AP - Unemployment is stuck at high levels even though some companies are hiring. The problem, government data show, is that too few jobs are being created for the growing number of people looking for work.

AP - A weakening but still dangerous Hurricane Earl steamed toward the gray-shingled cottages and fishing villages of Cape Cod on Friday night, disrupting people's vacations on the unofficial final weekend of the short New England summer.

AP - A powerful 7.1-magnitude earthquake damaged buildings, cut power and knocked fleeing residents off their feet on New Zealand's South Island early Saturday, but there were so far no deaths and only two injuries reported.

AP - Secretary of State Hillary Rodham Clinton sought to inject urgency into Israeli-Palestinian peace talks Friday, warning the negotiations may be "the last chance for a very long time" to reach an agreement.

AP - One of the investors in a proposed Islamic center near ground zero is a Long Island medical clinic owner whose expressions of sympathy for Palestinians included a donation to a charity later shut down for links to Hamas.

AP - Wikipedia founder Jimmy Wales believes relief may be in sight for the beleaguered news media industry.

AP - Kara DioGuardi is following Ellen DeGeneres and Simon Cowell out the door at "American Idol."

AP - A witness in the Anna Nicole Smith drug conspiracy trial recanted statements Friday that he saw defendant Howard K. Stern give the celebrity model excessive drugs.

AP - Ben Roethlisberger isn't the only Steelers quarterback who might be out for four weeks.

Reuters - Authorities declared a state of emergency after a major earthquake hit New Zealand's second biggest city, Christchurch, early on Saturday, bringing down power lines, ripping up roads and wrecking building facades, but authorities reported no deaths.

Reuters - The U.S. government is likely to take a loss on General Motors Co in the first offering of the automaker's stock, six people familiar with preparations for the landmark IPO said.

Reuters - President Barack Obama said on Friday he would outline new measures next week to boost the U.S. economy, but analysts were skeptical he would be able to deliver a big enough package to lift growth significantly.

Reuters - Concerns over Israeli access to BlackBerry data, and the use of the device by the United States to spy on the United Arab Emirates are behind the Gulf state's moves to curb the smartphone, Dubai's police chief said.

Reuters - A weakened but still dangerous Hurricane Earl churned toward the Massachusetts coast on Friday, en route to Canada's Maritime provinces, after slapping North Carolina with heavy wind and rain but causing less damage than feared.

Reuters - A suicide bomber struck a rally in the Pakistani city of Quetta on Friday, killing at least 54 people in the second major attack this week and piling pressure on a U.S.-backed government overwhelmed by a flood crisis.

Reuters - Google Inc said on Friday it was the target of an investigation by the Texas Attorney General's office into the fairness of its search engine rankings.

AFP - A state of emergency was declared in New Zealand's second largest city Christchurch after a powerful 7.0 magnitude earthquake struck before dawn on Saturday, causing widespread damage.

AFP - At least 53 people were killed and 197 wounded on Friday in a suicide bombing targeting a Shiite Muslim rally in the southwestern Pakistani city of Quetta, police said.

Rescue teams were searching for trapped people after a major earthquake struck Christchurch.

Several relatives of 104-year-old reclusive heiress Huguette Clark went to court Friday, asking for a guardian to protect her. Msnbc.com's Bill Dedman reports.

FOX reality show has yet to announce a new lineup, but  Steven Tyler, Jennifer Lopez and Elton John are among  the reported front-runners. The show returns to the air in January.

If Kendrick Meek gets almost every one of Florida's Democrats, he can win the Senate race. But will that happen in a year in which polls show a GOP edge in voter enthusiasm?

Tiger Woods shoots a 1-over 72, while Zach Johnson and Jason Day beat up on the TPC Boston and beat the rain to share the lead at 8 under in the Deutsche Bank Championship on Friday.

A scientist detained at Miami's airport because of a suspicious item in his luggage had once been charged with illegally transporting bubonic plague, a senior law enforcement official said.

A UPS 747 cargo plane with two crew aboard crashed in Dubai shortly after takeoff Friday, the company said.

Ben Roethlisberger is getting time off for good behavior.

So stressed out you feel like pulling out your hair?  Save a few strands for the doctor. It could end up saving your life.

It wasn't what you would call a casual get-together.  A popular New York blogger attended a brunch with fellow "frazzled moms." They took in tips from a style expert and listened to a nurse extol the virtues of Mirena, a birth control device sold by Bayer Healthcare.  The nurse was on Bayer's payroll.

At 84 and having dusted off his military uniform, Fidel Castro on Friday addressed his first political rally since becoming ill and resigning as president in 2006.

A suicide bomber struck a rally in the Pakistani city of Quetta on Friday, killing at least 54 people in the second major attack this week.

Flirting, after all, is one of the oldest tricks in the book. But how do you use it to your professional advantage without crossing the line or inviting unwanted advances?

U.S. Agriculture Department employees worked full-time at two Iowa egg farms at the center of a salmonella outbreak, but two former workers said they ignored complaints about conditions at one site.

In their Friday stop at the Rundown, columnists Mark Shields and David Brooks answered some of your hard-hitting questions submitted via Facebook and Twitter, including ones about President Obama's handling of foreign affairs and the debate over whether to let the Bush tax cuts expire, extend them for everyone or everyone except the wealthiest Americans.

They also shared their experiences in the crowd at last weekend's Glenn Beck rally in Washington and delved into the "Brewer brain freeze" -- the awkward silences and grammatical flub during Arizona Gov. Jan Brewer's opening statement of a gubernatorial debate this week.

And cue the "Jaws" theme. Shields heralded news of bull shark encounters near Washington as signs that the Potomac River is getting cleaner, while Brooks remarks that Capitol Hill has always been infested with some sharks.

Follow Hari Sreenivasan on Twitter.
With contributions by Dave Gustafson.

Listen to the Audio

Syndicated columnist Mark Shields and New York Times columnist David Brooks speak with Jim Lehrer about the week's biggest news stories including the latest unemployment report, Alaska Sen. Lisa Murkowski's primary loss, how the political climate will affect the next Senate and the start of new Middle East Peace talks.

JIM LEHRER: And to the analysis of Shields and Brooks, syndicated columnist Mark Shields, New York Times columnist David Brooks.

Mark, we just heard Margaret's -- another of her superb reports, the last of her superb reports from Iraq. And, of course, there was also Middle East peace this week, the end of combat operations in Iraq. Is President Bush -- President Bush -- I will get this right in a moment. President Obama, does he get big points on the international front today -- this week?

MARK SHIELDS: He may get big points, Jim. They don't translate immediately or -- into political advantage at home, where the economy remains the dominant issue. But I...

JIM LEHRER: It just doesn't matter that much?

MARK SHIELDS: It doesn't. I think that the Middle East peace is -- he deserves credit for it. I am cautiously optimistic, probably more cautious than optimistic. But I think there are things going on this time, in part because of the president, in part because of the reality of Mr. Netanyahu is in a far stronger position than Olmert or Barak, Ehud Barak, were in 2008, 2008, at home to sell it.

I think there is an imperative nurtured by both King Abdullah of Jordan and President Mubarak of Egypt, as well as the other Sunni countries that are interested in containing Iran and the Shia influence. So, I think there are factors here. I mean, it's still a tough slog, but I think it's a positive development.

JIM LEHRER: But does the American people -- do the American people care that much about Middle East peace anymore?

DAVID BROOKS: I think if there was a realistic prospect for some radical improvement, they would care. If there was a prospect that we could somehow diffuse the Iraqi -- the Iranian nuclear threat, they would care, because that really does affect our troops over there.

