updated 7/6/2006 10:59:52 AM ET 2006-07-06T14:59:52

Guests: Brad Blakeman, Michael Scheuer, Philip Mangano, Brent Adams, Rachel Maddow

RITA COSBY, HOST, “LIVE AND DIRECT”:  That does it for me tonight.  THE SITUATION with Tucker starts right now.  Tucker.

TUCKER CARLSON, HOST:  Thank you, Rita. 

Thanks to you at home for tuning in.  It is good to have you with us tonight. 

Whatever happened to the hunt for Osama bin Laden?  The animal behind 9/11 is still at large.  But incredibly, the CIA has shut down the unit dedicated to finding him.  We‘ll talk to a former agency official who believes this is a serious mistake. 

Also, the U.S. government is giving apartment to homeless alcoholics and cash for more booze, and in return the drunks aren‘t even asked to try to stay sober.  Is it a good deal for taxpayers?  You‘ll meet one official who says, yes, indeed it is. 

And I don‘t know what you did to celebrate the Fourth of July, but it probably wasn‘t this.  You‘ll meet a man who claims that burning the flag isn‘t a protest; it‘s a celebration of America, somehow. 

That‘s all coming up.  But first, showdown with North Korea.  Pyongyang has test-fired seven missiles.  It was an action the White House called provocative, even though the long missile capable of reaching this country failed. 

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  One thing we have learned is that the rocket didn‘t stay up very long.  It tumbled into the sea, which—which doesn‘t, frankly, diminish my desire to solve this problem. 

(END VIDEO CLIP)

CARLSON:  But maybe the next missile won‘t fail, and maybe it will be tipped with a nuclear weapon.  The threat remains, in other words.  What‘s the president going to do about it? 

Here to answer that, Brad Blakeman, the former deputy assistant to President Bush.  He joins us tonight from Washington.

Brad, thanks a lot for coming on. 

BRAD BLAKEMAN, FORMER DEPUTY ASSISTANT TO PRESIDENT BUSH:  Pleasure.

CARLSON:  I don‘t think that there‘s any—any debate that the fact this is a provocation, as the president said.  It happened on the Fourth of July.  It happened right after the launch of our own space shuttle.  It was clearly designed to get our attention and to send a message, “We‘ll do what we want.” 

Is calling it bad enough?  That‘s not a very vigorous response, it is?

BLAKEMAN:  Well, listen, the president just sent Chris Hill over to China and to the region to speak to our allies over there.  The president is doing the right thing.  He‘s bringing the international community he knows have the most to worry about, and those are the folks in the six-party talks.  We‘re bringing in Russia.  We‘re bringing in China.  We‘re bringing in South Korea and Japan, because they have the greatest interest in this. 

We‘re bringing it to the Security Council.  Ambassador Bolton is putting the full-court press on our family of nations to come together and send a message: do what the United Nations intended to do, and that is... 

CARLSON:  Wait a second.  So we‘re bringing it to the Security Council?  It‘s like all of a sudden we care what the U.N. thinks?  For the record I don‘t.  I never have; I never will.

But wait a second.  I want you to compare—everything you said is reasonable, and I‘m not attacking it as unreasonable or crazy because it‘s not, but I want you to compare it to what William Perry, Admiral Perry, the former secretary of defense under the Clinton administration, is suggesting.  He said why don‘t we just bomb—why didn‘t we just bomb the missile on the launching pad? 

Could it be that a former Clinton official is, in fact, more bellicose on North Korea than Mr. Tough Guy, President George W. Bush?  How is that possible?

BLAKEMAN:  President Bush isn‘t Mr. Tough Guy.  President Bush is reasonable, and President Bush will do everything in his power to solve this diplomatically.  And President Bush, if you notice, Tucker, has not taken the military option off the table at all. 

So President Bush is doing a measured response, because those who have the most to lose in this matter really need to get involved, and that is China.  Because after all, North Korea is the bastard stepchild of China.  It‘s the black sheep of the communist world.  They need to step up to the plate and put their relative back in the bottle.

