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In the Arena
Interview with VP of Libyan Provisional Council; Wisconsin GOP Senators Order Arrest of their Dem Counterparts
Aired March 03, 2011 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ELIOT SPITZER, CNN ANCHOR: Good evening, I'm Eliot Spitzer, welcome to our program. Regulars E.D. Hill and Will Cain are here. We'll be chatting in just a moment.
But first I'm about to show you something amazing, it could be the dawn of a whole new country rising from the ashes of Moammar Gadhafi's Libya as Brother Leader clings to the last vestiges of power in Tripoli. The free Libya opposition movement is building all the institutions of a sovereign nation.
Libyans have come together to form a leadership group called the Provisional Council. They have an army in the field together with former leaders of the Gadhafi's military using outdated weapons the resistance fighters have somehow managed to drive Gadhafi's troops out of two key cities.
They even have a foreign policy, reaching out to the rest of the world for help and recognition of their role as the official voice of Libya.
Tonight for the first time in American television, you'll meet a leader of this new government. I spoke to him just moments ago. Abdel-Hassib Ghogah is the vice president of the Provisional Council, the new governing body of the rebellion.
Ghogah appeared from the studios of the just-established Libya Free TV. Logistics were difficult. But he had some astonishing things to say about just how far this nation in the making has come already.
Take a listen.
(BEGIN VIDEO CLIP)
SPITZER: Abdel-Hassib Ghogah, vice president of the Libyan Provisional Council, thank you for joining us.
Could you describe for us who the members of this Provisional Council are, how many and how they were chosen?
ABDEL-HASSIB GHOGAH, VICE PRESIDENT, LIBYAN PROVISIONAL COUNCIL (Through Translator): The National Provisional Council consists of 30 members. They were picked in consultation with local councils in all the Libyan cities that have achieved liberation. SPITZER: Are the military forces that are fighting against Gadhafi reporting to this provisional government?
GHOGAH (Through Translator): Yes, there is coordination with these military units. A military council has been formed from among these units and there's coordination between it and the Provisional Council. One of the primary concerns for the council will be to rebuild the Libyan armed forces.
SPITZER: Virtually the entire Libyan diplomatic corps has deserted Gadhafi and has renounced his leadership. Has the Provisional Council had any contact with the diplomats either in New York, at the U.N. or in Washington to see if they would be the emissaries and representatives of the new Provisional Council?
GHOGAH (Through Translator): Yes, of course, we've started with that. Those diplomats that have defected to the will of the people will represent the National Provisional Council abroad. As for those diplomats who have not defected, the council demands that they cease to be recognized as representatives of the Libyan people.
SPITZER: What other assistance would the Provisional Council like from the United States such as enforcement of the no-fly zone or humanitarian assistance? What does the council want the United States to do?
GHOGAH (Through Translator): As far as food and other humanitarian needs, we're doing well, thank God. We have been receiving humanitarian help already, but we are asking of the international community to support Libya's revolution and to recognize the National Provisional Council as the legitimate representative of the Libyan people.
Also, we're asking the international community to enforce a no- fly zone over Libya, especially from the direction of Niger, Chad, and Mali. Mercenaries and weapons have been pouring in from these countries. We want a clear condemnation from the world of these countries which have been helping to persecute the Libyan people.
We want a clear condemnation of these countries, and that has not happened up to now.
(END VIDEOTAPE)
SPITZER: Joining us now to discuss today's fascinating developments in Libya is Jamie Ruben. Jamie is the executive editor of "The Bloomberg View" and was an assistant secretary of state under President Clinton.
Also here, ARENA regular Will Cain.
Welcome to both of you.
Jamie, let me start with you. We have heard the request for recognition and the no-fly zone, or enforcement of a no-fly zone. Starting with recognition. What are the rules? When could the United States recognize this provisional government as the legitimate voice of Libya?
JAMIE RUBIN, EXECUTIVE EDITOR, "BLOOMBERG VIEW": Well, there are no hard and fast rules. One crucial criteria for recognition of a government is control of territory. And I think what this suggests here is that perhaps the first step might be to derecognize the Gadhafi government.
To simply say that he obviously doesn't control all his territory in any significant way, as the president has said. He's no longer a legitimate government because of what he did, leader, and perhaps the first step before you could actually get to recognizing and -- remember, they only control a relatively small portion, couple of cities, it's all very unclear about the rest of the country compared to Tripoli where Gadhafi is.
So I think the first step should be derecognizing Gadhafi, and then you can begin to have a discussion. But it'll take a very long time, a lot of countries in the Security Council of the U.N. will not accept this. So this is going to be a long, long, long battle.
SPITZER: We don't need to wait for the U.N., of course.
RUBIN: Correct.
SPITZER: Recognition is a bilateral, between us and that other country.
RUBIN: Correct.
SPITZER: Now the reason that I at least focus on recognition is the two big requests we heard from him were recognition and then the no-fly zone. The problem with the no-fly zone is that it's sort of an invasion of their sovereignty if we send our troops in. But if they have asked us, if a legitimate person who leads a Libyan government asks for it, then we can do it. So recognition is the predicate for that.