But I think, realistically, there is really little chance of peace between Israel and Palestine over the next few years. The Israeli public is disillusioned after the withdrawal from Lebanon and Gaza. The Palestinians are a little more radicalized, a little more disillusioned with the Israeli leadership.

The Palestinian Authority is relatively weak, doesn't control Gaza at all. And so the fundamentals just aren't there. So, I think most people have that Missouri show-me attitude. And so, right now, the enthusiasm in America and maybe in the Middle East just isn't there. But if there was a breakthrough, I think people would rally around that, because, as we have seen, it really does affect our lives.

JIM LEHRER: But relate that to Mark's point that, in this current environment, all that really matters is the economy and jobs.

DAVID BROOKS: Yes. No, that's absolutely true. I mean, if -- we went through several security elections. So, we shouldn't forget that it can happen. But the normal thing is that it's jobs or the economy or some domestic issue. And that's certainly true when the unemployment rate is 9.6.

JIM LEHRER: Yes.

MARK SHIELDS: One -- just some bright, encouraging -- maybe it doesn't mean anything, but this week, we had Hamas doing its best to sabotage the talks by killing four Israelis in one day and wounding two the next. And it didn't stop the talks.

JIM LEHRER: It didn't work, no.

MARK SHIELDS: No, that's right. And that, to me -- I mean, that, in the past, would have been an excuse...

DAVID BROOKS: I was at a dinner maybe a year-and-a-half ago with -- in Shimon Peres' house with Abu Mazen. And the relationship between those two men could not have been closer.

Just, they are old warriors. They have been through this. And, yet, that doesn't mean peace is happening, because the relationship at the top level really doesn't determine what is going to happen. And that is deep down. And there is no movement there.

JIM LEHRER: What is your specific reading about today's jobs numbers?

DAVID BROOKS: I think it's what we have to expect. A financial crisis is not like a normal recession. If you look at -- Ken Rogoff of Harvard has done this book on observing 800 years of financial crises. And the lesson of that book is that we have very long, slow recoveries. You don't get the quick upturn you get everywhere else. It just drags on.

Now, politically, the challenge is, can we do anything about it? And, for a time, I thought we could. And we threw a lot of stimulus money at it. But I'm sort of out of the mode that we can do anything fundamental about it over the next couple of years.

And what we should be focusing on is getting -- making sure the recovery, when it does come, is a really strong and broad recovery. In other words, don't focus on the short fizzing, trying to gin up the GDP growth next quarter, but say, OK, but, in three years, we're going have a really strong economy with shared responsibility. And that means going back to basics.

JIM LEHRER: But the politics of that are two-year -- it's a two-year politic problem, not a three-year, right?

MARK SHIELDS: Well, David presupposes a national city manager who has got a 10-year contract. I mean, that isn't the way it works. And I think that the -- any leader, at a time like this, at a time of crisis, who doesn't appear to be taking action, and is not acting, does so at his own political peril. I am not sure and confident that there are remedies that are going to -- the president has said time and again there is no silver bullet. There isn't. But I think...

JIM LEHRER: But there is talk that they're going to -- he's going to do something next spring.

MARK SHIELDS: He's going do something, but I think there's a couple of things that are -- that probably ought to be commented on, one, not the least of which, is we had a month ago, last August -- in August, people were talking openly about a double dip. I mean, it was encouraging that we did have...

JIM LEHRER: Double-dip meaning we...

MARK SHIELDS: Double-dip recession.

JIM LEHRER: ... go back and have another recession. Yes.

MARK SHIELDS: We go back. And it was encouraging. The glass is one-third full. Any time you begin the economic news was, it wasn't as bad as expected, rather than it was better than expected...

JIM LEHRER: You mean today's news. Yes.

MARK SHIELDS: ... I mean, it's not exactly a time for celebration. But I think that is not unimportant. And I do think that the reality is that it's -- unemployment is at 9.6 percent, and that is the story.

DAVID BROOKS: But the danger you get with financial crises is, people do try to do something short-term, and they end up creating so much debt or so much other problems or so much inefficiency, they end up making things worse. And you get these -- the debacles, these debt debacles.

Now, the administration is talking about some, I think, responsible things they will probably unveil next week, maybe a payroll tax holiday, maybe some business tax cuts, maybe some infrastructure spending, a lot of little things. But we shouldn't expect that is going to have a huge impact, certainly not this year. Maybe not next year. I think we just have to -- I have just lost a little faith that we have the -- we have the expertise or the capacity to fine-tune an economy in this shape, which we don't really understand.

JIM LEHRER: Now, Christina Romer told...

MARK SHIELDS: Judy.

JIM LEHRER: ... Judy a little while ago that she had some -- putting -- I'm just paraphrasing what she said -- that she wishes the administration had been more aggressive. Now, whatever anybody thought, whether it was aggressive or not aggressive, Republicans have been all over what the White House has done and what the Democrats and Congress have done. So, what -- how do you read that?

DAVID BROOKS: Well, it is an intellectual debate over what to do and what caused the problem. The Romer case is that there is a model, and, if you throw money into it, you will produce jobs. The counterargument, which is made by people like...

JIM LEHRER: In other words, you take federal money, and you spend it for bridges and whatever, it is going to...

DAVID BROOKS: Yes, or, classically, throw it out of airplanes or helicopters or whatever.

JIM LEHRER: Right.

DAVID BROOKS: But, if you pump money in, that will stimulate some activity.

JIM LEHRER: Right.

DAVID BROOKS: And that is a plausible model. The CBO has projections based on that model. The counterargument made by Robert Barro of Harvard, John Taylor of Stanford, and most Republicans is that, psychologically, it doesn't work, because people see the debt coming, and they think, oh, they're going to tax me, so I'm going to play it safe. Or they see the debt rising, and they say, I don't feel more secure. I feel less secure.

And, psychologically, when they feel less secure, businesspeople are less likely to take risks and invest and hire. And so these are the two arguments. And I'm on one side of it, the John Taylor side, but, to be honest, nobody really knows the answer.

JIM LEHRER: And you are kind of on the other side.

MARK SHIELDS: I'm on the other side. I think...

JIM LEHRER: You are on the aggressive side.

MARK SHIELDS: Yes. And I do want to say a shout-out to Christina Romer. I think she's been good. And I think she's about as good a spokesperson for this administration as the administration has. I mean, there is an optimism about her, just an upbeat quality.

But I think that, politically, Jim, what the Democrats have to do right now is, they have to redefine this election. We are in an election right now where all the polls show that the Republicans are ahead. All the available data

that all of us run into every day, the races that are being fought over are Democratic seats. They're not Republican seats. The Democrats are playing defense. The Republicans are playing offense.

And I think where the president has failed politically is to make a case on the economy and, I think, to draw the differences. And it's more than just trying to blame George Bush, whom he called on the phone this week, trying to remind people of that policy.

I think it comes down to, he's got to draw out the distinction on the taxes. The taxes -- the Bush tax cuts are going to expire on December 31 for everybody across the board. And I think he's got to be willing to say, the Republicans are willing to raise everybody's taxes, and put the economy at jeopardy, just to defend tax breaks for the top 1 percent of Americans.

JIM LEHRER: You think that has got to be the most...

MARK SHIELDS: I think he's -- if he does that -- and I just think he's got to recast it. Otherwise, it's parallel skiing, and the Republicans are ahead, and they're going to continue ahead, and they're getting closer to the finish line.

DAVID BROOKS: Republicans welcome that fight. The Republicans...

JIM LEHRER: They welcome -- they would love that.

DAVID BROOKS: Yes, they would love any fight about taxes. They are like a tank. They don't necessarily shoot diversely, but when you're in their target zone, they're pretty good. And taxes are their target zone. And their argument is that: Listen, we want to cut everybody's taxes. But if you raise taxes on those top rates, you will be increasing taxes on the majority of small business profits.

