or you could eat one of those. seems to me. that is a krispy kreme down at around a burger. there are signs of the apocalypse, right? you hear about them. this might be one of them. [captioning made possible by fox news channel] captioned by the national captioning institute --www.ncicap.org-- neil: do not knock it until you try it, shepard. anyways, holy patrick, what is happening? gold prices soaring, stocks soaring, everyone asking if there is a new world order going on. something happened today that has never happened before -- a single ounce of gold costs more than it ever has before. do you know why? the market likes goal but not us. more specifically, it does not like our dollar.

markets around the world, looking to dump the dollar. guess who else? france and japan, last time i checked they seemed to like us. they are all looking down this road for independent currency. they want to price oil with a basket of currencies, but not our currency. deficits are out of this world, now the dollar is clearly out of favor. the cheaper than it gets, the more competitive american companies get abroad. not exactly a ringing endorsement of how things are going here. if this goes through, we could lose a lot. >> it is more than simply prestige. it is about respect. we have lost respect of a lot of fronts around the world.

not just what is happening to the global currency. gold is a hedge. i am trying to buy it as well. shepard -- neil: the market is saying that inflation is coming back. that all of this spending everywhere is going to bring us back. do you buy that? >> inflation will come back. then we will try to control inflation with interest rates and we will have to start the cycle all over again. neil: this could be a sign of things to come. >> it is also about trade policy. we have not been able to move the colombian free trade agreement. we pushed sanctions on the chinese. it is the way we handle missile shield defense in eastern europe. you can argue which one is the

best, but you cannot argue how we handled it well. it was an insult to the czech republic. they were standing with us. look at afghanistan and the countries there. we just snubbed them in a very public way. on a variety of fronts i think we are doing things that are culminating in this storm with afghanistan. the dithering with regards to iran. the world is losing a certain amount of respect for us. broader than just the economy. shepard: -- neil: an interesting argument, right, senator? americans that think they are all that when they are not. but when push comes to shove they have always invested in us because as much as they hated us, we were the best financial game in town. assuming they are right and that

they are looking for an alternative to the currency, not wanting the dollar to be the dominant currency, that is telling us something significant. they are literally putting their money where their anti-american views are. >> there is antiamericanism. there is also jealousy. the american dollar, the american economy, and more importantly the ingenuity of the american people, coming down with regulations on taxes and spending, i think that the resilience well, i am once again. shepard: i think it we are knee deep in this stuff. you might not have regard for people in washington, however, who see a bigger financial deficit in america and i want out. >> people have asked me why i am

in washington now that i have retired, i say it is where the money is and where the trouble is. neil: think you for being here, mr. lott. interesting about this, inflation itself is not here yet. the argument is that with the dollar sinking and gold rising, that is what happens before it arrives. do you buy that? >> i do. everything that you and senator lott spoke about this right on the nose. not anger or jealousy, it is basic economics. the world is waking up to the fact that we are living beyond our means. i commend the fox business network, t. boone pickens

believes that our trading partners are talking about this. neil: you are referring to the fox business network, which if you do not get, you should really -- >> get it! neil: exactly. but this rumor from the financial times, what made it terry waite was the meetings going on in hong kong and paris, which was something that clearly people were talking about. even in sort of closed door conferences. there is something to that. you are saying that this is going to mean big inflation. spell it out. >> in my opinion this is why australia raised its interest rates. people forget that that is a huge move. 1/4 of 1%. they are preparing for

inflation. they know that they have to mop up this excess liquidity in the system during the crisis. america, japan, and the european union will not do it, but other developing countries are. i think that their currency -- it will be horrible for americans. your cost of living is going to go up. neil: some of the leadership met with the president today, saying that we need to commit a minimum 40,000 troops. when we were listening to this they had not made a decision one way or the other, we will be talking to the senator about that in a moment. you argue that afghanistan as a part of the same tactic, that people read confusion and a lack of decisiveness? >> i agree. think about it.

