captioning sponsored by macneil/lehrer productions >> lehrer: stocks rallied again today, settling a bit after days of record-setting swings. good evening. i'm jim lehrer. >> woodruff: and i'm judy woodruff. on the newshour tonight, we assess the week's mixed economic picture, including new figures today showing retail sales are up but consumer confidence is down. >> lehrer: then, from iowa, gwen ifill reports on the opening of the republican's 2012 nomination struggle. >> the republican presidential candidates descended on iowa this week for a debate, a straw poll

and, of course, the iowa state fair. >> woodruff: mark shields and rich lowry, filling in for david brooks, analyze the week's news. >> lehrer: and we close with a special honor roll of the 30 american troops killed in the helicopter crash in afghanistan last weekend. that's all ahead on tonight's newshour. major funding for the pbs newshour has been provided by: >> well, the best companies are driven by new ideas. >> our future depends on new ideas. we spend billions on advanced technologies. >> it's all about investing in the future. >> we can find new energy-- more, cleaner, safer and smarter. >> collaborating with the best in the field. >> chevron works with the smartest people at leading universities and tech companies. >> and yet, it's really basic. >> it's paying off everyday. >> and by bnsf railway.

and the william and flora hewlett foundation, working to solve social and environmental problems at home and around the world. and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. >> woodruff: for investors and traders alike, today brought a welcome end to a series of nerve-jangling sessions. there were no rumors, no bouts of panic selling, and no dizzying dives followed by sharp surges. instead, wall street managed a relatively calm advance, as the dow jones industrial average gained 125 points. when the closing bell finally rang this afternoon at the new york stock exchange, it capped one of the market's wildest

spells since the meltdown of 2008. >> put the order up. they're going to send more later. >> woodruff: starting last monday, a track of the dow jones industrial average resembled the seismic plot of an earthquake. a key volatility index found over the past two weeks swings in the dow averaged 15% a day; the norm is 1%. today's week-ending rally came on word of improving retail sales in july. they were up by the most in four months, with consumers spending more on cars, gasoline and furniture. that pushed the dow up more than 125 points to close at 11,269. the nasdaq also gained ground, up 15 points to close at nearly 2,508. >> needless to say, we are exhausted. it's been a tiring week with all the major swings up and down. >> woodruff: around the world, the week's record-setting swings also kept traders and investors

on their toes, and glued to trading screens at exchanges in city after city. but european markets, like wall street, finished friday with gains, with many rounding out the day sharply higher. french markets had to contend with the announcement that economic growth in france was flat for the second quarter. the finance minister took to the airwaves to reassure investors. >> ( translated ): i am very confident. i am confident because we have strong fundamental drivers in our economy. why strong? because our economy is diversified, because we have a banking system which is one of the most resistant in the world. >> woodruff: the french government also shored up its banking system by announcing a 15-day ban on short selling. several other european countries also moved to stop speculators betting against bank stocks. and in italy, prime minister silvio berlusconi and his cabinet met in emergency session

and approved new balanced budget measures. it was their latest effort to calm concerns over italy's public finances. in the end, after all that volatility, the major stock indexes dropped for the week by just small percentages. the dow finished down 1.5%. still, in just over three weeks, the dow has fallen by more than 1,400 points. to look at where things now stand on main street and wall street, we turn to roben farzad, senior writer for bloomberg business week. roben farzad, thank you for joining us, soafter this roller coaster week, why were things today calm by comparison? >> frankly, people want to just go home for august age just forget about the markets. a lot of feel indignant that this happened now. we know to expect this kind of stuff in september and october, but gosh, you want to be fly fishing now, you want to be in aspen, in the hamptons. and world events kind of

flung this on to wall street. i think people stepped back and realized that for all of that record volatile in in four days, 400 points up, 400 points down, 600 points up, 600 points down, that in the end this isn't really accomplishing anything but generating so much stomach acid so why don't we step back and wait for events to unfold. >> woodruff: well, we did have these good retail sales numbers today. what do they tell us if anything about the health of the economy. and by the way they seem to be con draw-- contradicted by consumer confidence survey numbers which are down within yeah, consumer confidence numbers are down to reagan morning in america levels. 30 years ago, 31 years ago t just tells you how far this economy has fallen. i mean after all unemployment is near double digits. there isn't much to really hang your hat on if you are someone look for wealth effect. gas prices are up, certain food prices are up. cost-of-living is not keeping up with wage increases. and yet you go to an apple store or you go to certain

