FULL INTERVIEW: Vice President Dick Cheney

Now we do have the kinds off issues with respect to housing and in the financial markets that require action, a lot of it that can be taken by the Fed, a lot of it can be taken by us, and that's what we're doing.

RADDATZ: I think there was a poll that showed 76 percent of Americans believed there's a recession. So you can name all those figures about why there isn't one, and we can argue definitions, but Americans look at this as a crisis. They see gas prices, they see the falling dollar overseas; to them it's a crisis. So how do you regain their confidence, and does the administration take any blame for what's happening now?

THE VICE PRESIDENT: What specific policy would you suggest caused all that?

RADDATZ: Oh, I'm not suggesting a policy. Is it 9/11? What happened to cause this?

THE VICE PRESIDENT: Well, I think it's a normal part of the cycle. Maybe we had a housing bubble. Some people argue that the interest rate policies, followed by the Fed in earlier years, when we got down to 1 percent interest rates for a long period of time, stimulated the housing bubble; or the development of the sub-prime mortgage market, where a lot of people bought into mortgages expecting they'd be able to pay that low rate of interest for a long period of time, when in fact it provided for the rates of interest to go up, and then they weren't able to pay those rates once those adjustments had been made.

A lot of it, though, goes back to the basic way the economy functions, and to say that there's a lot of blame to be assessed here, I don't think that's the case. I do think that we are going through a rough patch, and that's the way I would describe it until we have more data available that lets us make a judgment about whether or not there has been or is a recession.

RADDATZ: Let's go to Iraq. We've been there the last couple of days. I know the President is giving a major speech today about the progress in Iraq. You spoke to many Iraqi leaders. There are also political problems: The major significant political benchmarks have not been met, still need the hydrocarbon law, provincial elections. Tell me what you said to the Iraqi leadership, and how far you're willing to push them?

THE VICE PRESIDENT: Well, we talked a lot about the -- both the security situation, as well as the political situation. On the security front, I think there's a general consensus that we've made major progress; that the surge has worked; that the addition of additional troops -- General Petraeus and the counterinsurgency strategy that was adopted a year ago has resulted in a dramatic reduction in the number of incidents -- attacks, if you will -- and the casualty rate both among civilians and military personnel, including ours, as well. That's been a major success. The development of the sons of Iraq -- these concerned local citizens groups, for example, that have come together and in effect taken on al Qaeda, so that places like Anbar Province, that was really under the control of al Qaeda for a considerable period of time, has now been pretty well cleansed, and al Qaeda has been driven out. We've had a range of successes like that that you can point to on the security front.

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