tuition hikes at california's state colleges. >> the universities are trying to maintain their reputations and their class schedules, but they're having a hard time. >> lehrer: ruth marcus and michael gerson analyze the week's news. >> brown: and we close with a look back at an extraordinary moment in history, 20 years ago today, that led to the end of the soviet union. >> lehrer: that's all ahead on tonight's newshour. major funding for the pbs newshour has been provided by: ♪ ♪ ♪ ♪ ♪ ♪ moving our economy for 160 years. bnsf, the engine that connects us. >> well, the best companies are driven by new ideas. >> our future depends on new ideas. we spend billions on advanced technologies. >> it's all about investing in the future. >> we can find new energy-- more cleaner, safer and smarter. >> collaborating with the best in the field. >> chevron works with the smartest people at leading universities and tech companies. >> and yet, it's really basic. >> it's paying off every day. 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: financial concerns, especially the state of the u.s. economy, dominated vice president biden's talks with chinese leaders today in beijing. as they met, sell-offs spread from stock markets in asia around the world, all the way back again to wall street. u.s. stocks held their losses in check for much of the day, but fears of a new recession ultimately got the better of investors. the dow jones industrial average ended the day with a loss of nearly 173 point to close at 10,817. it was off 4% for the week. the nasdaq fell 38 points to finish at 2,341, ending the week down more than 6%. european markets had been down sharply in initial trading, but rebounded somewhat as the day went on. traders in asia, working hours earlier, took their cue from thursday's 400-point loss on the dow. major indexes from hong kong to japan to south korea plummeted 2.5% to 6%. chinese market analyst yu shao watched the sell-off from shanghai. >> ( translated ): right now, we are in a negative-feedback loop. so, when the sun rises, from asia to europe and then to america, each market influences the others in this negative loop. the key is to see who will be the first to get out of this negative-feedback loop. in the past week, the first to pull out were the asia-pacific markets, especially the chinese ones, which highlighted the confidence and optimism in this region. >> brown: the chinese have also kept a close eye on the situation in the u.s. as america's largest foreign creditor, china holds $1.2 trillion in u.s. government bonds. in beijing today, vice-president joe biden tried to shore up confidence in the u.s. economy. he told chinese president hu jintao that, when it comes to chinese investments in the u.s., "you have nothing to worry about." >> to get straight to the point, mr. president, president obama asked me to come to beijing to meet with you and others to reaffirm our absolute, total commitment to a strong and enduring positive relationship with china. >> brown: still, the recent debt ceiling battle in washington has drawn sharp criticism from beijing. last month, the state-run news agency, xinhua, complained the u.s. debate "kidnapped" the worldwide economy. it said american politicians had engaged in "dangerously irresponsible" political brinksmanship. this week, amid the biden visit, china's vice president xi jinping, who is expected to become president in 2013, took a friendlierack. >> ( translated ): in the current new situation, china and the u.s. share a wider common interest. we should also bear more important common responsibilities. it is the common expectation of the peoples of china and the u.s. and the people of the whole world for the two nations to carry out closer cooperation. >> brown: xi also said today the u.s. economy is "highly resilient". meanwhile, another attempt to improve u.s./chinese relations turned sour this week. a chinese team got into a punching, chair-throwing brawl with the georgetown university mes basketball team, captured on this video from sportsgrid.com. the georgetown team was visiting from washington on a goodwill tour. for his part, vice president biden, who'd attended a more peaceful game earlier in the week, wraps up his china visit sunday. for more on the u.s. and china amid the current financial turmoil, we go to: yasheng huang, professor of international management at m.i.t.'s sloan school of management. he's the author of "capitalism with chinese characteristics"; and gordon chang, an author whose books include "the coming collapse of china." he was a lawyer in china and hong kong for 20 years, and now writes a blog on commentary.com. yasheng huang, what is going on in these meetings in beijing? it looks a lot like attempts at mutual reassurance? >> well, i think there are several things going on. vice president biden wases to engage his chinese-- the other side-- the-- on the other side who is going to be the president of the country come 2013. the other thing as you pointed out is that he wants to convey to the chinese that the u.s. is going to honor the obligations to the chinese, and the chinese are the biggest holder of the u.s. treasury debt. so that assurance is very, very important. i'm not sure how convincing he is, given that his hands are tied by the republicans in the congress, but that assurance is very,important for the united states to convey to the chinese. >> gordon chang what, do you see? we said not very long ago there was a very public scolding of the u.s. in zing how. how do you see it. >> clearly, vice president biden wants to make the chinese comfortable. but we've got to remember that the united states is in trouble in large part because of the global imbalances in the world, and the chinese are not permitting the adjustments that must occur. for instance, they're fixing the value of their currency, which means that manufacturing is artificially encouraged to come to china. they have all sorts of other predatory trade practices. so i think vice president biden should be calling the chinese on this and say, "well, if you want us to be better, you've got to be better." >> brown: staying with you, given the situation with the chinese holding so much of the