places in the economy luxury car dealerships and you practically have to get into line. and i think this speaks to the bifurcated nature of this economy. certain people are doing very well. and on the flip side of it you have the c.e.o. of wal-mart come out recently and say, you know, you should see the traffic in the store the night that food stamp benefits are recharged. i mean people are literally paycheck to paycheck, benefit to benefit. >> woodruff: so do we just-- does the country just live with this kind of contradictory information? you know, for some time to come. and we keep hearing the word psychology. the psychology of what investors are doing. and how much is that a factor? >> you know, psychology is not monolithic. if you could put the market on a therapist chair. i mean 1 week feeling really bullish. the next week bearish, the next week it has mother issues. i mean look, let's not forget almost a month ago, we were talking about a linked in tech stock bubble, dunkin' doughnuts was going

public, and then bam europe is unhinged, the united states is getting its credit rating cut on friday. i mean things turn like that and i think when you step back it speaks to the fact that the financial crisis which kicked off four years ago hasn't played thought earnest. i mean there were some false starts that maybe were out of the woods. and yet when you see what europe is grappling with. when you see the potential of entire economies, not just greece but italy, france, spain, potentially defaulting, not being good on-- good on their money t is far big never order of terms of magnitude versus lehman brothers or bear stearns or merrill lynch which by itself was hard to cordon off in december 2008. imagine if entire economies in western europe fall. >> woodruff: speak of europe, americans don't usually pay that close attention to europe. but how much are people in this country going to have to continue to monitor what's happening on the continent? >> we're all connected. it's like that old new york telephone ad.

the federal reserve here came out this week and pretty much telegraphed and showed its hand and said that we're going to keep rates at record lows at least until 2013. now what that is forcing people out of-- into cash but making it prohibitively difficult to be in cash. meanwhile, european investors, institutional traders, investor and the like there are piling into u.s. treasuries at the very time that you have standard & poor's saying that we're not as good for our money as we were a couple of years ago. and so that is just pushing everything down in terms of interest rates. and you see investors almost being smoked out of their safety zone, being forced to go and dabble in markets. and yet, put europe, put asia, everybody together. we've lost $7 trillion off stock-market values in just three weeks. >> and it is another one of those contradictions. we were talking about a minute ago. you know, we had two economists on the program earlier this week who said the odds of a second recession are now rising.

how does that look to you at the end of this week? >> to me it looks like nothinging a dead or terminally ill horse at this point. i don't feel like we ever truly recovered out of this great clal amity of 2080. unemployment effectively doubled. the economy loses something like 8 to 10 million jobs. and when we're creating something like 15 or 20 or even 100,000 jobs a month, that's just not cutting it. it's not keeping up with population growth in the labor force. so this isn't a recovery in the truest sense of the term. i know that's very coldly comforting but to say that we are on the verge of a double dip really kind of overstates what we've just experienced in the way of recovery. >> last question, rob roben farzad, for ode folks who are watching this, what are they to look for, how are they to think about all this, as the rest of august unfolds and we head into the fall. >> shut it off. i mean stick to your

knitting. if you had a discipline before the united states credit rating was down graded a week ago if you stick to your guns and plan and discipline and tuned it out and said i'm going on vacation, and not gaze every day and resisted the urge to sell into these monster sell-offs which were followed by monster ral ease, again would you have preserved a lot of your stomach lining and you would be more apt to see the big picture. and time and again that is the lesson here. to have a discipline to have diversification, to ignore the day-to-day and the noise. >> woodruff: at the same time, appreciating a lot of people can't go on vacation. so keeping it all in perspective. >> make it a staycation then. >> woodruff: roben farzad, thanks very much. >> thank you, judy. pleasure. >> lehrer: still to come on the newshour: the republican campaign in iowa; shields and lowry; and a special honor roll. but first, the other news of the day. here's hari sreenivasan. >> sreenivasan: a federal appeals court today ruled americans do not have to buy health insurance.

