captioning sponsored by macneil/lehrer productions >> woodruff: good evening. i'm judy woodruff. the markets fell to their lowest point since february today, with a more than 300-point drop in the dow jones industrials. >> brown: and i'm jeffrey brown. on tonight's newshour, the market fall came after news of a disappointing jobs picture in may. we'll look at the numbers and the state of the recovery with economist lisa lynch and market analyst liz-ann saunders. >> woodruff: then, an update on the situation in the gulf of mexico as president obama made his third visit to the region. plus, spencer michels looks at

how the oil spill is affecting louisiana's lucrative drilling industry. >> there are thousands of oil production platforms like this in the gulf of mexico. now, there is fear that there won't be any more drilling, and that will affect the economy of the region. >> brown: we get the weekly analysis of mark shields and david brooks. >> woodruff: and paul solman talks to harvard economist ben friedman about the college graduates who still flock to wall street, three years into the financial crisis. >> it's all the more troubling when i think that, after they leave us, so many of them go into activities that are not economically productive for the country, for society, even just narrowly, for the economy. >> woodruff: that's all ahead on tonight's newshour. major funding for the pbs newshour has been provided by:

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. >> brown: the jobs numbers for may fell well short of expectations today, and that raised questions about the direction of the economy. but the direction on wall street was clear-- a sharp spiral down, fueled by renewed doubts about the recovery. on the surface, at least, the american work force made gains in the may jobs report. the labor department reported the economy added a net of 431,000 jobs for the month, and the unemployment rate dipped

two-tenths of a point to 9.7%. but the drop in the rate came mostly from people who gave up looking for work. and nearly all of the new jobs were temporary census workers, 411,000 of them. private sector hiring slowed sharply, making for the smallest monthly increase since january. president obama acknowledged all of that, but he told a crowd in hyattsville, maryland, there's reason for hope. >> even if you put those temporary jobs aside, there's no doubt that we saw another month of private sector job growth. and that is obviously critical, because when businesses are hiring again, people start spending again. that, in turn, gives businesses more and more incentive to grow. >> brown: wall street had a decidedly different take. disappointment over the weak private sector hiring helped spark another sell-off. the dow jones industrial average

lost 323 points to close below 9,932. the nasdaq fell nearly 84 points to close at 2,219. republicans also took a dim view of the jobs data. michael steele, chairman of the republican national committee, said in a statement: but in his maryland speech, the president held to his view that the trends are in the right direction. >> this is the fifth month in a row that we've seen job gains. and while we recognize that our recovery is still in its early stages, and that there are going to be ups and downs in the months ahead-- things never go completely in a smooth line-- this report is a sign that our economy is getting stronger by the day. >> brown: ultimately, some 15 million unemployed americans, as measured in may, are banking on that hope.

now, the numbers and the state of the recovery. we turn to lisa lynch, dean and professor of economics at the heller school for social policy and management at brandies university; and liz ann sonders, chief investment strategist at charles schwab. liza lynch when you look at the real slowdown in highering in the private sector is across-the-board? what do you see? >> well, in today's report we certainly saw only 41,000 jobs created in the private sector. but you know, rather than just looking at one month f you look at the three month average, the private sector has been adding, almost 148,000 jobs a month. and in particular we saw in this report that manufacturing continues to add jobs to the economy and that's great news to see those types of jobs coming on-line again. after over 2 million jobs lost in manufacturing sector. we also saw job gains in the

temporary help sector. we saw job gains as always in education and health services. and we saw some job gains in the transportation sector. >> brown: well, you are pointing to some of the good news and yet everybody was talking about even much better news. all the expectations were high. and i think this took a lot of people by surprise. economists and signals from the white house. so what happened here today? >> well, you know, economists are getting probably a well deserved bad reputation for our ability to forecast well. economists were expecting about 100 to 200,000 net new jobs in the private sector. so the number of 41,000 was clearly below the expectation. although it's hard to look at that difference and explain over 300 points dropping off of the dow today. >> brown: that bring me to liz ann sounders, over 300 points. this has been a fragile market anyway.

