uraptioning sponsored by newsroductions, llc >> woodruff: good evening. i'm judy woodruff. on the newshour tonight: s waeet woes. eee stock market plunges to one of the worst the u.s. has seen in years. then, republicans release their controversial memo. a look at the highly-disputed document alleging missteps by the f.b.i., and what imeans for the russia investigation. ngus, i sit down with outg chair the federal reserve, janet yellen, to talk the state of the nation's economy and what she sees for the financial future. >> we've enjoyed solid growth. it's helped heal the labor market and that's great, but the pace isn't what we would ideally ake to see. >> woodrufnd, it's friday.

mark shields and david brooks consider what the public fight between the white house and f.b.i. means for the state of ar democracy. all thatnd more, on tonight's pbs newshour. ng >> major funor the pbs newshour has been provided by: ♪ ♪ moving our economy for 160 years. ecsf, the engine that connts us. >> consumer cellular.

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thank you. dr >> wf: a sweeping sell-off on wall street, capping off the market's worst week in two years. stocks lost more than 2% in rlue, after a long period of calm aord highs set just one week ago. the dow jones industrial average plunged 665 points to close near ,520. the nasdaq fell nearly 145 points, and the s&p 500 dropped almost 60. all this unfold hours after news that the u.s. economy added 200,000 jobs in january. but, wages rose at the fastest pacen more than eight years, fueling the fears of inflation and higher interest rates. chr more on all this, we turn to liz anne sonders oles schwab. liz anne, ank you for joining us.

what happened? >> i think it was a number of things. you pointed out the theear iner year increase in hourly ea jumped 10.9%, a ten-year yield in treasure a blow through 2.8 on the up side. the last time we had a pullback in the market a week or so ago it was when ten-year yields wenb e 2.7. the flavor this year is different where we're starting toee inflation, develop ghaction and concerned that will result in r monetary policy, but it's a 2% drop. >> woodruff: right, have to keep that in mind. some people have been talking about a correction, a bubble in the market. could that be what's going on here? >> no, i don't think it's a bubb w. what i thi one of the problems that may have led to a bigger decline than maybe the fundamental suggested was appropriate isentiment got quite a bit frothy. after nine years skepticism about this bull market, in the

last couple of months weoticed a real significant return ividuaularly in i investors that excessive optimism kicked in. i would arguroth that built up in the up phase of the marke set this up. lamittedly changed news in terms of ion. >> woodruff: quickly, do you expect this selloff will continue? >> you know, friday selloffs are date little difficult. they have a tendency to carry over into monday. we may not be finished with this,inut i don't k this is indicative of the next bear i think it will only happen when the stock market sniffs out the onxt recession and we d think this is on the horizon but this is probably a healthy pullback. >> woodruff: liz anne sonders of charles >> woodruff: and we will hear from federal reserve chair janet yellen about the markets broadly, in a rare interview, later in the program. tonight's other major story is

the release of a highly contentious congressional memo on the russia investigation. nu is named for congressman devis of the house intelligence committee, and republicans say it shows abuses and bias. lisa desjardins begins our coverage. >> desjardins: president trump personally announced the sion to release the nune memo. >> the memo was sent to congress it was declassified. congress will do whatever they're going to do.'s i think disgrace, what's happening in our country. a lot of people shoulde ashamed. >> desjardins: the memo, written by republicans on the house intelligence committee begins with some stunning language. h it speaks of "concerns we legitimacy and legality" of how the d.o.j. and f.b.i. have worked with the fisa-- or foreign intelligence surveillance court-- and says

ofere is a "troubling breakdown legal processes." what is that based on? the memo centers on secret surveillance of carter page, who was an advisor to then-candidate donald trump for some six months in 2016. republicans charge that the f.b.i. and d.o.j., including top officials james comey, rosenstein and andrew mccabe, got permission to spy on page based on flawed sourcewethat biased against trump, and that the agencies knew that and icd it. specly, the memo says that officials did not disclose that toe trump opposition research dossier puther by christopher steele was funded at one point by the democratic national committee and the hillary clinton campaign. another charge? that christopher steele himself was biased, telling a justice official in september of 2016 he was "desperate that donald trump t be elected." one more: that the justice official he told, a ohn named bruc himself had conflicts-- that his wife worked for the company behind the assier. th matters far beyond carter page, because republicans say this information sparked the much wider russia investigation

