aren't offering a true portrait of the afghan war. >> when you constantly are saying, "things are going good" and everybody on the ground knows it's nothing close to being the truth, then your word loses all credibility. >> woodruff: mark shields and michael gerson, filling in for david brooks, analyze the week's news. >> brown: and we remember the life and career of veteran foreign correspondent anthony shadid. >> woodruff: that's all ahead on tonight's newshour. major funding for the pbs newshour has been provided by: bnsf railway. >> and by the alfred p. sloan foundation. supporting science, technology, and improved economic performance and financial literacy in the 21st century. >> and with the ongoing support of these institutions and foundations. and... >> this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. >> brown: china's rise offers the u.s. economic opportunities, not threats. that was the message today, as the man expected to be his country's future leader ended his american visit in los angeles, and a prominent u.s. film company announced it would open a studio in china. the new company will be called oriental dreamworks, a joint venture between dreamworks animation and several chinese media groups. dreamworks has enjoyed box office success in china, led by the "kung fu panda" franchise. but china has placed severe restrictions on the distribution of american films in the country. the deal came together as vice president xi jinping wrapped up his tour of the u.s. trade has been a major focus of the trip. yesterday, china's soon-to-be leader toured the port of los angeles, where nearly 60% of its imports come from china. earlier this week in iowa, china agreed to buy a record amount of american soybeans. china is already the top market for u.s. agricultural goods. still, the u.s. trade deficit with china has been a persistent economic and political problem for the two nations. president obama met with xi on tuesday. the next day, speaking in milwaukee, he talked tough on trade with china. >> i'm not going to stand by when our competitors don't play by the same rules. it's not fair when foreign manufacturers have a leg up on ours just because they're getting heavy subsidies from their government. so i directed my administration to create a trade enforcement unit and it's only got one job-- investigating unfair trade practices in countries like china, making sure we've got an even playing field. because when we've got an even playing field, i promise you, nobody is going to out-compete america. >> brown: on the republican campaign trail, china has been a common target. former massachusetts governor mitt romney. >> china has stolen our intellectual property, our designs, our patents, know how. it's hacked into our computers. it's manipulated its currency. i think you got to say we're going to label them a currency manipulator and apply tariffs, if necessary-- hopefully not-- but apply tariffs where they're applying... exercising unfair trade practices. >> brown: but at a luncheon with business leaders in washington, vice president xi said steps have been taken to revalue china's currency, and that the moves helped boost american exports to china. he added, the u.s. needs to make some changes of its own. >> ( translated ): to be frank, it is very important for addressing china-u.s. trade imbalance that the united states adjusts its economic policies and structure, including removing various restrictions on exports to china. in particular, easing control on civilian high-tech exports to china as soon as possible. >> brown: vice president xi is expected to become china's leader next year. more now on the challenge of u.s. companies in china. stephen orlins is president of the national committee on u.s.- china relations, which seeks to promote better business and other relations between the two countries. peter narvarro is professor of economics at the university of california, irvine, and author of "death by china: confronting the dragon." well peter narvarro, as that title suggests, you've been very critical of chinese practices when it comes to american businesses. this deal with dreamworks is quite new, but how might it fit into that larger picture? what does it tell you? >> jeff, i think this is actually the poster child chinese protectionism. if you look at the deal, basically, droom works is forced to take a minority stake in the deal. basically they have to transfer their animation technology to what will eventually be a future competitor. most of the animation-- and, there were, most of the jobs-- are going to be in china, and the revenues that we're likely to see over the course of that venture will probably amount to little more than paying for one day of our trade deficit to china. it's a poster child of the conflict between corporate goals and the goals of this country. and c.e.o.s like jeffrey catsenberg today, g.e.'s jeff emil, jim mcamericaning at boeing have consistently made these forced technology deals and the american worker and economy is really suffering. and then you hear the president talk about getting tough on china, and it's a farce. >> brown: all right, let me get stephen orlins in here. what do you see in a deal like this? >> i feel-- i see dreamworks getting close to their customer. i see them creating content for the chinese market. i see that, you know, 10 years ago, when china exceeded to thewt o these quantitative restrictions that exist on all foreign movies going into china were agreed to. this is not something that's new. the structure they adopted was the only structure they could use but it was 10 years ago that this was agreed to, and there are restrictions in other countries. there are restrictions in france. there are restrictions in canada, for cultural heritage reasons. so this should be a very profitable deal for them and i think a good one. >> brown: just to stay with you, even though the joint venture route is the only way dreamworks could get in, and as in a case like this, where it's the american company that has the competitive advantage going in, you still think it's a good deal for them to go route? >> >> the media is not a poster child for anything. media restrictions exist in virtually all countrys. so i don't think it's fair to say that's a poster child. as i said it's part of the asession agreement. we and all members of thewt o agreed to some restrictions in this area. almost 75% of