'This Week' Transcript: McMahon, Blumenthal, Lagarde and Musharraf

October 10, 2010 — -- AMANPOUR (voice-over): Welcome to viewers here and around the world. I'm Christiane Amanpour. And at the top of the news this week, a "This Week" exclusive, inside North Korea, Bob Woodruff from Pyongyang, as the country prepares for a new leader, and taking it to the mat in Connecticut. (on-screen): They say a vote for Linda McMahon is a slap in the face for Connecticut women. (voice-over): How has the multimillionaire pro wrestling CEO turned a state's Democratic Senate seat into a battleground? (on-screen): Is anybody worried? (UNKNOWN): You have to ask them. AMANPOUR: Are you worried? (voice-over): On the campaign trail with Republican Linda McMahon and Democrat Richard Blumenthal. Then, the jobless recovery. OBAMA: The most devastating recession of our lifetimes. AMANPOUR: But are spending cuts in Europe holding back growth here? Christine Lagarde, the French finance minister, defends austerity. And Pakistan on the brink. More alleged terror plots, more U.S. strikes. The country's former president has harsh words for the United States. General Pervez Musharraf, a "This Week" exclusive. Plus... O'DONNELL: I'm not a witch. AMANPOUR: ... all the week's politics on our roundtable with ABC's George Will, political director Amy Walter, Paul Krugman of the New York Times, and Tavis Smiley of PBS. And the Sunday funnies. FALLON: President Obama was giving a big speech, and the presidential seal fell off his podium. They tried to put it back on, but Hillary had already grabbed it and run away. (LAUGHTER) (END VIDEO CLIP) ANNOUNCER: From all across our world to the heart of our nation's capital, ABC's "This Week" with Christiane Amanpour starts now. AMANPOUR: Hello again. And we start with some developing news from Pyongyang. For the first time, Kim Jong-il and his son, his heir apparent, appeared live on television together at a massive military parade to celebrate the 65th anniversary of the state's ruling Workers' Party. A handful of journalists from around the world were invited to attend and to try to decipher the signals. One of them was our own Bob Woodruff. (BEGIN VIDEOTAPE) AMANPOUR: Joining us now, Bob Woodruff. Bob, what do you see? It's a spectacle behind you. It looks amazing. What did you see there that was new? WOODRUFF: Well, first of all, this is just so loud, I've got to actually hold this microphone right here next to my mouth. But we did see some really -- some very new things, Christiane, which we've never seen before. For one thing, when -- when Kim Jong-il actually -- Kim Jong-il came in and sat down about two seats away from his son, Kim Jong-un, there was a general sitting in the middle. And the general at one point actually turned and saluted to Kim Jong-il, and then he turned and saluted his son, which is a first indication that he could be actually in power here one of these days. There's also the concern about health of Kim Jong-il. We know that he had probably a stroke a couple of years ago. He might be suffering from diabetes. But we also saw some evidence of this for the first time I saw. As he's walking on his exit along the balcony holding onto the rail, he actually started to limp. He really looked like maybe he was, you know, getting older every single day. So it looks like the health issue is certainly a big one. AMANPOUR: And what do we know about Kim Jong-un? What do we precisely know? Any more about him now? WOODRUFF: Well, you know, even to this day, it's -- it's a massive mystery. We know that his age is 27 or 28. We don't even know if he was born actually in 1982 or 1983. We do know that he has actually studied in Switzerland for a very short period of time, so we know that he's speaking English and probably even some German and some French. He is the youngest son of Kim Jong-il's of his three. And we also heard that he actually likes basketball. In fact, Michael Jordan may be the one that he really wants to see. AMANPOUR: In a word, Bob, do you think this will bring more stability to the region or not? WOODRUFF: You know -- you know, we know that any time a government is changed, you got someone else coming in to power, you really can't figure out exactly what the answer to that is. But there's -- without question, South Korea is very concerned about it. They, too, don't know much about Kim Jong-un, and so when he comes into power, whether he's going to be exactly like his father was or his grandfather was, we still -- we still just don't know. AMANPOUR: Bob Woodruff there in Pyongyang, thanks so much for joining us this morning. AMANPOUR: And now we move on to politics. And who would have guessed the three weeks out from the midterm elections the Connecticut Senate race would be so hotly contested? The seat has been held by a Democrat for nearly 50 years, but this is a tough year. Connecticut has lost more than 100,000 jobs since the start of the recession, and a wealth Republican candidate has spent tens of millions of dollars of her own fortune to get