the rest of the system. >> woodruff: plus, as ebola spreads through west africa, so does fear, the death toll climbs, with leading researchers killed and two americans now infected. those are just some of the stories we're covering on tonight's pbs newshour. >> major funding for the pbs newshour has been provided by: ♪ ♪ moving our economy for 160 years. bnsf, the engine that connects us. >> and the william and flora hewlett foundation, helping people build measurably better lives. >> and with the ongoing support of these institutions 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: a brief pause in violence between israel and hamas came to an abrupt end today. a palestinian park and a hospital were hit by israeli strikes. among the dead were nine children. the overall death toll from three weeks of fighting grew to 1,050 palestinians and on the israeli side, 52 soldiers and 3 civilians. >> ifill: hamas-run al-aqsa t.v. showed a frantic scene outside gaza city's shifa hospital. the wounded from the blast at a nearby park being rushed inside for treatment. palestinian officials blamed an israeli air-strike. while an israeli army spokesman pointed to misfired hamas rockets from inside gaza. the park attack occurred just minutes after shifa's outpatient clinic was hit, wounding several people. in southern israel, the israeli military reported four of their soldiers were killed in a mortar strike by hamas and another five soldiers were killed in combat in gaza. at a midnight meeting, the united nations security council called for an "immediate and unconditional" humanitarian cease-fire. this morning in new york, the u.n. secretary general ban ki moon reiterated that call and called for the protection of civilians. >> we cannot continue to see many people continuing to be killed like this way. why these leaders are making their people to be killed by others? it's not, it's not responsible, morally wrong. >> ifill: ban added that more than 173,000 gazans are seeking shelter at u.n. facilities, ten percent of the total population. in washington, secretary of state john kerry added to the growing calls for a true cease- fire. gaza, he said, must be demilitarized. >> we also believe that any process to resolve the crisis in gaza in a lasting and meaningful way must lead to the disarmament of hamas and all terrorist groups. and we will work closely with israel and regional partners and the international community in support of this goal. >> ifill: in a televised address today, israeli prime minister benjamin netanyahu said the country should be "ready for a prolonged campaign" in the gaza strip. >> ( translated ): we knew that we would have difficult days. this is a difficult and painful day. stamina and determination are required in order to continue in the struggle against a murderous terrorist group that aspires to destroy us. >> ifill: speaking with pbs's charlie rose in doha, qatar, hamas leader khaled meshaal said israel must end its occupation of gaza and the west bank. >> ( translated ): you believe in the co-existence of peoples. however, i do not coexist with the occupiers, with the settlers and the-- those who-- >> it's one thing to say you want to coexists with the jews. it's another thing you want to co-exist with the state of israel. do you want to coexist with the state of israel? do you want to represent-- do you want to recognize israel as a jewish state? >> ( translated ): no. i said i do not want to live with a state of occupiers. >> ifill: the day's violence came as muslims observed the eid al-fitr holiday marking the end of the holy month of ramadan. >> ifill: that charlie rose interview you just saw a portion of will air in it's entirety on most p.b.s. stations later tonight. we'll return to the situation in the middle east after this news summary, with a focus on why there appears to be no diplomatic end in sight. >> woodruff: it was an especially violent day in ukraine as well, with government troops battling separatists in the east. the united nations estimates violence in the region has killed more than 1,100 people in the past four months. for a second day, heavy fighting prevented an international police team from reaching the malaysian airliner wreckage to secure the crash site. the deputy head of a european monitoring mission urgently appealed for calm. >> on that site there are still body parts missing, there are still bodies there, there is debris there, there is a job to be done. it can only be done if these guns are down and we have no risk on our way there. we are sick and tired of being interrupted by gun fights despite the fact that we have agreed that there should be a cease-fire. >> woodruff: the u.n.'s high commissioner for human rights today said the downing of flight mh-17 could constitute a war crime, and demanded a quick investigation. pro-russian separatists and ukrainian authorities have blamed each other for shooting down the airliner, killing all 298 people on board. >> ifill: president obama and european leaders have agreed on a new round of sanctions against russia, to be announced later this week. national security adviser tony blinken said they will target russia's financial, defense and energy sectors. he also said the u.s. has seen a buildup of russian forces along the border with ukraine. that follows yesterday's release by the state department of satellite images that purport to show russian troops firing on ukrainian forces from across the border last week. >> woodruff: russia was ordered to pay $50 billion in damages to former shareholders of the defunct oil giant, yukos. russia immediately vowed to appeal the hague arbitration panel's ruling, calling it "flawed" and "politically biased." the hague panel has been reviewing the case since 2005, and concluded that russian president vladimir putin had manipulated the legal system to bankrupt yukos. >> ifill: a federal appeals court in virginia today ruled the commonwealth's ban on same- sex marriage is unconstitutional. the two to one ruling upheld a district judge's decision from last february. 