that mandate is a central provision of the president's health care overhaul. the three-judge panel in atlanta voted two to one against it. but the judges ruled the rest of the law may go forward. in a statement, white house spokeswoman stephanie cutter criticized the court's conclusioonnd the iividual mandate. she said, "we strongly disagree with this decision and we are confident it will not stand." similar cases are working their way through other federal courts, bound for the u.s. supreme court. the u.s. postal service is proposing to lay off as many as 120,000 workers, 20% of its labor force. postmaster general patrick donahoe confirmed it today, in the face of mounting losses. he said the agency also wants to quit the federal health and retirement systems and provide benefits itself, at lower cost. congress would have to let the postal service break its labor contracts to make the changes. donahoe said he hopes that can happen by the end of september. crowds across syria stepped up their defiance today in the face of a growing military crackdown. in some cities, protesters

shouted for the death of president bashar assad. activists said assad's soldiers shot and killed at least 14 demonstrators. we have a report narrated by john ray of independent television news. >> reporter: after friday prayers, in their thousands, they filled the streets once again. five months on, these demonstrators seem as determined and as defiant as ever, despite the all-too-obvious dangers. there was panic in this suburb of the capital. one witness has told itv news they were shot at by snipers who claimed security forces threw what he called a nail bomb. there is no way to verify his story. but across the country today, the death toll rose as the protests spread. the regime's brutal response has met an almost complete chorus of

international condemnation. while the world watches on, the blood flows. this is thought to be a shooting in hama today, a city the regime declared safe after a week-long military occupation. but when the troops leave town, the protesters are quickly back onto the streets. this has become a protracted test of will, neither president nor people backing down. >> sreenivasan: meanwhile in washington, secretary of state hillary clinton urged other nations today to cut trade ties with syria. >> we urge those countries still buying syrian oil & gas, those countries still sending as ask-- assad weapons, those countries whose political and economic support gives him comfort in his brutality, to get on the

right side of history. president assad has lost the legitimacy to lead and it is clear that syria would be better off without him. >> sreenivasan: clinton stopped short of flatly demanding that assad step down. that's partly out of concern for concerns among allied nations, especially turkey. the turkish government has voiced fears about further destabilizing syria and sending mass flows of refugees north into turkey. in afghanistan, nato announced four more of its troops have been killed in action. that made nine in the last 24 hours. five of those were u.s. soldiers who died on thursday. just a week ago, 30 americans and eight afghans were killed when their chinook helicopter was shot down. british police were out in full force today to guard against any resurgence of rioting over the weekend. authorities also kept up the hunt for suspects in the aftermath of this week's looting and violence. they used images of people captured on security cameras during the riots. in birmingham, for example, a

large screen in the city center was showing those images. deputy prime minister nick clegg acknowledged today there's much to learn from the violence. >> with the benefit of hindsight we can all, you know, act as armchair generals saying this or that should have happened. i think the key thing is that what the public wants to see is that the streets are safe again, shops are safe again, homes are safe again, families are safe again. and that the people who did all of this are in court and are being properly punished. >> sreenivasan: so far, more than 1,700 people have been arrested, and nearly 700 in london alone have been charged. meanwhile, the government has blocked a far-right group's plan to hold a march in central england tomorrow for fear it might spark new trouble. those are some of the day's major stories. now, back to jim. >> lehrer: and to the 2012 presidential campaign. gwen ifill begins our coverage. >> ifill: they're all here, deep into an iowa summer, as the 2012 presidential suddenly picks up speed.

