MS. IFILL: In Libya, is it the end, the beginning or the beginning of the end? Plus Rick Perry’s very good week and Ben Bernanke’s mixed one, tonight on “Washington Week.”
GROUP [Libyan Citizens]: Libya free, Gadhafi go away. Libya free.
MS. IFILL: Celebrations in Tripoli, caution everywhere else.
PRESIDENT BARACK OBAMA: Over the last several days, the situation in Libya has reached a tipping point.
MS. IFILL: So where is Gadhafi?
SUSAN RICE [U.S. Ambassador to the U.N.]: The preponderance of reporting suggests that he’s still likely inside of Libya. 
MS. IFILL: And what of U.S. policy toward the North African nation? While at home the markets keep an eye on Ben Bernanke and on an economy that just keeps slumping. And Rick Perry leaps to the top of the Republican presidential field. 
Covering the week: Nancy Youssef of McClatchy Newspapers, Doyle McManus of the Los Angeles Times, Jim Tankersley of National Journal, and Michael Duffy of Time Magazine.
ANNOUNCER: Award winning reporting and analysis, covering history as it happens, live from our nation’s capital, this is “Washington Week with Gwen Ifill,” produced in association with National Journal.
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ANNOUNCER: Once again, live from Washington, moderator Gwen Ifill.
MS. IFILL: Good evening. As the week began, it seemed as if the end game in Libya had arrived. Rebels marched into Tripoli and directly into Moammar Gadhafi’s compound. The only thing missing was a toppled statue in the town’s square. But President Obama’s statement was muted, correctly so, as it turned out.
PRES. OBAMA: The situation is still very fluid. There remains a degree of uncertainty and there are still regime elements who pose a threat. But this much is clear:  The Gadhafi regime is coming to an end. And the future of Libya is in the hands of its people.
MS. IFILL: That uncertainty remains tonight. No one is quite sure where Gadhafi is, whether the rebels are poised to take over or whether the week’s events vindicate U.S. policy toward Libya. Starting with the most obvious question, Nancy, where is Moammar Gadhafi.
MS. YOUSSEF: That is the looming question over this revolution. That’s why the revolution started. We saw rebels take his compound, wear his fur coats, wear his gold chains, and seemingly take control. And yet he somehow slipped out.  We heard from his spokesman that he remains in Libya. And U.S. officials continue to believe he is in Libya. 
And right now, the best guess is that he’s either somewhere in Tripoli or in Sirte, his hometown, which is one of the remaining Gadhafi strongholds. He’s an important part to all this. Even if the rebels are able to move into the capital and take control, as long as he’s out, he remains a rallying point for those Gadhafi forces who will continue to fight in parts of the country. Remember, the rebels still don’t have full control of the country and there are key areas where the fighting continues. As long as he is able to go out and make ominous messages, send out ominous messages to his supporters, he remains a threat to this very fragile period in Libya.
MS. IFILL: So, Doyle, the U.S. policymakers are watching this and they don’t know whether to celebrate or whether to pull back. What are they thinking?
MR. MCMANUS: Well, they’ve had to react, as you said, very carefully, for all of the reasons that Nancy mentioned. The only sort of high-profile statement was the one you showed, President Obama back on Monday at Martha’s Vineyard, seven minutes in front of a camera. The administration resisted the temptation that they fell into back in January in the case of Egypt to sort of give a play-by-play commentary every day. So there were no claims of mission accomplished. There’s a lot of still diplomatic work. There’s still the military work going on. 
But there was also in what the president said and what his aides said later a kind of a muted attempt to both make sure that the main credit went to the rebels on the ground, who bore the brunt of the fighting, but that some of credit washed over onto the administration because there was an unmistakable desire there to say, we told you so. Remember when this all started there were lots of naysayers.   People thought the administration was doing too much, doing too little, it would never work. Well, it appears to be working out on balance not too badly. 
MR. DUFFY: Nancy, help me understand something that’s really hard to understand from reading the papers. What exactly was the U.S. role here? We know on the front side there were airstrikes. But at the end, the end game, assuming the tide has turned, were there Special Forces on the ground? Did we supply weapons? How much of this was made in the USA?
MS. YOUSSEF: Well, the most important role was the use of Predators. And those Predators helped NATO go about their air campaign. It began with striking Gadhafi’s air support, his compounds from there, the command and control structure and from there the logistical support. And right now those Predators continue to play a key role because we heard from the Brits that the NATO role has been stepped up in part to help the rebels find Gadhafi. 
