♪ >> from our studios in new york city, this is charlie rose. charlie: we begin with hugh hewitt. he is the radio host of his radio show. he also moderated two recent republican debates and we are pleased to have him back on this program. welcome. >> thank you, it is good to be back. charlie: size of this confrontation between donald trump and fox news?

is it about what it seems to be about? >> no soup for you. do remember that famous line? that is what he just said to that fox news. it is really about him master marketer taken control of eight situation that is fluid. putting his foot any position where it stomps on every other story in the news cycle, sort of like hey mark -- sort of like kmart before it hurricane. so no matter what the show is, we are all talking about donald trump. i did it on my radio show today. he is brilliant. he is brilliant in anyway that has broken every rule and destroyed every obstruction to ordinary political coverage. my hat is off to him as they simple matter of professional marvel. whether or not this is good for the republican party or the country or donald trump, i don't know.

but he won the news cycle again. to own the news cycle? it make sure he takes all of the room that perhaps other candidates are desperately in need of? hugh: i think that is exactly it. oxygen is in short supply and the people who needed our marco rubio and john kasich and chris christie and jeb bush. and carly fiorina. that is the division that is looking to be the alternative to ted cruz and donald trump. they need people to pay attention to their messages. ted cruz is in there's -- in this bear hug with donald trump. it is like the revenant seen from leonardo dicaprio. someone will survive that it in the american league where they are beating up on each other,

they need people to pay attention to their messages and donald trump just killed it again. it is simply brilliant. charlie: why would you do this to megyn kelly? why not say, we have had enough debates and i'm not doing it. i did he have to make it personal? hugh: i don't think it is about megyn kelly although at the beginning the week -- he tweeted out -- i've had one of these and it isn't personal, it is preparing the battlefield and getting the empires on your side but the press release that fox put out yesterday which taunted him -- and that is like taunting hebert -- taunting a bear. the american people like donald trump and he is leading in every poll because he hates the media as much as they do. he took out in reporter at the press conference yesterday who misquoted him or partially quoted him. and when he takes on fox news, that is contrary news. they do have a lot of lefties on that just like i do on my show -- fox is the same way and when he does that and takes the filter off, a lot of americans stand up and cheer.

if not for him, but for the other moment. i'm not going to take anymore. charlie: i don't think donald trump hates the media, i think he knows how to -- i don't want to save manipulate but he knows how to speak to the media. in these -- in the same way he knows how to speak to his audience. he knows how to speak. it is a shared conversation. and he knows how to have the media come to him which is not to hate them. hugh: but to play that role of knocking down reporters left and

right -- if he said that, i want to do the show tonight, you would bump me faster than they guy on they speeded train in japan. and that will be fine, i would do that to anybody. and that is because he is fascinating to talk to. i have done journalism, i have taught constitutional law and i have been in lawyer for developers. big developers on the west coast primarily. but abroad and back east. donald trump is a classic developer. he is eight steps ahead of the process. he is always anticipating where the game has to go and which bit needs to be gotten and which official needs to have their teams on the side. developers at that level are taking enormous risks and they make temples that payoff normally of the or they go bankrupt. and some projects do go bankrupt.

and so that developer gambler mentality -- we see that unfolding every day. i still think ted cruz will win iowa and i told donald crews that last week. i said ted cruz will win iowa and donald grows will win new hampshire and south carolina will reset the entire race. even george w. bush and john mccain -- it is in new state with eight coastal and towards him economy where they are building giant jets with a lot of higher education and football. it will be the reset of the campaign.

charlie: i grew up in north carolina, as you know. implicit of what you just said, it seems to me that it is 82 man race. hugh: i didn't mean to. donald trump and ted cruz are fighting it out for the outside washington, break the windows campaign. i heard it ted cruz at today that was paid for via super pac that was brilliant in which he raises his voice about washington but in the other lane is eight lane that is serious about it world that has gone to hell. this is why republicans are panicked. i think hillary clinton might be indicted. she blew the iraq forces agreement, she was eight disaster on syria and libya. she is tired and weary and not very good. we can win. for all the republicans who just want to win -- we have four supreme court justices -- ruth gator ginsburg is 83 degrees. -- is 83 years old. stephen buyer will be 78 years old. the next president gets to make the supreme court. so if you are republican you just want to win. the only person with higher unfavorables than hillary clinton is donald trump.

he scares a lot of people but he says he can turn around and make the negative and positive. charlie: ted cruz seems to scare a lot of republicans. like bob dole. hugh: he is interesting. he is not the guy i'm looking to for the latest developments on twitter and facebook and social media. [laughter] hugh: i will you right now that ted cruz has the best social media network of all the candidates. it is a deep web and it touches on people. his folks will show up on monday night.