by the f.b.i., now led by special counsel robert mueller. some are using that to question that investigation. democrats say that is e real and political objective here, to underme mueller's investigation. president trump was asked today if he is now more likely to fire deputy attorney general rod rosenstein, the man overseeing ate russia investigation. >> you figure thne out. >> desjardins: meanwhile, democrats argued the republican memo is wholly misleading. for example, it shows the date of the surveillance request, october 21, 2016, but thatas nearly a month after the trump campaign had said carter page no longer had any role with them. another example: democrats insist the steele dossier was only one factor in the rveillance, and republicans have left out the others. the f.b.i. said today ob takes itgations in this area very seriously, and that it was tven only a limited opportunity to respothis material. crat's next? the ranking de on house intelligence, adam schiff, is working to clear the rraease of

a se, democratic memo. for the pbs newshour, i'm lisa desjardins. >> woodruff: this evening, f.b.i. director christopher wray told his employees in a letter, "talk is cheap. the work you do is what will endure." in the day's other news, chaos unfolded in a lansing, michigan courtroom, as a father of three victims of larry nassar tried to attack the former sports docr. randall margraves spoke up after two of his daughters told the court how nassar had sexually abused them. first, margraves asked to have five minutes alone wssar. the judge said no. >> no, sir, i can't do that. >> would you give me one minute? >> you know that i can't do that. that's not how our legal system works. >> well, then, i'm go have to-- ( yelling ) >> woodruff: margraves later apologized, and the judge said there is "no way" she will ararge him with a crime. nas to be sentenced next

week for abusing young women at a sports club. he is already serving up to 175 years for similar crimes at u.s.a. gymnastics and michig erate university. is word of a new migrant magedy off libya. the u.ration agency says it appears some 90 people drowned to boat capsized.lers' most of those on board were pakistanis. last month, about 250 people died trying to cross the mediterranean,ainly from libya to italy. russia is making a new move to militarize disputed islands off japan. moscow announced last night that it is sending fighter planes to one of four islands that soviet forces seized at the end of world war ii. japan insists the islands are its territory. and back in this country, flu season keeps getting worse the centers for disease controli and preventiontoday the outbreak is now the worst since

the swine flu backn 2009. last week, 42 states reported high patient traffic for the flu, up from 39 a week earlier. still to come on the newshour: two different takes on the now-public memo about the russia investigation. changes to u.s. nuclear weapons, and when they might be used. outgoing fed chair janet yellen joins us to discuss the nation's economy. and, much more. >> woodruff: we return now to the memo released today by the u.s. house intelligence spmmittee. e earlier with two of the members of that committee. we start with republican will hurd of texas. i asked what informaas so explosive to warrant releasing bye document, despite call the intelligence community to

keep it assified. well, i don't know if i'd describe it with the adjective explosive, but what the information in the memo questioned askeduis sd federal law enforcement be ullowed to use unverified information, cirr reporting and rumors in a title 3 court to request arequest request a.l f. this is about providing good oversigh lof feder enforcement. this is not, in my opinion, about the mueller investigative. i belieob mueller should be allowed to turn over every rock, pursue ery lead to make sure we know what the russians are trying to do in our elections. but this is congress' responsibility to the american people to provide oversight and ensure that our civil liberties are being protected. >> woodruff: i'm sure you know those who are defending the f.b.i. here say that it did follow procedure very carefully and it relied on more than that

controversial steele dossier, so-called, to make its case a. again, i expect them to make their case and to defend their actions. whether or not other informas on ed is immaterial. the former director to have the ofb.i. himself said that some the material that was used was salacious and unverified. and then another piece of information, the yahoo news article, relied on that same information, which is circular reporting, and it was being used as confirmation of the original source. anthird, rumors from another host government, another government. so whether or not moreat infon was used or not, to e, is not the question. it's why was thatkind of information used? and to me, as a professional intelligence officer, judy, as you know, i spent almost as a decade as undercover officer in

the c.i.a., proecting sources, gathering infortion, my job was to determine the difference between information and intelligence. i was comfortable releasing this information bevuse, as you'e looked, none of this damages national security. >> woodruff: well, that isemthe argumentrats are making, that this damages the intense community, that it does long-term damage to the agencies that do this fundamental workday in and day out. >> i would disagree with that. this is not a criticism of rank and file members of the f.b.i. i've had the honor of serving side by side with them. this is about making sure the political leadership of these corganizations aressing every e and dotting every i. we glot of responsibility .nd authority to the department of justice and f., and that authority every single time should be used appropriately, and i think this is a case where