u.s. investment in of into china is done through what is called a holy foreign owned enterprise. so it is not joint ventures. of the $110 billion invested, $80 billion of that was through wholly owned foreign enterprises. so the idea that they're forced into joint vent surs not the case. some people choose to joint ventures because it brings you closer to the customer. the partner brings distribution capability. it brings other capabilities that make one and one make three. >> brown: peter narvarro, you broaden it out from the media world to the more general situation for american businesses going in. what other challenges do you see? >> well, first of all, stephen's just factually dead wrong. the w.t.o. does not allow forced technology transfer, period, and that's kind of the deal-- >> i didn't say it didn't allow. >> now, let me say that the bigger picture here is that china basically, since they joined the w.t.o., we have lost 57,000 factories. we've lost six million manufacturing jobs, and we've lost over feign million jobs total in those 10 years. and the reason we have done that is because of our trade deficit with china that is the result not of cheap labor but rather of what i call weapones of job destruction, which include currency manipulation, illegal export subsidies, the theft of our intellectual property, the use of worker abuses that zhave 16-hour days, seven days a week, and companies like foxboroughcon, which make our ipad. and the worst environmental regulations in the world, which are turning that country into a living hell for over 1 billion people. i think we are in denial here if we do not recognize that china is basically a primary source of our economic woes here and the best jobs program right now is not more fiscal stimulus. it is trade reform with china so we can play on a level playing field like president obama has acknowledged in his latest speech. >> brown: we clearly have two very different portraits of the world theor, stephen orlins but you're saying-- >> the assertion that all of those jobs have been lost to china-- talk about factually inaccurate-- is grossly inaccurate. they've been lost to automation. they've been lost to efficiency. very few of those jobs have been lost to china. second i did not say-- i did not say that treknology transfer is what was agreed to in the w.t.o i said quantitative restrictions on importes of films is what was part of the chinese asession to the w.t.o., agreed to by all members and the united states. if you're going to represent my position, i would ask you to represent it accurately. >> brown: what do you think, mr. orlin, about the government-to-government, the president announcing a task force trying to push gently or strongly china toep up a little bit more, to loosen some of the restrictions on businesses coming there? >> absolutely he should be doing it. and some of the peter's points, that we should be pressing on intellectual property rights, we should be pressing on market access are absolutely right. i just put it in the context of 80% of u.s. companies in china had double-digit growth last year. 40% of those companies had growth in excess of 20%. i just put in the context that u.s. business in china is doing well. but should we be pushing on these snooshz absolutely. >> brown: and peter narvarro, i guess you look at a visit like this one from vice president xi, you don't take much of this in terms of having a real impact? >> well, i think the most comical thing about the visit is that the chinese solution, basically, is for america to loosen its restriction for the export of high technology to china which basically has dual use for military applications. the chinese want that. and basically what we're seeing right now as we go into wal-mart and we buy the illegally subsidized cheap chinese junk, they are using those wal-mart dollars basically to finance the most rapid military buildup we've seen in a very long time. the chinese basically have a strategy. we do not. and we're losing our manufacturing base. at the end of the day, we cannot prosper in this country without a strong manufacturing base. >> brown: brief last word. >> and i argue that we can't-- i'm sorry? >> brown: a brief last word from you on this visit. >> that china can't prosper without a prosperous united states and the united states can't prosper without a prosperous china. >> brown: all right, stephen orlins, peter narvarro, thank you both very much. >> woodruff: still to come on the newshour: iran's new overtures; an afghan war assessment; shields and gerson; and remembering a pulitzer-prize winning foreign correspondent. but first, the other news of the day. here's hari sreenivasan. >> sreenivasan: a months-long standoff on capitol hill came to an end today when congress voted to extend a payroll tax cut for 160 million americans. >> the conference report is adopted! >> sreenivasan: the measure cleared the house by a vote of 293 to 132. and in short order, the senate vote followed, with 60 voting in favor and 36 against. the $143 billion package extends three main programs through the end of 2012: the 2%, $100 billion reduction in the social security payroll tax; federal unemployment benefits for the long-term unemployed; and the so-called medicare "doc fix," preventing a 27% cut in reimbursements for doctors treating medicare patients. even though the bill passed both chambers comfortably, a number of lawmakers from both parties found problems with it. republican senator dan coates. >> let's be honest with the american people. we're just simply taking money away from the trust fund, from retiree benefits, making social security come closer and closer and closer to bankruptcy and insolvency, at the same time not telling the american people that this so-called "tax cut" is robbing that fund. >> sreenivasan: and house democratic whip steny hoyer criticized it for cutting retirement benefits of new government hires. >> nobody is targeted in this bill, other than federal employees! you can tell i'm angry about that, because that's not fair. and that's not how you ought to treat our employees, america's employees. >> sreenivasan: president obama thanked congress for their efforts during a visit to a boeing factory in everett, washington. >> today, we took one important step in the short term. just before we got here, congress did the right thing, and voted to make sure that taxes won't go up on middle- class