louis and "newshour" political editor david chalian explain what the upset means for president obama's sinking political fortunes. >> brown: then, ray suarez examines the congressional probe of a failed solar-panel company that received federal loan guarantees worth half a billion dollars. >> ifill: from cairo, margaret warner reports on the rise of egypt's oldest and most established islamic movement, in the aftermath of the arab spring. >> now the muslim brotherhood, long confined to only social and religious service, could soon become the dominant force in the government. >> brown: and we assess the looming showdown at the united nations as palestinian officials push for statehood and a vote in the general assembly. that's all ahead on tonight's "newshour." major funding for the pbs newshour has been provided by: >> i mean, where would we be without small businesses? >> we need small businesses. >> they're the ones that help drive growth. >> like electricians, mechanics, carpenters. >> they strengthen our communities. >> every year, chevron spends billions with small businesses. that goes right to the heart of local communities, providing jobs, keeping people at work. they depend on us. >> the economy depends on them. >> and we depend on them. ♪ ♪ moving our economy for 160 years. bnsf, the engine that connects us. 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. >> ifill: president obama and his party faced the fallout today from losing a u.s. house seat they had long held. at the same time, new poll numbers showed growing unhappiness with the way things are going. >> we've been asked by the people of this district to send a message to washington and i hope they hear it loud and clear. ( cheers and applause ) >> ifill: republican businessman bob turner claimed victory last night in the race to fill disgraced congressman anthony weiner's vacant seat. >> i am telling you, i am the messenger. heed us. this message will resound for a full year and will resound into 2012. the only hope that our voices are heard and we can start putting things right again. >> ifill: turner defeated democrat david weprin by eight points in a brooklyn-queens area district where no republican had won since the 1920s. weiner resigned in june after admitting he'd sent lewd photos of himself online. democrats got equally bad news in another special election in nevada, where republican mark amodei beat the democrat by 22 points. the chair of the national republican congressional committee, pete sessions, laid the election results at the white house door. saying in a statement: white house press secretary jay carney, traveling with the president to north carolina today, warned against reading too much into the republican victories. but the loss of the heavily democratic new york district came at a time when the president's own numbers are sinking. a bloomberg news poll released today found that only 9% of americans feel confident the economy won't slide back into recession. and nearly three-quarters of the respondents said the country is on the wrong course. the president has been hoping his new jobs plan will help turn around the economy, and put a brake on that growing pessimism. he pitched his job creation proposal for the fourth time in a week. congress, he insisted, must put aside politics to come up with a solution. >> we're in a national emergency. we've been grappling with a crisis for three years and instead of getting folks to rise up above partisanship in a spirit that says we're all in this together you've got folks who are purposely dividing. purposely. thinking just in terms of how does this play out in terms of this election. >> ifill: but house speaker john boehner read the results of the new york special election differently. turner's victory, he said, delivered a strong warning to the democrats that the president's party is on the wrong track. for more on the meaning of last night's results, we are joined by errol louis, host of "inside city hall," a program about new york city and state politics that airs on new york one. and "newshour" political editor david chalian. erroll louis, what is it about this district that made it slip last night from democrat to republican? >> well, it's an unusual district, gwen, where president obama won with 55% of the vote, which sounds like a pretty broad margin, but for new york city it's actually pretty close. it's also a district that has a very large immigrant population from the former soviet union, they tend to vote conservatively. there's also a very large con conservative jewish population and they vote very conservatively. so it was always a district that would split its vote. it went for rudy giuliani, the republican, over the decades. it also voted for gore and it voted for obama. so you can never really pin it down and that tension really sort of came to a head in the special election. the republicans carried the day. >> ifill: you know, normally we go back and forth about whether these special elections have any larger national impact. were the issues that brought about this outcome local or national? >> it's very interesting. they really very much ignored local issues and the republican and the democrat both said it was a national race. so the democrat said we've got a tea party candidate running and if you want to send a message to push back the tea party, vote for me. the republican candidate-- who prevailed-- said "we'veot a problem with president obama's policies towards israel and problems with economic policy and if you want to send a message to washington, vote for me." so they both really nationalize it had race as best they could and in retrospect it wasn't such a smart strategy for the democrat. >> ifill: we've been talking a lot about the economy here in washington, obviously around the country as well. was that a drag for the would be incumbent for the democrat? >> well, i think it was a problem. the republican candidate, bob turner, said he got into all of this purely because, as a retired businessman... he's 70 years old, a successful retired executive who never held public office. he said he was tired of watching what was going on with the economy, he was tired of seeing policies that he thought would fail and he wanted to be heard. and he wanted somebody to go out there and as he put it, light a candle and that's what he did. so the economy was front and center and there's no corner of this country, gwen, where you can go where people are not concerned about the lack of