elected. This week, Sarah Palin declared her a "mama grizzly." I went on the campaign trail to Connecticut to find out why it's become a key state in the fight for control of the Senate. (BEGIN VIDEOTAPE) MCMAHON: An entrepreneur takes a risk. BLUMENTHAL: I'm not going to be an entrepreneur as a senator. AMANPOUR (voice-over): With the race tightening, both candidates were on the attack this week. MCMAHON: We cannot afford another tax-and-spend senator in Washington. We can't afford you, Mr. Blumenthal. We have enough of you already. BLUMENTHAL: My opponent actually buys through WWE most of her products manufactured overseas. She sends jobs overseas. AMANPOUR: Linda McMahon may be a political novice, but she's a business pro, running as a successful CEO who created jobs and balanced the budget of a billion-dollar company. MCMAHON: What I created over (inaudible) AMANPOUR (on-screen): You talk a lot about reducing the size of government and reducing spending. What precisely would you tackle in order to reduce the massive trillion-dollar-plus budget deficit? MCMAHON: The reason I've not been specific as to particular programs -- and I've dealt with it in terms of rolling back non- defense discretionary spending to 2008 levels -- because that was an approach that I took as a CEO. You look at, OK, how are you going to cut costs and cut expenses? You can look at a 10 percent cut across the board. AMANPOUR: Everybody's busy trying to do the math right now on all the campaigns and regarding the budget deficit. The latest shows the Republicans can come up with something like $100 billion in cuts, which is a lot, but a pittance compared to the trillion... MCMAHON: ... $1.3 trillion deficit... AMANPOUR: Yes, exactly. MCMAHON: ... and over $13 billion debt. I get that. AMANPOUR: Exactly. So the big issues that take up most of the spending are, obviously, defense -- some 20 percent... MCMAHON: Sure. AMANPOUR: ... Social Security and Medicaid. Is that where you would cut? MCMAHON: Let me just name a couple of other things, too. I just think we should freeze the federal hiring and freeze wages again, not going to make a big dent. However, I do believe we should take the balance of the stimulus money and pay down the debt. AMANPOUR (voice-over): Her lack of specifics is countered by her claim as an outsider who will impose her own term limit. (on-screen): So how much can you really change? MCMAHON: All we can do is try. And I would only seek a second term if I really felt I'd been effective in a first term. AMANPOUR (voice-over): Battling to reach Washington, she's also having to overcome controversies over past allegations of a steroid- fueled wrestling ring and the promotion of sexist and violent behavior while she was managing the WWE. Criticism has come from Mothers Opposing McMahon, a group funded by Democrats. (on-screen): They say a vote for Linda McMahon is a slap in the face for Connecticut women, the whole issue of the women in the ring and the -- what they call degrading and demeaning behavior towards women. I mean, I'm a woman; you're a woman. What do you really think when you see some of that go on in the ring, the girl who was told to get on all fours, I think by your own husband, and bark like a dog? Are you comfortable with that? MCMAHON: Well, WWE programming has changed from being TV-14 over the years, which -- that's the time you were talking about. It was called the Attitude Era -- into now being PG, rated by the networks as PG. I'm happy with the content today. AMANPOUR: As a senator, if you could stop it, would you stop that kind of depiction against women on -- on the public airwaves? Would you at least lobby your campaign against it? MCMAHON: I do believe in the First Amendment rights and content... AMANPOUR: So you don't think there's anything wrong with it? MCMAHON: Well, content providers are clearly creating scenarios. From an entertainment point of view, I think that you either elect to go to a movie or you elect to watch a program, so I'm a strong proponent of First Amendment rights. At the same time at WWE, women really are powerful women, and the programming content, as I've said, has changed from TV-14 to TV-PG. I much prefer it today. BLUMENTHAL: You know we can make a difference, and we will make a difference. We will make a difference this November. AMANPOUR (voice-over): For his part, Richard Blumenthal, a five- term attorney general, is banking on being a familiar face, even as he's painted as the establishment amid national anti-Washington fervor. BLUMENTHAL: My biggest strength is that the people of Connecticut know me, they know me as a fighter, someone who has been on their side. They can count on me. And I have been with them for 20 years. AMANPOUR: Why, then, has a 41-point lead diminished so -- so dramatically since January, if they know you and they trust you and -- and they know what you've done for them? BLUMENTHAL: We've said from the beginning that this would be a tight, tough, competitive race. And a $50 million negative attack machine is bound to narrow the