captioning sponsored by macneil/lehrer productions >> lehrer: good evening, i'm jim lehrer. president obama talks about thwarting future terror attacks >> woodruff: and i'm judy woodruff. on the newshour tonight, we'll talk to denis mcdonough, chief of staff for the national security council, and get reaction to the president's proposals. >> lehrer: then, the strained u.s. jordan relationship, after a jordanian double agent killed seven cia employees and himself

at a base in afghanistan. >> woodruff: jeffrey brown looks at a treasure trove of national geographic images from around the world, never seen before by the public. >> i didn't know if i had the pictureç at all, but i was going to do everything i possibly could, within reason. without being eaten. to try to get thatñi photograph. >> lehrer: and we take the pulse of the nation's economy at the start of the new year. that's all ahead, on tonight's pbs newshour. major funding for the pbs newshour is provided by:

>> this is the engine that connects abundant grain from the american heartland to haran's best selling whole wheat, while keeping 60 billion pounds of carbon out of the atmosphere every year. bnsf, the engine that connects us. intel. supporting math and science education for tomorrow's innovators. and the william and flora hewlett foundation, working to solve social and environmental problems at home and around the world. and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs

station from viewers like you. thank you. >> lehrer: president obama has made his latest statement on the government's response to the airliner bomb plot. he outlined findings this afternoon from security reviews he ordered, after the christmas day incident in detroit. here is some of what the president said. >> as i described over the weekend, elements of our intelligence community knewç that umar farouk abdulmutallab had traveled to yemen andç joined up with extremists there. it now turns out that our intelligence community knew of other redç flags that al qaeda in the arabian peninsula sought to strike not only american targets in the united states itself. we had information that this group was working with an

individ]am who was known ... who we now know was, in fact, the individual involved inç the christmas attack. the bottom line is this. the u.s. government had sufficient information toç have uncover this plot and potentially disrupt the christmas day attack. but our intelligence community failed to connect thoseç dots. which would have placed the suspect on the no-fly list. in other words, this was not a failure to collect intelligence. it was a failure to integrate and understand the intelligence that we already had.ç the information was there. agencies and analysts who needed it had access to it. and our7s professionals were trained to look for it. and to bring it altogether. now, i will accept thatç intelligence by its nature is imperfect. but it is increasingly clear that intelligence was not fully analyzedç or fully leveraged. that's not acceptable. and i will not tolerate it. time and again we've learned thatm3 quickly piecing together information and taking swift

action is critical to staying one step aheadç of a nimble adversary. we have to do better. we will do better. we have to do it quickly. american livesç are on the line. so i made it clear today to my team, i want our initial reviews completed this weekçó. i want specific recommendations for corrective actions to fix what went wrong. i want thoseç reforms implemented immediately so that this doesn't happen again and so we can prevent future attacks.ç some have suggested that the events on christmas day should cause us to revisit the decision to close the prison atç guantanamo bay. so let me be clear. it was always our intent to transfer detainees to other countries only under conditions that provide assurances that our security is being protected. with respect toç yemen in particular, there's an ongoing security situation which we have been confronting for some timeçó along with our yemeny

partner. given the unsettled situation, i've spoken to the attorney general.ç we've agreed that we will not be transferring additional detainees back to yemen at this time. but make no mistake.ç we will close guantanamo prison which has damage our national security interests and become a tremendousç recruiting tool for al qaeda. in fact, that was an explicit rationale for theç formation of al qaeda in the arabian peninsula. as i've always said, we will do so, weç will close the prison in a manner that keeps the american people safe and secure. as theseç violent extremists pursue new havens, we intend to target al qaeda wherever they take root forging new partnerships toç deny them sanctuary as we are doing currently with the government in yemen. as ourç adversaries seek new recruits we'll constantly review and rapidly update our intelligence and our institutions. as they refine our tactics,

we'll enhance our defenses including smarter screening and security atç airports and investing in the technologies that might have detected the kind of explosives used on christmas. in short, weç need our intelligence, homeland security and law enforcement systems and the people in them to be accountibme and to work as intended. collecting, sharing , integrating, analyzing and acting on intelligence asç quickly and effectively as possible to save innocent lives. not just most of theç time but all of the time. that's what the american people deserve. as president, that's exactly what i will demand.ç >> woodruff: for more on today's meeting and what comes next in t >> woodruff: for more on today's meeting and what comes next from the obama administration, here's ray suarez. >> suarez: and for that, we are joined by dennis mcdonough, the chief of staff of the national security council. just a while ago we heard the president refer to this not as a failure to collect but asç a failure to integrate.