RUBIN: Yes, I agree. And having a Libyan so-called representative who purports to speak for Libyan people ask the U.N. for it would certainly make it easier for Arab countries, the Arab League, et cetera, but I don't think any of that's going to work.
SPITZER: Right.
RUBIN: And I think what -- what would work as compared to all this no-fly zone talk, which is a very complicated issue that got created during the Gulf War and then in Bosnia, I think it would be much simpler and far more effective is if President Obama would ask NATO to begin to examine ways in which NATO forces, which are very close at Aviano Air Base and in Sicily, very close to Libya, what steps the NATO aircraft could take -- and here's the key phrase -- to deter Libya from using its air force and helicopters.
Not a no-fly zone with all the sovereign complications that that goes to. What planes can fly? Can you fly in humanitarian aid? Do you have to control all the airspace? That's not the goal here. The goal here is to stop Gadhafi from this great advantage he has of aircraft and helicopters.
And I think a NATO coalition action that's focused on the objective would avoid all the complications that you raise with recognition and all that other stuff.
WILL CAIN, CNN CONTRIBUTOR: James, you sound skeptical of the no-fly zone, as am I. And yet, as Eliot suggested, that's been the call.
RUBIN: Right.
CAIN: At least from the Libyan opposition.
RUBIN: Correct.
CAIN: Let me ask but a no-fly zone. Gadhafi has ground forces, he has mercenaries. Would a no-fly zone do anything on that front?
RUBIN: No. The no-fly zone is very clearly intended to -- they're sitting there on the eastern Libya, and they don't want the Gadhafi's air force and helicopters --
CAIN: Right.
RUBIN: -- to be destroying them, attacking them.
CAIN: So what's happening on the ground would theoretically continue. Would a no-fly zone push Gadhafi out of power in your mind?
RUBIN: I do --
CAIN: Saddam Hussein lived under one for 10 years, did he not?
RUBIN: Well, it depends on how you enforce it. Remember, Saddam Hussein survived at the end of the Gulf War because he was able to use his helicopters and his airplanes to prevent the rebellion from succeeding in southern Iraq.
So I do think air power can be decisive in a battle between the two forces, and that's why I believe that taking away Gadhafi's advantage of air power is part of what the international community could do.
SPITZER: We don't know the answer to those questions, but we certainly know that those who are there on the ground are saying if you take away the air presence of Gadhafi, then at a ground level, they at least -- I want to ask one follow-up to your notion of NATO going and taking away that air advantage.
What does that mean that it's fundamentally different if anything from a no-fly zone? Because what I gather you're saying is NATO aircraft would go in and either take out, just bomb, so we would get rid of Gadhafi's air capacity, or we would shoot him down in the air.
I just want to make sure I'm understanding this right.
RUBIN: NATO planners can get together. I'm not a military planner.
SPITZER: Right.
RUBIN: I've talked to some people, and what you're trying to do is -- there are pilots on the ground. They have to decide to get in the air and attack the other side. There are lots of things that NATO airplanes could do and NATO military forces could do from jamming, from other operations, covert things.
And if necessary, if you see a NATO -- a Libyan plane go up, then you might attack it or you make -- or you want to do is have them think you're going to attack it. And they probably won't go up.
SPITZER: Right.
CAIN: Eliot, you're exactly right. We don't know the answers to the questions I'm asking. But I guess what I'm arriving at is --
RUBIN: Yes.
CAIN: -- analyzing the risks. And you've been in this seat, Jamie. And I'm wondering, as we look at a proposition where we won't have much effect on the ground war, and we may not push Gadhafi out, is it worth the risk for a no-fly zone? Either NATO or the United States?
RUBIN: I think that what is going on right now in the administration and in the Congress and why you're hearing so much about this and in Britain and in France, why their ministers -- people are imagining now what if this thing goes on for a while and Gadhafi's air forces really do get used to slaughter dozens or hundreds or thousands of civilians.
And I think more likely that it's that scenario that's generating talk. In that case, I do think preventing him from flying his planes and using that aircraft, those helicopters, would make a huge difference and would prevent him from doing something. But so far, there's really hasn't been that many air raids.
CAIN: Right. Right.
RUBIN: And I think we're getting a little excited --
(CROSSTALK)
SPITZER: There have been a couple. We're responding as much to the rhetoric that we're hearing from those on the ground.
RUBIN: Absolutely.
SPITZER: But the other rhetoric we're hearing is the president. Not rhetoric, I don't mean to diminish it. The statement is clear today, greater clarity to them, indeed, that Gadhafi has to go. And in fact, he has no legitimacy. And yet there's a little bit of a tension between his increasingly powerful statements and the absence of any follow-through of any sort, military, humanitarian. So does the White House need to pull -- pull the trigger, maybe not a great metaphor in this context -- do something very shortly?
RUBIN: I think there is a gap between statements and actions. And I think I'm sure the White House knows it, too. This is not a secret.
SPITZER: Right.
RUBIN: They want Gadhafi to go. Most of the world now wants Gadhafi to go. I think pretty much everyone who looks at this knows that sanctions are not going to make him go.
SPITZER: Right.
RUBIN: In fact, sanctions, if you prevent him from going to Venezuela or some other place might make him more likely to stay.
SPITZER: Stay and fight. Exactly.
