sick of the nanny state. we are out of time. appreciate you being with us. greta has a great show. i don't know whats in it, but she's got a great show tonight. greta, take it away. >> greta: this is a fox news alert. here is the number, 10.1% unemployment. in the month of september, the united states unemployment rate, according to gallup spiked up to 10.1% in august gallup had unemployment at 9.3%, one month later, devastating news unemployment is up .8% higher. the government had its number at 9.6% worse than gallup's 9.3% number. brace yourself, karl rove joins us live. this must, besides the devastating nature to the many unemployed americans across the country this must be devastating to the democrats

tonight. >> it is. it is confirmation of what has been baked into the political cake for sometime that is, this is a bad economy that the administration failed to deliver on the proms of the stimulus that we do not -- promises of the stimulus. that we did not have the rebust growth they promised. as a result of over promising and undelivering the democrats are going to suffer a very bad loss at the polls this november. >> greta: christine romer no longer an economic adviser saying when we did the stimulus bill that unemployment would be at 8%. then larry summers, saying last december the recession is over. then you've got the president saying things are getting better. now tonight 10.1% and the democrats will have to live with that number between now and election day. no new numbers before election day. >> yeah. look we have the summer of recovery. this is the last big mistake

of the administration. they went out and announceddedded in june they were going to undertake a pr offensive -- to convince the american people how good the economy was in is a result of bad mistakes in policy bad bill that was poorly crafted, ill-conceived and badly executed. the stimulus will spend more money between 2011 and 2019 than it spent in 2009 when we were trying to stimulate the economy. you are right cries teen romer issued a report that said if we did nothing unemployment is going to rise to near 10% and remain throughout 2009 and 2010. if we pass the stimulus bill bay the end of the summer of 2009 unemployment would top out at 8% and decline rapidly thereforeafter. she may be again but the other person who wrote that report, bernstein is still around as is romer's colleague.

>> greta: 10.1%, gallup. we are going to wait tomorrow for the government numbers. gallup was much more optimistic in august than the government numbers. can we expect that tomorrow or is there no way to tell? >> no way to tell in fairness, the best number we get is the government number. there are several other sources of information about unemployment. there's a report out of the data processing company adp which handles a lot of payrolls for companies which is somewhat reliable. gallup is not considered unreliable but it is not relied upon as much by economists as the day it comes out of the department of labor or even the ap report. this is again, bad news for democrats. it is a confirmation of month after month after month of which we've had bad news about job creation and the economy despite all the promises of the democrats that the 814

billion dollar stimulus bill would generate robust economic growth and lots of new jobs. >> greta: adp had grim news in the month of september 39,000 jobs private employers cutting jobs. that's a painfully bad sign. even if gallup were somewhat off the mark, the fact that we've lost all those job, doesn't suggest gallup could possibly be that far off. >> as i wrote in my column today in the "wall street journal", i looked back at what president obama said in 2004 as a candidate for senate in illinois he attacked president bush in march of 2004 for presiding over what then candidate obama called a jobless recovery the month he said that 334,000 jobs were createdded in america and the unemployment rate was 5.8%. if president obama thought

that was a jobless recovery what does he think nearly 10% unemployment and the anemic job creation we've seen this year amounts to? i think it was hypocritical for him to say those things back anyone and unlikely to see him be so candid about his own pathetic performance now. >> greta: within, is the political issue which is -- one is the political issue which is less significant, the more significant one is the fact that people are unemployed, it is not getting better. even if you have a you might have fear when you see the numbers. the third important factor is that if this is wrong, the economic path we are on, and the president owns the economy because he changed the direction with the stimulus bill, at what point does he say, look we need to regroup? will he do that? if in is wrong, he's got to change the course -- if this is wrong, he's to change the course. >> i think you are right on

those things and the order of them too. the political is the less important. the economic impact in the future policy implications are bigger. i'd add one item to your list. these are the people who are unemployed and are still looking for work. the unemployment that is people who have given up looking all together. and the people who have accepted a part-time job in lieu of fulltime employment, those rates have been nearly double, 18 or 19%. it will be interesting to see what that number is tomorrow. that number i suspect and after employment against to improve, we are likely to see still relatively high unemployment because it is going to take a long time to get back to the pace of job creation we need you need to create 150,000 jobs a month to stay even. that's how many new job entrants we have into the market how many come into the market each month, 150,000. if you are creating less, you are losing ground. if you are creating 150,000 a

