been al qaeda attacks all over europe. iran has attacked so many other countries, mostly shiia countries, not being willing to focus their efforts on the development of their own societies and we have to find a way to cope with that. i don't know whether we are going to be successful in their cultural and in a terrain like afghanistan. karzai, who is a leader of afghanistan, is one of those leaders who seem to be a responsible leader but has turned out to run a totally corrupt regime with apparently his brother as sort of the bagman for the family. he's managed to outmaneuver us from buying out various support levels from different tribes within afghanistan. he'll probably continue as president. we don't know how to get out of this mores a that we are in. we can't cread the ground to either alk -- cede the ground to either al qaeda or

afghanistan. pakistan is a country that has over 100 nuclear weapons. we hope that a tyrannical regime mr. take over pakistan and use those nuclear weapons to threaten large parts of the world where we are very, very concerned about. and in a year from now we'll have another radical regime which is iran which is a high likelihood that they will have nuclear weapons. it is that nuclear capacity that just changes everything. it's a game changer. and it changes the level of fear and anticipation and gives these countries a great deal of power and influence in these other countries, even if they don't use the weapons. and as i say, they also control the world of energy which is critical to the whole functioning of our economy and our society. it's just going to be a hugely challenging foreign policy dilemma for any administration in this country and for the europeans. host: next call, new york city, this is jack. you are on with mort zuckerman. go ahead, please. caller: hello. it's an honor to speak now, mr. zuckerman. earlier you were talking about

the effects on the economy and you mentioned russia. i had actually been looking into that for a whole. well, my main question about the whole ning was, did you notice -- host: let me move on to new eye beeria, louisiana. democrats line. go ahead, please. caller: yes, good morning. i was trying to get on the first issue when you were talking about state budgets. if you go back to the regular administration -- reagan administration when he dedicated all of in double defense budget and cut states. louisiana had to regulate an income tax. moving beyond that, that was a problem with the states and they ever restored the budget. now, moving on to this gentleman here, i am not going to argue any point with him, basically. he's a revisionist, propagandaist of the right-wing

neocons and this type of thinking got us not bind we are in. he's trying to revise history. i reject everything he has to say. i'm disappointed in c-span. i mean, the american public has been informed and turned the corner on these issues and i'm disappointed that you allow this man to continue to legitimize his point of view. thank you. host: would you like to respond to him? guest: well, i appreciate the first part of your comments. i'm sorry that you disagree with whatever my analysis is. i am not somebody who shall we say just has a hypothetical view. i really do believe in everything that i try to do that i try to base it on what the facts are and trying to determine what's good for the country and what's not good for

the country. and you can agree or disagree, and i respect your views. i guess we just have different views. host: back to the bernie madoff story. this tweet said so long as madoff paid off the investors no one raised an eyebrow about his fraud. what do you say about that? guest: in some ways it is true. it's not just that he made the payments . everybody thought he had a legitimate approach. after all, think about it. this man, single man, was investing some $65 billion. and it had many of the major financial institutions in the world investing with him. most of the major banks in europe, some of the major funds here in the united states now. the fact that they may not have done their due diligence and investigate it is a whole other

thing because whatever it was he did not expos to them -- expose to them in some credible way that they checked out properly what was going on. and they accepted it. he basically wouldn't tell them what he was doing. and there are those who are way too close to him. a fellow, the fund manager in connecticut, walter noel, is being sued by their state attorney general. and one in new york city is being sued by our attorney general for basically a lack of due diligence in what me call civic fraud. and i think i happen to believe that that is a valid argument that they are making against these people who clearly misrepresented what they were doing. and may very well had more involved with madoff than anybody knows about. and that i hope will come out in the trial. but in any event, it's on its face, it's a valid case. i do think that it really does argue for a more intelligence

supervision of these kinds of investment vehicles. we don't want to overburden everything with regulation, but there are a lot of people who've been hurt and not just people who can afford the losses but a lot of people who couldn't afford the losses whose entire lifetime of savings and work has been wiped out by this man's fraud. while he lived the high life. and this is something that should not be allowed to happen. you can never totally control these things, but it is clear that when the s.e.c. had the chance to investigate him they did not. and we need to have a financial system that the public can trust, that it will be done intelligently and reasonably conservetively because if it gets into the position that we have now seen is possible where they get a huge amount of debt in relation to equity. and by the way, it wasn't limited to private investment funds. fannie mae and freddie mac had $65 of debt to every $1 of

investment. this was supported by the democrats in congress. these were honey pots for the democratic party. this is something frankly they never should have allowed. the question is now, will these organizations that got the country into so much trouble be properly regulated so we don't have to worry this will happen again? and that has not happened. the president has proposed some financial regulations. what is happening now, however, is that our absolutely horrific political systems where you get lobbyists from different areas provide rg financial support for different members of congress or their owe pones if the congress doesn't go along with them has an undue and disproportionate corruption in our politics. we have a system of corruption that is absolutely disgusting and we have not been able to do anything about it.