was it one that just involved the accused man trying to bring down that jetliner heading for detroitw3 or were intelligence agencies routinely not comparing, not cross referencing their[ information? >> ray, thanks a lot for the opportunity to join you. look, i think if you look back over the course of the last yearw3 and frankly over the course of the last many years i think if anybody would have taken a bet after 9/11 and said there will be many many years beforeç you see another successful attack, i think a lot of people would have taken that bet. i think the fact that we've been as qu been including this year against david coleman headley, against the five guysr to pakistan, i think this is an example of... those are all examples of the good, hard work, coordinationok, sharing, analysis, correlation of the kind of information that we've nowç come to expect from our intel community. in an instance like this whereas the president indicated it's a; failure, we had come to expect

such regular success that it really stands out. i think what you saw in thetpden the meeting today was a whole host of agencies eager to work together, eager to learn lessons from thisç, to up our game as each of them said. that's exactly what we expect to do. >> suarez: the president referred to speed and talked about quickly closing these gaps in the cross-referencing of informatioí.ç he said the intelligence was not leveraged. can you do that quickly? >> you can do that quickly but i think he's referring toç a number of things. he saw this attack obviously on christmas day which throughtw know. what he wanted to do is address the shortcomings with urgency. that's why john brenna number of people in each of these agencies have worked overtime throughout the holidays to make sure that we understand just wheh-[ the gaps were. but now we want to address them with agility, with alacrity as tiu president has indicated. you can do that quickly.

not only do we believe we can, but we have seen very many instances like thewgk2y÷átjns i outlined before where we have. frankly we believe that we must. so we're going to keep the pressure on al qaedaç central, as it is, in afghanistan and pakistan. we're also going to continue to keep the pressure on al qieea affiliates including in yemen, in somalia, in southeast asia and obviously keep our eye on the target hereç with threats at home. we're going to do that. we think we can do it with speed but we also know we must do it with speed. >> suarez: theç president referred to the countries that have been asked to up their security for flights that may end upç approaching the united states. can the united states or aviation agencies compel them to up their security orç is there an aspect of voluntary compliance here? >> well, look, i think there's a recognition acrossw3 the board that this is a threat we want to confront collectively. we know that we want to work together. obviously international travelç is something that by its nature is going to require a

partnership and cooperation. frankly we know that al qaedaç is looking for new opportunities to target us and our allies and our friends. frankly you have a movement here that's killed more muslims than frankly people of any other faith. we're going to have to draw on( and south and central america and asia but also our friends in the muslim world including in north africaç, in the middle east and in south asia. we believe that we don't really need to compel ourç friends to cooperate with us because i think we uniformly recognize that this is a shared threat. >> suarez: the president took the opportunity to both assert that he'll stay on track with closing the guantanamo bay prison and at the same time said thatç yemenis won't be released and sent home. help us square those two aspects of the policy. >> asç you know, ray, all along we've been going through each of these cases of individuals down at began taun mow bay dgt tooth comb, addressing them

individually on a case-by-case basis,ç making sure that those that we can transfer in a way that will advance our interests and protect the united states, we do that. obviously under the right conditions and the right circumstances. as the president said today and as he discussed with the attorney general, the current situation on the ground in yemen is not the right circumstances. so he wanted to send that clear signal. but we will continue to prosecute/+ those cases as we put them together, as he has announced and as the attorney general has announced on a number of occasions butç the bottom line is this. we have to take a step back and recognize that the guantanamo bay detentionç facility is a principal recruiting tool for al qaeda and its allies. we've known that for some time. as the presidentç pointed out today al qaeda on a arabian peninsula used it as a motivation and recrgiting tool from day one in the information of its organization. the bottom line is we recognize the challenge here. we're going to address it front on asç the pat has any number of issues throughout the course of this year.

>> suarez: dennis mcdonough is the chief of staff of theç national security council. thanks for being with us. >> thank you, ray. >> lehrer: we get three other perspectives now on airline security, homeland security and terrorism from: ken button, director of the center for transportation at george mason university and a professor of public policy; steven simon, former terrorism specialist at the national security council during the clinton administration, he's now with the council on foreign relations; and clark kent ervin, former inspector general for the department of homeland security in the bush administration. he's now director of the aspen institute's homeland security program. mr. ervin, just a few moments ago , the white house issued a statement or issued a statement that the president reportedlyç said to his folks that he met with, in other words, his team, his 12 folks that were there, and the president saidç this. quote, this was a screw-up that could have been disastrous. we dodged a bullet but just it was averted by brave individuals, not because the

system worked, and that is not acceptable. while there willç be a tendency to finger pointing i will not tolerate it. what do you make of that? >> i think that's absolutely spot on. the president was exactly right to say that. he has said essentially in the public statement. you can't fix a problem until you acknowledge it. theç president has said this before. this was a systemic failure. it is the first impulse of government always to down play crises.c that was the first impulse here with the department of homeland security. so the president is quite right, and the sense ofzv urgency that he conveyed is also important. most importantly to say it was a failure to connect the dots. we created four entities afterç 9/11, the department of homeland security, tsa which is a part of the department of homeland security, the director of national intelligence and most importaodly the national counterterrorism center precisely to make sure that we do connect the dots in the future. we had the necessary informationç to prevent this plot but it was thanks to passengers, as the president said, and not our ownp0.overnmes foiled. >> reporter: mr. simon, how do you read the president's term