why has our currency always been so solid? not just the economics. we are a very stable country. now the world is seeing people at the parties, seeing a country not responding to the needs of their people. look at the stimulus in australia. they gave paul credits to first- time home buyers, increasing pension benefits by $1,400, putting money into the hands of the real people to stimulate the economy. neil: that was targeted and effective as opposed to throwing money at everybody? >> absolutely. our stimulus was supposed to be timely, targeted, and temporary, and it was none of the three. that is not how you solve problems. you solve problems by stopping spending money we do not have.

everything else should play second fiddle to that short of our engagements overseas. neil: thank you very much. the scene outside of the west wing of the white house right now, democratic leaders discussing with reporters this meeting with the president. our producers have been monitoring this. the bottom line is that generals in the region one more troops. members of the jet -- democratic leadership do not know if they will get it. coming up next, chopping salaries. the pay czar is ready, are you? meg whitman is here.

neil: all right, mitch

mcconnell, republican leader, outside of the white house right now. the major leaders of both parties have gathered out there with the president to discuss what we are going to do in afghanistan. no decision has been made. john mccain is coming to the microphone. they are looking for a surge, in this case, which was successful in iraq. no indication, democrats have been urging the president to go slow on this. liberal members of the president's party advising the president to go slow. in the meantime, the pay czar is ready for more. ready to build up companies. the talk is that they're going to get the extra dough, but not

in cash and not right away. phil, you think of this would actually discourage them? >> we have a government bureaucrat, saying that the top executive will be slashing these salaries in half. it will be difficult for them to attract and retain top talent, which they are going to need if taxpayers are ever going to get it back. neil: the argument is not that they would be denied their riches, rather than the payout would not be immediate. that their long-term expenses would be taking away the short- term risk. what you make of that? >> this is the same argument that was made for the pay caps during the clinton era, which led to the excesses' of the

1990's, people coming up with different ways for different structures. neil: we should stop there, you are an encyclopedia. basically, companies can write out any amount of money. clinton limited that the $1 million. companies found ways around it. do you worry that the same thing is being done here? >> the only way that these companies are going to be able to retain or attract people is innovate around these restrictions as these government interventions always go. i am frankly concerned that these policies will start with the seven bailout companies. barney frank has already suggested this is how he wants to go. this is a dangerous precedent.

i think it is a mistake this time. neil: i could be wrong, but i think that the administration in washington wants to discourage people from going into the financial arena. talking about going into the sciences, things that have to do with math. that clients should use the salary structure to this incentivize people from going into wall street. >> i think that you are right. i think we have an administration that has a financial services industry that is high style towards business and has a lack of understanding of how free markets work to generate wealth. we have got people that fall for the fallacy of economic planning, thinking that we know better than the market. i think that they are wrong to

impose a salary restrictions and there will be consequences. >> good to see you. thank you very much. there is john mccain arguing outside of the white house. there was a big afghan policy discussion with the president. time is not on our side. the senator is a big advocate for a troop surge in afghanistan, as he was for a troop surge in iraq. he says that if we ignore the general in the region there could be some serious problems as a result. that pretty much draws the line between conservatives and liberals on this issue. conservatives tend to want more troops. liberals tend to want to go slow on this. by the way, i was just discussing john mccain with one of my colleagues. health care reform is another big issue. the white house wants

schwarzenegger on their side, but what about the woman that wants to take arnolds place? here in a very big news day.

neil: we have got this word just in, arnold schwarzenegger is taking the administration to task a little bit for saying that he is on board with the health care reform efforts. he does endorsed the administration's attempts, but he is not on board with the public option. arnold schwarzenegger, just trying to make it clear, not so fast. to a woman that wants to be his successor, the former the day -- e-bay cfo, meg whitman.

