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CNN LARRY KING LIVE

Jet Blue CEO Explains Why Customers Must Pay for Blankets & Pillows; Paris Hilton Strikes Back With New Ads

Aired August 6, 2008 - 21:00   ET

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


LARRY KING, CNN ANCHOR: Tonight, air travel outrage -- JetBlue Airways' CEO is here to tell us why that we now have to pay for pillows and blankets.
Are we shelling out more and more to fly while getting less and less for the buck?

Plus, Paris strikes back.

(BEGIN VIDEO CLIP)

PARIS HILTON: Hey, America. I'm Paris Hilton and I'm a celebrity, too.

(END VIDEO CLIP)

KING: Hitting hard at John McCain, who used her to trash Barack Obama.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: He's the biggest celebrity in the world.

(END VIDEO CLIP)

KING: Is the Republican candidate suddenly feeling the heat from an ad that might have backfired?

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I'm John McCain and I approved this message.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

HILTON: I'm just hot.

(END VIDEO CLIP)

KING: All right now on LARRY KING LIVE.

Good evening.

Depending what airline you're flying this summer, you may have to cough up extra cash for food, water, baggage check in, more leg room, a particular seat assignment or ticket changes. And now JetBlue has added a new twist to the airline industry's ongoing effort to squeeze more revenue out of passengers. It's charging seven bucks a pop for blanket and pillow package on flights of two hours or longer.

By the way, you do get to keep the package. You are buying it.

We welcome to LARRY KING LIVE Dave Barger. He is the CEO of JetBlue Airways. Thanks so much for joining us, Dave.

DAVE BARGER, CEO, JETBLUE AIRWAYS: Hey, Larry. I'm absolutely honored to be here on behalf of our crew members.

KING: My pleasure.

We sent a LARRY KING LIVE camera crew out to find out what JetBlue passengers had to say about the airline's new pillow plan. Here's a sample, Dave.

BARGER: Great.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Well, I don't know if I want to pay $7 for a pillow. That just -- that just doesn't make any sense. And with the gas prices going down, that absolutely doesn't make any sense.

UNIDENTIFIED FEMALE: They've got to make it up somewhere. It's expensive, gas and jets and -- so I'm OK. With that. We just chose not to buy a blanket or a pillow today.

UNIDENTIFIED FEMALE: I carried my own blanket and I have my own headset. But I just think when you get down to $7 and a dollar for a headset, like, when you pay $800 for a ticket, it's a little bit ridiculous.

(END VIDEO CLIP)

KING: All right Dave, what's been the customer reaction?

BARGER: Yes, well, I'll tell you, Larry, it's been only since the third of this month that we've been out there with the pillow and blanket campaign, if you will. But I think the way to look at this is this is really about a -- this is a $2 product. This is a $7 purchase of a brand new pillow, blanket, a very cool company called Clean Brands up in Providence, Rhode Island. And you take it home with you and you get a $5 gift certificate store coupon from Bed Bath & Beyond.

So that's a pretty good deal as opposed to, say, using somebody else's blanket and pillow off the inbound aircraft. So this is a nice way to offer an amenity, if you will, to our customers.

KING: So you're in another business there, Dave?

BARGER: I'll tell you, it's all about listening to our customers, Larry. And we have heard -- especially as we fly, say, from our home here in New York to Los Angeles. You know, that's a six hour flight and people are looking for those type of amenities on the airplane. So we wanted to be responsive and this is the product we came up with.

KING: What happened to cause this?

BARGER: Well, I think, you know, truth be told, with the pillows and the blankets, within JetBlue, we've been wrestling with this for the last several years. Because there's an awful lot of logistics tied into flying an airplane 13 hours a day, but also offering a clean pillow and a clean blanket to all of our customers.

Now, all that said, let's face it, the whole industry is on our heels as we're taking a look at how do we offset the cost of oil, today, over $118 a barrel. The cost of refining another $30 a barrel.

And so I don't think of this as necessarily offsetting the cost of oil, but more about a product enhancement and listening to our customers.

KING: "Time" magazine, Dave, recent had an article out called "Airline Fees: Who's the Stingiest?" And in a list ranking nine major carriers from friendliest to stingiest, you came up fourth behind Southwest, Virgin, America and Delta.

How do you react to that?

BARGER: Yes, I think it's -- I think my reaction, Larry, would be one of -- you know, for the forth straight year, J.D. Power and Associates honored JetBlue as best in category. And so I would look at probably that type of response from the traveling product as opposed to the recent poll regarding who's stingiest, if you will.

So I think our product has been recognized by our customers and we're certainly trying to improve it every day.

KING: JetBlue started out a very unusual airline at the time -- live TV throughout the flights, very low costs and only flying to certain places. You've expanded a lot.

Why?

BARGER: Yes, it's a -- well, first of all, from our, again, our home in New York -- and we'll open a new terminal in about 60 days, October 1st, as a matter of, the new building here at Kennedy Airport.