i'm firmly in opposition of using unverified information in a court. >> woouff: do you believe deputy attorney general rod rosenstein or any othe top official at d.o.j. or the f.i. should lose their job over this? >> no, i think this is part of oversight, making sure that we are ensuring our agencies are operating the way that they're o.pposed t there's currently a department of justice inspector general that is dong a review an apparently i think a draft report has been produced. i think that's also another tool in order for us to look at our agencies. a's just unfortunate, i think, thl this information is going to be used bipartisans to promote their partisan position. >> woodruff: very quickly, will you vote to release the democratic memo in your commi

committee? >> of course, as long as it dirs of exiing ongoing internlings which i think we can take out, but, of course, i wousupport that. >> woodruff: representative will hurd of the house intelligence committee. thank you very much. >> thank you. uff: the author of that democratic memo is representative adam schiff of california, ranking member of the u.s. house intelligence committee. i spoke with him just a short time ago. congressman schiff, thank you for joining us. you are one of the few sople who han all the classified information that underlies this memo, but what i want to ask you is criticism that essentially what we have here is f.b.i. officis who relied on inadequate information, on what some people are calling circular news andumors to put this request for surveillance together. >> yeah, that's just not accurate. d if you could read the entire f.i.s.a. coont applicaou could see the body of evidence

they put before the i.s.a. court. there are a number of things directly misleading in thepu ic memo and you alluded to one of them. there is the suggestion a yahoo news article was used to corroborate steele when steele was the source of the article. that's not how the article uswas in the application, so this is selectively pulled out and presented in a misleading way. the application also had a lot of other information ability abt trter page this doesn't discuss and you can see discussion they include about geor papadopoulos that is misleading that if they couldn't paow conspiracy between poulos and pag, the i haven't before the court. there was rumor of stolen e-mails.

very relevant for the f.i.s.a. court. you can sure pick information from any application and mislepd le and that's what's been done here. >> woodruff: congressman, one of the main points replicans are making is that this memo proves that there was poliical bias at work inside the f.b.i. when they were seekg to pursue this investigation. >> yes, they make that accusation. they suggest in the beginning to have the memo that this shows some systemic abuse, some politically motivated abuse but they don't show evidence of that. the suggesauon is that bse they didn't include certain things in the application, it must he been because they had a corrupt motivation. when the reality is that som of these claims are simply untrue and, in the context of the full application, you can see just how untrue they are. th make statements for example ability not disloewsing the political bias or app political actor may have been involvein supporting christopher steele's work. that also misstates what's in the application. now we hope our own response

will be made public soon so that the public can see more complete picture, but even we are not publishing the ente f.i.s.a. application. upis is just not how oversight issed to happen. what should have happened here, judy, if we were serious about oversight is you invite the f.b.i. in and say d you include this and if you didn't what was the reason why. you give thea chance to answer. here, when we ask that the f.b.i. come before our committee, the chairman said no, i don't want the committee memberto hear from the f.b.i. that is an oversight. that's a politil hit joby the selected publication of esleading information. >> woodruff: in thnd, congressman, republicans also say that this will not do damage to the work of the f.b.i. also simply an efforoot to after what americans cherish in their civil liberties. >> well, of course, that's not true. the whole point of it is to damage to the f.b.i. and damage to the mueller investigation. again, if they were serious about this being oversight and not just designeto undermine

the investigation, they would have brought these agencies before the committee. that's what we do whenever we do oversight and they certainly woul 't accomplish one memoand not the other. if they're really interested in transparency, they would have been transparent. the goal here is t tryo distract attention away from what the russians did anwhat the trump campaign they have done in combination with theru ians. >> woodruff: congressman adam schiff representing the house intelligence committee. congressman, i know we'll be wanting to talk to you more in the days to come. thank you. >> woodruff: the trump icministration released its blueprint for ams nuclear arsenal today. it continues the obama administration's plans to rebuild all of america's nuclear-armed submarines, aircraft a missiles, but it

also calls for deploying new nuclear capabilities on submarines and ships ls nick schifrin reports, pentagon officay this is a response to what russia and china are doing. critics say the planspark a new arms race. >> schifrin: for more than half a century, the u.s. nuclear arsenal was designed to deter nuclear attack on america and allies. today, the trump administration d id the u.s.' nuclear air, land . weapons aren't strong enough >> we cannot afford to let it become obsolete. >> schifrin: the u.s. says it's trying to cope with adversaries increasing threatening and complex. russia is modernizing its nuclear arsenal, and warns it's willing to use relatively small nuclear weapondi china is exp its conventional military, and increasing its nuclear capacity. missile launch ) and north korea is on the verge of creating a viable nuclear that could hit the u.s. deputy secretary of defense patrick shannan released today's