RUBIN: So there are going to have to be things done. But the humanitarian assistance to refugees, to perhaps medical supplies, food supplies, nonlethal aid to the free Libya, so to speak, those are things that are on the table.
I don't think a no-fly zone is going to be the end point, but if this is a civil war that goes on for a long time and people start to die in much larger numbers than they have by now, the pressure is going to build.
SPITZER: It seems another reason the pressure builds is that the president in a way has put his own credibility on the line saying Gadhafi must go. And if this settles down into a sort of civil war that stagnates, then we begin to look a bit impotent because in a way the White House has said our prestige is now behind the revolutionaries.
RUBIN: You know, I know what you're saying, Eliot, and I think that they've used that language very carefully. They've given reasons why Gadhafi has lost legitimacy. The president has said he has no legitimacy.
Now I think saying he should do the right thing for his people and go that the president has said doesn't exactly add up. But they are not saying we're going to make him go. They're very careful to talk about this in a somewhat passive voice. Precisely for the reasons that you mentioned.
(CROSSTALK)
CAIN: So then do you think he's hit exactly the right tone? Has the president gone far enough verbally or has he gone too far? Is it almost compelling some sort of action now?
RUBIN: I don't think he's gone too far. Let's face it, the British and the French have gone much farther than the United States certainly on the possibility of using force.
CAIN: So have they gone far enough?
RUBIN: I think what he should do is tell the world what -- and first do it privately, but consult with our NATO allies and say that we are going to ask NATO military authorities to consult and to make plans to take away Gadhafi's air advantage.
Now to put a no-fly zone with all the complications and look at ways to do that, which will -- already make the pilots and the air forces working for Gadhafi begin to think and maybe more of them will defect.
SPITZER: All right, Jamie Rubin, thank you for that critical and important distinction between the no-fly zone and perhaps just taking care of what we really care about, getting rid of their air force.
All right, we'll be back more and you'll be back later in the show.
RUBIN: Thank you.
SPITZER: Coming up next, wanted -- fugitives across state lines, and oh, did I mention, they're state senators? The latest from wacky Wisconsin in just a moment.
(COMMERCIAL BREAK)
SPITZER: Joining us now, a wanted man. Republican state senators in Wisconsin today ordered the arrest of their Democratic colleagues. The Dems have been AWOL for two weeks now, an attempt to hold up Governor Scott Walker's controversial budget bill. Whether the arrest order is constitutional is unclear.
State Senator Fred Risser is one of the fugitive Democrats. He joins me and E.D. Hill now from an undisclosed location.
Senator, thank you for taking this enormous risk, appearing on TV. They may swoop in and arrest you any moment. But so far you're surviving --
FRED RISSER (D), WISCONSIN STATE SENATOR: I don't think -- I don't consider it a risk.
SPITZER: All right. Well, that's -- glad you're not at risk.
Let me actually throw the first question now. Because, you know, I poked around in your state's constitution for a few minutes this afternoon. And I'm not asking to be -- hoping to be retained by you guys.
But there's a provision here, article 4, section 15, that says members of the legislature shall in all cases except treason, felony, and breach of the peace be privileged from arrest. And then it continues on. So have you committed treason? Is that what they're saying? (LAUGHTER)
RISSER: All that was done was a Senate resolution was passed. And we pass hundreds of those resolutions every year. Anyone with the slightest knowledge of civics knows that to become law a bill must pass both Houses of the legislature and be signed by the governor.
There's no violation of being a law here. There are not court orders out. I can't believe that Wisconsin law enforcement officers are going to spend much time trying to look us up.
E.D. HILL, CNN CONTRIBUTOR: I don't think they will. In fact, the union -- the police union chief was saying he thinks it's insane to even do that.
But let me ask you -- I'm guessing one of the basic functions of your job is to show up to work. And I'm just wondering, do you think it's professional how you're behaving?
RISSER: Well, we're going to come back. We're not staying out indefinitely but --
HILL: Well, you're staying out a long time. When are you coming back?
RISSER: Well, the purpose of going out was to slow the matters down. The governor introduced a bill on Monday that he expected under suspension of the rules to pass on that week.
You know, you don't repeal collective bargaining and workers' rights in less than a week. The rights that have been accumulated over 50 years.
HILL: Yes, but sir, respectfully --
RISSER: Our purpose -- our purpose was to slow down --
HILL: You're not slowing things down. You've stopped them.
RISSER: Our purpose is to slow things down, give the public a chance to react to the governor. And that has happened. Over 100,000 peaceful demonstrators have been around the capitol, made known their opposition.
I think that this should have an effect on our Republican colleagues and hopefully they should tell their governor that maybe he should represent all the people of the state rather than just the right wing zealots.
SPITZER: Senator, here's how it shakes out in my mind at least. Look, I'm not thrilled that you've gone across state lines. But I view it as something akin to what the United States senators in Washington did using the filibuster, using the rules as aggressively as they could to stop bills from being voted upon when they disagreed with them and didn't have the votes to defeat it but could stop the process. It's the way the system works right now. And we got to try to get beyond it somehow. Let's move to the substance for a minute. Is there any progress being made bridging this gap?
