captioning sponsored by macneil/lehrer productions >> lehrer: good evening. i'm jim lehrer. a sharp drop in the number of americans in the work force. >> woodruff: and i'm judy woodruff. on the newshour tonight, the unemployment rate remained at 10%. jeffrey brown gets context on the numbers from david leonhardt of "the new york times." >> lehrer: then, the bombing suspect makes his first

appearance in federal court. ray suarez talks to paul egan of "the detroit news." >> woodruff: we look at the state of u.s. intelligence after the botched attempt to blow up an airliner. >> we find those and put them together. much easier to -- >> lehrer: paul solman reports on why small businesses aren't increasing their hiring. >> woodruff: plus, the weekly analysis of mark shields and david brooks. >> lehrer: that's all ahead on tonight's "pbs newshour." major funding for the pbs newshour is provided by:

>> lehrer: more americans losing jobs, and even more giving up hope of finding them. that was the gist of december's unemployment report. jeffrey brown has the story. >> brown: the labor department numbers today fell well short of hopes in some quarters that the economy might have added workers at the end of 2009. instead, 85,000 americans lost their jobs last month, led again

by hits in the construction and manufacturing sectors. the unemployment rate held steady at 10%, but that's because more than 660,000 people gave up looking for work. president obama cited the numbers this afternoon, as he announced new spending to create jobs in renewable energy. >> the jobs numbers that were released by the labor department this morning are a reminder that the road to recovery is never straight, and that we have to continue to work every single day to get our economy moving again. for most americans and for me, that means jobs, that means whether we are putting people back to work. we have to continue to explore every avenue to accelerate the return to hiring. >> brown: overall, more than 15 million americans are out of work now, and nearly 40% have been looking for a job for six months or more. that's the highest percentage in six decades. economic growth in the last quarter of 2009 actually helped slow job losses from what had been happening in the summer and

fall. and revised figures from november showed a net gain of 4,000 jobs, the first time that had happened in two years. but december's renewed job losses will raise new questions about just which way things are headed. and with me to walk through the latest jobs picture is david leonhardt, economics writer for "the new york times."/a- irst, today's number was worse than expected. >>. >> yes, it was. there were definitely hopes as you pointed out that we would get a positive number. it turns out revisions gave us a very slightly positive number for november. but then we got this negative number for december. it's funny, the negative positive line is actually not as important as it often seems because it we really need more than 100,000 jobs each month just to ep could up with population growthment but this gives us a sense really for how far we are from getting the job market healthy again. >> reporter: i want to pars the expectation games a little more here. because you say this revision in november actually shows we had one month where we gained jobs.

>> yeah. >> reporter: and as i said in the introduction, recent numbers are not as bad, certainly, as what we saw. >> exactly. it is a question of hoping, expecting, all around a framework of numbers. >> that's right. one of the ways to pars it in a way that doesn't get you too dizzy in a month-to-month stuff is take a three month moving average which economists often like to do. when you do that you don't get into quite this much noise and what you see is things have continued to get better. if you look at the three month moving average we have lost 70,000 jobs on average over the last three months. that is the best by far, far better than it was earlier this year. and the best by far, the best we have had so far. and so that eliminates a little bit of this noise. it tells you the job market is getting better. but painfully slowly. >> reporter: yeah, now speaking of painful, the real disconcerting part of this, it seems to me on the human side, is showing many more people looking for work for longer periods of time, and many, just giving up. >> yeah. and the official numbers

even understate that because they don't count all the people who have have given up. many are just long-term employment. >> reporter: explain that the quirk in the jobs number. >> absolutely. so to be considered officially unemployed you must have looked for work in the last four weeks. there are a lot of people out of work who, particularly in high unemployment areas, who would like to work but have not looked in the last four weeks. they are not considered officially unemployed they are not counted in the 10% number. and so once you include those people, you really do have a large number of long-term unemployed. and our safety net systems are set up to deal with the way unemployment used to be. they are set up to deal with the manufacturing worker who is laid off for a few weeks or month and goes back to work. >> reporter: with the expectation that they will get a job fairly soon. >> that's right. they're not set up to deal with this more structural unemployment. and i think that is a rel concern. i think we're going to have large numbers of people who will have spent a very long time out of the workforce. >> reporter: you're referring to that as a structural -- >> a structural problem, that's right. and it's the result of a number of things. we've had slowing education

gains in this country. we put a lot of people to work in say the housing sector where they are to the going to be able to go back to work. and i think there is a big question of where these people are going to end up once they are able to find jobs again. it's a real worry. >> reporter: now a related side of this is that as i read the report, there were gains in the private sector but many of them are in the temp area. >> that's right. >> so that sometimes we look at that and we say well that's sort of a good sign because that means employers are thinking maybe it's time to start hiring people, right. so they are hiring temps. >> right. >> reporter: but the problem here seems to be that a lot of these remain temps. >> yeah. so some economists believe that temps are a leading indicator, that things are going to get better. some aren't so sure. obviously we don't want to move to an economy in which we would have vastly more temporary jobs because then we are talking about an insecurity that will reduce the ability of people to win raises, reduce their ability to learn on the job. and so temps are a mixed blessing. at this point, though, i