19 states and the district of columbia now allow gay marriage. more than 70 lawsuits are pending in the 31 states that still prohibit it. >> woodruff: medicare's financial health is improving, and it's hospital trust fund will remain solvent four years longer than projected, until 2030. the trustees who oversee the country's social security and medicare trust funds issued their yearly update today. the massive social security retirement program won't be exhausted until 2034, but its disability program is projected to run dry in 2016 unless congress takes action. >> ifill: crews ramped up efforts today to contain two wildfires in northern california. one blaze has burned about four square miles in and around yosemite national park. about 100 homes have been evacuated, but an air assault helped limit the fire's spread. east of sacramento, another wildfire spanned six square miles and was 65% contained. >> woodruff: jury selection began in the corruption trial of former virginia governor bob mcdonnell and his wife maureen. mcdonnell arrived at a federal courthouse in richmond this morning. he and his wife face 14 counts of fraud and other charges for accepting $165,000 of gifts and loans from a political donor. once considered a rising star in the republican party, mcdonnell has insisted he did nothing illegal. >> ifill: president obama honored 22 americans with awards for their contributions to the arts and humanities today. the awards were handed out in the east room of the white house. singer linda ronstadt and public radio host diane rehm were among the recipients. the national medal of arts is the nation's highest award given to artists and their patrons. the federal aviation administration proposed a $12 million fine against southwest airlines today for not complying with safety regulations. it's a civil fine related to repairs on boeing 737 jetliners that were returned to service even though they didn't meet regulations. southwest has 30 days to reply. >> woodruff: on wall street today, the waiting game was in effect as traders looked to the end of the week when a slew of earnings reports are released. the dow jones industrial average gained 22 points to close at 16,982. the nasdaq lost more than four points to close above 4,444. the s-and-p 500 gained less than a point to close just under 1,979. still to come on the newshour: differing perceptions on who is actually winning the war in gaza. a bi-partisan push to fix troubles at veterans affairs hospitals. foreigners flee libya amid clashes between rival militias. contrasting economic theories for building up the middle class. and how fear is hindering efforts to stop an ebola outbreak in west africa. >> ifill: the latest battle between hamas and israel has raged for nearly three weeks, as efforts to broker a cease-fire, including secretary of state kerry's whirl-wind trip to the region, have fallen short. why is it proving so difficult to bring a halt to the violence? for that we turn to robert satloff, executive director of the washington institute for near east policy. he's written extensively about the arab israel peace process. and mark perry is a writer and foreign policy analyst who's covered the israeli-palestinian conflict for over two decades. mark, this renewed conflict seems especially intractable this time. you have been in contact over the years with representatives of hamas. what are they saying? why is this so tough? >> because their request, their demand, their conditions for an end of the conflict have not been met. and they have one condition an one condition only and that's an end to the siege of gaza, it's absolutely out of the question for israel. israel says to do this. it's what secretary tried to get israel to agree to. they wouldn't. and so tonight sadly this conflict continues. i don't think it's going to end in the short term and i don't think hamas will give in to the demands. >> what do you think are the major sticking points. >> the most significant sticking point is that hamas continues rocket fire. that hamas continues to use its underground tunnels and attack civilians in israel. when that ends and when there is an agreement on the path toward disarming hamas, this will end. the israelis accepted two cease-fire proposals along the last three weeks. hamas rejected them. when there's a cease-fire that brings an end to the actual fire, it's over. >> i'll start with you, but i want you both to answer this question. what does a cease-fire have to gain or lose from a prolonged conflict as this is turning into. >> well, prolonged conflict is never in israel's interest. israel is a small country surrounded by enmows. it is a civilian army of people's army so it doesn't want to get into conflict. i think everybody around the world saw the long hesitation before the decision was made to use ground forces in gaza. israel, once it went in, and then it discovered not just the rocket fire but also the tunnel nass were coming out into israeli communities, into villages. >> they -- know about those tunnels before? >> they knew that there were tunnels but nobody knew the extent, the number, the sophistication and the coordination amongst all the tunnels, that the potential for a dramatic event of many different villages and communities being attacked in kindergartens and schools, to the by rockets, but by terrorists coming up from within these buildings. the israelis across-the-board, 90% of israelis urged the government to go in and finish the job. the government actually has been reluctant to send in troops to finish hamas. >> because that's not what their goals-- they want to end what hamas is doing. and deny them the means to rearming the acquisition of more rockets and more ability to attack further. that's what their goal is. >> mark, same question to you. what does hamas have to gain or lose were allowing this prolonged conflict to continue, not agreeing to a cease-fire? >> freedom, escape, respect of the international community. a retrenchment of their land in gaza and the west bank. a flag, a parliament, self-determination. this is what the palestinians have always wanted and been denied for 60 years. it's not going to be solved militarily, it's going to be solved politically. israel undermined the peace process. derided our secretary of state and continues