"i will not tolerate this." heç said before it's unacceptable but he has said i will not tolerate. what does that mean? how should that be read? >> i think he'shdoing a couple of things. first, he is in an adversarial political contextç in which it's very important for him to show resolve because the other side is saying that actuallyç he's shown insufficient resolve. >> lehrer: you mean the republicans. >> the republicansç, absolutely. secondly, he's got to send a message to the national security bureaucracy that they've really got to be careful in thp secondly, he's sending a message of reassurance to the american people that this very near miss registered on the white house screen. they understand it was aç problem. they're going to do something about it. i think the message was clear but it was intended for three audiences. >>$ audiences here at least? >> i think it was at least three audiences.

the fourth is the international audience asç well. the president really has to address two major audiences. the u.s. people,ç americans travel throughout the world and others come to thisç country. i was disappointed when he didn't mention the fact that there were not only americans on that flight to detroit. you have a bombó#:u i think you're sending a message that the u.s. may takeñi stronger leadership in counterterrorism. it does seem to have fallen back recently and become slightly defensive is is probablyç a good word. he's resuring the world community as well as the american population. >> lehrer: what about the bureaucracy of theçó u.s. government? >> the bureaucracy is difficult. bureaucracies do have their failings. theyç inevitably are not perfect. people talk about a totally safe airline system and a totally safe transportation system. that's simply not possible. onym this occasion i think the system did fail exactly the way he pointed out.

there's information there. it was handledúbhdly. you find out why that happened. you make sure it doesn't happen again. and you also look forward because a terrorist will be[ playing games with you. you have to look forward to ways they're going to try and tweak the system, get around the system in the future. i think that's a real challenge for the security people. >> lehrer: mr. ervin, right after 9/11, the same words were spoken. we must doç things now to make sure this never happens again. >> precisely, jim. it's so rim reminist 9/11. information was collected. it was not translated and the significance was not or@sped until september 12. the c.i.a. had listed two of the hijackers. onceç those hijackers came to the country not shared with the f.b.i.. had it been, the f.b.i. presumably could have tracked them down because they were living underç their own names in san diego in the phone book. similarly here as the president said again today, the nsaç intercepted messages that said a terror attack was being planned in yemen using a nigerian.

theç suspect's own father, a respected nigerian banker went to the state department not once but twice. talked to uxe central intelligence agency too. then followed up with telephone calls and with written communication. as the president said that was enough at a minimumç to get him on the no-fly list in which case he wouldn't have boarded the flight at all. >> lehrer: mr. simon, youç know this. you've worked in government as a career. you're a specialist in this particular area.v: do you leave the words... hearing the words of the president with a sense of confidenceç "now, final he, they're going to get their act together and we're going to stop this and they're going to stop... they're going to start connecting theç dots, et ceter, et cetera, et cetera"? >> well, look. this case was complicated by the fact thatç under the way we use intelligence,78p&h! h didn't give the system what

the system needed to move, to move expeditiously. normally a walk-in to the embassy who provides information on a suspectedç terrorist is not going to be put at the top of the cue until he's imparting some actionable intelligenceç which means something really specific. and this man wasn't. >> lehrer: okay. let's move it to the next step. if somethingç similar happens today because of what almost happened over theç landing in detroit, this will not... this will be averted because of the fact that the president isç moving and the united states government is moving and the world is moving. you don't... i don't think your answer says yes.@z >> see, what's going to happen now is that the threshold for reporting this kind of information and for allocati%g a lot of attention to this information, this sort of information is going to go way up.ç which means that the people whose job it is to interpret it, analyze it and assess its

significancewk1, their job is just going to be more difficult.... >> lehrer: put thelç on the watch list. when in doubt, put them on the watch list. >> of course. if you were an embassy at this point and somebody came in and said, you knowç, my son is hanging out with the wrong people and, you know, he's taking a real anti-american line and i'm not really happy about thiq i think you should watch him. you know, you're going to send a flash cable to washington saying we've got to do something about this guy.ç >> lehrer: you agree that things are going to happen, mr. button? do you agree they'll be the right things. >> things will happen. i think the point about this case was the bomber basically had a visa. it's not too difficult to# and pull him out. >> lehrer: let me stop you there. it really isn't.ç there are data banks within the u.s. government that has the name of everybody who has a visa, right? >> exactly. if you get some report there'snk while you can check. you can be safe rather than sorry. i'm surprised they didn't do

that.ç one of the dangers of the current situation though is we're moving towards focusing on the aviation sector. that's where theç recent events have occurred. we're trying to stop foreign nationals coming into the country who are undesirable. the bigñv is you can get complacent about domestic terrorism. in many places outside of america, theç standard method of terrorism is not to attack the airline. obviously english. we have bombs on theç metro system. we have the situation in tokyo where we had gas pumped into subway systems. i thinkw3 the situation is rather more complicated than simply handling foreign nationals coming into the country andç collecting intelligence on them. there's a lot more intelligence out there which we've not heard about which needs to be dealt with.4úyr.9eht with mr. ervin. that said, what mr. button just said, the fact of the matter is it's anç airplane incident that we just had. not another one of these kinds of incidents that you were talking about.

