>The Iowa outcome as seen by our regular political analysts, syndicated columnist Mark Shields and "Wall Street Journal" columnist Paul Gigot. They are joined by David Yepsen, political reporter for the "Des Moines Register." (Margaret Warner talked with second place finisher Patrick Buchanan.)

JIM LEHRER: Gentlemen, let's start at the bottom because that's where the news is of the day, and work back up, and that's Phil Gramm, that's the latest development. He'll make an announcement tomorrow, Mark. Is it over for him?

MARK SHIELDS, Syndicated Columnist: Yes.

JIM LEHRER: Dave Yepsen, why couldn't he make it in Iowa?

DAVID YEPSEN, Des Moines Register: Phil Gramm had the props knocked out from underneath him here. Steve Forbes took the economic conservatives away from him, and Pat Buchanan's victory in Louisiana took the social conservatives away from him, and there was no legs left on his stool.

JIM LEHRER: Paul Gigot, what would you add to that?

PAUL GIGOT, Wall Street Journal: I think that David summed it up quite well. He never found a way to talk about the values agenda that is so important to Iowa voters in a way that made them believe that he really believed. Deep in his heart, I think Phil Gramm is an economist, and he's a libertarian-economist, and that's the way it came across to these voters.

JIM LEHRER: Mark, the fourth place finisher was Steve Forbes. We just heard what Pat Buchanan said about him, and his attack ads. What do you think he did wrong, if anything, in Iowa?

MR. SHIELDS: A couple of things, Jim. First of all, he stayed negative too long. In a multi-candidate race, you cannot go negative and expect to be the beneficiary. In a two-way race, if you're running against, Brown against Jones, and Brown's beating Jones' brains in, voters only have an option if they're going to vote against Jones to vote for Brown. Voters had another option than to vote, as he attacked everybody in sight, and they could go elsewhere; they did. They went to Lamar Alexander; they went to Bob Dole; they went to Pat Buchanan. But they didn't go to Steve Forbes. I don't think he gave them a reason to vote for him last week, and I think the other thing is that at some point the lack of restraint in that campaign on spending became a political liability. If he had spent 20 or 25 percent more than everybody else in the race, Jim, it wouldn't have been as much of a problem. He spent $4 million on television. He spent more on television, seven times as much as Buchanan spent in the whole campaign.

JIM LEHRER: Yeah. Paul, what's your reading on Forbes in Iowa?

MR. GIGOT: I think that the negative advertising gave everybody, including his opponents in the media, a chance to change the subject from his message, which was, as Pat Buchanan said, a good message, to the, to the ads. I also think that getting into a fight in Iowa with the Christian Coalition is a little like running for mayor of Nashville and running against country music. I mean, you are just not going to win here with that, and that was a--and the social conservatives also moved against him. He was doing well with them for a while.

JIM LEHRER: Yeah. Dave Yepsen, I heard on television last night various people, various Iowa pundits saying, well, this is terrific, that Forbes did so poorly, it proves that Iowans can't be bought. Is that an oversimplification of what happened?

MR. YEPSEN: Well, I think it's a little bit true, but I think it's also true that Steve Forbes went negative when he should have stayed positive. If you look at Steve Forbes' tracking numbers in the polls, when he started in this race, it was a positive advertising message that he had about the flat tax, and he really took off in the polls. And then when he went negative, then he started flattening out. You know, if you swing a ball bat at other people, sometimes things splatter on you. And so I think he was one of the big helpers of Pat Buchanan in this, in this state, because he knocked down Bob Dole and he knocked down Lamar Alexander. Pat Buchanan has to thank Steve Forbes for a lot today.

JIM LEHRER: Yeah. Mark, Lamar Alexander apparently has a lot to thank Steve Forbes for too. Has that--what's that--what's your explanation for Alexander's good strong third place showing?

MR. SHIELDS: It's a good third. He's claimed a good third. I mean--

JIM LEHRER: It sounds weird, doesn't it? The words--

MR. SHIELDS: Most guys get 18 percent, Jim, and they go into hiding, and only in Iowa, do you stand up in front of friends and family and say, boy, oh boy, did we wamp 'em, but, no, he had 12 percent in David's paper's poll in December. He ended up with 18 percent as opposed to Buchanan, who went from 7 to 25. But he's the remainder man of this campaign. I mean, his basic message is he's Dole-light; I'm not as hard to swallow as Bob Dole, I'm certainly not as old, I'm not as threatening as Pat Buchanan, my campaign is not as mean as Steve Forbes. And, and that's sort of the message. Now, Lamar Alexander, just like Pat Buchanan in Margaret's interview, will be scrutinized this next week, more so than he has been before. I mean, his basic message has been I'm a president for the 21st century, whatever that means.

JIM LEHRER: Yeah. Paul, what's your reading on Alexander?

MR. GIGOT: Well, he is the none of the above candidate. And he's the best at props. I mean, I've never seen any politician use props so skillfully. You know, he has those ABC blocks, Alexander Beats Clinton. He had those mud boots, which he used as a prop to describe his candidates and his strategy which worked enough to keep him fighting another day or another week was to run right up the demilitarized zone between Dole and Forbes, and it's succeeded. He's got a tougher job in New Hampshire, though, because it's an economic-minded electorate out there, and he's going to have a hard time beating Pat Buchanan to move into second or to beat Bob Dole to move into second, to stay in this race.

JIM LEHRER: Dave, Buchanan, how did--what's your explanation for why he did as well as he did, 23 percent to 26 percent for Bob Dole?