I'm with you. I think this is the wrong thing to do substantively, the wrong way to do it. The public is with you, by the way. The public opposes what the governor is trying to do out in Wisconsin. But is any progress being made in a negotiation?
RISSER: Well, I'll tell you the truth. The Democratic senators, even though they're out of the state, have been spending quite a bit of time talking about -- to their Republican colleagues in the Senate.
And yes, I think that there has been progress made. And I think that we will be returning in a reasonable time to act on matters. But our job was to try to slow this process down, give the people a chance to realize what was going on.
HILL: It's a pretty far leap to say that the public supports this. You've got dueling polls. You look at Quinnipiac Poll and they say that the public does not support the Democratic senators' action. You look at the "New York Times" poll and they say they do.
So I'm not buying either of the polls. But basically, do you think that you're going to be able to get back and will anything be different? Do you think that your Republican colleagues in the Senate have changed their minds, that the governor's changed his mind, that you've accomplished anything?
RISSER: Interestingly enough there's a series of recall petitions out. And I suspect that will determine whether the public supports their representatives or not. I think that we did the right thing. I think that we will get back in a reasonable time. And I think that the public has been aware that we have a very unbending, rigid, uncompromising governor. One that's even unwilling to sit down with the opposition.
SPITZER: Senator, expand on that. Who is being recalled and by whom? Very quickly, how does that work? And why do you think that's going to determine the outcome here?
RISSER: Well, because under Wisconsin law, a recall petition can be filed and that in 60 days you have to get a certain number of signatures. I think that this will bring the issue back to the general public. The public feels their legislators are not representing them, they could have them removed from office.
I don't really like a lot of recalls, but there's a lot of them going on.
SPITZER: All right. Well, State Senator Fred Risser, thank you for being here. Don't get arrested tonight. And, you know, stay safe.
And now we're going to hear from your colleague on the other state. Republican State Senate Majority Leader Scott Fitzgerald. Senator Fitzgerald says that Democrats have created a constitutional crisis, forcing the Republicans' hands. And he joins us tonight from Madison, Wisconsin.
Senator, welcome back to the show.
SCOTT FITZGERALD (R), WISCONSIN STATE SENATE MAJORITY LEADER: Yes, good to be with you.
SPITZER: So I don't know if you heard the question I poised to Senator Risser. It seems to me that this resolution you passed violates certain critical provisions of your state constitution. You don't really attempt -- think that you're going to go arrest the Democratic senators, do you?
FITZGERALD: Eliot, you're in the wrong part of the constitution.
SPITZER: I've been told that before.
FITZGERALD: Yes. There's -- this is not criminal. It's not civil. It's very clear in -- that the state Senate has the ability to hold members in contempt. And as a result of that, an order was written and the warrant issued that I signed for each of the 14 Democrat senators today.
And law enforcement across the state if they are informed of a Democrat senator or if -- for whatever reason they have contact with them, their orders are to arrest that senator and to bring them directly to the chamber of the Wisconsin state Senate.
SPITZER: Well, look, I think you're -- there are dueling provisions here in the constitution. It is true. And I did read a fair bit of your constitution. You can define the rules of the Senate, define and force people theoretically to attend, but a contempt finding will not either get them into the court -- into the chamber, nor does it give you the authority to arrest them out of state certainly. So you're not going to really advance the ball by doing this.
FITZGERALD: Not out of state. No, I know what's going on. I mean everybody knows that the Democrat senators have been coming back and forth into Wisconsin on the weekends and certainly at night where some of them have been sleeping in their own bed.
And, you know, we have a call of the house, which is a different procedure. But unfortunately that doesn't have the force that was needed. I thought these -- I thought these Democrats -- the hypocrisy of what Senator Risser, somebody who has lectured me over the last 16 years about the rules of law and about the way that the Senate is supposed to function.
This is a man that presided over the body and lectured us about Senate rule and really kind of forced the hand of many a minority over the time, saying that we were not allowed to be heard. It's just amazing to hear that come out of Senator Risser's mouth this evening. HILL: I'm going to pry just a tad into your personal life. I heard that your wife is a school counselor and basically the action that you're taking right now is one of the reasons she just got a layoff notice. Did she? And if so, is she still talking to you?
FITZGERALD: Yes, that's true. No, it's -- it is. It's very personal. And this is happening in many families. But my -- you're right, my wife is a high school counselor. And there's a good chance she could lose her job over this.
But you know -- I mean she's also a true believer in what we're doing. She understands that this is about our future and about balancing the budget. And, you know, she's a great woman, and as a result of that, she's been very strong.
SPITZER: Well, Senator, you and I had a fun conversation a couple days ago when you were on the show. And I asked you a few times a question, I never honestly got a satisfactory answer to it so I want to just try one more time.
You keep saying this is about balancing the budget, and I don't see that. The union has said we will give you every financial giveback you want. Every bit of salary giveback, every change you want in work conditions, everything else. Just don't eliminate our capacity to negotiate collectively. Something that many people think is integral to what this nation stands for.
How does that right affect the dollars and cents that go into the budget?
FITZGERALD: Eliot, you either believe that there's a cost associated with the items under collective bargaining or you don't. I mean, what Governor Walker announced on Tuesday evening was that in essence there are savings that will be captured by every level of government, level of state government that will offset the deep cuts in education and in shared revenue. The money that makes its way to the local level.
