macneil/lehrer productions captioning sponsored by macneil/lehrer productions >> brown: new data showed a mixed economic picture today with some glimmers of hope in manufacturing and retail sales. good evening. i'm jeffrey brown. >> warner: and i'm margaret warner. on the newshour tonight, ray suarez has the latest on the economic ups and downs a day ahead of the release of new jobless figures. >> brown: then, from tripoli, we get an update on the war, as moammar qaddafi vows not to surrender. and we assess what's next for the west's campaign to oust him. >> warner: we examine a new report showing tens of billions of dollars in waste, fraud and

abuse by private contractors in the iraq and afghanistan conflicts. >> brown: from the "economist film project," we get the story of a radical environmentalist now facing domestic terrorism charges. >> we saw the mills. you go into the forest and stumble upon a clear cut. sometimes when you see things being destroyed you want to destroy those things. >> warner: gwen ifill talks to historian richard norton smith and journalist carl cannon about defeated presidential candidates who changed history. >> there are people who lost in the immediate sense but who turned out not only to be ahead of their time but in fact were catalysts for political transformation. >> brown: and we close with another in our series about economic inequality in america. tonight, "atlantic" magazine writer don peck on the disappearing middle class. that's all ahead on tonight's newshour. major funding for the pbs newshour has been provided by: >> auto companies make huge profits. >> last year, chevron made a lot of money. >> where does it go?

>> every penny and more went into bringing energy to the world. >> the economy is tough right now, everywhere. >> we pumped $21 million into local economies, into small businesses, communities, equipment, materials. >> that money could make a big difference to a lot of people. >> and by bnsf railway. >> 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.

>> brown: economists sifted through a new pile of data today on the state of the u.s. recovery. and the obama administration lowered its expectations for what's to come. ray suarez has our report. >> suarez: with the august jobs numbers coming tomorrow, today's raft of reports offered differing clues to the economy's direction. whether it was manufacturing, retail sales, or unemployment claims, those first-time applications for benefits fell to 409,000 last week for the first time in three weeks. the figure has to drop below 375,000 to stimulate long-term job growth. and major retailers reported better-than-expected sales in august. even as those numbers suggested some bright spots in the economy, other data out today were more of a mixed bag. construction spending fell sharply in july by the most in

six months to about half the level that economists view as healthy. on the other hand, the manufacturing sector, which had been expected to contract in august, grew for the 25th straight month. as to what it all means, here's brookings institution economist martin bailey. >> the numbers you mentioned were maybe a little bit better, but we certainly haven't had a sustained set of indicators yet that we're going to get better growth going forward. i hope we will. we surely can't get that much worse growth than we had in the first half of the year, but concerns about a possible double dip are real. >> suarez: for its part, the white house budget office revised its projections on the economy down, putting growth at just 1.7% this year, off a full point from a forecast in february. it also forecast a 9% unemployment rate for next year. that will be cold comfort to millions of unemployed, including the 10,000 who lined up at a jobs fair in los angeles yesterday.

>> i've applied for, i would have to say, pretty close to over 300 jobs in the last year. >> suarez: economist bailey says there are still two big obstacles to a full-blown recovery. >> one is the debt that's still hanging over a lot of households-- they took on too much debt. and the other is we built too many houses. and we just haven't yet reached the point, when you add in the foreclosures as well, that we can get construction spending going again. >> suarez: president obama now plans to detail his jobs plan before a joint session of congress next thursday night, september 8. he initially wanted wednesday, the same night as a republican presidential debate, but house speaker john boehner objected. white house press secretary jay carney played down the timing skirmish today. >> sideshows don't matter. the economy matters. the american people matter. jobs matter. and that's what we're focused on. that's why... you know, if

thursday's the day, thursday's the day. we want to give the speech. >> suarez: the jobs issue also remained front and center on the presidential campaign trail. republican hopeful jon huntsman delivered his job creation blueprint, in a wednesday speech in new hampshire. >> so there is no more urgent priority at this point in our nations' history than creating jobs and strengthening our economic core. everything else revolves around it everything else is dependent on it. >> suarez: another republican, former massachusetts governor mitt romney, is expected to outline his jobs plan in las vegas next week. >> warner: still to come on the newshour: what's next for the u.s. and nato in libya; waste in wartime contracts; an environmental activist charged with terrorism; losers who made a difference; and the erosion of the middle class. but first, the other news of the day. here's hari sreenivasan.