where you stand on this? >> everyone is for reforming the health-care system, there is a lot that can be improved. i am not for the public option either. you have got to focus on cost end access. shepard: -- neil: the president has argued that the way to get things under control is to have competition to the public option. >> i disagree. the best way is to open the borders between states. there is limited competition from state to state. neil: amongst californians, it is a big state, there are a lot of them, do a lot of people have the heebie-jeebies about big government? >> it is hard to speak for all of california. i would say that they are very worried about what is going on

nationally. they know that you cannot spend more than you take in. they are very worried about the ballooning deficit. i think that they are worried about the future of their state. neil: a lot of people thought that this was just a story of a billionaire ceo try and you buy way into sacramento. you were prepared for that. what about other issues? you wanted to delay the climate change issues. the mayor of san francisco faulted you on that, calling it backward thinking. >> i was prepared. it is rough and tumble out there. but i say what i mean and i mean what i say. ab32, do you know what it does? it brings down greenhouse gas emissions in california. down to a disadvantage against

other states. we are bleeding jobs to texas, who have none of these standards. i want great environmental standards in california, but we cannot continue to lose jobs. 2 million people in california are out of work. let's all make sure that we understand the situation we find ourselves in, which is far more dire than when we began. when they see the size of that unemployment rate, the situation is very different. shepard: would you say that the president is doing this at the same time as these good ideas? >> you and i have known each other for a long time. you know that i agree with doing nothing until we get the other thing done. in the state of california i believe in getting government spending under control and fixing the education system.

neil: i know that some of your core principles, you want to cut state spending. you want to cut government agencies. you are looking at laying off as many as 40,000 state employees. you are not the first candidate that has wanted to target waste, abuse, and redundancy. every time they get in office, what happens? >> but this time we have to do it. we have a government that we can no longer afford. neil: but it got bigger under your predecessor, under ronald reagan, it got bigger. taxes notwithstanding. every governor since. the front running democratic contender, they are all trying but they cannot do it. >> californians are fed up. did you know that government

spending has gone up 18%? the state is 80% bigger, the rose are not paid for it -- roads are not 80% better. californians have been told that you can only cut services or taxes, but there is a third way. $15 million in savings that we can go after. neil: as a novice running for office, naturally things, that you least expect. did you have missed voting in a lot of elections. that you have not voted since george bush sr.. is that true? >> i have been straight up. my voting record is not perfect. i missed too many elections.

neil: the last one? >> in 1984. i remember it clearly. neil: but this last one? >> john mccain. neil: so you did about? >> absolutely. neil: if you missed out on all of those elections, who argued to try to start selling an election now? -- who are you to try to start selling an election now? >> my record is not perfect, but this is about california. i became very engaged in politics. we represent millions of small business sellers every day. bureaucracy, taxation, regulation, i am very engage. going back to open " the sacramento -- going back to

"sacramento bee," they did not represent me accurately. they said that i did not vote until i was 46, which was not true. neil: given your experience with e-bay, would you do something novel? auction assets? the golden gate bridge, how much good that cost? >> we will not be doing that. [laughter] there is unused surplus property that should be sold. neil: who better to auction things off. would you pitch something like that? not a bad idea. what you think? >> there is absolutely surplus property that the government no longer needs that we should sell on ebay.

really, we have to look at the core drivers and the cost to the government. programs that have never been explored before. neil: you would not sell anything? >> only unused surplus property. and now might not be the best time to sell it either. neil: always great to see you. the former head of e-bay, now running for governor california. >> thank you. neil: elijah cummings, he wants one thing. the president wants another. what does he do?

neil: you know, they do not get more loyal to barack obama that elijah cummings. but if the president thinks that he can rely on him to vote yea on his reform, he has some news for him. democratic congressman elijah cummings, here to tell me what that important thing is. what is it? >> our euboea -- how are you doing, neal? neil: good. what is it? >> we have got to have a public option in this bill. frankly, i think we will get a despite what some naysayers are saying. i think that it is dicey in the

senate, but keep in mind, senator schumer needs at least 54 votes for the public option. even those that might be against it, they are not really against it. they are looking for some room to help out. if we come out under the leadership of speaker pelosi with a strong, robust public option, and we come up with something approaching a public option in the senate bill, we will be able to get what the president has asked for and what i have been asking for. neil: i spoke to many of your conservative blue dog colleagues. more than half of them are not a fan of a plan that includes a public option and would vote no.