was it the surprise factor, what do you see? what happened today? >> well, you know, i think the jobs number was part of it but we've been in a downtrend anyway and that's the momentum in the market right now. in addition you had hungary come out prior to the open in the market, in fact, let's remember that the futures were actually negative before we got the jobs report. so there was negative momentum into the day even before we got the jobs number. you know, the correction that we've experienced so far with today's close we're down about 12% from the highs. we had actually been at about that level a week or two ago and had a bit of a rally attempt and are back down. and i and i by to means want to suggest this is not an angst riden time particularly for individual investors watch what the market do what is is doing particularly twh much volatility-- volatile im but at down 14% with an 80% rally that preceded it is actually a fairly normal correction. it may get a little bit worse before it gets better here but in the context of

history to see a 10 to 15% correction after an 80% rally 14 months into a bull market is actually fairly normal. >> well, what are you seeing-- you are talking about an anxious time. when you look at-- i know you look at things broadly. if you look at industries what does it tell you about what's keeping companies from making more hiring decisions at this point? >> you know, i think it's uncertainty. in fact lisa talked about the subsectors of the economy that are still creating jobs and that was an important point. but i also think if you look inside the employment numbers it's maybe sending an interesting message about what is plaguing businesses right now. because not only was there some hiring, not as much certainly as what expectations had built in but the average workweek extand-- expanded. average hourly-- went up t is telling you the conditions are there, the demand is building. the kind of growth the businesses need to see is there. hence their need to increase earnings or wages to their workers to extend the work week. but there's uncertainty.

and you fill in the blank, uncertainty about taxes, health-care costs, regulation, concerns about what's happening in europe. contagion into the financial testimony. and the list unfortunately is fairly long and i think that's delaying the hiring process. the good news again is that the economic fundamentals are there to support some hiring but that uncertainty i think is preventing that in the near term. >> brown: what about, lisa lynch, the drop in the unemployment rate as we said because of more discouraged workers. that's not the way you want to get your unemployment rate down. what happened there? >> no, and just you know, the prior month we saw the unemployment rate go up even though we had added a lot of jobs in the economy. and that was because people who had dropped out of the labor market returned into the labor market because they felt conditions were improving. so we're going to see a lot of bouncing around with respect to the unemployment rate as people come in, see if -- into the labor market, see if there are jobs available and then if not,

will withdraw. but just to follow up on the point about uncertainty, one of the things that we saw which again was good news on this report was that the under employment rate which includes those people that are unemployed, dicouraged workers and people who are working part-time because the employers have cut back their hours, that actually fell quite a bit to 16.6% from 17.1%. and again that's as liz ann was talking about, employers are willing to add more labor input and they're doing it through hours as opposed to hiring more workers. so it is not that things are all completely doom and gloom in the labor market but this uncertainty and i would add especially for small businesses that tend to be the driverss were coming out of recession like this one, the access to capital, the availability of the bank loans, i think, is another constraint for small businesses in this country.

>> well, liz ann sonders, is there any more-- i want to ask, where are we in a normal cycle of recovery. i don't know if there is normal any more. but where would you expect to be? and what are these numbers telling you about the potential long-term recovery now? >> if you do an historical analysis comparing the depth of downturns in the past to the pop you tend to get in recovery this is undoubtedly subpar. given the contraction you saw in the economy would you actually expect at some point in the first year of recovery to get about a 7 or 8% gdp quarter that is a pretty pie in the sky number. nobody has an estimate resembling that. so far the first quarter of 2009 has been the best quarter in the recovery, up 5.6% so even that very strong quarter in the context of broad history, relatively weak in the context of the downturn that we got. our view has been at schwab that the most likely scenario would be if we remember this from our math days, a square root recovery.

so you get the v initial v where you get a rebound from the bottom but then you get a little bit of a flat line as opposed to it continuing. that's a better scenario than the dreaded w or double dip recession. i till think that that is a fairly low priority. but i think it is this uncertainty. all of the aforementioned uncertainty that is elongating the period between the contraction and the true juice in the recovery and probably also keeping a lid on the type of recovery that we would otherwise expect to see given how compressed things got during the downturn. >> all right, lisa lynch before we end here i want to bring you back to today. because we're about to enter the summer season here. got a lot of young people looking for summer jobs. you have college grads trying to get into the workforce. it's got to be a difficult time. >> yes, so we saw in the employment report today that the teenage unemployment rate over 26%, so that's pretty grim news for young

people that are trying to find a summer job. there is a little bit of good news for college graduates. we saw that the unemployment rate for people age 20 to 24 actually fell, a little over 14%. that was down from where it was a year ago over 15%. so the scenario, the labor market for college graduates is challenging but it looks a bit better than it did last year. for teens it's grim but hopefully a lot of them will be taking advantage of some summer school programs and volunteer opportunities. >> brown: all right, lisa lynch and liz ann sonders, thanks very much. >> thank you. >> thank you. >> woodruff: still to come on the newshour: the latest on the efforts to cap the gulf oil spill; the analysis of shields and brooks; and the lure of wall street. but first, the other news of the day. here's kwame holman in our newsroom.