jobs the sagging income, the inability to get credit. it's a long-standing problem and it's the problem for the democratic administration. >> ifill: and david, how much were the problems of a democratic administration a problem for him. >> well, they had to be. he ran as a democrat and said he wanted to support the president and he supports the president's plan for jobs and he supports the president's approach to health care and all of these are controversial within this district. there were a lot of people who have some grave doubts about it. this was a chance for them to express those doubts and i don't think the democrats really understood exactly how uneasy people are with what's going on with the president's policies. to that extent, i think there this really was a bit of a wakeup call for them. >> ifill: so david chalian, special election, one congressional district or not, are the democrats freaked out about this on a national basis? >> they're expressing concern and real concern. we can't overinterpret. it is one special election or two, actually, that was race in nevada we can get to in a moment as well. but what special elections do, they don't predict the future, they don't tell us, oh, this means exactly this will happen a year from now. but they do give us a snapshot of the current political environment. and right now when the democrats were 0-2 last night, the current political environment is really bad for them. so the psychological impact on the party is actually what democrats fear the most, democrats in charge of the democratic national committee, the campaign committees on the hill, the obama reelection campaign. what they're hearing from democrats now is real concern and worry, and that has a way of feeding on itself and that's what the obama team is trying to tamp down. >> ifill: you mentioned nevada. that was supposed to be... that was a republican seat, it was expected to be continued as a republican seat. why is that a haar binger for the democrats? >> well, it was a republican seat and although it was pretty close in the last presidential election because nevada swung so heavily towards barack obama's direction. it is a battleground state, though, where the obama campaign is going to invest a lot of time and resources and try to keep in its column next year and specificically in that congressional district, gwen, what shaw county is a battleground county. barack obama won that county by some 12 or 13 points against john mccain in 2008. just about half the vote in that congressional district. the republican trounce it had democrat there yesterday. so there are signs there that it's not just easily written off and, trust me, the obama campaign is not writing it off as just a republican district. there's lessons to be learned there, too. >> ifill: it's not just the president's approval ratings or lack thereof, not just the right track/wrong track polling numbers. there seems to be just a growing sense of pessimism among american voters. >> whitey bulger david t problem in new york is not so much the problem as barack obama but the same problem barack obama has which is exactly this: when you are the democrat in charge of the white house, this kind of pessimism is going to weigh on you and your political prospects. there is a bloomberg poll out today, gwen, and we saw that only... that famous ronald reagan question: are you better off now than you were four years ago. only 27% of the country said they're better off than when barack obama took office. that's fundamental question getting at how people are feeling, how the economy is permeating everybody's political outlook and that doesn't bode well for the president at this moment in time. >> ifill: certainly not for the future. so the democrats are looking at this and they say, well, we just get better candidates or a better set of issues or do they look at this and say there is something fundamentally wrong that we have to tackle here? >> they look at this understanding how great their challenge is. yes, they want to recruit the best candidates possible, but what they see here is-- and, again, specifically the obama reelection campaign, they look at this and they say, listen, we are going to have to bring yet new voters again into the process in 2012 if we are going to be successful, they say. so they are in a process-- a year and a half long process-- identifying young african american hispanic voters that have not voted before, that have not participated to bring them into the fold, that's one mission. >> ifill: to try to expand their base? >> right. and literally alter electorate. one of the things democrats keep saying about new york nine today is that well, this electorate doesn't look like the way the country is going to look, all these republicans showed up. well, the republicans showed up because that's where the enthusiasm is right now. so the enthusiasm gap that we saw exists in the 2010 midterms last year is still here. we see hit in the fund-raising right now, the d.n.c. had a really bad fund-raising month in argue and the r.n.c. had one of their best off year fund-raising month. so all in these different factors we continue to see the energy and enthusiasm on the republican side right now. so the president needs to enliven and awaken his base, he needs to reach out to new voters and alter shape of the electorate so he has a better chance than right now polls would suggest and he needs to keep that conversation going with the independent voters that have totally defected from him since 2008. the polls suggest they are going to need to be energized, which is why a lot of democrats say, hey, it's someone like rick perry who is the nominee, that can go a long way in energizing the democratic base. >> ifill: erroll louis, up in new york, are democrats, elected officials, people who will absorbing the impact of this election, are they beginning to say, you know, there is something... something smells bad here? something we have to fix in the end and that involves stiff-arming the president? >> i don't think so. actually, gwen, i think's an interpretation here that's going around that they blew it locally. and it was really the whole democratic establishment. i mean, it was stunning how all of the big guns... i mean, our very popular governor was doing robocalls former president bill clinton was doing robocalls for them. the scene at his headquarters last night looked as if it was a candidate's forum for the 2013 mayoral race. everybody's who's even