minute, you are treading water. you have to get significantly above that to make a dent in the back log of people who want to work who can't find a job or a fulltime job. >> greta: phrouplt for gallup in august was eight -- unemployment for gallup in august was 18.6%. now the political question, i assume every place any democratic candidate is going from now to november 2nd, the question is what are you doing about the economy. put on your independent political hat. what is a democrat to say? >> well first of all, i think the democrats, it is interesting, i mentioned it in my column today. now not a single vulnerable house democrat is heralding their stimulus bill except for the democrats who voted it. they are wise not to do that.

they have to focus on thingses that resonate with people that would lead people to believe will cause creation and economic growth. putting our fiscal house in or. cutting unnecessary spending. reducing deficit and targeted tax cuts aimed at encouraging business to invest in equipment those things have greater sail . the administration out during the -- last week and began to show openness tax cuts aimed at encourage businesses invest in plants and equipment not just businesses favored by the administration, allowing all business to more quickly write-off investment in plants and equipment. those kind of things might resonate with voters. democrats are in a deep hole on this anybody who voted for the stimulus has a bad vote to explain and it ain't easy to explain. >> greta: do i overstate saying this is rocking the democrats politically?

if the government is likewise up tomorrow, could this be a game changer in many races? >> it will be. it is a confirmation of bad numbers already. i put this in my column today. historically, republicans have been able to went congressional seats and pick up in elections when they are not ahead of the democrats on the issue of who is better able to handle jobs and the economy, but within striking distance within five points or less. today the lead is seven points on jobs and economy. 12 points ahead of the point at which republicans are able to win the congressional elections thfpbl is a big margin. when -- when gallup put out its numbers, in a turn out that would mimic what we had four years ago, 82 million in the races for house of representatives the republican lead would be 56-38. in a high turn-out election

higher than that the turn-out, republican generic ballot advantage would be 53-40 more than twice as big as it was going into the '94 elections and would pore -- portend a tsunami. the democrats are going to spend the next few weeks not talking the economy, cap and trade being financial regulation not talking about anything they vetted for, but focused on taking every dollar they can and pounding their republican opponents with anything they could say to make them radioactive. distort their views, their records and going after them personally. i put examples in my column today this is way over-the-top and likely to backfire. it is a sign of the does of the democrats. >> greta: karl, standby we going to show the new christine o'donnell ad that is being aired. we'll take a quick break. you know things are brutal

when a campaign ad talks about viagra. we'll show that ad and have more with karl rove. texas governor perry guess on the record. he just call president calderon of mexico about the search -- is the stimulus package trying to bring dead people back to life? we are getting this is going to make you furious. we'll explain. it's pain relief without the pills.

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>> greta: if you think things aren't rough in nevada watch in. >> i'm sharron angle and i approve this message. >> announcer: want to know how out of touch harry reid is? 787 on a stimulus that didn't work. here's the kicker reid voted

to use taxpayer dollars to pay for viagra. for convicted child molesters and sex offenders. what else could you ever need to know about harry reid? >> greta: karl you said the democrats are going to come out swinging doing everything they can. how about that ad? that seeps like the shoe is on the other foot on that one. >> except that it involves an actual vote that harry reid cast. he voted for the stimulus. he voted for the special break for illegal aliens. and the last one, senator coburn, a doctor from oklahoma proposed a sensible amendment that did two things. one, would it save 650 million dollars a year scored by the congressional budget office. would it deny rapists and child molesters access to viagra and other performance-enhancing drugs, no longer would the government pay. second of all, it would set up a special board focused on

finding ways to end medicare fraud. basically make insurance policies have a fraud detect system like we have in private insurance have it for the government, which we don't have. i was a good . the democrats should -- it was a good amendment. the democrats should have voted for it. >> greta: was there anything else in it, number one? was there a tactical reason? lots of times, there will be something to vote against part of a huge package procedural thing and they get hammered about it on ads. >> look, co- , is a pretty straight-up guy. two things in the measure. frankly, the problem was the democrats said we don't want to accept anything from the republicans. let's jam this through it went didn't on a straight party line vote. this was the kind of thing if they ed for it the american people could have looked at