charlie: so that is why he will win in iowa. he will have troops on the ground with enthusiasm. hugh: yes, you don't get to argue nine times before the supreme court before you are lucky. i have one law partner who is eight former federal judge and he has argued there once. you get there because you are really good at he skill set that is useful. charlie: john roberts was the same way before he became late chief justice. it is a small group of people who argue in front of united states. he is among the smartest people i have ever met. he has difficulty not showing that. but bob dole doesn't like the fact that he showed up and he didn't sit down and be quiet.

he explained that he came to town and made everyone ponds on his chessboard. that is what you see with the bob dole institutionalist wing of washington, d.c. politics. charlie: has that lane of the party waited too late? did they all think that donald trump was going to go away? hugh: clearly yes. and anyone who says otherwise is

lying. in 1994 when newt gingrich to go over -- chris cox came onto the set and leaned over to me and said, if anyone tells you they saw this coming, they are lying. and i tell you the same thing. nobody saw this coming. from the very first time that donald trump even opened it was on the john mccain comment. he is the kind of guy where the more bullet to takes he is rasputin likes. he keeps coming at you. charlie: if you had to lay money today, where would it be? hugh: i have two more debates to do. i don't want to -- i predict iowa and new hampshire but beyond that i have never seen anything like this. i'm looking forward to those two debates. charlie: what will control and be the deciding factor in south carolina? hugh: south carolina is eight defense and military state. charlie: you know why that is? because the chairman in the house was from south carolina.

hugh: i didn't know that. iowa is in evangelical state. but south carolina? look for people to talk seriously about war and policy and strategy for dealing with isis. we dodged in bunch of bullets yesterday. the fellow they picked up in milwaukee, thank god for the fbi and the milwaukee law enforcement. he was pretty far down the road. if someone does another attack, paris style -- south carolina knows that.

charlie: let me turn to bernie sanders and hillary clinton. you seem to lay all the blame and criticism of the obama administration at the feet of hillary clinton when you know that foreign policy is run out of the white house. hugh: i do believe that she purposely positioned herself to take responsibility for libya. whenever she talks about the 11 hours of -- i think of the movie, 13 hours. in her own memoir, which i may be the only person to have read, she takes credit for the reset button and then she argues that it was working when netanyahu was in charge. putin was in charge then. so she is either naive or afraid of what happened. they were building their artificial island at the same time. the crimean intervention was in the works. it is in nightmare.

if you go to washington, it is so rich and wealthy. republicans know it is about looping up the wheels. and they are tired of the promise. given time, i think paul ryan will change that. he had it good start and his reach out as soon as he became speaker, he did get a lot of people on the right a lot of hope. if we can get it with the president, we can have the 1980's all over again. the democrats are not looking backwards and it is not about going full sweden.

i am told by republican opposition firms that her three biggest boulder abilities is that she is viewed as dishonest, corrupt and incompetent. when someone calls you dishonest to your face, you don't repeat that but you talk about it. and she could have talked about her work on the behalf of children in arkansas. there are so many good answers but charlie rose, she is the dreadful candidate and god love her, if she is the president, i wish her success but she is me -- she is the worst party candidate in the last 40 years who gets a second chance. charlie: why is she leading so big nationally?

bill clinton remains the biggest retail president we have seen. every time she comes out, i swear bernie sanders picked up five points during her part in the town hall. charlie: it is the year. hugh: it is. charlie: and then there is michael bloomberg. hugh: ura new yorker so you have eight different view but i was in colorado teaching the colorado christian university for a few weeks this past fall and they love their guns in colorado and they don't like the mayor. mayor bloomberg rules all seven so if he gets in, they win. if you are watching, run, run, run.

if they make it deal like the tennis people did in the exhibitions where they split the pot and they say look -- everybody tonight, all we do is hammered donald trump. and it becomes the hammer on donald trump -- whatever the question, they load on donald trump. it would be an mistake but i'm not counting on them doing anything. charlie: great to have you on the program. we will be right back. ♪

charlie: we continue now with politics and the back-and-forth between donald trump and fox news. joining me now we have gabriel sherman. he is the author of the loudest voice in the room, how the brilliant bombastic richard neal's bills. -- built fox news. megan, let me go to you in iowa. what is the talk and iowa about the impact of this? obviously we will not know until we see the debate and the numbers and what donald trump does. but having those kinds of restraints, what is the talk? >> it is the talk of the town. ebay talk is what you are flagging, will this be able to fit or something that hurts him? the overwhelming consensus of what you hear is that this is again going to help him. he has the upper hand and is showing the voters who is boss and he is walking away. he is using the tone that has made him famous.