>> sreenivasan: wall street backed up today after a four-day rally. stocks slumped late in the session as investors hedged their bets against tomorrow's unemployment report. the dow jones industrial average lost nearly 120 points to close at 11,493. the nasdaq fell 33 points to close at 2,546. thousands of people spent another day slogging through the floods and wreckage of hurricane irene. the long, slow job of cleaning up gathered momentum up and down the east coast. across the northeast and new england, swollen rivers have mostly crested by now, but remain far above flood stage. in the ravaged city of paterson, new jersey, the passaic river was still surging out of its banks today as hundreds of home and business owners tried to cope with the damage. >> you can never prepare for a disaster like this. you can always try to prepare, and you do your best, but you can never prepare for something like this. >> sreenivasan: the swollen passaic also engulfed parts of wallington and lincoln park, new jersey.

president obama was scheduled to visit the area this sunday to see the wreckage first-hand. meantime, in vermont, repairs were under way on washed-out roads and bridges, while people cleaned ruined belongings out of flooded homes. >> there's nothing left. i have a small pile out back of what we're keeping, and that can fit in the front seat of my car. >> sreenivasan: the flooding in vermont had stranded entire communities until national guard helicopters and truck convoys began arriving with much-needed relief. they brought in loads of food, blankets, and bottled water. >> we are trying to get supplies over to some of the outlying towns that don't have road access at this time, or limited road access. >> sreenivasan: farther south, the damages continued to add up today. in beaufort county, north carolina, for example, hurricane irene tore up a local marina, destroying the dock slip and flipping boats. and along the state's outer banks, people salvaged whatever they could. for many along the east coast, the cleanup proceeded without benefit of power. hundreds of thousands were still in the dark today as outages

from the storm persisted. forecasters were also keeping an eye on tropical storm katia far out in the atlantic. it had been a hurricane, briefly, and could still grow into a major storm by the weekend, but its path remained uncertain. and a tropical depression was brewing in the gulf of mexico. it could bring much-needed rain to texas and other states suffering from prolonged drought. a top syrian legal figure resigned today, and condemned president bashar al assad. the attorney general for hama in central syria appeared in a youtube video. he said security forces killed 72 protesters and activists at a local jail in july, and another 420 people in august. in a second video, he denied the regime's claim that he had been kidnapped by rebels. >> ( translated ): previously the attorney general in hamma. i have declared i resigned from my position to protest the cruelty of the regime against peaceful demonstrators what the regime announced about me being

kidnapped not true. i am in the protection of the rebels and in good health. >> sreenivasan: al bakkhour said he plans to leave syria soon, and will give more details of the government crackdown when he does. there were no u.s. troops killed in iraq last month, the first time that has happened since the war began in 2003. at the same time, new figures showed the death toll among iraqis remains high. 2,600 civilians, police and soldiers have been killed in the last 12 months since u.s. forces formally ended combat operations. the last american units are scheduled to leave by year's end, but iraqi leaders are discussing having some stay on as trainers. those are some of the day's major stories. now, back to jeff. >> brown: on a day in part devoted to planning for a post- qaddafi libya, the story took another turn with the apparent reappearance of the longtime leader. lindsay hilsum of independent television news begins our coverage. >> reporter: video from an r.a.f. strikes on a barracks. that's where qaddafi's closest associates, and maybe the man himself, are thought to be.

>> they are liees, don't believe it. fight it with guns. fight it with bullets. if they want to enter into a long war with us, let it be so. we are listening to these nonsensical comments which we consider to be those of a dead man dancing. the collapsing former regime has neither power nor any forces anymore. >> reporter: at the beach house we found fighters enjoying the facilities. last night, sadi said he had been authorized by his farther to negotiate with the new transitional council but another son said to arabic television that they would take tripoli back, a sign of confusion and disunity in the family. sadi doesn't seem to have been as hated and feared as some other members of the qaddafi family.

one man just said to to me, "as long as any of the qaddafis are alive and in libya, we'll be looking over our shoulders." the fighters who took tripoli 10 days ago are now neither colonel qaddafi's hometown of sert. a spokesman for u.n. authorities said saturday's deadline for surrender would be extended by a week in the hope that whatever the qaddafis said, his supporters will now crumb pel. >> warner: meantime, in paris, top officials from 60 countries gathered to discuss a post-war libya, including releasing libyan money now frozen in western banks. but they acknowledged that the victory of the anti-qaddafi rebels is not yet complete. secretary of state hillary clinton and other leaders said the nato military campaign would continue. >> what happens in the coming days will be critical, and the international community has to help the libyan people get it right. first, as i told my counterparts earlier today, we need to

continue nato's military mission as long as civilians remain under threat of attack. for the sake of the libyan people, we have called on qaddafi and those around him to recognize their time is over and to lay down arms. >> brown: we look more at the role of the west now with robert malley. he worked in the national security council in the clinton white house, and is now program director for the middle east and north africa at the international crisis group. welcome to you. >> when you listen to secretary clinton there and you think about how the u.s. and west-- and the west can help libya now, what are the main considerations? >>ic the first consideration is what's happening in libya today, what are the main challenges. and then you work backyards and see can the international community help. number one is to make sure the country remains together-- in other words you don't have convictiones, you don't have a witch-hunt, you don't have part of the country that feels the other part is taking revenge and that is something we have experienced in iraq, and the

international community could encourage the new leaders to be as inclusive as possible and giving as possible. >> brown: when you say "the new leaders" part one is determining to who we are dealing with. >> that's the other question. the west and u.s. has recognized the transitional national council as the legitimatate representative but that begs the question of whether they are united and whether there are other forces who will participate, and the other thing outsiders can do is encourage them to come together and avoid the kind of internal convictions that would be harmful for the future, though they're unavoidable. >> brown: any revolution is followed by a scramble for power. >> brown: well, particularly when there's been one-part, one-man rule for so long, lots and lots of people worked for and with this guy, right? >> that goes to the first point about justice and reconciliation. a lot of people had to work for him. again, let's take that page out of the book on iraq. a lot of people had to work for the ba'athist regime in iraq.