CARLSON:  Well, of course.  They don‘t want millions of impoverished North Koreans flooding across their border.  That‘s their interest here, as you know.

But look, here—here‘s the moral question, and it‘s a moral question raised by the president himself.  North Korea isn‘t simply a bad place; it‘s an evil place.  Indeed, it‘s part of the access of evil.  Right?  As you well remember.

BLAKEMAN:  Yes.

CARLSON:  And you have a mad man running the place, who‘s killed literally millions of his own people, who has weapons of mass destruction, we‘re fairly certain nuclear weapons, the means to deliver them, we believe, and certainly the will to do so.  He is destabilizing the entire region.  You see the parallel I‘m drawing here.

Why the hell are we waiting to invade?  Why aren‘t we holding this guy up to the Iraq standard and marching forward into Pyongyang? 

BLAKEMAN:  Well, the Iraq standard was that we would use every reasonable method diplomatically to stop Saddam Hussein.  We had 15 separate resolutions, unanimously passed, that the United States should use, and its allies, whatever means necessary to take him out, and we did.  And our Congress voted for it. 

So could you imagine if President Bush decided on his own to attack another country without exhausting every means available to him?  That‘s what he‘s trying to do.

CARLSON:  All I‘m saying—look, all I‘m saying is the obvious.  And you know as well as I, we are not on an Iraq track with North Korea.  We are not—I mean, a year before the invasion of Iraq, I knew, you know, any sober person knew we were going to invade Iraq.  I mean, we knew, OK?

I said so on television.  I‘m sure in your heart of hearts you knew.  A similar build-up is not occurring now in North Korea.  And I am just suggesting that, by the president‘s own standards, we have a moral obligation to invade North Korea, to liberate the people of North Korea.  Isn‘t that the standard you set down, the president set down?

BLAKEMAN:  No.  No, absolutely no.  We have a moral obligation to use every means available to solve this diplomatically and to get those nations who have the most to lose in this, those other nations of the six-party talks, to bear the most amount of pressure and—on North Korea, and then get the rest of the civilized world through the U.N., through the Security Council, to put as much presser as possible, whether that be sanctions, whether that be resolutions, and then...

CARLSON:  Come on, tell me—are you saying China is going to care about the human rights record of Kim Jong-Il?  Do you think China...=

BLAKEMAN:  We‘re not talking about human rights. 

CARLSON:  China is a totalitarian state.

BLAKEMAN:  We‘re talking about weapons.  We know their record on human rights.  We‘re talking about offensive weapons. 

CARLSON:  Whoa, whoa, whoa.  There‘s so much more than that, Brad.  Let me remind you what it is to be a neocon.  Today the president himself said he feels for the people of North Korea.

BLAKEMAN:  Of course we feel for them. 

CARLSON:  OK.  Then why aren‘t we liberating them?  We went—you know, 2,500 Americans have been killed liberating Iraq.  Why aren‘t we planning to liberate a place so much worse than Iraq every thought of being?  I don‘t get it.

BLAKEMAN:  We—we are going to use every diplomatic reasonable way to solve this problem diplomatically.  And the United States is not the policeman of the world.  We need to get other nations involved.  We need the Russians involved.  We need the Chinese.  Without the Chinese support, North Korea goes down the tubes. 

CARLSON:  Yes, in about 20 minutes. 

BLAKEMAN:  They need to step up to the plate. 

CARLSON:  Well, if I can just end by saying I think it‘s quite a stretch, though awfully generous of you to add Russia and China to the list of so-called civilized nations, but you‘re a big-hearted guy.

Brad Blakeman, thanks for joining us. 

BLAKEMAN:  Thank you, Tucker.

CARLSON:  We now turn to the hunt for Osama bin Laden.  Are we throwing in the towel?  The CIA has shut down the unit charged with tracking bin Laden.  Yet, there was no suggestion that we‘re any closer to finding the 9/11 architect President Bush pledged to bring to justice, quote, “dead or alive.” 