to do so. there are-- there were three israelies who were killed sadly, unfortunately kidnapped. it's not clear that hamas did it but israel decided to launch this an here we are. >> you said hamas wants to be a statement but it is not a state currently. >> hamas is one of the political parties, that joined a national unite government before the outbreak of these hostilities there was no hamas member in the cabinet of that national unity government. they were willing to cooperate with mahmoud abbas in forming a government. and they've said time and again, they're willing to negotiate. but they won't negotiate for their rights. and they-- a government to prove that and have been repute-- repudiated by israel. >> go ahead. >> i think to be accurate, we should recognize that we are not dispassionately looking at two equal combatants here. one is a democratic ally. the other is a terrorist organization. mark just described the palestinian authority as being a negotiating partner ands with there were important diplomacies but hamas opposes that peace. it opposes the idea of a solution with any israel, big, small, any israel. their goal is to kill israeli civilians. >> let me ask you about the john kerry piece. you brought it up, mark perry. usually with a united states secretary of state goes to a region and attempts to broker a peace he's seen as a fair and honest broker. that doesn't appear to be the case right now. why is that? >> sadly i think that our relations with israel are strained. i think that john kerry was an honest broker attempting to get a cease-fire, worked tirelessly and i think courageusly to do it and you hear now in the israeli press about how he was on the side of hamas. how he was with qatar and turkey. how he undermined israel. it's really painful to see, a close friend, an ally of the united states like israel call names, point fingers at the secretary of state. i think he did his best. and the cease-fire proposal that is on the table, that he put on the table by asking turkey and qatar what hamas wanted, it ends with a siege, is, in fact, it was called today a cease-fire that israel should and could accept that it was the best deal they have seen in ten years. >> so robert, your take on why secretary kerry has not been warmly welcomed by an old ally? >> let me quote david ignatius from tomorrow's "washington post". you can read tomorrow's newspaper these days. >> tell me about it now. >> it is-- that he says that john kerry pushed too fast instead of getting with what should be inside this agreement. namely, disarmament. three key elements to an agreement, stopping the rockets, ending the tunnels and a path toward disarmament. if that had all been within the agreement, the deal would have been sown up. instead the idea was to kick that down the road. the deal in the original quote that we saw in the clip, he talks about an eventual path to disarmament. put disarmament in the deal now. the deal is done. >> does a deal get dom if arms-- in hamas -- >> interesting we are hearing about disarm am mill tarization now, three weeks ago we didn't hear about it. and the reason we're hearing it now from the secretary of state and from israel is that the disarmament and demill tarization of gaza strip because of israel offensive failed. israel cannot defeat hamas. this is an intractable quagmire for israel. they will have a hard time extricating themselves from it. >> who has the leverage whether the u.s., qatar or turkey, somebody in this to get everybody off the dime. >> the key leverage is egypt hamas wants only those two parties can provide. hamas wants access. they want to survive. only the egyptian and the israelis control the area around hamas. turkey, qatar, everybody else essentially irrelevant. >> hall as doesn't trust egypt. >> and egypt doesn't trust hamas. and general sisi is an enemy of hamas but sisi has a create,-- street, and the egyptian street is clearly here turning against israel. i think europe is turning against israel. this offensive has turned out to be political nightmare for israel so sooner or later -- >> but the u.s. is not turning against the israelis. >> no, we're not. and i don't think we will. but sooner or later sisi is going to come to the table and say all right, who do we need to do. he doesn't want to have a conflict on his border. and he's going i agree. it's going to be cairo and it's going to be sisi and egypt that really lays out how we get to a cease-fire. >> we'll be watching to see who makes the next move. mark perry, robert, thank you both very much. >> thank you. >> woodruff: lawmakers did something today that has become rare in this congress, reach a compromise. house and senate negotiators found that common ground over reforming the department of veterans affairs. the bipartisan breakthrough to try and improve patient care at the v.a. came after weeks of tough talks to merge competing proposals passed by the two chambers last month. >> woodruff: the chairs of the senate and house veterans' affairs committees announced the deal at a joint news conference this afternoon on capitol hill. independent senator bernie sanders of vermont. >> rather than go through why we didn't do this a month ago and get it done, the important point is we are here together having done something that happens rarely in the united states congress. their total $17 billion proposal would: provide $10 billion for veterans to seek out private doctors if they are unable to get an appointment within 30 days, or if they live more than 40 miles from a v.a. facility. provide $5 billion to hire additional doctors and nurses, and another $1.5 billion to lease 27 new clinics around the country. the agreement comes months after allegations first surfaced that the v.a. manipulated the appointment schedule at facilities in phoenix and elsewhere, to hide long wait times for veterans. the controversy ultimately led to the resignation of v.a. secretary eric shinseki, amid an outcry from lawmakers in both parties. the senate is expected to vote by the end of the week on the nomination of former proctor & gamble chief executive robert mcdonald to take over the department, which has more than 300,000 