former massachusetts governor mitt romney tackled hecklers at the state fair. >> hold on just a moment. hold on just a moment! i'm going to let you speak in just a moment. ready for my answer. you want someone who's going to raise taxes? i'm not going to raise taxes. >> ifill: minnesota representative michele bachmann targeted her appeal to the state's powerful network of social conservatives. >> it's about having somebody who's new and bold and is going to get her done. i'm not interested in two terms; i'm interested in getting it done. we got to get it right in 2012. we are going to have a tidal wave election. with the right candidate, it will be a tidal wave. >> ifill: as political spectacles go, it was hard to

look away. the candidates flocked to the famous state fair, with its fried food, amusement rides, its cow carved out of butter, and its potential voters. >> people are really fed up with congress, no matter what party. i think it's down to 10% approval. so something's got to change. >> ifill: add to that, last night's candidates' debate, where the two minnesotans-- former governor tim pawlenty and bachmann-- took aim at one another. >> i have a very consistent record of fighting very hard against barack obama and his unconstitutional measures in congress. i'm very proud of that record. that is what qualifies me, as a fighter and representative of the people, to go to washington, d.c., and to the white house. >> she led the effort against "obamacare," we got "obamacare." she led the effort against tarp, we got tarp. she said she's got a titanium spine. it's not her spine we're worried about; it's her record of results. if that's your view of effective

leadership with results, please stop, because you're killing us. >> ifill: other candidates just fought to be taken seriously. >> you need leaders, you need people who are good at leadership, not showmanship. >> reporter: how do you respond to people who say that your campaign has been a mess so far? >> well, let me say, first of all, chris, that i took seriously bret's injunction to put aside the talking points, and i wish you would put aside the "gotcha" questions. ( applause ) >> reporter: when president obama joked about protecting the borders with alligators and a moat, not only did you embrace the idea, you upped the ante with "a 20-foot barbed wire electrified fence." were you serious? >> america has got to learn how to take a joke. >> ifill: the "des moines register's" kathie obradovich says that saturday's big straw poll in ames-- part street fair, part hardball political exercise-- will be the biggest candidates' test so far. >> reporter: historically, the straw poll has not been

important by itself. it's a party fundraiser. but candidates have caught on to the fact that the media pays a lot of attention. so they started back in the '80s organizing to show that they are ahead of the pack. and so, over the years, it's come to be seen as a real test of candidate strength and the organizational muscle that they have. >> ifill: the three events are a political trifecta, but the announced candidates now risk being upstaged by two candidates not yet in the race: texas governor rick perry, who travels to new hampshire, south carolina, and bachmann's waterloo, iowa, birthplace this weekend to announce his entry into the race... >> he could actually steal headlines away from candidates who have been working here for over a year leading up to this day. >> ifill: ...and 2008 vice presidential nominee sarah palin, who arrived to work the state fair today.

doug gross chaired romney's state campaign four years ago. >> stalwart republicans-- those republicans not focused solely on social issues but focused on economic issues and a desire to beat obama, lots of folks like that, like myself, are unaffiliated. we haven't decided who were going to support. so for both of them, there's still plenty of time. >> ifill: iowa has served as the political launching pad, or graveyard, for presidential candidates since 1976, when democrat jimmy carter came out of nowhere to win the january caucuses. so, although candidates like romney and former utah governor jon huntsman won't take part in tomorrow's straw poll, all made sure they were onstage for last night's fox news candidate's debate. >> we were the best-managed state in the country. we maintained a triple-a bond rating. all of the things this country so desperately needs. when you look at me and you ask, "what is that guy going to do?" look at what i did as governor. that is exactly what i'm going to do.

>> ifill: all the candidates are hoping to harness the previously unmeasured power of the state's tea party movement. ryan rhodes, who has been organizing tea party voters in iowa, has decided to back bachmann. >> i think a lot of people are looking for someone to be that strong candidate, to step forward and articulate what they're saying. right now, they have to go beyond the grassroots activists, because right now, the only people paying attention are the really avid political people like you and me. the average iowan isn't paying much attention, the average american is not paying attention because they're working trying to pay their bills. >> ifill: indeed, with all the political activity now underway, even some of the most activists themselves remain undecided. >> i myself haven't made up my mind and i've been involved in g.o.p. politics since 1988. i want a candidate who has a winning message. i absolutely believe a winning message has to focus on the

economic troubles of this country. right now, a lot of our candidates are not talking about things we really care about, those issues. i'm going to wait and see who can do the best job at that. >> ifill: less engaged voters only know they want someone, anyone, who can beat president obama. >> there are quite a few candidates out in the field. i don't really see any frontrunner right now, other than mitt romney, who hasn't shown that he's very interested in iowa right now. >> i think obama has failed to show his leadership ability and i'm anxious to have somebody replace him. >> ifill: every candidate is hoping to capitalize on that unhappiness. >> and if you can come to ames this saturday and cast a ballot for me, i'd really appreciate it. >> i do know that you can make the difference. one vote in a straw vote situation like this is very valuable. >> i love you!