a lot of people had to work in this system. you can't exclude them and that's the point secretary which the has made repeatedly. you will deprive yourself of real talent, and you will sew the seeds of a future. >> brown: there have been to be concerns about, again, we have various models to look back at. >> the person who works for me in libya, in tripoli, tells me the security situation is much better and getting better by the way and that's obviously good news. it's not like baghdad was after the fall. on the other hand, this is a country in which almostern has weapons. it's a country where there are divisiones, and it is a country where people are going to be fighting because there's a big pie they want to get a piece of. so disarming the militias, trying to get the weapons and gathering them, and, again, making sure that you include as many people as possible is going to be challenge number one for the people who are going to rule the future libya. >> brown: u.n. secretary

general called on the security council to deploy a civilian mission, to help stabilize libya. now, what-- what would it do and how would it do it coming from the outside? >> well, the first point is you don't want to do too much from the outside. another lesson from iraq. diplomats said recently there are lessons to be learned. there aren't lessons to be taught. let's be mod nest going about telling them what to do. the expertise in governance, and tripoli itself there is still a shortage of water and electricity. there are things they're going to need outside help. they're going to welcome outside help. i think it has to be done with a very modest touch to avoid the impression that outsiders are coming to tell them what to do. >> brown: not to have a heavy hand, not to show we know better and we're running the show. >> we often don't know better. again, the history shows that. >> brown: another issue, of course, was the money issue. that was discussed today in paris.

in the press conference, not in what we showed, but i was watching and secretary clinton said the money will be disbursed but it must be clear to libyans that the money is being used to help the libyan people. that's an example you're talking about, making sure it's being used directly, because it is not always used that way, right? >> one of the things, again, that outside help can provide is ensuring transparency in where the money goes, how it's spent, who is using it. we've seen again too many case where's money gets used in ways it wasn't intended to be. libya will have a lot of money, once all the frozen asset where's unfrozen. but that money is going to have to be spent wisely and it's going to have to be spent both on immediate improvements but also in the longer term in ways that libbians will feel accountable, they know where it's going, and they know it's going to before them. >> brown: now, what do you make of the continued nato involvement at this point? what kind of debates or discussioning must be going on at that level about what exactly they'd be doing? >> well, the military phase is

phasing out, one would hope. secretary clinton said we're going to continue that and they're providing assistance. i would hope to see that reduced as quickly as possible to minimum and to make it less of a military enterprise and more a political attempt by the new libyan leaders to be as inclusive as i said, inclusive as possible. there is a risk, and some of these pocks of resistance, they see the rebels and new leaders as subjugatores, coming to impose their way. it's a military confrontation as opposed to a negotiation, the worst it will be, which is why i think it's a good thing we heard today the libyan rulers, the authorities say we're going to extend the deadline. you don't want to go in forcibly and simply antagonize cities or villages that are still loyal to qaddafi. >> brown: now when you look longer term, you talk about business ties, cultural tigers so on. do you plant the seeds for those things now? are there ways that we've learned from experience that you get that going now, even as the fighting continues or is that just not worth thinking about?

>> i mean, the fighting is continuing in some pockets. the things you could do, i just think that we need to be very careful about thinking what in the u.s. or the west by helping some groups, human rights groups, democracy activists, that we're going to redetermine who are going to be the future rulers of libya. that's going to be decided by libbia, and a think as this all these revolutions -- in fact in all revolutions -- the people who come out ahead or the people who lead the revolution are notes inly the ones who are going to rule after the revolution. and however much we might want to help certain groups, we're not the ones who are going to decide. it will be decide over there and we will have to live with whatever the outcome is. >> brown: robert malley, thank you. >> thank you. >> warner: now, waste, fraud and abuse of taxpayer money during a decade of war in afghanistan and iraq. after a three-year investigation, a

congressionally-mandated commission yesterday issued a blunt finding: between $31 billion and $60 billion has been misspent on the two wars. that's up to one quarter of the entire $206 billion outsourced to contractors for everything from security to food preparation to reconstruction projects. the last ten years have brought more than 260,000 contractors to work in war zones, where they sometimes outnumbered soldiers. the panel urged quick action on 15 recommendations to tighten controls. for more on all of this, we turn to dov zakheim, one of the commissioners. he was the defense department's comptroller from 2001 to 2004, at the onset of both wars. and mr. zakheim, thank you for joining us. this was a pretty stunning finding on your part. i mean, up to one out of every $4 spent on contractors was misspent. first of all, give us a flavor. what are you talking about? >> well, out of that $60 billion, about $40 billion is what you call waste. again, that's an estimate that