Our next guest is a longtime CIA analyst and the author of “Imperial Hubris: Why the West is Losing the War on Terror”, as well as “Through Our Eyes: Osama bin Laden, Radical Islam and the Future of America”.  Michael Scheuer is also a terrorist analyst for CBS News.  We‘re proud to have him join us tonight from Washington.

Mr. Scheuer, thanks for coming on. 

MICHAEL SCHEUER, AUTHOR:  Thank you.  Good evening to you.

HANNITY:  What do you think of this?  We‘re closing down the bin Laden unit?  I mean, what could possibly be the rationale for this?

SCHEUER:  They claim the agency released a—released an announcement yesterday that somehow bin Laden is not in control of his organization any more, and al Qaeda is broken and destroyed, which is probably news to everybody in the world. 

There really is no rational reason to break up what was the most successful American government counterterrorism unit in the history of counterterrorism. 

CARLSON:  Now what is—I mean, those of us who never worked with the CIA approach all CIA pronouncements with the assumption there‘s something else really going on here.  Right?  That there‘s a back story. 

Why would CIA have an interest in lessening the public perception of bin Laden‘s power?  Why would they want us to think he‘s not as powerful as he once was?

SCHEUER:  I really don‘t know what the answer to that is.  I think there‘s partly a political answer to that.

CARLSON:  Right.

SCHEUER:  That it‘s a little embarrassing that five years after the fact we haven‘t got him yet. 

It‘s really very inexplicable, to me at least.  The one thing about the unit was that it was always very bureaucratically unpopular inside the agency,  because it didn‘t fit into the mold of their organization.  The operations director was organized into geographic regions, and the Osama bin Laden unit was focused on one man, one organization, wherever he was in the world. 

And so the bureaucrat—it was a bureaucratic anomaly, and most bureaucracies can‘t tolerate that.

CARLSON:  No, they hate them, of course.  But you‘d think—I mean, in a bureaucracy as vital to our nation‘s security as the CIA, you‘re think that would be tolerated maybe more than you‘re describing?

Is—is—don‘t know think, though, that there‘s a moral component to the capture and/or killing of Osama bin Laden.  I mean, leaving aside his day to days responsibilities in al Qaeda, whatever those may be. 

But isn‘t it kind of important to the message that it sends to the rest of the world: fool with America, as you did on 9/11 and die.”  Isn‘t it a good message?

SCHEUER:  It‘s a great message, and it should have been done long ago.  Mr. Clinton had the chance to do it eight or 10 times, and he refused to do it.  Certainly...

CARLSON:  Can you repeat that one more time.  I just want you to say that slowly so our audience picks up on what you just said.

SCHEUER:  Well, if you look at the 9/11 Commission, it‘s not noted very distinctly, but it‘s there.  Mr. Clinton had eight to 10 chances to either capture Osama bin Laden using CIA assets, or to kill him, using the U.S. military.

CARLSON:  Right.

SCHEUER:  And they refused to do it on each occasion. 

CARLSON:  I was aware of that.  I think most Americans are not aware of that.  For as much blame as we cast in the direction of this administration, it‘s wide, for example—you‘re not the only one.

Can you show me very quickly how close you think we may be to capturing and/or killing bin Laden.  Does it mean the hunt is over?  It can‘t mean that.

SCHEUER:  It can‘t mean that it‘s over.  No, sir, what it means is that the forces in Washington that support operations in the field have been diluted and spread very thinly.  I think we‘re not very close to capturing or killing bin Laden.  We‘re fighting an increasing war in Afghanistan, and the drain of resources to Iraq has also been very significant. 

CARLSON:  Boy, that‘s depressing.  Michael Scheuer, really, one of the few authorities whose word you can take at face value on this stuff.  Thanks a lot for joining us. 

SCHEUER:  Thank you, Sir.  You‘re very kind. 

