captioning sponsored by macneil/lehrer productions >> lehrer: good evening. i'm jim lehrer. there was a governmentrackdown today in tehran against anti-government protesters. >> woodruff: and i'm judy woodruff. on the "newshour" tonight, the demonstrations came on the same day hundreds of thousands of government supporters marked the 31st anniversary of the islamic republic. >> lehrer: an interview with christina romer, head of the president's council of economic advisors about the latest jobs forecast. >> woodruff: paul solman begins a two-part look at wall street's goldman sachs. profitable again after a government bailout.

>> i'm not saying that they're necessarily doing my god's work, but as far as they're concerned, >> lehrer: ray suarez reports on digging out and cleaning up after the record snowfall >> the next available flight for me to leave is the 16th, which is next tuesday. >> woodruff: and we'll look at how those delays and cancellations have affected airports and airlines across the country. >> lehrer: that's all ahead on tonight's "pbs newshour." major funding for the pbs newshour has been provided by: >> every business day, bank of america lends nearly $3 billion to individuals, institutions, schools, organizations and businesses in every corner of the econy. america-- growing stronger everyday.

when someone you count on is not responsive, bad things could happen. grant thornton believes it's important to be responsive, through direct client access to our partners. grant thornton. this is the engine that connects zero emission technologies to breathing a little easier, while taking 4.6 million truckloads off the road every year. bnsf, the engine that connects us. >> chevron. this is the power of human energy. pacific life-- the power to help you succeed. and by the alfred p. sloan foundation. supporting science, technology, and improved economic performance and financial literacy in the 21st century. and with the ongoing support of these institutions and foundations.

and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. >> lehrer: government supporters massed in tehran today. as the iranian regime worked to stop opposition forces from protesting. margaret warner has our story. >> warner: this was the view at freedom square in tehran today-- hundreds of thousands of iranians massing to mark the anniversary of the islamic revolution, 31 years ago. government supporters chanted the traditional "death to israel" and "death to america" and hoisted effigies of president obama. opponents of the government tried to stage their own rallies. but their numbers appeared small, compared with the huge protests after last year's disputed presidential election.

amateur video showed protesters being chased by the pro- government basij militia, and opposition web sites said many were beaten and tear gassed. the web sites said mehdi karroubi, one of last year's opposition candidates, was pepper-sprayed. former president mohammad khatami was said to have been attacked, and his son and daughter-in-law briefly arrested. ironically, she is the granddaughter of the islamic republic's founder ayatollah ruhollah khomeini. and karroubi and khatami were part of the 1979 revolution that deposed the shah. but in the years since khomeini's death, growing divisions have appeared and today, protesters tore down pictures of the late leader. they were kept away from president mahmoud ahmadinejad's speech. he defiantly declared iran is now a nuclear state and has begun enriching uranium at 20% purity, a significantly higher level than before.

>> ( translated ): in natanz, we are producing and stockpiling several kilos of this everyday and god willing, in the near future daily production will be tripled. >> warner: just two days ago, technicians at the natanz nuclear facility switched on new centrifuges. to provide the capacity for 20% enrichment. that's well short of the 90% mark required for modern warheads, but it still defied international calls to halt the nuclear program. at today's rally, president ahmadinejad again declared iran could, but does not plan to build a bomb. >> ( translated ): the iranian nation is brave enough that if one day we wanted to build nuclear bombs, we would announce it publicly without being afraid of you, the west. >> warner: those claims conflicted with a "washington post" report today that two scientific groups believe iran is "experiencing surprising setbacks in its efforts to enrich uranium." white house press secretary robert gibbs said ahmadinejad's latest nuclear claim is not

believable. and he took aim at the tactics used to suppress iranians' freedom of expression on the internet and in the streets. >> a lot of media-- google and other internet services-- have been basically unplugged. i think the president was very clear in his speech in oslo that we stand by the universal rights of iranians to express themselves freely and to do so without intimidation or violence. >> warner: yesterday, the u.s. treasury department announced enhanced sanctions against a general in the elite "revolutionary guard" and four construction firms he runs. they're accused of funneling money into iran's weapons programs. president obama said tuesday the u.s. is moving to get other major powers to isolate the iranian regime as well. >> what we are going to be working on over the next several weeks is developing a

significant regime of sanctions that will indicate to them how isolated they are from the international community as a whole. >> warner: but in tehran today, the iranian leadership gave every impression that they think they're riding high. for more on today's developments-- political and nuclear-- we go to reza aslan, an iranian born author and journalist now living in the u.s. he's a professor of creative writing at the university of california, riverside. flynt leverett, who has held posts at the state department, national security council staff and c.i.a. he's now with the new america foundation, a washington think tank, and teaches at penn state university. and david albright, a former u.n. nuclear weapons inspector. he's now president of the institute for science and international security. it produced one of the reports on iran's nuclear program cited in today's "washington post."