no matter what the new candidate says he's going to come in and run it differently. you saw what happened with financial regular layings, with the energy regular police stations. the energy -- energy regulations. the energy companies came in and made it suitable to their particular interest rather than the public interest. there was a sense that one was acting on the part of the city at-large and not his political interest. we do not have that in the country. and particularly in the congress, which is much more susceptible of to lobbyists. if we don't do it it's going to cost the country an immense amount and our children will bear those costs. host: go six minutes left with mort zuckerman. now is the next call from texas on our republican line.

good morning. caller: good morning. host: your volume is up on your tv. hit the mute button. we are getting feedback. caller: ok. i got it. host: thank you, sir. caller: well, the man hit on this regulation. bill clinton started that deregulation. and george bush went along with it whenever he got in there. seemed like the rest of the media forgot about that. and i do appreciate his comment on that to remind the people of the united states who actually started derg -- deregulation. i am not saying that bush made mistakes but bill clinton did. ncaa. host: thank you. greg from indiana. independent line. go ahead, sir. caller: i am an independent and i like to say i appreciate your

views on the government. i have a question about those bond rating agencies. they racesed the most need than anyone on that whole process of $2 trillion going down the tubes. it seems to be there is going to be some suggestions made about that but there seems to be a seller-buyer relationship and what the rate is. without doing due diligence, geez. so is that too constrictive? are these, you know, guys that are slicker than mules and a barrel of hogs' head here? how do you write? how do you make a bonding agency tell the truth? and one more question. i was watching c-span -- i was watching c-span last night and there's an excellent drn there was an excellent presentation by a lady in pakistan by the heroin trade. i don't know if your magazine is doing anything about it but

she was really explicit. back to the rate of bond rating. could you help us out here? host: thank you. guest: the rating agencies were critical to process that emerged in the last decade of securityization. by that i mean they would take a whole bunch of mortgages or automobile loans or student loans and they would create bundle of them and they would develop a security that would take the income and the expense of these and you would sell these securities. and the securities were ranked and rated by these rating agencies. and there was a fundamental conflict of interest in the structure of the way rating agencies were involved in doing these operatings. and the people that were selling the bonds were actually paying the fees to the rating agencies and, therefore, you could understand how in some cases and not in all the rating

agencies would get the message if you don't give us the rating we wanted we'll go to another agency and pay these fees. they were eliminated -- limited to state municipalities and state governments. when this industry exploded in the trillions of dollars, they began to make huge amounts of money of rating these different securities, many of which turned out to be disasters for investors, because as you were implying, the rating systems were not particularly well managed. and i don't -- i gather from what i know about the obama administration's bill that they are going to continue the process whereby the people who are the borrowers pay the rating agencies, and, therefore, you have in a sense almost an implicit conflict of interest. that may be the best way to do it because the other alternative, i suppose, is having government agencies sort of like an s.e.c. do the

ratings for these things. i'm not sure you can get the right kind of people in that. a system has to be in place whether there is no real or apparent conflict of interest on the part of the rating agencies so that when they give a rating it's based on the highest professional standards and does not have to do possibly with the fact that they be -- they will be making a good client relationship out of the person selling the securities. and that may be more important than being concerned for the investors. this is something that has to be looked at very, very carefully and in great detail because the rating agencies really were completely discredited. nobody gave them credence after what we saw in the last year because their ratings turned out to be completely inadequate to the challenge of giving the security to the investors. host: we have one last question . before we do the -- jobless

numbers are out from the government. payrolls drop larger than expected, 467,000. jobless rate rising to 9.5%, a 26-year high. let's take our question from mr. zuckerman. chelsea, massachusetts. in is the independent line. caller: good morning, c-span. i was listening how the type of mess we got in to the middle east there with iraq. and looks like we don't learn from our history. i'm relating to the situation when the soviets were in afghanistan. but besides that, we all talk about the nuclear free zone in that area and obviously everybody agrees we don't want no more nuclear weapons around. if i was the leader of iran, like -- or some other country up there and i had a neighbor like israel in that region that possesses nuclear weapons, you