And people are saying they want to go to Florida, the Caribbean. They want to go to the West Coast. So we're offering those selections, flying to 53 markets today.

And now, we're not growing as much as were in the past. We opened 16 new cities in 2006. And this year we've only opened two so far. So we're slowing the growth, like the rest of the industry, being responsible to the new normal, if you will, of the oil -- the cost of oil.

But our plan is to win and be here for the long-term and keep expanding, listening to where our customers want to fly.

BARGER: We're check out some people at airports live right now.

And we've got a lady named Barbara at the Long Beach Airport who's waiting for some people coming in on a JetBlue flight.

Do you have a question for Dave Barger, Barbara?

BARGER: Thank you.

BARBARA: Hello, Larry, and David.

KING: Hi.

BARGER: Hi.

BARBARA: My question is two parts. And the first part is now that we're starting to see a decrease at the gas pumps, when might we start to see some relief on our airline fares?

And the second part of my question is, with the incidental expenses for the pillow and blanket bundle, are those here to stay or are there going to be other incidental expenses coming along the way?

KING: Two good questions, Barbara -- Dave?

BARGER: Sure. Real good questions. Thanks, Barbara.

I think, first of all, from the standpoint of fares, Barbara, oil is still at a record high level. So from the standpoint of oil just over the past year, up over 100 percent and the cost of a barrel, if you will, that raw product. And for us, that's now 40 percent of the cost of flying a seat one mile, if you will, is 40 plus percent.

So I don't think we're going to gouge fares. Our highest fare was only $138 last quarter. So we're still going to be a fair, fair airline, if you will.

From the standpoint of your second question, and that is, really, the nickel and diming or the ancillary revenue themes, our plan is really one of here's the JetBlue, the core experience. You can purchase up to a better experience or there's going to be some limited fees for those customers who need that special handling. We don't want to be known as the nickel and diming airline.

KING: We have an e-mail question from Anjali in West New York, New Jersey: "How much added revenue does JetBlue expect to make from the on board sale of pillows and blankets?"

BARGER: Yes, and I'll take that, Larry, from Anjali and the e- mail. It's a -- and, hopefully, the customer is flying us out of Newark Airport.

But it's a rounding air. We're not looking at this product as something that is a significant bottom line contribution to our revenues. This is really about a response to what customers are saying.

Pillows and blankets are one thing, but I want clean pillows and blankets and something I can reuse. So it really was a perfect opportunity for us.

KING: We'll be back with more of Dave Barger. We thank him for joining us, the CEO of JetBlue.

Don't go away.

(COMMERCIAL BREAK)

KING: Would you pay for a pillow and blanket on an airplane? That's tonight's quick vote question. Go to CNN.com/larryking and let us know what you think.

Dave Barger is our guest, CEO of JetBlue. By the way, Dave, if you want to bring your own pillow and blanket, is that OK?

BARGER: Oh, absolutely, Larry. In fact, we encourage that. In fact, bring your own headset to watch live TV or listen to satellite radio. So that's part of -- that's part of our offering.

KING: That's right. On JetBlue, they could be watching us right now, right?

BARGER: I'm sure right now 130 plus airplanes in the sky -- Channel 11, CNN, watching.

KING: OK. Good to know.

As you might expect, David, the late night comics have had some fun with JetBlue's new selling pillows policy. Let's take a look.

BARGER: OK.

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, HOST "THE LATE SHOW WITH DAVID LETTERMAN": If you want a blanket and a pillow and -- it used to be who wants the blanket, who wants the pillow, who wants the blanket, who wants the pillow?

(LAUGHTER)

LETTERMAN: Now, if you want a blanket and a pillow, seven bucks on JetBlue. Right there, yes. Great. So now you'll be able to get a solid eight hours sleep on the runway.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": Isn't that unbelievable, seven bucks if you want a pillow and blanket. Oh, and here's the good part. This is true. They say you can take the pillow and the blanket home with you. Oh, that's a home decorator's dream come true.

(LAUGHTER)

LENO: Like, who would want airline decor in their own home?

(END VIDEO CLIP)

KING: How do you react, Dave?

BARGER: Yes, it's a, I think certainly our timing on the back side of other carriers charging for water and what have you, Larry, we kind of -- maybe our timing wasn't the best. But I saw Mr. Letterman and Mr. Leno, as well. And I think it's fair game. Hey, we're out there in the marketplace here in New York and across the network.

KING: What does it cost JetBlue to fuel up for a New York to California flight?

What's the average fare for that flight?

What does it cost you to fuel up for that flight?

BARGER: Yes, a way to think about that, Larry, from, say, Long Beach or Burbank into New York/Kennedy, about 5,000 gallons that we'll use for that type of flying. And so what used to be about $9,600 to really fly the trip, to fuel the airplane, if you will, is now pretty close to $16,500. So you can start to run that math. I mean this year, it's going to cost us about $3.27 at the pump.

KING: Almost double?

BARGER: Yes, sir.

KING: Let's take a question for Dave Barger.

Centerville, Virginia, hello.