this and said this is a better bill. there is no reason we ought to be paying, the taxpayers ought to be paying for viagra for a rapist or child molester. we ought to have fraud detection systems lake in private health care. the fbi is responsible for overseeing fraud in medicare and medicaid. they put out a report saying 1 out of every $10 in the program is lengthly . we have lots of -- fraudulently spent. we don't have it in these government programs. i thought it was a sense able move and to this day i don't stand why the democrats created a problem for themselves by voting against it. >> greta: maybe he can explain his vote. christine o'donnell has a new ad. >> i didn't go to yale. i didn't inherit millions like

my opponent. i'm you. i know how tough it is to make and keep a dollar. when some tried to push me from this race, they saw what i was made off and so will the senate if they try increase our taxes one more dime. i'm christine o'donnell and i an this message. i'm you. >> greta: that's the "i'm you." she is down 17, 19 points. what do you think about the ad and can she make up that mar yin? >> i like the ad. fred davis her new media guy did a clever thing with the first ad. it a lot of buzz and attention. they confronted these things about witchcraft head-on saying i'm not a witch, i'm you. in this ad she begins to carry that line forward, so people can understand her foreclosure and failure to pay college loans and so forbes saying i know how hard it is --

consider so forbes saying i know how hard it is to make and keep a buck. then she begins to try to say, october if you accept you now have a god explanation and part of the explanation was touched on in the ad most offered up on her appearance on hannity she begins to make the turn to say this is about big issues that divide me from my opponent. i think she has more to do to answer questions that have been threating for months raised by the media in january, february, march, when she into the race. she last least now has a j. can she make it up? she's four weeks. she made up a lot of points in the primary. -- the one warning sign is in the university of delaware poll the first poll the university of delaware has done, they did break out the independents. in order to win in delaware you that carry all the republicans and carry the independents by a substantial margin then get yourself a

chunk of the democrats, particularly down south in sussex county. she has not got where she needs to be among independents just yet. >> greta: senator murkowski, a -- got a shot? >> i don't think so. i think joe miller is going a very good job. he has his head on straight. he's focused. i think people look at this and say he won fair and square even if they voted for murkowski, they are inclined to vote for miller. growth karl, thank you. -- >> greta: karl, thank you. it is absolutely chilling, hear what nuclear armed pakistan is now doing? when you hear our report, you are going to ask what is wrong with some people? ambassador bolton is here, minutes away. be cool if cars didn't need keys?

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>> greta: . is sticking to his guns and pushing all his chips in. >> the president: we are moving in the right direction! i'm confident that we are finally headed in the right direction. the policies we've put in place have moved us in the

right direction. we're making progress and we are moving in the right direction. >> greta: the question is, do voters agree? doug schoen joins us live. moving in the right direction. any thoughts? >> well, i think it is clear, given the news at the top of the show about 10.1% unemployment that we are moving in the wrong direction and the president is out of touch with the concerns of the american people. and how they look at the country today. >> greta: if in fact we're moving in the wrong direction and these numbers, i mean they are bleak i don't know how anyone can think if unemployment is rising the official government number is rising, i don't think you can say we are going in the right direction. how do we get the president, if he is on the wrong track, to sort of change his tact to look him in the eye and say okay, wrong plan let's try this one? >> it has to happen.

i think it is going to take a stunning and perhaps historic defeat in the elections for him to do that. i've spoken to high ranking democrats who have spoken privately to the president and they say he doesn't get it. he's not going to back off. he's going to keep going in this direction. and these same democrats throw their hands up and say they don't know what they can do to get the president to recognize the need for job creation, fiscal discipline and a different approach to try to respond to the concerns of the american people. >> greta: in statistics it is bad to seize upon one number. there are lots of end kay towards. for instance housing starts. creation of jobs. loss of jobs, whatever. is there any statistic that you november that any democrat is pointing out to you saying, look this one indicates we are going in the right direction? >> oh, the only thing that indicates to democrats they are going in the right direction is that the republicans as a party are

viewed less well than they are. that being said the midterm election is a referendum on the party in power. given there's been no frank acknowledgement by the president or the democrats they need to change course and dramatically i think they are going to suffer as a result. >> greta: the people that you have spoken to who have spoken to the president, does the president fight back and say they are wrong and identify how they are wrong? does he say you need to look at a, bc, c and did? or is he unwilling to have the discussion? -- >> unwilling to face the issue is what i'm hearing. stay the course is his position. we're gonna succeed as he said in new jersey. weigh ed a depression. we've done better tan the other side. we have to continue with policies that clearly are becoming increasingly unpopular. >> greta: it is -- china is coming out of it fast arer than we are. there are other nations that are doing a little better.

