captioning sponsored by macneil/lehrer prodtions lehrer: good evening. i'm jim lehrer. on t "newshour" this wednesday: thlead story: dead attacks infghanistan and pakistan, gwen ifill tks to margaret warner in islabad. then, after the her news of the day, two views of a new governnt proposal for handling financial firms coidered too big to fail. fred de sam laza reports on impring the lives of the people and the healtof the rainforestn borneo. >> so you can pay with bkets and wovemats. you can pay with labor

you can pay with seeings that we u for reforestation or seeds. >> lehrer: and jefey brown priles a piano playing pop star >> what was exting about this to me was thidea that we would arrangmy music in a way to where that made e orchestra e rock band. major funding for e newshour with j lehrer is provid by: >> what e world needs now is engy. the energy to get the onomy hummg again. the energy to tack challenges like climate change. what if that energy me from an ergy company? everyday, evron invests $62 million in people, in ideas-- seeking, teaing, building. fueling growth around thworld to movus all ahead. this is the power of human energy. chevron.

intel. >> and by wells fao advisors. togeer, we'll go far. and by bnsf railway. and the wiiam and flora heett foundation, working to solve social and envonmental problemst home and around the world. and with the ongoing suppo of these institutions and undations. and... this program was made possle by t corporation for publ broadcasting.

and by contributionso your pbs station from viewers like yo thank you. >> lehrer: militants suck today in major cities ross afghanistan anpakistan. in the afgn capital, an asult on a u.n. guest house kill 11 people. and a car bombing in pakista killed me than 100 people, and wounded more than 200 as u. seetary of state clinton arrid in the country. gwenfill begins our lead story corage. >> ifill: the attack on u.n. workers in afghanistan beg near dawn in kabul. police finally got thepper hand t hours later. taban fighters in police uniforms and suicide vests stormed the bakhtar est house. the fighting tched off a fire thatent smoke billowing high over the city and forced people to jumfrom roof to roof to

escape. >> ( anslated ): the gun fire hit the door a then the attackergot inside the guest hoe. the guards were on the rf. reign guests inside were ying out for help, but we cod not help them. the were a lot of shooting, some were killed and injed. >> ifill: the de included five u. staffers, one an american. at least 25 u. workers were staying at the guest house preparing for afghistan's esidential runoff election, november 7. new york, u.n. secretary general ban ki moon call the attack a "shocking and sensess act," but he said the u.n. wl not be deterre >>he united nations is committed tooing all it can to support the afghan people they once again st their ballots and ape the destiny of their country. ifill: the taliban warned t strike at the u.n. was jusa start. militants also fired rocke todaat the afghan presidential

lace and at kabul's main luxury hotel. ere were no casualties reported. but the violen echoed all the y to washington, where president obama mulling whether to send more troopto afghanistan. white house press secrary robert gibbs. >> i don't dou that there are going to be memberof the taliban or viont extremists that seeto disrupt the will of the afghan people, tt's not going to be suessful. the afghan people are gointo decide who their next governnt will be run by and we' confent in that. >> ifillgibbs would not answer questis about a "new york times" reporthat ahmed wali karzai-- brotherf the afghan president-- has been wking with the c.i.a. the story sa he received regular yments from the agency for much othe past eight yes, partly to recruit a paramilita force. ahd karzai is also believed to be heavily involved in the afghan drug trade. he dismissed the timeseport as

"absutely ridiculous." across the borr in pakistan today, the day's bloodsh left hundredsead and wounded in peshawar-- mostlwomen and ildren. a car loaded wh 300 pounds of explosiv detonated in the mile of a busy market, collapsinguildings and setting the ci's old quarter ablaze. >> ( transled ): ten minutes before i was inside my sp, and then the blastent off. everybodran towards the scene, to see it closely, and we saw everything destroyed there. >> ifill: firefighte struggled to douselames, and onlookers stggled to pull survivors from thrubble. it was the deadliest in a stng of bombis and assassinations in recenweeks. it came secretary of state hillarclinton arrived three hours away in the pital islabad. she said the fht is not pakistan's alo. >>hese extremists are committed to destroying that which dear to us, as much as they aommitted to destroying

that which is ar to you, and all people. so thiis our struggle as well, and weommend the pakistani military for their courageou ght, and we commit to stand shoulder to oulder with the pakistani people in your fht fopeace and security. we will give you theelp that you needin order to achieve your goal. >> ifill: pakistan'soreign minier said it was a heinous attack, but hensisted, "we will not buckle." >> youhink that by attacking incent people and lives, you will shake our determination? no sir, you will not we will more determined to fight u and defeat you for our own reasons. becae we have a vision for pakist and that vision does not fall in line with what y and for. >> ifi: peshawar is ju miles from the mountainous border region with afghanistan, whe pastan has sent 30,000 troops