And if you -- if you real are still not a believer in that, one of the items that the Democrats are trying to negotiate now through back channels is to start putting in some of those collective bargaining ideas that they say don't have a fiscal impact. So I -- it's a long list of items that, you know, I think many of your viewers would actually be surprised is part of collective bargaining. And that's what we stand by.
We are going to move in a different direction here from top to bottom. And that is that collective bargaining has a cost, and if we -- if we don't eliminate those items, then we're not going to be able to balance this budget.
SPITZER: Look, Senator, the outcome of a collective bargaining agreement either saves money or costs money. But those are consequences of a process. The process itself does not have a cost.
Anyway, look, thank you so much for being with us tonight, Senator Fitzgerald. We'll continue this in days, weeks ahead, or who knows how long these fun and games will continue.
All right. Thank you for being with us.
FITZGERALD: Thank you.
SPITZER: Still ahead, a glimmer of hope for the economy perhaps. Ben Stein's surprising forecast coming up next.
(COMMERCIAL BREAK)
SPITZER: Two numbers in the economy today haven't been seen in more than 2 1/2 years. First, the good news. Initial jobless claims are down. Meanwhile, oil prices hover near $100.
Here to help us break this down our resident economics professor IN THE ARENA, Ben Stein. You may remember him as someone else's professor.
(BEGIN VIDEO CLIP)
BEN STEIN, ECONOMIST: Bueller? Bueller?
(END OF VIDEO CLIP)
SPITZER: All right, Ben. You know that every time you're here, I love to play that little bit from "Ferris Bueller's Day Off." Anyway, welcome back.
BEN STEIN, ECONOMIST: I love to see it.
SPITZER: All right.
STEIN: Thank you. Honored to be here.
SPITZER: All right, makes us all happy. All right.
Ben, before we get into the two data points that I just talked about, Fareed Zakaria, my co-host here and not on this show but here at CNN, has a show Sunday night called "Rebuilding the American Dream." I want to play a little sound bite from it in which he has a brief conversation with the Harvard economic historian, Niall Ferguson. Take a listen to this.
(BEGIN VIDEO CLIP)
FAREED ZAKARIA, HOST, "RESTORING THE AMERICAN DREAM": When you look at America in a world in which China is rising, India is rising, what's your sense of where America stands in this new economic order?
NIALL FERGUSON, HARVARD UNIVERSITY: Well, in some ways, America stands on the edge of a cliff because great powers don't gently decline. They don't sort of fade away over decades. History shows that they very often collapse quite suddenly. They lose power quite dramatically. That was the experience most recently of the Soviet Union. And I think when one looks at the fiscal position of the United States, with the vast explosion of debt before but particularly after the financial crisis, it's clear that there's a major risk there.
(END VIDEO CLIP)
SPITZER: All right. Ben, cheer me up. Tell me that Niall Ferguson is wrong. Tell me things aren't quite that grim.
STEIN: He could not possibly be more wrong. Countries collapse -- countries that are at war collapse. Dictatorships collapse. A free, prosperous industrial democracy does not collapse. We will probably lose our first place status as the world's largest industrial nation to China within the next 10 years. Our per capita gross domestic product, that is the individual wealth and income of the ordinary American, will still be many times higher than that of the ordinary Chinese man or woman. We have a very, very rich country. We're coming out of the recession.
Mr. Ferguson is a respected historian, but in this case he's just completely wrong. There is no case he can mention where in peace time a free industrial democracy has just fallen off a cliff. We're nowhere near the level in terms of debt that's going to make us fall off a cliff. Japan has just added sovereign debt downgraded by two of the three big ratings agencies. They're still incredibly a prosperous country. I mean, he is -- I value his intelligence and his knowledge, but he's just wrong here.
SPITZER: Well, look, that's nice to hear. But let me push back a little bit.
You're clearly right. The total size of our economy, GDP, will be second to China in a number of years almost inevitably. But per capita GDP, which is perhaps more important, how much wealth is generated for each person?
STEIN: Much more important.
SPITZER: You're exactly right -- will be much larger than theirs, and so that's the good news. But aren't we losing the edge in terms of our capacity to both innovate and produce so that more increasingly wealth creation is traveling to Asia? Whether it's China, Vietnam, or even to Latin America, whether it's Central America or Brazil?
STEIN: Well, they have a high labor -- highly skilled, highly mobile, highly motivated labor force in those countries. They're acquiring a lot of education and human capital. Adam Smith said that the true wealth of nations was in the intelligence, energy, imagination, and discipline of the labor force. Ours is not really keeping pace with that of China.
But look, China is four times the size of the United States. The people there are acquiring an enormous amount of education, an enormous amount of capital. They should be a bigger economy than ours should be. We will still be a very rich country, and any American who really wants to acquire an education, really wants to work hard, really is disciplined, really has good financial sense, will still live quite a prosperous life in this country barring war for the indefinite future.