u.s. debt, what are the implications of that amid this turmoil? >> i don't think that that actually gives the chinese that much leverage because you've got to think about the way the global marketserate. you know, if the chinese don't buy debt, well, they've got to because their economy is geared to selling things to us. if they want to sell our debt to hurt us they have to buy other things like euro's, pounds, and, you know, which means london, and tokyo are to go out in markets to bring their currency back down in value and that means the chinese really don't have a weapon. we have a lot of ability to deal with this. >> brown: yasheng huang, how do you see that? >> i disagree with that. i agree with gordon that the chinese could do more. they have done, i think, within their political and economic situation as much as they can. the chinese currency did appreciate from 2005-2008 and stopped aappreciating since 2008 but began to recent a little bit this year once again. and chinese inflation is picking up. so the effective exchange rate of the chinese currency is actually appreciating more than the nominal exchange rate. and the chinese trade surpluses are declining relative to the size of the g.d.p. i agree with gordon that the chinese can do more, but it is not the case that they are resisting changes. i think the bigger change they can do is within the domestic economic management. they should get the domestic consumption up. they should reduce the pace of the investment. they are not willing to do that. that i'm worried about. >> brown: well let me ask the other side of this, of course, amid all this economic worry around the world is if there's no growth or slow growth in the u.s. and europe, a lot of people are still looking to china as the potential economic engine. so gordon chang, starting with you, the perception, of course, has been that china is this dynamo. is that still true? >> no, it's not true and it's never been true. china has not been the engine of world growth. i mean, to be an engine of growth, you've got to accept imports to create manufacturing in other countries. chine is is an exporter and because of its predatory policies a lot of manufacturing that now occurs in china should be occurring elsewhere. also they have problems with their domestic consumption, which is not growing as fast as it should, and imports in china, which would create growth elsewhere, to be a real engine of world growth, they're not growing as fast as they should. the real engine of world growth remains the u.s. consumer who is just about tapped out, by the way, and that's a real problem for china because last year 149.2% of china's overall trade surplus related to sales in the united states. >> brown: yasheng huang, weigh in there. do you see more potential for positive growth from china? >> the imports are increasing, and the imports from the united states into china are also increasing. i think the bigger problem is not so much the import per se. the bigger problem is the chinese are importing from the wrong places. they're importing from brazil. they're importing from africa, pushing up the prices of the commodities, and they are not importing as much from the developed economies as they should, as gordon pointed out. but i think the fundamental issue is not the international balance. the fundamental issue is the domestic re-think abouting. arguably, in the last three years, the chinese government has made the matter worse because they are increasing investment and relative to the pace of the investment growth, domestic consumption is not growing as fast, even though domestic consumption is growing but it's not as fast as the investment growth. so i worry that in two to three years, the investment is going to peak, and then what is there left? the consumption is not there to pick you want engine of the growth. >> brown: coming back-- gordon chang-- coming back to this question, at a moment like this, who needs whom-- who needs whom most of all at this? when we go there, we say we reassure you everything is okay here, and they seek reassurances from us. weigh that balance for us. >> they need us so much more because their economy is geared to selling things to us. our problem-- we say they need to buy our debt. our problem is that that there are not enough people in the world to buy treasury securities. our problem is there have been too many people willing to do that which has not permitted the discipline this washington. you know, you've got to remember on the monday after the s & p downgrade, you know, what were the favorite investments in the world? gold, swiss francs, and u.s. treasuries purpose the u.s. treasuries were going to be okay even if the chinese stopped buying but they can't do that. they're selling things to us. they get dollars need to put them someplace. the only place to put them is treasuries. >> brown: yasheng huang, weigh in, we still need them in some part, right? >> oh, we do. the treasury bond is a very important source of financing for the u.s. growth, and, also, u.s. corporations depend very heavily on the growth in the emerging marketes, such as china and india. so it is-- i would not test the hypothesis advanced by gordan that we don't need the chinese. i think the u.s. economy is in too tragil a state to test that hypothesis. >> brown: all right, yasheng huang, gordon chang, thank you both very much. >> thank you. >> thank you. >> lehrer: still to come on the newshour: deporting illegal immigrants; cost-cutting at california universities; marcus and gerson; and looking back at the end of the soviet union. but first, the other news of the day. here's kwame holman. >> holman: bank of america. the nation's largest bank, will cut 3,500 jobs by the end of september. that's 1% of the company's work force, and it follows a string of other cuts announced earlier this year. "the wall street journal" reported more layoffs could follow, possibly reaching 10,000. the entire banking industry has been contracting amid new regulations and the fallout from the financial meltdown in 2008. a suicide bomber struck a sunni mosque in pakistan today, killing nearly 50 people. the attack occurred in a village in the khyber tribal region. some 