ranged from about 20 to about 40, and waste is simply money that you spend that you needn't have spent. for example, a road in afghanistan that should have cost about $85 million wound up costing over $170 million. we were paying workers in iraq, contractors, for a full day's work, when in fact they were work 15% of the time. that's simply waste. it's no different from hiring a contractor to fix your house, getting overcharged and paying for it. the rest of the $60 billion, anywhere between 10 and 20, depending on whether it's a 30 billion or 60 billion estimate, the rest of that is pure fraud, criminal fraud, people making off with money they shouldn't. that's how we got to the numbers. >> warner: and that might be either the contractor getting paid for something he didn't do or what, extortion, in afghanistan or iraq? >> well, in afghanistan, clearly, that's the case. when i was over there, together with one of my fellow commissioners, we were handed a

copy of a bill, an invoice, that was charged to a contractor and was issued by an outfit that called itself the islamic republic of east afghanistan. we've reprinted it in our report. it has a phone number to call. if you want to be safe, call this number. we're paying people to kill our kids. >> warner: you were at the defense department. how was this allowed to happen? >> well, in afghanistan, the basic problem was that for the first couple of years or so, we really didn't put very much money in at all so we didn't have that kind of a problem. when we then went into iraq because it was so hurried, we drew up contracts that were not specified the way a contract normally is. it's understandable. it was the beginning of a war. what then happened is that we didn't have enough people to monitor, to supervise, to oversee what was going on, to fix the contracts up, and that was due in part to the fact that many of the acquisition professionals and contracting professionals had been let go in

the 1990s. so you had, in effect, the perfect storm-- not enough people because they had been let go in the 90s, and too many contracts for too much money, not provided in the specific way in the beginning of the iraq war, and that continued because, again, we just didn't have the people to monitor the contracts, to let them properly, to force competition, and, of course, with all of that, you lose money. >> warner: but, i mean, in a huge defense department budget, that's certainly a question of what priorities were set. i mean, the pentagon doesn't lack for personnel. >> well, it doesn't lack for personnel but you have to have the right personnel. one of our major recommendations is that the leadership be really focused on this issue. you just heard about libya, robert malley was talking just a minute about about how there's going to be a need to reconstruct libya. that country has money but we have the possibility of going into other countrys. we have been fighting what are

called contingencies pretty much on an annual basis for the last two decades. if we don't have the experts, if we don't train them, if our leadership is not focused on them, then we're going to make the same mistakes over and over again and our commission-- which, by the way, was bipartisan-- actually, nonpartisan. we all agreed on every recommendation. we believe that unless there is top-level focus on this, unless the culture is changed, unless commanders recognize how important it is, that contractors are just as much a part of their force as the people wearing uniform and oh, by the way, thousands of contractors have been killed, and they don't get ceremonies at dover air force base-- unless there's a focus on contracting in a proper way, we're anything to make the same mistakees, waste the same money, and the debt crisis shows us we don't have the money to waste. >> warner: could that problem even be exasperated as the u.s. draws its troops down from iraq in the next couple years, or three years, afghanistan, and say state department or a.i.d. become even more dependent on private contractors

for security, for example? >> absolutely. in fact, there are two ways that the problem is getting worse. one is the challenge of starting projectprojects that the eithere iraqi government or the afghan government cannot sustain. we built the power plant-- excuse me, a water treatment plan plant in iraq that has intermittent power, and that is not being used. we built a prison that is not being used. iraqis don't want it. we have built schools in afghanistan without teachers. health clinics, over 130 of them in iraq, without the proper equipment and supplies. so you've got the problem that we're building stuff that won't be maintained, and at the same time, if you rely on security contractors in place where's there's corruption, where there's danger, where maybe the contractors themselves are a danger, then you've got a problem as well, and we've recommended that instead of simply focusing on the narrow issue of whether this is something government can or cannot do, you focus on the risk

involved. then we will clearly identify place where's we just shouldn't have contractors. >> warner: now, some of your recommendations, first of all, require congressional action and require spending more money, hiring more people as you're saying or an i.g., inspector general, for all war time contracting at a time of budget austeritiy, do you think congress is going to go for that? >> i believe so. we're not talking about big bucks here. when you look at waste that amounts to over $40 billion, or could, and fraud that amounts to as much as $20 billion, to spend the kind of money we're talking about for a relatively small number of people, you would only get more of them once the contingency started. but you have a core that would watch over those who are contracting out and managing to ensure that we don't make the same mistakes again. we're talking about millions and not billions. this is a peppy wisely spent, and we'd be pound-foolish if we didn't spend it. >> warner: dov zakheim, on the