So those Predators are being used to gather intelligence and try to spot him. And so it’s not the traditional role that we’re used to of the United States. There were no boots on the ground per se, but that was a key role in helping NATO support the rebels and give them a chance to march into Tripoli.
MR. TANKERSLEY: The moniker, Doyle, that’s been given to this was leading from behind and it was mocked by Republicans and some Democrats, frankly, when this first came out as a strategy from the president. Now is it vindicated? Do we all love leading from behind?
MR. MCMANUS: Well, it has even been disavowed by the administration. It was one incautious official who used a phrase that apparently stuck in his or her mind from something actually Nelson Mandela used to talk about, his model of organizing a social movement he called leading from behind. But it wasn’t really accurate even in this case. 
It wasn’t – if you go back to the beginning of this thing, it was the British and the French who wanted to fight this war and the United States was sort of dragged in. The United States played an important role putting together the ideas that became this campaign, but then it became just another joint NATO operation. That’s not a new idea. It’s happened before. It’s happened before in different mixtures. 
And it wasn’t actually a pretty process every inch of the way. There were plenty of points at which some of those NATO allies ran out of planes, ran out of pilots at one point. They came to the United States and said, we really need helicopters – can you give us some helicopters? And the administration actually drew the line and said pretty tough to its allies, no helicopters. No, there’s no model here that works. I mean, Libya is such a strange place anyway. 
The other big deal is that, of course, you had the Arab League. You had the U.N. Security Council. You’d need a whole lot of things to happen in the same way for this to be a model.
MS. IFILL: You talk about how this model is different. But it’s irresistible to look at this and to look at other examples we’ve seen in this Arab spring and say, okay, this is – who are these people? Who are these rebels? Are they equipped to take over? We saw this even play out in Iraq. We saw it play out in Afghanistan. Who takes the place of the person who’s been deposed?
MS. YOUSSEF: Well, Mustafa Abdul Jalil is the head of the National Transitional Council and he’s made his way to Tripoli, but Tripoli is not secure enough for the council. And so they’re kind of moving in and out. A lot of them remain in Benghazi, the rebel capital. So far there are some troubling signs we’re seeing in Libya. 
One of the most important periods is now because the question becomes, who can secure Libya and whether the council can do it? And anything going forward begins with that point. And what we’re seeing, which is most troubling, is some of these rebel fighters – we’re seeing death squads and some rebel fighters perhaps torturing some of the captured Gadhafi forces. And that’s troubling because that portends of potential insurgency or civil war. And so, so far, we haven’t seen a real strong command of the country. In fact, it really resembles anarchy at this point. But we’ll see as Tripoli becomes more stable whether they’re able to come in and restore not only the security, but the economy of Tripoli and the country writ large.
MR. MCMANUS: One of the interesting themes that has come out both from the council and from the Obama administration is that this shouldn’t be like Baghdad in 2003. Policy here for the weeks ahead is that the national council in Libya, with the support of the Obama administration, has decided it’s not going to disband the Libyan Army; it’s not going to disband the police force; and it is going to invite the people from –
MS. IFILL: We know the mistakes not to make again.
MR. MCMANUS: Right. It’s going to invite people from Gadhafi’s government, if they have relatively clean hands, to join some kind of a new coalition. Now, it’s easier said than done, but it’s a different direction.
MR. DUFFY: You had said there’s not a lot of – there’s not a great template here militarily going forward to some of these other places. But have we learned any lessons diplomatically from some of these other Arab spring about what the events – about what the U.S. should and shouldn’t do?
MR. MCMANUS: Well, we’ve learned a lot about the limits of what the United States can do. This one had to be done on the ground. We have learned that it’s very hard to get the U.N. Security Council lined up. There’s no – if you take a look at Syria, the Arab League won’t vote that way on Syria. So actually to me, the immediate lesson is that there isn’t an immediate transfer. You can’t use these lessons in Syria. It’s going to come out quite differently.
MS. YOUSSEF: You know, one of the biggest differences between Libya and the Arab spring in Egypt and Tunisia is that when regimes collapsed, there were still some institutions left in place – the military primarily in those two countries. Gadhafi built Libya around him. He was the keystone. And so the fact that he’s not there anymore means everything has to be rebuilt from scratch. And I think that will present particular challenges not only for the Libyans but also for the United States in determining who to work with and how to build up this National Transitional Council which has no governing experience and has no foundation to really build on.