welcome gentlemen to all of you. flynt leverett, beginning with you. how do you read what you've heard and seenn terms of the video what happened today on the streets in iran? >> i think it's further evidence for what i believe has been evidence since last june. namely that this movement, the green movement, the opposition, however you describe it, that this movement does not pose a threat to the fundamental stability of the islamic republic. there is no revolution afoot in iran, and the social base of this movement is not growing, it is, in fact, shrinking. i don't believe this movement ever had majority support in iran, but whatever its height of support was in the immediate aftermath of last june's presidential election, that support base has contracted very significantly. >> warner: reza azlan, do you read it that way? that today's suggestion is that the opposition movement is losing steam?

>> not at all. on the contrary. if you look at what the government does that it usually does, which is bus in people in the rural villages, give them a free lunch and a few dollars and some flags and placards, this is pretty standards. so i don't think the numbers issue is really the defining aspect of the strength or the weakness of the so-called green movement, but i do think it's important that because of the fact that this movement has lasted much longer than anyone really thought, it's becoming not just larger but, more importantly, it's becoming more diverse. we're seeing business leaders, merchants starting to join. now as a result of ahmadinejad's deliberate attempt to distance himself from the religious leaders, saying quite clear they the supreme leader shouldn't actually run iran, you're getting more and more of the religious classes who are beginning to move towards the protest movement. and i think even the conservative politicians, who are afraid of the militarization

politics are beginning to join this movement. so it's not going anywhere. >> warner: what do you say to that flynt lev sflet there is the view that, in fact the regime just managed to successfully suppress what was going to happen today by controlling all the electronic communication, let's say. >> look, let's compare it to when there was a real revolution in iran in 1978 and '72 that overthrew the shah. in the 12 months preceding the shah's departure from iran and the founding of the islamic republic, iranian security forces and military force s gunned down literally tens of thousands of protestors. now, in the case of iran today, since the june 12, 2009 presidential election , there have been clashes between demonstrators and security forces. a few more than a hundred people have been killed in those clashes. every death is a tragedy, but this is not mien men square. this is... when you look at what the government could in theory do, this is actually a

relatively restrained response in that context and under that condition, this movement has actually shrunk. >> warner: reza azlan, i want to get back to you in just a minute but let me bring in david albright. mr. albright, meanwhile, on the nuclear front, what do you make of ahmadinejad's boast that they have achieved this 20% purity enrichment level. particularly after your study found they were having problems. >> well, our study found that they are certainly having problems with enriching. they're not enriching nearly at the level that they would have expected to based on their own analysis . unfortunately, they're doing it well enough. and i think if iran decided to build nuclear weapons now, they could produce weapon-grade uranium for those weapons. it may take longer. a lot of centrifuges may fail in the process but i think they could... that was the essential finding of our study. they could succeed. >> warner: so reza azlan, what

did you make of ahmadinejad's post? i mean political terms. >> well, understand that this is iran's version of the fourth of july. so the job of the president is to make these kinds of statements to tout the successes of the revolution, the things that iranians can be proud of. but we have to recognize that the statement that iran is going to start enriching uranium at 20%, that it's going to build ten more enrichment plants in the next year are, frankly, laughable. it took iran years to build its one sight and they can barely keep that up and running. so this is not just for domestic consumption but more importantly it's designed to get a response from the west because if there's one thing that all people in iran, despite their politics or piety, in the green movement or pro-government agree on is iran's enalienable right to enrich uranium. >> warner: do you agree that

it's laughable, david albright? >> parts of it are. the ten enrichment plants are laughable. you have to interpret that a little differently. unfortunately iran does build secret sites and has a long history and then they get caught and they become public sites. >> warner: like the one at com. >> right. so the ten centrifuges are a smokescreen. they want to build another secret sight. >> warner: do you think 20% is an idle boast? even the white house said they didn't sound credible. >> it's very tiny amounts that they've produce sod far so they're going to produce it slow lift we would expect they produce it more slowly than what they claim. they're going to run into problems, they'll probably need to bring in more cascades of centrifuges to replace the one they're using now so i wouldn't think it lo l go slower than they say so they can do it. >> warner: flynt leverett, put these things together. the obama administration has to proceed on both these tracks. on the one hand, the nuclear front.