And that's the argument they will make, that you can't tax small businesses at higher rates and expect them to hire more. And I'm not sure, politically, how that works out. I will say that we have had several elections, with John Kerry and Al Gore and others, who said, they want to raise taxes -- I want to cut taxes on the top 1 percent. They want to -- they don't want to do that. And the Republicans have done pretty well often in those fights.

JIM LEHRER: Speaking of pure politics, what did you think of the Lisa Murkowski loss in Alaska and the Joe Miller victory?

DAVID BROOKS: Yes. It's a message about aggressiveness. The Republican primary voters want, not only opposition, but really aggressive opposition. They don't want a hint of compromise. They want you to be super-aggressive, not, as they say, get along and go along. And, so, I thought that was the key message, which will have an effect...

JIM LEHRER: Aggressive -- aggressive against -- in attacking Obama, Democrats, whatever?

DAVID BROOKS: Everybody, Democrats, right. So, it will change the tone of the next Senate, more aggression, and it raises the idea of repealing health care.

MARK SHIELDS: By their definition, your political opponent is an enemy. It really is. I mean, it's the Sharron Angle mantra. And it's similar.

JIM LEHRER: That's in Nevada. That's in Nevada, yes.

MARK SHIELDS: They demonized Lisa Murkowski in this race as well.

JIM LEHRER: Yes.

MARK SHIELDS: And, you know, Ronald Reagan was about as formidable an adversary as anybody on the Democratic side would ever want to run into, as principled, conservative. But, at 5:00, he could sit down and have a drink with Tip O'Neill. Under the rules and under the mores of these folks, any cooperation, any civility toward the other side is a sign of collaboration and collusion. And I -- boy, I think that doesn't augur well for our politics, nor this city.

DAVID BROOKS: Well, I mean, my whole life was based on what Mark just said, but I have said we should wait and see. In Massachusetts and other places, we have had people who are pretty partisan, but surprise you and sometimes can be nice. And Reagan was plenty tough. But he was nice. Mark's right. And maybe they will be tough and not -- but I -- personally, you know, the Republican Party is not headed in the direction I want to see.

I do think you have to collaborate. And that has become a dirty word. There is no question about that.

JIM LEHRER: OK. Thank you both very much.

MARK SHIELDS: Thank you.

DAVID BROOKS: Thank you.

Listen to the Audio

As part of his ongoing series of reports on Making Sense of financial news, Paul Solman's reports how economic woes aren't just hard on the unemployed. As the recession drags on, many of those who are employed say they're overworked and underpaid.

JIM LEHRER: Now to another part of the labor story. It's about those who have jobs, but are being asked to do ever more.

NewsHour economics correspondent Paul Solman reports on the rise of the so-called burned-out worker.

It's part of his ongoing reporting on Making Sense of financial news.

PAUL SOLMAN: By this winter, when the great recession hit the two-year mark, Boston nurse Ann Driscoll's patient load had become truly daunting.

ANN DRISCOLL, nurse: They have taken a lot of nurse's aides away. They have cut the staffing down. They have closed an ICU. And we feel that it's going to lead to bad-quality patient outcomes.

PAUL SOLMAN: In California, flight attendant Ramona Arellano-Snyder also feels overworked and underpaid.

RAMONA ARELLANO-SNYDER, Flight Attendant: We're working more, but we're -- we're not seeing any rewards for that.

PAUL SOLMAN: Ditto for Maryland public defender Emily Livingston.

EMILY LIVINGSTON, assistant public defender, Montgomery County, Maryland: We are doing more with less. We have fewer attorneys right now handling an increasing caseload.

PAUL SOLMAN: And, in Boston, architect Lee Braun has had to do more in fewer hours since his workweek was cut to four days.

LEE BRAUN, architect: It kind of makes you wonder what recovery looks like. I mean, you know, if you're able to do more with less, and you just keep doing that...

PAUL SOLMAN: Well, then employers might be reluctant to start hiring again, and folks both without and with jobs will suffer, too.

At a Mott's plant in Williamson, New York, Shelly Snyder is on strike, in part because she was pressed to work overtime.

SHELLY SNYDER, Mott's worker: I don't think I should be on call or have to work 90 hours a week to make apple sauce. I just think it's crazy.

PAUL SOLMAN: The pressure recalls the worker speedups of the depressed 1930s, famously satirized by Charlie Chaplin in the film "Modern Times," management pushing workers to the edge or well beyond.

The official speedup data aren't in yet on this downturn, but Juliet Schor, author of several books on work, including "Plenitude" and the 1991 bestseller "The Overworked American," says high unemployment with no drop in output means overwork.

JULIET SCHOR, Boston College: We do know that we had massive layoffs. The workers who are left are doing much more work, and so we're seeing a lot of anecdotal evidence of rising stress, burnout, and unmanageable kinds of schedules for people.

PAUL SOLMAN: A burned-out work force, yes, says Bill Driscoll of Robert Half, a staffing firm, that's what workers report.

WILLIAM DRISCOLL, Robert Half: We surveyed 1,400 people across all lines of business in different jobs, and 37 percent said that they were overworked and underpaid. And even four in 10 said that they might want to look for another job, you know, as things start to improve.

PAUL SOLMAN: Take airlines, please. They have cut a sixth of their work force since the economy flatlined, on top of cuts made back in 2001 never restored. Arellano-Snyder flies for a major carrier.

RAMONA ARELLANO-SNYDER: We took a 33 percent pay cut initially, after 9/11. We're working longer hours. We're getting less rest on our layovers. We have fewer flights, which means the flights that we do have are packed, so we have people that are more grumpy because they are on planes that are crowded.

PAUL SOLMAN: JetBlue's Steven Slater is the iconic example, of course. Though lacking footage of his passenger dust-up and subsequent suds-supported slide to freedom, one can only imagine how it actually looked.

CHILD: I love you.

RAMONA ARELLANO-SNYDER: I love you, too.

PAUL SOLMAN: Arellano-Snyder neither approves of the behavior, nor thinks any of this is funny.

RAMONA ARELLANO-SNYDER: I'm just tired. You know, I'm working 10-to-12-hour days. But, a lot of times, you have a delay, and then you end up with even less rest. So, you might get maybe eight hours behind the door, which means you get to your hotel, and you have exactly eight hours before you have to go back to the airport. Well, you have to be at the airport an hour before your flight, so that already cuts it down to seven hours behind the door, and that doesn't include the time it takes you to fall asleep.

You walk in the door, you're supposed to jump in your bed and go right to sleep. That doesn't happen for most people. You're pretty tired when you get up in the morning. And, sometimes, it's hard to even get yourself up in the morning.

PAUL SOLMAN: Given layoffs at his firm, architect Lee Braun is grateful for a job to support his family, even though he too is working harder.

LEE BRAUN: You feel like you have got to keep your job, so you have really got to do your work well, and you got to work hard and, you know, do what it takes.

PAUL SOLMAN: Is that a good thing or a bad thing?

LEE BRAUN: I think, from an employer's perspective, that's probably a pretty good thing.

(LAUGHTER)

PAUL SOLMAN: And a good thing, too, for that old ideal of economics, productivity, turning out more stuff per person.

Juliet Schor has analyzed data from time-motion studies of the sort that began in the 1900s. This one tested ways to save time in the stamping of order forms.

JULIET SCHOR: There's almost no data on this topic, but I happened to have found an amazing data set. It shows, when the duration of unemployment goes up, people work harder and faster in the workplace.

PAUL SOLMAN: During the current job drought, says economist Andrew Sum, productivity has jumped a stunning 7 percent.