polls, and we expected it. It's happened. AMANPOUR: Why did you think it was going to be so tough, given that this is a Democratic state? No Democrat expects to lose this; no Republican is supposed to win it. BLUMENTHAL: What I know about people is that they vote for the person, not necessarily the party, and that is increasingly true these days. AMANPOUR (voice-over): McMahon has outspent Blumenthal 16 to 1, she told me roughly $25 million to $30 million of her own personal fortune. And those millions, according to voters I spoke to, have had varying effects. (UNKNOWN): You can't just have someone who's made a fortune (inaudible) in my opinion, that's what she represents. (UNKNOWN): The money's an advantage, because she can get her word out, but the business experience I think is equally part of it. We want someone in there who can balance a budget. AMANPOUR: But Blumenthal's lead has also narrowed because of statements he made misrepresenting his military service in the Vietnam War. All of his Marine Reserve duties were in the United States. BLUMENTHAL: ... since the days that I served in Vietnam... (UNKNOWN): He lied about Vietnam. What else is he lying about? AMANPOUR (on-screen): How badly has that hurt you? BLUMENTHAL: I have answered the question about Vietnam saying that I am sorry that I inaccurately described my military record. I'm proud of having served in the United States Marine Corps Reserve. And I think the voters of Connecticut are concerned about the real issues, and I believe that those are the issues that will be center in the election. My opponent may have more money, but I've got 20 years' worth of friends. AMANPOUR (voice-over): The president has campaigned for him. The first lady is on her way. And the Democratic Party is pumping in $2 million, which means less money for their candidates in true swing states. (on-screen): Is anybody worried? BLUMENTHAL: You'd have to ask them. AMANPOUR: Are you worried? BLUMENTHAL: I always run like I'm an underdog, like I'm 10 points behind. But I think there is a very clear contrast between someone who has been a CEO, claims to create jobs, and has treated people in a way I don't think the people of Connecticut would want anyone representing them to treat them. MCMAHON: I've been bankrupt. I've lost everything along the way. And I've had an opportunity, and sometimes it sounds a little bit hokey to say you're lived the American dream. I have. I've been totally down and out, able to come back. And I want to make sure -- I mean, this is -- this is the greatest country in the world, and I really want to make sure we preserve that opportunity. (END VIDEOTAPE) AMANPOUR: And we'll discuss that race and all the other midterm politics on our roundtable later in the hour. AMANPOUR: The unemployment report Friday showed September was the fourth month in a row that the economy lost jobs. The U.S. treasury secretary and finance ministers from around the world met in Washington this weekend to try to find a way to get the global economy moving again. The United States is very worried that if Europe cuts government spending too much, it could severely hurt economic growth right here. So earlier, I spoke with the French finance minister, Christine Lagarde, a proponent of European austerity about whether growth is at risk. (BEGIN VIDEOTAPE) AMANPOUR: Minister Christine Lagarde, thank you so much for joining us. There seems to be tension between the United States and Europe over what's the most sensible way to deal with the current lack of growth. The U.S. wants Europe to continue pushing money into the system; Europe is talking about a lot of austerity. LAGARDE: In terms of growth versus austerity, it's a policy that we've adopted in pretty much all European countries. But we need to address both issues. If we do not reduce the public deficit, it's not going to be conducive to growth. Why is that? Because people worry about public deficit. If they worry about it, they begin to save. If they save too much, they don't consume. If they don't consume, unemployment goes up and production goes down. So we need to attack that circle from the deficits. AMANPOUR: But you took -- you called it a circle, and there is a circular argument about it, because, in fact, many economists, particularly American economists, are saying that Europe is... LAGARDE: Some of them. AMANPOUR: Many of the prominent ones are saying that Europe is, in fact, going around it the wrong way, that, in fact, it needs more stimulus to provide more growth and then to attack deficits from a period -- from the position of strength. Why won't Europe do that? LAGARDE: Because if I look at my numbers, which is better than, you know, theories and -- and -- and speculations, if I look at my numbers, we've stimulated the French economy massively in the year 2009, end of 2008, 2009. And my numbers are now going up. I've got growth up 1.6 percent from negative 2.6 percent. I've got unemployment down from 9.6 percent down to 9.3 percent. And I've got deficits down, as well, from 8.2 percent, where