how to stop this program in its tracks and on the other hand, we see the administration speaking out more enthusiastically or forcefully on behalf of the pro-democracy movement. how do today's developments affect the way the administration out to balance those? >> i think the obama administration goes down a very dangerous path if it lets support for green movement take over its iran policy. the obama administration, the united states, has very, very important objectives vis-a-vis iran with the nuclear issue, with iraq and afghanistan, with other regional issues. the united states needs to be doing serious strategic business with the islamic republic as it is and not as some might wish it to be. and that's what the obama administration needs to be focused on and not give into what is, frankly, an illusion that iranian domestic politics are going to produce some government that we are going to

find much, much easier to deal with. >> warner: reza azlan, do you share that view that whether it's today's demonstrations or what's happened even in the past eight months don't suggest that this 31-year-old regime is going away any time soon. >> nobody is talking about regime change or the collapse of the government. what we are talking about, however, is an incredibly significant movement, the most significant movement, popular movement, in iran since the '72 revolution, that could conceivably create a government that's more open, more... less internationally isolated, that is more democratic than it is today. and i think that there is a fear, a delicate balance here that obama has to be careful of that his fear of the nuclear situation in iran doesn't overshadow or derail what could be a far more significant aspect which is an thern, if not more

friendly to the united states, is more integrated to the international community. >> warner: and david albright, what's the latest assessment of the actual timeline by which iran would have enriched enough uranium and be able to produce a nuclear weapon if it chose to. >> i think they're delayed. i don't think they're going to be able to do... build a bomb in 2010. after that, i mean, it really depends on what they're doing in secret right now. 2011, 2012, if they make the decision they could succeed and they could succeed relatively quickly. and unfortunately, they've also been working on nuclear weapons themselves, deliverable nuclear weapons. >> warner: you mean the webs or the delivery vehicles? >> the weapons that would go on the delivery vehicles, namely missile. it's a challenge to put a nuclear warhead on a missile, but we think... and, again, i think this is shared by european intellence agencies, increasingly here in the united states, they have resumed work on nuclear weapons. >> warner: so does that mean flynt leverett that the

administration has to really... it's already said it's pushing as hard as it can for more intensified sanctions against iran. does it, in your view, even mick that more urgent? >> no, i think sanctions are a dead end. they won't give us strategic leverage over iranian decision making. i think it will prove counterproductive to what needs to be done which is a kind of nixon-to-china strategic opening with the islamic republic in which u.s./iranian relations are fundamentally realigned and the major bilateral differences between two countries are put in a strategic framework. >> warner: let me give reza azlan a quick opportunity to respond. what impact would that have on the opposition movement? >> i think the way obama is dealing with the sanctions regime, targeting businesses run by the revolutionary gord which is, by the way, far more than intelligence military apparatu it is a mafia. it controls about $100 billion-- with a b-- of iran's annual budget.

and the attempt to kind of push back against that as a way of helping the regular businessman, as the undersecretary of state said, is probably a good move at this point. >> warner:. >> rodriguez:. >> rodriguez:. >> rodriguez:, thank you so much we have to leave it there. and still to come on the "newshour": an economic forecast from white house advisor christina romer; profits for investment bank goldman sachs and the fallout after the snow storm. >> lehrer: but first, the other news of the day. here's hari sreenivasan in our newsroom. >> sreenivasan: former president bill clinton underwent a procedure to have two stents placed in one of his coronary arteries today. a statement from his press office reported he was hospitalized in new york after feeling discomfort in his chest. the statement went on to say he is now in good spirits and will continue to focus on the work of his foundation and haiti's earthquake relief efforts. he was assigned to coordinate the international response to the crisis there. president clinton is 63 years old. he had quadruple heart bypass

surgery in 2004. european union leaders have agreed to provide aid to help greece deal with its debt crisis. they began discussing steps today at an economic summit in brussels. we have a report from lucy manning of "independent television news." >> reporter: the cry was one for all and all for one, the promise that those in the euro would step in pro-to-protect anyone else struggling. >> your area member states will take determined and coordinated action if needed to safeguard financial stability there the euro area as a whole. the greek government has not requested any financial support. >> reporter: but the deal didn't melt the worries of the moneymen who weren't overly impressed, wanting more than just strong words. >> the worst thing for markets is uncertainty and that's what we're seeing at the moment. we don't really know what the details of the plan will be, any sort of assistance in the european union, whether it will

beñi in form of loans or whether it will be a full scale bailout. and, of course, this will be at huge cost as well. so there are a number of questions that need to be answered. >> reporter: the taxis ground to a halt in greece in protest at the rising prices. europe's leaders are demanding they put the hand brake on spending and borrowing that's out of control. this was, as the prime minister kept saying, a euro area issue. >> i think the issue today what the euro area is part of the euro currency area, its debt is denominated in euros. >> reporter: greece and its leaders still at the center of the euro crisis, no one's sure if the strong words will head off what could be a greek tragedy. >> sreenivasan: the greek prime minister insisted today his country will not be needing help and has not asked for any. wall street took heart from the news out of brussels. the dow jones industrial average gained more than 105 points to close at 10,144. the nasdaq rose 29 points to close at 2177. police were targeted for a second straight day in northwest