think we take any new job. and so an uptick in temps is seen as more good than bad. >> rooney: what is this telling you --. >> reporter: what is this telling you about companies and where they are in this, sticking their toes back in the water in terms of hiring people? >> they are really reluctant. and the reasons aren't entirely clear. some say there is a lot of uncertainty out there about government policy. others say that they can't get loans. others say we just don't know what is going to happen. and then there's the fact that there is always a lot of uncertainty and pessimistic before things get better. and which do seem to be in the process of things getting better, so businesses are reluctant to hire. what's not clear is how temporary that is going to end up being. >> reporter: and you mentioned government policy, speaking of that. there a continuing debate here in washington about what to do and whether to do anything. >> yeah. so i know you all have had on the show carmen reinhart and ken rogoff who has written a book about the history of financial crises and it shows on average unemployment

rises for four to five years after a financial crisis. that would take us to 2011 or 2012. the reason people think it will not raise for that long is, in fact, this aggressive response, this big stimulus package, the federal reserve move. nd so there is wide agreement, not unanimous but wide agreement that government policy has helped soften the downturn. the problem is at this point we're not going to get another huge stimulus package. we probably shouldn't get another huge stimulus package given the deficit fears that a lot of people have. so the responses the government will have at this point are muted. >> reporter: the president today had a targeted green job. >> the targeted green jobs which really isn't that big, right. we're talking about at most i think he said tens of thousands of jobs. and that is relative to what we've got in the economy right now. that is not going to fix things. i think we are going to see small moves by the administration to try to deal with the job market. and they will spend a lot of time talking about them, to convey the sense that they are concerned about them. >> reporter: all right, david leonhardt of the "new york times", thanks very much. >> thank you. >> woodruff: later in the

program, paul solman profiles a company that is grappling with hiring issues. now, for the other news of the day, here's hari sreenivasan in our newsroom. >> sreenivasan: wall street's response to the job numbers was muted. the dow jones industrial average gained 11 points to close at 10,618. the nasdaq rose 17 points to close at 2,317. for the week, both the dow and the nasdaq gained about 2%. the f.b.i. has arrested two more men in an alleged plot to stage bombings in new york city. the men attended high school in queens, new york, with najibullah zazi. he was indicted in september in the same investigation. law enforcement officials have said they believe the men traveled with zazi to an al- qaeda training camp in pakistan. another u.s. soldier has been killed in afghanistan. it happened thursday in a roadside bombing. five americans have died in the afghan war since the new year began. and in a separate attack, eight afghan soldiers were killed thursday when their truck hit a roadside bomb. bitter cold refused to let up across much of the u.s. and europe today. britain endured more of its

longest cold spell in nearly three decades, with deep snow and sub-zero cold in scotland. and in germany, there was a rush to buy snow sleds. in this country, bismarck, north dakota, had wind chills of 50 below zero for a second day. the deep freeze extended as far south as florida. and schools closed in at least ten states. vice-president joe biden's mother, jean biden, died today in wilmington, delaware. she had been seriously ill in recent days. then-senator biden paid tribute to his mother at the democratic national convention in 2008 as she looked on. >> you know, my mom taught her children-- all the children who flocked to our house-- that you are defined by your sense of honor, and you are redeemed by your loyalty. she believes that bravery lives in every heart, and her expectation is that it will be summoned. >> sreenivasan: jean biden was

92 years old. the vice-president's father passed away in 2002. the university of alabama celebrated today after winning college football's national championship last night. the crimson tide beat the texas longhorns at the rose bowl in pasadena, california. the star quarterback for texas, colt mccoy, was knocked out of the game early. after that, alabama dominated the first half, and then staved off a late rally by texas to win 37-21. it was alabama's first title since 1992. those are some of the day's main stories. i'll be back at the end of the program with a preview of what you'll find tonight on the newshour's web site. but for now, back to judy. >> woodruff: and still to come on the newshour: an assessment of u.s. intelligence; the jobs picture from the vantage point of small businesses; and shields and brooks. that follows our look at the arraignment of umar farouk abdulmutallab in detroit today. the 23-year-old nigerian is charged with trying to blow up a detroit-bound airliner on christmas day.