nuclear posturreview, or n.p.r. >> this n.p.r. ensures we can adversary,potentia because they are not all alike. >> schifrin: the review lls for deploying new, relatively small nuclear weapons carried on submarines, and bringing back nuclear-tipped cruise missiles rer ships. thew also says the u.s. would consider using nuclear nuapons in response to non- ear attacks, such as strikes on critical infrastructure. john rood is the undersecretary of defense for policy. >> in the context of a non-nuclear attack on the united states or allies that was strategic in nature, that imposed substantial impacts to our infrastructure, to our people, that we would consider that context in evaluating the appropriate response, perhaps to include nuclear weapons. >> schifn: the administration maintains the obama administration goal of rliminating nuclear weapons, but it sees the as more danger the cold war.me since >> perhaps someday in the future, moment when the countries of the

world will get together to elimine their nuclear weapons. unfortunately, we are not there yet, sadly. >> schifrin: more thalf of the u.s.' nuclear infrastructure is 40 years old. the obama-era modernization was estimated to cost $1.2 trillion, anentoday's additions don't have a price tag. but the administration says, whatever they cost, ites compared to a much more costly war. ti, are the trump administ's nuclear plans a good idea? we get two views. jon wolfsthal was special assistant to the president and senior director at the national security council for arms control and nonproliferation during the obama administration. he is now director of the nuclear crisis group, a non- profit advocacy organization. and, rebeccah heinrichs was an adviser on military matters and foreign policy to republican representative trent franks, who served on the house armed services committee. she is now a senior fellow at

the hudson institute. and welcome to you both. >> thank you. >> schifrin: jon wolfsthal, let's starwith you. do you believe that the trump administration's plans for new nuclear capacity actually arcreases the chances of some kind of nuclconflict or using nuclear weapons? >> well, i think the goal to have the npr was to reduce the risk of nuclear war but i think te new programs they're supporting lowe nuclear threshold to make the use of nuclear weapons more likely. i n't see how a potential adversary will know if we're ing a low yield, high yield or conventional weapon if we're going to intermix our capabilities this way and the goal of the nuclear policy is to have clarity but we've ended up with ambiguity. >> schifrin: so is there more am bam my duty? >> no, the point is to lay out the administration's plan for decreasing the chances for nuclear conflict, a deterrence report. most of the report is very

similar, got a lot of overlap from the 2010 obama npr committed to the nuclear triad, committed to eventually seeing the end of nuclear weapons, but as long as they exist we have he haveability to deter them. what the report centers on is hrraising the nuclearhold that the russians in particular have lowered. so that ishe goal the report. it is a necessary response to the precise things hat the russian federation, in particular, is doing, and that is increasing the number of nuclear weapons, the threats of use, and, so, there's a gap, clearly, in our current strategic deterrent and, so, this report is making deliberate attempt to close that gap. >> schifrin: the specific notion is russia hats relaively small nuclear weapons and the u.s. needs relatively small nuear weapons in order deter russia's use to that. is that right? >> if you believe that, then yow like the fac already have

about 500,000 low yield weapons. but i think it also ignores the uact that russia is threatening the use ofear weapons because they're conventionally inferior to the united states. they have no choice by to threaten nuclear weapons because they know they'd lose a conventional war to n.a.t.o. or the u.s., which is the same thing we threatened ithe '60s, to escalate to the nuclear response to a conventiunal attack. rstand the desire to deter and i think it's an important one and the language on npr in deterrence is sound. the probem is russia will look at these newcapabilities and they're not going to change their strategy. they will say they can beat us conventionally and on the nuclear front, so we need to take even more asymmetric steps and that will increase the risk of accident. >> when the obstruction negotiated new start treaty which cut strategic nuclear reps, the russian rdulars fuse to include the tactil armed nuclear weapons in the deal.

what we're doing is not working. the curre tnttical nuclear weapons we have are not ready enough. so if they were, then the russians would not perceive this gap. so we have to do something now, immediate that provides adi ime response to raise the threshold. doesn't matter what we think. what matters is what the russians think and clearly they see a weakness. is report works to -- build up that weakness and provde a deterrent that the russians actually change their calculus that they might get away wit delivering one of these low-yield nukes. >> schifrin: what we're doing now isn't w yking, so worked on the last review in 2010.ta this revies about how the u.s. should respond to non-nuclear strikes. did what you hear today and read in the review, was i demonstrably different than the 2010 version you worked on?