85 people were wounded. the attacker exploded the bomb as hundreds of worshippers, including anti-taliban tribal leaders, gathered for friday prayers during the holy month of ramadan. >> ( translated ): as joint prayers finished and some people were still busy with prayers, a blast took place. so many people were killed and so many were wounded. then we had to start moving the dead and wounded people to hospitals. the wound read inside the emergency ward. >> holman: there was no immediate claim of responsibility for the attack. in afghanistan, taliban militants stormed a british charity's compound in kabul, triggering a gun battle that lasted all day. at least eight people were killed. we have a report narrated by paul davies of independent television news. >> reporter: it was a coordinated attack on a symbolic target. suicide bombers created this devastation. a car full of explosives detonated outside the british council. a second suicide bomber had somehow infiltrated the building. between them, they created the breach so other insurgents could enter. what followed was an eight-hour gun battle inside the compound walls between the heavily-armed taliban fighters and coalition forces. these are british soldiers who were called in to help. but it was a unit of special forces from new zealand who played the key role, entering the compound and ending the attack. they paid a price-- one member of the special forces was killed, along with all the insurgents and at least eight afghan police officers. all british staff were safely evacuated. >> i'm pleased to say that the british council staff who were in the compound, who essentially were in the safe room for most of the day-- we were in contact with them-- have been extracted safely. they are now in the embassy, obviously shaken but well, uninjured. >> i've also spoken to the new zealand prime minister this >> reporter: but this incident again demonstrates the taliban's ability to strike in the capital. the latest target, the offices of the british council are in a part of the city that's supposedly well-guarded. but it is close to the intercontinental hotel, which was the target of a taliban attack two months ago where 12 people died. the british embassy is also close by. last year, there were car bombs here targeting nato and government officials, killing 22 people. the taliban say they chose a british target today to mark the 92nd anniversary of afghanistan's independence from britain. >> holman: elsewhere, a nato soldier died in a roadside bombing in southern afghanistan today. syrian troops fired on protesters again in a fresh round of mass demonstrations, killing at least 20 people. the anti-government protests were held across the country in repeated calls for president bashar al-assad and his regime to go. the military deployed tanks, troops and armored personnel carriers in multiple cities. just yesterday, assad had assured the u.n. that military and police operations against the protesters had stopped. there also was new violence in israel and gaza. the israeli military staged new air strikes into gaza, and hamas militants launched rockets into southern israel. the escalation followed yesterday's attacks by gunmen that killed eight israelis. but both sides cited the need to defend themselves. >> we in the i.d.f. will not tolerate this kind of continued violence, and we will do the utmost, with the restraint we have, in order to counter this kind of terrorism. ( translated ): non-violence is the way forward to reaching, eventually, a solution that ends israeli occupation. but in the meanwhile, we cannot possibly in any way accept the israeli retaliation policy against our civilians in gaza, which amounts to collective punishment and a war crime. >> holman: separately, egyptian officis lodged a protest with israel after five egyptian security guards were killed along the border. they apparently got caught in fire from israeli forces chasing the gunmen in thursday's attack. those are some of the day's major stories. now, back to jim. >> lehrer: and to a new policy affecting thousands of illegal immigrants in the united states. ray suarez has that story. >> suarez: the obama administration has unveiled a significant change regarding immigration policy in this country. under the new rules, the u.s. department of homeland security will reasess some 300,000 deportation cases, in an effort to focus on deporting criminals, while dismissing the cases of those illegal immigrants who pose little threat to public safety. in addition, immigration officials will determine case by case priority by considering: how long someone has been in the country, their level of schooling, any military service, and ties to the community, we get two different views on the new rules from: dan stein, president of the federation for american immigration reform; and angela maria kelley, vice president for immigration policy and advocacy for the center for american progress. dan stein, for the millions who are already here undocumented without a right to be here, what's different as of today? >> listen, i care about immigration. i care about my country. i care about our constitutional framework with its checks and balances, where congress, with its plenary authority establishes who can come in, who can stay, and under what terms. the president faithfully executes the laws of the land. that means carries out the law as passed by congress. in this new policy, which appears to potentially apply to millions and millions of illegal immigrants, there appears to be no limit to the potential affirmative exercise of discretion on behalf of illegal immigrants and giving them work authorization indefinitely. this is a form of amnesty that runs around the prerogativees of congress to set the terms of the law. and as much as-- whether you care or not, or whether you support amnesty or want people to stay who you think are good people, you have to be concernedded about broader issues here, which is if it doesn't matter what congress says, if it doesn't matter what laws congress establishes but the president and the administration can just ignore it and let people stay, under the new policy, if you come in on a tourist sleazy and go to