pakistan. a pair of suicide bombers attacked a police complex near the afghan border, killing 15 people and wounding up to 30. the first blast struck outside the entrance gate. minutes later, the second went off as rescuers were responding to the first attack. president obama will meet with the dalai lama-- the exiled spiritual leader of tibet-- next thursday. a presidential spokesman announced the white house session today. china had warned against any such meeting. it accuses the dalai lama of pushing for tibetan independence. the chinese have also complained sharply about u.s. proposals to sell more weapons to taiwan. ten american missionaries detained in haiti may be going home. a judge there recommended today they be released and not face trial on charges of child kidnapping. most of the americans are from an idaho baptist group. they were arrested in late january while trying to take 33 children-- ages 2 to 12-- to an orphanage in the dominican republic. some of the children had living parents. but some of the parents have

since said they willingly handed over their sons and daughters. those are some of the day's main stories. i'll be back at the end of the program with a preview of what you'll find tonight on the "newshour's" web site. but for now, back to judy. >> woodruff: now the economy, the white house today released its annual report to congress on the economy, predicting an average of 95,000 jobs will be created each month this year. but the jobless rate could go up to 10% again as discouraged workers reenter the market. this report comes as the u.s. labor department reported initial claims for unemployment benefits dropped last week by 43,000 to a seasonably adjusted 440,000. for more on this, we're joined by christina romer, chair of the president's council of economic advisors. dr. romer, thank you for talking with us. >> great to be with you. >> tell us first, what is the main message in this economic report?

>> you know i think the main message in the report is three-fold, someone to document the tremendous challenges that this president and this administration and this whole economy confronted over the last year and more generally. it's to talk about the policies that have been put in place and here i think the biggest message when you bring them all together it's an incredible body of action that even obviously what we've done to try to get out of the recession and heal the financial markets, heal the housing market. but it goes beyond that to things that we've already done in health care, like reauthorizing the children's health insurance program to investing in innovation and education. and then, of course, the third part is the president's agenda going forward and, again, i think it's very helpful to bring it together in one place because you see what a... i think what a lovely coherent whole it is and how it really is all aimed at helping average americans do better both right now and into the future.

>> woodruff: speaking of those challenges, as soon as the report was made public, republican congressional leaders criticized it. the house g.o.p. whip eric cantor said "this report is full of blame for policies of the past." he said "instead of praising yourself" he said the administration should have put on greater focus on small business and on smart solutions to reduce uncertainty. >> well, the first thing to say is we're just presenting the facts so it's very much talking about anyone that looks at this economy knows that there are real economic challenges and that they were very large last january and continued to be substantial. the other thing is this volume is full of discussion, for example, of our small business policy, because that's something where the president working with congress has done a lot of important actions and where we have many more things than we're working with congress to do. it's a very honest appraisal of

what we've already done, how well it's worked and the things that remain to be done. >> well, there is that good report that came out of the labor department today on unemployment claims dropping last week. but you forecast that unemployment overall is not going to be much below 9% or 10% this year. what's holding employers back from hiring? >> that's a very good question. certainly you are right about the unemployment insurance claims. we have to be careful because they jump around from week to week. seeing them go down again is a step in the right direction. in terms of what you can do to get employers hiring, we're at an important step in the recovery. we're seeing g.d.p. growing again, we're seeing firms start to higher temporary workers again. productivity is off the charts. they're producing more with the same or fewer workers. so we're trying to think of what policies will get them over that next step.

i've been a big proponent of the president's small wages tax credit. that's the uniquely well-suited poll city to say you're probably going to be hiring a year from now, six months from now. if we give you a tax credit might you bring it forward? i think it's a little bit like the cash for clunkers program or the first time home buyers credit. trying to bring forwhard we know employers are going to do to when we know people need the job. the. >> woodruff: how much is the white house wed to that tax credit proposal versus today there was a bipartisan jobs bill that was introduced on the hill, republican charles grassley, democrat max baucus. basically they're talking about tax breaks for companies that hire unemployed workers. is that something that would make a difference in your forecast? >> it's certainly something we could support. we're anxious to work with both houses of congress to get the best kind of hiring credit. our forecast, the one reported both in the budgets and here in the economic report of the