see you on saturday! >> ifill: let the games begin. >> woodruff: gwen will be in iowa all weekend. margaret warner talked with her from the state fairgrounds a short time ago. >> warner: hi, gwen, look to be right in 9 middle of the action out there. >> ifill: i'm out here in the heartland. >> warner: so what's been the reaction among the players, other people you've talked to to last night's debate? >> ifill: well last night's debate was really a breakthrough for a lot of the candidates and a lot of the people watching carefully in a way as you saw in the piece haven't necessarily made up their minds. they wanted to see whether tim pawlenty was going to come alive, whether jon huntsman who is not participating in the straw poll will make his voice heard. instead what they got was an interesting sideshow, a fight between michele bachmann and tim pawlenty the two minnesotaans and they also begin to see what the front-runner looked like, mitt romney who also is not

participating in the straw poll there are a lot of people in this race who were depending on last night's debate and tomorrow's straw poll to survive. >> warner: and meanwhile you've had right in the state fair where you are now sarah palin come approximating in today, i gather. and rick perry not yet announced candidate coming in sunday. what impact are they having? >> ifill: well, sarah palin shows up, there is an immediate crowd which is what happened here today. she came, she toured. she visited the butter cow which is celebrating its 100th year on display here, a cow carved entirely of butter. and she decided to come back to try some the deep fried butter, another delicacy here. but everywhere she goes she is asked if she is going to run. everywhere she says she doesn't know yet and welcomes rick perry to the race. rick perry the governor of texas who actually does have a big footprint and who a lot of activists in iowa are more curious about. he is going to be announcing this weekend, visiting new hampshire, as i said, south carolina. but the real big thing everybody will be watching is what happens when he gets to waterloo, iowa here. michele bachmann's birth

place. >> warner: so how much interest is there among iowans in general or iowa republicans in the straw poll tomorrow? what are they looking for there? >> ifill: well, it's really interesting. because iowans by their very nature follow politics very closely. but even they are saying gee, really? it's still august. but they are very curious. a lot of iowa republicans are very unhappy with the way things are going in washington. people stop me on the street and say when are you going to tell them. what are we going to get those bums out of there. when are they going to tell them to get serious but they haven't decided who is the person that can defeat barack obama. they have a wide social. the social conservatives have a way of determining the caucuses in january, and the straw poll tomorrow. but a lot of people are saying to me that the economy is as big a deal as any social issue and they're looking for the candidate who is going to be able to articulate that vision. >> warner: and who has the organizational muscle, from what you have been able to see? >> ifill: you know, it's interesting. tim pawlenty who is widely

perceived as not being very strong, i saw him this morning. he has actually got a lot of organizational muscle. and therefore if he doesn't pull out a very early finish, people are very high finish, one, two or three, preferably one or two, people are going to say it was all for naught. mitt romney who of course is not competing here spent $10 million on caucuses last time, on the straw poll last time. and has decided he's not going to take part this time. so people are waiting to see. i had a senior official say he's expecting michele bachmann to win. so expectations have now gone up for her to pull out a really big win here tomorrow. and then there's ron paul, the libertarian candidate who actually has a lively, engaged, young support base who also are going to show up there. we'll be interested to see whether they could actually show up and then cast those votes. >> warner: gwen, thank you v a great time at the stau poll. there is a viewer who wants to know if you tried the fried oreos? >>.