disneyland and never leaf, you're never going to be deported. >> suarez: angela kelly, was palm beach within his rights to do what he did? >> absolutely, look, the president, the department of music, the department of justice, what they announced is right out of law enforcement 101. it's that you're setting priorities for who's to be removed, high-target removals still should be removed from the u.s. people who are involved with drugs with guns, with violence, people who have criminal records. of course we want prioritize those people and remove them all. but any law enforcement officer will tell you that you have to make priorities. you have to allocate resources wisely and that's simply what the administration has done. it's what other administrations have done in the past. it's what all law enforcement agency have done. this isn't going to be applied to millions of people. there's going to be careful scrutiny of cases that have been backlogged in the courts tar long time ask an assessment-- is this person a low risk? do they have long ties to this country because they came as a child? is it shhh a person who has a family member who is serving in the military? if they are, that is not going to be a priority for removal. if, however, you have someone who has a criminal record, who poses a national security threat, then, of course, we're going to accelerate and focus on removing that person. i think that's smart policy. i think it's smart law enforcement. >> suarez: you just heard dan stein call it amnesty, is it? >> of course it's it's not amnesty. i think dan sign would call anything amnesty that is not a mass deportation. we have to make choices. we have 11 million people here without papers. 11 million. that's the size of the population of ohio. we can't randomly deport people without focusing on those who mean to do us harm, those who have a criminal record. that's something the obama administration has done vigorously. this administration is on track. they will have deported more people than the bub administration and on track to have deported 1 million people, 800,000 and counting. this is not a soft, easy on illegal immigrant policy. this is getting smatter about how we allocate taxpayer dollars. >> suarez: this, as i understand it, affects those people who are already in the deportation process, at some stage or another upon. is it smart to put criminals, as angela kelly suggests, further in the line. >> from the moment nepal tano came into office she started the cunard from the clinton administration saying we're going to put our resources behind deporting violent offenders, national security theft, to suspend deportation and enforcement operations for everyone else. naturally, we've had a flood of illegal immigration as a result of the failure to enforce these laws. angela says well, we have 11 million people here illegally. guess what? we must be doing something wrong. the obama administration repeatedly tried to get an amnesty bill through congress, was not able to do it. the president himself said he didn't have the discretion to use various loopholes in the way to try to give work authorizations and benefits. and then he goes off to martha's vineyard and suddenly we get this announcement, okay, we're essentially telling everybody here illegally if you don't fit within these narrow classifications of serious repeated aggravated felon, national security threat, you basically got thought to worry about. if you are apprehended somehow inadvertently by local police they turn you over to ice, you're just going to get released again. this is going to create an enforcement chaos nightmare. we have no idea how many people we're talking about? where are the resources anything to come from when you start giving deferred action to 1,000,000 people, where are the resources to screen those cases. in the memo they were saying we don't know where the funding would come so it's not a feasible approach but now they're doing it anyway. in our view eye don't say this lightly. i know people like angela say we're hard hearted. we're concerned about the breakdown of the country's ability to control its borders and determine who has the right to stay and who doesn't. this is what is at stake. splay how do you answer dan stein's concerns? >> we're concerned about the same thing. we're concerned did bhaving a coherent removal procedure and policies and i'm breathing a sigh of relief because i think this administration is getting a handle on how to do that, by targeting the worst of the worse, rather than deporting the best and the brightest. by assessing that we've got limited resources. these are tough economic times. nobody has infinite resources. and by targeting those who mean to do us harm, those with criminal records and saying, "you're going to be the first in the queue to be removed." but not only that, the memo is also clear that this isn't an open program that's going to protect everyone. it's very specific. we're talking about people who have been in the u.s. as children, we're talking about people who have a military spouse, a close family member in the military. it's very narrow. i think it's very smart and very targeted. but at the end of the day, the only way that we're going to be getting to a real solution is if congress steps up and acts and there is yet to be any will, particularly on the part of republicans, to get behind a comprehensive bill that would put resolution to what are we going to do about the 11 million people here without status. >> suarez: secretary napolitano said for her part this doesn't give categorical relief to anybody. >> it's a case-by-case determination. >> suarez: but an official also said this could lead to legal right to work in the country if it is found you are not one of those high-security risk people. how is that not amnesty? >> so for people who are among the 300,000 who are the very lowest priority, those cases will be closed, and the person whose case is closed will have an opportunity to apply for work authorization. time limited so that they can work in the country. it's not permanent residency. it doesn't permit them to travel. it doesn't give them any permanent benefit. some will get that opportunity