UNIDENTIFIED FEMALE: Hi, Larry.

KING: Hi.

UNIDENTIFIED FEMALE: I'm calling, you know, my question isn't really about the $7 blanket and pillow. But it's more about the luggage charges and like you were saying, what it costs to fuel a plane to fly. And, you know, recently I was at an airport where, when they checked my bag, I guess it weighed maybe two pounds more than the limit and they wanted to charge me a fee.

And I looked around and I realized, you know, I weigh 110 pounds and the person next to me 300 pounds.

And why is two pounds penalizing me and not somebody who is larger -- and then I'm thinking taking up more of the fuel costs?

KING: Yes. Good point. Good point. Dave, how do you respond? BARGER: Yes. I think it's a great question, Larry. And, in fact, 11,000 crew members across our airline -- and what I don't want is really -- pardon the use of the term, but really to be ticket police. And I mean common sense has to take place at a ticket counter. For two pounds overweight, let's use common sense and really take care of that customer, because that's a perfect question in terms of how much does the individual weigh plus how much are we taking on the airplane?

I mean this is really about -- I mean we only charge for the second bag and only 25 percent of the customers check a second bag. And we think that that is an appropriate fee for those extra 50 pounds, not the two pound.

KING: Another person at an airport. This is Dulles. And the questioner is Adnan.

Adnan, are you there at Dulles in -- out in the outskirts of Virginia?

ADNAN: Yes, I am. I can hear you clearly, Larry.

KING: Go right ahead -- Go ahead.

ADNAN: Yes, my question is -- my question is, usually, over the past few years with airlines -- and I travel internationally quite frequently. The perception is that an airline is going to add more services within the same cost. And now we hear with this airline that each extra that they give you, in addition to your seat, they're going to charge you for. And that sort of doesn't fit into my mind set of hospitality.

So I don't know how do they plan to market that, because it's something I'm just not used to and it isn't fitting into my perception of hospitality.

KING: All right -- dave?

BARGER: Sure. Yes, I appreciate Adnan's (ph) question from our operation out of Washington Dulles. And I think that it's really, again, Adnan, we're not about just the continuous -- the unbundled product, where we're going to charge you for everything. The core JetBlue experience -- and, again, this J.D. Power award-winning experience as a new airplane, it's a very comfortable seat. It is -- and, by the way, we offer the opportunity to even purchase even more leg room if you want. So that's an upgraded service.

We offer you an assigned seat assignment. We don't overbook. And, oh, by the way, there's 136 channels of entertainment options and a great staff to deliver the product.

So that's the core experience. And take advantage of as much as you want to eat and drink en route, as well.

So I really don't think the JetBlue product is one of nickel and diming and totally unbundled. KING: An e-mail question from Kathleen, Upper Darby, Pennsylvania: "In my opinion, the average customer doesn't give a darn about free drinks or snacks or pillows. What we care about is safety. And with all the operation cutbacks the airlines are making, should we worry that safety is being compromised?"

BARGER: Yes, it's a great question by Kathleen. And, really, at this point, Larry, it's -- I think we take all our logos off our chest as an industry. And I saw your show a couple of weeks ago also on this topic.

Safety and security is the top -- that's the top of the pyramid in this industry. And airlines don't compete when it comes to safety and security. And so everything that we do, first and foremost, is with those two topics in mind.

We're going to fly you nicely, if you will, but we're going to do it safely and securely, first of all.

KING: All right. We'll be right back with Dave.

Is the cost of jet fuel and its impact on you on the candidates' radar? Should it be?

That's next.

(COMMERCIAL BREAK)

KING: We're back with Dave Barger, the CEO of JetBlue.

An e-mail from Charlie in Beverly, Massachusetts, Dave: "Mr. Barger, when do you expect airlines might start using biofuels?"

BARGER: Yes, Charlie, I think the use of biofuels -- there's a lot of discussion and a lot of investment taking place. But alternative fuels in airliners, unfortunately, is still a long way away. I don't think you're going to see anything for at least a decade on this front, although you're going to see some testing here. And we're participating with our business partners on testing, as a matter of fact, right now.

KING: All right.

Let's go out to an airport again. This is Long Beach Airport. And standing by is Ike -- Ike, are you there?

IKE: Yes, sir.

KING: Go ahead, Ike.

IKE: Hi, Dave. My name is Ike.

I'm looking to be an airline pilot.

If the prices keep going up, I was wondering if this will be a great industry to be in within the next five years? BARGER: Yes, thanks -- Thanks, Ike.

It's -- by the way, I think the airline industry and being a pilot, I think it's a great career. In fact, my father was an airline pilot for 37 years. And so -- and I encourage you to stay after it.

I think what's happening right now is this industry is really reacting to this new normal of cost of oil. I think there's a silver lining here, because what's going to happen, I believe, is we're going to have a stronger industry when we come out the other side. And I think that this is going to be a great place to work. In fact, I would encourage you, get those hours and apply with JetBlue.

KING: Let's take a call now.

We go to Phoenix City, Alabama -- Hello.