that's stillg)r'gvxz be the focus. is it not? >> unfortunately yes. i say unfortunately because we do have this tendency which we suffer fromç to always fight the last war. this was an airline attack. therefore we're going to redouble our efforts in the aviation sector. we've done more already in the aviation sector than any other because that's how 9/11 happened again. i think he's right to say that there are also vulnerabilities ilç the maritime sector, the mass transit sector. we need to focus on those as well. >> lehrer: meanwhile, doç you have a feeling of confidence now? you've been involved in this also in the government right after7s 9/11 and you were involved in this very piece of work. do you think, oh, now they're going to get snit. >> jim, i'mç getting there. the president said the right things, point one. he's already taken a number of steps inv: terms of terror watch lists and there are more to come as he also said today. but the one thing he didn't talk about today is accountability.!3 we've not yet heard whether any individual in the bureaucracy who didn't connect the dots is going to be held accountable for it byç losing

his or her job. that needs to happen. >> lehrer: that does need to happen. somebody should be fired for what happened. >> this whole phraseç that we got from the nixon administration. mistakes were made. mistakes were made by people. unless and until peopleç are held accountable, mistakes will continue to be made. >> lehrer: do you agree? >> i go back to truman and the buck stops here. someoneg# has to be accountable. >> lehrer: mr. simon, do you agree? >> i think you will find that people did their jobs ç. they had intelligence that was of an ambiguous nature. it was put inç the track that ambiguous information is put into. >> lehrer: don't fm anybody. >> the dots would have been connected eventually. >> lehrer: okay. quickly starting with you, mr. simon. theñi president right on the no yemenis from guantanamo back to yemen? >> i don't think there are going to be any yemenis going back there. >> lehrer: he's right to say that?

>> well one of theñi yemenis who went back happens to be at the head of al qaeda, the arabian peninsula, which is theç group we're really worried about. >> lehrer: enough said. mr. button. >> exactly the same. public confidence demands they stay atw least in some form of security detention. >> lehrer: an automatic decision. >> absolutely. it was inevitable. no question butç the president had to say that. we're going to suspend the repatriation. if i could briefly disagree!3 with my friend steve. >> lehrer: you may. >> intelligence is always ambiguous. it doesn't get any clearer than it was here. unless we connect dots in this instance, heaven help us in future cases. >> lehrer: you still don't want to fire anybody, mr. s[mon. >> the thing is, it is often ambiguous and clark is absolutely right about that. but it does get lwss ambiguous. if mr. abdulmutallab had come in to the embassy and said, listen, myñlson wants to blow up an airplane and he wants it to be a christmas present to the american people. and i know he's really seri)uj

about this and he gave the names of some of his son's associates it would have been different. >> lehrer: isn't that more than aç little dot? i mean that would be a huge.... >> it's a big dot but there are walk-ins who do come intoq information. >> lehrer: we'll leave it there. gentle member, thank you all three very much.ç >> woodruff: and still to come on the newshour: the spy who killed cia employees in afghanistan; out-takes from thousands of national geographic expeditions; and taking stock of the u.s. economy. that follows the other news of the day. here's hari sreenivasan in our newsroom. hari. after closing for two days under threat of attack. embassy said the threat had passed after yemeny forces on monday. in all, the government sent thousands of troops into two provinces and theç region around the capital to go after militants. a government statement said security is good in the

foreign embassies has abated. the u.n.'s world food program has suspended operations r southern somalia. a spokesman today cited rising attacks on aide workers a spokesman today cited rising attacks on aid workers and extortion demands by armed groups. he said it's "virtually impossible" to reach as many as 1 million somalis. much of the south is controlled by the al shabaab rebel group. their spokesmen said today the world food program is a spy agency, and will not be allowed back. an arctic blast extended its reach today from the eastern u.s. to the deep south. hard freeze warnings were issued all the way to the florida panhandle. farmers in the region rushed to save strawberry crops and citrus groves. meanwhile, parts of the great lakes and the northeast were shoveling out of another record snowfall. forecasters expect the bitter cold to stick around all week. 2009 will go down as the worst year for u.s. auto sales in nearly 30 years. chrysler was hardest hit, with sales down 36% from 2008. general motors was down 33%, and

ford was off 15%. the major japanese brands were off as well. ford and chrysler did report sales gains in december, compared with november. wall street marked time after monday's big gains. the dow jones industrial average lost nearly 12 points to close at 10,572. the nasdaq rose a fraction of a point to close at 2308. the rise in health care spending in the u.s. slowed in 2008, by the most in nearly 50 years. still, it grew faster than the nation's overall economy. a government study, by the centers for medicare and medicaid services, found health spending topped $2 trillion. that works out to an average of about $7,700 for every american. those are some of the day's main stories. i'll be back at the end of the program with a preview of what you'll find tonight on the newshour's website. but for now, back to judy. >> woodruff: information has emerged about a possible jordanian connection in the attack that killed seven americans at a cia operating base in afghanistan.

