certainly whatever it is that comes forth has got to improve on what we had before. because the danger that we face now -- in an economy where the function of the financial system is critical, we would have another collapse. we must avoid that at all costs. the madoff thing is one aspect and the failure to regulate the financial world properly is another. host: the next phone call is from dallas. edward on the democrats' line. caller: good morning. thank you for taking my call. mr. marc zuckerman. i have been listening to you for a while. previously on this program. but you answered my question about why we went into iraq. i thought about this. if the energy was the reason and we haven't gotten anything from it, why are we still

there? because afghanistan is where we need to be. can you answer that question? guest: i'm not sure i can answer that question because i'm not sure it's easy to give you an answer as to why we are still there. we are under agreement to withdrawal our forces from the cities as of just this the last couple of days. and we are going to withdraw all those forces. not, i might say, to the thanks of grateful iraqi population but it's a celebtory kind of thing because they're comparing the withdeprall of american forces to the withdrawal of the british in 1920 and 1921. but the british were a colonial power and we are not a colonial power. we did not go there to take over that country and exploit that country. we did go there in the defense of that country. we thought from a tyrannical and cruel dictator whom we were

fearful might have nuclear weapons which he could then feed off to terrorist groups and in any event to gain a threat to that region. so we are going to be pulling back. and in two years we're supposed to withdraw all of the troops in that country. we do have a problem in afghanistan. i'm not sure if our problem in afghanistan is the taliban. the taliban is a whole mix of various tribal forces. the real problem is al qaeda, and al qaeda is now primarily sort of concentrated in certain parts of pakistan rather than in afghanistan. but we have now -- it's what happens all the time and in so many things, not just in politics and in war but in business where people make a commitment and they feel, you know, i've sort have made the commitment, how do i get out? but there is no doubt but there is a radical group there, and they are -- they are totally hostile to the west. and they see us really as a

group that has corrupted their religion and corrupted their societies and exploited their societies and they're determined to find some way to eject us in many ways. and if they were just willing to stay within the boundaries of their own country, it would be one thing. but as we have seen, there have 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 automobile loans or student loans and t and they would create a bundle of them and they would develop a security that would take the income and expense and you would sell the securities. the securities were rated by the agencies. and there was a fundamental

conflict of interest in the structure of the way rating agencies were involved in doing these ratings. in that the people who were selling the bonds were actually paying the fees to the rating agencies, and therefore you could understand how in some cases -- not in all -- some rating agencies would get the message that if you didn't give us the rating we wanted, we will go to another rating agency and pay them the fees. originally rating agencies were limited to, for example, municipalities and state governments but when the whole world of securitization exploded in the trillions of dollars, they began to make huge amounts of money out of rating the different securities. 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 h 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 >> thank you for being with us today. guest: y. very much. 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 rht 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 and he said he knew we were not but he kept but he kept saying that. when i say i'm proud of the media coverage building up to the surge, i think it really help 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. that is why the surge happened, that is why they changed strategy, because they realized things were not working. so i think the critical coverage leading up to that was important. i think the coverage when