president was done way back in november before sort of the the specifics of any jobs package was talked about. so i do... so it has built into it some kind of jobs initiatives but perhaps not the specifics of things like a jobs credit that we think could be particularly effective. >> you... so you're saying something like these two senators are proposing could work. >> i think it absolutely could. again, i think this is... we should think of this as a first step. we know that we're going to need to be working with the house to get a bill. we also know that there will probably be multiple steps in this. that, you know, the bill as it's coming out of the senate, there are more things that we think could be very helpful, for example, in energy retro fit or more programs for small business lending. we think all of that is really important so we're going to keep working with congress but we're always happy to see movement,

especially bipartisan movement. that's incredibly important. >> woodruff: were you surprised that bloomberg news reported a majority of the standard & poor 500 stock index companies are holding on the almost $1.2 trillion in cash at the same time they're cutting spending. in other words, they're not letting that money out hiring people. >> i think it does go to what's unusual about this recession. we don't have a lot of experience with recessions caused by financial crises. and we really haven't seen that since the great depression. and we do think that those have some different impacts and one is that firms and financial institutions and even households have just been through a wrenching period and it does tend to create caution and that's part of what you're seeing with the holding big cash reserves. i think part of that is the that natural healing is just going to happen as the economy does better. i think people will start to get their sea legs again but we're

always looking for what can we do to help the economy b stronger to give them the incentives to put their caution aside a little bit and start hiring people. and i think that's going to be an important step. >> woodruff: all right we are going to leave it there. christina romer, chair of the president's council of economic advisors. thanks. >> thank you. >> lehrer: now, a second economy story. "newshour" economics correspondent paul solman begins a two-part look at the investment bank, goldman sachs. tonight, how it makes money. the company reported a record $13.4 billion dollar profit last year. it's part of paul's reporting: "making sense of financial news." >> do you solemnly swear or affirm under the penalty of perjury. >> reporter: kicking off last months inaugural hearing of president obama's financial crisis inquiry commission, c.e.o.s of the four biggest banks. in the hottest of the hot seats, lloyd blankfein of goldman sachs. >> in the end of the day-- and i'm going to press you on this-- it seems to me that you survived

with extraordinary government assistance. >> we never anticipated the government help. we weren't relying on those mechanisms. >> reporter: and just a year later, venerable goldman sachs, beneficiary of bailout largesse, is the most profitable firm in wall street history. so, how did they do it? lloyd blankfein told the "times of london," "we're very important. we help companies to grow by helping them to raise capital," and that he was just a banker doing god's work. the interview seemed to play better as comedy than p.r. >> despite collecting the highest salary on wall street at $68 million a year, blankfein never forgets that he's a, quote, blue collar guy. i believe he is referring to the sapphire choker he wears on casual fridays. ( laughter ) >> reporter: now, blankfein took only a $9 million bonus for

2009, much less than in recent years, despite record profits. as for a defense of finance, he elaborated under oath. >> what we do a lot for the economy isn't that visible as an investment bank. we help allocate capital. we raise. we do... we put companies together. we launch new businesses. >> reporter: so that's how goldman sachs is making money as a traditional investment bank. well, not according to nomi prins, a former goldman sachs trading strategist-- now a senior fellow at demos, a progressive think tank. >> the classical investment banking function is a very small portion of their revenues. i think it's about 10% or so. so if he's doing god's work, he's only doing it at 10% capacity. >> reporter: most of the rest, says prins, is so-called "proprietary" trading, for the firms own profit, rather than its clients. >> they're a trading house. they can talk about being an

investment bank and doing gods work and helping raise financing for companies and all of that, but in the scheme of things they do very little of that. >> reporter: another longtime wall st. insider, from the other side of the political spectrum, agrees, though he doesn't disapprove. >> i think first you have to admit they are very smart, they are very capable and they have a huge franchise in the global capital markets. >> reporter: david stockman, president reagans budget director, went to wall street in the mid-'80s. >> take their results that just came out in 2009. they had $45 billion of revenue of which $35 billion was from equity and fixed income trading and commodities and currencies. now that's 75% of their revenue was basically from trading. >> reporter: so when a republican friend of mine who used to be in the treasury department says that goldman sachs is a hedge fund masquerading as a bank, that's true? >> absolutely true. >> reporter: and you could look it up, since goldman's financial filings are public records. only a tenth of its revenues

come from investment banking, more than three fourths from trading for its own account. and while the firm declined any interviews, if it's subordinating the god's work of investment banking to making money on proprietary trading-- well, says jeff macke, who's run a hedge fund of his own, so what? >> goldman sachs analyzes their investments as carefully as anyone. right now, they're saying proprietary trading is better business for them. >> reporter: but with all due respect that is not god's work! >> listen, i'm not saying that they're necessarily doing my god's work, but as far as they're concerned they're doing financial god's work. you can argue whether or not they should be doing this but what they really should be doing is making money for the shareholders. that's their job, it's not theirs to judge why or how they're going about it. they need to make bucks for shareholders. >> reporter: but consider how they're making those bucks, says nomi prins. on knowledge that, as when she was there, comes in with every trade a client asks goldman to make.