MR. TANKERSLEY: So, Nancy, where do you start with that? What’s literally the next thing that has to happen here?
MS. YOUSSEF: Well, the most important thing is securing the country. Remember, we talk a lot about Tripoli and the last remnants of Gadhafi’s regime, but over in the east, which looked like a stalemate for months and months, there’s still fighting there. The Gadhafi forces are very aggressively fighting at Bin Jawad, which is the furthest point the rebels ever got on the eastern side. And so we’re seeing fighting there. We’re seeing fighting in Sabhah in the south. And, of course, we’re seeing fighting in Gadhafi’s hometown. So there has to be a clear, if you will, victory for the rebels and a clear securing of the country before we can even begin to discuss governance because otherwise, if done incorrectly, we might be seeing the early seeds of civil strife.
MS. IFILL: The same question to you, Doyle, which is NATO, the U.N., all of our allies, the United States have all come under question is we’re always doing these joint exercises. What happens next? 
MR. MCMANUS: Well, of course, as Nancy says, the military effort is still going on. And NATO has actually escalated some of its bombing. I mean, when this started there was – the U.N. mandate was only to protect civilians. That’s been stretched way far. But the other thing that’s going on now is organizing the money and the backing that the government is going to need to function. The good news is country with a small population and a lot of oil revenue, a lot of which is in banks around the world and has been frozen. There may be as much as $100 billion out there. 
So, remember, one of the things that was supposed to happen in Iraq was it was supposed to be a self-financing recovery. This should be a self-financing recovery. You’re going to hear an awful lot over the next weeks. There’s going to be a big conference in Paris next week that Hillary Clinton is going to go to to organize aid. But that’s really short-term loans that they’re supposed to be able to pay back later. This really should end up being self-financing. 
MS. IFILL: Does Congress look at this and say, okay, the president was right, and then they say, now it’s up to us to step in to help, to provide additional aid?
MR. MCMANUS: In an election year, almost nobody who isn’t on his side is going to say the president was right. And in terms of resources, though, there is a lot of support. There really hasn’t been a lot of pushback against these bridge loans. As to the question of whether President Obama gets any domestic political bounce from this, all you’ve got to do is look back to what happened when Osama bin Laden was killed. He got three good weeks out of that one and then it went away. 
MS. IFILL: We love election years. Okay. Back on these shores, Federal Reserve Chairman Ben Bernanke gave another one of his long awaited speeches on the economy today. He was actually sort of upbeat, saying the nation is definitely in recovery mode. He said “the growth fundamentals of the United States do not appear to have been permanently altered by the shocks of the past four years.” But he also scolded Congress saying “perhaps most challenging, the country would be well served by a better process for making fiscal decisions. The negotiations that took place over the summer disrupted financial markets,” he said, “and probably the economy as well,” which is tough talk coming from Ben Bernanke, isn’t it, Jim?
MR. TANKERSLEY: Yes. This is tough talk. This is the chairman of the Federal Reserve, who is an academic economist, so it’s not like he’s going to go out and talk cowboy talk. But he’s stepping up and telling the Congress, hey – and like he has before – you need to do a better job of holding up your end of the bargain on the recovery. 
Yes, he was upbeat about the prospects for America’s economy, but he was also very clear that if the joblessness problem that we have no persists, we could really do damage to our economy for a long time. If people stay out of work for a really long time, they lose skills. They lose wage-earning ability. And he was warning Congress, hey, don’t let them sit on the sidelines for too long.
MS. IFILL: He left the cowboy talk to Governor Rick Perry from Texas, who promised to do him harm if he should come down to Texas. He’s a very unpopular figure right now with people on the right end of the Republican Party. So why – how did he become so important to this process being the Fed chairman of all things?
MR. TANKERSLEY: Well, the Federal Reserve has an important role to play, obviously, in the economy. And the reason he is such a lightning rod for the Republicans right now is because by making monetary policy easier, by loosening up the monetary policy, he has been accused of financing these big deficits that Barack Obama has signed off on as president. So Bernanke has become sort of the financer-in-chief almost in the eyes of Republicans of big deficit spending. 
And the other thing is that Republicans are much more worried about inflation now than they are about growth in terms of what the Fed should do policy-wise. 
So in both those areas he’s run afoul of Republicans and we see a situation where he, Bernanke, who was first appointed by George W. Bush and is himself a Republican, is coming under a lot more attack from the right than from the left. 