commission for war time contracting, thank you very much. >> thank you for having me. >> brown: next, another story from our economist film project series. tonight, a film about eco- terrorism. the earth liberation front, a radical environmental activist group, was named a "domestic terrorist threat" by the fbi in 2001. in this documentary, academy award-winning filmmaker marshall curry follows the story of a former e.l.f. member, daniel mcgowan. mcgowan was arrested in 2005 for involvement in several fires and placed under house arrest in new york city to await trial. here's an excerpt from the film, "if a tree falls". >> you may have heard of the earth liberation front. the attorney general himself

says its a domestic terrorist organization. the fbi says it is one of the most dangerous groups in the country. >> the e.l.f. has claimed responsibility for more than two dozen major acts of eco- terrorism since 1996. firebombings include attacks on lumber mills, wild horse corrals and two meat packing plants. >> so far, not one of the cases has ever been solved, and authorities acknowledge they know next to nothing about the membership or the leadership of the organization. >> in 2001, i was involved with the earth liberation front, and i was involved in two separate arsons in one year. there was no one in any of these facilities. no one got hurt, no one was injured. and yet, i'm facing life plus 335 years.

it was like mostly work class people. my dad was a cop in the new york police department. and i was a track runner and, you know, i got scholarships and stuff like that. and then when i got to college i was like, i guess i'll major in business because that's practical. i moved out west in october of '98. i had never seen trees like that before. it had a rofllpry ound impact on me. i have memories of, like, for the first time, seeing log trucks, you know, and being like, "whoa." you saw the mills, or you go into the forest and you stumble

upon a clear-cut. like, it just blew me away, just the arrogance of it. i mean, you think, like, "why are we being so gentle? why are we so gentle in our activism when this is what's happening, you know?" >> the more radical environmental community have, in my opinion, a misconception about this industry and what we do. does it have an impact? certainly. nobody likes the looks of a fresh harvest, but we really do regrow these trees.

you can't be in the lumber industry without having trees to cut, so its ridiculous for people to think we're going to go out there and cut the last tree.pr we were quite surprised that we had been targeted. >> i went up to portland and wrote the communiqueé and sent t in. even then, it wasn't real. it was just, like, still kind of like this cartoonish thing. and it wasn't real until i really saw the newspapers, seen the man from the company, i think steve swanson, just walking through this, like, charred remains. and it was just, like, "holy crap." its like, when you're involved with it and you're in the thick of it, it's hard to look at, like, all the consequences and, like, the real repercussions about, like, you know, did this action push them in a better direction? diit scare them? did it... did it help the movement in any capacity on old- growth logging? there's lots of questions, but i

don't think at the time i was asking those questions too much. >> a federal judge must determine whether the fires qualify for something called the "terrorism enhancement." if the judge rules that daniel's fires were terrorism, daniel could be sent to a new, ultra- restrictive prison that was set up after 9/11 to house terrorists. in the media and in the courtroom, the question is debated. >> eco-terrorism-- terrorist acts by radical groups. >> eco-terrorists. >> eco-terrorism. >> environmental terrorists. >> people need to question, like, this buzzword and how its being used and how it's, like, just become the new "communist." it's become the new... you know, its like the bogeyman, it's a bogeyman word. it's, like, "whoever i really disagree with is a terrorist." >> some people have a problem with, you know, calling this terrorism. but when you're basically making a threat where people go home at night wondering if they're going

to be a target, that's what terrorism is. >> after the fire, for a long t ime, you really looked over your shoulder. i mean, we put an alarm system in our home and things like that that before we hadn't thought about. >> you know, being a new yorker with... expngieihncuc suc serious terrorism firsthand, it's like, how are you going to call someone who sets fire to an empty building a terrorist? us it j'st inappropriate in every j way, d n itlt's asuin.su >> the word "terrorism," to me, is about kimaing hu.ns. it's about ending innocent life. and that is the antithesis of what these people did. concern for life was a very big part of the plan and implementation of these actions, and is why no one was ever harmed or injured in them. 1,200 incidents are being accredited to the e.l.f. and

a.l.f. in this country, and not a single injury or death. those statistics don't happen by accident. >> terrorist acts, under the definition of the law, can vary all over the board. there's no requirement in the purposes of terrorism that you physically endanger another person's life. i mean, you don't have to be bonnie and clyde to be a bank robber, and you don't have to be al qaeda to be a terrorist. >> i don't think these people are terrorists. i think the people and the agencies and the industry that they're fighting are the true terrorists. when you've got big timber companies coming into the northwest, clear-cutting old- growth forest; big oil companies with their big oil spills that cost billions and billions and billions of dollars-- you don't see the fbi raiding these executives' homes or anything like that. they aren't being threatened with life in prison. all they really do is just pay a fine and move on to the next court.