>> i think this npr was designed to look and sound like the obama npr but thei deta are different. president obama said we want to pursue a worldithout nuclear weapons and reduce the role of nuclear weapons. we're going to reduce the role of nuclear weapons in our national security strategy and the number. this npr says we'll increase the role of nuclear weapons. the goal of deterrence are the same but the circumstances to use them are broader. we said specifically massve chemical attack from a nuclear state might require us to respond wio a nuclear weapn. this new category of nonnuclear ctrategic attack against critical infraste, against early warning are problems but they don't have a nuclear solution. my view is the threatened use of nuclear weapons in these circumstances simply aren't credible, they will weaken the credibility of our oer deterrence and assurance commitments, and they're not going to reduce ssis drive into these areas. if some these threats we're facing in cyber and space are so

great, why not invest the $1.7 trilliowe'll spend on nuclear arsenal and improve our cyber capa silities. ifrin: does the talk of nonnuclear strategic strikes and responding in response to nonnuclear posture we view weaken deterrence? >> of course not, it increases e r deterrent credibility. ama 2010 npr did not preclude the possibility that the united states might resr nd with nuclsponses in response to nonnuclear attack. it even said that they were specifically not going to rule out that possibility because what we don't want to do is create an incentive for atadversaries to think they might be able to get away with a slew of nonnuclear attacks against u.s. vital interests. again, the united stats is ying to deter nuclear use and, in fact, any kind of attak that could pose a direct and catastrophic threat again u.s. vital interests, so the point here is, again, it's to change the calculus of the adver clearly the russians are not

deterritory. we have to do something different. >> rebeccah heinrichs, jon wolfsthal, thank you both. >> thank you. woodruff: stay with us. coming up on the newshour: mark shields and david brooks weigh in on the controversial russia memo, and the rest of the eks news. but first, an interview with arguably the most important person influencing the u.s. economy for the past four years: the outgoinghair of the federal reserve, janet yellen. i spoke with her elier today, before the markets closed and while the dow was spiraling down to its worst week in two years, and after a solid jobs report was released. the economy has grown, and the longest job expansion on record has continued on her watch. i wanted to get her overall assessment of the economy on her

final day in office. what's so great about the economy, i thinkinhings are lovery strong. the economy's growing at a healthy, solid pace. the job market the strong at this point. we have a report this morning 200,000 jobs in january, average of 175,000 jobs a month over the last year. we're seein bg theefits of, ththink for almost all boups in the american economy and, you knong able to and a job, seeing plentiful job openin wages beginning to rise at a slightly fastr pace. you know, of course, there are still problems in the labor market, structural shifts that have created over time problems for groups. but i think, general, the job market istr sg, and inflation is low. >> woodruff: i want to ask you

about many of, those thint in terms of growth, how long do hou think this kind of growt can continue? heother two, three, four years? >> well,conomy has been growing at 2% or a little bit over 2% for a number of yea now, and one of the problems we face is 2% is not a very high mber, and yet it has be sufficient pace of growth to see a lot of jobs created, a lot of tightening in the labor which is good because we had so many people who were out of work after the financial crisis, it'h pu back to work. it's helped heal the labor market, and that's great, but the pace is not ideally what we would like to see. >> woodruff:ou mentioned the wages and job report today. b did show a nice increase in wages, but tkdrop is that wages have been very stagnant dforades. >> yes. >> woodruff: do you think now,

though, we could be seeing the start of steadily increasing wages fo americans? >> well, i do expect to see in a tight labor market over time that the pace of wage growth will inch up and i think if we look not just at the series that was in this morning's report that's pretty volatile, but a number of series on the part of workers, we're seeing some upwar upward movemt. wage growth is moderate but limited by productivity growth which is weak,o firms are not going to be willing -- or what they're willing to pay is constrained by how fthey see the productivity of their workers rising. and unfortunately, for quite some time no that's been pretty chloe, and it limits gains in real income. >> woodruff: do you think we're in the early stages of a