>> ifill: i went with the fried twinkie t seems much more disgusting. >> warner: thanks. we'll look forward to your report on monday. >> ifill: take care, margaret. >> lehrer: and to the analysis of shields and lowry-- syndicated columnist mark shields, reporting from des moines, iowa, tonight, and "national review" editor rich lowry. david brooks is away. mark, how did you read last night's debate? >> well, i think first of all, jim, at any debate where the front-runner, acknowledged front-runner if not electrifying front-runner mitt romney goes in, and comes out on the other side unscathed, unharmed, unwounded, has to be a good night for the front-runner. and the others were just sort of subplots. you could see the obvious tension between congresswoman michele bachmann of minnesota and that state's former governor tim pawlenty who are really dualing it out in the saturday caucuses here. it could be a survival test for governor pawlenty who

had been regarded quite seriously when he entered-- entered this race and has been eclipsed. and you have newt gingrich and rick santorum trying to break through themselves, each with his own distinct style. gingrich scolding chris wallis for daring to ask him-- chris wallace for asking about the majority of his staff quitting his campaign. and finally the introduction of the mystery man, jon huntsman,the former governor of utah and former ambassador to china. so there were a lot of subplots but i think the main plot is mitt romney goes in ahead and comes out ahead. >> lehrer: do you agree with that overall, rich? >> yes, the second debate in a row where romney has basically skated by untouched. but the most consequential exchanges for the next couple of days, and then the campaign following were those between tim pawlenty and michele bachmann. i think what's happened to tim pawlenty in this race is very unfortunate. anyone who has met him will say he is one of the nicest guys you will ever meet in

politics. and i think the best play for him in this campaign would be himself, basically. be the low-key slightly self-deprecating guy from the upper midwest who has a pretty good record as governor. instead, he's been forced in this desperation role where he's lashing out at romney and especially at bachmann. because bachmann is stealing his thunder in iowa. and pawlenty has this entire campaign now riding on the outcome of the straw poll saturday. if he finishes third, he probably doesn't make it through to the end of the year. so he's got to finish first or second. and so you saw that last night with pawlenty going after, with a line of attack that could tell over time. saying is she doesn't have accomplishments, and suggesting she's not that serious a figure. but that's the kind of judgement voters make five days before a real caucus or a real primary. i don't think that's going to work here in the middle of august. and i think a lot of viewers will think why is he being so hard on this nice lady.

>> lehrer: you think the he hurt himself. >> i think at the let it didn't work and he may have hurt himself. >> lehrer: do you agree, that pawlenty's choseen strategy did not work. in other words, take on bachmann the way he did? >> well, jim, he tried it round and he tried it flat. i mean in new hampshire, in june, he was roundly criticized for being too passive. and having coined the phrase o bom ney care, mitt romney being the father of barack obama's health-care plan on a tv show and then refusing, being unwilling to make the same statement when romney was sitting next to him on the set. so he was said gee, haven't you got the fight or the feist in you. and he was going to prove it last night. and i think that's the way he decided to go. i don't know if it does work. jim, what we're talking about is a straw poll where

we're talking about 4500 vote kos win this for anybody so if it move--00 or 1,000 people last night, that debate, it could really alter the outcome. and i would say in rich's mix, i would call ron paul in that topfully. i mean he has a campaign here and a following that is intense and dedicated. and a campaign that's real. >> lehrer: and because of the numbers, rich, you would agree that ron paul could make a difference. >> and ron paul and his supporters have shown the ability and the path to really play and win these straw polls. there's an annual conservative gathering here called c pac where ron paul flaunts it plaquically every year now. and what he's done is take that operation and will try it out in iowa in a much more consequential setting. and ifback mann finishes first and second and paul finishes first and or second and knocks pawlenty down into third this may be the political act with the most

practical consequence that we've ever seen from ron paul which is ending the tim pawlenty campaign. >> lehrer: let me go back to romney for a moment. you used the term, you used the word skate. he skated through. what do you mean. how does romney, what is romney doing that keeps himself as the front-runner. >> well, you get the sense that he's flying a little bit above everyone else. he's going out of his way to attack the president more than any other candidate. when tim pawlenty had, i thought that somewhat cringe inducing attack on romney where he said if you can identify the president's entitlement plan i will mow your acre but only one acre of romney's lawn what was romney's response when asked that. well, that's okay. just brushing it aside. what is going on is romney learned from first time along that you can move your legs really fast for a very long time very early in the process. you can spend a lot of money to win the ameses straw poll