to be able to work legally in the u.s. but that's it. no benefits, nothing else expect it's not even, frankly, sure who will get that benefit. >> suarez: very quick response. >> the american people have a right to have their fiscal integrity secured through border and perimeter controls, whether it's good accuse, health care, hospitals, our job market. we have the right to compete in a fair labor market where illegal immigrants are not work. the obama administration seems to have abandoned any pretense of enforcing u.s. immigration law in the interior and any dry-eyed look at the analysis will tell you congress and the american people have been shoved out of the way and the administration has gone rolling. >> suarez: dan stein, angela kelly, thank you both. >> brown: college students around the nation are preparing to go back to school soon, facing rising tuitions, and a particular hit on public universities from budget cuts and a weak economy. newshour correspondent spencer michels reports on the fallout in california. >> reporter: the signs are everywhere-- california's vaunted higher education system is broken. recently regarded as one of the top systems in the nation, california's public colleges offered places for all kinds of students, at affordable rates. but today, at san francisco state university, with nearly 30,000 students-- and at all 23 of the california state university campuses-- the squeeze is on. >> it's really hard to get into the classes you need. >> i took a math class last semester; it was an online math course. there are over 200 students, but we only have two to three teaching assistants to grade our homework, so it's ridiculous. >> reporter: nationally, public higher education funding dropped $1.2 billion last year, and this year expected cuts, federal and state, total $5 billion. in california, such cuts affect the 420,000 students-- many of them commuters and the first of their family attending college-- enrolled at california state universities, or c.s.u., the largest university system in the country. to offset declining state support in a poor economy, c.s.u. trustees recently raised tuition 12%, on top of a 10% raise earlier, jumping tuition to about $6,000 a year. nearly half the students in the system receive financial aid, so they effectively don't pay tuition. but for the others, the raises have been serious. robert corrigan has been president of san francisco state for 24 years, and he's never seen it this bad. >> what i think we're seeing is, increasingly, the middle class being priced out of campuses like san francisco state. >> reporter: he says state universities like his were designed to attract a wide, diverse student body-- nearly anyone could attend. >> we can't provide that access any longer, and we can't project that we'll continue to have the quality faculty that we need in order to educate them. >> reporter: and so does the physical plant-- roofs that need replacing are left that way; tiles fall off the ceiling in creative arts classrooms, where the faculty has tried to patch the problem, though not very well. the cutbacks and the tuition increases have been met over the past two years by a series of demonstrations on several campuses. but they seem to have had little effect. ethnic studies teacher klasky, who has taken part in the protests, lays the blame for poor state funding on inequities in the tax system. >> once the public understands fully the impacts of these cuts on education, they will rise up and demand that we stop giving away these huge tax cuts to the richest californians and the richest corporations, and we return... california can return to become a model for the nation. >> reporter: but others believe the situation is more complex, and perhaps more long-lasting. the university of california at davis is part of the elite ten- campus u.c. system, the jewel in the state's education crown that includes berkeley and ucla, ranked among the top public universities in the world. cutbacks and tuition hikes here have jolted davis chancellor linda katehi, who is trying to preserve her schools' high reputation. she thinks the state legislature's failure to fully fund education reflects a shift in values. >> what is happening with higher education, it is not anymore as high in the public's mind and not as high on their priorities list. and as we deal with the economy that is not going very well, i think the public worries about their well-being, about their healthcare, about their ability to live well after they retire, >> reporter: with undergraduate tuition at u.c. now more than $11,000-- up nearly 10%, on top of an 8% jump last year-- many students are hurting. to lessen the crisis, and to increase revenue, u.c. davis has promoted its summer school program, where the classes are smaller. it has encouraged admission of intertional students, who pay high tuition. it has made some administrative consolidations to reduce costs. it has partnered with private enterprise to construct a housing and educational village on campus. and it has just launched a drive to raise a biion dollars from private and alumni sources, a large sum for a public university. but the chancellor says this is all part of the new world, which includes higher tuition costs. >> we are making higher education more of a private good. we are asking the individual families and the individual students to pay for their own education. the time when the state was the main contributor to the cost of higher education is gone, and i don't necessarily see us going back to that. >> reporter: that's because getting more money from the beleaguered state seems like a long shot, given the legislature's refusal to raise taxes. regent russell gould, former president of the board and former finance director for the state, said, in the end, a tuition increase was the only alternative. >> the regents had to accept an increase in fees just out of fundamental financial realities. >> reporter: that increase has had real consequences for parents like these attending freshman orientation week on campus this summer. among them was mayur patel, who runs a small hotel in ventura, california. he had to attend to hotel business, even during the session. >> in