SPITZER: Look, I want to drill down on some of those numbers that I mentioned when I was introducing you. The price of oil is going up above $100 a barrel. That has got to be a shock to our economy. You can see on that chart --
STEIN: It is -- it's a shock to our economy. It's not that big a shock. We -- look, we've had considerably higher oil prices. For the ordinary family, the price of oil and gasoline is less than five percent of their income, of their expenditures, rather. That's not a gigantic shock if it goes up 10 percent or 15 percent. It's not good. We'd rather it didn't happen. But if it happens, it's not the end of the world.
I mean, yes, if Saudi Arabia were shut down, that would be a true crisis. That doesn't seem to be happening. If it does happen, you'll hear everybody screaming bloody murder forever.
SPITZER: But on the other hand, certainly when the cost of gas at the pump goes up, people cut back on their consumption. Consumption, 72 percent or so of our GDP is the big driver --
STEIN: I know, but --
SPITZER: So it's job growth will slow down again --
STEIN: No, no, not true. First of all, the oil companies will employ more people to do more drilling and more refining and more production. Second, we're talking about a very small increase. If gasoline is something like three percent, not counting heating oil, of what the ordinary American family spends and if it goes up 10 percent, say, or even 20 percent, that's a fairly small amount. If production -- sorry, if consumption rises the way it normally does in a recovery, it dwarfs that effect.
Yes, if we have -- if oil goes to $150, $200 a barrel, that's going to be a real problem. But the increase we're seeing so far are not a giant problem for this economy. The speculators want to make you believe it is. The speculators want to make you panic. The speculators want to make money on their speculation. But over the long run, these things are not -- this is not a crisis unless Saudi Arabia gets shut down.
SPITZER: All right. So look, certainly --
STEIN: God forbid.
SPITZER: If there were other oil shocks that would have a dramatically greater impact on our economy. But certainly it depends --
STEIN: It depends on the price. It depends on the price.
SPITZER: But I was going to say you can track the correlation between the cost of gas at the pump and people's willingness to go to Wal-Mart, Costco, or even Target and spend those disposable dollars that then drive the job creation that is just beginning to come back.
STEIN: You know, Eliot, you said such a smart thing in the segment about Wisconsin, about how it's a question of magnitudes.
SPITZER: Right.
STEIN: It's not a question of the process. It's a question of magnitudes. It's a question of the magnitude.
I mean, if gasoline goes up an enormous amount, it will have an enormous effect. It went up an enormous amount in '73, '74 during the Arab oil embargo and afterwards, and that had a significant effect. It's never really had a decisive effect on the economy since then. There doesn't seem to be any sign it's going to have that this time. Again, once again, if something happens in Saudi Arabia, Katy bar the door.
SPITZER: All right. Actually I agree with you. I think you're arguing the case very effectively.
We've got to run in one second. I just want to point out one of the consequences of this increase in the price of oil has been domestic production, has been going up considerably. And that is on the other side the good side of the ledger in terms of what happens when the cost of oil goes up. You generate the domestic production, not only jobs here, drives down our trade deficit, all good things that will happen.
Anyway, Ben, "Professor Bueller," as we call you, thanks for being here and look forward to chatting with you soon.
STEIN: Thank you very much.
SPITZER: All right, my pleasure.
STEIN: Thank you very much.
SPITZER: Coming up next, breaking news out of Wisconsin. We'll have it for you in just a moment.
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SPITZER: Spies, car chases, and a standoff between two nuclear powers. That's what one American has gotten himself into. It may sound like a spy novel, but in fact it's the case of Raymond Davis, the CIA contractor who was working in Pakistan and allegedly killed two men at a traffic stop in Lahore.
To bring us into this mysterious tale, David Ignatius. He's a "Washington Post" columnist who's covered international affairs for decades. He's also a spy novelist.
David, welcome. Thanks for joining us.
DAVID IGNATIUS, "WASHINGTON POST": Thank you, Eliot. SPITZER: So first, tell us the facts of this crime. There's no question, there were two dead bodies on the street in Lahore. Raymond Davis has been charged. Is he a CIA contractor? Is he a diplomat? What does this mean? Take us through this crazy story.
IGNATIUS: On January 27, Raymond Davis was arrested in Lahore after according to witnesses he had shot two Pakistanis who he said or was alleged were trying to rob him. They were shot and killed. A third Pakistani was killed by an American driving a vehicle trying to come rescue Davis. Then began the drama that you referred to in the introduction. The question of whether Raymond Davis, who it was later revealed, confirmed by the CIA, was a CIA contractor, qualified for diplomatic immunity and therefore was not subject to prosecution in Pakistani courts. The U.S. has insisted that he is covered by this diplomatic immunity and demanded that the Pakistanis turn him over. The Pakistanis have let this become very political. And today, according to Pakistan rule, that he does not qualify for diplomatic immunity, which means that if things go forward, he'll have to stand trial.
This is as big a mess as I've seen between these two countries, normal allies in a long time. And it's one that's making people both in the U.S. and in the Pakistani government pretty nervous.
SPITZER: But we'll get into the larger geopolitics of this in a moment. The first question was, does he have diplomatic immunity? And there was all sorts of, you know, contradictory evidence at the top. Was he a CIA contractor? Was he a diplomat? Was he listed as a consular employee or an embassy employee which matters? But what's undisputed now is that he was working for the CIA. Two people are dead, shot in the back, and that this seems to be shaping up as a battle between the CIA, our good guys, and the ISI, the Pakistani secret service. This is a proxy war, in fact, isn't it?