>> and just by evidence from the profits they make and where they make them, what divisions they make them in, they're not sitting on that knowledge. they are trading on that knowledge. >> reporter: so they know somebody is going to buy a commodity or currency so they either buy that commodity or currency first or a commodity and currency very much like it. >> any information that you get, particularly if it's going to move the markets a lot, is going to filter into the trading positions you take. >> reporter: but isn't this "front running"-- trading ahead of your clients to profit from the price changes that will come from the clients trades for your own firm's benefit? and isn't that, strictly speaking, illegal? >> the long and ancient secret of wall street is they've always been front running their clients! in other words, when you're in the customer trading business and then you're in the proprietary business, which trade are you making first? i don't know and if it's in

milliseconds, how's anybody going to figure it out? so i don't know if you ought to get all exercised on that or not but the fact they make all this money in proprietary trading is clearly part and parcel of being a massive player and dealer in the markets for both customer trades and house trades. >> reporter: so goldman might insist that, technically, it isn't front running. or that the charge could never be proved. so let's move to another: how about the extravagantly profitable bets, for its own account, that "goldmine sachs" as some call it placed with insurer a.i.g., against the very products, "mortgage-backed securities"-- that the firm was trading to customers? "mcclatchy" reporter greg gordon was the first to uncover the practice. >> in 2006, goldman began in different ways to make bets that the housing market would turn south.

when you're selling $40 billion in securities, u.s. registered securities to investors here and abroad in 2006 and 2007, and at the same time you're secretly betting that these securities are going to go south and are going to lose value, well that raises a big question. >> reporter: lloyd blankfein's response? >> what we do is risk management. because we had this risk, because we were accumulating positions which, by the way, we acquired from clients who want to sell them to us, we have to go out ourselves and provide and source the other side of the transactions so that we can manage our risk. these are all exercises in risk management. >> well, i'm just going to be blunt with you. it sounds to me a little bit like selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars, pension funds which have the life savings of police officers, teachers. >> these are the professional

investors who want this exposure. >> reporter: professional, sophisticated investors, who should have known what they were getting into with mortgage backed securities, a theme blankfein hit again and again. >> a sophisticated investor. the exposure that these professional investors are seeking. >> again the most sophisticated investors who sought that exposure. >> reporter: and look, says investment advisor jeff macke, even if goldman's people are more sophisticated than their clients, blankfein's still right. >> caveat emptor. goldman sachs didn't get to become goldman sachs because they're bad traders. of course, they know more than the other guys, they're packaging the goods, it's their book, they know more about it than anyone. and if they're selling it, well you probably don't want to be a buyer. i want to buy things from people who i know more than, not people who are creating these instruments for me to buy. >> reporter: but pension funds don't bring in the math whizzes, the quants, the people that goldman sachs has, they're no match for goldman sachs salespeople or traders.

>> generally speaking they aren't. so what is a pension fund doing involved in these securities? >> reporter: even if you think macke and blankfein provide a reasoned defense, however, one huge final question remains: has the firm been making record profits with your and my money? we'll look at that next time. >> woodruff: and to the record- breaking snow storm-- ray suarez has the clean-up story. >> suarez: sunrise brought the scale of the big dig into stark, snowy relief. from washington, through baltimore, philadelphia and into new york city, crews labored to move mountains. they also worked to bring heat and light back for more than 100,000 households from virginia to new jersey that lost power during yesterday's coast-coating blizzard up and down the east coast-- except for new york city-- schools were closed again today,

and the federal government was shut down for an unprecedented fourth straight day as the capital dug out from its record breaking snow. with too much snow, and not enough machines to move it, the district of columbia is bringing in hundreds of pieces of equipment-- plows, trucks, from nearby states. adrian fenty is mayor of the district of columbia. >> so today, all of this type of equipment will be out in the tight, narrow, residential neighborhoods on the hilly streets, digging things up. what we hope is to be able to get people out of their neighborhoods by tomorrow and get them back to work. >> suarez: all forms of travel along the east coast remained difficult-- if not downright dangerous-- with ripple effects across the nation. airports tried to get back up and flying, to an extent, in the face of up to 6,000 canceled flights this week, by some estimates. washington's three airports re- opened with limited service.