>> the old adage that, you know, one man's terrorist is another man's freedom fighter is true. you know, if you agree with their motives, "wow, they're a hero. they're not a terrorist at all." if you disagree with their motives, then they're a terrorist. that's tough, okay? that's why its a whole lot cleaner to deal with crimes. g,i ood cthris, t n-crimes. okay, im good with that. i can do that. arson is a crime. good, i can do that. yeah. is it terrorism? we'll find out. >> brown: mcgowan pled guilty to arson and conspiracy charges in 2007. the judge sentenced him to seven years in a special prison designed to hold terrorists. he is allowed limited communication with the outside world. the film, "if a tree falls" airs on the pbs series "p.o.v." on tuesday, september 13. check your local listings. >> warner: in this political

season, we turn to campaigns past and ask, are there reasons to remember the losers? a new c-span series looks at failed presidential candidates who changed history. gwen ifill explains. >> ifill: u.s. presidential campaigns always produce a winner. 43 men have served, one of them twice, as the nation's commander in chief. history books pay less attention to the losers, even though many had an out-sized impact on the election and on the national debate. a number of them turned out to be ahead of their times. beginning september 9, a newha c-span series titled "the contenders" they ran and lost but changed political history, will examine 14 of the losers who turned out to be influential, even in defeat. richard norton smith, scholar and resident at george mason university, is an adviser to the series, and carl cannon is washington editor for the political web site realclearpolitics.com. isn't the point to win?

why do we care about the losers? >> well, has famously been said, the winners write the history books, and there's a lot of truth to that. turns out winning and losing are relative terms. of these 14 people, there are a number-- and we could debate who, who went on, perhaps, ultimately to have greater impact than the people who-- quote-- won. more important there are people who lost in the immediate sense but who turned out not only to be ahead of their time but in fact were catalysts for political transformations. the most recent example certainly being barry goldwater who carried six states against lyndon johnson in 1964, when of and yet who planted the seeds of a conservative movement that arguably has yet to crest. >> ifill: carl cannon, who are your favorite catalysts? >> barry goldwater is hard to top. a more recent wanna-be president is ross perot. he finished third. he doesn't do much.

he doesn't carry a single state. but he plant a seed, and the seed he plant is the government spending too much money, and you can't go to one of these tea party rallies or even a republican gathering today without hearing things you heard in ross perot's 1996 campaign and his 1992 campaign. >> ifill: he got 20% of the vote, so without that, bill clinton may not have been president. >> well, that's right. bill clinton, you know, there was a period there where bill clinton, most of the summer of 1992, was running third behind president george h.w. bush and perot, and then perot dropped out of the race for a while, and then bill clinton picked al gore. they had the most unified democratic convention in my lifetime. clinton emerges from that in the number one spot and i don't know that bill clinton has ever trade a republican in a ew po s inll.thce poll since then. >> ifill: all thanks to the guy who lost. let's go back, richard. would any of these losers have made good presidents? >> oh, a number of them. i think henry clay maybe of may

be the best president we never had. >> ifill: how is that? >> well, abraham lincoln said he was by ideal of a statesman. he was a constructive force. first part of the 19th century, he's the bridge between alexander hamilton and abraham lincoln. the idea that government had a significant role to pli. i mean, it's curious, conservatives in the 19th century, believed in using government as an agent of capitalist development. >> ifill: not so much now. >> absolutely. just the opposite. clay was like the speaker of the house on the day he arrived in the house of representatives. he, of course, was known as the great compromisers. the last one in 1850 arguably delayed the civil war for 10 years, which gave the north an opportunity to become that much stronger and equally important allowed abraham lincoln to emerge from obscurity. >> ifill: let me throw out a couple of names. al smith. >> al smith, in many ways, is

the farther of the modern democratic party. before franklin roosevelt, al smith-- do you know the last republican presidential candidate to carry new york city? calvin coolidge in 1924. four years later, the candidate is al smith, a catholic, with the immigrant experience, the modern-- before the new deal, it's al smith who is beginning to forge this coalition that also rejecting the old jefferson, jackson small governments. democrats of the 19th century believed in small government. al smith as a legislator and governor of new york, believed in the progressivity agenda, and in many ways, laid the groundwork for franklin roosevelt. >> ifill: carl, adlai stevenson. >> stephenson is an egghead, famously. he runs against dwight eisenhower, loses to him twice, in 1952 and 1956, and after it's over, the democrats sort of decide oh, the public isn't ready for an egghead. the republicans decide this, too, and dwight eisenhower as

president begins to very subtly and 0 repetitiously dumb dun his speeches. so fred greenstein, the great political scientist who wrote "the hidden hand presidency" documented this many years later but it leads to a series of presidents -- ronald reagan and george w. bush, who are supposedly not as smart as the people they defeat. 's the point is the public-- both parties realize that the public prefers street smart in a president maybe to book smart. >> ifill: what about the vice presidents who ran and lost-- hubert humphrey, mondale, al gore, people who were supposed to be anointed to rise? >> well, hubert is the president-- you asked richard who he thought would have been the best president who never was and hubert humphrey would have been my answer. i would say he's largely forgotten now by the young generation. he leads the way at the 1948