UNIDENTIFIED FEMALE: Hello?

KING: Hi. Go ahead.

UNIDENTIFIED FEMALE: Hi, Larry.

My question is, for people who don't fly often, could there be an all inclusive price that includes everything -- luggage, food, drinks, blankets and, of course, the price varying from, you know, if you fly to the Bahamas as opposed to Europe?

BARGER: Sure. It's a -- as a matter of fact, yes. And some airlines are totally inclusive. And, in fact, I think how we look at that is, when you talk about the Bahamas, we have fun with the JetAways package. And that is all inclusive. Everything is included, from airfare to ground to car rental or whatever the case may be. But it's an all inclusive package. And customers really like that.

KING: By the way, we have a great panel coming ahead. And that panel will include Arianna Huffington and Kellyanne Conway and Stephanie Miller and Ben Stein. And we'll have a couple of them ask questions of Dave Barger, as well.

One other thing from here, Dave.

BARGER: Sure.

KING: The Dow Jones News Service quotes David Stempler -- we all know him.

BARGER: Yes.

KING: ...president of the Air Travelers Association. He says: "In many way, we've seen the enemy. It's us. We're not willing to pay for better services, yet we fully expect them."

BARGER: Yes, I think that, you know, David's question has really been battered about the industry. And, in fact, should we re-regulate?

Was deregulation the right thing to do?

Larry, I think my response, on a go forward basis, deregulation was a good thing. I'd like to see the government somewhat involved, for example, say investment in next generation air transportation systems.

But we want to make sure that we open the doors to the traveling public, those who want to fly, which is really a result of lower fares. And I do think that we'll be able to offer a very nice product at different price points to anybody who wants to fly in the sky.

KING: A couple of our...

BARGER: So I...

KING: A couple of our panel members, Dave, may have questions and they may relate to the campaign ahead.

BARGER: Sure.

KING: We'll start with Arianna Huffington for Dave Barger.

BARGER: Great.

ARIANNA HUFFINGTON, CO-FOUNDER, HUFFINGTONPOST.COM: Dave, actually, you brought up the whole point of deregulation. And this has also been one of the reasons for the problems the airline industry is facing, as well as the high oil prices.

So if you're going to get the government involved, as you said, what exactly would you have the government involved in?

What would you change?

What would you re-regulate?

BARGER: Yes, Arianna, good evening.

It's, I think, really from a standpoint of deregulating the marketplace, that's really all about schedule and price. And I don't think that this is a good use of U.S. government resources to determine if JetBlue should fly to a market and what we should charge.

International, I understand that it's a little bit different ball game. I think what I'd really like to see out of the White House and Capitol Hill is a huge focus on a national energy policy, which I think is so important. And I think, really, reauthorization funding, if you will, for the FAA. And this is all about user fees, as opposed to the current tax situation that we have.

I think that that's the best use of government resources.

KING: Ben Stein. Ben is with us tonight. He's in Sandpoint, Idaho, where he owns a home.

Do you have a question, Ben? BEN STEIN, POLITICAL COMMENTATOR, TV PERSONALITY: I do, indeed, Larry.

I am old enough to remember, with my gray hair, when airline travel was, indeed, regulated and prices were fixed by the Civil Aeronautics Board and so were schedules. And airline travel was magnificent. It was clean, it was neat, it was orderly, it was spacious. It wasn't torture.

Why don't we just admit we made a mistake, that deregulation doesn't work in a super high fuel cost environment and go back to regulated travel?

I mean it was so much more pleasant. Why not do that? I mean in the regulated travel days, coach was far better than first class is now.

Why don't we go back to those days?

BARGER: Yes. Good evening, Ben.

I certainly agree with you that in the past, for those who could afford it, air travel was a -- it was a very nice luxury. And I still think that air travel is a very affordable luxury today.

And when I look at something like our rail system across the country, I don't think that's a very good example, if you will, of government involvement and just, you know, a return to regulation.

So I think there's a fine line between the government being involved at the right point, but also too much involvement.

STEIN: But air travel now...

KING: All right...

STEIN: ...it's not a luxury, sir. It's torture. I mean it's torture.

BARGER: Yes. And, you know, it's...

(LAUGHTER)

BARGER: It can be. But, again, when I think about a brand new airplane from New York to L.A. tonight watching this station, six hours and, say, 20 minutes from block to block and somebody's doing it for $220, $240 on average, that's an affordable luxury to be able to end up in Los Angeles this evening, Ben.

STEIN: Well, it's affordable torture. I mean what it is, affordable torture.

KING: Ben, you've made your point.

STEIN: Yes.

KING: Dave, by the way, took a 50 percent cut in his pay.

Do you encourage other CEOs in this time of financial crisis to follow suit?

BARGER: I think, Larry, every airline is going to be a little bit different. Every CEO is going to make their own decision.

My decision to reduce my pay was one to say hey, listen, there's some hurt going on in the industry. I want to share in that, if you will, on behalf of our members.