ANDREW SUM, economist, Northeastern University: This time around, we had one of the highest, you know, 15-, 18-month gains in productivity since the end of World War II.

Yet, at the same time, there is no evidence that the average worker has received an increase in their real weekly wage as a result of that productivity gain. For the most part, the vast majority of these gains went in the form of increased before-tax corporate profits.

PAUL SOLMAN: Corporate profits have, in fact, been quite high.

ANDREW SUM: Extraordinarily high in the last 18 months.

PAUL SOLMAN: At Mott's, hourly workers are on strike, since their profitable parent company, Dr. Pepper Snapple, cut their pay and benefits.

Again, line worker Shelly Snyder:

SHELLY SNYDER: If I come here and I give you my life, and I'm here and I work and I do my job and I make a good product and I make you money, why should I have to make less?

PAUL SOLMAN: But at Dr. Pepper Snapple, Bob Callan says the company is no different than any other facing a tough competitive environment.

ROBERT CALLAN, Dr. Pepper Snapple: We're focused on making sure that that facility can compete in the marketplace, and that we have -- we convert -- we Williamson into an efficient operation that -- that has a competitive wage structure. That is our focus.

PAUL SOLMAN: For workers and those they serve, though, there are real costs to doing more with less.

In Maryland, attrition has forced fewer public defenders, already a stereotype of overwork, to handle more cases than ever. In the last two years, Emily Livingston's average caseload grew from 12 to 20.

EMILY LIVINGSTON: It is sometimes physically difficult to handle that many cases in a single day. Sometimes, we will be in front of the judge in one courtroom handling a case, and we will be told that we're needed in the other courtroom, that our cases need to be resolved in the other courtroom. So, it's a juggling act, definitely, now more than ever.

PAUL SOLMAN: Livingston is hoarse from bronchitis that just won't quit. She feels she shouldn't take time off, though.

EMILY LIVINGSTON: If you have got, you know, clients who are in lockup, you want to come. You want to make sure that you're there for that client to get those cases resolved. We don't want to let them down, so we're -- we're working harder to make sure that we don't.

PAUL SOLMAN: Working harder in speeded-up America. And, with an unexpected productivity decline in the last quarter, there's now even data to suggest that American workers, though mostly in services these days, may be, like workers of the past, reaching their limit.

Listen to the Audio

In other news Friday, U.S. markets rose ahead of the holiday weekend on news of the latest unemployment reading.

HARI SREENIVASAN: Wall Street took some encouragement from the jobs numbers. The Dow Jones industrial average gained more than 127 points to close near 10448. The Nasdaq rose more than 33 points to close above 2233. In all, the markets had their best week since July. The Dow gained nearly 3 percent. The Nasdaq rose more than 3.5 percent.

Hurricane Earl lost a lot of its punch today as it churned north off the East Coast. The storm's winds dropped to 80 miles an hour after swiping at the North Carolina coast.

The storm's western edge blew over the Outer Banks in the middle of the night. But, apparently, hurricane-force winds never reached land, and the sun rose to reveal only minimal damage and choppy surf. Road crews worked to clear sand, in some places, three feet deep, but there was no major flooding. North Carolina Governor Bev Perdue voiced relief that Earl stayed farther offshore than feared.

GOV. BEVERLY PERDUE (D-NC): Purely and simply, North Carolina dodged a bullet, and we're glad that the bullet is now out of our state, for the most part.

HARI SREENIVASAN: The hurricane still had the potential to do damage as it headed north, on course to pass New England tonight. And a series of states remained on alert. In the Mid-Atlantic, both Virginia and Maryland saw stronger waves and wind as Earl passed.

WOMAN: It's almost like you're in a sandstorm.

MAN: This is my first hurricane, or somewhat hurricane. We didn't -- I was expecting more wind and more rain, but the waves are pretty ominous.

HARI SREENIVASAN: Lifeguards watched over swimmers in New Jersey, where one person had already drowned and another was missing. On Long Island, New York, officials said they still expected heavy rain, flooding, and power outages.

STEVE LEVY, Suffolk County Executive: The storm has actually slowed a bit, which you might think is good news, but it means that it may linger over us for longer than we had thought, which means more rain.

HARI SREENIVASAN: And, in Massachusetts, Governor Deval Patrick warned against under-rating the storm.

GOV. DEVAL PATRICK (D-Mass.: The public should continue to take precautions. In particular, stay indoors and off the roads during the height of the storm. Exercise extreme caution this afternoon during the times when the winds begin to pick up.

HARI SREENIVASAN: Out on the Bay State's coast, inmates from the Plymouth County Jail shoveled and stacked sandbags. Nearly 400 out-of-state utility crews were staged and ready. But, as Earl kept moving, officials up and down the coast hoped to salvage tourist revenue through Labor Day weekend.

Another bombing in Pakistan has killed 54 people. It happened in Quetta in the southwest, the latest in a series of such attacks. A suicide bomber targeted Shiites staging a pro-Palestinian rally and procession through the city. Police said 160 people were wounded. The Pakistani Taliban claimed responsibility, and a spokesman claimed that the group will launch attacks in America and Europe very soon.

In Afghanistan, the U.S. death toll rose again, with another American killed today. It came as Defense Secretary Robert Gates visited U.S. troops in Kandahar, the birthplace of the Taliban. He said he saw progress there and in Pakistan, where government forces have attacked insurgents in their safe havens.

U.S. SECRETARY OF DEFENSE ROBERT GATES: If you had asked me two years ago if I thought the Pakistani army would have 140,000 troops on their western border fighting some of these extremists, be in South Waziristan, be in Swat, be in places like that, I would have thought you were smoking something.

HARI SREENIVASAN: Pakistani officials reported today that U.S. airstrikes killed seven people in the border region. They said drone aircraft fired missiles in two separate attacks.

There have been more battles in Mexico's drug war. Soldiers killed 25 suspects Thursday in a border town not far from McAllen, Texas. They killed five more today in a shoot-out in Juarez. All of the gunmen were believed to be members of the Zetas gang. That group is suspected in the massacre of 72

migrants last month.

Those are some of the day's major stories -- now back to Judy.

 
A transcript of our conversation is after the jump.

JEFFREY BROWN: Welcome to Art Beat. This is Jeffrey Brown. Joining me today is Lawrence Wright, here to talk about his documentary, "My Trip to Al-Qaeda," which is based on his Pulitzer Prize-winning book, "The Looming Tower." Welcome to you.

LAWRENCE WRIGHT: Thank you, Jeff. It's good to talk to you again.

JEFFREY BROWN: Yes, talk again. It's been fun to kind of follow this from the book to the stage to the film, so before we even go into the substance, did you have any idea of what all this would become when you started long ago?

LAWRENCE WRIGHT: No. Well, when 9/11 happened, I knew pretty quickly I wanted to write a book about it because it was just the main thing was going to happen in my generation. I felt a compelling need to address it, but when I finished the book, honestly, I was sick of writing about terrorism. I had been affected years ago by going to see Anna Deavere Smith do her one-woman play called "Fires in the Mirror," about the Crown Heights tragedy. I just was very struck by the fact that she had been able to marry journalism and theater. I got intrigued by the notion that these apparently very disparate disciplines -- journalism and theater -- could be put together in a kind of nonfiction theatrical form.

JEFFREY BROWN: What was most interesting to you along the way in learning about the differences, and then how to process and disseminate information?

LAWRENCE WRIGHT: In a way I don't think that they're entirely different. If you think about how the reporting game must have begun years ago when people were sitting around campfires and somebody went over the hill to see what was over there and came back and made a report, that's the roots of journalism. And in a way when I'm standing on the stage I feel really in contact with that. I am talking to the community about what I learned. It's a very intimate way of communicating with people. It's hard to express how gratifying it is to be able to have the audience right out in front of you, that you are actually talking to. You don't see your readers.