philadelphia international resumed some flights. and new york's three major airports-- newark, jfk and laguardia-- were all trying to get back to normal. but even today, 2,000 flights were cancelled nationwide. >> they said the next available flight for me to leave is the 16th. >> suarez: major highways were still in bad shape, not to mention many local and neighborhood routes. crews in maryland had to rescue stranded drivers from eight-foot drifts. governor martin o'malley >> suarez: and the national guard was called out in several states for support. this pennsylvania unit most recently served in iraq >> a crown vic in two feet of snow doesn't work. so what we do is we come out, we give emergency personnel the extra mobility necessary to get out and do their job. >> suarez: and mass transit was affected as well. amtrak limited service and regional bus and train service was largely parked. the fire chief of montgomery county maryland said people

wanting to get back to routines right away can make things complicated. for one thing, pedestrians are sharing the roadways with cars and trucks. >> the next 48 hours after the storm becomes even more challenging, because people venture out. and things begin to occur. you have pedestrian issues, you have traffic issues. >> suarez: thousands of homes have precariously dangling ice, and awnings, gutters, and roofs weighed down by accumulated snow and ice. and plenty of houses can't be lived in at all when the temperatures in the 20s. the collapse of a massive old tree took down power lines to a small washington side street. utility workers couldn't start restoring electricity until the tree is gone. renee workman and her family toughed it out overnight as the house cooled down. >> the middle wasn't as cold as the outside. it was bad getting up. we're getting out of here now. it's freezing now. it's colder now

>> suarez: now she's packing up and heading to an aunt's house until she has heat again. she's been told it might be another day or two. ike leggett is the county executive of montgomery county, maryland. as glad as he is that the sun is finally shining, he said the two big storms are costing his government serious money. >> normally, we get six to 12 inches, we can recover in 36 hours. this takes longer because in some communities you have to pick it up. you simply can't push aside, have to pick up. >> suarez: the county budgets up to $15 million dollars in a normal winter for snow operations-- sand, salt, overtime. just this past week will cost what a whole winter does. and the county loses on the revenue side as well as closed

businesses aren't collecting sales tax. states are waiting for federal disaster declarations to help them pay for emergency recovery. >> lehrer: more now, specifically on the storm's impact on air travel. alan levin covers aviation for "usa today." alan, welcome. how widespread is the disruption in airline travel right now? >> well, we're coming out of it right now. but what we've seen over the past week is truly extraordinary. i just got numbers a short while ago indicating that from friday through yesterday the airlines canceled 13,000 flights and from what i'm hearing from people in the industry, they've never seen those kind of cancellations due to weather ever. >> lehrer: well, explain where... how... there's a ripple affect, is there not? it wasn't just on the east coast.

it was primarily on the east coast but explain the ripples from a storm like that as it affects the airlines. >> well, what happens there this case is, you know, as you just reported, places like philadelphia, laguardia in new york, they're operating flights now, but the airlines have this huge backlog of passenger s who were on canceled flights who need to get where they're going. by the way, they estimate on those 13,000 flights that that's approximate ly one million passengers. so that's a lot of people to accommodate. you have very few open seat s available and so the airlines are going to be struggling for at least into next week to try to accommodate all those people. >> like washington, philadelphia new york, they've moved the airplanes out ahead of the storm did they not? and canceled a lot of flights before the first flake of snow came down.

explain that process. why do they do that? >> you know, airlines make a cal chralted decision that it is better to move everything out of harm's way and just give up, essentially, for one day or one and a half days so that it will be... they can recover faster when the storm ends. it works. you know, it... when you have these disruptions in the summertime that are less predictable, when you get a big thunderstorm that hits new york or something like that, then you end up with planes in the wrong places, you have crews, pilots, who by law can't work beyond certain number of hours and it can be much more chaotic to try to get back to speed. but i also think there's another factor at work here, which is

driving this high number of cancellations, and that is many of your listeners remember... your viewers, that the airlines have taken a lot of criticism in the past few years for stranding people on the tarmacs. and the government just a month or two ago announced that starting in april is going to fine airlines large amounts of money if they strand passenger s. i've been told by folks that these cancellations were higher than they've seen in previous similar storms and you have to think that at least part of what's going on here is airlines calculating that they'd rather deep planes on the ground than risk having them stuck out in the snow with passengers on board. >> lehrer: what do they... as a

practical matter, give us an example where an airline actually puts its airplanes where the snow is falling. where do they fly them to and how do they get them back and how do they put it all back together again? >> i'm told it's quite an act . for example, just finding a place to put the airplane can be tricky. they have these elaborate conference calls and they'll call their station chiefs all around the country and say "do you have space on the tarmac for a couple of planes and then they'll send plane "a" and "b" to that spot. but of course you don't want to fly them across country to los angeles or something like that. so they're scrambling like crazy to find places to put these planes. but it's not just that. it's an enormous orchestration going on. they've got to locate all their pilots and, as i say, pilots have pretty strict rules