lo awaited climb in interest rates that's going to continue? >> well, it's hard tol t the economy is recovering, and we're seeing solid growth, and the federal reserve has been on a path of gradual rate increases and, if conditions continu as ohey have been, that process is likely continue and, as it does, we would expct long rates to move up. >> woodruff: the markets, they've jumped around this week, but overall we have seen a remarkable rise inar the mts since the recovery started nine years ago. >> yes. >>uff: former fed chairman alan greenspan said the arher day he's seeing a bubble in the stockt and the bond market. are you worried about bbles? >> so i don't want to label what we're seeing as a bubble, but i would say that asset valuations

generally are elevated, and this is aa charcterization that we've offered up, for example last summer in our monetary policy t,port, for the stock marke the ratio of price to earnings which is a measure valuation is near the high end of its historical range. and if we look at, for example, commercial real estate and other asse, we're seeing high valuations. >> woodruff: so should ordinary americans be worried about the markets? >> they should be careful and i would say diversified in their investments. i think what we look at is the likely resilience of the economy and the financial system, if there were to be a correction in market valuation an in that regard, we have a banking system that is much stronger and better capitalized and better able to withstand a shock than prior to the

financial crisis. so asset valuations could change. i'm certainly not predictin t tht would happen, but we couldn't rule that out. but i think the financial system would be resilient enough to absorb the >> woodruff: financial regulations. the president, a number of republicans have been very vocal and they've started to move, roll back, to weaken the regulations that were put in .lace after the financial collapse are there consequences to what they're doing? >> well, i area that i'm most familiar with in banking regulation, we put in place very strong improvements to makethe financial system more resilient. more and better quality capital which which is a buffer, if there are shocks, it erves to absorb losses and leave firms

able to lend to support the credit needs of the economy. but there are calls among somemb of congress for cutbacks in regulation that would be dangerou i think we all need to remember the financial crisis, the terrible toll it took on americans, the loss j, lost homes, lost retirement savings, and make sure that we he a financial nstem that will be subject to that kind ofga crisis for quite some time, that's farore resilient. >> woodruff: janet yellen, you have been the rst woman to hold the job of chair of the federal reserve. ha you felt additional pressure because of that, do you think? to have i felt proud been the first woman to hold a job. i know, when i go to international gatherings of finance ministers and central bank governors, there are not a

huge number of women around the table, and i would love to see that improve. i'm very impressed by the contribution that women are able to make at this level and every level, and i've tried to do good job to help show that women are able to perform in the most important, critical jobs. i think, re generally, it's distressing to see how few women have reached the highest levels in the kind of work that i do in economics busiess, finance. too few women, i think, are going into it -- into these fields at younger ages. ste number of college majors is ssingly low. meybe 30% of college economics majors are w. i would like to see that improve

because i thinit's a great field with many opportunities, and i thik most distressing, the higher you go up the ranks, the fewer women you see. and we're really trying to understand what causes that. part of it, i think, is the fficulty in achieving an appropriate work life balance and the demdsf jobs at high levels both in the private sector and in government. and i think it's importantor employers to think about ways to design jobs so that they have an appropriatwork life balance and support. >> woodruff: you were talkings to pdent trump about reappointment before he made the decision not to keep you on. aru became the first chair of the -- of the federal reserve board in modern history not to bede renominfter serving a full term. how disappointing was that?

well, i would have liked to serve an additional term, and i did make that clear. so i will say that i was disappointed not to be reappoted, but i have had the privilege and the honor of rving in very high positions in the federal reserve system and inernment more generally for quite a longime as vice o air, president of the san francid. i've really had a seat at the table through tumultuous times,h includin financial crisis and the recovery in its wake, and i'm very satisfied with the career that i've had. >> woodruff: let me sk you finally about how you grade yourself as chair of the feral reserve. you put a lot of emphasis on employment, on getting people into the workforce, keeping interest rates low. you famously said, very early on, we are going to at least keep filling the punchl b

until guests have all arrived. and some wereic skep when you said that. >> well, i'm n going to try to grade myself. i think that's for others to do. lock, when the economy -- look, when the economy is successful, it's becausehe workers and households in this economy, they get up and pull up their socks and go to work every day, and businesses are thinking about how to be successful, and it's the efforts of so many business people and workers, households in this economy that is responsible for the suess we're seeing. but we've tried to create financial conditions and interest rate environment and financial conditions more generally that are conducive to strong growth and ay recov from the terrible toll of the financial crisis. , when i see the unemployment rate decline to 4.1%, whichs

the lowest rate in 17 years, i feel very good abot the progress we've seen there. >> woodruff: janet yellen, serving your last day today as yoair of the federal reserve, thanvery much. >> thank you so much, judy. >> woodruff: a quick note: speaking of banking regulation, the fed announced a short time ago that it would take the unusual ep of restricting the size of banking giant wells fargo because of "widespread consumer abuses." in 2016, wells fargo employees had previously set up more than a million fake accounts to meet sales goals. the fed also said that it would replace four members of the bank's board of directors. >> woodruff: and now, to the analysis of shields and brooks.