and it can all wash away at the end. so part of this is a deliberate strategy to be a lower key candidate until the fall. >> lehrer: do agree with that mark this is a big decision he made. he did not even involve himself in the straw poll. he was at the debate but he's not in the straw poll. >> that's right, jim. if you just look at the straw poll, we're looking at president phil gramm in 1996. in addition to president mitt romney in 2008. and of course that caucus was one three years ago by mike huckabee. so it is not definitive. it can be enormously helpful to a candidate who hasn't been around before. and romney had not in 2008. he has been around before. everybody's an amateur running for president. having run before, especially on the republican side is considered a real plus. and romney last time out was more elbows and seemed to be

recreating himself on an hourly basis. and in the process really alienating himself from every other candidate on the republican side. and i think he's avoiding that this time. >> rich, now, the other person who, the person who really wasn't there last night is rick perry who is about to announce, how major an event is this. how major a candidate could he become just like that? >> he could be pretty major. this is the perfect segue. he has never run before. he's trying to put this operation together on the fly in six months rather than 30 months the way some other candidates have. so we'll see. but potentially he has a lot of appeal because he can steal some establishment support from mitt romney. can steal tea party evangelical support from michele bachmann and can make the pawlenty case that i'm a governor with results. so we'll see. he has 17% in the polls already. i don't know whether that's

solid rick perry supporters or that's more kind of the same 17% you saw when donald trump was very famously flirting with running for president. the 17% that just wants anyone who is not currently in this field and we'll see whether he keeps that 17% once he actually gets in the field. >> lehrer: mark, rick perry of course is an enormous fund-raiser too, he is not? >> he is, jim, as republicans in texas are want to doorxz he rations a -- want to do, he raises a lot of money. and there is a lot of republican money and conservative money in texas. in addition to rich's point about his establishment appeal, probusiness, anti-fax republicans and his cultural religious conservative appeal, he also is really tea party before tea party. but i think that rich touched on something that is very real here. there's a lack of widespread enthusiasm for the current field. there was a yearning for rich daniels, for heally

barber, for chris christy -- kristy, it was reminding for the democrats where they were hoping for mario cuomo to run earlier, evenly iacocca -- colin pow welt. he don't know what kind of candidate rick perry will be. i agree the unveiling, the presentation is well orchestrated, dramatically timed. he certainly is coming in at the most auspicious of circumstances. but we'll know after the three debates in september whether he's for real or he is the flavor of the month lrz all right. let's switch to the person that whoever wins the republican nomination will run against, of course, that's president barack obama. what kind of two weeks has he had. and where does he stand? is he considered vulnerable among taes these folks running against him right now. >> absolutely. it's been an awful couple of weeks for the country. i think the downgrade was a national embarrassment and he's in a very awkward place

there. because he is the president of the united states of a country that has a debt problem. and he really can't offer his own plan. because if he were to take public this plan that he has been talking to john boehner about and write it down and campaign on it, i think if there are serious entitlement savings in that plan the way he is suggested there are, he would see a revolt among his own party. so he really can't do it. so he's in a box where all can do on the debt now is exor the congress to do its work without affirmatively offering his own agenda. >> do you agree, mark. bad two weeks for the president? >> bad two weeks for the president. i do disagree on the debt ceiling. i mean not on the consequences of that vote and the terrible turmoil we went through and certainly the downgrading. but that is not whereback bam-- where barack obama or the democrats are going to win or not win in 2012.

it's the economy. and what's remarkable to me is that given all that has happened in the economy and its turmoil and troubles and travails of the country, all the dissatisfaction that president obama is still in the mid to high 40s on his job rating. quite frankly, it's astounding to me and it's an indication of level of popular support for him personally. there's a considerably wide spread personal support and identification hoping that he will succeed. i mean president reagan was in the 30s at this point. so was bill clinton. rough times like this and barack obama has never been there so. so there is a core of voters rooting for him. but i agree, things are bad and stanley greenberg the democratic pollster announced today that three out of four americans, this is i think a new-time high, feel the country is headed the wrong direction. that is bad news for any incumbent. house, senate or white