august, we were planning to take a vacation, mini- vacation. as soon as we heard that it's going up about 9% to 10%, we stopped, we cancelled that. last time i took time off work was june 4, 2006. that was my dad's 50th wedding anniversary. >> reporter: even with the tuition increase, regent gould worries about the future. >> i think the university is at risk, in terms of its quality. the risk is if the lack of confidence is created in the university, and faculty starts believing that this is not a sustainable enterprise, that california's given up on it, i think you could see an erosion of the kind of talent that we're able to bring to the university. >> reporter: university officials at all levels, eager to preserve their schools' reputations, are reluctant to say the educational quality has already dropped. but they admit it's in jeopardy and that major changes are coming. >> lehrer: and to the analysis of marcus and gerson-- that's "washington post" columnists ruth marcus and michael gerson. mark shields and david brooks are both away. michael, the republican presidential nomination race, rick perry came into it this week. how would you characterize h entrance? >> i think he had a good week. he is a tremendous retail politician which matters in iowa. he went into michele bachmann's home town in a joint appearance and essentially cleaned her clock-- i think that's the right term for it. he also proved he can make errors, quaffs, and he showed that he doesn't really know how to back off of an error or a gaffe. >> lehrer: are we talking specifically-- >> about the federal reserve chairman, intemperate language about the federal reserve chairman. that's a useful political skill to be able to back off of a mistake. he doesn't seem do have it. there are plenty of republicans right now, however, that are discontented with the whole field, people like jeb bush and mitch daniels were encouraging other republicans to get in. they look at romney and perry and they're not happy. so it's a very fluid field right now. >> lehrer: do you agree, ruth, the gaffes are there, but the gaffes do not prevent him from making a good entrance. >> i would call it a good week. i would call it a surprising rocky week from somebody who is an experienced politician. as president obama said you're in a different league when you start running for president and every single word you say is scrutinized. i thought these were just unforced errors. what he said about bernanke, using the word "treasonous" was really, in my view, crossed the line, when he was asked whether president obama loves his country, he said,"you'll have to ask him." he had some questions about evolution versus creationism. he had some issues with global warming. i think all of that is pretty rattling. it might be good for sort of energize a certain base in the party but it-- if i were looking towards a general election, if i were a republican consultant or activist, i would be pretty nervous. >> lehrer: explain, michael ythose gaffes would not disturb the republican electorate, for a candidate to use the word "treasonous" in the context of talking about ben bernanke. >> i think the unfortunate context here is that that's the importation of language that's used on the internet, used to talk radio, used in book titles-- we have titles like "treason." so i think that type of language has been imported in the republican primary process. i yeah it's a long-term problem. i don't think that it's necessarily a short-term political problem in iowa and other places. i cothink that most republicans view perry as having much longer future in this race than michele bachmann, having more skills, more ties to business, ability to raise money. and these are mistakes that i think do hurt him in the general election but don't necessarily hurt him in this early primary process. >> lehrer: rich lowry editor of the "national review" was on this program friday. he said what remains to be seen-- and we're looking tat a week later-- whether or not rick perry goes the route of donald trump, that he has all this big hoopla ands does does well in the polls and then says a few things and then, boom, he's gone. >> or fred thompson-- >> lehrer: or fred thompson. >> i think it remains to be seen. he clearly is-- and this is the s&rt of upside of the week-- a very good retail politician, really knows how to get in there and work the crowd. that's important, especially this those early states. whether he can learn from these mistakes and be more careful-- i hate to say guard because we don't like guarded politicians-- a little bit more controlled in the future. one of the things that's been remarkable, actually, is watching michele bachmann who has been known to say in the past somewhat disturbing things is how disciplined she has been. he needs to-- and she has not gotten herself into trouble in this latest round. he needs to take a little bit of a page out of that bachmann playbook. >> lehrer: you think he can do that? >> he's a politician that's never lost an election in 27 years of politics. he's a skilled guy, and i do think bachmann hurt herself a little bit with a reputation for being a prima donna in iowa that doesn't play very well if you look at some of the coverage, the local coverage. i think more broadly republicans still feel like this race is open. they don't feel like this is a complete field. now it may be, it may be what woe end up with, but a lot of republicans are not happy where we are right now. >> lehrer: that really centered on mitt rom nearby the kind of presumed front-runner? >> i think a lack of enthusiasm with romney and a lack of comfort with perry. i think that that that's the dynamic you're seeing now, so you have people pushing for paulrian or chris christie, even giuliani is talking-- which i don't think is likely. but there are other people that might be in this field. so that's the dynamic here. i don't think people are all that happy. >> lehrer: there have been a lot of complaints from ron paul and his folks. he came in, within 200 votes of balk map in the straw poll, and he was just brushed aside. is he not considered a serious contender for the republican nomination? >> well i think he's not a serious