families at the end of this month. >> sreenivasan: the president is expected to sign the bill right after returning from his west coast trip. a 29-year-old moroccan man was arrested today after planning to detonate a suicide vest near the u.s. capitol building. a counter-terrorism official said amine el khalifi was taken into custody with an inoperable gun and inert explosives given to him by undercover fbi agents. he is not believed to be associated with al-qaeda, but had been under surveillance for at least a year. economic help for greece seemed to edge closer today as top european leaders expressed confidence that a second bailout deal can be worked out next week. german chancellor angela merkel said she was optimistic a meeting on monday of european finance ministers will clear the deal. greece is in line for a $170 billion rescue package, but first, the country must agree to a host of debt-cutting programs. the uncertainty in the greek situation kept markets in limbo and struggling for direction. on wall street, the dow jones industrial average flirted with the 13,000 mark before ending the day up 45 points to close just under 12,950. the nasdaq fell eight points to close above 2,951. for the week, the dow gained more than 1%; the nasdaq rose 1.7%. in olympia, greece, thieves stole more than 60 priceless ancient artifacts from a museum dedicated to the olympic games. police called the robbery a well calculated hit by two men wearing ski masks. it is the second major art theft in greece this year. museum guards have been among those public sector jobs to face cutbacks in the face of the greek debt crisis. italian and swiss authorities worked to confiscate $6 trillion in counterfeit u.s. bonds today. the bonds carried a fake issue date of 1934, and were transferred to a swiss trust in zurich via hong kong. italian police said they had arrested eight people who were trying to sell the fake bonds to a developing nation. the sale never went through. libyans marked the one year anniversary of the revolution that toppled moammar qaddafi. the former leader was captured and died in the hands of rebel fighters last october. in benghazi, people gathered in liberty square for friday prayers, which later turned into celebrations. waving the libyan flag, many cheered for a revolution in syria, where government forces continue to crack down on opposition protesters. harry mcpherson, who served as counsel and special counsel to president lyndon johnson, has died. mcpherson also served as president johnson's chief speechwriter from 1966 to 1969. in 1968, he worked on one of the major addresses of johnson's presidency, when he announced an end to the bombing of north vietnam. and as the president discussed with mcpherson, he had a late addition to the speech-- the stunning announcement that he would not seek another term in office. >> i've been working on it for almost three months. i said i think it's okay, mr. president. he said, "i have an ending that i've added." i said, "i've heard that." he said, "do you know what's in it?" i said, i think so." "what do you think about that?" i said, "i'm very sorry, mr. president. he said, thank you, partner. i'll see you." >> sreenivasan: mcpherson went on to spend the rest of his career as a lawyer and lobbyist in washington. he was 82 years old. those are some of the day's major stories. now, back to judy. >> woodruff: and to iran's new willingness to resume negotiations with the west. ray suarez has our story. >> suarez: past negotiations over iran's nuclear program have been stalled for more than a year, and tehran appears to be moving toward gaining the technology and materials it needs to build nuclear weapons. recently, iran's government sent a letter to catherine ashton, the coordinator for talks between iran and six other nations, indicating it's ready to start again. ashton met with secretary of state hillary clinton today. afterwards, clinton said the letter appeared to acknowledge that the talks must begin with a discussion of iran's nuclear program. >> the international community has been looking to iran to demonstrate it is prepared to come to the table in a serious and constructive way. this response from the iranian government is one we've been waiting for, and if we do proceed, it will have to be a sustained effort that can produce results. >> suarez: secretary clinton said the major powers are still reviewing a formal response to the iranian letter. swift has agreed to stop handling iranian bank transfers. it's seen as an important setback to iran doing business with the rest of the world. for more, we get two views: ray takeyh was a state department official in the obama administration focusing on iran. he's now a senior fellow at the council on foreign relations. and flynt leverett was the director of middle east affairs on the national security council during the george w. bush administration. he teaches international affairs at penn state, and is the co-author of the blog raceforiran.com. ray takeyh, what do you think of this latest iranian overture? >> well, it's not particularly unusual. iran's strategy of achieving nuclear capability has, in my opinion, always involved negotiations. diplomacy helps iran in the sense it can potentially divide the international community. its response to the pressure that the chinese and the russians are issuing to the iranians, that they need to get back to the table, during the time when we're talking about the potential israeli military strike, engagement in diplomacy protects you from that military retribution. so a protracted process of dialogue has a lot of advantages for its iranian regime. >> suarez: flynt leverett, same question. >> i would agree there isn't anything new about this but i would put it in a different context than ray did. i think the iranians have been willing to negotiate on the nuclear issue for some time, even in september when president ahmadinejad and his foreign minister were here in new york, they were indicating that. and the letter that came from mr. jalily is of course a response to a letter sent by catherine ashton, in her role as the spokesperson for the p5 plus 1. i think the iranian position on the as soon as not really changed. they are prepared to am can to talks. they are prepared to reach various types of agreements, but the fundamental issue, what they would describe as their right to enrich, is not up for negotiation. and i