JEFFREY BROWN: And what about the turning it into a film. You worked with Alex Gibney -- I've seen the stage version, I've now seen the film version. Of course the film allows you to open up a bit because you show both what's happening in the intimacy of the theater but also out in the world.

LAWRENCE WRIGHT: When I was doing the play at the Kennedy Center in Washington, Alex came to see the show. We met afterwards and he said he had a concept for how it could become a more cinematic piece. In the play there is a screen where I project images taken from my travels and he said that screen becomes a portal. And you can go through that portal from the stage to anywhere in the world. And then you can always return to home base, which is the stage. I thought it was a really brilliant concept that allowed the integrity of the play to remain, but it became much more cinematic immediately.

JEFFREY BROWN: Well, we should turn to the actual substance, which is tracing from the book now to the movie, tracing the lines that lead to the rise of a movement or a terror network, while much of the world wasn't watching. Have there been some changes in your thinking about that or some things that didn't strike you in your original reporting?

LAWRENCE WRIGHT: Things have been evolving since I started my original research. Al-Qaeda has changed and grown and survived, and I learned a lot about that organization and about our response to it. Those are the things that I think that are really striking to me. When al-Qaeda hit America on 9/11, it was the kind of IBM of terror. It was a very hierarchical organization, you know, you had to sign the form in triplicate to buy a spare tire, you know, but it had health benefits and month-long paid vacations for its employees it was, you know, Osama Bin Laden was a business student. That's the organization he created and that is not what we're facing now. It's a much flatter, smaller, more nimble and multifarious organization than it was then. Also, when we tried to respond the threat that al-Qaeda imposed to us on 9/11, we made a lot of mistakes. The level of knowledge about Islam, about terrorism, about the countries that we were engaging was so low, and I have to say that in many respects we still have a lot to overcome. One of the heroes of my book who also figures in the film, Ali Soufan ...

JEFFREY BROWN: ...Former FBI agent...

LAWRENCE WRIGHT: ...He was more than anyone, Ali came closer to stopping 9/11 and might have been able to had been given free rein by the CIA, which stood in his way. Ali is a native Arabic speaker and understands the language and a culture in a way that very few people in the intelligence community do. He was one of eight Arabic-speaking agents on 9/11. Last year when I checked with the FBI there were nine. So I can't say that we've made a tremendous amount of progress in bringing people into the intelligence community who have a profound understanding of where this movement comes from.

JEFFREY BROWN: What about the other running theme through the book, the staged play and the movie is this idea of humiliation that drove so many of the people who joined or formed al-Qaeda. Talk a little bit about that as it translates even to today as you look at sort of the broader situation. Is it still an important theme?

LAWRENCE WRIGHT: It's a crucial theme. Humiliation is one of the most common words in Bin Laden's vocabulary. Certainly there have been many Muslim men who have been physically humiliated, especially Arabs and Egyptians in those prisons. For instance, Ayman al-Zawahiri, the number two guy in al-Qaeda, experienced three years of torture in Egyptian prisons, as was true of many people who are in al-Qaeda today. I think that accounts for the appetite for bloodshed that's so characteristic of al-Qaeda and so unusual in many respects for a terrorist movement, which is normally just interested in theater. Physical humiliation really has an effect, but there is also a kind of sense of cultural loss that I think Bin Laden is speaking to when he uses the word humiliation. He himself, of course, has never been physically humiliated. He's a rich kid from Saudi Arabia, the son of one of the most prominent families in the country. When he uses that term, it resonates with many Muslims who feel that Islam has been in retreat for hundreds of years and been displaced from his proper place in the world.

JEFFREY BROWN: Before I let you go, dare I ask what's next for you? Is it the actor side of Lawrence Wright, journalist or some combination thereof?

LAWRENCE WRIGHT: Jeff, I have to admit I'm doing this again.

JEFFREY BROWN: You are?

LAWRENCE WRIGHT: I am. I've got a new play that is about Israel and Gaza. It's called "The Human Scale," and the Public Theater is putting it on in New York October 2. We open with the New Yorker Festival and run for a month at a theater in downtown called 3LD. I thought I would never do it again. But, you know, here I am learning lines again. It's
a very challenging and interesting experience for me.

JEFFREY BROWN: All right. "My Trip to Al Qaeda" airs on HBO on September 7. Lawrence Wright, it's nice to talk to you again.

LAWRENCE WRIGHT: Thank you, Jeff. I'll look forward to talking again in the future.

JEFFREY BROWN: And this is Jeffrey Brown for Art Beat. Thank you for joining us.

Kellie Maier kayaks Friday on water-covered Highway 12 in Kill Devil Hills, N.C. (Photo by Mark Wilson/Getty Images)

Hurricane Earl continued to churn along the East Coast Friday, heading north from North Carolina and expected to reach southeastern Massachusetts by Friday night.

The hurricane was downgraded to a Category 1 storm and it was still predicted to stay slightly east of the coast, but strong winds and heavy rain threatened holiday weekend travel plans and prompted tropical storm warnings throughout the mid-Atlantic and a hurricane warning on Cape Cod.

You can track the storm's progress with the National Oceanic and Atmospheric Administration's Hurricane Earl widget, which will take you to a website with the latest official public advisories for areas under hurricane watches and hurricane warnings, as well as charts of the wind speed and storm surge probabilities along the East Coast:

Below, more resources:

The National Weather Service has a map of all U.S. weather advisories -- including those related to Earl -- as well as a drop-down menu to view advisories by state. The NWS also has the radar view of the storm.

The Washington Post collects that view and others on its Hurricane Tracking Center site.

NASA satellites and aircraft follow the storm from space and the sky -- some even fly through the storm. NASA's hurricane website has information and images, you can also follow the agency's hurricane Twitter feed.

Bronze works by renowned French artist Edgar Degas are seen at a press preview in Sofia. Bulgaria's National Art Gallery has announced that it will present the full collection of 74 bronze sculptures by the French impressionist Edgar Degas. Photo by Ditmar Dilkoff/ AFP/ Getty Images

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Conservators at the Van Gogh Museum in Amsterdam have finished restoring the artist's iconic painting of his bedroom at Arles, via the Associated Press. You can read more about the process on the museum's blog.

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The Seattle Art Museum has asked for a $10 million loan as it struggles to keep up with the costs of its expensive new building through the economic downturn, via ARTINFO.

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Slate reveals an exclusive look at artwork made by the prisoners of Guantanamo Bay.

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Need To Know follows the daughter of a famous ethnomusicologist who is trying to restore Haiti's lost music.

"A great moment of opportunity," she said.

"There's a lot of skepticism out there," he said. "But I think there is ground to be hopeful."

She was Madeleine Albright, a Democrat and former secretary of state. He was Stephen Hadley, who served as national security adviser in George W. Bush's second term. On the PBS NewsHour this week, they were in lockstep on one of the most stubbornly contentious conflicts of our time: Middle East peace.

After watching and covering the on-again, off-again effort to find middle ground between Israelis and Palestinians for decades, it is not completely crazy to be skeptical of the prospects for actual peace.

I was one of the hundreds standing on the White House south lawn on Sept. 13, 1993, when President Clinton nudged Yitzhak Rabin and Yasser Arafat into a tentative handshake to seal the Oslo Accords. You could feel the history in the air.

Two years later, the same two men shook hands once again, this time under the chandeliers in the White House East Room. They'd amended the deal they were signing just minutes before in pen and ink. Once again there was applause.

But less than two months later, Rabin was assassinated, sending the peace talks back onto their regrettably familiar cycle of diplomatic frustration. From Camp David to Annapolis; from Aqaba to Madrid to Sharm el-Sheik, the peace talks have bounced to and fro across the Atlantic.