>> holman: israeli prime minister benjamin netanyahu vowed today to stop another aid ship heading for gaza. the "rachel corrie" was on schedule to reach the israeli exclusion zone, 20 miles offshore, by saturday morning, despite a maritime blockade on gaza. an irish nobel peace laureate, mairead corrigan maguire, was on board. she said activists would not resist if israeli forces board the ship. nine people were killed on monday when commandos raided a flotilla of aid ships, and fighting erupted on one. in afghanistan, a three-day peace conference came to a close. delegates at the peace jirga issued a resolution urging the government to negotiate with the taliban. it said militants who take part should be removed from a u.n. list that imposes travel and financial restrictions. president hamid karzai offered his own appeal to the militants during his closing remarks in kabul. >> dear taliban members who are dissatisfied, use this

opportunity. this is the voice of the afghan people and this is the voice of peace. embrace it, come and join souse that we can rebuild our country with our own hands and make it peaceful and stable. >> holman: many taliban leaders rejected the jirga, and insisted there will be no peace talks until foreign troops leave afghanistan. most of the senior leaders of al qaeda in iraq have been captured or killed in the last three months. that word came from the u.s. commander, general ray odierno, in a washington briefing today. and "the washington post" reported the obama administration has greatly expanded special forces operations against al qaeda and other extremists. the account said units have been deployed to 75 countries, up from 60 a year ago. the president has made his choice for director of national intelligence. it was widely reported late today retired air force general james clapper will be nominated tomorrow. he's currently the top intelligence official at the pentagon. if the senate confirms him, clapper would replace dennis blair, who resigned as d.n.i. last month. a massive inferno in the capital of bangladesh killed at least

117 people overnight. police in dhaka said an electrical transformer exploded and started the blaze in narrow alleys of an old neighborhood. most of the dead were trapped in two or three residential buildings. one witness described the scene. >> what i saw here can only be described as scenes from hell there was nothing we could do. we had to stand at a distance and watch people burning and dying. down the street the fire was advancing like lava. everywhere people were running and screaming in pain and fear. people couldn't help each other. they were diing where they stood. >> holman: officials said firefighters had trouble reaching the scene because their trucks couldn't fit through the narrow streets. japan has a new prime minister. the parliament today elected naoto kan to the post. kan has served as finance minister, and is known as a populist. he pledged today to regain the trust of the japanese people. his predecessor, prime minister yukio hatoyama, stepped down on wednesday. he broke a campaign promise to move a u.s. marine base off

okinawa. fast-food giant mcdonald's recalled 12 million "shrek" drinking glasses today. the u.s. consumer product safety commission said there were traces of cadmium in the painted designs. the toxic metal is a known cancer-causing agent. mcdonald's said about seven million of the collectible glasses have been sold. they were made in the u.s. those are some of the day's major stories. now, back to judy. >> woodruff: b.p. claimed progress today in its six-week struggle with that gushing oil well at the bottom of the gulf of mexico. and onshore, the president was back for another update on the disaster. ray suarez begins our coverage. b.p. managed to install a cap on the damaged wellhead last night, designed to greatly reduce the flow. still, as the hours passed, oil continued to burst from the sea floor a mile below the surface. company officials said the visible leakage was expected. b.p.'s doug suttles:

>> but what you're seeing on tv is there are a series of four vents on the top of this cap, which actually let oil out the top, and we'll be successively closing those vents as we bring the production up that. i'm actually pretty confident this is going to work. it probably won't capture all of the flow, but it should capture the vast majority. and i think we'll know that over the course of today. >> woodruff: one early estimate was that 42,000 gallons per day were being collected, but up to 20 times that much oil may be escaping every day from the out- of-control wellhead. by this afternoon, another b.p. executive said it would take "a few days" for the cap to get to "peak efficiency." while that operation continued, president obama made his third quick trip to the region-- the second in two weeks-- landing at louis armstrong airport in new orleans. he held off-camera meetings with federal, state and local officials, and also with people affected by the spill. >> it appears the cap is holding.

we will know more over next 24- 48 hours. it is way too early to be optimistic >> woodruff: to underscore his point, the president canceled a trip to indonesia and australia scheduled for later this month. meanwhile, the spreading effects of the disaster in the gulf were seen in stark relief-- heart- rending images of heavily-oiled birds, dead or dying in viscous waves on grand terre island, louisiana. governor bobby jindal: >> we're concerned about, is not only this bird, but the future. that's why it's so important for us not to allow this oil to get in these wetlands. >> suarez: the brown pelican, louisiana's state bird, had survived near extinction caused by the pesticide d.d.t. its population had thrived in recent years, but the oil has posed an entirely new threat. elsewhere, beachfront towns in the florida panhandle braced for the worst. >> fish are going to die. then the birds are going to die.