to flu out taliban and al qaeda militants. pakistanofficials said today's bombing came in retaliation for that ongoing campaign. rgaret warner is traveling i pakistan witsecretary clinton. i spoke th her earlier today. maaret, it's good to see you. you begin your vis to pakistan with secretary clintonith the news today that out 10people were killed i northwest pakistan today in these latt car bombings. has it cast a pall of any knd over the secrary's visit? sglerk secretary inton and the foreign nister were in a eting in the foreign ministry when the news hit, and we were clustered th pakistani journalists iting for them to come out and ta to us. certainly, suddenly, the headlis on television went from hillary clinton's arril in pakistan to the news of th horrific bombing andorrible, horrible-- just wall-to-wal pictures of . they came out that meeting

and i would say incredibly enerzed. and i think u've got some of wh they said. i an, kereshi in particular was almos emotional when h said you're on the run a we're going to beat you. andsecretary clinton said ere d again at thisinner tonight with the pesident, she said they onlwant to destroy. we want to build. that said, of course, her aides are concerned that ts message she came with, which is we want to bron our agenda beyond terrorism, fighting terrorism, could be overshowed by this attack. i was talking to one of her top aidejust before the dinner who sa it's a dangerbut we're still ing to pursue o agenda here becau there's the short-n problem but then there's the long-range problem which is pakistan doesn work for a lot of its citizens. and the foreign minister wh was standing there chattingith us ad a way this attack helped to unrscore that point. ifill: when you talk abou

thu.s. agenda in pakistan what, is seetary clintos al for this trip? why is she there? >> warner: wel gwen, she wants-- e wants and the ministration wants to stiff and strengthen the solve of the pakistani governmen d pakiani military to keep thup really quite-new serious campaign again the militants. and they concluded they can't do that without, a., broadening the relationship bond terrism-- abuse bauz that's whathe pakistanis wt-- and,., addressing the very ral anti-americasm, the distrust about americthat exists hre ong the pakisti elites and th pakisnipublic. so she came here with a message that we do wt to broadep the relationship. won't be the transactional relationship of th old-- some military aidin return for supposedly fighting terrorm. we're gog to help you build your infrastruure. we're gog to starttudent changes.

this whole kind of broadening of the relationship, and at thi same pre conference with foreign minister kereshi she anunce the the u.s. will t a substantial amou of money into helping pastan rebuildr build its aging infrastructure. it's a countr that has 70 rolling blkouts every smer. as i said,he question is whether something li that will en get coverage morrow. we'll have to see. >> ifill: you talked to senor ker oat situion on the ground in the rion when you were in washington earli this week, and it sems almost as if the secretary's visit is a one-two punch in thi effort to win the2s hear and minds back tohe u.s. side. is tt about rght? >> warner: that is about right. d i don't think they're overating the degree of the problem they have here the pew global pject did is poll worldwide just in may, an it found here in pakistan, now 70% of pakistanis do see the talin as a real threat.

they don't support t taliban any long. bu % still s the united states as "enemy," and so there is this deep we of distrust that goes bk to when we came in tbuild up the mujahideen and then we left an it's gone on and on. >> ifill: today she met with the president d the minister. tomorrow involves what? >> warner: she also had this very coentious roundtale with pakistantv joualists. one aide said itas like being in a room with bill o'reilly, keep olberman, glenn beck, and chris matthews and they'r all shouting questionst you. she turned the argument. there's a question aut the lugar aide bill, where theris a backlashbout here. and she is really-- s really

wantto engage with pakistani people. so s's trying to go beyond justhe official meetings now tomorr she is going to lahor, a both tomorrow and th next day it's sedule is being kept quietor security reason- she is going to have semipublic events, taking little bit of a risk, but wanting to engage rally through pakistani media to theroader pakistani publ. so that is-- that's hegame plan. and asong as the security situation esn't getoo terrible i thinkhe's going to stick with it sgln you mentioned the curity situation, margaret. how mu does atrip likehis have to be planned with at in mind, espeally when there are so many things gog on, like wh we saw this morng in the northern part of the country? warner: it waslready taken into accnt in the planning of the tr. for instan, as you know, even though they announcedhey were coming to pakistan at se point the actualate and time was not publicly announced unti after