>> the american people are clear they want reduction of the debt, deficit, balanced budget and private sector job creation. so far we are neither getting it nor having the democrats and the president speak to pit in any serious way. >> greta: any information about what his economic team is saying? he has a new team or within in progress. are they backing him up or are they saying we need to change course? >> again i spoke privately to a couple of them. when you talk to them, they shrug their shoulders and you get the sense they don't have a clear census of where we need to go it is clear he has to do what bill clinton did in the mid 90s to be for a balanced budget, rei, in -- rein in spending. unless he moves in that direction i think his administration is boomed to fail. >> greta: what about the democratic leadership in the house and senate. publicly they say they are behind the president do they

say that privately? >> there's a lot of friction. harry reid is a decided under diagnose to angle. nancy pelosi felt she did all the heavy lifting for the president with health care and the stimulus and she has been cast aside. i think there is dissention in democratic ranks. after the election given that one congressman in alabama saying he's not going to vote for nancy pelosi i think there could be a wholesale change in the democratic approach and leadership. >> greta: doug, thank you next governor perry is here to go on the record about the man shot on a jet ski. he has called president calderon. hear who vice president biden insulted? stay where you are and we will tell u i dare any other politician to try what vice president biden did. >> uh-oh say a cameraman got roughed up at a

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delicious pringles multigrain. multigrain pops with pringles. >> greta: texas governor rick per very here. two nights ago he tried to reach the president of mexico. he's demanding help in the search for the american man allegedly gunned didn't while jet skiing with his wife on a border lake. he asked to have president calderon call him back within 48 hours for an update. did the president of mexico call back? governor perry joins us live. good evening. we are at the 48 hour mark have you heard from the president of mexico? >> no. that was hopefully an estimate for him to get back us to. what we did do was have the opportunity to tack to the acting foreign secretary ventura.

he was very helpful, very open and we are starting to see -- over the last 12 hours we've seen some very good movement from the mexican government from the national side and from the state of governor hernandez who has been in touch with our office. has a substantial number of individuals coming down to assist with the search for mr. harley's body. we are seeing a good response from mexico at this point in time. >> greta: have they done anything? you spoke to them, you see movement, have they actually searched? >> right. it is our understanding that the troops are on sight -- onsite and engaged in the search. we have a substantial number of texas individual there is parks and while life, 10 of our big boats on the water as

well as aviation assets and our department of public safety have their aviation assets, as well as our state troopers, texas rangers. fbi is the lead agency on this investigation at this point in time. rightly so, you got an american citizen who is allegedly been killed in a foreign country. so, appropriately the fbi is on top of this. gonzalez the sheriff has been working 24 hours a day seemingly on this project. it is all hands on tech -- on deck from a texas standpoint. hopefully we are going see in the next 24 to 36 hours being able to find mr. hartley's body that is our real push to get the family satisfied the search has been done properly, the body become. i talked to tiffany hartley today, bless her heart she is

trying to get both of these federal governments to act in an appropriate way. hopefully today, we saw movement particularly from the mexican government that's where it has got to happen. >> greta: we always use the term allegedly when someone has been arrested. everyone uses allegedly shot here. so, you don't is -- you don't say the husband was shot. do you have any doubt it is as the wife has said? >> i don't have any. >> greta: you have no doubt she telling you -- >> i have no doubt this has gone down the way she said it did. there is no indication it is anything other than that. again, until you get the body back to be cautious i think the word allegedly gets pitched around maybe too easily. we are pretty comfortable we know what happened here. >> greta: are the u.s. search