The arguments vary only a little - two-state solutions, Palestinian right of return, settlements in Gaza, dividing Jerusalem.

But efforts at Middle East peace do seem to be something that makes allies of normally warring parties in this country at least. As Albright and Hadley demonstrated on the NewsHour, American presidents and their lieutenants seem unable to turn away from the prospect for peace -- no matter which party they swear allegiance to.

Still, it is Mr. Obama -- like so many chief executives before him -- who must, in Albright's words, be "the closer."

"In the end of the day," Hadley agreed, "Middle East peace is presidential business." Good thing the president does not have anything else on his plate these days.

But he may have taken some heart in Israeli Prime Minister Benjamin Netanyahu's words to Palestinian President Mahmoud Abbas this week. "I see in you a partner for peace," the Israeli leader said. "Together we can lead our people to a historic future that can put an end to claims and to conflict."

It's what Yasser Arafat called "the peace of the brave." Arafat, who died in 2004, said that in 1995.

Gwen's Take is cross-posted with the Washington Week website. Friday's Washington Week roundtable will assess how the Obama administration is trying to "turn the page" from Iraq to a slew of other domestic and foreign policy issues.

On a day when new jobs numbers indicate that U.S. unemployment is continuing to edge up, Paul Solman answers a viewer question on the Business Desk about how it's possible to have a jobless recovery.

Name: Mohammad Khan

Question: I have a hard time understanding "jobless recovery." If there are few jobs and businesses are suffering, how are the Wall Street indicators (DJIA etc.) recovering from lows just two years ago?

Paul Solman: The Dow Jones Industrial Average of 30 giant and supposedly representative companies is more than 50 percent higher than when it hit bottom after Lehman Brothers. Thus the question.

The answer, I think, is both simple and important to understand. Stock is an ownership stake in a company. If the company becomes more profitable, any share of it is worth more. Period. It has nothing to do with how many people the company hires.

In fact, as we all know, companies laid off workers in droves during and after the crisis. At first, it didn't help profits any, as the world stopped buying and sales sank. But, gradually, inventories were depleted and firms had to start making more stuff. In addition, our government and others (including China's) poured money into the global economy to goose demand. All of this made for higher sales.

But -- and this is the BIG "but" -- companies did not start rehiring workers. They made do with trimmed-down workforces. (We'll have a story tonight on the NewsHour about worker burnout that looks at a few of the repercussions.)

And therein lies the answer to your question, Mohammad. Greater sales + lower employee expenses = GREATER PROFITS. Which is just what U.S. firms have been reporting all year.

Shares of stock, as I said, represent a claim on the pro-rated slice of those profits. That is, you own 1000 shares of a company, say, with a million shares outstanding -- trading publicly -- and your stake represents one one-thousandth of the profit; you own 100,000 shares and you've got a claim on 10 percent of the profits, and so on.

No wonder, then, that as companies become more profitable, the value of their shares goes up. And that happens regardless of how many total jobs are -- or are not -- out there.

Now eventually (the thinking goes), a "jobless recovery" will peter out, as unemployed workers dampen demand, which would presumably translate -- eventually -- into lower sales and lower profits. But suppose, mainly to be provocative, that America can get by with 15 million fewer workers -- permanently. And that the Americans who remain in the workforce can buy enough to keep the economy humming. In that case, you could conceivably have profitable companies AND high unemployment, theoretically even forever. A truly jobless recovery.

Name: Mohammad Khan

Question: I have a hard time understanding "Jobless Recovery." If there are few jobs and businesses are suffering, how are the Wall Street indicators (DJIA etc.) recovering from lows just two years ago?

Paul Solman: The Dow Jones Industrial Average of 30 giant and supposedly representative companies is more than 50 percent higher than when it hit bottom after Lehman Brothers. Thus the question.

The answer, I think, is both simple and important to understand. Stock is an ownership stake in a company. If the company becomes more profitable, any share of it is worth more. Period. It has nothing to do with how many people the company hires.

In fact, as we all know, companies laid off workers in droves during and after the crisis. At first, it didn't help profits any, as the world stopped buying and sales sank. But, gradually, inventories were depleted and firms had to start making more stuff. In addition, our government and others (including China's) poured money into the global economy to goose demand. All of this made for higher sales.

But -- and this is the BIG "but" -- companies did not start rehiring workers. They made do with trimmed-down workforces. (We'll have a story tonight on the NewsHour about worker burnout that looks at a few of the repercussions.)

And therein lies the answer to your question, Mohammad. Greater sales + lower employee expenses = GREATER PROFITS. Which is just what U.S. firms have been reporting all year.

Shares of stock, as I said, represent a claim on the pro-rated slice of those profits. That is, you own 1000 shares of a company, say, with a million shares outstanding -- trading publicly -- and your stake represents one one-thousandth of the profit; you own 100,000 shares and you've got a claim on 10 percent of the profits, and so on.

No wonder, then, that as companies become more profitable, the value of their shares goes up. And that happens regardless of how many total jobs are -- or are not -- out there.

Now eventually (the thinking goes), a "jobless recovery" will peter out, as unemployed workers dampen demand, which would presumably translate -- eventually -- into lower sales and lower profits. But suppose, mainly to be provocative, that America can get by with 15 million fewer workers -- permanently. And that the Americans who remain in the workforce can buy enough to keep the economy humming. In that case, you could conceivably have profitable companies AND high unemployment, theoretically even forever. A truly jobless recovery.

Updated 3:00p.m.ET
President Obama called Friday's jobs numbers evidence that the "economy is moving in a positive direction" but that more work was needed. Find a transcript and video here.

Posted 9:30a.m.ET
The unemployment report for August released Friday shows that the job market remains in a deep funk -- but also contains some better economic news than expected, suggesting that a double-dip recession may not be inevitable.

The unemployment rate climbed slightly to 9.6 percent and 54,000 total jobs were lost last month for the second consecutive month, much due to the loss of government jobs. But there was some good news amid that dreary data. Private payrolls increased by 67,000 jobs - that's about 20,000 to 30,000 better than expected, depending on whose forecasts you read - and revisions to the June and July reports were also better than expected.

"I think it's encouraging," economist Mark Zandi of Moody's Analytics told CNBC reporters shortly after the Labor Department issued the report.

Jobs in the private sector grew by 107,000 in July, rather than the initial estimate of 71,000, according to the revised figures.

But still, there was more bad news than good for the millions of unemployed Americans.

The federal government lost more than 100,000 workers who had been temporarily hired by the Census Department. State and local governments shrank their workforces by more than 10,000. After increasing recently, the manufacturing sector dropped 27,000 jobs.

And the so-called "underemployment" rate - those who are working part-time but want full-time work or those who have given up looking - increased slightly to 16.7 percent.

"I'd say the real unemployment rate is in the teens," former Wisconsin Gov. Tommy Thompson said on CNBC when asked to react to the report.

It all comes amid the prospect of a midterm election that suggest the Dems will suffer heavy losses (more here from your daily dose of the Morning Line).

And it comes as President Obama and his economic team are mulling what new measures they can take to boost a weak economy. Several reports out Friday in the Washington Post, Politico and elsewhere say the president is considering a temporary break in the payroll tax, new tax credits for companies' research and development and possibly an infrastructure program that Congress would be reluctant to approve.

We'll have much more on all of this here on the Rundown and on Friday's NewsHour, including a new report from Paul Solman.

The man charged with saving the Democratic majority in the House seems to be providing an opening on a short-term extension for the Bush tax cuts targeted at the wealthiest two percent of Americans.