thought about running for mayor was there, all of the major unions were committed, everybody was involved and it just didn't make a difference. in a district where there's a 3-1 registration advantage for democrats. so they've got to rethink both their tactics and the underlying philosophy that led to this. but, no, the sven thinking is that they didn't have such a great candidate, that he made some mistakes and that if it weren't a special election their normal what sheenry would have produced the outcome they expected, even though they seriously outspent the republicans. now i think that might be a little short-sighted, but that's my sense of how they see it here locally. >> ifill: erroll louis of new york 1, david chal i don't know of the newshour, thank you both very much. >> thank you. >> thank you. >> brown: still to come on the "newshour": what went wrong at a solar-panel company; the rise of the muslim brotherhood in egypt and the palestinian bid for statehood. but first, the other news of the day. here's hari sreenivasan. >> sreenivasan: wall street had an upbeat day. stocks rose amid new signs that european leaders would act to prevent greece from defaulting on its debt. the dow jones industrial average gained nearly 141 points to close at 11,246. the nasdaq rose 40 points to close at 2,572. markets in europe also finished higher. the rally came as leaders of greece, france, and germany held an emergency teleconference. at the same time, european commission president jose manuel barroso warned there is no simple solution to the debt crisis. >> we are confronted with the most serious challenge of a generation. this is a fight for the jobs and prosperity of families in all our member states. this is a fight for the economic and political future of europe. this is a fight for what europe represents in the world. this is a fight for european integration itself. >> sreenivasan: in a related development, the italian parliament passed a new austerity plan to reduce italy's deficit by $70 billion over the next three years. hundreds of demonstrators protested in rome against the plan's tax hikes and spending cuts. the protesters threw smoke bombs as they clashed with police in riot gear. a major investigation of last year's gulf oil spill put the overall blame on b.p. today. the u.s. coast guard and the federal bureau that regulates offshore drilling issued a final report. it said: the report said b.p. violated a series of federal rules on the well's cement seal and blowout preventer. both failed, leading to the deaths of eleven rig workers and the worst offshore spill in u.s. history. a new wave of attacks struck at iraqi security forces today. at least 19 people died in three separate incidents. more than 50 others were wounded. the worst attack was south of baghdad, near hillah. a car bomb blew up outside a busy restaurant as local police were eating inside. at least 15 people died there. in afghanistan, an assault on the heart of kabul finally ended after 20 hours with 27 afghans and insurgents dead. nato helicopters and troops killed the last insurgents in an unfinished high-rise building. from there, the militants had fired on the u.s. embassy and other key structures. u.s. marine general john allen commanding nato forces conceded the militants won a propaganda victory. but the american ambassador ryan crocker rejected comparisons to the communist tet offensive in vietnam, in 1968. >> you know, this really is not a very big deal. it was a hard day for the embassy and my staff, who behaved with enormous courage and dedication. but look, you know, a half a dozen r.p.g. rounds from 800 meters away that isn't tet offensive, that's harassment. >> sreenivasan: crocker accused the haqqani network-- based in pakistan-- of carrying out the assault. officials in iran sent mixed signals today about the fate of two american hikers arrested in 2009 and convicted of spying. the judiciary system said it is still reviewing bail for shane bauer and josh fattal. it gave no indication when a decision would come. just yesterday, president mahmoud ahmadinejad said a court had set bail of $500,000 dollars apiece and the two would be freed within days. nasa has unveiled the general plans for its powerful new rocket to take astronauts into deep space. shown in this animation, the giant space launch system would allow manned exploration of asteroids and mars. it would carry six astronauts and more than three times the payload of the now-retired space shuttles. in washington today, senator bill nelson of florida-- chair of the science and space subcommittee-- said the program will cost $18 billion over the next five years. >> we are in an era in which have to do more with less. all across the board. and the competition for the available dollars will be fierce. but what we have here now are the realistic costs that have been scrubbed by an outside independent third party in their study of nasa. >> sreenivasan: nasa hopes to start unmanned test flights of the new rocket in 2017, with the first crew in space by 2021. the summer-long texas heat wave has reached another milestone. on tuesday, it was over 100 degrees in wichita falls for the 100th day this year. the old record was 79 days, set back in 1980. and laredo reached 100 again today, for the 115th time this year. just last week texas officially recorded the hottest june, july and august in the country ever. there was bad news today in the latest s.a.t. results for american high schoolers. reading scores for the class of 2011 were the lowest on record. and the combined reading and math scores were the lowest since 1995. the college board administers the test. it said the record size and diversity of those being tested affected the results. those are some of the day's major stories. now, back to jeff. >> brown: and we turn to another looming problem for the obama administration: did the white house inappropriately push along financial help for a now- bankrupt solar-panel manufacturer? a congressional hearing today focused on the administration's very public embrace of the company. ray suarez has the story. >> suarez: it began in september of 2009 with vice president joe biden on a video link, announcing a federal stimulus loan for solyndra. nine months later, in may of 2010, president obama toured the solar panel company in fremont, california. it was part of his push to use the stimulus for creating green technology jobs. >> less than a year ago, we were standing on what was an empty lot. but throu