IGNATIUS: Well, it's a battle between two intelligence services. These intelligence services have -- are once allies and cooperated in operations and have been taking potshots at each other. The CIA's chief of station in Islamabad two months ago was outed in the Pakistani press and had to be withdrawn. That followed the chief of the ISI, the Pakistani service, being named in a New York lawsuit and he regarded this as the work of the CIA and so it's argued this was retaliation. You know, if this -- if this was a married couple, the CIA and the ISI, you would say they should get a divorce. Unfortunately, divorce is really not an option here.
SPITZER: Why not?
IGNATIUS: Because -- because we're fighting a war against Al Qaeda. And Al Qaeda is based in part in the tribal areas of Pakistan. And Pakistan is fighting a war of its own against domestic terrorists who've been killing ISI officers by the dozens who are also based in the tribal areas. So the reality that I think both sides understand is that they need each other. But, you know, they are like a classic married couple who just can't stop fighting.
A friend of mine said to me the other day that a divorce would be too bad for the kids. You can't consider it, but that they need counseling in a hurry. And this case of Raymond Davis is a perfect example. Absent some intervention, some way of resolving this, it's going to go to court. And it's going to be as one of my Pakistani sources said, like an atomic bomb, not just for the CIA and the Americans, but for the Pakistanis. All questions about how did he get there, who approved his visas, what was he doing --
SPITZER: David, look, there are going to be 100 issues factually about what the CIA is doing inside Pakistan. There are also going to be issues about whether the ISI, which is the Pakistani intelligence agency, is honest with the CIA about what they know about Al Qaeda and the Taliban.
IGNATIUS: True.
SPITZER: Because as you point out, we're fighting against Al Qaeda and the Taliban. We have very serious questions about whether the Pakistani force, the ISI, is doing everything it can and should do to push back against Al Qaeda. And so there is -- this is really -- it's worse than a bad marriage. This is really a dysfunctional family. And so there are a lot of tensions here, and right now Raymond Davis is at the vortex of all of this. But you have a solution, you think?
IGNATIUS: Well, I wrote a column this week in which I suggested that this terrible problem could be resolved through the ritual mechanism for resolving disputes in this part of the world, which is known as payment of blood money. The relatives of the two dead Pakistanis could, if some mediation was arranged, bargain out a payment of a sum of money in compensation for the loss of these two men. It sounds barbaric, but that's a way that disputes the resolve routinely in that part of the world. If that were done, it's argued, Pakistani courts would no longer have to consider the murder charge, and you'd find a way to resolve this and a way for Davis to go home. So oddly enough, this very traditional and to our eyes quite primitive ritual of blood money could end up being a way out.
SPITZER: I want to raise a larger issue here which is that Raymond Davis to a certain extent has now become the focal point of pretty strong anti-Americanism running through Pakistan.
IGNATIUS: Yes.
SPITZER: You have written about that. You know, we don't have much time left. But tell us why is that, why is there such virulent anti-Americanism running through Pakistan, and how will that affect this case?
IGNATIUS: Eliot, I think that the heart of the problem is that -- is that Pakistanis will not stand up and say that they are working with the United States in joint efforts. And this anti-American feeling in Pakistan gets bigger and bigger, and the Pakistanis frankly get caught in their own hypocrisy. They don't admit what they're doing, and then there's this terrible backlash. If there's one thing that people need to do going forward is be more honest with their public, especially the Pakistanis, just say this is what we're doing, and begin to build some basis of support for what they actually do behind the scenes.
SPITZER: All right. David Ignatius, thank you so much for that perceptive commentary. Also, oddly enough, your book coming out soon is called "Blood Money." And who would have thunk it? All right.
IGNATIUS: That is spooky.
SPITZER: Spooky indeed. David, thank you.
Coming up next, we'll get to that breaking news we promised you out of Wisconsin. Back in just a moment.
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SPITZER: We want to bring you some breaking news now. You're looking live at the capitol in Madison, Wisconsin, where a judge has ordered the protesters there to be removed. As you can see, about 50 to 100 holdouts remain after two weeks of protesting Governor Walker's attempt to strip public union employees of their collective bargaining rights. But as you can see, several dozen of them look like they have no plans of doing so.
Joining us now is Casey Wian who's in Madison. Casey, what's the latest?
VOICE OF CASEY WIAN, CNN CORRESPONDENT: Well, truly a remarkable scene that has unfolded here tonight, Eliot. I'm not sure this could have happened anywhere but in Wisconsin. In a court hearing as you mentioned, the judge has ordered that these protesters who have occupied this capitol for 17 days now be removed from the premises tonight. But the protesters are viewing this as a victory. The reason it went to court is to be allowed unfettered access to the capitol during business hours. And they are going to be able to come back on Monday morning without restrictions and be able to resume their protests. We were expecting that some of them were going to be arrested. But it looks now that they are all planning to leave peacefully tonight -- Eliot.