know, how is it going to be a zone-free area if you have a country that possesses nuclear weapon? we don't know how me got it. there's no inspections being taken place. so how could you blame these other countries of wanting to have nuclear weapons, not that it's the right thing, but, israel be disarmed if we want this nuclear-free zone, that's my question. guest: look, in criminal law, for there to be a criminal act there has to be two things. you not only have to have the act, you have to have the intention to commit the act. if a gun goes off accidentally and kills somebody, that's not murder. if you intended to fire that gun at somebody, that's murder. intentions becomes very important. the difference between israel and iraq and iran is that israel has no intention of using these weapons. it is purely defensive. anybody that has fick knowledge of that situation knows that. there are just two completely

different situations. we have nuclear weapons in this country. we are not using nuclear weapons to threaten other countries. i think it's the same kind of situation there. let me just go to some other point which are the unemployment numbers which are critical. because it does go to the point that i have been hammering on for the last number of months which is this economy is much weakering than we would like. -- weaker than we would like. it shows up in home prices. in this massive increase in unemployment, even though it's a slightly lower rate. and i think we are nowhere near to being out of the woods in terms of our domestic economy. and i have urged this government and a part of the reason i might add is the stimulus program itself was so chopped up by special interest groups, by earmarks, by programs that were sort of on the democratic party wish list and not enough went into those parts that stimulate the government. the government accountability

office itself indicated only $48 billion would be spent in the way of new money, new spending by september 30. and another $108 billion by september 30 of next year. now we're facing demrr 1 trillion drop in demand all the way across consumer spending, investment trading, etc., etc. there is an inadequate response to the downward pressures on the economy. i worry about that number greatly. i do worry that we're not preparing ourselves for the very real possibility -- i'm not necessarily saying it's going to happen -- the economy might prove to be much worse than they expected. they predicted, the obama administration predicted an 8% unemployment rate when they put through their stimulus program. we are now at 9.5% and it's still going up. i think we have a lot of very, very serious work to do to make sure this economy does not take another downward dip. host: thank you for faking --

for taking our viewers' questions. host: thank you very much. -- guest: thank you very much. host: our next guest will be "abc news's" martha raddatz. before we do let's show you some of her reporting this week. >> it was 10 days ago that lieutenant handed over command of sadder city to the iraqis. a baghdad neighborhood that's been one of iraq's most violent. the father of three young daughters, carcher survived a gunshot wound to the shoulder two years ago. he had been in command of sadder city only since march. i spent one of many days that i spent with in 42-year-old officer during his three deployments. are there changes from when you were here last? >> the iraqis have really stepped up and they are really taking the lead in so many areas now. >> so what are you expecting here in sadder city today? >> i have to tell you we're

expecting anything from intense combat operations to really helping the people. >> lieutenant current karcher got both. this officer who is beloved by his soldiers has helped countless people. but food i learned of the firefight west of sadder city and the enormous bomb which shattered karcher's vehicle. he lost both legs. he's fighting for his life. a senior officer who knows karcher well told me to remember, this war continues. host: and martha raddatz joins us from abc studios in washington, d.c. you have posted on your blog on "abc news" an update on colonel karcher. can you tell our viewers how he's doing? guest: he's expected to arrive back in the united states either tomorrow or saturday. his condition is stable but he was in very bad shape for a couple of days. they had a very difficult time

stabilizing him. i learned after we filed that report that he could not be airlifted away from the scene. they had to drive him to the combat support hospital because there was a terrible dust storm that day. and some very brave soldiers who drove him there and then when they were leaving they actually hit a roadside bomb, an e.f.p., those very, very powerful, powerful bombs that can penetrate metal. and there was a sergeant killed. so they delivered their commander to the combat support hospital and then when they were on their way back they were struck by a bomb as well. and it shows you this war as the commander told me, this war depuzz continue. host: well, on that note, in addition to the personal tragedy in these soldiers' lives, what should people understand about the violence that is taking place this week as american troops begin their pullback? guest: clearly there's been a big uptick in violence.

there have been about 250 people, mostly iraqi civilians, killed this month. but it does appear there are focusing on american soldiers again. now, one of the things i worry about a little bit as u.s. soldiers and marines full out of bases in the cities in iraq is that it is more difficult for them to get to their bases. they're further away. and those soldiers who remain, the trainers and advisors, have that force protection further away. but they have gotten out about 100 bases. they are pulling back. i think people misunderstand. they think somehow everything is closed there. the bases like camp victory, which is the major military base in baghdad, is still open. there's still a base in mosul open. er in scattered throughout the country. they have not reduced any troops in the last month or so. we're still about 130,000, a

little more than 130,000. i think it will only go down to about 12r5,000 by the end of the year. -- 125,000 by the end of the year. you have a huge american presence. they just won't patrol by themselves in the cities. but they are certainly out there, and they are certainly in the fight. i think i said on abc the other night that it will feel an awful lot like combat whether we have combat troops there or not. they're all combat trained, and if they get in a firefight it will feel an awful lot like combat. host: "the financial times" fee furred a common fare piece who is an assistant professor of history at stanford university. with the headline on it, "iraqis are too shrewd to fall for an invisible occupation." it is a follow on to what the