to fill us in on the events in and outside the courtroom is paul egan, who covers federal courts for "the detroit news." he talked to ray suarez late this afternoon. >> suarez: paul egan, welcome, what was abdulmutallab eventually charged with, what are the multiple counts? >> well, the most serious count is attempted use of a weapon of mass destruction. that's a charge that carries a maximum penalty of life in prison. he's also charged with attempted murder and attempting to blow up an airplane, taking a destructive device upon an airplane, and two counts of using a destructive device to help commit a felony. >> suarez: and how did he plead and did he enter that plea on his own or was it done by his lawyer? >> he stood mute today. and what normally happens at an arraignment happened today. the judge entered a not guilty plea on his behalf jz. >> suarez: this is a young man who has only been seen in old photographs since his

arrest. describe for us his appearance, his demeanor, what did you see today in court. >> well, the thing that struck you the most when you first saw him was how young he really looks. he looks, most people i spoke to agreed, looked considerably younger than 23 years old. his head was shaveen, he is relatively small young man. he was wearinging a white t-shirt and khaki pants. and he really is not your image of the stereotypical terrorist. >> suarez: when he was entering or leaving the courtroom was there any sign of the severe burns that he incurred during the attempted attack? >> well, he did appear to walk with a slight limp. and he mentioned to the judge that he is taking painkillers. those are the only signs we saw that he is, you know, that he's been injured in the attack. he was burned apparently trying to set off these -- allegedly trying to set off these explosives hidden in his underwear.

>> suarez: did the judge exchange many questions and answers with him? what did they talk about? >> an arraignment is usually a very brief proceeding, this lasted no more than five minutes. the judge only asked him -- he asked him how far he went in school. and he -- it was very hard even for the judge to hear the young man's answers. he didn't really get a satisfactory answer from him and then he moved on to whether he had taken any medication and then he basically after that he really just dealt with the attorney as far as you know, he asked him have you talked about your attorney. do you understand the charges. he just answered yes to those. the most words he said during the entire hearing was i'm taking some painkillers. >> suarez: were the public galleries full? were there many people from the detroit area trying to get into court for a look at what was happening? >> the courtroom was full although they probably could have held a few more people there was intense -- intense interest in this case because it was the first

chance anybody had to really had a -- have a look at this defendant. people had to line up to get a card to enter the courtroom. security was extremely high. there were sniffer dogs to check for explosives in the courthouse. large numbers of u.s. marshals. and they were even more restrictive than normal in terms of what electronic equipment you could bring in the courthouse because they were apparently concerned about electronic equipment possibly being used to set off an explosion. >> suarez: was there much of a crowd outside the courtroom? there had been some controversy in michigan about bringing an alleged terrorist to be tried there. >> well, there was a fairly large demonstration outside the courthouse. and interestingly it was mostly muslim americans and nigerian americans protesting against terrorism, disassociating themselves from the alleged action to this defendant saying you know, we love this country.

and we denounce those who would try to -- try to hurt its citizens. >> suarez: paul, what are the next steps in this case? did the judge schedule either an evidentiary hear organize the beginning -- >> no, there is no hearings set yet. from now on, today's proceeding was handled by a u.s. magistrate judge. from now on the proceedings will mostly be handled by a federal district judge, u.s. district judge, and the next step is really motions. there will likely be motions by the defense to suppress statements that the young man-made to the fbi shortly after he was arrested, before he was represented by counsel. there is also likely to be motions for discovery. the defense will be trying to find out exactly what evidence the government has. and i'm told that the lawyers if they don't already have them will have to get probably security clearances because some of the discovery in this case will be classified

information. >> suarez: paul egan from the federal courthouse in detroit, thanks a lot. >> thank you, rain. >> woodruff: next, how the near-success of that would-be terrorist has raised questions of how well intelligence is being gathered and analyzed. it began last november, with the massacre at fort hood, texas. the accused gunman, army major nidal hassan, had escaped the notice of u.s. intelligence officials, despite signs of his growing islamic radicalism. then came christmas day, and the failed attempt to blow up a northwest airliner. again, the suspect, umar farouk abdulmutallab, and his possible ties to al qaeda had evaded detection. and just days after that, seven c.i.a. operatives in afghanistan were killed by a suicide bomber from jordan, an apparent double- agent working for al qaeda. all three incidents raised questions about whether the

intelligence community is doing its job-- the same question posed by the failure to prevent the 9/11 attacks. for decades, american intelligence-gathering agencies worked through traditional and separate channels. >> information sharing was not a priority for many of these departments and agencies. >> woodruff: rick nelson is a senior fellow at the center for strategic and international studies in washington. >> there were information sharing restrictions in some regards to what levels of information could be shared with other entities that didn't have the perceived need to know. it made communicating very, very difficult. >> woodruff: but after 9/11, a new department of homeland security was created, combining 22 agencies. then, the 9/11 commission pinpointed a lack of intelligence sharing, leading to a further sweeping reorganization. the centerpiece came in 2004, when president bush signed the intelligence reform and terrorism prevention act into

law. it created the director of national intelligence, a post now held by dennis blair, to channel all intelligence-related information to the president. the director would get his information from a new national counter-terrorism center, or n.c.t.c., acting as a central repository for all-source intelligence on international terrorism. 16 separate agencies and departments now feed information to the n.c.t.c., including the c.i.a., the defense intelligence agency, and the national security agency. the goal of the center, which president obama visited in october, is to increase communication among different departments and agencies like historic rivals, the c.i.a. and the f.b.i. but the center's mandate is limited. >> n.c.t.c. is not an operational arm. operational activities still reside with departments and agencies.