don't think that's going to change going into whatever new talks might come out of this exchange of letters. >> suarez: the letter, as we noted, was welcoming cautiously by the secretary of state. is the idea that talking in general is better than not talking? >> in general, i would agree with that, talking is better than not talking. but i think actually in terms of, you know, whose position is unclear, whose position is ambiguous, i think it's actually the united states and its western partners that aren't clear. if the united states is not prepared as a basis for negotiations, a basis for trying to reach an agreement on the nuclear issue, to accept both the principle and reality of safeguarded enrichment on iranian soil, there is not going to be an agreement in this next round of negotiations or in any negotiations that might come up. and this is something which the obama administration has never been prepared to face. i seriously doubt they're prepared to face it while the president's running for reelection. >> suarez: ray takeyh, you noted that this has long been a part of iran's strategy. but making the overture now, when sanctions are really starting to bite, and today, we get the announcement of this further refinement of the economic isolation of iran. does it show in a way sanctions work? they're trying to find a way out of the corner they're in. >> the level of economic pressure that is come coming to iran is unprecedented and we're on the front end with the prohibition on the central bank transactions that are coming. the european states are no longer buying iranian oil as of july 1, the basic collapse of the value of the iranian economy. to some extent, the timing of this can be seen as dictated by sanctions. the sanctions may get iran to the table, but the iranian intransigence on the issue of enrichment, we may not get to agreement but the sanctions in my opinion had an effect on the timing of the discussions in the effect they're willing to come to the table. and, also, the letter they have sent is more responsible than previous letters. they seemed to understand that negotiations are designed to deal with the nuclear infractions, as note bide several u.n. security council resolution. i think the position of the united states and the western allies is that the iran has a right to pursue a nuclear program, but enrichment, which is the most indispensable pathway to a nuclear weapon, is not necessarily something they need or require, nor does iranian civilian nuclear program require enrichment. most countries that use nuclear energy do not use enrichment. there are other ways iran can get the energy resources other than through a costly and arduous process of enrichment of uranium. >> suarez: this week we saw president ahmadinejad touring facilityes, iran very triumphantly announcing some major technical thresholds that they've cleared. this was week an important're important week in that program, and more proof that they want to, as you suggest, continue to enrich while continuing to talk? >> i think it certainly is a demonstration of the later point. i think it also, in a sense, it does put the lie to some of the charges that people have made about the nature of the iranian program. that when, for example, they started to enrich the 20% level, that this was clearly only meant to take them closer to a weapons capability because they couldn't possibly make fuel plates with 20% enriched uranium for the tehran research reactor. well, now they're making fuel plates for this research reactor which produces medical isotopes for cancer patients. un, they keep advancing their program, and they keep putting it to use for what are basically peaceful purposes. the fact of the matter is, whether the united states likes it or not, a treaty gives them the right to enrich uranium if they choose to do so. if the united states wants to have a deal, it could have a deal where there is safeguarded enrichment in iran, where iran would observe the n.p.p.'s protocol. >> suarez: let me turn to ray takeyh. there's a suggestion that the youth has to get used to the idea of an iran that enriches, that this kind of interference that it's been doing so far has not worked. and we might get along better if we accept an iran with nuclear technology. >> the strategy of the iranian has been to develop nuclear material and nuclear advances and get the international community to accept them. we used to say it's not permissible for them to do this and do that and they have crossed those lines. i think at some point you have to draw a line and insist upon it. >> suarez: you heard flynt leverett say the cat is already out of the bag. >> what goes up can come down. the facilities they haven't embarked upon can be shuttured. what the international community has suggested is that iran has to assure the united nations security council resolutions, which most have passed unanimously, that its previous activities and its intention not to produce a weapon. thus far, the united nations inspection arm, i ieas, and thee are indications iran has intentions of nuclear program other than civilian purposes. iran has to clarify that particular position, not to the satisfaction of the united states, but to the satisfaction of the international community. >> suarez: very quickly, can that work what, he's suggesting? >> as long as the right of iran to enrich, which is not something in the u.s. ambit to grant permission, as long as that right is recognized and becoming the basis for diplomacy, i believe all these other issues could be resolved. >> suarez: flynt leverett, ray takeyh, thank you both. >> brown: and next to afghanistan, where an officer serving in the u.s. army has openly criticized top brass for misleading congress and the american people about the war. margaret warner has our story. >> warner: as the war in afghanistan continues into its 11th year, top u.s. military officials have repeatedly said that progress has been made in arresting the taliban's drive and moving to afghan self- sufficiency. but recently, an army officer, lieutenant colonel daniel davis, has made waves, charging that is simply not the case. in a classified report to congress and an 84-page unclassified version, davis accuses the military's top brass of misleading the american public about just how badly the war is going. he draws on 250 interviews he did with u.s. troops and afghans during a year-long mission