gwen ifill has that story. >> ifill: new details surfaced today about the attack, a suicide bombing allegedly carried out by a double agent working with the u.s. the names of the victims have not been released by the cia, but family members have identified 3. 37-year old harold brown junior originally from massachusetts leaves behind a wife and three children. >> his concern was to make the world a better and safer place for everyone who lived here. i think that fueled his own commitment to the military and to our country and indeed to the people that he was trying to help. >> ifill: jeremy wise was a 35- year-old former navy seal who worked as a security contractor. friends have already set up a memorial on facebook, including this entry: "he was doing what he wanted to do." and 39-year-old scott michael roberson was working as a security officer. he leaves a wife who was eight months pregnant.

they will each receive a star here on the agency's memorial wall at the headquarters in langley, virginia, commemorating those who have died in the line of service. an eighth victim identified as a jordanian spy was also killed in the attack. captain sharif ali bin zeid was a member of the royal family, and received a state funeral on saturday. he reportedly recruited a top informant, humam khalil abu- mulal al-balawi, the alleged double agent working for al- qaeda. the 32-year old was a doctor from zarqa, jordan, also the hometown of abu musab al-zarqawi, the slain leader of al-qaida in iraq. a c.i.a. spokesman would not confirm al-balawi's alleged role in the attack, saying in a statement:

a key part of those operations have been u.s. drone aircraft strikes on insurgents. he bomber struck at a base coordinating the strikes on taliban militants near the border with pakistan. >> ifill: so who was the attacker, and how did he get close enough to carry out such a devastating attack? for that, we turn to two men who have been tracking just those questions. david ignatius, a columnist for the "washington post" who has covered intelligence issues for many years. and jarret brachman, the author of "global jihadism" and the former director of research at west point's combating terrorism center. he now teaches at north dakota state university. david ignatius, this sounds like a plot from a novel, oneç you may have written actually. what do you know about how this unfolded? >> well, what we know is that the jordanian intel service which has been a key partner for the u.s. in fighting al qaeda for many years developed this doctrineç, this young doctor as a

potential penetration of al qaeda at a high level. he seems toç have been turned. he was a radical jihadist. he wasç somebody's whose writings appeared on websites. you can track his trail. the jordanians have seemed to have turnedç him into what they thought was a double agent, somebody was normally a jihadist butó[ working for the. in that guise he was making his plans with al qaeda and ended up here on the afj1 what's interesting is that he came, it seems, a triple agent. that somehow al qaedaç flipped him back and sent him into this camp apparently bringing really hot intelligence about theó[ perhaps having the locations of the number two in al qaeda, just tantalizing stuff forç the americans. they left him in the gate and he had a suicide bomb. >> ifill: is it generally understood$ intelligence circles or even

in jordan that the u.s. intelligence community was working so closely withç jordanians? >> it's understood for people who pay attention to this. i wrote a novel, a body of lies, that wasç made into a hollywood movie with leonardo decap pre-owe. the whole scene of that movie isçó jordan is a key in the fight against al qaeda. jordanians generally know about it and are proud of it. the fact that the jordanians afghanistan at that close range i expect people didn't know that. >> ifill: jarrettç brachman, explain to us who this individual was. who was he? what do weç know about him? >> well, you know, the thing that i didn't know him by that name. i knew him by the name/+ñ , different from that one which was the moniker he was using online. since at least 2007 this guk has become one of the most prominent al qaeda jihadists pundits. and soid@is guy is, you know, what you might consider a commentator.

he takes the big ideas of al qaeda and tries to translate them intoç digest i believe tidbits in compellingç essay formats for the followers. >> ifill: this all happens online? >> yeah, and, you know, heç started off as a cheerleader kind of on the side lines. what happened is he was recognized by more formal al qaeda, you know,ç web administrators as having a lot of potential. they basically promoted him to this elite status. well, over the courseç of writing tens and 20, 30 essays people began to really take notice that this guy had potentialéo over the course of several years he became one of the most heralded essayists or jihadistsç pundits on the forums. >> ifill: was it significant that he was a physician? >> well, youç know, that information never came out. the only biographical information we ever knew about himç was that he was born somewhere in the northern part

of the arabian peninsula, that he was married and hadç two kids in his early 30s. all we had to go on what really the essays that he had. they were thoughtful. they were rabid.ç they were very creative. >> ifill: you mentioned another physician.çó do you think there's a connection there between their two occupations? >> i'm just guessing but i'm thinking that one reason that he was seen as suchç a valuable potential penetration of the al qaeda circle was that as a physician, he might be able to make his way tj conceivably there was hopes of getting him close to osama bin laden. it's veryç interesting that here again we have an example of a very well educated person in the muslim world, a doctorçó p we've seen other doctors in britain in these plots. it's a reminder that the very top of sociefy, the best educated often the most prosperous people seem to be vulnerable to thisç type of recruitment. >> ifill: a lot of people don't realize that the c.i.a.