employees. sanders and house committee chair jeff miller of florida said they expect both chambers to vote on their plan before lawmakers leave friday for a five-week recess. >> woodruff: here to explain their proposal and provide insight into the problems facing the v.a. we are joined by senator bernie sanders, the independent from vermont and chairman of the senate veterans affairs committee. and representative jeff miller, a republican congressman from florida and chairman of the house veterans affairs committee. gentlemen, we welcome you both. congressman miller to you first, how did you arrive at these numbers? i asked because the last time its congressional budget office took a look at what congress was proposing, they came back with an estimate much higher than what you had thought. >> well, it was. and a lot of that money was dealing with a choice portion of the bill. we feel like cbo was wildly off on their estimate. we asked them to reestimate. the number came down a little more. we still think that it's not going to cost as much as they estimate. so we are willing to look in a $10 billion number to start with. >> woodruff: senator sanders, it does appear that this amount of money is less than what you originally proposed. as i understand it, over three years, what makes you believe it's going to do its job, that it's going to make the difference that you think needs to be made? >> well, i absolutely don't think it's enough money to do the job. but i think it's a very, very good thought. i think it will give the va what it needs in its first year, in terms of going out and getting the doctors and the nurses and the medical personnel and the space that they need for quality to care for veterans in a timely manner. frankly, between you and me, i think we will be back discussing this next year. >> woodruff: literally that quickly? >> well, i think so. and i think that the needs of the va and the veteran community are very, very significant. judy, we're talking about a va system in which in the last four years a million and a half more people have come into the system. you're dealing with $500,000 people have come home from iraq an afghanistan with ptsb and tbi. you're dealing with an older veteran's population from world war ii and korea who need some difficult medical help. so my hope is and my belief is that what we have done is a really good start. we want to see the va get its act together. we want to see it be more efficient. we want to see doctors go to where they're needed. i have a feeling in a year, year and a half we will have to continue this discussion. >> representative miller, do you think you're going to be back at this next year too? >> i would expect that we may come back but this is one 69 differences between the chairman and myself. i think the choice option is critical to give the veteran an opportunity, if they choose to do so, to opt out. we have done that in this particular piece of legislation for those that have been waiting in line, and particularly for those that live 40 miles or more from a va facility. we believe that this is an important first step. but i'll tell you, neither one of us believe that you can fix the culture from within by just throwing money and people at the same. there has to be a systemic change within the system. and i hope that the new secretary, once he is confirmed will begin that process. >> woodruff: so you're saying this bill will make some difference but you're saying bigger changes are going to have to come from somewhere else. >> well, i think one of the first steps. and i'm glad we were able to reach again a bipartisan agreement, is an account ability side. people are still shocked to find out that many of the same people that have been involved in really lying about the numbers in regards to wait time are still on the job. what we've done is we have come up with a crafted piece of bipartisanship that will, in fact, give the secretary the ability to fire those that have lied to him with an appeal process built in. and i think that will send a clear message to those who want to fudge the numbers. >> senator sanders, do you believe this is going to pass the congress this week? >> i am quite confident it is going to pass the senate. because i know that virtually every member of the senate understands we just cannot turn our back on men and women who have put their lives on the line to defend us and who are hurting today. it really would be an obscenity to go home in august and not address this issue. so i'm confident it's going to pass the senate and just make the determination as to what happens in the house. >> congressman miller, what do you think at the house. i heard you say in the news conference today that your background as a salesperson is going to come in handy because you're going to have to do some education i think is the way you put it of some of your fellow republicans. >> that particularly deals with some of the more conservative members and trying to educate them and describe how we arrived at this particular number to agree upon to bring forth in the conference committee. i believe that both sides of the aisle, both democrat and republican will support this in very large numbers. the important thing and it's a date that senator sanders and i had set out really early on, and that was to finish this conference report v it voted on by both sides of the capitol building and send it on to the president. >> but do you think you're going to get it through the house, is that what i hear? >> oh, i have no expectations that anything less than passage by a wide margin. >> senator sanders, it's so unusual to see an agreement between republicans and democrats in the congress. what is the secret? because just a few days ago the two of you, you and congressman miller were at odds over at least a big part of this. >> look, here's the problem that we have. i mean it's no great secret. number one in my view and i think the view of most americans, that congress itself is pretty dysfunctional. we are not addressing the real needs of the american people. and second of all, philosophically there is a huge division between the house and the senate. but what i