throughout the country last year. among those in his sights, general david petraeus, who commanded troops in afghanistan before becoming cia director, and statements of his like this testimony last march: >> the momentum achieved by the taliban in afghanistan since 2005 has been arrested in much of the country and reversed in a number of important areas. >> warner: lieutenant colonel davis has briefed members of congress and staff, and spoke with us this morning. colonel davis thank you for joining us. >> my pleasure. >> warner: you charge in this lengthy report and in your article that not only is the war in afghanistan failing, but that the senior military leadership has used what you call omission and outright deception in order to prevent the american public from knowing the truth. that's a very serious charge. what's your evidence that it's actual deception? >> well, when you have a certain amount of information that you know things are a certain way, and then you convey them in public in a way that contradicts that, that's hard to get by that that's not intentional or knowing we're trying to make you think something that's not so. as i point out in a some of the classified information is very stark, which naturally i can't convey. but even some of the things that you can convey and you can observe and whatnot, get pretty clear evidence that things are not at all the remarkable success that has been noted in recent days, were not that way at all. >> warner: let's take the main sort of strategic assessment that senior military leaders have been giving for the last couple years, which is the momentum of the taliban and other insurgents, which will be progressing before the surge of troops, has at least been arrested and in some areas reversed in terms of control of territory. >> there have in fact been some place where's we drove them out of an area, particularly in some areas of northern kandahar. but that does not at all intone that we have succeeded in those areas. there was one particular occasion where there was a firefight going on not far from where i was. went inside to the command center, we were watching on a camera where we could physically see it. some of the taliban guys put down their weapons by a haystack, got on a motorcycle and start to drive off. they were driving in the direction of an afghan national army checkpoint where there were two humvees sitting astride the road. the commander of the unit saw that and turned around to his afghan lno, and said tell them to stop those guys. these guys drive right past them. no one moves, no one answers the phone until the guy gets out of sight and then they pick the radio up. >> warner: that is one of the most devastating things in the report, the performance of the afghan national army and police. the basis for the surge and the beginning withdrawal of american forces is that we would stabilize the situation enough that they could take over. give us a flavor of what you found about their performance. >> well, i will give you a flavor, and i'll also tell you, in my view, that is one of the most profound consequences of this propensity we have to not be square with what's going on. when you constantly are saying, "thingses are going good" and yet everybody on the ground knows it's nothing close to being the truth then your word losing credibility. i saw in the kunar area-- >> warner: in the northeast. >> in the northeast part of afghanistan, we were taking a patrol out there and there had been reported attacks two and a half mowers prior to my arrival. we asked where did the attack come from? he pointed up on the hill. i said, what's your normal procedure? do you form up a patrol and go after them? do you do periodic patrols? what's your normal procedure?" as the translator is translating the part about "go out on patrol" his head whipped around like this to the translator, looked back at me and laughed in my face and said, "no, we don't do that. that would be dangerous." i turned around to the guys who are there every day and say, "is this typical engagements? is this how it works all the time? is this unusual?" i'll tell you in 100% of the cases -- and there were no exception they say personally observe-- they said, this is normal. they don't even leave the confines of the checkpoint. they sit there and try not to get shot and get their paychecks." what do you have that's sustainable after we start pulling 20,000 troops out in the next seven months? >> warner: what makes you so sure this is outright deception versus believing in the mission, believing it can be done, seethe glass half full, seeing more progress being made? >> yeah, and part of that is in fact exactly what you describe is this can-do attitude, which most guys who wear a uniform, you give me a mission that has no chance of success, i'm going to do everything in my power to accomplish and it. and i'm not going to start off saying, "this is a failure, i'm not going to make this. am i'll do everything i can, especially on the tactical level. if this was the third or fourth our fifth year even of the war, then you could say we need to continue being optimistic. but when you see the same comment from 2004, especially about the afghan national security forces, from 2004, these guys are increasingly taking the lead. they're getting out there, gaining the support of their countrymen, only in the 11th year you still don't see physical evidence of that. and they're predatory-- like i said, they watch while guys drive right by them that they saw were shooting. >> warner: now, why did you not just take this up through the chain of command? you have instead gone to the congress, briefed the congress. you're talking to the press. and you filed an inspector general report. why go that route and what are you trying to accomplish? >> i frankly have lost my confidence in the ability of some of the senior leadership of the army to police itself. and based on what i had seen over an extended period of time, and then what i've definitely seen in afghanistan, it was clear that just going-- quote-- through the chain of command was going to accomplish nothing. so i believed the only chance that there was to actually get some kind of-- something to fix the situation, to where we're just being honest about what's going on, it's going to take some external help. and that's why i went to congress. >> warner: you're not trying to change policy. you just