CARLSON:  Still to come, Iraq‘s government is actually considering giving weapons to insurgents, in the hope they‘ll turn on foreign fighters who were once their allies.  What a crazy misfire on the war on terror.  Weird idea, anyway.

And more signs that Rudy Giuliani may run for president.  But is America‘s mayor the right man for the White House.  We‘ll debate that.  We‘ll be right back.

(COMMERCIAL BREAK)

CARLSON:  Still to come, bunks for drunks?  One city is offering brand new housing to homeless alcoholics, and not even asking them to get sober?  What kind of message does that send?

Plus, why one literacy group wants to change the way you spell in English.  Stay tuned.

(BEGIN VIDEOTAPE)

CARLSON:  Welcome back. 

Here‘s an idea.  Here‘s an idea, in fact, that‘s floating around in Iraq.  The new government is considering arming home grown insurgents on the theory that they would then turn against their former allies, foreign al Qaeda elements in Iraq. 

One Iraqi lawmaker who‘s in favor of the idea says, quote, “They claim they could wipe out the terrorists and work with the government.”  That‘s the claim.

The next guest says the plan might not work out that way.  He‘s the author of “Jawbreaker: The Attack on bin Laden and Al Qaeda”.  A personal account of the CIA‘s key field commander.  Gary Bernstein is also a former CIA special operations field commander.  He joins us in the studio.

Gary, thanks a lot for coming on.

GARY BERNSTEIN, FORMER CIA FIELD COMMANDER:  Pleasure being with you.

CARLSON:  What you think of—I mean, I think it‘s easy to dismiss, and I will dismiss this idea as crazy, but maybe it‘s not.  I mean, what do you think of that?

BERNSTEIN:  Well, first of all, governments need to be either expanding or absorbing militias, not arming them.

CARLSON:  Right.

BERNSTEIN:  You arm them, and you know, the cure may be worst than...

CARLSON:  Thank you.  I thought I was going insane.  I just wanted to run that by a rational, sober adult.

BERNSTEIN:  What we should be asking for is intelligence from those groups.

CARLSON:  Right.

BERNSTEIN:  They should be talking to them and saying, “Look, you want to join the government.  You want to help us.  Provide us with the intelligence.  Let us run the operations.  Join us, please, and try to absorb those individuals.  To get through Iraq, to do the things that we need to do to succeed in Iraq.  There‘s going to be negotiations.  There may have to be amnesties, and a lot of things that some people may be uncomfortable with. 

CARLSON:  Of course.  And I‘m not even arguing against them.  I‘m just wondering if there comes a time, and a time will come, when the policies of the new Iraqi government endanger our soldiers and Marines on the ground there, is there anything we can do about it?  Since we‘ve made so much noise about how the Iraqis are now in charge of their own country and democracy is great for its own sake.  I mean, can we step in and say, “No, sorry”?

SCHEUER:  I‘m sure that Ambassador Khalilzad will have detailed discussions with the Iraqi government.  He‘s an experienced diplomat.  He did Afghanistan before.  He did Iraq.  I have faith in him. 

CARLSON:  Yes.  But he doesn‘t have veto power, will he?

SCHEUER:  He doesn‘t have veto power.  But I‘m sure he can convince them.  We‘re going to be providing a lot of aid, economic aid over time. 

We provided for military support.  They‘re going to need our helicopters for...

CARLSON:  Yes. 

SCHEUER:  ... operations for years to come.  We‘ve got influence.

CARLSON:  Good.  I‘m glad.  I‘m glad.  We‘ve earned that influence as far as I‘m concerned. 

What about Guantanamo Bay?  There‘s been a lot of debate.  Even some people on the right, or even the far right like me, are wondering aloud if these guys are guilty of something, why aren‘t we trying them?  Who are these people?

SCHEUER:  One of the things is a lot of people making statements to the effect that the majority or a large number of those individuals at Guantanamo were picked up by accident or were, you know, taken there under some nefarious, you know, plan.

CARLSON:  Right.