plan is for the redeployment of american troops there. he writes, we are at the beginning of the end. on tuesday u.s. troops left iraq's cities and in two years they will leave the country. or so the official story goes. in reality, most of the troops are going to forward operating bases which they will be hunkering down. and expensive built to last facilities. later on he writes, iraqis are too shrewd to fall for invisible occupations as me did in the 1930's with the british. the piece closes this way. in 1932 as now rhetoric about withdrawal was aimed at global as much as iraqi opinion. instead of attending only to appearances, stroking the fears of the people familiar with nominal independence, the u.s. and iraqi governments should deliver the reality iraqis and americans want. yes for independence, the troops basically out.

that's my addition on the end there. guest: well, i've been calling it a bit of a stealth force now. but we do have a status forces agreement with the iraqis that calls for complete withdrawal at the end of 2011. now the iraqis can ask the american forces to stay. they can renegotiate that agreement with the americans. i think you'll probably see forces there longer than 2011. the iraqis right now don't really have much of an air force. i'm not sure i've ever seen an iraqi helicopter in the sky. they don't have air support really. they don't have a navy. they don't have the sophisticated intelligence equipment that the u.s. does. and they do not have the ability to evacuate their own forces in a medical emergency. so there is a lot that the iraqi forces depend on the u.s. for. so i think what you might see is a renegotiation at the end

of 2011. do american forces want to occupy iraq indefinitely? no, i don't think so. when you think of bosnia and how long u.s. forces was there and when they came in the combat was gone. there were no u.s. soldiers who were killed in that conflict. so it seems pretty improbable that u.s. forces will be completely out by 2011. but that is what that agreement says. right now that all forces are out by the end of 2011. and in fact by 2010, by the end of august, ray odierno, the general in iraq, says he'll have them down to about 50,000. i think you would have to have a terrible, terrible turn in iraq, and i mean the uptick in violence would be enormous for any of those numbers to change. you have a president who wants to get out of iraq. he made a campaign promise that he would get troops out of

iraq. so i think that is the path they are on. host: we are going to take some telephone calls and come back from a break of calls to talk about afghanistan because there's clearly a major troop action there and i'd like to learn more about you. let's hear from c-span viewers. first being from halifax, massachusetts. this is chris on the republican line. go ahead, chris. caller: hi. good morning. thank you for taking my call. i was just curious to hear sort of what mar that's view on this, the difference in coverage between sort of presurge, you know, when we were fighting in iraq and taking a lot of casualties and, you know, the media was very critical of the bush administration, critical of the war's efforts. you know, there were a lot of calls for withdrawal at that time. and now i see the coverage and it just sort of seems to be everything is rosey and fine and there's very little critical coverage, you know, of

the war. and also the fact nat surge worked and -- that the surge worked and bush's stay the course ended up working. i'll take the answer right there. host: thanks, chris. guest: i think it's more critical than that. i'm proud of the media because the bush administration at the time was saying things were going well. president bush in an interview with me before he left office, i asked him about the fact that he said we were winning before the surge. and he said he knew we were not but he kept saying that. so when i say i'm proud of the media coverage building up to the surge, i think that really helped the american people understand and the bush administration that they needed to change course. indeed they stayed the course. indeed they stayed in there and president bush was committed to turning this around. and that's why the surge happened. that's why they changed

strategy because they realized things weren't working. so i think the critical coverage leading up to that was important. i think the coverage when the surge happened certainly gave the president credit in saying that the surge had turned it around and general david petraeus and all the soldiers and marines over there worked very hard to turn that situation around. i agree that there's not much coverage now, and i think that is in fact because the security situation changed so dramatically because of the surge. and you're not getting as much coverage. and you're also in many ways the same way the army has to get soldiers out of iraq to go into afghanistan i think you're seeing a lot of news organizations switching their focus from iraq to afghanistan. but i would hardly say it is a kumbayah coverage. if you saw my coverage of colonel karcher, it is still

dangerous for u.s. troops. i want to show the sacrifice they are making over there. host: martha raddatz is an author of a book called "a long way home" which made "the new york times" and "washington post" bestsellers trip. since the war began, how many trips have you made to iraq? guest: i've made 20. that's a lot of trips over there. it meant a lot to me to continue to go back. covering the last term of president bush i still wanted to go back to iraq because that was such an important story. and i could see from the ground changes that were made. i could see the difference between 2004 and 2006 when things were really, really terrible. and the difference since i was there a few months ago with lieutenant colonel karcher of the optimism that many of those soldiers had about the situation there.