governing how many hours a day they can work. so you've got to find pilots who are legal to work, flight attendants. you've got to put them... figure out how to get those people who-to-where the planes are. another issue getting your employees to work. here in d.c., it's been a real struggle with some n some cases the subway not running and you've got to get hotels for your workers at the airport and the folks at the airline who sort of manage this thing really earn their money after a week like this. >> lehrer: is there any way alan finally, to guess how long it's going to be put back together and everything is going to be working the way it's supposed to be working at this time? >> well, you know, i just talked to someone at newark tower and he said theye running a more

or less normal operation now. but the big question is how long will it take to reaccommodate all these passengers who the, you know, have missed flights who are stranded. i talked to a guy yesterday who had tried to leave cancun, mexico, on saturday. he made it as far as fort lauderdale and he was crossing his fingers hoping he could get back to washington, d.c. today. so it's going to be at least into next week before those people get to where they're going. >> lehrer: okay. alan levin, thank you very much. >> oh, thank you. >> woodruff: finally tonight, a celebration of music from the civil rights era. earlier this week, president and mrs. obama began this year's music series at the white house. first up, a concert in honor of black history month with some well known performers. it was held in the east room. here is a sample.

♪ ain't gonna let nobody turn me round, turn me round ♪ turn me round ♪ ain't gonna let nobody turn me round, i'm gonna keep on walking ♪ keep on talking marching up to freedom land ♪ ♪ come writers and critics who prophesize with your pens ♪ keep your eyes wide but don't speak too soon ♪ and there's no telling who is speaking for the loser now will delay to win ♪ for the times they are

a-changing ♪ ♪ keep on walk ing, hold your head up high ♪ lay your dreams right up to the sky ♪ sing your greatest song and you'll keep growing, growing on ♪ take it from me someday you know, hey, it won't be long ♪ take it, take it from me someday we'll all be free ♪ i'm gonna say it again, just

wait and see ♪ someday we'll all be free just wait and see ♪ we'll all be free ♪ ♪ free at last ♪ one day one daily work along ♪ thank god almighty i'm free at lost, i heard voice ♪ but i saw no one ♪ thank god almighty, i'm free at last. ♪ voice i heard sounded so sweet i thought i heard the sound of an angel ♪ speak he placed one hand upon my head ♪ and let me tell you what he said ♪ ♪ lift every voice and sing till

earth and heaven ring ring with the harmony ♪ of liberty ♪ in a rejoicing voice let us resound till victory is one ♪ >> thank you, everybody, have a wonderful evening. the. >> woodruff: in performance at the white house airs tonight on most pbs stations. >> lehrer: again, the major developments of the day. vast crowds turned out in iran to support the government on the 31st anniversary of the islamic revolution. police and militia units suppressed all attempts to protest. former president bill clinton underwent a procedure to have two stents placed in one of his coronary arteries. a statement from his office reported he is in good spirits at new york presbyterian hospital. he was taken there after

experiencing discomfort earlier in the day. and much of the u.s. east coast began digging out from a blizzard that broke records in several cities. the "newshour" is always online. hari sreenivasan, in our newsroom, previews what's there. hari? >> sreenivasan: is there a connection between goldman sachs and the debt troubles in greece. paul solman explores that on his "making sense" page. and on our "rundown" blog, harvard economist kenneth rogoff looks at what the debt crisis means for the future of the euro. on iran, we have links to youtube videos showing today's protests. and you can watch more of that white house concert by following a link in the public media resources box on our homepage. all that and more is on our web site, newshour.pbs.org. judy? >> woodruff: and that's the "newshour" for tonight. i'm judy woodruff. >> lehrer: and i'm jim lehrer. we'll see you on-line. and again here tomorrow evening with mark shields and david brooks among others. thank you and good night.

major funding for the pbs newshour has been provided by: >> what the world needs now is energy. the energy to get the economy humming again. the energy to tackle challenges like climate change. what if that energy came from an everyday, chevron invests $62 in people, in ideas-- seeking, teaching, building. fueling growth around the world to move us all ahead. this is the power of human energy. chevron. >> bank of america-- committed to helping the nation's economic recovery. pacific life-- the power to help you succeed. grant thornton.

>> and by the bill and melinda gates foundation. dedicated to the idea that all people deserve the chance to live a healthy productive life. and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. captioning sponsored by macneil/lehrer productions captioned by media access group at wgbh access.wgbh.org to providing service to

its auto insurance customers for over 70 years.

more information on auto insurance at geico.com or 1-800-947-auto any time of the day or night.