contender for the republican nomination. he has a floor of very committed supporter asks a ceiling that's not too much higher than the floor because he has very radical views which came out in the debates. he seemed very much excusing of iranianian behavior, libertarian on even the hardest illegalization of the hardest drugs. he has views that are definitely not mainstream views, in my view, and in the view of most republicans. so i do think that he is a force but i think he has a very committed core that's not likely to expand beyond that group. >> lehrer: how do you see the total group right now, the total race? >> i think michael put it very well that it's kind of dissatisfaction with romney and unease about rick perry. and then sort of a question about how much of a race bachmann can make it with perry, and the degree to which that inures to governor romney's benefit or not because i think rick perry is like you might want to just let them play and fight it out and you could stay, governor romney sort of playing possum beneath the surface. and that might work well or else one of them, probably rick perry, could really take uveand you would find the wildfire-- all my metaphors really out of control. sorry about that. >> lehrer: smoke him out. >> all right, enough. >> lehrer: now let's move to president obama. he is-- he was in iowa on a bus tour, not political they said, but he went through the heartland of america. and not just iowa. two other states as well in the midwest. what do you make of that bus trip? >> i think people will remember the vineyard vacation more than the heartland tour in this case. i think the president's policy on his tour was pretty weak. some of it minor. some of it unlikely to pass when it comes to jobs. and in fact the white house essentially admitted that this week by saying oh, we're going to have new policy in september. which is an admission that the old policy wasn't really cutting it. i think the president's problem here is not just a vacation, which is easy to focus on, but the fact that he's coming up with a big jobs plan. 28 months after unemployment went over the 9% figure. which most people see as quite late. he's playing catch-up on the most important issue in american politics. >> lehrer: ruth? >> i wish i could say i disagree. but i thought the taurus very odd. because it was i'm on a tour. i'm anything to come up with a policy. wait until september. and that was problem one with it. problem two, i thought, was when he started to sort of ramp up this argument against congress. i need your help to get this congress to get off its-- get something done. well, when president truman ran against a do-nothing congress he had not promised the voters earlier that he was going to be able to make the congress do something, that he was the guy who was going to be able to come to town to change all of this. for the are the to be ramping up against a do-nothing congress, i feel his frustration, but he did tell us he was the one who was going to be able on fix this broken political system that still turned out to be broken. >> lehrer: how do you, in the discussion that ray ran a moment ago, it was mentioned, oh, the president went off to martha's vineyard. it's now kind of a line used to disparage the president. how do you feel about that? >> well, in my human hat, the guy needs a vacation. all presidents deserve a little bit of time off. they never really are off. they're always getting briefed. you sought pictures with john benon, the coter-terrorism adviser. >> lehrer: he was briefed by the white house today. >> isn't that funny. i don't think we're going to see him wind suffering. in my pundit hat, of course he shouldn't be doing this. no political adviser is going to tell him to go on vacation with the economy in this shape. and particularly if they were going to pick some place to go on vacation, i do not think market's vineyard would be the top choice. but there you have it. >> it should be the jersey shore. >> down the shore as we say this jersey. >> lehrer: you worked for george w. bush, michael. what is the-- how do you fit this whole thing-- it comes up no matter who the president is, whenever he goes on vacation they take a hit. why? well, i think it's an easy political hit. and i completely agree. i've seen presidents close up. they need vacation. and they don't really get a vacation. it doesn't matter. because they're constantly dealing with security briefings and other things. so it's an illusion anyway. so i don't begrudge the president that. but i mean the political advice here is just bad. this is a-- it's a beautiful place. it's a wonderful place. but it's a playground for the rich and famous on vacation. and we have an economic crisis as the president acknowledged during his own tour. and i think the symbolism here, i just know political adviser would want-- >> lehrer: of course the congress is on vacation as well. so could you read this if you wanted to-- wanted to read-- if you were a pundit, say, and wrote columns in newspapers, would you say that, you know, we have this big financial and economic crisis and yet the government is all on vacation? >> that's not a vacation. that's a district work period. >> lehrer: oh, i see. i see. >> look, the worst thing that could possibly happen to the economy would be for congress to come racing back to do what? bicker some more? disagree about policy. i think the best thing that can happen from the country's point of view is to have congress go back to their districts, actually hear from people, hear what people are asking for, from them. we're seeing some interesting reports about some people giving members of congress an earful about, hey, make we need to think about raising some taxes. it's anecdotal, but members of congress should hear from their voters. being here and getting nothing done would have been a very bad idea. >> lehrer: do you agree with that? >> yeah, i do. i think it was probably not a good strategy to bring the congress in, create a sense of urgency and national emergency when you don't know what the outcome's going to be. that's-- i think that would have been a bad political approach. but the president has to take seriously-- there