want the statements coming out about the assessment of the current policy to jive more with what the reality is that you saw on the ground. >> that is exactly right. i'm a staunch proponent of civilian control of the military, and that they set the policy in conjunction with the military, however they do that. my strong feeling is whatever they want to decide, but it needs to be based on an accurate and truthful assessment of what's going on, on the ground. >> warner: you said a minute ago you have lost confidence in the senior leadership of the military. judge have you remained in the military gilove the army. there's nothing i would rather do. i love serving our country here and there are so many fantastic soldiers, men and women that are serving. there are some great leader outs there, too. there's just a small group of folkes, i believe, that are-- exert an unusually large percentage of power over this, and i want to see that get fix glargd so are you confident you have a future in the military? >> i don't even-- i don't know. i'm not that confident of it. because i don't know how it's going to work out. but i believe i had a moral obligation to do what i did, and whatever the consequences were is what they are and that's yet to be written. >> warner: colonel danny davis, thank you. >> my pleasure. >> woodruff: and to the analysis of shields and gerson-- syndicated columnist mark shields and "washington post" columnist michael gerson. david brooks is off tonight. gentlemen, it's very good to have you with us. >> thank you, judy. >> thank you. >> woodruff: a word about the economy, mark. good news seems to be coming in bits and piece. the dow industrials almost at 13,000, which would be, i guess, a record in four years, if it hits there some time soon. how does all this affect the presidential campaign going on out there? >> well, if in fact the pattern continues, judy, four consecutive months of declining unemployment and the lowest number of unemployment applications for unemployment insurance in four years, and good news in the market that you described, and building consumer confidence, then it really hits the basic premise of mitt romney's campaign-- the republican campaign-- which has been that barack obama has been a failed steward of the economy, that the economy has floundered under his leadership-- or lack thereof-- and voters were understandably discouraged and pessimistic and sometimes hopeless about the future. if all of that changes, then romney's basic message-- i can improve the economy-- loses saliency and traction, along with his argument about his electability, which has taken a body blow as well. so the republicans almost have to redraw their campaign. when the economy is bad, voters blame the party in power. when the economy is good, voters make their decisions on other issues of their choosing or what candidates offer. >> woodruff: so, michael, an unmixed blessing for the president and his campaign? >> well, i think the direction of the economy, particularly on election day, the perception of that matters greatly. now, we don't know what that is going to be on election day. if you remember, the administration had the summer of recovery in 2011. they declared that this was going to happen, and it didn't really work out the way they wanted. so that's a problem. and we also do know, however, that this recovering economy remains a weak economy. we have now had three years above 8% unemployment. that is the first time that's happened since the great depression. we still have a housing market that's at depression-level reductions in values. these things are something that, you know, even if the economy is improving, we still have serious economic problems. and i think the republicans will be able to point to that. >> woodruff: separately you had, michael, on the hill this week, this rare show of bipartisanship, the two parties were able to come together, mass payroll tax cut extension, unemployment benefits. on the surface, it looks like the republicans david, the democrats won. is that what happened? >> oh, i think the surface is pretty accurate. i think john mccain said you know, republicans lost this debate in december on middle-class tax cuts. they didn't want to repeat it again. and john mccain with typical bluntness said today we're dumb but we're not stupid. and, you know, i don't think this is a fight republicans wanted. but republicans are happy to vote for tax cuts. democrats are happy to vote for extension of unemployment insurance. but the people that shouldn't be happy are people concerned about the deficit. this is really not offset. it doesn't deal with fundamental problems about the deficit. you know, we've with had four years of unprecedented deficits in this country, and the congress still can't, you know, take that seriously. and so i think it's both, you know, a good sign that the people can agree on this but i think it's a little bit there ndenial about our economic circumstance. >> woodruff: it's a reversal on the part of the republicans. >> it was. the republicans took a big hit in december. it's awfully tough to argue that we favor tax cuts for goldman sachs but we oppose them for nurses and firefighters and teachers, which they would have been in that position. and the republican sort of late mantra about they have to be paid for was a little hollow after the 2001, 2003 tax cuts which remain unpaid for and still a drain and contributing to the deficit. i think republicans really wanted to get it behind them. john boehner understood that. there was greater resistance in the senate. what it really means more than anything else, judy, legislatively this year, i liken this to a narrow canyon in a western movie, where the stagecoach goes through and it's most vulnerable to the attack of the bag padguys that can be held hostage, that this is the last place where the administration has to go through that narrow canyon in this legislative year. >> woodruff: you're saying the administration are the good guys. >> they're the stagecoach, whether they're the good guys or not, but it's the place you want to stop the stagecoach,. there's no more of those-- thes 31st of december, 2012, the world ends. the world ends. that's when the bush tax cuts expire. it's when the debt ceiling has to be raised, everything. but that's after the election. in other words, there are no more confrontations scheduled between now and then