for example, the state department retains authority to revoke visas; the military obviously has the authority to conduct combat operations. >> woodruff: when the new administration came to power, little changed in the intelligence structure. and in his statement yesterday, mr. obama offered this assessment of how that structure worked in the foiled airliner attack. >> the u.s. government had the information scattered throughout the system to potentially uncover this plot and disrupt the attack. rather than a failure to collect or share intelligence, this was a failure to connect and understand the intelligence that we already had. >> woodruff: for now, the president has not ordered his national security and intelligence team to change their structure, but to do their jobs better and faster. and the director of national intelligence blair sent out his own memo. among the recommendations: assigning clear lines of responsibility for investigating all leads on high-priority

threats; distributing intelligence reports more quickly and widely; and speeding up additions to the terrorist and no-fly watch lists. c.i.a. director leon panetta also instructed his agency to get information out faster to the broader intelligence community, and to increase the number of analysts focused on yemen and africa. for more on the state of the u.s. intelligence community, we turn to two who served on the 9/11 commission: former united states senator slade gorton, republican of washington state; and deputy u.s. attorney general in the clinton administration, jamie gorelick. >> woodruff: good to have you both with us. jamie gorelick, i'm going to start with you. have the reforms instituted in the intelligence community since 9/11 worked? >> they have worked but they have not worked perfectly. and that's kind of obvious from what's happened. clearly having an all-source center, a national center to

fuse all the information is critical. but you still have people reading the intelligence and maybe not reading it as well as they should. you still have people providing the intelligence in ways that perhaps don't have the flags on them that they need. and a lot of this, judy, is just blocking and tackling. it's the hard work of execution. and that is apparently where we had failures. >> woodruff: senator gorton, how do you see whether these reforms have worked? >> i agree with jamie. but hi will go one step further. in this case, it wasn't a failure to collect intelligence, it was only partially a failure to share intelligence. it was a failure, i think, to have the kind of standards and feelings of urgency that were necessary to do something about it. the rules under which the intelligence agencies were operating didn't allow this man's visa to be pulled, didn't allow him to be put on a no-fly list just

because his father came in and gave us a warning in lagos. it should have done so automatically. and i think from what the president said yesterday it will in the future. in other words, the burden of proof to take action was too high. i think now as a result of this near disaster t won't be quite so high in the future. >> woodruff: so senator gorton, it sounds like you are saying you essentially agree with the president that it wasn't collecting and sharing, it was the analysis, understanding and then you added the urgency. >> the action, analysis and so on is a part of it. but the decisiveness in taking action on the kind of intelligence we have was a great shortcoming. >> and jamie gorelick, when the president said he doesn't think the apparatus needs to be overhauled or even tinkered with, he basically thinks people just need to do their jobs better, is it really that simple? >> well, it is that simple. but i would also agree with slade that there are some

policies that need to be changed. the burden of proof for putting someone on the no-fly list is too high. if someone is identified as al qaeda, they don't necessarily go on the no-fly list, so there are some tweaks and changes that need to be made. but we have an instinct in this country every time there is a problem to move boxes around. and honestly, what most of success in life in my view is about execution. and we just need to execute better. slade is right that we need to lean into the intelligence that we have. and i think that's the other thing that comes out of this report from the white house which is that we had intelligence and we didn't lean in to making sure that all the actions that were taken, that should have been taken were taken. >> woodruff: what do you mean lean in? >> well, what i mean by that is if you look at something that might be a problem, you can do one of two things with it.

you can see if it becomes a problem. or you can really try to prevent it from becoming a problem. and that's what i mean by leaning into it. what could we be doing more than we are doing to track this down, to make sure that a bad actor doesn't get on a plane, that a bad thing doesn't happen. >> you both seemed -- >> go ahead. >> let me if i can just follow up on that. remember, going through that security line to get on a plane is the very last line of defense. we need to be pushing that line of defense out further. we need to be derling that some people should never get in the line in the first place. shouldn't have a visa, shouldn't be allowed on planes at all. we've got to go after this kind of situation at the source. and if i have a shortcoming that is still present there, it is the fact that we didn't interrogate this man long enough. we far too soon decided to charge him in a civil court when i think we could have gotten much more information