'd landed. so, for instan, even though shtalked to us on the plane and people could le from the refueling stop everythg had t be kbaerged. there wasn't a cnvenient time for potential attacrs. the press, we and her press corps ha reservation at the sirina hot here in islamabad, sister to the one in kul tried to attack toda and we were pull out thereof and put the sort of windowless-i guess you'd callhem acked trairs inside the embassy grounds. so the have been very, very careful preparations daling with security, and at thsame time, i'm told shend richard holbrookand her team pressed hard to do this public engagent and to not limit it to just islabad, to t out in the country. sos i said, they're gng to lahor tomorrow, whh was the scene of a very deadly attack, a rekrauting ortraining academy.

but e was reminiscing on the plane today abouthe first time she came here first lady 1 years ago-- 14 year ago. it certainly notthat atmosphere now. she said s and her daughter chelsea walked among peopl had all theseind of outdoor events andthey were wh benaz bhutto who, of coue, was assassinated two years ago. so she wil enge with the pakistani publicut not to the degree that she wouldhave liked. >> ifill: a differt role for her in aifferent time. margaret warner, thank you >> warner: thanks, gn. >> lehrer: in othenews today, president obamsigned an expansion federal hate crimes law to include sexual orientatio gay and lesbn groups had tried for years to get t government to take that step. the expansion s attached to a dense policy bill worth $680 billio wall strt had a rough day, driveny new worries over the housing market. according to the commerce departme, new home sales

dropd unexpectedly last month, by more than 3.5%. response, the dow jones industrial arage lost 9 points to close above 9,76 the nasdaq fell 56 pois to close at 2,0. congress has stepped uthe pressure on pro footba over head injuries d brain ailments later in life. the issue was aired at a hse hearintoday. the commissioner of e national football leagu- roger goodell --would not acknowledga link between head injurieand brain disease. still,e said the league is doing re to protect players. >> let's start with facte have made significa rule changes to our game. five rule changes alone th year that are improvg safety and well being of plers. they have had a positive iact in the short terthey have been in place will continue to evaluate rule cnges to make our game safer.

>> lrer: a former president of the tampa bay buccaneers-- dr. gay culverhouse-- testified ayers feel pressured to hide any sympto and keep playing. >> i c tell you owners are a bunch of mavericks. it is difficult to mdate to them h to have their players play. because centives, bonuses, are e way you get players back i thgame and you win. they don't mollycodd. this is a buness. the bottomine is making money. >> lehrer: committ chairman john conyers cled it a life d death problem. he said he wants to e medical records on hd injuries from the pro ranks down thigh school. t the top republican on the panel-- lar smith of texas-- said there's no way to legiste an end to otball injuries. federahealth officials promised action day to increase output swine flu vaccine.

they ackwledged supply has been slow to reach t public, even as ses of the flu surge. e secretary of health and man services-- kathleen sebelius-- said ere were start-up glitches ataccine plants. >>ike a roll out of a new restaurant, it didn't goery well. those have beefixed and the growth rate now much more robust as the mpanies change to other strai that were growing at fasr pace so both of thoseroblems have been, thoschallenges have been met. >> lehrer: sebelius urged pele to t again, if they already waited in line and fled to get a vaccinatio there was word late day of an f.b.i.aid in detroit that turned deadly. ficials said the leader of a dical sunni islamic group w shot and killed. they said he refus to surrender, and gunfireroke out. 11 members of the grou we charged th ilgal possession

of weapons and stealing from inrstate cargo shipments. nasa test-launch a new type of rocket today for t first time in nearl30 years. the ares x-1 blaed off from cape canaveral a completed a brief ight. it carriedo payload or passenge. the st was the first step in a possible bk-to-the moon program. >> lehrer: and sti to come on the "newshour" tonight: regulating the bigge, and a pop musician ben folds. that follows aenergy story. yesterday, president oba pledged more than $3 billi of stimulus money aimed at king the nation's power grid mo efficient. is summer, "newshour" correspondenspencer michels reported on lifornia's efforts get renewable energy to whe it's needed st. he's an encore look at his science unittory.