convention, democrats. he's mayor of minneapolis, and he lays down the gauntlet to those who said that-- don't rush civil rights. and he said we're not rushing civil rights. we're 170 years too late and it's time for the democratic party to emerge from the shadow of states rights ask march forthrightly into the sunshine of human rights. this is the the man who looks like all along he is going to be president. he is elect to the senate that year. he then becomes the vice president. johnson picks him as vice president, but the vietnam war bogs him down. he loses his voice as vice president and never becomes president. >> ifill: richard, who is the most consequential losing candidate who most people have never heard of? >> oh, that's-- that's a great question. charles evans hughes. >> ifill: that's true. i've never heard of him. >> a very successful governor of new york, reformers, beginning in the 20th century. them he was put on the supreme court. left the court in 1916 to run a very close race against woodrow

wilson. he went back to service in the 1920s as secretary of state under two presidents, but his greatest contribution, arguably, his greatest historical significance, came in 1937 when f.d.r. tried famously to pack the supreme court, hughes was then chief justice, employing all of his old political wiles, he almost singlehandedly managed to thwart the president's effort to change the court in a way that i think a lot of people today, and certainly even then, regarded as radical. >> ifill: is it possible any of these people we're talking about here today could have actually changed the course of history or were they just ahead of their time and this was not to be? >> let me turn that around. henry clay could not have prevented civil war, and one of the lessons-- we don't want to be-- richard and i both think the series is a wonderful idea but we don't want to be too polyannaish-- one of the lessons is there were great forces at

stake. the great compromiser could never have prevented that war. they remind us the winners as well as the liars, there are inexorable forces and one person can only coso much. >> but to delay it was a major contribution. tom dilly, someone who tend to be written off as the guy who lost-- >> ifill: lost by just a little bit. >> who lost to harry truman. if tom dewy had been elected in 1948, i would-- i think you would never have heard of joe mccarthy. >> ifill: because? >> two things. one, dewy is a prosecutor. the first national political debate in america was in 1948. tom dewy in oregon against harold tasson, the question being, shall we outlaw the communist party of america? and dewy, ironically, took the civil libertarian position. beyond that, dewy was a boss. he was used to having his way. joe mccarthy would not have been allowed to become the

phenomenon that he had. dewy would have taken care of it and dewy would have cut mccarthy off at the knees. >> ifill: fascinating. all fascinating. we'll watch it on c-span. richard norton smith, carl cannon, thank you both so much. >> thank you. >> brown: finally tonight, in the last several weeks, we've been looking at the problem of inequality in america, focusing on the extreme top and bottom. recently, i talked with a writer who's studied what he sees as the erosion of the vast middle. don peck's cover article in the latest issue of "the atlantic" magazine asks, "can the middle class be saved?" his new book on the subject is titled "pinched." here's our conversation. don peck, welcome back. >> it's a pleasure to be here. >> brown: now, we've been talking a great deal of late about the ongoing jobs problem. you're making a case that there is something even bigger going on. >> yeah, absolutely. you know, if you look at the

structure of job losses in this recession, what you find is overwhelmingly, the jobs lost on net are what economists call middle-skill jobs. these are the jobs in manufacturing, in nonmanagerial office work that have traditionally provide a middle-class life to people with a high school diploma but not a college degree. >> brown: those are the ones hit hardest now? >> they've been hit hard nest this recession. companies have pulled forward, restructuring decisions and offshoring decisions that otherwise would have taken years to play out. so that group of people, high school graduates, really, have been hit extremely hard in this recession. but that's really just an acceleration of a trend that's been happening for a long time. >> brown: that's what i was going to ask you because we have talked about some of these things over time. this is long-term trend, now it just gets worse. >> exactly. if you look at the-- wages were not rising for people with high school degrees, job growth was

quite flat. that was really covered up to a large extent by the housing bubble, and by rising housing prices, which gave people a sense of progress, but, of course, you know, that fig leaf has now blown away. >> brown: you can give me an example? you went out in the country and you talked to people. >> so i talked to one guy outside of redding, pennsylvania. i call him frank misoli in my book, an italian american in mid-40ing. he's worked outside much of his life, began in factories and had more recently workedaise construction foreman and he lost his job, you know, as the recession started. he's a great guy. he adopted eight kids with his wife before they split up. but he really struggled when he lost his job. he-- he knew there were retraining opportunities available to him, but he told me, you be, "i've never been much of a classroom guy. i've struggled in classroom and it's been a long time anyway. i feel like i'm too old for retraining."