SPITZER: So there will be no confrontation between the protesters and law enforcement. And if I heard you properly, the reason the protesters are saying this is a victory is just on the cursory reports I've just read. The judge found the state had violated their constitutional rights by attempting to close the capitol forever to all the protests and said you've got to reopen on Monday. Is that what I gather from all this?
WIAN (on camera): That's absolutely correct. There were hundreds and hundreds of people inside this capitol for many days during this protest. It has now dwindled to about 100 protesters. The judge is now saying that they can't restrict the number of people who are here, that they have to open it during business hours. But they just can't stay here overnight when the capitol is closed. So they are viewing it as a victory and it looks like they're not going to risk being arrested.
SPITZER: All right. Casey Wian, thank you for that report. Coming up, someone's questioning President Obama's legitimacy and his Americanism. No, he's not one of those crazy birthers, but he could be the next president of the United States. I'll go into the arena to discuss it with E.D. Hill and Will Cain, coming up next.
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SPITZER: Mike Huckabee doubles down on his claims about President Obama's boyhood. The potential 2012 GOP presidential candidate returned to talk radio today, firing back at critics and continuing to raise questions about the president's African roots and what he calls the president's anti-American world view.
OK, guys, what happened to the nice Mike Huckabee who sang and played the guitar?
E.D. HILL, CNN CONTRIBUTOR: I'm on record saying I like Mike Huckabee. I'm disappointed in this. I think that when he talked about President Obama growing up in Kenya, he came out and he said, I'm sorry, I was referring to the four years he spent in Indonesia.
What he does say is that when you spend any amount of time growing up overseas, you develop a different world view. I think that's accurate. I don't, however, think that necessarily leads to an anti-American viewpoint. And as far as boy scouts, from what I know the president actually was in the Indonesian version of boy scouts. And as far as rotary clubs, there's plenty in Hawaii.
WILL CAIN, CNN CONTRIBUTOR: But, E.D. -- E.D., the assumption is the implication is that it is anti-American. The implication is that Obama isn't one of us. And that's why he shouldn't be doing this.
Look, I have said this, Obama's ideas are terrible. Defeat him on ideas. There's no need for this junk.
SPITZER: Will, let me ask you this -- look, I'm disappointed in Mike Huckabee. I've met him a couple of times, I also like him. But I see this and I think this is playing to the worst of American politics.
HILL: But you know what --
SPITZER: And I'm with Will -- why can't Mike Huckabee come out with ideas instead of going back to this ugly stuff?
HILL: I'm sure he will. You say dumb things, I have certainly said my share of dumb things --
Well, I mean occasionally. But I do it a lot. We all make mistakes. Mike Huckabee is a good guy.
SPITZER: Wait a minute.
HILL: He made a mistake and I hope he's not doing this intentionally.
SPITZER: I'll be real, but this is an intentional game plan. He keeps doing it.
HILL: I hope not.
SPITZER: He keeps doing it.
CAIN: You know what? The reason why he can't -- he has to attack on this because Huckabee's ideas are bad, too. He's a statist just like Obama. He's behind --
SPITZER: What do you mean by that? What's a statist?
CAIN: Well, he was for a cap-and-trade bill at one point. He's for banning cigarettes to improve health care. He was for putting the 10 commandments back into schools.
HILL: Wait, you mean banning cigarettes wouldn't help --
CAIN: Individuals, certain people are for the state. Huckabee appears to be for the state.
SPITZER: You're saying some things that, you know, banning cigarettes because they're bad for your health or taxing them, they are -- you agree they're bad for your health, right?
CAIN: Yes. That doesn't take a big brainiac to know.
SPITZER: OK.
CAIN: I don't need your government to take that privilege away from me because it's bad.
SPITZER: But can the government --
HILL: Yes, but they'll make you wear a seat belt.
CAIN: That's not the same thing.
SPITZER: Why not? Why not?
CAIN: Because -- I have to wear a seat belt to drive in a car on the roads and public roads. I live in a world I can smoke cigarettes all I want.
SPITZER: Who's going to pay for your health care?
CAIN: If I smoke cigarettes?
SPITZER: Yes.
CAIN: I will.
SPITZER: No, we are.
CAIN: No, no, no, I will pay for my health care. Trust me.
SPITZER: You know what? We will have that conversation some other day. So you're angry at Mike Huckabee?
HILL: I'm not angry. I am hoping that this is not a pattern, and that this is just something that he did that is out of character.
SPITZER: And if he does it one more time, then what are you going to say?
HILL: I'll be -- I will be extremely disappointed.
SPITZER: All right. You know what, guys? This is, unfortunately, I think the first salvo on what we're going to hear more and more of from the Republican side. I'm with Will. I wish they would have ideas. I wish the candidates would have ideas -- you've got five seconds.
CAIN: Don't paint the whole Republican Party conservative movement with one guy's statements.
SPITZER: Why not? Why not?
HILL: What about the Democrat Party?
SPITZER: I'm getting the last word because time is running out.
CAIN: Because you have the last word.
SPITZER: I get the last word. I'm going to paint them --
CAIN: Thanks a lot for joining us IN THE ARENA tonight.
SPITZER: All right. E.D. and Will, thank you for joining us. Thank you for watching tonight. We'll be back tomorrow night.
Good night from New York. "PIERS MORGAN" starts right now.