>> reporter: thibubbling mud >>... tohow the latest effort by los angeles to capturthat power. a new wind farm which his depament has built in the mountain positiv it's its largest city-owned wind farm in the nati. to hook the engy from these 80 wind turbines into the grid and make it useful, l.a. had to build new transmissionines and grade existing ones at a cost of $16 milon.

it took more than five years to get approval ando build. >> with conventional fuel, we take the fueto the powe plant with renewal energy you have to go where the ergy is locate he's also oking elsewhere. he wants to use the power generate bide this bubbling mud eld in southernalifornia's perial valy. the super hot wat that bemes geotrmal power is sometime called "the holy grail of renewable energy." because unlike wind and sor, it isonstant and not intermittentnot dependent on e weather. ernie hiins,heeneral manager of geothermal operatis at cal energy, said this resoce isust waiting to be pped. >> it pratss twr hours a day, seven ys a week. specifically, the imperial

valley we culd produce easily obably 2500 megawts. wee currently producin342. so there's a big pential here. >> repter: the problem is how to harnessthis rich subtrainian energy srce, who steam turned into electricity in these power plants, but how to transport is from this rote locati to los angeles, some 16miles away. to do that, it has to be part of the grid, the infrastructure of 157,000 mis of high-volge transmission lines that opere across america, connecting ousands of pwer sources to substations and homes. but the tranission capacity is suar and out of date, cording to former imperial county superviso ay horn. >> it stts right here above the horin. yocan see a big substation out ere. >> reporter:e says no new

ansmission line has been bui in the region in0 years. >> this is theast big transmission line but in california. and so, with the infrastructure behind the curve in terms of beinable to deliver those renewables to the populion centers like san dego and los geles and san francisco, we need these new transmission lines to be built. >> reporter: it's a problem not just in california. while the demand for electricity has risen 25% nationally since 1990, construction of transmission les has decreased about 30%. that's led to congestn on the lines and power outages. so why notuild more power lines? first, it's expensive. but it's not just thmoney at has stalled thbuilding of powelines. it'setting everyone to agree where the lines should bbuilt. and nowhere is tha more evident than in the debate aboutow to

get the energy from this bubbling mud along the shores of the saltan sea nr the mexican border up to majorrban areas. th utility wants to build a transmsion line called green path north. s towers could be 150 feet high. >> this would be theorridor, continui on into los angeles. >> reporter april sole supports green energyut as direct of the california desert coalition, she al was to preserve the landscapes original rutes proposed were in highly strirlly seitive areas so you're desoying habita in this case it certainly is not so there are better places to do these projectsnd we need to look for theeast impact. >> reporter: she said the les were origilly proposed to go through arealike this wildlife

reserve north of palm ringses. desert comnities like this one all the y to saltan city. this is... there's a rig way to do this, d there's a wrong way to do this and we need learn from mistakesf the pastnd, and go about this in a smarter and re telligent way. use new technology, use isting corrids, and get power to the source of needith the least distance so that wdon't have transmission los >> reporte sall would like the put powerlines along feway routes, but that isn't aays easy. she isot alone in her concerns five yearsgo, austin puglisis and his wife bght a 55-acre parceln a spectacular desert canyon, to buildis dream house. he got theermits and drilled a well, and was rey to build. i dot see any house. >>ell, everything came to a sceching halt. >>eporter: because?

in april of 2006, a friend mine tald to me about plans that she had just learneabout, at the city of los angeles h beenlanning already for years to build high voage transmission lin through this area and the original pl called for 200 footall towers. and i ally didn't like the idea of living the rest of m life underheir shadow. >> reporter: nai says l.a. power and ter is trying to balancthe environmental impact th the desire to reach californ's other environmental his agency is now proposin seven different utes in hopes ofinding the one that is the most efficientnd has the least environmental impa. >> therere local interests who... who are concern viously about the aesthetic effects, the environmental effects-- for instance, one the alignments for gen path woul.. would pass through ten separate municipalitie each with theiown concerns, each with thr own needs. so it all... it becomes i thk

very, very difficult prospec but neveheless one that has to >> reporte dan kammen, professor of energy athe university of lifornia at berkley and has been studyg transmission lines and renable ergy, says the decision-maki process has too beyond the state of calornia. >> t real issue for transmission is at it requires fedel coordination and oversight. you cat do it state by state. you have to build ouregional reurces and so this is another place where the ama administtions role is going to beital. it's not justhe amount of money but italso coordinating what happens arod the country. >> reporr: los angeles officials are seeing firstand that getting green per is taking longer an they thought. they just push back the start date of green th north by three years to aft the year 2014. >> lehrer: sce spencer's story first aired,avid nahai

resign his job at the los angeles depament of water and powe and the departme is -evaluating the green path project again. >> lehrer: next tonit, dealing withhe financial industry's too big to fl problem. "newshour" congressial correspondent kwame hoan begins our covage. >> reporter: since t financial crisis hit last septemr, the gornment has injected hundreds of blions of taxpayers' llars into firms such as ban of america, citigroup, and a.i.g.-- all dmed "too big to fail." in the wake of the colpse of lehman brothers and the crit cris that followed it, government officialsepeatedly have said theyad no other option. federal reserve chairmanen bernanke explained his tnking during a "newshour" forum is summer >> the proem we have is that in a financial crisis if youet the bifirms collapse in a