an interviewing coach sponsored by his church group tried to help him in interview, and she told him, "you know, frank, you're just not going to get a job given your very gruff style of self-presentation outside the construction." but that's what he was used to. so he didn't really know what to do and what he ended up doing was essentially rooting through his neighbors' trash for a year and a half or so. he learned the trash pickup schedule for his neighborhood, his town, and surrounding tens of thousands. he would go out in his pickup, sometimes with his kids, at night, ask try to scavenge old appliances that he could recell for scrap. and his plight really, i think, is representative of the plight of many middle aged people, especially blue collar middle aged men who have not only been struggling in this recession. they've been struggling for a long time as the economy has evolved. >> brown: well, when you put this together in a larger picture, you write, "america's classes are separating and

changing." so a tiny elite, a professional class that is going sideways at best, i guess. and then this kind of, what you're calling the nonprofessional class, which is going backwards. >> exactly. i talked to a lot of college graduates and parents of co egegraduates who are really word about their future or their children's futures and with good reason. with the economy so weak, few people are getting ahead outside of the economy's upper echelons. but i think that problem is one that's temporary, and related to current weakness. there's something more worrying going on for people who don't have a college degree, whose skills have been devaled by globalization, and even more so by the encroachment of technology. and i think as a society, we need to recognize that many of the people who are falling out of the nonprofessional middle class without help are not likely to regain it. >> brown: one of the aspects you look at here is i think you refer to as a kind of

geographical segregation. you can see what you're talking about in specific places. >> yeah, absolutely. i mean, if you think about the recession and the recovery, they've both been very uneven. so washington, d.c. is the most optimistic city in the u.s. right now. >> brown: really? >> as the state and future of the economy. you know, wages in manhattan and silicon valley have been growing remarkably rapidly. in the place where's the most highly educated, highest skilled people have increasingly congregated over the past 20 years, the recession was lighter, housing fell les, recovery has begun. in many of the former middle-class meccas, though, places like tampa and phoenix and las vegas, where people with moderate education, limited savings, tended to go over the last 20 years to try to get in on a middle-class lifestyle, we see tremendous pain. many-- >> jim: you noted tampa

specifically. >> tampa has really collapsed. a lot of its growth was predicated on housing. and it built out more and more housing. people took out home equity loans, and now what you see is a shrunken economy. tampa doesn't have a particularly high base of human capital. fewer highly productive industries than many cities. and in the ex-burbs of tampa particularly, you really see a lot of pain, a lot of disappointment. >> brown: and the other aspec aspect, i mean, sort of looking at this longer term, the provocative side of this, i think you refer to as a cultural segregation, the long-term implications of what this could mean for a large segment of our population culturally. >> that's right. you know, when you-- when you look at the cultural habits and family structure as well of people with high school degrees in the u.s., you know, their

families, their outlooks-- in the 1970s-- closely resembled those of college graduates. today the families of high school graduates closely resemble those of high school dropouts in terms of the happiness of marriage, the likelihood of divorce, the prevalence of single-parent households. so as life has become more insecure for nonprofessional middle class, their family and cultural habits have also changed. and i think this is profoundly worrying because children who grow up in unsettled households don't do as well as children who had very stable childhoods, and increasingly you are seeing big class divisions, big geographic divisions in the families and communities in which these children are growing up. that could have big implications for the whole idea of opportunity and upward mobility in america. >> brown: let me just ask you

briefly, is it your sense because we've just come after this big political debate here in washington, is it your sense that leaders, republican and democrat, across the board, have a sense of these long-term trends or is it just the focus on the here and now? >> you know, i think there's not as much recognition of these trends as there should be, in part there is a i have very myopic focus right now on the budget and on the debt. but i also think that because of the geographic segregation that we've seen, the most influential people in the u.s., including its political class here in d.c., they don't see many of the struggles of everyday americans. they don't see the family problems that a lot of people have. and i do think that has led them to focus less, perhaps, on many of the cultural problems and long-term problems that are really plaguing the nation today. >> brown: all right, don peck's work is in the "the atlantic" magazine and in the

new book "pinched." >> brown: in our next story, we'll look at the questions of whether the inequality gap may not be growing as large as conventional wisdom has it. >> warner: again, the major developments of the day: new economic data showed a mixed picture, while white house budget officials lowered their projections for growth this year by a full percentage point. and moammar qaddafi warned that his loyalists in libya will keep fighting. in a broadcast from hiding, he insisted, "we won't surrender again." on our web site, we have a history exam, and images from hurricane irene. hari sreenivasan has the details. >> sreenivasan: test your knowledge of famous failed presidential candidates by taking a trivia quiz on our "politics" page. and find a narrated photo essay on recovery efforts in vermont after hurricane irene from a new hampshire public radio reporter who has been covering the story on the scene. plus we check in with a globalpost reporter in mexico for a preview of president

felipe calderon's state of the union-style address to his nation tomorrow. that's on our "world" page. all that and more is on our web site, newshour.pbs.org. margaret. >> warner: and that's the newshour for tonight. i'm margaret warner. >> brown: and i'm jeffrey brown. we'll see you online, 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: chevron. we may have more in common than you think. >> and by bnsf railway. 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

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