SCHEUER:  I can tell you, having driven the first 130 of those terrorists out of Tora Bora into Pakistan and into the waiting arms of the Pakistani army, that they were terrorists.  They were enemy combatants.  They went to Afghanistan to conduct jihad.

CARLSON:  Right.

SCHEUER:  Before the war, thousands of people were entering Afghanistan to be heroes of the new jihad, and they lost. 

CARLSON:  Right.  This was the Arabs.  Yes.

SCHEUER:  And we captured them there.  They were taken out of the prisons, foreign fighters out of Shepargon (ph) out of Musar Sharif (ph), after the battle of Baer (ph). 

CARLSON:  Yes.

SCHEUER:  And some of those people are in Guantanamo.  And they deserve to be there, and they are terrible, terrible terrorists that are committed to killing us. 

Now, I think the people need to look back and remember 1992 in Israel.  1992 in Israel you‘ve got the Intifada.

CARLSON:  Right.  The Israelis expelled 400 Palestinians, some from the West Bank, some from Gaza.  People that had never met one another before.  They were expelled into Lebanon.  They lived in tent cities in Lebanon, and while they were there, the international community cried and whined and said, “Oh, they need to be put back.”

CARLSON:  Yes.

SCHEUER:  Well, that was the formation of Hamas.  During the six months that those people that were there living in those tent cities, they formed the nucleus of what would be Hamas.  They would conduct hundreds of bombings inside of Israel, kill 377 people, injured thousands. 

CARLSON:  Right.

SCHEUER:  We have to be careful that Guantanamo Bay right now isn‘t that in the future.

CARLSON:  I agree with that completely.

SCHEUER:  And that 10 or 15 years from now, we could have leaders of terrorist organizations will be alumni from Guantanamo or they will be presidents of countries in the Middle East. 

CARLSON:  Well, sure.  You look at the resumes of all these guys, from Zarqawi on down, they all have spent time in Jordanian prisons, Egyptian prisons.  You know, they all have spent time in prison.

But why shouldn‘t these guys be tried for the crimes they‘re presumably guilty of?

SCHEUER:  We need to be trying them, but we need to remember.  I think that the president now, because of what the Supreme Court has done, needs to work with the Congress.  And we need to find a way to deal with these individuals, and others in the future that we will pick up on such battlefields. 

This was the first war of the 21st Century where irregulars in large numbers came to fight.  We will have other conflicts like this.  We need to establish something now that will work.  I am sure the president will get down to work with the Congress on this.  That‘s what we need to be thinking about, defending ourselves first?

CARLSON:  Yes, I think that‘s a good point.  And spoken by a man who‘s actually met some of the people at Gitmo.  More compelling.  Gary Bernstein, thanks a lot for joining us. 

SCHEUER:  Pleasure being with you, Tucker. 

CARLSON:  Still to come, why one city is giving brand new apartments to homeless drunks.  We‘ll talk to one man who says every city ought to do it. 

Plus, observing the Fourth of July with flag burning?  Some people say it‘s great.  It‘s a great way to celebrate the First Amendment: torch Old Glory.  All that when we come back. 

(COMMERCIAL BREAK)

CARLSON:  Welcome back. 

Tonight‘s “Under the Radar” segment comes to us from Seattle, Washington.  That‘s where a first of its kind experiment is giving homeless drunks a place to live without requiring them to give up the bottle or to go to counseling. 

Seventy-five chronic public inebriates were offered homes in a new $11 million apartment building, paid for by taxpayers.  My next guest thinks the plan saves the government money in the long run and ought to be implemented everywhere across this country. 

Philip Mangano is the executive director of the United States Interagency Council on Homelessness.  He joins me tonight from New York City. 

Philip Mangano, thanks a lot for coming on. 

PHILIP MANGANO, EXECUTIVE DIRECTOR, UNITED STATES INTERAGENCY COUNCIL ON HOMELESSNESS:  Good to be with you, Tucker.

CARLSON:  Why should taxpayers pay for drunks to drink?