MR. MCMANUS: Jim, the markets expected or at least they hoped that Bernanke was going to signal that there would be a new form of quantitative easing, some magical formula by which the Fed could provide a quasi-stimulus. And it wasn’t a very clear message and the market’s tanked. What are we supposed to expect?
MR. TANKERSLEY: Well, they did. Certainly it appeared that the markets were hoping that Ben Bernanke would drop new monetary stimulus out of the sky. But that was probably unrealistic, Doyle, because the Federal Open Market Committee has to meet first before any big new monetary policy decision can be made. And that’s not what was happening here today. This was a policy conference in Wyoming at a resort. So Ben Bernanke wasn’t probably about to step out and announce something by fiat. 
What he did do, though, is leave the door open for more stimulus measures perhaps monetarily to come next month in a meeting that he said would go not just one day, as originally scheduled, but two days now.
MS. YOUSSEF: So what do his statements then tell us about what the Fed can do in terms of job creation? 
MR. TANKERSLEY: Well, he keeps emphasizing that the Fed does have policy options left on the table. We’re in sort of very unconventional policy turf right now because interest rates are already low. What the Fed would normally do right now is just cut interest rates to spur growth. They’re at rock bottom. So they do have more tools. They could do a third round of quantitative easing, as Doyle mentioned, or they could try other things. They could set an inflation target that is higher than normal, all sorts of things that have been mentioned. But Bernanke’s loath to roll those out on his own. He just keeps saying, we’ve got options, we’re talking about them. Stay tuned.
MR. DUFFY: Bernanke can’t operate without the okay of the Open Market Committee or at least a vote in the majority. They aren’t all for doing more either. Is it possible to separate, from what you can tell, how much of Bernanke’s hesitance to do more is about the complicated political situation in America where people now have made the Fed an issue and how much of this is economics where he’s got people saying, no more easing? Is there a way to –
MR. TANKERSLEY: Yes. I would say that you got pretty good indication today that Bernanke is a lot more worried about the complications internally than externally. He gave a fairly strong rebuke to the fiscal policymakers, largely the Republicans, who want austerity measures now – spending cuts, not at all doing measures to make growth from a fiscal stimulus side. So that’s basically a direct rebuke to the Rick Perrys of the world who want the Fed to slow down, focus only on inflation and not do more stimulus.
MS. IFILL: What a beautiful segue. Thank you. Welcome to –
MS. IFILL: Just what I needed because new polls out this week show yet another frontrunner in the Republican presidential race: Texas Governor Rick Perry. And each of the leading candidates is seeking a way to victory by claiming his or her own piece of the GOP is rapidly collapsing big tent. 
FMR. GOV. MITT ROMNEY [Republican Presidential Candidate]: I’m in a race right now which is going to be exciting. A lot of people in the race. We’ve got a great field of people. But I’m the guy who spent the time in the private sector to know how it works and also spent some time in government to know how to get the job done there.
FMR. GOV. JON HUNTSMAN [Republican Presidential Candidate]: You have to win over some independents in order to get the numbers, in order to make the math work. And as people increasingly look at the field of players, I think they’re going to come to the conclusion that we may be one of – if not the only who basically can put the numbers together to actually win in 2012.
REP. MICHELE BACHMANN (R-MN) [Republican Presidential Candidate]: Quite frankly, you can’t spend $1 trillion stimulus and you can’t have Obamacares. You can’t do those extraordinary things and think that you won’t pay the piper.
MS. IFILL: So how did Perry steal the spotlight from last week’s kind of flavor-of-the-week in this race, Michele Bachmann, Michael?
MR. DUFFY: It’s magic. (Laughter.) It is a measure of the unhappiness I think with the state of the Republican field that Rick Perry, who was not a candidate on August 1st, at the beginning of August, for president. At the end of August is now leading in national polls. That’s like from a Democratic nominating race. That’s really not the way Republicans do things. But he’s come a very long way in a very short period of time. He’s reshuffled the race, as you hinted. And potentially set up the prospect of a two-person race between Mitt Romney and himself, depending on how things will go. But that’s a maybe. We’re going to find out. 
Perry is testing the notion here that he can plant a flag and take votes from the three big parts of the Republican Party now: the economic conservatives, who are worried about the state of the economy; the tea party Republicans, who are a little more libertarian, worried about the size of government; and, of course, religious and social conservatives. 