all the vegetation is going to die. i would like to see the whole community come out here every morning and start scooping. >> woodruff: tar balls began washing up at pensacola beach and elsewhere. governor charlie crist: >> the news this morning to hear that there is oil there is one of the most disturbing things that we could imagine. so, obviously, there must have been a shift in the current and the wind over the night. so we're not happy about that. >> woodruff: alabama governor bob riley had a complaint of his own-- that locals, put out of work by the spill, are not being hired to help clean it up. >> every person i saw tending boom was from the state of maine. now that just defies logic. and again, we have had assurances from everyone involved that that's about to change. >> woodruff: meanwhile, scientists confirmed today that at least two giant underwater plumes of oil have accumulated in the gulf.

last weekend, b.p.'s c.e.o., tony hayward, denied such plumes existed. today, hayward faced a different challenge-- reassuring b.p. investors. in a conference call, he said the firm had sufficient cash reserves to meet its obligations, and he pledged to restore both the gulf coast and his company's sullied name. but the president said now is not the time to worry about corporate image. >> my understanding is b.p. has contracted for $50 million in tv ads to manage their image. but they have moral and legal obligations here in gulf. what i don't want to hear is, when spending money on

shareholders and ads, that they're nickel and diming small business and fishermen here in gulf having hard time. >> greedy b.p. oil wells burst because you put your profits first! >> suarez: protests, like this one today in washington, added to public calls for hayward and the company to be held to account. for more on the latest efforts to contain the oil leak, we turn to greg mccormack, director of the petroleum extension service at the university of texas, austin. for the record, the service partners with the oil and gas industry. he joins us from houston. mr. mccormack, let's take a look at what's going on right now as we're speaking to each other. below the with thers of the gulf of mexico. the cap as the company has indicated has been successfully put in place. yet very little of the oil is being recovered. why is that? >> well, we have to measure success incrementally. there's no silver bullet

solution to this. they have to be very careful that two things don't occur. that the flow of oil & gas does to the lift the cap off riser, and therefore make everything worse. and the second thing is they always have to be cautious of getting water in there and hydrates forming and plugging that pipe that leads the oil and gas to the surface. that again would negate the effectiveness of this cap. but i think over time they will increase the amount of oil & gas flowing to the surface from the five to ten% capture rate that they have now. >> well bp has said that you will see more of the oil being captured over time as they close the valves. but now we're about 18 hours into this operation since the cap was put in place. why haven't the valves been closed yet? what is it that makes this such a slow operation? >> they have to be very,

very cautious that they don't undo all of the incremental successes they've had to date. they have to do a lot of measuring. they have to wait for the flow to come to an even flow after they have made a change. if they keep on making changes without understanding the effect of those changes, they could negate everything that they've done to date. >> suarez: the cap is attached to something that, for want of a better term, looks like a giant soda straw that goes all the way up to the surface. is it hard once you got that attached, to actually get the oil to go up that tube and make it recoverable by a ship on the surface? >> no, actually it's very easy to make it go up there. because there is gas that involved with the oil you have what is known as gas lift and it makes the oil a lot less dense and it makes it want to float to the surface even quicker . >> suarez: so how do you

explain the discovery of large amounts of oil that have not gone to the surface. >> well,hat is kind of interesting. and really not being an environmental scientist, i am at a loss to be able to explain that to your listeners. >> suarez: do the earlier attempts to cap this flow, the things that they had done to this well up until now actually make it harder to do what they are attempting today? >> actually, it makes it easier because every solution that they try before, they learned something from it. they learned about hydrates. they learned how to deal with them. the top kill gave them information about where the restriction was so that they didn't have as large a concern taking the riser off, that they would magnify the problem by three or four times. so they learned something with all of those previous attempts it. >> suarez: once you are fully operational with this cap let's say things start

to look better over the next one or two days, are you recovering commercial grade oil at that point, can it be brought to a refinery and turned into petroleum products, is there some use for this stuff once you keep it out of the gulf? >> my guess is they'll use this just for its heating value. it's mixed with water and therefore it's very difficult to separate. you could separate it and put it through a refinery but my guess is they'll burn it in a power plant somewhere and just use the heating value to either generate electricity or steam. >> suarez: the president was down in the gulf today and he termed it way too early for optimism watch. do you think, are you encouraged by what you saw today since the capping operation began? >> i am encouraged. i am encouraged the fact that they were able to feather the riser, though not quite the way they wanted to. that they were able to get a cap over the riser stub and that they were able to get