that means they getting the votes in the house does not look like a sure thing. how would you answer? >> i have no doubt that option in the house. we are in good shape there. speaker pelosi has done an outstanding job. neil: they are ticked off, i spoke to them. >> i think she has done a great job. she has got to balance the blue dogs and the progressives, not an easy task. but i believe that if the public is coming around, even the folks that what you, some of them are going to save it we need something to control the costs.

neil: what you mean even the folks that watch me? >> [laughter] neil: that was a good one. i almost did not lead it through. so, you are going to get this public option you are off to the races. what you think of it? >> it is a possibility. if we come out of the senate, that is not what i want but it is a step in the right direction. neil: if that is what it came down to, public option, not build into the legislation. >> i do not see it as being enough. i do see that if the senate comes out with a trigger or an

amendment that would basically make provisions so that the negotiations to go back and forth. i think it we can come out with a public option. i believe that. i think that the american public is getting their. now the numbers are beginning to slide in the public option. neil: i do not know what numbers you are reading, must be cnn. >> 65%. neil: if you were president of the united states and were

meeting with doctors in the white house, would you provide lab coats for them to wear so that they would look like doctors? >> [laughter] neil: curious. >> you got me there. i have a tremendous and out of respect one where the other. i want to see them take care of the people around the country that need them. white coat, a black coat, purple coat. i do not care. neil: a gravel code would have gotten a lot of attention. great to see you, thank you. why is this man smiling? when was the last time that you saw this? the union caves in.

neil: it took four years but we are getting word that delphi has taken its bankruptcy protection. keep in mind that the parts and suppliers were big to gm, who had gone belly up as well. what does it do? the good news for them is that after four years it is over. the union caves, the governor wins after a long standoff. the biggest union in littlest state accepting a contract. the republican rhode island gov. joins me now on the phone. governor, this is a big win for you. what does it mean? >> i am very pleased, really proud of the employees that voted in favor. what it means is we can keep

everybody working. you and i have talked about this. it is all of us. union and non-union. the legislature, the judiciary, everyone is in the pool, if you will. delaying the cost-of-living increase next year, it is like an increase. neil: that has not been cut for say? >> is being cut -- is being cut. we are all taking a 3% pay cut. neil: they are not getting paid for those days. this avoids layoffs. what is the signal that you are trying to send it to other governors battling the unions? >> when you look at state

budgets there are only three big pieces. thirdly, most of us need to give the the local governments. as you look at this and the tough times we are in, we are not seeing revenue is improving. they are continuing to fall. you have got to look at people. every household is tightening down. every small business and large business, what we did is rather than lay people off, hopefully we can keep everybody working. neil: you said that part of this

quid pro quo does that you cannot shut the government down. >> of these savings will be for real. they are actually a pay reduction. that savings is real. what other options do we have? the entire medicaid issue was a huge one. the health-care package cannot mean increases in medicaid costs to the state. we cannot be there. we have got to find ways to reduce medicaid costs. that is a huge part of the budget. it will put pressure on the municipalities. neil: a nightmare down the road.

in the meantime, nationally we will watch it closely. >> i am proud of the rhode island state employees. this will keep people working. neil: thank you very much, governor. lawmakers wrapping up a meeting with president obama. is the president budging? do you think that the president is dithering? >> i would say that he is looking at all the different arguments, trying to come to a wise conclusion. senator mccain concluded that time is not on our side. we have got about 12 months to

turn this around. in that timeframe it could be that we cannot succeed in the mission. neil: any hint that the decision is going to come soon? >> it is troubling me. i want to support the president. it is the case that in times of war you do not have the luxury, when you are not sure that everything will come out right. neil: on health care, if you do not mind, max baucus had a nasty exchange -- it is on youtube, it is a must see. bottom line, they were rushing this.