disorderly way, they'll brin down the whole system. really need-- and this is criticallymportant-- we really need a new regulatory framork at will make sure that we do not have this probm in the future. >> rorter: yesterdayhouse financl services chairman barney frank brought fth new leslation designed to provide at framework. the bill-- which was draftedn conjunction with the treury department-- would give th federal rerve authority to take or firms that are at risk ofailing and present a danger= to the broader enomy. it would aow the government to dismantle a coany without sending it through a sndard baruptcy. to pay for that procs, banks and other firms withore than $10 billion inssets would contbute to a special fund. shareholde and creditors of stitutions would take losses d top management could be removed. the ll also would strengthen oversight-- creang a new regulatory council oversn by the trsury secretary-- to

address risknd toughen regulaons on large companies. te yesterday, president obam expressed stng support for the proposal in a letter to chrman frank, saying small chges were not enough to fix e system. >> lehrer: we get two vis about the propal and what it could mean euge ludwig is the forr u.s. comptroller ofhe currency, which regulas and supervises national banks. he'sow the c.e.o. and founr of promontorfinancial group, a global consultg firm. dean baker is an economistnd co-director ofhe center for economic and policy resear in washington. he's the author of sever books, including "plder and blunder: the rise and fallf the bubble economy dean baker, do you bieve the frank proposal willolve the too big to fail problem? no, it's reallyard to see how it does that. bacally the too big to fail problem is thearkets don't believe the govnment will acally let a firm le citigroup, goldman sachs, or

these big bas go out of business so that means there's not effectiveiscipline on their activiti. the question i if we had this in pla, we do have tis commitment, you kno, the vernment-- representative frank saying we will let these bas go under but y're looking at firms thatave gotten bigger. do the markets belve the government would let a citigroup or goldmanachs gonder? it's very hard t see that story. i expe you would still have people willing to lend wh the with theexpectation if they got into trouble t government will least in part, bail them out. there won'be full market discline. >> mr. ludwig? >> i think chrman frank has t together a strong proposal here. i think the refiment that can improve it markedly, but both chairm dodd has been focing on this in the snator, and senatorarren--. >> lehrer: chrisodd,hairman a comparable committee. >> congress has been lking at these ises hard and i thi we're going to get strong

regulati. the proposals i think e headed inxactly the rig direction. i think one can question elements of them a improve them, bui think he's made a strong step forward here. >> lehrer: dea baker, you dot even tnk it's a step forwa is thacorrect right? yothink thehole proposal is flawed or do you think there are parts of it that mightork? >> well, i think the are aspects-- it's aig proposal. it's 300 ges, so there are aspects-- r example trequires that issuers of mortgages maintain stakein them ev if they sell themn the secondary maet. i thinkhat's a good thing. in terms of the fuamental oblem, you have nks that are too bi to fail, the market sees them a too big toail, do this dl with that? i find that hard to believe. the resolution process-- it is god ha an oerly resolution process. the pr was we had a financial crise, and l's carry this through for a second and envision we had this in pce.

ppose you had a.i.g. gounder, do we rlly think the fed, the easury, would be t to slap on a special assessment on tigroup and bank of america last september to covethe cost of resolving aig? that's a little hard to belie. ichk it still en up in the taxpay's pocket. lehrer: you thi that prosal will not work? the guts of the proposal, mr. luig, as we just said, a kwame ju said, the $10 billn every cmpany has $10 billion in assets has to contribute to helping the companie that are too g to fail and if ey in fact fail instead using taxpayer money they haveo contribute to thisund. you ard what m baker said. that'sot going to work. >> nobody wants to use taxpayer money, tt's for re. i think the part of the proposal th needs a lot of focus and is movings ings forward which is as imptant as the resolution mechanm itself--. >> lrer: resolution means the company isbout to fail, and somebody-- and th government stepin and doesomething.