oil & gas to the surface. i'm very encouraged by that. we should not expect that this is going to be a complete solution. it's only an incomplete solution. >> suarez: and that expected capture rate of about 90%, do you think that's achievable. >> i think anything over 50%, i think we should look at the at as a success. don't forget they have another option here. on the top kill we're using the choke and kill lines to force mud down the well boar. we can use those very same lines to take oil & gas out of the blowout preventers before it reaches the surface and put them into another pipe to the surface so we can capture more oil & gas that way as well. >> suarez: do you worry about getting to the bottom of the bag of tricks, that if this doesn't work, that the better solutions have already all been tried and

now you have got even less of a chance of success? is there a technology waiting behind this one if this doesn't work? >> i am always worried when we have a problem of this magnitude that's causing so much distress to everybody. but i think what the industry can do and what b.p. can do in this case is if this cap doesn't work, design another cap that works. we know where the oil is leaking from now. we can certainly be able to capture it. we will find innovative solutions to capturing that oil before it soils the gulf coast. >> suarez: greg mccormack, thanks again for joining us. >> thank you >> brown: the gulf of mexico is literally dotted with thousands of offshore drilling rigs, and as newshour correspondent spencer michels reports, the b.p. catastrophe has had a ripple effect throughout the industry.

>> reporter: like many people in louisiana, neal ryan, who owns a small offshore drilling company, doesn't like hearing about any more restrictions on oil production. he's concerned and a little confused about a moratorium on new deep-sea drilling the obama administration is promulgating. he agreed to take us out by helicopter to see what his industry is fighting to save. we flew over endless marshlands dotted with oil platforms. oil has been big business in louisiana since the first offshore well was drilled there in 1947. from overhead, we could see the vast petroleum infrastructure in fort fourchon, the state's southernmost port. it services over 90% of the gulf of mexico's deepwater oil production, with over 600 oil platforms.

the petroleum industry accounts for 17% of all jobs in the state and we saw hundreds of the 5,000 or so oil platforms that dot much of the gulf coast waters, a virtual city on the water, pumping oil and gas, and piping it to shore. 37 miles offshore on the continental shelf, more than 90 miles from the b.p. "deepwater horizon," was our destination, a production platform called ewing bank 305. built by conoco in the 1980s, it is now owned by independent oil producer louisiana-based stone energy. this production platform operates routinely, sending 2,500 barrels of oil and 11 million cubic feet of gas to the shore every day. since stone bought it eight years ago, it has had no leaks, no problems. running night and day, the

platform's 18 wells descend deep beneath the ocean floor-- 10,000 to 18,000 feet. the ewing bank 305 will not be affected by the moratorium, but drilling on a stone energy well several miles away is being curtailed pending a safety inspection, to the company's dismay. on board the ewing bank, the six-man crew watched tv raptly for news of the oil spill that could affect their livelihoods. they were not allowed to talk to us, but the oil and gas industry claims that thousands of jobs could be lost if all new offshore drilling was stopped. >> i think that there's people that don't understand what it means for the state and don't really understand what it means for the nation. they probably do have that opinion that they'd like to see the whole thing shut down. i'm not saying that the... that the spill isn't an awful event, it isn't going to impact our communities. we live in louisiana. we want to make sure that the

water that we go and fish in and have recreational activities in is safe, and we don't enjoy the fact that there's pollution. but we also don't want to see an entire industry killed off as a knee-jerk reaction to that. >> reporter: ryan says the industry is especially concerned about a possible stoppage of so- called shallow-water drilling in depths less than 500 feet. yesterday, the minerals management service office that oversees drilling canceled permits for two shallow-water operations that it had approved the day before. and you think that's a possibility they might turn that off? >> that seems to be the rumor of the day. so, if that is the actual reaction from the government, then the state of louisiana is going to have a lot of issues moving forward. >> reporter: back on land, the support for drilling is equally strong. in la fourchet parish, with a population of 90,000, the oil

industry presence is everywhere. and parish officials like brendan mathern want to keep it that way >> we feel like we've lived with oil and gas industry most of our lives. we now have one of the, one of the biggest ports, one of the most important ports in the nation, and certainly the hub for oil and gas here in the gulf of mexico. i mean, the bottom line is, you know, the attitude is, yes there's some people upset. obviously, we're all upset with b.p. for this happening, but all we're asking for here on the local level is not to move the entire industry out. this was one platform, one company. >> reporter: mathern says that even fishermen, who've been restricted from their favorite waters, don't want to see the oil industry go away. many work on oil rigs in the off-season, so they too are dependent on the industry for much of their livelihood. those not working for the industry and worried about the pollution also support oil drilling. scuba diver ricardo gutierrez makes his living cleaning the