has bases in war zones. what was the significance of the c.i.a. havingç an outpost ? >> this was an important base, gwen. it's very close to the areas of pakistan. this base was used for gathering information that could then be given to the targeters for our predator drone attacks on key al qaeda and talibanç figures who are hiding out in these tribal areas of pakistan. it was said to be a key hub forç information. they were meeting with agents . unfortunatelyç they seemed to have invited the agents inside the base which was dangerous but it was an important place in this war. i talked to c.i.a.ç officer today's who said we have done so much damage in the last year against this enemy, against al qaeda and p taliban, we have to expect they're going to try to hit us back. it won't stop us from continuing the activity that that base was doinu. >> ifill: the president talked about the flexibility with

which al qaeda is demonstrating andçó changing its tactics. is that something we have begun to see? was this unfortunate episode a sign of how alç qaeda is changing and becoming something else? >> well, i mean i think this is really a d the sense that this was a guy who was something i've called a jihadist, somebody whoko cheers from the side lines as nothing more than a hobby. we then took the next step and did something. he's providing aç role model for the thousands of people who are in these jihadist discussion forums that they too can be an al qaedaç army of one. they can two out to afghanistan or they can, you know, go anywhere that they canç pick up a gun or an explosive and do some damage in the name of al qaeda. i think this shows both a¿d5" these guys are and how dedicated they are. >> kfr11iñ one.... >> one of the things we see in this man's writings is that he

felt, you know, from at least 2007 thatç he was kind of the representative of down-trodden communities, of oppressed and persecuted people.çó you also got a sense that he was very upset with himself for doing nothing more than talking about it. so it's thisç disconnect between, you know, consuming the ideology but not doing anything about it that drives guys likeçó him mad. forcing them to find a way to get out there and activate themselves. vi finally, doesç this change now the way the c.i.a. operates on the ground and in dangerous frontiers likeis? >> people at the agency have been saying today no, we're in the line of fire. we know that. we have toç be to do to do our work. i hope it will change the trade craft that they use in meeting with people. >>ç ifill: meaning? >> typically in a spy novel and in real life you meet agents in safe houses. you don't meet them in embassy vulnerable or they can see a

lot of the people around you. it's not secure to do that< typically you go outside. we stopped doing that in iraq and afghanistan because we thought it was too dangerou for our c.i.a. officers to be traveling. i have a feeling people will reexamine that and say it is pro out because it's more secure. they can do less damage. otherwise i think they'll keep pushing. they think their fight hasç been effective. >> ifill: david ignatius and jarrett brachman, thank youç both very many. >> lehrer: now, bringing a world of images to light. jeffrey brown has our report. >> this is tunisia in nearly the 20th century. i mean some of these pictures are just eye-popping. iñi mean just beautiful. >> brown: bill bonner has had a treasure trove largely to himself forçó 27 years. here in the bowls of the "national geographic" society in washington d.c.

bonner, theç archivist oversees a collection of some 11.5 million images. >>ok without the excavation around. >> brown: there's everything from an expedition at the north pole inç the late 1800s to hunters in zanz bar several decades later. ñi coal miners in england in 1938 to mount rushmore under construction in 1947. 5a >> just can't wait for people to see some of these things. >> brown: bonner's underground world is made up of aisle after aisle of envelopes and boxes containing images that for the most part went unpublished, called them theç outtakes from thousands of assignments and expeditions. vintage black-and-whites and transparencies asçó well as the first commercially successful color photographs produced on glass and known as w3 autochromes. there are also 12,000 pieces of original art commissioned

by the society includingç this wyeth painting titled sea monsters now to be worth several million dollars.ç millions of more recent transparencies are kept in cold storage including 35,000 specially trained personnel can retrieve them in low-light conditions. for most of "national geographic"ç's 120 years, images were filed by hand. these photos show workers inç 1933. and bonner continues to ... the traditions. the holdings are now indexed computer and everything is beingç digitizabled. geographic staffers ringing a doorbell for access to the highlxç secure vault have always borrowed from the collection for their publications, but it's been kept hidden from the public eye.ç now geographic has started to change that by publishing a 500-page book. "national geographicç" image collection. it spans 12 decades of world events and photographic

evolution.ok a 30-year veteran of "national geographic" who oversaw the project says picking a few?; hundred photos from such a huge archive required a detailed framework. >> when you're documenting world. we're known for documenting science and climate change. we're known for documenting naturalç history. we're really known for exploration. we kind of put mental çly a bucket. within those we wanted to tell an important story which is every one of these stories we were able t] tell differently because of the technology we had at our disposal at the time. so, for example, if you look you can see that we had to start with black-and-white photographs. those photographs look so still.ç most of the animals are dead in the early part because we couldn't capture motion very well. it was in black and white.-and r photography. glass plates. you couldn't capture motion at

all but you can get the color.ç 35 millimetre came. suddenly you could capture owl this motion. each chapter in the book we arranged77k chronologically. >> brown: chris johns who first worked for the magazine as a contract photographerç and became its editor in 2005 said while insiders knew what they were sitting on, readers enjoyed the photos that were selected for theç magazine, no one stopped to think about releasing some of the other images from the archives. >> one of themy things when you've been in institutions, sending people all over the world for more than 120 years , youç can take some things for granted that, in fact, you shouldn't take for granted. well, let's slow down for a minute. let's really look back in that rich history. >> there's added pleasure forw3 johns in seeing 7 of his own photographs in the new book. he described the thrill of taking one of them. >>ç but occasionally i'll run into a situation that i know