about his sources if we had waited, treated him as an unlawful combatant and interrogated him thoroughly before we decided how to try him. >> woodruff: i do want to ask you both one question about the structure of the intelligence community and that comes out of a "the wall street journal" editorial today. i will start with you senator gorton, essentially they are complimenting the president but they go on to say the director of national intelligence, the apparatus under him has become such a big bureaucracy t spends a lot of its time essentially duplicating what the cia does. is there a legitimate argument there? >> it may be that that is somewhat too large an agency. but i will have to say, and i think jamie agrees with me on this, the congress didn't adopt all of our recommendations with respect to the dni. the congress did not give the dni as much authority as we thought he ought to have. and we may see some of the

shortcomings here as a result of the fact that there are still rival towers of power in the intelligence agency. and that can't be all the dni's fault. i think he needs more authority than he has. >> i would make two points to follow up on slade. number one , we had four basic commissions that we wanted to see the dni have. and again this is a director of national in --. >> woodruff: director of national intelligence. >> yes, the person -- we thought, we have 16 intelligence agencies. you need to have some grown-up above all of them to make rules where they are in conflict. so one of those places of conflict is the one that is slade eludes to which is budget. the dni did not get budget authority over the defense intelligence apparatus which is a very big piece of the budget. but we also said make the rules for information sharing. make the rules for personnel sharing.

make the rules for a common -- a common technology infrastructure. i would like to see the dni focus on that and not replicating a lot of what goes on in the intelligence community, and particularly in the cia. so i think "the wall street journal" editorial on this subject makes a fair point. >> woodruff: i want to turn to the other two incidents that we mentioned, senator gorton, in the opening segment. and that is, of course, the ft. hood shootings, major hasan, nothing was done about him. and then this terrible incident in afghanistan in the last week, the death of seven cia agents. where -- where -- what fell apart what didn't work in those instances? >> well, let me just, looking as an observer who has read the news stories on it and would with no extra information, start with the second of those two first. obviously there was too great a degree of trust on the part of someone there in afghanistan about this man because presumably he had

given us some decent intelligence in the past. and so he got in to that building and in among those seven or more people without being checked out at all. now that -- i think that was just a failure in following their own policies. it was a terrible and a tragic failure. but i can't imagine that this is something that we allow to happen on an every day basis. on the first one it looks to me like there was a certain degree of political correctness involved. a lot of people in the service itself felt great suspicion about what doctor but they were afraid to say anything about it. they were afraid they would be criticized. they were afraid they would be called racist. i hope that isn't going to happen in the future. but i believe that that contributed to ft. hood. >> woodruff: is it almost as if every laps points to a different problem? >> yes, but you know, you can't expect perfect execution. you have to strife for it.

so we learn from mistakes. but these mistakes are very, very costly. i mean the thing that haunts me about the ft. hood matter is that the imam al-aliqwi it was a loose thread in the report that slade and i and other kos lab rated on. i mean he was running a mosque on -- one mosque on the west coast and then later a mosque on the east coast that helped the 9/11 conspirators. and so we have to, when i spoke earlier about leaning in, i think if you find someone like him and he has been the subject of attention in the intelligence community, you follow every lead surrounding him. and i hope we're doing that. >> woodruff: well, we know these are issues we're going to come back to. we want to thank both of you for being with us, senator slade gorton, and jamie gorelick, thank you both.

>> lehrer: now, our second jobs story-- a closer look at why hiring is going so slowly as seen through the lens of small business. newshour economics correspondent paul solman has our report. it's part of his ongoing reporting series, "making sense of financial news." >> it's a little guy that went in a store, and more carousel horses... >> reporter: c.e.o. steve guy of entertainment design group in atlanta, where the economy still looks as scary as some of the props they manufacture. >> that's a mannequin we put there. we have laid off so many people that it's a little lonely around here. >> reporter: so, how many people did you have here at the peak? >> about 75 full-time and about 300 part-time. >> reporter: really? and what are you down to, at the moment? >> right now, were down to 42 full-time and around 100 seasonal. >> reporter: guy's company sells everything from shopping mall holiday displays to theme park

attractions. it produces atlanta's annual tree lighting ceremony, and the dropping of the sweet georgia icon that marks the local new year's celebration. and yet, the hiring situation is, if you'll excuse the expression, not so much peachy as in the pits. >> big corporations are not building new buildings, theme parks are not building new rides, and with that, we're sort of just stuck like a boat stuck on a sand barge. so, for now, there's absolutely no reason to hire anybody full- time, because i don't want to have to hire somebody and just come back and have to let them go again. >> reporter: the company, clearly quirky but perhaps characteristic of small business in america these days, is down 30%, year over year. but steve guy considers himself a survivor. when times were better, he bought this machine, which uses super-high pressure water and sand made of garnets to cut through just about anything.