bottom of expensive pleasure boats in metarie, louisiana. >> if there is oil out on the water, the pleasure craft are not being used, it affects my business. i'm afraid it will stop our economy, particularly here on the gulf coast. >> reporter: gene hemard is a marine repairman whose livelihood is dependent on recreational boating, which, along with fishing and tourist industries, has taken a hit. even more fearful of what could happen to the oil industry >> it would be like if you have a plane crash, you can't shut down the whole industry just because one plane crashes. >> reporter: hermand thinks that b.p. alone should be held responsible. >> it would put so many people out of work. you know, the economics of it would just kill us. >> reporter: meanwhile, though, the oil spill has already cost louisiana billions of dollars of lost income. many fishing operations have stopped, tourism is down, the seafood industry is in trouble,

and the state's main industries- - a large source of america's energy-- are facing an uncertain future. >> woodruff: and to the analysis of shields and brooks-- syndicated columnist mark shields and "new york times" columnist david brooks. gentlemen, great to have you back with us this friday. so they have capped thewell in the gulf. but the oil is still coming out. the president, mark, was back down there today. second trip in a week. do you see a change in the white house approach? >> certainly, today's repeat visit by the president is indication that he has received loud and clear the criticism he had gotten from both democrats and republicans that he was not as visible. his presence was not as visible as it had to bement and now we're seeing the narrative of the whole story, judy, move from the well and

the gushing a mile below the surface to the har october, whether it's people's lives threatened and livelihoods threatened, beaches, birds, fish, as we saw in ray's piece. and they just-- the oil is now just a reality. and regardless of when we stop it, even though it hasn't been stopped, that's the story. >> woodruff: so david, did this make it look like the president was more in control of what's going on? >> well, the oil is still gushing. there is the still the bad ambience. the oil is still coming out and nobody knows what to do with it. i think people rationally know there is nothing the president could do about something. but the ambience is bad and they want to see some reaction. i personly don't hold him responsible for any of this. someone has a good line that says we elected a guy who is cool in a crisis and now we are up set because he is cool is a crisis. people want to have a sense that seymour emotionally engaged. i thought today was a good step in theatrical terms. not the best step.

i want to see him surrounded by fisherman, by regular folks, he still hasn't done that. but in the white house they have done something quite intelligent which is to create a separate team that is just going to do this. because one of the things that is a challenge for people in these circumstances is to pay serious attention to this but not get consumed by it. jimmy carter was consumed the by the iran hostage crisis. the clinton people with the scan dals, they couldn't get anything else done. i think they have done a right thing is get serious people involved but still have most people going about the regular job of the presidency which is the right way to handle it internally. >> woodruff: and mark, you said last week that you thought the president needed to show more feeling. i don't remember the word that you used but you you said he needs to -- >> i was going to say, today or yesterday i guess he told in an interview he said on cnn that he doesn't think he should do that. >> well, i think part of the job description of the president is not simply could pander in chief, it's comforter in chief. it really is. ronald reagan did after the

challenger crisis, really wound up the nation, at a terrible time. and president clinton going out and welcoming back the caskets from the embassy assassinations and murders. i mean those are important acts for a president. and i really think that that's part of the job description. it's not-- he doesn't have to emote, he doesn't have to pretend to be what he isn't. but i think there is a sense of communicating that at the highest levels of power and authority in this country, there is an understanding of the human factor in this. david mentioned the fishermen in particular. >> woodruff: in addition to blasting b.p. which is what he was doing again today. saying they are spending a lot of money on advertising but they need to spend money on the people here. >> and i think that is moderately effective, i'm not sure. but people want to know that the communication with the government is two-way. and that doesn't mean you just sit with a series of government officials in your shirtsleeves around a table it means you are in a nongovernmental setting

where most people are at a restaurant, maybe out on a boat with people. and i think so far theatrically they haven't done that. but again, i should stress, that's theatrics and it's important but it's not the most important thing. i think on the substance of the matter, they're doing reasonably well. they're being, people are angry for a lot -- still the cry, do something, do something! but what are they supposed to do. i think they are doing substantively what they can. >> woodruff: the other big story today, mark, was the jobs numbers came out, unemployment numbers for the month of may. it was an increase but not as much as a lot of the experts had hoped. implications for the administration here. >> well, i mean the good news you get by very quickly, unemployment fell from 9.9 to 9.7. fifth mont, sixth month in a row of creating jobs, positive numbers. but underneath it, not great, judy. i mean the jobs were overwhelm ingly in the census bureau, we only do that once every ten years.