MANGANO:  Because in fact, taxpayers are already paying a very high premium for people to be on the streets.  Cost benefit analysis across our country is demonstrating that even though people are on the street, they look like they don‘t cost very much, but what we‘re discovering is that they‘re some of the most expensive people to the public per.  Studies literally all across the country, and they are demonstrating a cost of $50,000 and $130,000 for a person simply to be out on the street. 

CARLSON:  Well, it costs money because we have agreed to provide social services to these people.  I mean, it‘s a voluntary—it costs money because we‘re generous enough to spend the money on these people, to clarify.

But just because—OK, I actually buy your argument.  It probably is cheaper just to put these guys up in an SRO somewhere and, you know, give them money to buy Mad Dog all day.  But that sends a very clear message, and it is that taxpayers approve of your behavior.  And that‘s the wrong message, it seems to me.

MANGANO:  Well, actually, again, because these people are random ricocheting through the emergency rooms of hospital, through the acute side of behavioral health programs.  They take a disproportionate amount of law enforcement and court and incarceration expenses.  What the taxpayers discovered, and this is a conservative idea, that the cost of housing these folks with permanent supportive services that help these people get the recovery in their lives, that‘s a good investment. 

And in these programs, these folk pay rent.  This is not a free ride, but in fact, that program that you mentioned in Seattle of the 75 people that were housed, 72 are paying rent.

CARLSON:  Please, I mean, it‘s subsidized.  I mean, it‘s probably like Section 8 housing.  It‘s not like these buys are paying anywhere near market rates. 

So no, we‘re paying—we‘re paying for them to live there.  They may be adding to it.  But look, the point is, sitting around all day in a publicly subsidized apartment and drinking, that‘s kind of the dream for winos.  That‘s the dream, actually, for a lot of Americans.  I think Kevin Federline essentially does that. 

I mean, it‘s the kind of thing that a lot of people would do if they could.  Don‘t you see that it‘s wrong for hard-working, middle class Americans should be subsidizing other people‘s drinking habits?

MANGANO:  Well, the difficulty is the government is already paying a lot for these folks.  They‘re actually subsidizing a life on the street right now. 

The intent of this 1811 program in Seattle is to move people off the street to improve the quality of life for everybody, whether you‘re a pedestrian, a librarian, or a person working in the emergency room. 

CARLSON:  I‘m for that.  No, no, no.  I‘m for that.  I think that‘s thoughtful. 

But why not just say, “Look, if you‘re lying drunk on the street, you‘re a noncompass menace, almost by definition. You don‘t—you‘re not in control of your faculties.  We‘re taking you, as we would a schizophrenic, and involuntarily committing you in some residential treatment for a year.  Right?  But you don‘t get to drink, and then you‘ve got a shot, at least, of getting better. 

MANGANO:  Well, Tucker, as you probably know, that‘s been tried in a number of different cities, and unfortunately, lawsuits have been lost on that.  You can‘t coerce people to come in. 

As you know right here in the city that I‘m in, a mayor tried to do that a number of years ago.  That person was released back to the streets the next day.  The ACLU weighed in on behalf of the homeless person who was taken off the streets. 

CARLSON:  I remember that story well.  But doesn‘t—isn‘t the bottom line here, this is—there‘s a hopelessness at the core of this.  We‘re basically saying to these people, saying, look, you‘re never going to get better.  And if you wanted to, we‘re putting you in an apartment building full of a bunch of other drunks.  So there‘s no way you‘re going to get sober in that environment.  We‘re just giving up on them, and that‘s kind of depressing isn‘t it?

MANGANO:  I think to the contrary, Tucker.  What we‘re doing is we‘re understanding how costly these people are, and we‘re putting them in a place in the situation where they can receive the services they need to get into recovery. 

What service can be better delivered on the street or in a shelter, than it can be delivered in the stability of housing.  There is no service.  So when we‘re expending money already in terms of helping people go to detox, or get back on their meds if they‘re mentally ill, the appropriate nexus point for the delivery of those services is, in fact, in the stability of housing. 