Everything that we're doing across the airline is voluntary. There are no involuntary programs -- cutbacks, furloughs, what have you, happening at JetBlue.

So I think each airline's CEO is going to have to make that determination themself.

KING: Thanks, Dave.

BARGER: Thank you.

KING: Dave Barger, the CEO of JetBlue Airways.

Thanks for that. We hope to have you back again.

BARGER: I look forward to it.

KING: And our panel -- we'll be joined -- Ben Stein and Arianna Huffington already here -- by Kellyanne Conway and Stephanie Miller.

And Paris Hilton's making news.

Has she got a good energy plan?

Are we for real?

When we come back.

(BEGIN VIDEO CLIP)

HILTON: Hey, America, I'm Paris Hilton and I'm a celebrity, too, only I'm not from the olden days and I'm not promising change like that other guy.

I'm just hot.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: Welcome back. We got a great political panel assembled; Ben Stein, the "New York Times" columnist, political commentator, best-selling author. His latest book is "How to Ruin the United States of America." He's a supporter of John McCain and he's in Sand Point, Idaho; Arianna Huffington, here in Los Angeles, co-founder and editor of TheHuffingtonPost.com and a support of Barack Obama; in New York is Kellyanne Conway, Republican strategist and pollster, and supporter of John McCain; and here in L.A., Stephanie Miller, the talk radio host of her own program, supporter of Barack Obama.

The McCain campaign, folks, has grabbed a lot of attention, stirred up a lot of fuss with an attack ad called celeb. Watch.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: He's the biggest celebrity in the world. But is he ready to lead? With gas prices soaring, Barack Obama says no to off-shore drilling, and says he'll raise taxes on electricity? Higher taxes, more foreign oil, that's the real Obama.

MCCAIN: I'm John McCain and I approve this message.

(END VIDEO CLIP)

KING: Not one to shy from the spotlight, Paris Hilton has fired back in a video spot on the comedy website FunnyOrDie.com. Here's part of that spot.

(BEGIN VIDEO CLIP)

HILTON: Hey, America, I'm Paris Hilton, and I'm a celebrity too. Only I'm not from the olden days and I'm not promising change like that other guy. I'm just hot. But then that wrinkly white haired guy used me in his campaign ad, which I guess means I'm running for president. So thanks for the endorsement, white haired dude. I want America to know that I'm like totally really to lead.

And now I want to present my energy policy for America, just as soon as I finish reading this article on where I can fly to to get the best tan. Oh, Maui. Loves it.

OK, so here's my energy policy: Barack wants to focus on new technologies to cut foreign oil dependency, and McCain wants offshore drilling. Why don't we do a hybrid of both candidate's ideas? We can do limited offshore drilling, with strict environmental oversight, while creating tax incentives to get Detroit making hybrid and electric cars. That way, the offshore drilling carries us until the new technologies kick in, which will then create new jobs and energy independence.

Energy crisis solved. I'll see you at the debates, (EXPLETIVE DELETED). Now if you'll excuse me, I have to go pick out a vice president. I'm thinking Rihanna. I'll see you at the White House. Oh, and I might paint it pink. I hope that's cool with you guys. Bye.

I'm Paris Hilton and I approve this message, because I think it's totally hot.

(END VIDEO CLIP)

KING: Amazing. That was off the top of her head, by the way. OK, Ben Stein, what is your read on this important news politically of the day?

STEIN: Well, I think it's pretty amazing to see the likes of Paris Hilton, a person who got her start as a well-known national celebrity by appearing in a porn video, criticizing McCain. And you left out the most vicious parts of it, where she made vicious fun of his age. And I -- it just shocks me that a person who is -- who is -- who she is has the nerve to make fun of a man named John McCain.

He's a very far from perfect guy and I've criticized his economic policy over and over again in my column, but to make fun of him because of his age and because of his wrinkles and infirmities for being captivity for this country, it just staggers me.

KING: OK. Stephanie, do you think she was making fun because he was making fun of her being a celebrity?

STEPHANIE MILLER, RADIO TALK SHOW HOST: I think he started it, as they say in eighth grade. And, you know what, Larry, here's where we've entered a parallel universe in the 2008 race. John McCain at a biker rally offered naked video of his wife, for some reason, for a naked beauty pageant, and Paris Hilton has a more comprehensive energy strategy than he does. So we've entered a really weird time in politics, in my opinion.

KING: Kellyanne Conway, what's your read?

KELLYANNE CONWAY, REPUBLICAN STRATEGIST: I'm of two minds on it. I think it's harmless fun on the part of Paris Hilton, who in 2004 was part of the Vote or Die Campaign and then it was revealed she wasn't even registered to vote, and I assume did not cast a ballot. Hopefully, this time she's a little bit more engaged.

I do have to say that Paris Hilton has a living grandfather who's 81, ten years older than John McCain, and I hope she doesn't think he's an old white wrinkly guy. At the same time, people need a little bit of levity in politics once in a while. I don't think anybody takes her seriously as a political commentator. Her energy plan makes a little bit of sense. She did more in that ad than Nancy Pelosi did, who refused to have a vote on offshore drilling in the Congress. I don't know how this ad helps or hurts either candidate. I think it's a moment of levity, much-needed levity in a tightly contested campaign.