"We know from economists on all sides of the political spectrum is that is not a very efficient way to boost the economy -- that there are better alternatives. But it seems to me the big issue here is on the Republican demand for permanent tax cuts. Because they are not saying only well let's keep this going for just one more year," Democratic Congressional Campaign Committee Chairman Chris Van Hollen said in an interview with PBS NewsHour. "That can be part of the discussion. That can be part of the mix," he said of the possibility of a short-term extension for the tax cuts for the wealthy so as not to raise anyone's taxes in the middle of a recession.

"That can be part of the mix in the very short term," he added.

(Be sure to check out our entire interview with Rep. Van Hollen in our new interview series with key midterm players. We'll have more highlights on the Rundown blog later today.)

President Obama and congressional Democrats are preparing for a fall debate surrounding the Bush tax cuts. They are eager to make the tax cuts permanent for the middle class, but the president has publicly remained committed to allowing the tax cuts for the wealthiest two percent of Americans expire at the end of the year. Unlike Mr. Van Hollen, neither Speaker Pelosi nor President Obama have yet to publicly appear open to the idea of a possible short-term extension of the tax cuts for the wealthy.

Republicans charge that a tax hike on that top two percent will harm many small businesses in the middle of a recession. In addition, Republicans are calling for a permanent extension of all the tax cuts which would cost $3.2 trillion over the next decade according to the non-partisan Congressional Budget Office.

Many Blue Dog Democrats in the House and a handful of Senate Democrats including Sen. Evan Bayh, D-Ind, Sen. Kent Conrad, D-N.D., and Sen. Ben Nelson, D-Neb., are all opposed to allowing the tax cuts for wealthy Americans to expire at the end of this year.

With the latest monthly jobs report out Friday morning still showing a wheezing economy, President Obama is preparing to roll out some new policy proposals perhaps as soon as next week.

The president has spent his first week back from summer vacation focused on the anniversary of Hurricane Katrina, the end of combat operations in Iraq, and a diplomatic push for Middle East peace.

Next week, he plans to keep public attention on the economy with stops in Wisconsin and Ohio before capping the week off with his first full blown solo press conference in many months.

In a must-read preview, the Washington Post reports what may be the crux of Mr. Obama's fall economic policy push, including hundreds of billions of dollars of tax cuts for businesses to spur hiring:

"Among the options under consideration are a temporary payroll-tax holiday and a permanent extension of the now-expired research-and-development tax credit, which rewards companies that conduct research into new technologies within the United States."

BREWER'S BRAIN FREEZE

Political debates are all about the exchange of words and ideas, but perhaps the most significant part of Wednesday's Arizona gubernatorial debate was what wasn't said.

The reason: Republican Gov. Jan Brewer's cringe-worthy opening statement, with two inexplicable pauses, which transformed her performance into cable news chatter, a YouTube sensation and the talk of the political world.

The first stammer last just a few seconds, with Brewer seemingly losing her train of thought. "I have ... done so much and I just cannot believe that we have changed everything since I've become your governor in the last 600 days. Arizona has been brought back from its abyss," said the governor.

Brewer continued: "We have cut the budget, we have balanced the budget and we are moving forward. We have done everything that we could possibly do."

Then, for 10 seconds, the governor said nothing, looked down at her notes, laughed awkwardly, before finally regaining her thoughts, but not full command of the English language: "We have ... did what was right for Arizona. I will tell you that I have really did the best that anyone could do."

In an appearance on a Phoenix radio station Thursday, Brewer acknowledged she drew a blank. "It was the longest 16 seconds of my life," she said, before adding, "I'm human, I'm human."

Brewer's Democratic challenger in the race, state Attorney General Terry Goddard, avoided the gaffe during the debate. He and Brewer battled instead on the economy and immigration, including the state's controversial new law signed by the governor this past April and which is now the subject of legal challenges.

Brewer said the law helped gain the attention of the federal government, which she claims has not fulfilled its responsibility to secure the border. Goddard accused Brewer of damaging the state's image and economic prospects by making false statements about beheadings in the desert.

According to the Arizona Republic, reporters tried to press Brewer following the debate on her past claims of beheadings, but the governor refused to answer the questions and quickly escaped into a service elevator.

MIDTERM MADNESS

Two key midterm data points emerged this morning that you will want to take with you as you go about your Friday.

1.From the Gallup organization we get some data that suggest voters leaning to supporting the GOP this year may be doing so as much in anger at Democrats as in support of Republicans.

"Among voters backing Republican candidates, 44% say their preference is 'more a vote against the Democratic candidate,' while 48% say it is 'more a vote for the Republican candidate.' The 44% of Republican voters who say they are voting more against the Democratic candidate exceeds the level of negative voting against the incumbent party that Gallup measured in the 1994 and 2006 elections."

2. Charlie Cook, the congressional race watcher extraordinaire, writes in his National Journal column Friday that control of the Senate is more in play now than it has ever been, but still a tough hill to climb for Republicans.

"For much of this year, it seemed a near mathematical impossibility that Republicans could score the 10-seat net gain needed to flip the Senate, which is split between 59 Democrats (including two independents who caucus with Democrats and largely vote with the party) and 41 Republicans. As recently as six weeks ago, I wrote in a CongressDailyAM column that a GOP win was "certainly possible" but "still fairly unlikely." Although the "fairly unlikely" part is still valid, the possibility of a GOP takeover is growing. To be sure, a 10-seat gain for Republicans remains hard," writes Cook.

JOBS, JOBS, JOBS

With 60 days left until November's midterms, Democrats are running out of time to convince voters the economy is moving in the right direction. That task became even harder Friday with the release of the Labor Department's jobs report showing the unemployment rate edged up a tenth of a point to 9.6 percent in August.

Overall, the economy shed 54,000 jobs as 114,000 temporary Census workers saw their positions come to an end. Private sector employers, meanwhile, added 67,000 jobs, better than the 40,000 or so that had been expected.

President Obama will make a statement on the report at 10 a.m. EDT before departing the White House for Camp David.

After a week spent marking the end of the U.S. combat mission in Iraq and bringing together Israeli and Palestinian leaders for Mideast peace talks, the president has also loaded his schedule next week with events on the economy.

On Monday, President Obama will deliver Labor Day remarks at the Laborfest event in Milwauikee. Then, on Wednesday, he will travel to Cleveland for an economic speech, before capping the week off with a White House press conference.

We won't have a Morning Line on the Labor Day holiday, but tune into the NewsHour that night for a recap of the president's speech plus a look at how the campaign season is shaping up in four key states.

Jim Lehrer was honored in late August at a parade in Washington hosted by Gen. James Conway, commandant of the Marine Corps. Lehrer, whose father was a Marine, served with his brother in the Third Marine Division in the Far East in the 1950s.

Listen to the Audio

Margaret Warner reports from Baghdad on the growing frustration among Iraqis -- and allies -- that a government has yet to be formed five months after parliamentary elections.

JIM LEHRER: And now again to the latest on Iraq from Margaret Warner. She reports from Baghdad on Iraq's political stalemate.

MARGARET WARNER: The book market along Baghdad's Mutanabi Street is a reminder of the city's faded past, where students hawk pamphlets, intellectuals look for their favorite authors, and the chattering class gathers to chew over politics.

The Humvee at the entrance is a reminder of the car bomb that ripped through the market in 2007 next to the stall of bookseller Munaf Fadel. He says the terrorists were targeting Baghdad's educated elite.

Every day, he worries, it will happen again, and he blames Iraq's leaders.

MUNAF FADEL, bookseller (through translator): I have to emphasize, there's no government; therefore, there's no security. Stability depends on the government's ability to enforce the law. We don't have a government, so we don't have security.