He speaks directly. His message that is two weeks old, maybe three, speaks directly to each one of those. He talks about being the jobs generator in Texas, having turned that into a state that has a relatively low unemployment rate. He talks about Ben Bernanke a great deal. He said it would be treasonous if he engaged in quantitative easing. And, of course, he launched his campaign in a stadium in Houston, a prayer service at which 30,000 people attended, the Sunday before he actually got in. So whether he can weave these three threads into a kind of quilt that makes sense, that’s a real message, remains to be seen.
MS. IFILL: Now, when I was in Iowa last week, the week before last, talked -- had a chat with Mike Huckabee who – this is just before Rick Perry got in the race. And his response was, you know, the guy hasn’t been roughed up yet. He just got into the race. He’s just – he hasn’t been in a debate yet. He hasn’t really shared a stage yet. So maybe we’re getting a little carried away?
MR. DUFFY: You know, Romney said, I’m excited that he’s getting in. I don’t think that he really looked excited.
MS. IFILL: He didn’t look excited.
MR. DUFFY: I talked to Romney’s people about him this week. They said – they kind of grudgingly said about Perry, well, he’s – okay, he’s a really good competitor. He’s a great campaigner. And it sort of implied that they hadn’t had one up until now. They respect the fact that he can raise money. There’s no question about that. But they said, it’s been a month, guys. Let’s see – there are three debates coming up in September, three in a row -- one, two, three -- one I guess in California, two in Florida. We’ll see where he stand at the end of September. They said, call us back then. We’ll see – we’ll tell you what it means.
MR. MCMANUS: Perry does seem to have a couple of weaknesses. I mean, he’s got an awful lot of Texas swagger. He says things like Bernanke and treason. Then he said Social Security is a Ponzi scheme. He said some things that kind of rattled the tea cups and are going to make independent voters –
MS. IFILL: Rattled the tea cups? Really? Did you say that?
MR. MCMANUS: I said that.
MS. IFILL: The tea cups –
MR. DUFFY: Excites the tea cups. Maybe that’s sort of the way to put it. Yes. He said –
MR. MCMANUS: Is he reining in that kind of language at all?
MR. DUFFY: Not in his first act I guess. Not at all. He said that he didn’t think that American servicemen really respect Barack Obama. That provoked Jeb Bush, a member of the GOP establishment, if there is one – I’m not sure there is – to say, you know, you guys, you’ve got to tone down the rhetoric. He was talking about the whole field this week. But he was really I think aiming at Perry, who has always had a complicated relationship with the Bush family and the Bush camp in Texas. But there is going to be a secondary conversation about what – you saw him, he’s smiling and he’s all upbeat – about what kind of race to have, what the level of the dialogue is going to be. And Perry changes all of that. So that’s another reason this is a sort of pivot in the race.
MS. YOUSSEF: Mike, is there room – given how quickly Perry skyrocketed into this campaign, is there room for moderates or more than one moderate in the GOP?
MR. DUFFY: Well, there are not a lot of moderates in this GOP anymore. 
MS. IFILL: But Jon Huntsman was just saying about how there were people – I’m not sure how he’s counting.
MR. DUFFY: He was calling all moderates. That was kind of the message of Huntsman, who had gotten into the race and first started talking about how civil he wanted it to be, certainly not the way we talked about this week, and has now kind of fallen back to the position of saying, I’m really the moderate in the race because there are so many people in it now who are more conservative. He sees his daylight more to the center. But that’s not the Republican Party of, say, today when for eight, 12 years ago there was a much greater number of moderate folks in it. Now it’s a much more conservative party. So we’ll see. Huntsman has been fading in the last couple of weeks. We’ll see if he continues that way.
MR. TANKERSLEY: Is there oxygen left for anybody?  Sarah Palin?
MR. DUFFY: There’s plenty of oxygen left. Palin’s game is very complicated. We don’t know whether she’s getting in. It doesn’t look to me like she is. Karl Rove said this week, either get in and compete or get out and stop trying to get attention.
MS. IFILL: And she dismissed him as a Washington pundit.
MR. DUFFY: She did.
MS. IFILL: So it shows how much you know. Well, thank you everyone. Thank you. We’re headed home now to buy bread, milk, and batteries and get ready for good old Hurricane Irene. But if you’re online this weekend when our power is out, be sure to check out our webcast extra where we pick up the conversation where we left off and then take a look at my blog this week in which I write about the anniversary of the 1963 March on Washington and the opening of the new King memorial on the National Mall. All of that you can find at Keep up with daily developments on air and online at the PBS “NewsHour.” And we’ll see you here next week on “Washington Week.” Good night.