KING: Arianna, Paris' mother, Kathy Hilton, vented her displeasure about the McCain ad on a blog on the Huffington Post, but she contributed to McCain's campaign, as did her husband. What do you think of all this?

HUFFINGTON: Actually, what Kathy Hilton wrote sums up exactly what the situation is. She said that the McCain ad -- as you said, she's a maxed out contributor -- was a waste of her and everybody else's money, you know, was a waste of the American people's time and attention, at a time when million of jobs are being lost and millions of people are losing their homes. And it was frivolous.

That is really, ultimately, what we're dealing with here, a major presidential campaign descending to this level of frivolity and empty politics. This is truly the politics of nothing.

KING: Ben, is it going to get worse?

STEIN: I think by the way, Arianna, with all do respect, it was probably the most brilliant campaign ad I've seen in decades. The reason it's so brilliant that it pin points the fact that Obama is basically a celebrity. He isn't a person with a tremendous amount of experience and leadership in Congress, the way McCain is. Once you pull on the threads in that commercial, an awful lot of Barack Obama unravels.

That being said, I think he -- Barack Obama's an amazingly talented guy and could possibly be a great president. But it's a devastating ad and I don't see it as frivolity at all.

(CROSSTALK)

MILLER: You think that's fair, Ben, even if you're not for Barack Obama, to compare him to Paris Hilton or Britney Spears?

STEIN: Oh, sure, he's a celebrity above all.

KING: Isn't he more a rock star?

STEIN: He has no major legislative achievement.

MILLER: By the way, in terms of John McCain's age, he has made a number of major, major stumbles. I don't know if it's age related at all or not. Because you know, age is not the issue. It's the fact that he has made one stumble after another --

CONWAY: What are those?

KING: One at a time.

HUFFINGTON: I don't even think that's an issue. The problem is the age of his ideas. This is a man who is still supporting a war which has been basically the greatest disaster in America foreign policy. This is a man who has basically changed his mind on everything from taxes to immigration, and has even voted against a bill that would have prevented torture. So this is a man basically standing for nothing at this moment, except wanting desperately to win the White House.

KING: We'll have response to that, but hold it, folks. We'll have more on that ad. What were they thinking? We'll ask the man who helped create it because he's here, next.

(COMMERCIAL BREAK)

KING: We're back. The panel will rejoin us in the next segment. Adam McKay is now with us, the co-founder of FunnyOrDie.com. He's now playing on that website Paris Hilton's response to John McCain's celebrity ad. He is, by the way, director and screenwriter of "Stepbrothers," now playing in movie theaters nationwide. He also did "Talladega Nights." He is a supporter of Barack Obama. What led to this?

ADAM MCKAY, CO-FOUNDER, FUNNYORDIE.COM: We basically were hearing all about the McCain ad and the fact that, you know, he was bringing Paris and Britney into the sort of national dialogue. And we thought, oh, my god, someone has to respond.

We need a response from Britney or Paris. And I basically called a friend of mine who had a connect with her. Within three hours, I was on the phone. I told her my idea. She was game. It just felt like the fact that he brought her into the national discussion, she had to respond basically.

KING: Did you feel his ad was bad news?

MCKAY: I thought it was a little cheap, yes. I think, you know, given that this is a really historic election that's coming up, that our country's at a crossroads, to be mentioning Britney and Paris, to go into the pop culture world was an odd choice. Then the Moses one I thought was even stranger. It was really odd to me. So yes, yes, that was part --

KING: Why you put yours on your website?

MCKAY: Yes.

KING: You get all this play everywhere else? You're the play of the day, right. You're on every network.

MCKAY: We're the play of the day, yes. It's been insane. We put the thing up and right away, boom, it's -- I think it's well past five million hits right now, because it was part of the news cycle. It was -- you know, he had done the ad about, you know, her. And then there was the one about Moses. Barack had made his comments. The next beat was Paris has to respond. Now we're working on getting a response from the 40-pound cat that was all over the news last week.

KING: Was she paid?

MCKAY: She was not paid, no, no. The way Funny or Die works is that we have our guests come on and they just want to do fun stuff. It's purely in a sense of like "Saturday Night Live" or "Letterman."

KING: You do major movies. You did "Talladega Nights." Your "Stepbrothers" did 31 million opening weekend. You're a successful movie maker. Why do you need this?

MCKAY: When Will Ferrell and I started this site, the whole fun of it was that it's a place for friends of ours to come and play. We loved working for "Saturday Night Live." That was one of funniest jobs we've ever had. We've always had ideas that only work on that show. So that was why we started the site. An idea like this is a perfect example. If we'd been on SNL, we would have gone to Loren and said, get Paris Hilton. We would have written this bit. But we're not there. So it seemed like a fun thing to do.