was a poll number this week that said 71% of americans disapprove of his handling of the economy. >> lehrer: 71%. >> that's a dismal figure. it's a serious threat to his reelection. he needs to take that quite seriously. i think they're saying we will when it comes to september. they're not giving too many signs right now that they understand the gravity of what's going on. >> lehrer: michael, ruth, thank you both very much. >> brown: finally tonight, we remember a dramatic day in history, 20 years later, as it unfolded on the newshour. >> macneil: good evening. the stunning overthrow of mikhail gorbachev by communist hard-liners dominates the news this monday. gorbachev was reported under house arrest as soviet tanks took up positions throughout moscow. >> brown: that was how robert macneil described the shocking developments of august 19, 1991, on the "macneil/lehrer newshour," a coup that would backfire and lead to the end of the soviet union. a report from robert moore of independent television news showed the chaos on the ground. >> reporter: the red army tanks had rolled into the heart of the city, and not evenheroic gestures could stop them. workers and shoppers quickly surrounded the security forces... the man who has taken over is vice-president gennady yanayev, whose reputation as a hard-liner is matched only by his image as a gray man who would serve loyally. >> brown: then came a description of what would become the most iconic image of the day. >> macneil: early in the day, russian president republic... republic president boris yeltsin called on the soviet people to challenge the coup leaders. the onetime gorbachev rival made the appeal on top of a tank near the russian parliament building. >> brown: judy woodruff reported on the swift u.s. reaction... >> woodruff: president bush issued a statement tonight condemning what he called "an unconstitutional resort to force." >> it seems clearer all the time that, contrary to official statements out of moscow, that this move was extra- constitutional, outside of the constitutional provisions for governmental change. >> brown: then-newshour correspondent roger mudd identified the men behind the coup, who were strangers to most americans. >> reporter: instead of the single charismatic gorbachev the world had become accustomed to over the past six years, it was once again eight men in gray suits who held the power. it was the first appearance of the state committee for the state of emergency, and it included the head of the kgb, the defense minister, the interior minister, and the police. >> ( translated ): to do nothing at this crucial period means to take grave responsibility for tragic and very unpredictable circumstances. >> reporter: when yanayev was finished, the very first question, of course, was, "where is mikhail gorbachev?" yanayev's answer drew derisive laughter from the press. >> ( translated ): let me say that mikhail gorbachev is now on vacation. he is very tired after these many years and he will need some time to get better. ( laughter ) >> brown: next, russia watchers weighed in in a panel discussion. >> they're acting strongly against the right of national republic. this commission is illegal. those leaders absolutely criminal people. >> my concern is that, while acting in the name of law and order, they may trigger a civil war. >> brown: two former k officers predicted the coup would not succeed. >> i do believe that, within few months, probably within a year, all of them will be gone. the problem, however, is that they can cause great civil unrest and maybe civil war in the soviet union and before they will be kicked out of power. >> well, i've seen quite a few kgb-orchestrated coups while being in the center, and i must say that this is a very, very unusual coup. >> brown: one of our commentators that day was madeleine albright, who would become secretary of state six years later. >> well, i think that the coup will not last. i think the issue here is that soviet union is unraveling. what we're seeing are very deep splits within the public, and they're unclear about what direction to go in. they treasure their democratization and glasnost. >> brown: she was right. in the next two days, protestors rallied against the coup, which quickly fell apart. by the end of the week, gorbachev had returned to moscow and to power. the communist party was disbanded, and by the end of the year, the soviet union itself had been dismantled. >> lehrer: again, the major developments of the day: stock markets around the world had another bumpy ride. on wall street, the dow jones industrial average lost more than 170 points. in beijing, vice-president biden tried to reassure china about the u.s. economy. he told the chinese president, "you have nothing to worry about." a suicide bomb in pakistan killed nearly 50 people at a sunni mosque. and syrian troops fired on protesters again in a fresh round of mass demonstrations. at least 20 people were killed. and to kwame holman for what's on the newshour online. kwame. >> holman: what's prompted thousands of israelis to take to the streets and plan a million- man march for next month? the target is runaway inflation. find the numbers on our "rundown" blog. how much do market swings matter to average americans? "patchwork nation" charts stock ownership-- who owns what and how much-- in communities across the country. and on "art beat," jeff talks to composer philip glass about his new arts festival in california. all that and more is on our web site, newshour.pbs.org. jeff. >> brown: and that's the newshour for tonight. i'm jeffrey brown. >> 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. thank you and good night. major funding for the pbs newshour has been provided by: ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ moving our economy for 160 years. bnsf, the engine that connects us. chevron. we may have more in common than you think. >> and by the bill and melinda gates foundation. dedicated to the idea that all people deserve the chance to live a healthy, productive life. and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. captioning sponsored by macneil/lehrer productions captioned by media access group at wgbh access.wgbh.org