MARGARET WARNER: Haiem Mahdi al-Shatri, who's been selling books here for more than 50 years, can't understand how a civilization that brought written language to the world has spawned such unworthy leaders.

HAIEM MAHDI AL-SHATRI, bookseller (through translator): It's a game they're playing with us. Is it logical that no one could form a government? For the last seven years, what have Iraqis benefited from their government? Nothing.

MARGARET WARNER: Iraqis voted in parliamentary elections nearly six months ago. No party won a majority, and, ever since then, the four leading parties have been tussling over how to form a new government.

Iraq's former Deputy U.N. Ambassador Feisal Istrabadi:

FEISAL ISTRABADI, former deputy Iraqi ambassador to United Nations: The wrangling has not been over policy or over principle. It's simply a matter of who occupies the seat of power. It's a personal -- almost a personal dispute, in which, I must say, the interests of the country come a distant second.

MARGARET WARNER: The dispute pits the top vote-getter, former Prime Minister Ayad Allawi and his coalition of Sunnis and secular Shiites, against the close second-place finisher, current Prime Minister Nouri al-Maliki. A Shiite, he, like Allawi, ran on a secular platform.

But the distrust is deep. Both sides raise the specter of utter catastrophe if their opponents assume the top position of power. Here's what the country's highest elected Sunni official, Vice President Tariq Al-Hashemi, warns will happen if Maliki remains prime minister.

TARIQ AL-HASHEMI, Iraqi Vice President: This could lead easily to another dictatorship.

MARGARET WARNER: A dictatorship by whom?

TARIQ AL-HASHEMI: By whoever, al-Maliki himself. If he's going to be prime minister, and he's not going to change his course, definitely, this country is drifting to a dictatorship within might be the umbrella of -- of a fragile democracy.

MARGARET WARNER: And Najaf Governor Adnan Al-Zurufi, a member of Maliki's coalition, warns of a return to Saddam-era Baathism if Allawi is in charge.

ADNAN AL-ZURUFI, governor of Najaf: It's about the society and the power. So, that's why we believe that, if those people came back, there's no democracy.

MARGARET WARNER: This week, U.S. Vice President Biden was in Iraq, urging the two leading parties to resolve the stalemate by forming an all-inclusive government between them, and, with the two other leading parties, one all-Shiite, one Kurdish.

JOSEPH BIDEN, Vice President of the United States: The government has to reflect the outcome of the election, which is another way of saying, all the four major entities that did relatively well have to be included in the government. That's a difficult thing to put together.

MARGARET WARNER: And if they don't? Many Iraqis fear, if negotiations don't bear fruit soon, Sunni and Shia political leaders may once again resort to sectarian violence to resolve their differences. That could well happen, warns Vice President Al-Hashemi, if Maliki cuts a deal with the other all-Shiite party and excludes the Sunnis.

TARIQ AL-HASHEMI: I'm afraid the response from the Arab Sunnis will be again negative. I can't control the behavior of my constituency, and I'm afraid that this country back to the sectarian strife.

MARGARET WARNER: Istrabadi says this six-month political deadlock has already taken too high a toll.

FEISAL ISTRABADI: Even if, tomorrow, somehow, a magic wand were waved, say, and a government were formed, it's going to take, I think, a tremendous amount of time for the government to reassert its authority.

MARGARET WARNER: Leaving Iraqis to wonder if their government elected by the people will ever be able to work for the people.

JIM LEHRER: Ray Suarez talked to Margaret after she filed that report.

RAY SUAREZ: Margaret, welcome. You have shown us the stalemate in Iraq. Has there been any movement to report in recent negotiations? Are there any proposals on the table for breaking the stalemate?

MARGARET WARNER: Well, Ray, there are some proposals on the table that would help a sort of power-sharing arrangement between the two top vote-getters, Prime Minister Maliki, former Prime Minister Allawi.

But Vice President Biden really came here to give the two sides a kick in the pants, if you will, and to say, you have to get serious about talking to one another. And he told them that the U.S. administration is growing alarmed that some of these recent terrorist attacks we have seen aimed at government institutions, army, police, municipal buildings, are being encouraged by this political vacuum.

So, he talked turkey to both of them. He said to Maliki, look, no one else is going to accept you as prime minister unless you give up some of the power you have accrued to yourself while prime minister. For instance, he has this 56th Brigade. And it's basically an army brigade that's answerable only to him and bypasses the military bureaucracy.

He then said to Allawi, look, you did win the most votes. You won 28 percent, though, and we think you're a great guy, but we don't see you getting to 50 percent. And the only way you're going to do it is in partnership with Maliki. And you ought to be willing to talk seriously about power-sharing.

So, what I'm told today is that it has galvanized the players somewhat, but certainly nothing has come out of it yet.

RAY SUAREZ: The U.S. has carefully avoided taking sides in the deadlock, but two very different outcomes, two very different governments could emerge from the process.

What might the U.S. face in Iraq if it goes one way or another?

MARGARET WARNER: Yes, that's a great question, Ray, because the key here is, which two blocs form the core of this new government?

If it is Maliki's Shiite bloc and the other Shiite bloc, which is composed of parties with real ties to Iran, including Muqtada al-Sadr, the fiery cleric we all know, that is not a good scenario for the United States, because it's believed that it will be heavily influenced by Iran. And with Sadr in the coalition, he is very anti-American.

If it is Maliki and Allawi's coalition, then the U.S. thinks that's a government it can do business with, because, in fact, both Allawi and Maliki to some degree do want to have a working relationship, and they think, if they are the key core partners, they will be able to be free of too much Iranian influence.

Iran, meanwhile, sees it the other way. And we have been -- I have been told by a member of both Maliki's coalition -- and then I met with Allawi today -- and he implied the same -- that Iran is very worried that if, say, it were the scenario the U.S. wants and headed by Allawi, that Iraq might be used as a base for the U.S. to invade Iran.

So, what you really have are regional power politics on a grand scale here.

RAY SUAREZ: As you mentioned, this has already gone on for almost six months. What's the risk for Iraq if the standoff continues? Can it go on much longer?

MARGARET WARNER: Well, people in the street think it's very risky, and -- and you saw this in my taped piece. We heard that over and over again. And it's kind of amazing to me, actually, that people are even paying attention to an arcane subject like the formation of a government. But people say, look, we went to the polls. We mostly voted for secular parties. We want people who can get something done. And now they're just dithering around.

So, the -- and the public does see these attacks as related to that vacuum. Whether or not that's the case, no one is sure. But U.S. and Iraqi intelligence do believe so. So, the risk, of course, as I said in the piece, is that, if it keeps going, that the temptation here, which happened three years ago, is that some of the political players may decide to use violence themselves as a pressure point.

And that would really be a dire scenario for Iraq. And the Sunni camp told me that -- that Biden, Vice President Biden, made clear -- in this visit, he said, if this place descends into sectarian violence again, the U.S. will not be able to ride to the rescue with more troops, the way we did in '07.

That said, Ray, both Allawi today told me, and the vice president said yesterday he sees another month or two before this is resolved.

RAY SUAREZ: And what do you have coming up in your next report?

MARGARET WARNER: Well, Ray, my last piece tomorrow on the broadcast is going to be about why there isn't more electricity here in Iraq.

As I have reported before, I mean, people have been sweltering all summer in 120-degree heat. And here in Baghdad, power goes off all the time. In fact, I think every single interview we have done has been interrupted by a power failure. It goes black, and then the private generators have to kick in.

So, we have got, I think, a fun and interesting story about that tomorrow. And then I have been doing a lot online, blogs. And I take viewer questions that will be on tonight. So, I hope people will tune into that, too.

RAY SUAREZ: Our Margaret Warner in Baghdad, good to talk to you.

MARGARET WARNER: Great talking to you, Ray.