KING: The first part of this video, which we didn't show, takes some major shots at John McCain's age. You have me in it. I'm rubbing my eyes and you show that.

MCKAY: It was out of love.

KING: I did not take it as a slur. Hey, as Don Ripple said, what are they going to do to me?

MCKAY: Exactly, anytime you're next to the Crypt Keeper, you have to be happy. That means you've lived a long, great life and you have much more to come.

KING: Thank you. So this website, you're going to do a lot more in this campaign?

MCKAY: Yes, I love the idea that sort of the tabloid creations of the American media are now coming out to talk about real policy decision. My goal is to get Screech from "Saved By the Bell" to talk about regulating the media. I'd also love to see the 40-pound cat from AOL fame come and talk about funding for the Iraq war. And we're in some discussions for John Wayne Bobbit, if he could come and talk about universal health care.

Yes, I think this is a whole new way of sort of presenting the truth to Americans, through faces that they get titillated by, but, at the same time, adding a substantive element to it.

KING: Do you like being famous for gross?

MCKAY: Being famous for gross?

KING: Gross. I mean, "Talladega Nights" had some things that were incredibly gross.

MCKAY: What was gross in "Talladega Nights?" I would say, it was a wholesome family comedy. "Stepbrothers," on the other hand, is definitely a little gross. But "Stepbrothers" is all about being immature. It's sort of the question of what is the American man? What does it mean to be responsible in America? We actually opened the movie with a quote from George Bush about American families, where he says "families is our nation's greatest hopes. They are the wings upon which we take dream."

That sort of points to how convoluted our sense of responsibility is, which relates to this as well, the fact that a legitimate presidential candidate would bring into the discussion Paris Hilton, who -- got bless her, she's a champ. But it's just an odd, odd choice. Our country's in a weird place right now.

KING: Adam, one gets the feeling we'll be seeing lots of you before November. Adam McKay, the co-founder of FunnyOrDie.com. There are other issues in the news, you may be surprised to learn. We'll get to them when LARRY KING LIVE returns.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP) MCCAIN: My opponent, Senator Obama, opposes both storage and reprocessing of spent nuclear fuel. He opposes offshore drilling immediately. And he's out of touch.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Instead of offering a comprehensive plan that will lower gas price, the centerpiece of his entire energy plan is more drilling. George Bush's own Energy Department will tell you that you will not see a drop of oil from offshore drilling for seven years.

(END VIDEO CLIP)

KING: Our panel has reassembled. Kellyanne Conway, is this race going down to the wire based on all the polls? Are we going to not know who's going to win up until the last minute?

CONWAY: Maybe. I mean, unless and until you see one of the two candidates above 50 percent, say for two or three straight weeks, or they open up a 10 or 11 point lead and stay there, not just through one of their conventions, but actually make it stick through the debate, then I think you've got a pretty wide-open race.

I think that John McCain and Barack Obama, according to a poll released yesterday for Lifetime Networks, had 81 percent of the women of each of their respective parties. In other words, 81 percent of Republican women are voting for McCain; 81 percent of Democratic women are voting for Obama. And the race right now is really for those undecided women, about 10 or 12 percent.

KING: Let me hold you a second, Kellyanne. I forgot to check in with Anderson Cooper.

(NEWSBREAK)

KING: Stephanie Miller, a puzzlement. We have a very unpopular president, a very unpopular war, a terrible economic crisis.

MILLER: Keep going.

KING: Energy, gas crisis. Why is this race close?

MILLER: You know what, I got to say, if you look at the important thing, the electoral map, Larry, if you look at the latest one, I don't know that it's going to be close. I still think we could really be talking about a landslide for Obama. I think the polls right now nationally are not that important.

I think, at this point, if you were just playing the oil crisis stuff, the Republican party has been reduced to prop humor. They're Carrot Top now. They're sending out like tire gauges because they're trying to say that's Barack Obama's whole energy plan. And then McCain today says, you know, inflating your tires would be a good idea. I mean, it's just --

KING: Inflating your tires? MILLER: Yes, it's gotten pathetic. First of all, it's not Obama's whole plan. And secondly, every expert says that would save gas.

(CROSSTALK)

STEIN: I think Obama has not been able to make the sale. And I think the reason he's not been able to make the sale is that he is primarily a celebrity. He's a very smart celebrity. He's being advised by the smartest man in America, Warren E. Buffett. He's got a whole bunch of very smart advisers. But he is primarily at this point a celebrity more than a seasoned national leader.

That being said, McCain, except for the most recent ad, is running an extremely weak campaign. There's something about McCain that just doesn't come across as powerful, and I don't know what it is. But there's something weak about him when he campaigns. But somehow Obama is not making the sale.

MILLER: Maybe he's wrong on all his positions. Could that be it?

KING: Arianna?

HUFFINGTON: Calling Obama a celebrity, which is really the point of the ad and the point that so many surrogates or pro-McCain commentators like Ben are repeating endlessly, is the absolutely pathetic trivialization of American politics. This is a truly inspiring leader who had the judgment to get it right on Iraq, while John McCain did not. This is something we should never forget.