It helps the person get in the right trajectory for recovery.  And it helps the taxpayer by being significantly less expensive.  I think that‘s a basic conservative principle. 

CARLSON:  I know, but it‘s just—it‘s just offensive to me, because it‘s like you‘re rewarding people for sitting around and drinking all day.  Something you know, I‘ve enjoyed doing at various points in my life, and nobody paid for me to do it. 

All right.  I‘m sorry, Mr. Guy, we are out of time. 

MANGANO:  You are hardly rewarded, just to let you know.  They‘re paying their dues.  They‘re going to be in the right direction.

CARLSON:  No, I know it‘s terrible to be in that building.  No, they‘re not.  Thank you.  You‘re a very able spokesman for your point of view.  And I appreciate your coming on.  Thank you.

MANGANO:  Good to be with you, Tucker. 

CARLSON:  Still to come, does America‘s mayor have what it takes to be America‘s next president?  Will Rudy Giuliani strike fear if the hearts of liberals if he runs in 2008.  We‘ll debate that next.

(COMMERCIAL BREAK)

CARLSON:  Still to come is infecting somebody with HIV a crime even if that person does not know he has at virus? 

Plus, a proposal to overhaul the English language and make your kids a lot dumber.  It‘s all that in just a minute, but first here is what else is going on in the world tonight. 

DAN KLOEFFLER, MSNBC CORRESPONDENT:  I am Dan Kloeffler, and here is what is happening:

The medical examiner says an autopsy shows Enron founder Kenneth Lay‘s fatal heart attack was caused by clogged coronary arteries. Lay died today while vacationing in his home in Aspen, Colorado.  He was 64 years old and he awaiting sentencing in October along with former Enron CEO Jeffrey Skilling.  Both were convicted in May of fraud and conspiracy in Enron‘s collapse.

NASA says inspections today show no major damage in to the space shuttle Discovery during yesterday‘s liftoff. Officials say that thermal tile filler was found poking about a half-inch out of Discovery‘s belly. But engineers do not think that is going to be a problem.  In the meantime Discovery is due to dock at the International Space Station Thursday morning.

And oil closes at a record high of $75.19 a barrel today. Gasoline futures also rose more than 5 cents a gallon. Analysts say it could all push average US pump prices past $3.00 a gallon by the weekend.  You are up to the minute, and now back to THE SITUATION.

CARLSON:  While most of the country spent the 4th of July eating burgers, watching parades, and launching fireworks, my next guest burned the American flag. Several of them, in fact.  Brent Adams organized the second annual old time American flag burning in Santa Cruz, California Monday night.  About 25 people showed up for the event.  Brent Adams joins us tonight from Mountain View, California. Thank you for joining us.

BRENT ADAMS:  You‘re welcome, thank you.

CARLSON: So in the story—I read about this. One of the participants said, and I am quoting “it seemed like a good idea to burn some flags just because we can”.  That seems like a particularly lame rationale for burning the American flag. Is that really the idea behind this?

ADAMS:  that might be a lame thing to say, I did not say that.

CARLSON:  Right, I know.

ADAMS:  I don‘t know if that‘s a good idea.  I guest the point that he was making, I think that was my partner, Sha Lar and he said that the point he is making is they are taking that right away, and you know how reporters can truncate and chop up our statements.  They are trying to take that right away, they were.  It went to congress and the flag burning amendment to the bill lost by one vote, so one of the reasons that we were out there, so since we can, let‘s exercise that right. 

CARLSON: But wait a second. You also have the right to swear at old ladies or scream obscenities at your children, and the Supreme Court has not taken those so-called rights away, but that doesn‘t mean you exercise them.  Just because you can do something doesn‘t mean you ought to do it.

ADAMS: That‘s true, that‘s. I am not arguing for screaming at old ladies, but I guess that‘s cool if you want to do that. For me...

CARLSON: but it‘s not cool. The thing is, it‘s not cool. And it‘s not cool to burn the  American flag either.