think congressman miller and i understood is the failure in the sense was not an option. it would be reprehensible, it really would make you sick to think that we would go home and not address the very serious problems facing the veteran's community. and i think congressman miller shared that same perspective. >> woodruff: congressman miller, so do you have a secret you want to share with others seeking consensus on capitol hill or was this just a one off proposition here? >> no. and i think senator sanders and i both can be as partisan as needed during particular debates. but in this issue as it relates to the wait times with veterans, partisanship was not appropriate. we worked as hard as we could, even during the time when the press was making out like this particular conference report was dead. we continued to talk to each other. our staffs were negotiating back and forth. >> so no advice for the others in congress seeking consensus. >> well, they should have great personalities as we do. that's what it is. >> we'll take that. we'll take that for an answer. senator sanders, congressman jeff miller, we appreciate it. thank you both. >> thank you. >> thank you. >> ifill: now a look at the deteriorating situation in libya. the country has struggled with violence and instability since the revolution that unseated muammar gaddafi in 2011. in recent weeks, it's only gotten worse. jeffrey brown has the story. >> brown: factional fighting, regional rivalries, personnel at foreign embassies fleeing the chaos. and today a fire burning out of control near the airport in the capitol of tripoli. we begin our coverage with this report narrated by lindsey hilsum of independent television news. >> that's what happens when you fire rockets into a fuel depot. as rival militia did in the libyan capitol yesterday and again today. sirens sounded. this afternoon the national oil company said the blaze was out of control and firefighters had been forced to withdraw. tripoli has descend mood anarchy. revolutionary brigades from the part city of misrata have teamed it up with islamists to fight rivals from a town that controlled the air force since the revolution in 2011. no one is controlling the armed men. there are no police, no army, and a government that exists in name only. burned out buildings near the airport, emblems of the failure of the libyan revolution which has brought not freedom but more conflict. the u.s. embassy is shuttered. american diplomats were pulled out on saturday. other foreigners and libyans who can are leaving from the small airport inside the city. >> this crisis is adding to our security problems. a large number of foreigners and embassy staff have left through this airport. >> staff from the british embassy left yesterday, reportedly in these armoured cars which were attacked en route not one was hurt. such are the shortages tripoli residents have to queue for petrol. electricity is intermittent, water comes and goes. three years ago lib ran-- libyans celebrated the overturned muammar gaddafi. today no one seems to know how to pull their nation out of the abyss. >> brown: with me now is frederic wehrey. he's a former u.s. air force officer who served as a military attacheé in libya. he's been to the country often since the overthrow of gaddafi, and is now a senior associate at the "carnegie endowment for international peace." >> why this violence? i mean there are many different players involved but give us a sense of who the key ones are. what is going on in a basic sense the two rival factions in these rival town, the zintanies have controlled the airport. the misrati a are allied with islamist militia that enjoyed control in a previous parliament. that parliament is no longer in poer with. i think the islamist militias felt like the windows what closing, that they had to act now to seize the airport from these zintanies that were holding the airport there. there is also some factional politics that relate to what is going on in the east. you had a again gaid general who launched an operation in the east against the islamists. he's partnered with those militias that are controlling can the airport. so in this very complex web of dynamics of alliances, it's finally arrived to tripoli and these misratans felt like they had to act. >> brown: and is it right to see this all within this larger context of post gaddafi libya about what happened? we talked about it as it was happening, i recall. >> it is i mean this is a country that under gaddafi really had no state institutions. it didn't have an army. didn't have a police. it's only gotten worse since the revolution. what has happened really is that the provisional government, the transitional government put these militias on its payroll. the militias are getting funding from libya's oil well. and they really mushroomed. they become their own entities. they grabbed the oil ports, the airports, they control armories there is no mediator, no referee to keep them apart. this is what they are seeing now with the fighting. >> when you refer to a provisional government. is there an actual functioning government right now? >> there is, but it's incredibly weak. there's a new parliament that is supposed to meet in benghazi, there are questions about its security. the last parliament was really rife with militia pressure. it was isn'ted to militia pressure. the prime minister is caught in the middle between these various factions. so the real story of libya is that there is no one faction that can really compel or coerce the others, really. >> an to what extent is oil an factor. is that what they are fighting over, one of the things they are certainly fighting over. >> it is. several months ago you had the blockade of oil, facilities of oil, production facilities by a militia in the east that was seeking greater autonomy for that region. in that sense the libyan economy into a tailspin and the country is still recovering from that. that is why you have these long lines for gasoline. i mean the country given its oil wealth should not be in such a state right now. but it is because of the factional fighting among the militias. >> brown: an important aspect is the degree