I think the only reason why he's only three to five points ahead, instead of being 20 points ahead is really twofold. One is the fact that the McCain campaign has successfully distracted attention from all the things that Larry mentioned that are going wrong in this country that the Republicans are responsible for. And the Obama campaign needs to run a bolder campaign, a campaign that's based not to attract the undecideds, as Kellyanne mentioned, but to actually go for the 83 million Americans who did not vote in the last election, and whom he has a chance to inspire.

KING: Kellyanne, before we get a break, want to respond?

CONWAY: No, I think what she's asked is something that I always ask. Even if in this poll, you have Obama leading McCain by 11 points among women, but that's exactly the margin that Gore beat Bush on among women in 2000, and he didn't become president. I think that McCain needs to get over about 53, 54 percent among men to be the next president. Obama needs to get 53 or 54 percent among women to become the next president. This is really standard it usually it is when you have an open seat race, like you do now.

I also took note of today's Pew Poll, Larry. In the Pew Poll, a third of Democrats, a third of self-identified Democrats, said that they've heard enough or too much about Barack Obama. And it was 47 percent of all the people surveyed. I think that's put him in a little bit of a tough spot. You're going to hear more about him and from him over the next couple of months. But you've got most of the country feels like they're tapped out of too much Obama already.

KING: Let me get a break, and we'll be right back with some more. Don't go away.

(COMMERCIAL BREAK)

KING: The polls say that it's going to be very important. Ben Stein, who are the picks for each candidate?

STEIN: I think that Tim Pawlenty from Minnesota is likely to be the pick for Senator McCain. I don't know who Senator Obama's pick will be. I think Senator Obama himself is such a charismatic character that it really doesn't matter who his choice is. He's got all the charisma he needs. The real question is whether his ideas will work. Frankly, in response to what Arianna said pre-break, there are no easy solutions to any of these problems.

KING: Stephanie, vice president?

MILLER: Tim Pawlenty might have taken himself out of the running, Ben, by saying how great Barack Obama is today. I think the only pick for John McCain now is Paris Hilton. I think that's the pick. McCauley Culkin (ph), somebody really young, Larry.

KING: That's his pick. Who's Obama's pick?

MILLER: He's going to go safe with Romney.

KING: You're confusing me.

MILLER: I think McCain is actually going to pick Romney. He's going to go safe. I think Obama may go out of the box. I think he may do a Chuck Hagel or something like that.

KING: And you think Hagel would take it?

MILLER: I think he would.

KING: Kellyanne?

CONWAY: I think both candidates will be more safe and more comfortable than not, because you've got to get through three major events, pick your VP, get through the convention, get through the debates. Those are three big challenges. I think on the Republican side, Pawlenty has the inside track right now. Outside track that people are talking about in my circles is Eric Cantor, Congressman for Virginia. I think that poses a whole bunch of interesting possibilities.

On the Democratic side, Barack Obama would do well to pick either Evan Bayh, the senator from Indiana, or Kathleen Sebelius, the governor of Kansas, because he would put a woman on the ticket, thereby quieting all the charges of sexism, which I think have been unfairly charged towards him, and also not putting Hillary on the ticket. He needs the Clintons to campaign for him, but he hardly needs them on the ticket with him.

KING: Arianna?

HUFFINGTON: Obama has said again and again that he wants to pick somebody who will help him govern, somebody who shares his vision for the country, with whom he's very comfortable with. From everything I hear, it comes down to three men, Joe Biden, Tim Kaine of Virginia, and Evan Bayh. Chuck Hagel is an interesting idea. I hear that he's more likely to be the keynoter in the Democratic convention.

KING: He'll keynote for the Democrats.

HUFFINGTON: Quite likely, as opposed to being a VP nominee.

KING: Who does McCain pick?

HUFFINGTON: McCain, at the end, is stuck with Romney. Much as he dislikes him, I think he's probably going to pick Romney. That's my bet.

KING: They're not friends?

MILLER: That's a love match. That is so "Brokeback Mountain," Larry.

CONWAY: You hope.

KING: Kellyanne, you don't want Romney?

CONWAY: No, it's not that I don't want him. It's that I currently don't see it. I think he has great strength particularly in this economy. Here's a man who has built many businesses and employed many people over the years, certainly rescued our Olympics, which were a national scourge for a while, several years back. I also think Governor Mark Sanford of South Carolina poses another possibility. I think these guys have to pick somebody who's comfortable and who causes them no distraction.

KING: Thank you all very much. We'll have you back frequently. Ben Stein, Arianna Huffington, Kellyanne Conway, Stephanie Miller. Go to CNN.com/LarryKing, check out our guests lists. While you're there, take a look at some photos and home videos of Christian singer Stephen Curtis Chapman. He and his family will be here tomorrow. They suffered a tremendous tragedy. They'll tell us what happened and how they got through it. That's LARRY KING LIVE Thursday night. It's time now for Anderson Cooper and "AC 360." Anderson?