captioned by the national captioning institute --www.ncicap.org-- >> this week on "inside washington." the u.s. loses half a million jobs in june and the california state budget goes into intensive care. >> we don't have the money to pay our bills. >> i iraqis celebrate the departure is -- celebrate the parture of american forces from their city. >> al qaeda can not set up safe havens from which to attack americans. >> the supreme court rules in favor of white firefighters who claimed reverse discrimination. >> if you work hard you can succeed in america. >> south carolina's governor needs more ammunition for his opponents.

>> welcome to of "inside washington." gordon peterson is on vacation. the economic news is bleak. unemployment is at a 20 cents- year high. -- it is at a 26-year high. >> we lost 467,000 jobs last month. >> for more bad news just look west. >> come to the table to negotiate and recognize that we need to get rid of the waste going on in government and we cannot promise any more people things we cannot deliver. >> arnold schwarzenegger's state is drowning. the state legislature is deadlocked on how to balance the budget.

california is issuing iou's to itsreditors. this raises questions abo the effectiveness of the stimulus package. is there any sign of economic turnaround anywhere in sight? >> you have to put this in perspective. seven months ago the big thing was the financial sector. and would we be able to get through this crisis? the financial sector is now stabilized. who would have said that six months ago we would be saying in july that the financial sector is stabilized? mr. millis package is working its way through the economy. -- the stimulus package is working its way through the economy. there is no way that a stimulus package will address the problems they have in california and other states. that problem is not economics. >> any bright lights? >> we are talking about the green shoots in the economy.

green shoots are the season of the locust. this is a steep recession. i always thought we overestimate the influence of the administration on this economy. it is a $15 million economy. we blame the president if things are bad and praise him if things are good. the best evidence is how little this stimulus has had. it will have almost no effect at all in this recession. we are in the deaths and the stimulus money will hit after the trough. >> i think charles is right. in february congress allocated $780 billion to help the economy recover. a little bit has been spent but we have lost 2 million jobs since then. we were also supposed to have these jobs are ready and apparently they were not ready. but we are not putting people

back to work. unemployment is getting worse less slowly, but it is still getting worse. this is the problem for president obama. if he does not produce jobs, then he has not signaled anything to the american people to have recovery. >> how much time does obama have? >> we are really not sure. part of the reason we are in such trouble is there are jobs that are closing forever, like in the automobile industry. people realize that and on the other hand, these are very scary numbers. i agree with everything that everybody said a septet there really is -- one person who took a big hit for voting for the stimulus package told us she kept encountering small businesses who were doing business and saying there are 100 jobs here or i was not going

to keep these people and there are now working. >> not a very comforting thought for lifornia. >> i don't think so. i don't think we have to worry about california. they brought this on themselves. they had the capacity to solve this problem. they don't want to raise taxes, they want services without paying for them, they put restrictions on themselves as far as paying for services but they extend more services to people. they have to come to grips with their own problems. there is no role for the government in california's problems. >> but it is dangerous, and they have this crazy rule that requires two-thirds of a vote of the legislatoure to ok the budget. >> there is no role for the federal government. that is why the serious news is

not the unemployment numbers. the administration has said on thursday that it is open to requests by states for a bailout. >> you better close the door right away. >> if that happens that is the end of the world. today only the fed can have a huge deficit because they print money. if these dates have access it will be the state's printing money, and we will ha 51 jurisdictions out of control. >> you get the kind of government you deserve. california has this crazy system of initiatives where the people can demand where the people -- were the states spend money on certain things.

>> put marine corps forces

back behind enemy lines. we dropped into a few places where nobody had been. >> rains are being sent out across afghanistan to launch a new offensive. earnings will break into small units and live in villages. how different is this from the previous strategy? >> very different. this is a recapitulation of the iraqi surge in afghanistan. the idea is you do not stay in basis, you live iyour work. you walk to work and you live in the villages. at the beginning our casualties were extremely high on account of that and then we were prevailed in the war -- and then we prevailed in the war. it is a risky strategy but it is the only strategy. i have to credit obama for the courage of trying best. >> why did you sign it?

>> even that this is in military initiative, it is a different policy. this is counter insurgency. we are after the hearts and minds of the people. we are living among the people and we will make it safe for the couple government to send people back into the province. -- we will make it safe for the kabul government. now we're doing nation-building. i would not look for an early exit from afghanistan. >> the wild card is whether the afghans will be up to this job as well, because the u.s. cannot do it as well. -- the u.s. can i do it alone. the iraqis have to prove their capacity to take over and run things themselves. will that happen in afghanistan? can the u.s. bring this along

and transfer responsibility? >> a lot of the locals say they are more afraid of the local police then they are of the taliban. we have tried this before and this has some new wrinkles, but it did not work before. we will see if a greater commitment of troops will work. >> the problem here is what roger said about the time scale. there are a lot of democrats who are moderate to said obama gets one year. >> they are reflecting public opion as well >> there was a different story saying this week in iraq. those are iraqis are celebrating because of iraqi forces had finally assumed control of baghdad. there has been a string of deadly bombings. is this a hint of things to

come? >> at any point when we start pulling back in iraq this kind of thing will happen. i don't care if we stayed 10 years, this kind of thing would happen. they have to be responsible for themselves at some point. even president bush put this as the deadline for pulling back from a city. >> do you agree? >> it is a scene i would love to see in afghanistan. that would be a good outcome. >> many thousand troops are still in iraq. >> am i the only one who finds it ironic that our friends in iraq would as to lead and our enemies want us to stay. our bombings have happened in order to make the u.s. slowdown its withdrawal. it is the people of iraq who are celebrating in the streets who want us to go. >> we are going obviously, and i

think it is a time where we ought to look back and see where we have come to. two years ago harry reid had declared the war was lost. that was the consensus in washington. we had the iraq said a group advocating a withdrawal -- we had the iraq study group advocating withdrawal. bush said no and almost alone he pushed the surge, which has led to the day where iraq is largely self sufficient. might succeed and that would be remarkable. >> a ????????ccccc