legislatively where the administration can be held hostage as republicans did hold them hostage last summer and the administration looked weak in the process. >> woodruff: what does that mean for want rest of the year in the congress? >> well, i've asked that question up in congress whether they're going to do anything the rest of this year. i think you're correct that now the last confrontation has ended, i'm not sure-- i think the leadership, the democratic leadership is going to be fairly partisan. they're going to try to find vulnerabilities that highlight romney's weaknesses. the republican policy committee, i was up there talking to some of those people-- they're doing the same. so we've entered, i think, a strategic chess game in the congress about what comes next. no one thinks we're gog resolve these issues, but everyone thinks that immediately after the election in that lame duck period, it's going to be very large issues taken on. >> woodruff: over that prld of a month and a half. michael mentioned romney's weaknesses, and, mark, which brings up what's going on right now with the primary. the next primary is am category up in about 10 days, michigan, arizona. romney seems to be struggling right now since the three states rick santorum won, a week and a half or so ago. he's campaign, in a state, michigan, i guess everybody thought was going to be a cakewalk for him? his former home state? >> yeah. >> woodruff: but he's struggling there. what's happened? >> i middle eastern the passage of time. his dad was governor there close to half a century ago, so the romney name is not what it was. but i think it's deeper than that, judy, as far as michigan is concerned, and as far as mitt romney is concerned. what's happened to mitt romney, in my humble judgment, from watching him, is that rick santorum has emerged-- there's always been-- and michael has addressed this-- a market for the non-romney. the other non-rom these have been flawed models. pick rer we was a-- perry was a flawed debater, failed debater. rick santorum is a good debater. newt gingrich had more baggage than swert airlines carries and rick santorum does not have personal baggage. herman cain appeared from nowhere and had no legislative, governmental experience, rick santorum does. so he sits better. the problem that romney-- timing is everything in politics. he's going on gunn into michigan, all right, at the time of general motors having a 130-year record profit. it's now three shiftes, three shifts. it's around-the-clock general motors. workers are getting a $7,000 bonus. it's the number one auto maker in the world. americans are not ideologues. we're pragmatists. the ideologue hasap ideology and says what is right works. the pragmatist looks at it and says what works are right. whatever americans think, this auto bailout worked, whether they think the government shouldn't have been there or not, it worked, and mitt romney's relitigating is it all week and saying the banks should have done it. at that point we were bailing out the banks. the banks weren't making any loans so he look silly and off key and really rooting against michigan's success, and against clint eastwood of all people. >> woodruff: remembering the super bowl. michael, you did write about this today. i mean, how does romney work his way through this? >> it's a long-term problem. he has a chronic condition. he has a political anemia. he has a hard time exciting people. he doesn't know how to touch the buttons for conservatives, and when he tries too hard he looks inauthentic. santorum is not an ideal candidate. >> not at all. >> he has an acute condition, i think, which is kind of a culture war fever. he seems to enjoy those debates, culture war debates a little too much. it scares people. people don't like aggressors in the culture war. it's hard, though, for romney to exploit that. it's hard to come in and criticize his social conservative can views in the republican primary. >> woodruff: you mean during this period. >> this period. he can do it through proxies. he can raise questions about his electability. but of course barack obama won't have any problems attacking the views on contraception or women's rights issues or gay rights issues. it creates a dynamic i think if i were barack obama i would want to face santorum, but it's hard for romney to make those attacks about electability. >> one of the things about santorum that has gone uninoid, judy. this is a man who was 16 years in the congress. he served four years in the house, with 227 house republicans. he served with 89 different republican united states senators. up until today, not one of them had ever endorsed him for president. that's a minute for sorts. i mean, it really is-- gliekd mike dewine. >> he did today. that does reflect a sense is he really the presidential candidate they want hum to be. he spent this week criticizing president bush's policies and i think that's an attempt to sort of explain his 18-point lanslide defeat at the hands of bob casey in pennsylvania in 2006. >> woodruff: that's a little convoluted. >> no, that the bush policies caused him to lose. how do you explain losing by 18 point if your third race. >> woodruff: mitt romney pointed that out several times. >> i'm glad to hear you standing up for president bush. i agree with your point, any president-- republican, democrat, liberal, conservative-- when you have a collapsing financial sector and the collapse in the economy in the upper midwest is going to act. george bush acted on those things. president obama acted. it seems disconnected from reality and ideological to come in and say for completely ideological reasons, "i would have done nothing." i don't think it plays very well in the general election, certainly. >> woodruff: do we look for some movement in the next few weeks? do they slog away until the primaries? >> i think romney has to win michigan. if he doesn't, he has to lose it closely. if he loses michigan lopsided i think it's going to be a moment of greatst grave self-doubt for the entire republican party establishment as well as the romney candidacy. maybe he loses michigan and wins in arizona. i think ohio will be a real battleground on march 6, supertuesday. >> woodruff: do you agree with that? >> i do. he can narrowly lose michigan and win big in arizona and survive this near-death expense. he loses big in michigan it reconfigures the race. >> woodruff: all right, we