to which libya becomes a failed state where militant groups are operating freely and affecting the rest of the region. >> well, that's a huge concern. and we've already seen libyan weapons from the armouries, gaddafi's weapons showing up in syria, in gaza n africa. it has destabilized mali. and we know there are libyan jihaddists training there and going to fight in other theatres of conflict so from a regional perspective you are right. there is a concern these terrorist, al qaeda will exploit this ungovernance ansett up shop in these ungoverned territories of libya. >> brown: what about the role of the u.s. and allies. is there a role? how much sway does the u.s. have at this point? >> again, i think you have to go back to the overthrow of gaddafi. but the u.s. policy from that point was really to put a libyan face on this revolution. and that obviously the real sensitivity to another nation building exercise, the lightfoot print approach. the u.s. is involved in training libyan society and helping libyan political actors. there is a planned effort to help train the libyan army. the united nations is also involved, so are the british. the problem really is one of security and access. i mean after of course the tragic attack in benghazi there was a real i think sensitivity, that this is a dangerous place. we need to protect our people and our diplomats and that hindered movement around the country and it hindered access to libyans. >> and then the state department pulled out the embassy personnel now. is there a level of frustration on the part in washington about our inability to influence things. and in fact having to brief. >> i think there is. the sense i get in washington is that they feel there is just no partner on the other side. they want to help the libyans but the libyans first have to help themselves. this is a government in disarray, that is weak. i think there is just a red line that was crossed where the embassy was caught in the middle of the shelling and they pulled out. so i do think the libyans themselves need to step up to the plate before the outside community can help. >> so very briefly is that the potential way out. has anybody got ideas about how some end to this? >> when i visited libya i was really struck by the level of prague nationalism among certain politicians. and libyans do have this tendency to walk things back from the brink. it's a small country. there are divides but it's not the sort of deep ethnic sectarian divide that is tearing iraq or syria apart. i think the libyans as we speak are trying to negotiate some climb down from this crisis and a cease-fire. >> brown: frederic wehrey, thank you so much. >> thanks. >> woodruff: we turn now to the continuing debate about how to fix this country's economic problems. some say we need to reduce income inequality, while others emphasize a need to create more growth and opportunity to climb up the ladder. our economics correspondent, paul solman, has been running into variations on those themes throughout his recent reporting on the battle over raising the minimum wage. tonight, he gets a different take on that debate. what you might call "top down" economics, versus "middle-out." it's part of his on-going reporting on "making sense" of financial news. >> in seattle this spring a win for advocates of a $15 an hour minimum wage. nearly double the federal minimum, as the city can did -- council voted unanimously in june to phase in $15 over several years. leading the charge were socialist activists, labor unions, and one most unusual suspect, billionaire venture capitalist nick hanauer. >> stock certificate number 7 from amazon.com from the ipo. >> a philosophy majer who went to work in the family pillow company where he still is c.e.o., hanauer first made his fortune as investor number 7 in amazon, then with a web ad firm. >> which we sold to microsoft for $6.4 billion in 2007. >> at which point hanauer began publicizing his progressive views. as in this edgy 2012 ted talk. >> it is astounding how significantly one idea can shape a society and its policies. consider this one. with taxes on the rich-- if tax on the rich go up, job creation will go down. if it was true, today we would be drowning in jobs. thank you. >> its central tenet of hanauer's philosophy, wrote isn't top down or even bottom up but as he puts it, middle out. >> the fundamental off capitalism is if workers don't have any money, businesses that don't have any customers. a thriving middle class is the source of prosperity and capitalist economies, not pouring money into rich people, right. which simply makes rich people richer. >> but trickle down economics is true to some extent, right? i mean rich people get money, and then they got to either spend it or ultimately like buffett or gates here in seattle, give it away. >> but there is this upper limit on what we can spend. i drive a very nice car but it's only one car. i don't own a thousand. even though i earn a thousand times the median wage. we have run a 30 year experiment. and what happens to an economy when you structure it to benefit the few at the expense of the many. and i would argue that for most people that experiment hasn't gone very well. >> he does not know what the definition of trickle down economics is. >> noted libertarian law professor and economics fundamentalist richard epstein, the other voice in this story. >> if it turns out that rich people hire poor people and both of them are better off in the exchange, you can start to call this a trickle down if you want. i would call it an overall social improvement whereby two people are made better offer and nobody else will be made worse off. >> but 80%, 90% of this country isn't any better off than it was 30 years ago. >> this is not a function of market behavior. it is a function of the regulatory apparatus which makes it impossible to have these mutual gains. >> so your argument is that the reason incomes have stagnated in this country over the last 30, 40 years is largely due to increased regulation. >> yes. you have to worry about family leave, you have to worry about anti-discrimination, explicit employment tax, have to worry about obamacare, about