MR. YEPSEN: Well, he got the social, a lot of the social conservatives, but I think one of the stories that, that Pat Buchanan really highlighted in this campaign is the economic disaffection that Americans feel. Many people feel left behind. I mean, the Dow is going through 5600, and there are a lot of people who are saying, gee, I can't make ends meet, and you go to a Buchanan event, and yeah, there were pro-lifers there, but the thing that really added the juice at a Buchanan event were the, were the blue collar workers who showed up, and there were times you'd sit there and you would close your eyes, and you'd think, my God, I'm sitting in a Jesse Jackson event, and Pat Buchanan has tapped into something here that I think will--is an issue that politicians in both parties are going to have to address, including President Clinton. He can't sit there on the State of the Union and tell us how great the economy is doing and expect that to resonate with a whole lot of American workers today.

JIM LEHRER: Now, Mark, you've said that before, that you think that's at the heart of Buchanan's message, correct?

MR. SHIELDS: I, I really do, and I think David's put his finger on it with the Jesse Jackson parallel, Jim. He's a hot candidate. You saw it. He's a guy, he has a coherent, consistent message. He doesn't go through focus groups. He knows what he believes, which is an enormous advantage, but he's speaking to and for a constituency that the party, each party covets in November--in this case, evangelical Protestants, religiously active people, in Jackson's case, it was African-Americans-- but the party really doesn't want to get, spend a lot of quality time between now and November. And, and they don't want their candidacy, didn't want Jackson, but what's fascinating to me is he's putting together a coalition, or he did in Iowa, he began to carry--he beat Bob Dole by better than two to one in Dubuque County, which is a Catholic county, in Carroll, County, another Catholic county on the other end of the state, he, he beat Dole by better than two to one. And he--putting together, a possibility of putting together, a coalition of conservative Northern Catholics and Southern evangelical Protestants, two groups that have been at each other's throats culturally throughout our history, but that FDR forged into a, a democratic coalition, just as Jesse Jackson tried to put together blacks and white working class people. If he does that, if he pulls that off, it's formidable.

JIM LEHRER: Yeah. Paul, how do you read that, and also put it in the context of Bob Dole. What did Bob Dole win yesterday?

MR. GIGOT: Well, first, on Buchanan, I think that I agree with Mark's analogy on Jesse Jackson but disagree a little bit on the analysis. I think he is the--he is the only Republican other than Steve Forbes who has an explanation and a prescription, a remedy for the economic distress that's going on out there. The problem with his prescription, and this is where I think the Jesse Jackson analogy is right, is it divides the Republican Party. He may be able to draw in some of those Perot voters, but the problem is it's going to push some of those business interests, as well as a lot of economic conservatives, away from the Republican Party. So he's got a very difficult job, I think, to be able to win the nomination. Bob Dole, the story was all he had to do was go to his rallies. I mean, they weren't really rallies; they looked like everybody there was under orders. There was no enthusiasm at all. One of the rallies I went to in Waterloo they had to import people from Wisconsin to have any kind of enthusiasm. There's almost a sense of resignation that he's a safe choice but there's a real doubt out here, and I think this vote showed it, about whether or not Bob Dole can go toe-to-toe and beat Bill Clinton.

JIM LEHRER: Dave Yepsen, what's your reading on what Bob Dole won last night?

MR. YEPSEN: He didn't win anything last night. In fact--

JIM LEHRER: Not anything? Come on, he came in first.

MR. YEPSEN: He got a wake-up call.

JIM LEHRER: Okay.

MR. YEPSEN: You know, he got 25 percent of the vote in a state where he, where he got 37 percent in 1988, he got fewer votes this time. This state is not typical of the country as a whole, but these 100,000 activists who, who showed up last night, are fairly typical of Republican activists everywhere, and I think it ought to be a real wake-up call to Sen. Dole's campaign and to Sen. Dole that three-fourths of these people wanted somebody else to be their nominee. And I think that--I think one of the problems he's got is a message. What's he for? He kind of wanders around on the stump, and, you know, he needs to, to get rid of that 10th Amendment card that he carries around with him and just write 10 things on a piece of paper that he wants to do and get up and talk to people about it. I mean, you know, there's got to be some energy in that campaign, because Paul's right. You go out to his events, and they're just flat.

JIM LEHRER: Mark, your reading of Dole right now.

MR. SHIELDS: Well, I mean, Bob Dole did finish first, I mean, that--and finishing first still does matter for something, but I would say instead of ten things, three things, three things that a Dole presidency means. I think he has to ask people for their vote. This is something that doesn't come easy to Bob Dole, or people of his generation, his background, to be self-promoting, but I think he has to do that to bring some energy and some intensity and some passion to the campaign. Jim, what's fascinating about this race to me is every Republican hates Washington. Some Republicans hate Hollywood. Pat Buchanan is the only one that also hates Wall Street. Okay. And the American people don't like all three.

JIM LEHRER: Yeah.

MR. SHIELDS: And I think that's what the key is, to me, coming out of Iowa.

JIM LEHRER: Finally, Dave Yepsen, from the inside looking out, in other words, from inside out, or we're looking out, does it--does it make sense to you that so few people, your 100,000 activists in Iowa, who went to these caucuses last night, are making such a huge difference in who's going to be the next President of the United States?

MR. YEPSEN: Well, that's always a criticism that's made of the Iowa process, and the problem is the country can't come to an agreement on an alternative, and so Iowa and New Hampshire continue to be first, they continue to have a disproportionate impact on the process. It may not be right, but that's the way the--that's the rules of the game.

JIM LEHRER: And the rules of this game are that we're over for tonight, and we'll talk about it again later. Thank you all three very much.