends at the Prime Rib restaurant in downtown Washington. This puts a political taint on the whole charge -- one that the acting U.S. attorney and the bureau should be forced to answer.

SHIELDS: This is Mark Shields saying good night for the CAPITAL GANG. "CNN TONIGHT" is next.

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