where do you think this thing stands? of >> he kept interrupting me, he would not let me complete my point. it must be playing in my earpiece right now. neil: it is. what about the public option, sooner rather than later, what you say? >> here you have the luxury of taking time to get it right. we need to make sure that we can read the bill and the holocaust with regards to the public --

read the public bill. for those that support it, they will know it is just around the corner. my concern is that one way or another we will be closed. neil: the dollar was tumbling this morning largely on the use that we are losing faith in the dollar as currency. that they are going to seek out another hedge. go to another currency. what he said that? >> i am very concerned about it. i told the bush administration that they should support the strong dollar as much as possible. we have got to have a strong dollar, but otherwise countries are going to start charging exorbitant interest rates.

neil: forget the court case, what does david letterman have that might stop women from suing him? .

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neil: well, a legal loophole for letterman. new details are emerging that the talk show host is technically not an employee of cbs but his production company, worldwide pants. cbs requires him to expose relationships with employees but worldwide pants does not. do does that protect letterman from potential punishment or losses? lis wiehl is here with us. can he dodge it? >> it is huge loophole for letterman. we assumed he would be under the cbs policies because the show is on cbs, but actually, worldwide pants, which he owns a part of, leases the time from clbs, so he doesn't work -- meaning

letterman, he doesn't work for cbs. why that's important that he works for worldwide pants, is because cbs has a no secrets clause, and what that says is no sexual harassment. in the course of human affairs, part of the time we know that people will have consensual relationships outside of the office. we can't do anything about that, but if you're the boss or the person in power, you have to tell us that the relationship is going on. neil: would that play in court? >> well, we would sign on to that if you are an employee of cbs, you sign on to that. if you are an employee of cbs, you would have had to go to the cbs big time guys which by the way is interesting because the president of the cbs married a long-time reporter there, but that's a whole other story, and obviously then he would have been in violation of the cbs policy, but he's not because he is not an employee of cbs. neil: i feel like it is

semantics. >> hello! semantics and law go together. neil: who is going to deny that he is associated with cbs? and who is going to deny that -- >> but he didn't have to sign on a cbs policy. he had to sign on to worldwide pants policies which has an anti-sexual harassment policy. neil: whether he signed the paper or not, if there are any aggrieved women, what happens to them? >> they are not aggreived but they have said they had consensual relationships with him. neil: let's say one or two pop up. they have no grounds? >> they have grounds but the time something going to be odd now because if they come forward now after this brouhaha, is it because they feel like they can come forward or is it the woman scorned? in other words, i thought i was just having a relationship with letterman but it turns out there is this line ofel other women and now i'm ticked off and now i am going to say it wasn't consensual and want to bring

this case. that's going to be tricky. i'm not saying there aren't lawsuits possibly out there. neil: but cbs couldn't be held accountable for accommodating this or allowing someone who is such a prominent member of the network for not signing something that is integral to working there. >> if one of the subordinates came to cbs h.r. and said something, they would be on the hook because they should have gone to letterman and said we know you're not under our policy technically but you're using our time, leasing our space, on our network, et cetera, but if they didn't come forward, then they wouldn't have had actual or constructive knowledge of the company, and that would, i think, potentially keep cbs, you know, from being liable. neil: bottom line, this is goes away? >> i don't think the whole story goes away. it depends on whether or not there are women who come out and say it wasn't consensual or as some of the courts have said, if there is that had a relationship with him and somebody didn't,

were they not getting promotions? a can of worms. neil: what a mess. >> yeah. neil: meanwhile, i formed my own production company -- kidding! see you in an hour on fox business network. you don't get f.b.n.? >> demand it! ún