is so rich and i've got my camera inç hand. of course you get to a point in your life when you realize you've only got so many clicks left in your life. ç you really go after a picture hard. an example of that would be a photograph i took of aç lion in a kalahari desert. the light was terrible. later in the day i found @il in the midst of a dust storm. black skies. wind raging. i was losing the light. but finallyñi i got one frame out of probably about 250. one frameç that worked. and i didn't know if i had the picture at all. but i was going to do everything i possibly couldw3 within reason, without being eaten, to try to get that photofbaph. >> brown: more of the previously unseen photos are now on exhibit at the society's headquarters. bothç inside and out. lit up at night.

forç his part archive ist bill bonner will continue to tend to the vintage collection one artifact ofç history at a time. >> woodruff: finally tonight the economy. in the early days of this new year, we have seen a string of conflicting signals about the state of the economy, and today was no exception. in a sign that the housing market remains weak, a national association of realtors monthly index, which tracks the number of homes under contract, fell by 16% in november, a sharper decline than economists had expected. on a more positive note, the commerce department reported that new orders at u.s. factories rose by over 1 percent in november. that comes a day after news that factory activity in december rose to its highest level since april 2006. recent jobs numbers have also been mixed.

while the unemployment rate remains in the double digits, new jobless claims dropped last week. so what does it all mean? is the economy on track for a strong recovery? or will we remain stuck in a slump? we get two takes: robert barbera is chief economist for i.t.g., a research and trading firm; and dean baker is co-director of the center for economic and policy research. gentlemen, thank you both for being with us. i want to start with you robertçó barera, you believe that the country is on the cuss-of a real recovery. what do you base that on? >> i think the giant challenge for the obamaç add m.was to rescue the banks and to get the financial system back in order. it was a giant challenge.ç but i think they succeeded. that panic that really took hold throughout the country,¿d5é recess. as a consequence, i think that's the back drop that you need to get aç genuine

recovery. >> woodruff: dean baker, you see it differently. you basically are saying that they rescued theç banks. that's a good sign. >> it's just that the american economic association convention in atlanta you had a lot ofç people running around saying we've prevented the great depression. that's a low bar. i should point out every other country in the wor to avoid the great depression as well. people are concerned about, are we creating jobs and getting the unemployment rate down? i seeç a story in which we will probably see growth very, very weak growth and we're likely to see the unemployment rate hoveringç around 10%. >> woodruff: you're focusing on unemployment whereasç mr. barbera was focusing on the banks. >> i mean my concern is jobs. for most people thatç is the economy. they're happy to know that the financial system is relatively sound so we aren't going to beç reading about a big bank going bust tomorrow. that's of course good news. what really matters to most people is are they secure in their job?

d that's not a good story for most people. >> what about that, mr. barbera? >> iç agree with dean very much in the sense that jobs are key. the take i have which is not the conventional wisdom right enveloped the economy late last year or early lastç year and throughout much of year was a panic about cash. you thought your banks might go bankrupt. you thoughtok they might pull your wires and so you slashed inventories and you also slashed your work force. if youok look at the data in terms of the amount of job decline over 2009 it was wildly in excessmy of what you would have expected based on the g.d.p. decline. most everybody expects a snapback forç inventories. i do too. but i think you're going to be surprised about the snapback for employment as somebody who sort of has to deal withç the details of the monthly pulse of the numbers. if you look at that sharp decline in joblessç claims,

that surge in the purchasing managers index, those traditionally are followed by material gainsúffr payrolls. so i think in 2010 quite distinct from dean you're probably going to createç more than 2.5 million jobs until the number one issue is jobs but i think we will be creating them. >> woodruff:ç it sounds like he's saying we've cut to the bone. they inevitably have to create jobs. >> we are seeing a slowerç rate of decline. for example, taking the jobless claims we were up around 650,000 a week. that'sç higher than is consistent with job growth. if we go back to 2 last recession, we didn't actually startu! creating jobs until jobless claims fell under 400,000 a week. we're still in a area where we're looking at losing jobs in the month of december and probably iíç the first couple of months of next year. i'm sorry we're in 2010. this year. and in terms of/+ expecting strong growth inventories we will see a bounce there but much of our inventory acculumation will come from imports.