team as loud to go into the area -- teams allowed to go in and search and use the air space and freely search from the air? >> we are assisting the mexican government at this time. >> greta: so the answer is no. we don't get to independently send our ships in and send our planes over the water in their air space? >> that is correct. mexican helicopters today were brought over to laredo to refuel to go back in to save time. it is my understanding we don't have any u.s. or texas forces over the spot where the event occurred. >> greta: we are in a little at their mercy in terms of the search. supposedly, allegedly or did, whatever happened last thursday we are now a week later this is a little slow to get action or movement out of them. >> it is very get action going. this gets back to the base

issue that both of these federal governments have been incredibly lax in working together to secure that border. i've had a request in since january of '09 for 1,000 national guard troops. we've got to secure this border. that's the issue. when you get past retrieving this individual's body and getting an investigation about what is going on. this going to get better. we've seen this violence escalating. car bombs. we've seen multiple individuals -- >> greta: university of texas student murdered recently on a bus, within the last couple of days, in mexico. >> that's correct. my point to the federal government, the united states federal government has been, i've said it before, what is it gonna take, an american citizen to get kill before we get action? well it is happening. this government must recognize

what is going on down there. frankly needs to be working with mexico to come up with a plan to deal with these cartels. these are brutal murders and terrorists along our border. we need to be using he every asset we have defeat them and push them back and let them know you cannot use the texas border freely as they doing today. >> greta: governor, thank you. >> greta, always good to be with you, thank you. growth what is coming up on the o'reilly factor. >> bill: the city of san francisco wants to tell people they have to put -- wants to tell mcdenial s they have to put fruit in their happy meals. growth bet we are live -- >> greta: we are live until the top of the hour. terrible news out of pakistan. this is just bad. ambassador billion ton goes on the record, next. -- ambassador bolton goes on

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growth next ambassador bolton but first to our new york newsroom. >> reporter: trials for two house democrats set to take place after november elections. house ethics committee refusing republican request requests hold the proceedings before the election. hearings begin for rangel and waters. u.s. an growing to sell israel a squadron of stealth fighter jets. they can reach iran and go undetected by radar. israel considers iran to have a strategic threat. checking the markets in asia. nikkei down, hang seng up. dow joins futures at 10, the 16. for more -- 10916.

i'm marianne rafferty now back to on the record. >> greta: on the record is the place for news out of pakistan. tonight a grim report that may convince you pakistan is not our friend. spare spy agency are urging taliban field commanders to fight the united states in afghanistan. pakistan is supposed to be our partners not helping our enemies kill our troops. a.m. bar door bolton joins us live you will -- ambassador bolton joins us. >> it is a perfect department of the split within the pakistani government. isi, essentially created the taliban. armed them, funded them, encouraged them, trained them. to take over pakistan from what later became known as the northern alliance after the soviets were defeated. the fact they are still --

>> greta: you mean afghanistan. >> the fact they are still aiding the taliban doesn't surprise me. it outrages me, it doesn't surprise me >> greta: this is one step further. i don't pretend to have the answer. >> honestly not. elements of the isi have been funding, arming and equipping the taliban right on through. growth grow we are continuing to lose dozens of american -- >> greta: we are continuing to lose dozens of american troops. if the isi is working against us in afghanistan maybe if it new it is still occurring and not showing forward progress and we are losing people all the time. >> what we should be doing and i hope the administration is, leaning on the of pakistan in a big way to finish the job of cleaning isi up. when musharraf was president he changed it, in part, but not sufficiently. we leaned on him but we didn't lean on him enough. we need to really put pressure on the government. if isi is doing this now with

a nominally democratic government in control imagine how bad it would be without our pressure on pakistan's government. >> greta: good idea in theory. the problem i have is president sar dairy of pakistan is -- president zardari went to his chateau in -- as 1800 pakistanis died and all their crops ruined, he went to france. he's also on the verge of possibility being indicted for crimes. he doesn't seem like the person we with want to lean on as being effective. their parliament which would be our next option isn't a god choice either. those are the people who created these laws so they don't have to pay taxes so their poor people starve. leaning on what government? >> you are absolutely right. that's why democracy and civilian governments in