osha, and then throw on top of that a recession. it turns out that the reduced demand and the higher barriers to entry creates the unemployment level that we had. >> but to epstein perhaps the liniest regulation is the minimum wage. or as he calls it. >> the guaranteed recipe to create massive unemployment. don't you have to pay people, workers, enough so that there will be enough aggregate demand so that they can buy what other people are producing. >> the question of course is how you get to aggregate demand. i want people to be able to take jobs at 2 cents an hour if that is what it takes so a year from now they can take $12 dollars an hour. >> and if they earn 2 cents an hour how do they survive. >> obviously at some point they will have to have two jobs. >> or at two centance hour, several hundred. >> but isn't that, well, absurd. >> no it's not. you assume that the only return that a worker gets from the job is the wage consideration. that's just wrong. it is a whole variety of social skills that you require, recommendations, connections, and network really matter. >> but wait a second says hanauer, even if those skills were developed, isn't it better for consumers and companies to keep workers alive than taxpayers? >> the average age of a fast food worker today is 28 years old. and those folks are being paid poverty wages. and taxpayers are making up the difference in food starches and medicaid and rent assistance. wal-mart earned $27 billion in profit last year. they could afford to pay the bottom million workers $10,000 more a year, raise all of those people out of poverty, save taxpayers billions of dollars and still earn $17 billion in profit, right. it's simply nuts that we have allowed this to happen. but when i talk to employers they talk about how workering don't show up on time. they don't have the basic skills. so why should a company pay more than the minimum wage when they're not getting anything more than minimum productivity. >> it is certainly true that there are many, many workers in the country that are lazy, and ineffective. but it is equally true that there are an equal number of c.e.o.s in the country who are lazy and infectionive too. and yet c.e.o. pay has gone up a thousand percent over the last 20 years or something like that and worker pay went up 5.7%. you know, this ridiculous idea that a worker on wall street who earns tens of millions of dollars a year, security advertising imagine air -- imaginary assets or doing high frequency trading is worth a thousand times as much as workers who are earning tens of thousands of dollars a year, educating our children, growing or serving us our food, throwing themselves in harm away to protect our life or property, that this difference reflects the true value or intrinsic worth of these jobs is nonsense. >> to hanauer, it's just crony capitallive. -- capitalism. but to richard epstein it's the free market. >> the concentration of wealth at the top comes not from currenty capitalism but for innovation, creates huge benefits for the rest of the system. >> bill gates billions, for example, are dwarfed says epstein by the value consumers have got friend microsoft products. as for the wall street wizards. >> it turns out functions that most people don't understand, namely how you maintain continuous liquidity in a complicated economy is, in fact, such a difficult tasing that we pay people a great deal of money to become middlemen. remember the guys you are talking about are not getting public subsidies from the government. they are getting paid by customers on both sides of the market. >> you know a lot of rich people. >> i do. >> if it's so clear to you that this is disfunctional and will hurt everybody in the end, why don't more rich, smart people agree with you? >> this change threatens both the pocketbooks but even more particularly the status of rich people. you know, a 15% tax rate on capital gains, a 15% tax rate on carried interest, massively advantages people like me. working people pay 39%. investors pay 15. justified by this idea that the more money people like me have, the better off you will be. of course if it's the other way around, that tax break makes no sense whatsoever. and these arguments don't just threaten pocketbooks, they threaten status. and so when you mess with that, people get very angry and emotional. and compare to you hitler. >> in fact, a number of prominent private equity partners, hedge fund owners, venture capitalists have denounced recent efforts to raise the favorable 15% tax rate on so-called carried interest, basically their fees, which seem like income, as a harbinger of nazism. epstein flatly rejects the comparison. and somewhat to our surprise he agrees that the government deserves more in taxes on such fees than 15%. >> but i'm not saying they should get 42% either. >> this is the one thing that nick hanauer would be happy about. i'm not going to say es he always wrong, just that he doesn't know what he is talking about. he could be right by accident and he off sen. >> so one modest points of agreement. but of course not on the larger issue of legislating equality of income in america. >> woodruff: nick hanauer argues we've long misunderstood prosperity to be a function of money. he explains how he defines wealth and capitalism in an extended conversation online at "making sense." >> ifill: finally tonight: worries, hostility and threats of violence are mounting in west africa as the worst ebola outbreak on record has spread to four countries, guinea, liberia, sierra leone and, most recently, nigeria. more than 670 people have died. among those now infected: two american aid workers and the lead ebola doctor in sierra leone. one of liberia's top physicians died from the virus on saturday. liberia's president today closed all but three of the country's land border crossings in an effort to contain the disease. dr. estrella lasry is the tropical medical advisor for doctors without borders, which has workers on the ground throughout west africa. >> thank you for joining us. >> thank you for having me. >> thousand extensive, is this outbreak. >> the fact that it's already extended beyond the numbers, the