anytime you think with donald trump he has done something that will backfire, he rises again. my favorite tweet of the whole season is someone who said that anyone who thinks this will hurt donald trump hasn't been paying attention. charlie: did he do it for that reason? i think anyone trying to import reason or a method into donald trump's madness is over reading things. he operates under eight different set of principles and rules with eight different ground game than what anyone has done. i'm not sure he makes these decisions within huge amount of thought about how it will prevent him -- how it will win him over voters. he is the overwhelming leader in national polls and is leading the last 10 polls taken out of iowa. last week he was 4, 5, 10 points behind. do i think you will set this and wonders what his strategic move is? i don't think he fixed at it that way. he is operating in an environment where he cannot seem mistake.

for some reason, megyn kelly got under his skin. this is personal, ever since august with the first debate he has not let it drop. there was something about the way he asked -- the way she asked the questions that she felt it was eight gotcha moment.

we know that rupert murdoch was hostile to the idea of a donald trump candidate. he has warmed and has been impressed. he has been impressed by his resilience. anyone who is a student of this primary cycle knows that. charlie: but he has also been tweeting that he welcomes eight michael bloomberg candidacy. >> which, i think there are many ways you can look into that. rupert murdoch likes to stir things up. there is talk that they michael bloomberg candidate -- charlie: donald trump -- taunting pr statement by fox that -- megyn kelly. what was in that? that was so infuriating to donald trump? or is he just using it? >> it's not infuriating, he is just using it. he talks about fox news terrorizing megyn kelly.

we have never seen anything like this and what i think is most interesting is the dynamic that fox plays in this race, it is so different and donald trump has cracked the code. he is using it to his advantage and how fox matures and will hold -- they are seeing bits of their empire take away by social media, by the way campaigns are using media in different ways and by the way money has been neutralized in this race in ways we haven't seen in previous races. fox is on the losing end of many of those.

donald trump released eight-week that said it is not about megyn kelly or the anything but the statement. and we know that statement was written by -- against the advice. charlie: if you listen to donald trump's statement, he was planning to do the debate even though he said he wouldn't. >> it pushed him over the edge. it sent them scrambling. today you have seen fox scrambling. donald trump will not pick up his phone call and -- even called his daughter and they are trying to broker peace but so far he is holding firm. we are in uncharted waters. he is acting like an man who has all the leverage. charlie: does he? >> it's crazy, this discussion is so -- it exemplifies this race. between donald trump and the iowa caucus and roger ailes is the type of media and he has to call surrogates to try to get him to do this debate. nobody would have thought we would have ended up here.

it is uncharted water.

there is no question in my mind that donald trump has the upper hand. >> in my book, i report this episode that happened during george w. bush. at one point, roger ailes felt that fox news was not getting the cabinet secretaries and high-level officials so he called the white house and said, you have to shake up. and word went down to karl rove who said they had to put the best people on fox news. if he said jump, the bush administration jumped. now, donald trump is telling fox news that they are so irrelevant to his campaign that i will not even show up to your campaign decorate -- to your debate days before the vote. charlie: will there be an appearance by donald trump on fox news? >> he will be on the bill o'reilly, he is still scheduled to do that. he is still the highest rated fox news host. along comes megyn kelly and she gets the primetime show at 9:00. this debate with donald trump has catapulted her into the culture and her ratings have skyrocketed. on

on certain nights, she beats o'reilly. there's internetwork rivalry. bill o'reilly is jealous that she is now the face of the network. he gave her airtime on his show. they have bill o'reilly interviewing the chief antagonist of megyn kelly on his network. that is a shot across her bow and roger ailes' bow. this is bill o'reilly raising his hand and saying, wait a minute, for 20 years i've been the face of this network, i can book who i want on my show and i will bring him on.

on that point, i actually don't think that establishment fatigue with washington is the primary animus in this election. i think it's about much more fundamental economics and security. people cannot see giving their children what they had. charlie: i agree with you, it is a policy question, and clearly they do have that -- they do feel that way and have a right to feel that way. but who do they blame for failing them? megan: if you're on the right, then you blame obama, entitlement programs, welfare, immigrants, people who are driving range rovers. if you're on the left, you blame wall street, politicians, greed,

the inability of unions to get better conditions over the years. you blame the outsourcing of work. so the reasons why this concern are shared, who they blame is very different, but the central concerns are quite similar. charlie: fox will say they thought your book was a hit on roger ailes.