house. >> lehrer: anything to that, rich? >> yeah, i agree with most of that i think there is a reservoir of goodwill for president obama that's still there. and people have not quit on him. if there's a double dip, i think that's when they would quit on him. i think the problem he has on the economy also, sort of like on the debt, he's really -- -- he's in a box and a hostage to for opportunity he shot his bolts with the stimulus program. even if you take all the ideas he's talking about now and stipulate that they are good ideas for the sake of argument. and stipulate for the sake of argument that they get through congress tomorrow, they're very small in the scheme of things. and he's a hostage on events in yoourp. if they take another jag down, we could take another jag down no matter what. and he can't get anything through congress. and it's really all on ben bernanke. and one of the disturbing events this week in addition to the downgrade, was the fed saying it's going to stay at zero basically until 2013 which is a sign that they are looking at economic conditions ahead and do not

like what they see. >> just in a minute before we go, from each of you, what do you think speaking of congress what do you think of this supercommittee, the six republicans, six democrats, do you see a compromise coming out of there? >> no, when you have a committee of this nature and it's a 6-6 split with both parties, it's really set up to fail. the very existence of the committee, i think, is a sign of a lack of real political will to do something on this. so i would expect that they'll find some savings and agree on them kind of cats and dogs. but well short of 1.2 trillion. and then they'll use that money to somewhat soften the automatic quest, cuts and sequester that will come without a big agreement but nass's all you'll get. >> set up to fail, mark? >> i hope not, jim. i'm disappointed as a lot of people are that the people who really spent time and effort and energy on being involved in bringing a compromise on this, tom

coburn, the republican and conrad and durbin, the democrats, the republican are not part of the process. but the leadership is very much involved here. and these are leadership picks. so if they, and they're going to be responsive. and bear in mind one thing. all you need is seven votes. if you get one person to switch, you can bring anything to the floor of the senate and the senate has to vote on it. there's no 60 vote phil buster. so-- filibuster. so the prospects of success are really inviting. >> lehrer: all right, mark, rich, good to see you again. >> thanks, jim. >> woodruff: we'll be back shortly with a special honor roll of the 30 u.s. forces killed in afghanistan last weekend. but first, this is pledge week on pbs. this break allows your public television station to ask for your support, and that support >> good evening, and thank you for joining us for another edition of "the "pbs newshour."

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wall street staged a relatively calm rally after a week of dizzying dives and sharp surges. the dow jones industrial average gained 125 points on the day, but it lost 1.5% for the week; the nasdaq lost 1%. a federal appeals court in atlanta ruled americans do not have to buy health insurance, despite a mandate in the president's health care overhaul. the judges left the rest of the law intact. and crowds across syria stepped up their defiance, calling for the death of president bashar assad. activists said government troops shot and killed at least 14 demonstrators. and to hari sreenivasan for what's on the newshour online. hari. >> sreenivasan: there's more from gwen and david on iowa and the 2012 election season on the "rundown" blog. paul solman previews his upcoming series on income inequality. take our quiz to see if you know about the distribution of wealth here in the u.s. today marks 50 years since construction began on the berlin wall.

we revisit an interview with robert macneil on his experiences covering the story from the scene. plus on "art beat," jeffrey brown talks to writer emeraldo santiago, author of the novel "conquistador". all that and more is on our web site, newshour.pbs.org. >> lehrer: and now, to our honor roll of american service personnel killed in the iraq and afghanistan conflicts. yesterday, the pentagon released the names of the 30 troops-- navy seals, soldiers and airmen- - killed in the helicopter downed by insurgents in eastern afghanistan last weekend. here, in silence, are the names and photographs of all 30 men.

>> woodruff: and that's the newshour for tonight. on monday, we'll look at the republican presidential field after iowa's straw poll. i'm judy woodruff. >> lehrer: and i'm jim lehrer. "washington week" can be seen later this evening on most pbs stations. we'll see you online, and again here monday evening. have a nice weekend. thank you and good night. major funding for the pbs newshour has been provided by: ♪ ♪ ♪ ♪ ♪ ♪ moving our economy for 160 years.

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