record numbers of the uganda outbreak of 2000/2001 and that it is into three countries makes it into three countries plus the nigeria case makes it quite an unusual outbreak. >> much more extensive than what we were expecting, much more difficult to manage, of course. >> why do you think this is? >> partly part of the outbreak happened in urban versus rural setting, so it is much more difficult to contain. it is much more difficult to trace the context-- contacts of the people who have been infected. also it's been difficult for to us have access to patients, to areas where we think there are cases. so that is also becoming more difficult to control and control the spread of the infection. and because the borders in that area are quite permeable in terms it of commercial relationships and people moving across from one country to the other. that's also making the outbreak spread more than what we would have expected and what we have seen in other areas. >> so how do you treat this? >> so the treatment is not a specific treatment for ebola. we treat the symptoms and we do supportive treatment and palliative treatment for the patients. so fluids, analgesics, we try to treat them for any other disease that they might have. we now test patients for malaria which we didn't used to do in the past, to avoid any invasive procedures. and we're treating patients more invasively than we used to do in the past because in the past we were trying to prevent anything that could put a health care worker in danger. and now we're still trying to prevent this but we prevent this at the same time that we're trying to provide more aggressive care for a patient. >> so if you are a medical personnel as doctors without borders is and going into these communities, many of whom are care-- scared about this, what are the special challenges for you in tackling this disease? >> well, first of all, it's trying to gain some kind of acceptance from the community so that it will actually grant access to the communities where we think the disease is happening. one of the things that we have to do, of course, we have to isolate the people who are suspected in probable casesment and also of course the confirmed cases. and to contact tracing which means following the context of the people who have been in contact with the suspect, probable or confirmed case in the past 21 days. and follow them up on a daily basis to see if they develop any kind of symptoms so that if they develop any kind of symptoms they are brought to an isolation facility and are then tested to assess whether or not they have the disease or whether it's something else. >> it seems one of the concerns also for your workers is that they are met with hostility as well as fear in these communities where they're trying to diagnose and treat. how have you been coping with that? >> well, it's one of the difficult things to cope with, part of the intervention, part of the response to an ebola outbreak hemorrhagic fever outbreak involves psycho social support and a part of educating the community and reaching out to the communitites to explain what the disease is. we usually use survivors so that they can do advocacy for the disease and explain what it is to be inside an isolation ward and what it is to come outside to prevent all of this. so it's actually very, we keep doing what we usually do in an outbreak but now it's been extremely challenging because we're having davids in accessing the parent. and what that means is we are also having difficulty controlling the spread of the disease. >> is there any way to know whether this outbreak has now peaked or whether it's continuing toed about build? >> it's difficult to know there was a decrease in case, in the past weeks and now its cases are starting to spike up again. so it's quite difficult to know. i mean the outbreak is behaving differently from previous outbreaks. the fact that again it's in multiple countries and in multiple setting in each of these countries, makes it also more challenging. and also more challenging to predict how it's going to go. >> dr. estrella lasry of doctors without borders, thank you for your work. >> thank you for having us. and thank you for your interest. >> woodruff: again, the major developments of the day. fighting between israel and hamas resumed in gaza, after only a brief pause over the weekend. late tonight, the skies over gaza lit up with flares and explosions, and there were reports a u.n. school was among those hit. and in california, a judge ruled donald sterling cannot stop his estranged wife from selling the n.b.a.'s los angeles clippers. that clears the way for shelly sterling to sell the team for $2 billion to former microsoft c.e.o. steve ballmer. donald sterling was banned by the n.b.a. for making racist remarks. >> ifill: on the newshour online right now, skipping a handshake in favor of a fist bump could protect you from harmful germs. scientists in the united kingdom analyzed the number of bacteria from different types of hand contact, they conclude that using the fist bump as a greeting could substantially reduce the transmission of infectious diseases. read about that study on the rundown. all that and more is on our web site, newshour.pbs.org. >> woodruff: and that's the newshour for tonight. on tuesday, we talk with senators cory booker and rand paul about their bi-partisan push to reduce prison sentences in the u.s. i'm judy woodruff. >> ifill: and i'm gwen ifill, we'll see you on-line and again here tomorrow evening. for all of us here at the pbs newshour, thank you and good night. >> major funding for the pbs newshour has been provided by: >> i've been around long enough to recognize the people who are out there owning it. the ones getting involved, staying engaged. they are not afraid to question the path they're on. because the one question they never want to ask is, "how did i end up here?" i started schwab with those people. people who want to take ownership of their investments, like they do in every other aspect of their lives. >> and by the alfred p. sloan foundation. supporting science, technology, and improved economic 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