>> but the company, calypso, that manufactures the machine has actually gone bankrupt in this recession. that is a portal that we were building for an entertainment center called belle island in pigeon forge, and that particular facility also went bankrupt. >> reporter: batman. >> yes, we manufacture those for six flags theme parks, which is also in chapter 11, and were hoping for the emergence as soon as possible. >> reporter: in atlanta's midtown hotel complex, at this week's annual economists convention, the view from well above the fray. the pros who track and analyze unemployment assemble here, and they see a job market that may finally be near the bottom. but even so, over the past two years, laments former clinton labor department economist larry katz: >> we've lost 8 million jobs. we needed 2.5 million jobs just to keep up with population growth, so we're about 10.5 million jobs in the hole.

even if, say, over the next four years, we were generating jobs at the pace of the sort of late '90s boom under clinton, we would be continuing to have incredibly high unemployment for the next four or five years. >> reporter: indeed, it would take a burst of new jobs over the next 4-5 years of 15 million new jobs to get us back to where we were at the start of the recession. yet december recorded another net loss. economic forecaster allen sinai spoke for many. >> we'll get positive job creation in the next month or two, and we'll have a surge in jobs when census workers come to work. but beneath that, the underlying growth of jobs in this country looks to me to be very anemic, another kind of jobless recovery like or worse than ones we've had before. >> reporter: so, are you

imagining a steady-state for the american economy with unemployment at 8%, 9%, 10%? >> its probably peaked at about 10%, but we wont see 8% at least until 2012. >> this is still one hell of a depressed economy. >> reporter: paul krugman is typically pessimistic, as well. >> who's going to want to expand? who's going to want to build an office building when we've got record vacancy rates? who's going to want to build a factory when we've got near- record excess capacity in industry and down the line? so why would you expect hiring in this environment? >> reporter: now, there were economists here who saw light at the end of the tunnel. northwestern's robert gordon. >> there's reason to hope that unemployment is going to come down substantially in 2010. first, all the outlook for g.d.p., the total amount of production, is for it to increase about twice as fast as it did back in 2002 during the previous recovery. the second reason is that we can't produce more with ever fewer people unless we have a gigantic boom in productivity. >> reporter: meaning more output per person.

suddenly, we were just much more efficient. >> productivity always grows rapidly at the beginning of the recovery because firms are still cutting costs as output recovers. and eventually they realize, "ah. output is recovering. let's rehire some folks." >> reporter: but back at steve guy's company, instead of rehiring, they're working people harder. holly robbins used to be in charge of accounts payable. she still is. >> i still do all the accounts payable and the bills and opening the mail and making sure everything we pay for is accurate and approved and get everything entered so we get paid on time. >> reporter: but now she also does shipping and receiving. so, are you working harder than you were before? >> it seems like it! ( laughs ) sometimes... sometimes, it's pretty crazy. >> reporter: and even if the economy really picks up, says the boss, he probably won't reduce the load. >> it's a fundamental change in how i manage my business where, for years, bigger was better; i

had growth every year. now, i'm pretty happy where i'm at. this could be the best year we've ever had. we've done so many proposals that are out there that if only a few of them take off, we're going to be covered up. but at the same time, that doesn't mean i'm going to hire full-time employees, and there's not a c.e.o. i know that's hiring right now. >> reporter: now, steve guy is, well, just one guy, and e.d.g. is just one company, but if it's a typical small business, we shouldn't expect them to rescue the american economy with new jobs any time soon. you're part of a group of regional c.e.o.s. if the economy picks up dramatically, will they begin to hire again full-time? >> i think they'll look for every avenue possible not to hire full-time. i think they'll hire temporary, contractors, and so on. i think they'll think about it a long time before they hire full- time people. >> reporter: and today's numbers bore out guy's scary take on the

labor market. 85,000 more jobs lost last month. plus nearly a million folks no longer counted in the workforce at all. the only glimmer of good news? temporary employment rose, giving hope that the job market could take off at some point. >> lehrer: and finally tonight, the analysis of shields and brooks-- syndicated columnist mark shields and "new york times" columnist david brooks. mark, the christmas bombing, what do you think of what president obama has said and done about it ? >> somebody said awhile back, jim, that sometimes a man's greatest strength is his greatest weakness, and there he endures. the president has been accused of lacking emotion, of almost running a passionless presidency by many of the supporters of the left. and with this you see that

as a strength. it was totally nonbombastic it was measured. it was classic oa. it was thorough. it was reflective, it was intense. and i thought it was impressive. impressive in the sense that a bombing that unlike the experience of 9/11 or the richard reid bombing, the shoe lace bomber in december of 2001 when there was -- we were free of partisan carping or criticism this was followed immediately bipartisan countriesism lead by the former vice president. and i just felt like he stilled a good part of that. i thought the reaction to it was as serious as his delivery was. the one surprise i had was that the -- total layman in the intelligence, his recommendations seemed to be self-evident. >> lehrer: doing a little bit better. >> doing a little bit

better. have to have a better list, better watch list and get information. and i thought it worked and i thought it was seriously. >> i was looking at the loyalty flow if you want to call it that. is he taking responsible. is he keeping a loyal team. people messed up but is he saying okay, i'm not going to publicly expose you. in the beginning of the week i thought there was fingerpointing to people beneath. >> lehrer: like what,. >> he said i'm going to make it clear this kind of behavior is to the going to be tolerated. >> lehrer: yeah. >> so it was like you guys really messed it up and i'm above it all. but by the end of the week i thought he had really taken care of it. he said we're all part of a team. we have some mistakes . we have to take responsible, the buck stops here, all of that. in times like this there will be mess ups, it's war. you have to keep a coheese ef team and i thought by the end of the week he had done that. >> lehrer: what did you make of the war statement.