>> steps in and u might say helps it fail otakes it apart, or takeshe management out, the board out, and tn refloats the company. that's resolution. resolving e problem. but i think the issue here that's even mo important is wh do you do before a company gets in this state? andthe frank proposal does-- has two aspects to it that i think are helpful but think can you use some refinement. first, there's systemic uncil to identi systemic problems. are we headed fo a probm area--. >>ehrer: so you don't wake up someie and some big company has failed. >> rht. >> lehrer: the fedal reserve uld already know this, right? it's a council with the fed as part of it. where i think refinemen is helpful, government helpso cause these probms, unttingly, of course, with policies that n't work. i uld hope as this evolves, you e a separate, independent

agency, a part of that systec procesthat's independent and can identify governmental mistakes. secondly-- and this is very imrtant it's cpanies that have ben successful withheir institutions ha had an independent, end-to-end credenal, so that t entities themselves don'tet into problems. we don't have that here. weave an alphabet soup of regulators. the frank proposalakes a step that direction, or a half step. that's an arean which we ve to take a fulltep, jim. we have to havein this country the kind of end-to-end, congressional supervisor that can really deal with these entiti and keep them getting sick in the first place. >> lehrer: dean ker, do you agree the process this begin before ty fail? >> would like to see them not get that big thing ds up being a story of we want better rulators and of

course w do but let's go back to '2, '03, '04hen the housing bubble was building . suppose we h th in place. alan greenspan was saying evything is fine, there isno housing bubble. do you think if we had this council in place byhen we would have gotten a different result? if the houses maet was fine, there was systemic risk. there were noig problems. i think it's unrealistic. yes, we want better regulator bu writing legislion that ys we need better regulators mean we'll g better regulators >> doon you fosed on an area i agree with you. think the federal reserve i a fabulous organization. the people in our regulato bodies areremendous. whate need here is somebody independent, that can identify these problems, ke the g.a.o., in a way, does in other areas before they ppen. >> lehre the accounting offi. >> look an accountingoffice-- that's the gernment accounting

office. it's independent. and i think ere the frank proposal takes a great step forward ying let's look at systemic rk. it's nothe fed lookg at itself that shouldn happen. >> lehrer:hy would the fed be looking at itself? >> well fit were in charge of the council. the treasu is actually i charge of the council,ut the fed saimportant element of it. and it's very ha for y organization, whether it's a governmental organation or any organization to be self-reflecte. so i think thiwould be improved if onhad an independen agencyineffect that was taed with the simple responsibili ofdentifying bubbles, had somebodbeen doing th in the eay 2000era, they would have identifiethis. >> lehre would you add that to your prosal if you had one, dean baker? >>ell,y i certainly i one of those pele out there yelling about the using bubble, that it was a bigproblem and largely ignored, unfortunately, think. yes, it woulbe great to have someone identify bubbles

whether we can count on that-- i don't think was hard to oy housing bubble. i don't think it w hard to identify thetock bubble. it should be somethi that we're on the lookout for and, again, this is annormous problem. i know alan greenspan maybe s a different view tod but had the view a few years ago tt bubbles weren'a big deal. you let em come, you letthem , and then you can up afterwards. hope we all realize now that's not the case ey can really be a problem. we have to identify bubbles, whether it the fed or an dependent body. part of the problem is people make money on bubbs, as we kn. if you say the's a bubble, and you have to stop this, it takes awayhe punch bowl and these are powerf fpbld ititutions that don't wt you to take away their punch bowls. >> lehrer: help us lay folk en you say "bubble,"hat's the simple definition of a bubble? >> essentially ass price increa that isn't jusfied by the fundamentals. so y go back to the s when t nasdaqhit 5,000. think tay it's less than

half that. there was no justification for that. there s no story tha underlyingrofitability of the companies would ha justified those rt of prize prices. and in the current decade of housin the uprecedented run up in house prices th couldn't be explain by the fundamtal supp and demand in the housing market so thfed nother tity has to recognize that the prices he gotten out of line wi fundamentals and basically when tat happens they do come back and usuly not in a way that is very pretty >> lehrer:ou agree somebody shld be look for bubble >> absolutely. i think that's a key ement. and we oht to have an independenidentifier of those bbles and anndependent regulatory agey that is focused o... supervision a is professionalized, much t a greater dege-- sactually act when the bubbles--. >> lehrer: you say th frank propal is a step in that direction but notar enoug and you say, dean baker,it's not even a step th way. i say there are some small steps buit's really not wh d like to see.

i don't thinit will get us where we need to go. >> lehrer: we need to go. thank you both very much. >> thank you, great to be on the sh. >> thank you >> lehrer:ext tonight, combining a ve of the environment with health re. ecial correspondent fred de sam lazaro repts from the island of borneo in south st as. >> rorter: it's not easy to run a clinic in is remote corner of borneo. patients come inith malaria, t.b. and diseases at should be treated much earli. mo people are extremely poor and health care is eithe unavailable ornaffordable but this clinic, on since 2007, has flexible payment policies. they don't take credit cds but they will take just about anything else. >> you can pay with basks, woven mats, bor in our organic