this is an american story, so if he wants to see that as a hit, that's the way he sees the world. i see it as a great american saga that he was a central character in and that is a universal story. whether he enjoyed it or not, that's not for me to decide. charlie: fox news is part of new corp., which is essentially run by the murdoch family, rupert murdoch and now his family. how are they involved? gabriel: in the background is a generational shift we have seen with the company. rupert murdoch elevated his two sons who have had a difficult history with roger ailes. roger ailes was less of a presence at fox after an extended health scare. he has been trying to prove he has still had his hands firmly on the reins. he still trying to show he is firmly in control.

donald trump maybe a loose cannon but i can put the lid back on it. that is another way to look at the controversy. charlie: back in a moment. stay with us. ♪

al: the center of the political universe is in america's heartland, iowa. we have three guests uniquely able to talk about this state, the history of the caucuses, its policies, the eccentricities of iowans that play such a huge role in the presidential election. they are michael gardner, a native of des moines, who became the editor of the des moines register and later the ames tribune where he won a pulitzer prize. dean owens took two downsizing detours to become president of nbc news. and doug gross, himself a former gubernatorial candidate, chief of staff to governor branstad, he is a repository for all things republican in the state of iowa, and a pollster for the des moines register and bloomberg politics. since 1992, ann has run her own des moines polling firm. when nate silver surveyed the accuracy of 337 posters, she was one of only three to get an a plus.

al: why is this the first place to have the presidential contest? doug: it gives everybody a shot. right now, jeb bush is running fifth or sixth in the polls but

he's spent over $100 million with his super pac. al: do you think iowa is a good place to have the first test? michael: it's like a reality show for the nation, or it was. it really was the whole experiment, and it worked. then satellite came in and cable channels. now in my view, it is like a reality show and we all know our role to play. folks come on your show and talk about iowa. but iowans learn their roles very well. they study the issues and become knowledgeable about it and then when you come and put the microphone or the camera in front of them, they say what you expect them to say. so it's really a stage for the national primary but it's more economically done. ann: i agree. what bothers people a lot is the whiteness of the state, because it's over 90% white.

people think maybe that means something to the outcome. historically, candidates of color have done quite well here, most obviously barack obama. at one point herman cain lead in the polls. jesse jackson came in third. ben carson lead in the polls. shirley chisholm opted out of iowa, but i think she could have done well. al: you talked about johnny apple and hamilton jordan. there were caucuses in 1972, but 1976 is really when -- >> jimmy carter had a theory, let's go up there and live in people's spare rooms and meet in church basements. he had these two white young guys with him. johnny apple caught on right away so he wrote about it, and then carter won, and all of a sudden it became the formula for success and it went on and on. you can challenge it little bit by saying carter is one of only a few people who won. ann: the most important thing a candidate can do is win. that's what jimmy carter showed.

>> george bush came and spent a lot of time here and beat ronald reagan in iowa. al: what are some of your memorable moments of the scene here? >> i remember 1980 we were counting votes in the republican caucuses and george h.w. bush was ahead. some of the rural precincts were not in yet, and we stopped

counting. [laughter] michael: my first caucus, i arrived in december and the caucuses were february. it was a steep learning curve. there had been a shortcut implemented before i got here that caused us to show that george bush was leading in that caucus. i had to go to the editor and say, our poll is showing that george bush will win, but i think bob dole will win. he said what will fix that, and i said money. in those days that was not the end of the conversation. al: we will all be looking for you 5:30 on saturday. michael: opening day is at 7:00, good tickets are still

available. [laughter] the politicking starts way before caucus nights. almost everyone ends up down at the ballpark, for one reason or the other. michele bachmann comes up to the press box and looks at me and says, your lawn is beautiful. most people don't call a baseball field a lawn. early on the senator from south carolina, fritz hollings, said to me one day -- we had a cup of coffee early one saturday morning. he said, you are a big man in

town, let me ask you a question. you see a lot of politicians come through. has every single one of them promised you a parking ramp? [laughter] al: the iowa cubs play at principal park which has the first amendment emblazoned across the outfield wall. one of the many reasons it's great to go there. is this state still a totally agriculture dominated state? the perception most people have from the outside is, this is farm country. >> next to hartford, we have more home offices for insurance companies in des moines than anywhere else in the country. [laughter] >> we keep our seven in the back room downtown. a lot of people think it is a rural state, but it is not a rural state anymore.