we are at war. because that is one of the things that former vice president cheney has been knocking him for that president obama doesn't act like it is war, he doesn't seem to get it, we are at war with islamic terrorism. >> i always thought that was three quarters an unfair charge. one moment i go back to and awareness that obama knows we are at war was in france. if you remember he held a town hall meeting there. and he went out of his way to remind the people there that we are at war. this is a big problem. we just have to deal with it. that was not necessarily an audience that wanted to hear that. so i took that as a sign that he really does know. i think if you are president you got that daily intelligence brief, there is no way you are not conscious of it every second of every day. so i thought that was three quarters unfair. the one quarter of legitimacy and concern some of the critics have, is if we are at war why are we not interrogating or questioning this terrorist or this suspect under military rules? why are we allowing him to plead guilty and to the go through that intelligence process.

why with retrying khalid sheikh mohammed in new york f it is war maybe we should have a war all the way down. >> lehrer: former senator gorton made that point to judy that -- >> the very point. >> lehrer: don't try the guy through the criminal courts, hold him, interrogate him, what do you think of that argument? >> i don't know the strengths of the argument constitutionally. i do know that there was no question that under president bush and president cheney , what was intriguing to me, it was such a different response. president bush immediately at the time of an attack was let's go after them. let's go get them. it was -- you know t was understandable as opposed to president oa which was what did we do, what do we have to do better. as far as this is concerned, this was how the 20th hijack er house aweee was tried. has saluted to a test mollial to the american judicial system rudy giuliani who has become the

avenging angel of the military tribuneal. i don't know if it is a rule issue or it isn't a real issue. i do want to point out that dick lugar the former senate foreign relations committee, long time republican senator --. >> lehrer: from indiana. >> from indiana said that bloomberg 's -- al hunt this weekend he thought the president had been firm, showed firmness and decisiv decisiveness. we thought the vice president's criticism was unfair. and i really think that we are now in a zone where everything becomes politicizeed. there is no question about it. during the campaignback bam said -- barack obama said daily that we're in a war on terror. it was not a -- it was not something that just eluded him. he regularly repeated that. it was part of his mantra. >> lehrer: what about the point also going back to the early -- earlier discussion, david b the allegation in "the wall street journal" editorial today or the

suggestion that there is too much bureaucracy, there is too much there. and that's one of the reasons in that they caught it -- they got the information but then they didn't deal with it properly. and something needs to be done about it. >> i think that is absolutely true on two levels. one, as i have said before, the national security agency alone collects four times as much data per day as exists in the library of congress. that's one intelligence agency. >> lehrer: an that's the agency who does through telephone line communications. >> there just a ton of data. the second thing and to me the more radical critique is that -- the guy's father comes in. he tells a story. that story is then turned into a cable so it's turned into a piece of information that can be put on a computer and processed by a bureaucracy. if you took a novel and turned it into the sort of information that could be processed by a bureaucracy, you would totally lose the meaning of the story. and so what we've got is a process that takes reality

and narrows it down to checklists. and to me when you do that, you are losing the feel and the importance of a lot of that information. and i suspect that's part of what has happened here. and that is endemic to bureaucracy. >> lehrer: so how do you fix that, mark? >> well, i mean, one of the ways suggested to fix it, jim, was made by the 9/11 commission, by jim baker and lee hamilton and their colleagues. which was the director of national intelligence, admiral denny blair, that is where it is all supposed to go. >> lehrer: give more authority. >> you have got 16 sources, military and civilian, 16 separate smoke stacks, silos as we call them. there is -- this is where it is supposed to come to and be acted upon. that has been back and forth, as people know and has been reported. but bean leon panetta, the cia director and protect his turf, and admiral blair and his mandates for the director of national intelligence. i mean i think that's something that only the president can resolve. >> lehrer: my --