s at's syndicated columnist mark shied "new york times" columnist david brooks. gentlemen, we're going to get to that memo, but i first want to ask you we were very privileged to have the only interview she did tay that aired, david, but it's very interesting to lock back at hera ten -- loo at her tenure. >> it's nice to see a normal person who isn't scream ago redu versusfight. it's a good reminder, people have their views and she had a more liberal view than her predecessors, but being a fed chairman like a lot of politics is about plans, expanding growth anmarkets while reducing inflation, so it's a problem and you try to find the rig balance for the moment. whatever your philosophy, you'rs presented withcific problem and you're trying to find balance. you're not driven by ideology or data, your best judgment. supreme court works that way, people i red and blue, but

they're just trying to do the n b well. that happensthe pure i don't care is i and we getls a e view of politics the way donald trump and nancy pelosi are screaming each other. >> woodruff: she's gettihing marks because of what she talked ability in emploshyment, an was very candid about the lack of women in her field. >> first, there is no moral parody between nancy pelosi and donald trump and david, i think, would like to withdraw that analogy or comarison. the fact is that janet yellen was refreshing. she brings a candor to it. she is an economist with a human passion for economic justice. i mean, she doesn't talk in abstractions and she's got a hell of a resume as she leaves. it's been impreive. i think david's right about her leadership and the fact that she was the first woman, certainly

as a s pione's a pretty strong example for more. >> woodruff: that we will see. i mean, she's succeeded by jay powell. he starts on monday. but let's go back now to our lead story, david, and that is that memo, that long-awaited memo finally released today by the house of representatives, republicans in the house. we see it. what do we make of it? w it the blockbuster we thought ld be? >> no, it's a minibuster. you know, it's not great that the f.b.i. apparently didn't tell the courts where their information came from, that it came from the steele dossier and that was funded by the democrat you would like to think as a part of a normal process, we have this information, this is how we got it, that seems how the system should work. but as something that's gog to derail the investigation or something that makes the f.b.i.i look parlarly bad, it really doesn't. av me, the main effect sit undercuts one tothe main trump narratives, and the main

trump narrative has been that this got starteceduse some mixture of f.b.i. partisans, obama-clinton people had this stle dossier and that launched this investigation. but what we learned in the last paragraph of thisemo is the investigation got launched, nothing to do with the steeler, dosst had to do with this conversation this guy george george ha -- george papadopoulos had with an australian in a bar. he blabbed this stuff about hillary clinton, about a month ago the australians went to the americans and said hey, what's e,ing on h and that was the beginning, so that underne the main narrative this investigation is premised on democratic partisan work. that's not true. >> woodruff: if that's the case, what did the republicans accomplish by getting this out there. >> they destroyed one of the last islan of non-strident partisanship in washington which had been the gang of eight. the gang of eight, judy, are the ur leaders of the congress, two in each party, and the four

ennking members and chairs of the intell committees. that has been historically a ratheremarkable abberation from the strident partisanship that has possessed our city, sadly, and that's now desoyed. the idea that this could not have been done in regular order, there were doubts about how the f.b.i. and their sources, they didn't question the substance, now they're going back to the source, you know, on steele, which really is sort of a reach. we've learned today that devin nunes, the author -- and i put that in quotes -- of this memo, because there are strong suggestions that he was not unaided in this effort, that the may have been collusion with those other places in government, that it's actually never en read the basic

material. >> woodruff: he said that in an interview. in fox news. he subcontcted that to tre gowdy, a colleague in the. house so i think it does nothing but damage. let's be very blunt. what it reveals more than anything else is that this president will do anything and leave any wreck inthis wake to avoid and to somehow stop what an authorized investigation by his administtion o russian influence in the last election. ?> woodruff: do you agree with th >> yeah. i mean, there are two acts ofe nunes' compl malpractice is not reading the underlying material. they can make tops. two people can read something. it seems to me, if this is the main thing your job, is spend a couple of days and read the stuff. second not reading e b.i. in to ask them questions. this is not complicated state