agribusiness and bioscience, the things that have agriculture as a piece of the manufacturing, that is still very prominent here in iowa. >> as michael said, we become the stage for a national campaign in a lot of respects. this year on the republican side where they had the debates and you could not get on the stage unless you were at a certain level in the national polls, everyone was playing on the national stage, just practicing their lines in iowa. we are really a microcosm of what the nation thinks right now. al: i'm fascinated by the political history. for those who don't know who marion morrison was, that was the new john wayne. the two most prominent political figures over the last 100 years have probably been herbert hoover and henry wallace, a third-party liberal democrat. >> most of the things henry wallace stood for are policy today.

we largely depopulated a good part of the rural part of the state. the state turned more democratic as a result of that. michael: for 30 years in the senate, we had tom harkin. and chuck grassley. and everybody here was just fine with it. ann: they both got more than 60% of the vote most recently. al: branstad has served longer as governor than any governor in america. if there is anger and alienation that has swept the country in the last 20 years -- you don't have to throw out somebody just because they've been in office for a long time, and by and large, they are good people.

>> people in iowa get to know them and they know that they care about the state. whether they are liberal or conservative, they care about the state, and that's good enough. when it comes to presidential candidates, the same thing there's nothing phony about chuck grassley or tom harkin. al: and a great sense of state pride.

>> they asked the question, do you think iowa is the best place in the world to live, or would you rather live somewhere else? 76% of people in iowa said this is the best place to live. >> another poll asked people if they thought they were going to hell or not. 5% said they thought their neighbor would. al: there are a lot of young people, you have one of the highest rates of college graduates. >> there was a lack of opportunity caused by the farm crisis, but that has changed. we have five kids who are all millennials and every one of them wants to come back to iowa. >> everybody ought to go away

for a little while. there is no one as devout as a convert. i went away. al: you deserted all the great institutions of higher education in the state. michael was the front page editor when we were at "the wall street journal." >> they come back with ideas, they come back enthusiastic, and they get into the core of the community.

ann: i love the name of your hometown, defiance. >> the railroad wanted to make us move the town and we refused, so they called us defiance. two sides of the same coin, bernie sanders and donald trump. you are seeing it today. al: but you have people like steve king who is from that northwest quadrant. you don't think of iowa as right wing. doug: you will find out that a guy like steve king over time will end up in the primary. people think he's in it for himself and not for the state.

they usually become a caricature of themselves and that is what happened there. the thing that same thing happened on the republican side this time. the irony is -- >> the integration of immigrants, it's just unbelievable. one reason is because there was never a rich part of town and a poor part of town in these towns anyway. the immigrants moved into your neighborhood, my neighborhood, and it was just amazing. al: are these working-class immigrants, farmworkers? >> summer packing plant workers, but they send their kids to

school and on to college and they come back as a mayor, pharmacist, lawyer. >> it's not any different than it ever was. >> it's the elevation of the family, just like my grandparents or your grandparents. although yours came on the mayflower. [laughter] al: did they stir up controversy? why does mitt romney switch, why is donald trump doing so well? >> i would argue that mitt romney would have won in 2008

and 2012 if he would have stayed true to his claims. the problem that these folks have is they listen to the extremes. that's the biggest issue i have with the iowa caucus. they tend to accentuate extremes. you would think in iowa if you look at these, most democrats are either hippies or wish they were. on the republican side you think they are far right-wingers. the great bulk of the unwashed masses are not that way at all. ann: i agree. the whole idea of the immigrant experience is no different than historically. we did a study with the hispanic population in central iowa. they are here to stay. this is not a transitory population just looking to make some money and go home.

they are putting down roots here, they are connected to the community through their church, home, and family, and they are here to stay. >> as a group, they want to come to america. they rode to every state. bob ray is the guy who said let's take everyone. this is also the state that when those judges on the supreme court said gay marriage is a constitutional right, they were voted out of office. the next cycle, the guy was kept in. my friend david wiggins was kept in and it won't be an issue this year. including the chief who wrote the opinion. i think we are terribly embarrassed about that but on the other hand, it's a small price to pay to have three people lose their jobs for the rest of us to gain our freedom.

al: the point about the caucuses is interesting. when we do the poll that bloomberg politics does with the des moines register, we have to be careful and not extrapolate this to a general election, because it is different on both sides. ann: we call it a low incidence event because not that many people show up on caucus night. they don't look much like the general electorate. al: there is no better place to be in january than iowa. the politics are fun, whatever the imperfections. you have all talked a lot about your great pride in the state, and i thank you for being here.

we had fun, i think. and thank you for watching. ♪

big story the moment. introduced to negative interest rates for the first time. -1/10 of 1%. will it work? fred: the jury is out.