are glad to have you both here to help us reconfigure our analysis. mark shields, michael gerson, thank you both. >> brown: finally tonight, we remember the life and work of a gifted foreign correspondent. anthony shadid's reporting took him from one conflict zone to the next. from egypt... >> this is anthony shadid for "the new york times" in cairo. in some ways, one revolution may have ended tonight with the overthrow of president hosni mubarak, and another revolution may have begun. >> brown: ...and iraq... >> baghdad's a pretty grim place right now. >> brown: ...to libya... >> the road to tripoli is about an eight-hour drive that seems to capture the hopes and ambitions, anxieties and fears of a country wrestling with its future. >> brown: ...and finally, syria. >> we have seen scenes of hundreds of thousands of people gathering in downtown hama. >> brown: it was in syria that shadid died yesterday of a severe asthma attack while reporting on the violent crackdown by the assad government. the 43-year-old american of lebanese descent spent much of his career covering the middle east for a variety of news organizations, most recently "the new york times." he also appeared often on the newshour with his reporting from the region. as one of the few american reporters fluent in arabic, shadid was able to shine light on untold human stories. >> security remains the overwhelming topic of conversation in baghdad today. these three families that i was spending time with over the past few weeks, it's almost the only thing they wanted to talk about. >> brown: he won two pulitzer prizes for his dispatches, in 2004 and 2010, both while working for "the washington post". david hoffman was his editor at the paper. >> you know, what made his writing special was his reporting. he was one of the most relentless and tireless reporters i ever worked for, and only after he had listened to hundreds of hours of people talking, after he had filled notebooks-- literally, buckets full of notebooks-- with things he had seen and smelled and heard, did he actually sit down and write. as one of his friends said he was one of those few people that wrote poetry on deadline. anthony's great brilliance about war reporting was that the story was not only the great tumult of violence and the bombs falling and the strategy, but also the peoples of war. and every single time, he got in his car and he went to the dark corners of the place where people had their lights out, and he would sit on the floor and ask them, "what was your experience like?" >> brown: it was often dangerous work. in 2002, shadid survived a gunshot wound while covering the west bank. last march, he and three other "times" journalists were kidnapped in libya by forces loyal to moammar qaddafi as they covered the revolution. they were detained for six days. >> those first three days were the most harrowing. as soon as we humanized ourselves, as soon as we became people in their eyes, we were treated, at times, better. but i don't want to dismiss what... what was visited upon us over those first 72 hours. >> brown: in 2005, i talked with shadid about his approach to his work when we discussed his book, "night draws near", about the iraq war. now, you had the advantage of speaking the language. how important was that? >> you know, it was important during the invasion because i could get off... get out on my own, and that was critical. in the aftermath, i found language most helpful in trying to, i guess, create a fuller portrait of what was going on. in a way, i think language added the background noise sometimes. it was the... you know, the choice of words, the sayings, how they fit into the bigger conversation. >> brown: capturing such intimate portrayals of life amid war, shadid said, was a key to his approach to reporting. >> i had made a decision before the invasion began to stay in baghdad to try to get a sense of how a city was going to react to an invasion, a city under siege. and it was pretty early on in the war that people started talking a little bit more honestly than they might have before the invasion. and it was actually something my editor saw as well, that there was a story to tell perhaps in what people were saying, just popular sentiments, and that popular sentiments might be more revealing than we thought they would be. >> brown: anthony shadid leaves behind a wife and two children. >> woodruff: again, the major developments of the day: china's likely next leader wrapped up a u.s. visit touting economic cooperation as a new joint venture with a hollywood studio was announced; congress voted to extend a payroll tax cut for 160 million americans; and iran showed signs it may be ready to restart talks over its nuclear program. online, we have more about anthony shadid. hari sreenivasan explains. hari. >> sreenivasan: find video of shadid's newshour appearances on "the rundown." on "art beat," jeff speaks with singer/songwriter and r&b star john legend about the launch of an arts and education campaign known as "what's going on... now." and tonight's edition of the pbs program "need to know" examines why americans need help buying food in record numbers every month. find a link to their coverage of food stamps on our homepage. all that and more is on our web site, newshour.pbs.org. judy. >> woodruff: and that's the newshour for tonight. on monday, president's day, we'll look at a new museum dedicated to abraham lincoln's legacy, across the street from ford's theater where he was assassinated in 1865. i'm judy woodruff. >> brown: and i'm jeffrey brown. "washington week" can be seen later this evening on most pbs stations. we'll see you online, and again here monday evening. have a nice holiday weekend. thank you and good night. major funding for the pbs newshour has been provided by: >> 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. captioning sponsored by macneil/lehrer productions captioned by media access group at wgbh access.wgbh.org >> this is "bbc world news america." funding for this presentation is made possible by the freeman foundation of new york, stowe, vermont, and honolulu. newman's own foundation. and union bank. >> at union bank, our relationship managers work hard to understand the industry you operate in, working to nurture new ventures and help provide capital for key, strategic decisions. we offer expertise and tailored solutions in a wide range of industries. industries.