craft. it seems to me the basic you would do if you were trying to do something fair. but the premise has been i think for him and trump himself is there are no fair players here, no process to be respected here, no constitutional order that we live within. it's ju they're out to get me and i'm out to get them and trump has made that his m.o. for the last since this whole thing is goingn. i remain skeptic there's a lot of big scandal underlying here but donald trump sacting as if there is and every single real problem he's created, he's created for himself. >> woodruff: trey gowdy who did read the underlying material announced in's not runfor congress again, he served five terms or ten years, and one of the comments he made in the statement, i want serve in an institution where fairness is respecteg of course, ssting that's not the case in congress. >> he did also add today, judy, r had 100% confidence, after

this, ert mueller and his investigation. >> trey gowdy said that? .: >> woodry question is what the president and republicans have done undermine the mueller investigation? >> i think it was a way into mueller they obviously laid out is to get rodwhosensteihad been confirmed as deputy attorney general of the united states by a 92-6 vote, with such notorious conservatives as chuck schumer and dick durbin and chris van hallen all voting for him and carmela harris. but to get him replaced ihon ng that somehow rachel brand who uculdeed him. >> woodruff: number three in the justice department. >> wse reputation for integrity and experience and solid legal credentials, she's a clerk of the superior courts very professional and respected on both sides, that she would somehow bow to donald trump and

get rid of bob mueller. as we learned from david's paper's reporting of don mhan, the white house counsel's refusal to go along with the firing of bob mueller, that the president is trying to do thise through ck door, i think this failed as a political means. >> woodruff: but we don't know at this point what the president will do, whetherry to get rid of rosenstein, that's been all the speculation. >> and he certaly left the door open. i guess what strikes me is we heard from the republican om texas earlier, very reasonable guy, trying just to do oversight, his rhetoric was na000 miles away from what trump's rhetoric has been, and 1,000 miles away from what a lot of the trump or bit als been. the precursor was this memo that would be scandal also worse than watergate, that this would be something so devastating. there'just a detachment from reality, no matter what side you take onhis, what's in this memo. that is sort of a way of raising

the arts feand delegitimizing the whole process, because a lot of people n't read these four pages. they will read what donald trum. sa it's like a misreporting that sort of undermines the whole proces >> woodruff: speaking of misreporting, i should say speaking of what the president said, seems like 100 years ago, mark, but the president did give a state of the union address this week. what endures from that? we've only got about a minute and a half but i don't want tobo leav of you without giving you a chance to talk about that again. >> the president has had two good moments in the polls, when he got a bump. when he talked seemingly normal in the state of the union and s oke with the truth on several

occasions he g lift but normal doesn't last. >> he's doin well inhe polls. he's got a bump in the republican party. citing the heroes in the balcony was positive. it gave him an uplift and prevented him from talking about himself more.dn i like the emotional mood but you have to regard it as a success for trump. >> woodruff: does it lay out an agenda for the next year. >> even his party says it did not. >> when he talked ant the heros, it's one of the few times when donald ump didn't talk about donald trump. what he failed to mention is virtually all the hos cited other than the 12-year-old and the parents of the slain ildren were public employees, and it would be nice to honor and salute public employees, just the fac that ty did accept government service as a high calling. >> woodruff: good note to end on. mark shields, david brooks,

thank you both. n woodruff: on the newshour online rig: as the new england patriots lece off against the philadelphia ethis sunday at the super bowl, paul solman explores an economic explanation for why the patriots have been so successful over the years. that and more is on our website, tow.pbs.org/newshour. lateght on "washington week," robert costa will have mo on the release of the house inlligence committee memo, and how it could have long-lasting repercussions on u.s. institions. tomorrow, on pbs newshour weekend, the trade battle between the united states and canada over milk. that's tomorrow night on pbs newshour weekend. and we will be back, right here, with a look at what can be done to stop houston, texas from repeatedly flooding. that's the newshour for tonight. i'm judy woodruff.

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what do these cng pages reveal mb about divided loyalties during the american revolution? i'm just amazeng by the whole thi. tukufu: what role did these records play in the sculpting of america's fixation with fitness? man on record: ready, begin. gwendolyn: and, in an encore presentation, was work bclmajor artists, uding andy warhol, smuggled to the moon? man: "a.o.k., all systems are go." wvis costello: ♪atchin' the detectives ♪ i get so angry rt when the teardrops sta ♪ ♪ but he can't be wounded 'cause he's got no heart♪ ♪ watchin' the detective ♪ it's just like watchin' theetectives ♪ ♪ watchin' the detectives