pakistan have been so discredited. i thought the musharraf government, military, authority tarrian rule that it was, was the -- most likely kind of government to make the changes. although we focus on afghanistan in pakistan, the radicals are also focused on kashmir, a part of india which they feel should be part of pakistan. which is one of the reasons why elements friendly to us, believe they need to equip muslim radicals to go after the indian government in pakistan. >> greta: you are suggesting we lean on the government. the government is infect i have to lean on for their problems what is your -- ineffective to lean on for their problems is what is your plan b? >> i would have kept musharraf in power. i think the bush administration made a mistake in pushing him out in pakistan they call the military the steel skeleton. it is the only thing that holds the country together. that offends some who think

democracy is always the answer. personally, i would put american interests above that. i wouldn't have gotten rid of musharraf. i think the military is the one remaining chance we have. it is infiltrated itself. but at last it really does have a higher standard of i think loyalty to the idea of pakistan than mr. 10 percent the current civilian president. >> greta: the head of the military a former isi person himself? >> right this is part of musharraf's effort to up isi. he succeeded in part. he did not finish. we need to keep on that. otherwise, we will lose pakistan to isi and with it, its nuclear weapons. >> greta: how do we accomplish this? >> through unremitting private pressure. and through not an ing whether we have a civilian or military government. in order to -- keep pakistan and nuclear weapons on our

side i would be will to live with a military government for as long as it takes this is all un isn't what is -- consider this is all un stan but what is most unpleasant is pakistan taliban in control of those nuclear weapons. i think things are trending in the wrong direction. >> greta: in my limit experience, this say horrible situation that's why i try think is there anything good going on there? >> get worse. therefore, greating our teeth -- gritting our teeth and staying in the drug , i think is the only alternative. -- staying in the struggle, i think is the only alternative. >> did a candidate get roughed up at a rally we'll show you the video and you can decide. >> apparently being dead is profitable. a stimulus report that will make your head cloud is coming up.

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>> greta: here's the best of the rest victim gets caught in the political across fire. listen to this radio ad paid for by the pro-life group americans united for life. >> announcer: salazar says he shares our values when running at home in washington votes for the est expansion of taxpayer funded an s ever the life of an innocent child may not matter to salazar here in colorado life counts and congressman salazar's vote has consequences. he betrayed our trust time send someone to washington who shares our value, not nancy pelosi's. >> greta: there's a slight problem with that one. ken salazar is not a congressman from colorado he's the secretary of interior and former senator. the ad meant john salazar, ken's older brother.

oops. the dope i group that made that ad is fiske the -- fixing the mistake. the pennsylvania republican party released this video reportedly from a joe sestak rally. >> they don't touch people. >> where are they? . >> don't get close i'll take you down right now. >> you are going to take me down? i don't that i is a good idea. you give me a little space. [ inaudible ] >> don't touch my foot sir!

>> whoa! >> what are you pushing me for? he just pushed me. >> greta: on the record contacted the sestak campaign for a comment. so far, no response. >> this is an interesting approach to campaigning. it is no secret president obama and vice president end have been tough on the base lately trying to get voters fired up. today vice president end on a role. he passionately told the crowd how democrats want to keep jobs in the united states. apparently the response was silence. could you hear a pin drop. after a few moments of silence he jokingly said you are the dullest audience i've ever spoken to. that the crowd laughing and cheering. it worked this time, ordinarily insulting the audience doesn't work. >> the latest stimulus project

bringing dead people back to life. not exactly, but listen to this. new government report found -- you are sitting right? 18 million dollars of stimulus money went to 72,000 people who happened to be dead. if that doesn't outrage you, try this on for size that same report found more than four million dollars went to 17,000 prison inmates. a total of 22 million dollars to dead people and inmates. half of that money has been returned. god good to see our tax dollars hard at work. -- there you have the best of the res. a scandal involving the first dog? things are rough now for president obama. stay tuned. i used to see the puddles, but now i see the splash. ♪ i wanted love, i needed love ♪

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>> greta: 11:00 is almost here. flash the studio lights. time, last call. another new controversy at the white house. >> when the cards go against you, president obama, this guy can't get a break now. even the dog whisperers sees him. the guy is criticizing the president. he says he let's the dog lead him on walks when the dog should follow him. give the guy a break. obama can't get democrats to follow him. forget the dogs. give the guy a break. >> greta: that is your last call. finally we wanted to fish a very happy birthday to us. yes, today is the 14th anniversary of fox news channel going on the air. a special thanks to all of you for watching so many