we thought it would be down to 7.7 percent. So the numbers are good. Unemployment is going down. Why would I inject more public money into the system when private investment is picking up? AMANPOUR: And there are tens of millions of people out of work all over the world right now. They seem to be having to pay for the excesses of the bankers, the billionaires, the speculators. How can you have fiscal discipline and make it fair? LAGARDE: We make it fair by two ways. Number one, we have a volume of shock absorbers, if you wish, that help the least privileged and the poorest in the country, where unemployment benefits, welfare, and so on and so forth, actually help them go through difficult times. That has worked well in 2009. We continue to sustain and support those programs because it's needed. The second thing that we did -- and that was decided in Sweden, in the U.K., in Germany, and in France -- we're going to impose a systemic tax on banks, for instance. Our banks had to borrow from the state. They have refunded, most of them, and the state, which means our taxpayers, have made a profit in the process. AMANPOUR: There is a new film that's coming out this weekend here in the United States called "Inside Job." You were interviewed for that film. And you were asked about the collapse of Lehman Brothers. (BEGIN VIDEO CLIP) (UNKNOWN): When were you first told that Lehman, in fact, was going to go bankrupt? LAGARDE: Oh, after the fact. (UNKNOWN): After the fact? LAGARDE: Yes. (UNKNOWN): Wow, OK. And what was your reaction when you learned of it? LAGARDE: "Holy cow." (END VIDEO CLIP) AMANPOUR: So let me ask you, what is there to prevent another "holy cow" moment? Do you believe that the right kind of -- of regulation against this -- this potential disaster is in place across the board now? LAGARDE: I should hope so. We... AMANPOUR: But is it? LAGARDE: We've been working really hard in the last two months to put in place what our leaders decided was needed: an alert control system, a supervisory system, discipline in the markets. But it's a constant job, because markets are very agile, and they reinvent new schemes, they invent new channels, new circuits. So we need to be careful for the whole public, not just for Wall Street, not just for the city, not just for the stock markets. We need to protect individuals. AMANPOUR: You talked about markets. To quote Joseph Stiglitz, apparently, he says that trying to appease the markets is like trying to reason with a crazy man. Do you think you're trying to appease markets in a way that actually won't protect the public interests? LAGARDE: Well, you talk about the crazy man. We don't necessarily want to put an actual straightjacket on everything that they do. But we need to put them under supervision. And we need to set rules and regulations that if they violate such rules and regulations, they are really hammered. And that's -- that's what's needed. AMANPOUR: Let me ask you about one of the things your own government is trying to do and that's raise the retirement age... LAGARDE: Yes. AMANPOUR: ... from 60 to 62. LAGARDE: And 65 to 67... (CROSSTALK) AMANPOUR: Is that going to happen? LAGARDE: Yes, it -- yes, of course. AMANPOUR: In France and across Europe, there have been huge political pressures because of the protests by so many people converging. Can France withstand that political pressure of the protests? LAGARDE: We have to in the interests of the next generations. It's a demographic issue that we have to deal with. It's an economic challenge. And we can't answer that by reducing pensions. We can't abandon the system as we have it at the moment. So the only way to fix it and to make sure that it's financially stable and -- and sustainable is to increase the retirement age by two years. It's only two years. And in the last 50 years, people have gained 15 years of longevity. AMANPOUR: I want to ask you about being a woman finance minister. You were a former CEO. Do you think women have a -- a different way of -- of approaching business or approaching the public sphere? LAGARDE: Yes. AMANPOUR: In what way? LAGARDE: I think we -- we inject less libido, less testosterone... AMANPOUR: Less libido? LAGARDE: Yes, and less testosterone into the equation. AMANPOUR: And how does that help? LAGARDE: It helps in the sense that we -- we -- we don't necessarily project our own egos into cutting a deal, making our point across, convincing people, reducing them to, you know, a -- a partner that has lost in the process. And it's probably over generalized what -- what I'm saying. And I'm sure that there are women that operate exactly like men. But in the main, and having had nearly 30 years of professional life, a bit more than that, actually, and getting closer to 60 than 50, I -- I -- I honestly believe that there is a majority of women in such positions that approach power, decision-making processes, and other people in the business relationship in a slightly different manner. AMANPOUR: On that note, Minister Lagarde, thank you very much for joining us.