thatok will not stimulate our economy. what you expect to fuel a rebound is housing and autos. itç just don't see that happening. >> woodruff: you made several points here. what about the fact that a lot of this would hinge as deanç baker just said on imports which doesn't benefit u.s. companys? >> well, if you look at theç swing for inventories and swing for imports, basically what i expect is about a 2 percentage point swing fort& they'll give a third of that back to imports. that still gives you a pretty important advance. inç addition, if you look at those jobless claims numbers or if you look at the job numbers, you know, my dad is a physicist.ç he said it's a second derivative world. the change that you want to keep an eye on, theç average change in payrolls over the last nine months is 75,000 improvement. at that rateç, we'll be at 250 by the spring and if we run 250 to 300,000, wehget

something on the order of 2.5-3 million jobs. that line has been very powerful. it's true. it wasç sharply negative at the beginning but it's been an important improvement. i'm betting that that trend will continue. so i'm nots]f imagining a trend. i'm simply wagering that the trend continues. >> woodruff: i'll stay out of the physics point. how do you respond? continue. i mean we had some sort of one- time boost, home sales, for example, were boosted first-time buyers tax credit. that pulled a lot of home purchases forward. people who might have bought this yearç instead made their purchase before when they thought credit would have expired back in december. the stimulus weç felt the peak impact from the stimulus back in the third quarter. we're still feeling it this quarter. that will start to wear outó1sñ over the course of the year. we'll have real contraction associated with state and local governments because they have hugeç budget deficits. i see a lot of downward pressure on the economy yet to come. >> woodruff: just to name a few, the housingw3 point....

>> yeah, i think there's an old joke that when you have some stimulus, are you building a bridge or a pier?ç do you get over a hump and into the promised land of self-sustaining recovery or does the economy after the stimulus disappears? we look at one sector when you have news today. the auto industry.ç we had the cash for clunkers. you got the sales. people were quite worried yát sharply negative numbers in the fourth quarter. we didn't. the number looks like 11.2 million for december.ç and in fact g.m. announced that their production in the first quarter on aç year over year basis will be up over 75%. for the industry overall it looks like it will be up 50%. you've got some improvement there that is significant. >> woodruff: let me stop you there and get mr. baker's response on that?ç >> we're up from extremely low levels. 11.2 million would be deploring if we go back a couple yearsç ago and look at 17 million sales a year.

we were at incredibly low levels. we are up from that but thisç is still well below normal output levels. >> no question. again we're talking about growth rates. is the economy going to grow af a good level? at a good rate? will it generate jobs? i say yes it will grow at a good rate. yes, it will generateç a fair amount of jobs. you're absolutely right. at the end of that 12 months the unemployment rate is probably 9%. very disappointing.ç auto sales are probably 12.5, very disappointing. but it's much stronger than the trajectory you're describing forç either the overall growth rate or for the growth in jobs. >> again i see the source as a weakness. theç non-residential construction numbers came out yesterday were very weak. we have a collapsing bubble there that i think people haven't fully appreciated the implications. when the housyb÷ market weakens that takes away people's wealth. we're going to see more of a negative wealth effect. people can't consume because they haveç negative he can quit he can quity. >> woodruff: what's at the core of the difference? is it

you are looking at the same numbers. >> forecasting is a black art first of all. a right? and i would simply point out that if you go back to theç last two deep recession, go back to late 1982 or lateok 197, early 1975, it is the nature of a deep recession to give you a very long list ofü ko1 about. as a consequence the consensus coming out of a deep recessionç always says very meager recovery. it makes a lot of sense. it's just been a horrible way to forecastç. >> woodruff: dean baker, a brief response. >> this is a qualitatively different session.on# it was brought about the collapse of the housing bubble. i think it will be extremely hard to recover from. >> they're all different. >> woodruff: we're going toç have to leave it there. gentlemen, we thank you both. we appreciate it. >> lehrer: again, the major

developments of the day. president obama told the nation it's now clear u.s. intelligence "failed to connect the dots" on the airliner bomb plot. and, he said he won't tolerate it. the president also announced he is halting transfers of detainees from guantanamo to yemen, for now. al-qaeda in yemen has been linked to the bomb plot. and u.s. auto makers reported sales for all of 2009 were the worst in nearly 30 years. chrysler sales were down again in december not up. as weç reported earlier. the newshour is always online. hari sreenivasan in our newsroom previews what's there. hari. >> sreenivasan: we talked to intelligence experts about the state of u.s. counterterrorism efforts and what they think are the most effective security reforms. you can ask paul solman your questions about the health of the economy on his making sense page. and on art beat, watch a slideshow of photographs from the national geographic image collection. all that and more is on our web site, newshour.pbs.org. judy.

>> woodruff: and that's the newshour for tonight. i'm judy woodruff. >> lehrer: and i'm jim lehrer. we'll see you on-line and again here tomorrow evening. thank you and good night. major funding for the pbs newshour is provided by: >> what the world needs now is energy. the energy to get the economy humming again. the energy to tackle challenges like climate change. what is that energy came from an energy company? everyday, chevron invests $62 million in people, in ideas-- seeking, teaching, building. fueling growth around the world to move us all ahead. this is the power of human energy. chevron. >> what makes us an engine for the economy? plants across america. nearly 200,000 jobs created.

we see beyond cars. intel. supporting coverage of innovation and the economy. >> and by bnsf railway. the national science foundation. supporting education and research across all fields of science and engineering. and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. captioning sponsored by macneil/lehrer