gaen, seedlings for replanting. ese are shells of rice, eggshells-- we u for these for coost. >> reporr: kidney patient musadin, agrd to pay partly th cash, partly th something, well, sofr. >> people in our cnic can actually pay with manure. >> reporte it's collected for anrganic farm next to the health in harmonor asri clinic arted by dr. kinari webb. she says the idea iso treat not just patients bua larger rainforest ecostem that's been der assault in borneo for decades >> it'not only about our physical health, which i incredibly iortant and the physical heah of the planet, but it's aut our soul health. the... these rain forests and this biodiversy is exquisitely beautiful. >> reporte these are the carcasses of lumbemills that

fed the asian economic bm in the '8 and '90s. they ran out of lumber depleting swathes of onef the in its wake are oil palm antations, producing cooking l that's a lucrative export markets acro asia. nearby, with little employme, peopletruggle on tiny plots of land. the forests-- firsexploited by thcolonial dutch and british-- ve shrunk more than a half across borneo-- the world' third laest island, now shared indonesia, malaysia and the tiny stanate of brunei. the gunung palong nation forest in donesia and these parks are the la refuge for orangutans, gibbons and millns of plant and amal species. and even tugh they're legally off limits to any mmercial exploitation, thesparks are not mune from illegal logging and conservationists whoork here say the only way totop it is to improve the ves of the desperately pooreople who live here. kinari webb learned thathen

she came here the early '90s. she came to study primatesbut was moved by t extreme poverty and poor public heth. >> i bano realize what it walike for people who live in... in tiny litt villages in borneo with just basicly no opportuny at all. and i came face face with what it's real like for the last bits ofain forest in the world, and i just begato think, "you kn, i could go to medical school and iould come back and make difference here." and t i never could let go of that love of the environment. and over tim we found a way to really combine those two. >> reporter: she alscouldn't let go of helove of a botanist she met here, nad campbell webb. shfinished medical school, they married and it s cam webb who rst enabled the move back in 27. harvard unersity hired him to conduct search in the forest with ionesian colleagues.

>> we're able toe here in a largsense, because i have a job re that enables me to be here and kinari doest take an income. >> reporter: iome for the clic, where kinari webb and abou20 colleagues work, comes from a patchwo of cash and in kind donationsrom u.s.-based supporte and even school fundraisers. the architecture dartment and students at orgia tech university. a hospitalto be built here xt year, is being designed b >>omorrow, we will be going to batambara to distribute glses and mosquito net >> reporter: about 8,0 patients have been seen in t two years since this six-rm facility opened. but the clinic also travelto villages surrounng the gunung palangark. there's uslly weeks of advance notice, so peoe can grow seedlings. ey use these to pay for care

the asri clinic workonly in so-callegreen villages, communities that are certifi by the park rvice as free of illegal loggin green viages also get a discount on clinic fees. >> they dermine that both through ound patrols and with fly-ovs of the national park in this tiny little cro light airplane, we're not ying to catch people, we're justimply saying we're listening tthe national park, andogether with them we'reoing to try and offer you incentes if you're not doing legal logging. >> reporter: at this ent, people got vision tests anbed nets to keep o mosquitoeand a leure that linked deforestation with increas malaa. >> people wereaying, "oh, yeah, wenow there's many more mosquitoes in gged areas so they knowt, and they would love to prevt it. >> reporter: no onvalues the fost more than those who live aroundt, she says, even though

porty has driven many people to engage in illegal lging. deforestation bringsisease, oods homes and affects rainfall for their crops. most a eager to join in conservation efforts. that means repting illegal logsoming through their viages from the park. anit means switching from the slash and burn tradition clearing ever more forestld to plant crops. the land remains ferle for only a few years beforit is abandoned. >> ( trslated ): in first three years that you opeland from forests and addhemicals, it's quite good, but everyear after, production es down and down. some of the fields are used 20 years orore so they are not productive. >> reporter: srikandi e is thepq head man in one of several villages wherehe asri program has introduced residents t orgac farming-- using soil enriched by composand manure. >> ( transled ): our old ople-- our honored elders, th are ones who cut down the forests and they are seeinthe

bad effects on theirrand children. that's why were pleased with this training that we are learning to do something abo . >> reporter: ovetime better la management should ease pressure on e forest. cam webb says that canllow forestation, even though i will neverring back the orinal rich biodiversity. >> we'll definity learn about what difrent species need, ich ones are good to plant, what metds we... we can employ to control weeds and allhese different things. >> reporter: and there's sll virtue nonetheless ibringing back a forest evenacking that diversity. >> yeah, absolutely anfor all the other reasons, forhe onomic reasons, for watershe managent, for sources of timber, imate control, finitely a forest is better than no forestn, in these habitats. >> reporter: h do you know you're succeeding? wh tells you that you've got something that's actuall working? >> yeah, thas an excellent, excellt question. we cant be a failure because we're veryucky to be able to be able to help so my