we can't do that-- we can't keep them on much longer. in fact, many of them will expire in june. only 41,000 jobs created in the private sector. the market obviously responded as markets do, rationally or irrationally. it expressed its judgement on it. and the most difficult thing in the world, i saw democrats trying to do this today including the white house, you know, put out the good news. when you are one of 15 million people who are unemployed and some of whom have given up after being out of work for more than six months of even looking, the last thing in the world you want to hear is things are getting better. that is an impossible message to deliver politically to communicate to people. there is such an anger, don't tell me things are getting better. i have been out of work for six and a half months, nine months. that's a difficult message. >> maybe we could take a census of china, or keep those people on. you know, then you get to the question of what are we

going to do about this. because the long term unemployment, the number of long term unemployed is truly horrific even by any historical standards going back to the great depression. so the question is do we have another set of job creation, another stimulus bills. and the thing that is worrying, i think, about these numbers is that as a number of economists say, the economy is sort of churning along but people don't want to hire because they are not sure if this is a sugar high this is a temporary set of growth. so they don't want to hire long-term so it could be people think okay, i've-- i see some energy but that's because the government is running a 10% deficit and that's going to go away. and then all the growth will go away. so i don't want to be stuck with a lot of long-term employees so in a weird way i think some of the stimulus spending while doing some good short term is also raising a lot of anxiety long term and sort of dampening down some of the hiring. >> you mean are you hearing people say they spent all this money and yet they are only creating 40 some thousand jobs. >> right. because i think, we've talked about this before. it is a psychology, you know, you can pump numbers into a macroeconomic number but people are basically anxious

for future taxes because of greece, because of a million other things. they are still not going to hire. and the psychological switch has not occurred. >> a different jobs question, mark, the offer by the white house of a job, one of three jobs to democrat runing for the senate in colorado to keep him from challenging the democrat who was already in the race. this on top of the pennsylvania. >> well, actually it is the third time. the late bill sapphire had a rule of 3. he had to have 3 separate instances-- incidents before a story really got legs. this is the third one and then the david pattison, the governor of new york, they-- on the day the president excuse me was visiting new york tried to get him out of the race. he later withdrew because of ethical question of his own but then joe sestak against arlen specter and andy romanoff. >> and they all turned it down. >> that's the big thing. there are two factors come out of this.

first is it violates the marvelous rule that i learned from speaker thomas p o'neill which is never write what you can speak. never speak what you can whisper. never whisper what you can nod and never nod what you can wink. and the idea of the house putting out a menu. >> i think i follow that. >> putting out a menu of three jobs, you know, and in print e mate and sending it out to romanoff and saying do you want column a, column b, well, there was no offer made. but the more important and significant development is that in both instances inspector ces-- ses tack and ses tack's case in pennsylvania and romanoff in colorado said that by defying the white house, by going public on this would cost them nothing and help them politically. and i think that's, you know, an unsettling message for the white house to receive. >> right, if you want a job, if are you unemployed, run against a democratic incumbent the offers will start coming in.

and i do think that is-- there this is an anti-establishment year. we have seen it already in a number of cases but it's also even true within the democratic party against a democratic president. it's sort of a badge of honor. we don't know if romanoff will win in colorado. i sort of doubt it but nonetheless it is clearly a case where you want to stick your thumb in the establishment and that is going to make it hard for party leaders to run campaigns. because nobody is going to listen. and you get bonus points for not listening. so that makes it hard to establish party discipline. >> woodruff: that means the white house has no clout? >> well, they have some clout but son cease-- obviously less. people are casting a lot of blame on the white house political op ratives. i sort of don't blame them. look, we've got a lot of races where we are seeing what is happening. we will probably see more of it in nevada next tuesday, the primary there that the further ideaologicalically extreme candidates are doing well and the anti-establishment candidates are doing well it is just tough if are you in the establishment. >> woodruff: this is unfair to ask you about this in just a couple of minutes but israel, gaza, attack on the

flotilla of ships t there is another flotilla coming. the israelis are threatening to stop them. how does the obama administration deal with this? >> they are dealing with it in a muddy way. of course i want them to be honest about it, which i think the true thing is israel was morally justified but politically stupid to do this. gaza is run by hamas which is threatening its destruction. if israel allows 10,000 tons of week of stuff to go through to gaza. they could have channeled the humanitarian aid that way. they wanted a confrontation but israel was phenomenalically stupid to walk into this trap politically and the administration is trying to walk down the middle and just being fuzzy about it between turkey and israel and really making no one happy. i really don't see another way for the obama administration. >> woodruff: it's a headache and more. >> it's more than a headache. i mean it is, one could argue about the illegality, the immorality of what israel did. but no one can argue against the stupid-- stupidity. it was isolating.