>> my point is that expert infew significance actually quite powerful. somebody who really knows the field, they just have a feel for something. we have a process that minimizes the role for expert intuition. because it has to go through all these different channels. and that bleeds away a lot of the oh, i think, i have a hunch, you just can't do that. >> lehrer: richard clarke, former white house guy for both george w. bush and before that bill clinton said on this program last night that software could -- that works, that makes all of these pieces of data matched is also not -- is also apparently not up to speed. >> no, that is exactly -- that and that surprised me that that -- that eight years later. >> lehrer: but david, you are saying forget software. go -- go with the human mind. >> the human brain is a lot more complicated than any software program. and people that know what they are doing come up with successful hunches. >> lehrer: and make good software. >> but there was a human failure. this, i mean, the information was there. i mean but there was a

failure to integrate and a failure to act. i mean that, you know, that is i isn't bureaucratic as much as it is a human failure. >> lehrer: new subject, david. two democratic senators, chris dodd and byron door gann have said they are not -- dorgan have said they are not going to run again. how important of that in the course of human events tas relates to the democratic control but also to everything else that president oa and others on the democratic side may want to do. >> well, just for two it is not a big deal if you are thinking about the future of the senate t makes the democrats more likely to keep connecticut and less likely north dakota but it part of a larger climate. and there has been a significant shift in public opinion over the last, really over the last year when franklin roosevelt was passing his reforms he galvanized the majority behind him. what obama has done is recoiled the majority. so you have the pollster's list, who do you trust on this issue, republicans or democrats on 13 separate issues, the public opinion is shifting to the

republican side on all 13, some of them quite significantly. more people call themselves conservative than have before. more people think global warming isn't real than before. more people are more pro-life than before. gun control, more hostility. so the whole shift to the right in the country has happened over the past year. sort of a recoil. and i suspect and it's just a theory, that it is because people are traditionally suspicious of washington, and they see a lot of power concentrated in washington and they are recoiling so that should be of concern. >> lehrer: that is a big picture, mark, do you see -- >> it is, it is an enormous picture, yeah. david -- >> i can get bigger. >> i was going to say. i was going talk about chris dodd and byron dorgan, two senators. >> lehrer: what did i ask? >> let's talk about those two guys. >> okay. i know them both and i like them both. and mi going to miss them both. and they are both been good public servants. chris dodd's leaving with

refreshing candor. he talked about his political problems. he didn't pretend i want to go home and spend more time with the family and do that. he did, in fact, level that he had problems, that he had a better chance of keeping the state democratic by his leaving and dick blumenthal, the attorney general running in his place. byron dorgan and kent conrad, sort of the touchdown twins, the two democratic senators, they've been winning elections in that state since 1980 in a state that ronald reagan won 2- -- solidly republican, north dakota, and somehow they have managed to survive, a populist, fiscally responsible national democrats. and byron dorgan i think decided that he had spent enough time, energy and effort doing that. and maybe that the prospects weren't that great. >> lehrer: you don't see glaciers moving the way david does. >> i do think that what you have right now is -- it is a difference from 1933.

1933, in 1932 there were 217 republicans and 216 democrats in the house of representatives. and two years later there were 200 more democrats than there were republicans under roosevelt. in other words, it kept increasing. the democratic numbers are not going to increase. what the democrats are concerned about are more retirement in the house, especially because open seats are the most vulnerable place for a party to defend. an incumbent is still tougher to defeat in a house election. >> lehrer: no matter whether they are republican or democrat. >> republican or democrat. in 1994 when the democrats suffered their few nam -- tsunami loss with bill clinton, lost 54 house seats, 40 of the 52 seats they lost were open seats. that is members retiring, or running for another office. they have been able to keep the retirements now under single digits. if they can do that they should be in pretty good shape. but i don't think anybody expects the democrats not to lose probably somewhere around the average of 21 seats which is the average number that a president loses in his midterm of his

first term. >> lehrer: dow want to take it to even a larger picture. >> in the ploois seen age --. >> lehrer: do you see the numbers kind of the same way. >> i think charlie cook who follows the house for a living says 25 to 306789 i just think there is a chance it could be a sort of bigger landslide. a job stays terrible. the country sort of scared in a very bad way. this public opinion mood is unprecedented, the distrust of government, the distrust of washington. not unprecedented in democratic republican, but in anxiety, unprecedented. >> one thing, jim, two seconds. >> in the decade between 2000 and 2010, this country created zero jobs with 28 more million people came into the population, 0 jobs. that's a political dynamite. >> lehrer: we have zero time left."a- hank you both very much. >> woodruff: again, the major developments of the day: the economy shed another 85,000 jobs in december.

but the unemployment rate held at 10%, as more than 600,000 people stopped looking for work. and the nigerian man accused in the airliner bombing plot pleaded not guilty in federal court in detroit. the newshour is always online. hari sreenivasan, in our newsroom, previews what's there. >> sreenivasan: we hear more from "new york times" reporter david leonhardt on the health of the u.s. jobs market. and paul solman caught up with some of the job seekers we profiled last year to find out how they're faring. our series on "the next chapter of reading" continues with a look at the newest e-readers on display at the consumer electronics show in las vegas. and check back later tonight for a "rundown" conversation with newshour regulars mark shields and david brooks after the program. 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. "washington week" can be seen later this evening on most pbs stations. we'll see you online, and again here monday evening. have a nice weekend.

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