patients. but in terms of consertion, how succesul are we being? it's not going to ppen immediately. 've already seen a 30% decrease in thnumber of villages which a doing illegal logging. but we'd like see much more than that. but i believe that it willake time to do that. >> reporter: and she planso take t time. aside from fund-raisintrips to the u., kinari and cam webb plan to spend theicareers here >> lehrer: you can jn fred on his river boat re, and hear his report about h poverty threatens born's natural resours. that's on our web site at newshour.pbs.org >> lehrer: finally tonighta piano rocker a his big band. jerey brown has our profile. >> reporter:en folds, a 43- year-old pianolaying pop star

with string of hits, usually peorms solo or with a small grou >> how about my nd tonight! ( applause ) >> reporter: but thirecent night in washington d.c.his "bd," as he called it, was the "nional symphony orchestra." ♪ >> what s exciting about this to me was the ea that we would arrange music in a way to whe that made the orchestra the rock ban because the orestra has grood for hundreds of years, whdoes it have to sit there and go "eeehhh" for a whil behind me? they're rlly taking care of a lot of theercussive elements of the songs. >> reporte folds himself began as a percussion playern youth orchestras in nston-salem, north carolina. eventually, heurned to the piano. although, you castill see the percussiist in the way he sometimes sls the keys.

heirst made his name with ben folds five in 1994. and had his firsbig hit, "brick," three yea later. >> ♪ she's a brick and i drowni slowly ♪ off the coast and i heading noere ♪ she's brick and i'm drowning slowly... ♪ >> rorter: folds went solo beginninin 2001 producing a string of albums. most recently,e released a collection of his songs sungy univsity a cappella groups. >> ♪verybody knows, it sucks to grow ol ♪ but everybodyoes, so weird to be back here...♪ >> reporte folds' songs ofn feature down a out characters, like newspaper reporter who gets laid off after 25 yea. >> ♪ there was no part there wereo songs ♪ cause today'sust a day like

the day that he stard... ♪ >> reporter: others can beery funny, like the one about an out-of-town sitor who keeps hanging around. >> ♪ well, we thought was go but he's come back again ♪ last weekend wafunny but the joke's weari thin. ♪ onof my models would be j.d. salinger shorttories, just in w quickly he gets in and out of the character, how at character and ripheral characters in the sty relate to other characters. ♪ and humor, that's a ve serious tool. people laugh. th don't know why they laugh a funeral, or they'll make joke at a time tt's either inappropriate, or trng to keep thr composure in the middle of

somethinthat's actually really tough. ♪ so i find that mh more effective for me. people call them noveltyongs. but i find them much more effective for to show the depth of what's ing on, than justo say, "i'm so sad..." and here's my minor chord. ♪ >> rorter: as to playing with an orchera, it turns out that for folds, is actually a mecoming of sorts. he fir conceives his songs-- in his head-- th a variety of arraements, including orchestral. >> i sucture the songs so that e voice leading and the potentiaarrangement inside the song can be carried by a orchestra-or it can be carried by a choir, or you canusk it. the songs will be builso that they cantand up to a lot of different treatments. the rockand treatment was a bit of a twist wn i started out as a piano player aying in sort of grun era, playing punk

clubs. because my band would beathe songs . th would take otherwise pretty chords-- and a lotf these songs we're pling with the orchesas now were just played with a band crashing cymba and distorted bass guitar. and so hearinghem this way, in a funny kind of y, it's more cong back home for those songs. >> reporter: ben folds'sour continues is fall and includes more perfoances with some of the nation'seading orchestras. ♪ >> lehrer: jeff's intervw with ben folds contins on our web site: nehour.pbs.org. and annline only feature tonight: analysis anreaction to the hate crim bill presidenobama signed today.

>> lehrer: again, the major developments othe day: taban attackers killed 11 pele at a u.n. guest house in afghanista a car bombinin pakistan killed more than 100 people. u.s.ecretary of state clinton promised sidarity with the pakistanis, as she arrived i e country. and wall street had a ugh day, after word that nehome sales drped last month. the dow jones indurial average fell nrly 120 points. >> lehrer: we'll see you on-line, a again here tomorrow evening. i'm jim leer. thk you and good night. major funding for the newsur with jim lehreis provided by: stngth and the experience of >> 150 years of fincial streng and the experience of anstablished investment firm have ce together wachovia securities isow wells fargo advisors. the nancial advisors nearby and nationwide

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