it lead to worldwide condemnation it put the united states in a terrible position. it put turkey in a terrible position. the one muslim country that had been open and dealing with the israelis. put the united states, as general david petraeus said earlier this year, and testified that this weakens the united states and its ability to be an honest player in the middle east and inn the resolution with other nations simply because we are seen as being too pro israeli and uncritically supportive of israel. and i think what complicates it all, if prime minister netanyahu feels threatened at home politically by his own political-- political right. and the way to reestablish as we all know a political leader who is beleaguered is to introduce a foreign threat and to stand up to international pressure. and president obama is not popular in israel because he, ironically, is seen as too pro palestinian and

sufficiently uncritically supportive of israel. >> woodruff: it was unfair to ask you but i did and i thank you for your answers. mark shields, david brooks, thank you both. >> thank you. >> woodruff: finally tonight, back to the question of jobs. but this time, a story about the enduring appeal of wall street to some of the nation's top college graduates, even in the wake of the financial meltdown. newshour economics correspondent paul solman has our look. rts harvard commencement 2010 celebrating its newest graduates. and casting a critical eye on those graduates harvard economist bench men friedman, they're more able than ever, he says. and for that reason it's all the more troubling when i think that after they leave

us so many of them go into activities that are not economically productive for the country, for society, even just narrowly for the economy. >> reporter: friedman bemoans the fact that three years into the financial crisis, top institutes continue to flock to wall street. at harvard as at other top schools about one out of every four graduates entering the workforce take a financial sector job. >> and in light of how skewed some of the rewards are, today the greatest incentives, ironically, seem to be for institutes to go into those activities in which at least the apparent economic function being served is harder and harder and harder to understand what it is. you don't see any value, you think it is a waste of human resources? >> consider nanotrading very high speed trading in which the only visible economic

contribution is whether some tiny depar ture from what somebody thinks the right price of a security ought to be is correct corrected in one nanosecond instead of two nanoseconds. and yet people are receiving enormous compensation for putting their time and energy and inventiveness into making that happen. >> reporter: indeed while it's still not clear what caused the so-called flash crash of the u.s. stock market on may 6th, computer trading has been implicated. much of it designed by math whizs from universities like harvard. so long time bank analyst analyst-- friedman's critique is part of the usual anti-wall street bias. >> i think it's a harsh value judgement to say that wall street doesn't add any value. you know, wall street is never a favorite of main street. the politicians have always been running against it

because it's a good and convenient thing to be able to blame all of society's problems on one percent of the electorate, right. i'm not so naive to think that people will ever walk around their town or their city and they say gee, you know, all these building, all these factories, they were-- shouldn't we thank the wall street financiers who put their money together to make all this happen. >> reporter: do you personally think that it's a good thing for america that the best and literally the brightest, by test scores any way of america's college institutes go to wall street. >> the world has become a more capital intensive place. much more so than it used to be 30, 50 years ago. and getting capital together for any enterprise is a challenging thing. and it's not easy. >> reporter: by friedman argues that wall street has largely abdicated its role as financier in favor of

trading, to which his institutes increasingly flock. >> i think it's a very serious issue for our society how we allocate resources in general and scarce resources in particular and the high end supertalented, superenergetic, supercreative young people have to be one of our most valuable, scarceest resources. >> reporter: are you genuinely up set by this? >> if these firms that are hiring so many of our best institutes had had troubles like lehman brothers troubles, then our institutes might have thought twice or three times about going there. but i think the way the government is handled the situation has kept these firms vibrant and profitable and able to continue to hire our best institutes and

keeps the ball rolling in the same direction. >> reporter: and keeps your institutes flowing from harvard to wall street. >> we'll have to see. we don't know yet and it will be interesting to see over the next year or two or three whether the share of our institutes who graduate and go into these kinds of jocks remains the same or goes down. we don't know. >> reporter: ben friedman, thank you >> woodruff: again, the major developments of the day: b.p. engineers worked to tighten a newly installed cap on that blown oil well in the gulf of mexico; president obama visited the region again, and he cautioned it's "way too early" to be optimistic; israel warned it will stop another aid ship from trying to run the blockade off gaza. the newshour is always online. kwame holman, in our newsroom, previews what's there. kwame. >> holman: we've got more on today's jobs numbers.

we talked to university officials from around the country for insights on the employment prospects for new grads. former state department adviser aaron david miller gives his take on the elusive search for arab-israeli peace, and why diplomacy has made little progress. plus, on our arts blog "art beat," jeff talks to barbara pollack, author of "the wild, wild east: an american art critic's adventures in china." and a reminder-- we'll bring you the latest on the gulf oil leak all weekend online. we've updated our interactive ticker. it estimates the amount of oil that has leaked so far. and you can watch the live video feed from the ocean floor as attempts continue to bring the crisis under control. 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. >> brown: and i'm jeffrey brown. "washington week" can be seen later this evening on most pbs stations. we'll see you online, and again here monday evening. have a nice weekend. thank you and good night.

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