>> this is approved people should be treated as individuals. that one out at the supreme

court today. >> that is one new haven firefighter who was one of the firefighters who sued, claiming reverse discrimination. white firefighters were denied promotions unfairly because of their race. will this decision permanently altered the public debate on the policy of affirmative action? >> i actually don't think so because this is an important decision and law. it is an important decision symbolically. very few employers hire any more based on numbers in a test. they use a test to make sure people are qualified, but this was a test where one-tenth of one. meant the difference between promotion and not promotion. -- wherene-tenth of a point

meant the difference between promotion and not promotion. >> your reaction. >> i am not sure [unintelligible] it does make it very difficult for employers to do what the city of new haven was trying to do, and that is coming up with an approach to hiring that would allow them to overcome serious problems that they had in the fire department. i think justice ginsberg and her descent was a very important point. key facts in the story did not come out in the majority's opinion. you will see that there are a lot of things about that test that were wrong and the city of new haven could have done a better job of producing a test that would have been designed to show who could do what in the

fire department. >> this is a very important decision. sandra day o'connor wrote in one of her last decisions that she said this court expects in 25 years there will be no need for reverse discrimination. this is a little harder now to make a claim simply that if statistics produced a racially skewed result it is discrimination. it makes it significantly harder to impose a reverse discrimination, so i think the line has moved. it pushes us in a direction of reaching the o'connor goal of eliminating it in our lifetime or younger people's lifetime. >> a political question, i have en no polling, but my guess would be that this was a popular

decision politically. would you agree? >> it was but i don't think anyone understood what the court was saying. they say if you think he will get sood and liz you cannot do it, but -- if you think you will get sued and lose you cannot do it. she said there are other tests and other cities use these tests. the results are less racially skewed. >> in sat tests asians do extremely high on math. does that mean that the test has something wrong with it? >> if no black person could pass the sat test, wouldn't you say it was skewed? >> no college in america it metts only on s.a.t. tests. that is what -- no college in america admits only on sat

tests. >> minorities past but they did not score quite as high. what this decision said was you better not withdraw a test after you get it. you can change this test all you want until you get it. once you get it, you are stuck with it. >> in the case of new haven, they had a graded so that 46% of your support depended on the test may be 30% on interviews. the testimony said that this will probably skewed the results. they could design a test that would give you a good indication of performance othe job where you will have less reliance on the written test and more reliance on the interview. new haven did not do that. they could have done that and produced different results, but

you have to go back tthe beginning. look at where in new haven was. you had a city of a racial composition with a large minority population. one officer got ask the question why did we have this? how do we remedy this situation when the fire department is known for having had very restricted hiring practices or interest racial minoritiehiera's favoring whites. that is what this decision will show. >> it is hard to give a quick response but one point on using a test. the reason that test was introduced over one century ago in civil service, it was a way of eliminating racism, favoritism and trying to get

objective tests as a way to staff government. that was a revelation. >> this allows for favoritism. i know i was a beneficiary. i took the civil service test and passed it. >> in new haven nobody got a preference. >> this is not what he said it was. >> next, governor sanford continues his ki fios guy! where ya headed? ah, just installed fios in the whole building. now everyone has the fastest upload speeds. and we're giving them a mini netbook. well, i'm sticking with cable. so's ted.

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>> i would not say anything definitive at this point. >> mark sanford refused to resign even though calls for him to do so are coming from many. he made a batch of new declarations this week. he said he considered the woman in argentina to be his soul mate

even though he wants to fall back in love with his wife. is it past time for mark sanford to leave the stage? >> mark sanford thinks he is in group therapy and we are the group. we now know how many women he got to second base with, how many women he crossed the line with. this is the world's oldest 16- year-old. i think most people have heard too much from mark sanford. people say what is the difference between this and what bill clinton did? bill clinton never walked off the job for a week and flew to argentina. he took his affairs to work for him -- took his affairs to work with them. mark sanford he took off and did not tell anyone where he is going. >> last week on this show you said we were watching a man go through a public nervous breakdown.

>> it is a hard diagnosis to make. you do not need a license even though i still have one. i am not sure i agree with your comparison to clinton. i am not sure what kind of defense that he did it in the oval office. >> [unintelligible] >> mark sanford has a real problem and he ought to deal with it in private. i think he does not have more than a couple of weeks in office left. >> we are witnessing a meltdown. i would like him to come to washington and check in with a hospital that deals with problems like this because this man needs attention. >> he does seem to have a problem but i think this is his own business and he should do in private. i feel sorry for him because this weekend his vacation with

his wife and sons and in lost in florida. -- and in-laws in florida. >> we also saw further civil war from the mccain campaign. is there anynd to this? >> the question is who was the real drag on the ticket? i have to say i think sarah palin was under qualified to be vice president. if you are a republican and uc sarah palin doing the things she was supposed to do. she gave good speeches, she held her own in a debate against joe biden and did at least as well as john mccain did against obama. i am sorry. thirdly, even though she gave a terrible interview on tv, she

said nothing worse than what mccain said in the midst of the worst economic crisis since the depression, saint economics is not my strong suit. which really lost more votes? >> i covered the sarah palin campaign. mostly she was the warm-up for mccain. she is a great draw. she can give one stage but that is it. >>hat is it for this week. tune in again next time for "inside washington."