ADAMS:  I never would have burned the American flag, and I don‘t  take it lightly at all, I am against the war, I am against this political regime that we‘re under, but I never wanted to burn an American flag  until the moment that that I heard that they were taking that right away, which signaled to  me that the congressman who  were elected to represent me don‘t  understand the symbol that they  are sworn to protect. It actually symbolizes liberty...

CARLSON:  So why are you burning it? I don‘t get it, why are you burning it?  Think through what you are saying. If I were to say, you know what  I respect the Torah so much, I am going to douse in gasoline and set it on fire. Would that be an act of love for the Torah, or would it be an act of anti-Semitism.  Probably the latter.  I think that this is an act of aggression against America, obviously.

ADAMS:  That logic doesn‘t really work, see.  The reason that the Supreme Court said that the first  amendment speech protection  protects flag desecration, like  for instance, in the Vietnam War, some of those protesters burned  the flag and they saw that the war actually was wrong, so those people should have the right to protest their government by  burning the flag. No one is saying—burning the flag is  not the same thing as burning  the Torah.  But if you want to burn the Torah...

CARLSON:  Wait, slow down.  I don‘t know why it‘s not? 

ADAMS:  We could burn the bible if we get so upset.

CARLSON:  Absolutely and that would be an act of  hostility toward what the bible represents. I‘m merely saying that your point that “I burn the flag because I love America” is like what a wife-beater says to his wife, “I hit you  because I love you.” And it‘s a crock of mierde, buddy.

ADAMS:  That‘s not the same thing.  Apples and oranges.

CARLSON:  You burn the American flag, you hate America.

ADAMS:  That‘s apples and oranges.  Now, we‘re talking about free speech.  The protectors of our  constitution who are the  Supreme Court say that flag  desecration should be protected  as free speech. I am not saying that. Your Supreme Court of the  United States says that.  It‘s the constitution wreckers,  these republicans in congress...

CARLSON:  All right, all right.  You know what, they‘re not the...

ADAMS:  They are wrapping themselves in the American flag to try to get elected. 

CARLSON:  But you are the one burning the  flag. I don‘t think that I‘m going to win you over, but... 

ADAMS: I never wanted to burn the  flag until they tried to take  that right away from me. Now, ladies and gentlemen, it‘s time to burn the flag. 

CARLSON:  “The radical Right made me burn the flag.”  I love it.  Talk about playing the  victim. Thank you for joini g us any way, I appreciate it. 

ADAMS:  You‘re welcome, thank you.

CARLSON”:  Rudy Giuliani was known as  America‘s mayor, after the attacks of 9/11.  It appears he‘d now like to be known as  America‘s president.  Speaking at an event in the Hampton‘s over the holiday weekend, Giuliani said that he would run for  president in 2008 if he could  raise enough money. He certainly has the name recognition, but can the former New York City mayor overcome his very liberal  positions on the social issues: gay marriage, abortions, and gun control?  Can he win the republican nomination with his position on those issues?  For answers, we turn to Air America Radio show host, and our old pal, Rachel Maddow.  Rachel, welcome.

RACHEL MADDOW, AIR AMERICA RADIO HOST: Hi, Tucker, nice to see you. 

CARLSON:  I don‘t even know the answer to this  question, and I suspect, and I say this as actually kind of an attack  on the republican party, but I suspect Giuliani could get the nomination, because I think a  lot of republicans, certainly like a lot of democrats care in the end about winning  then they do their own principles, and they would nominate this guy because they  think he could beat Hillary, and I think that‘s a shame. 

Maddow: Well, I think that Giuliani  could get  the nomination, I think he would probably get ht nomination because even though on the social issues he doesn‘t hit all the right litmus tests - he‘s not anti-abortion enough, he‘s not anti-gay enough, all of  those things...

CARLSON:  He is as liberal as you are on those issues.

MADDOW:  But he is already changing on those, too.  His abortion position has been changing. He was previously—he did not have a  problem with so-called partial birth abortion, and now he has decided that he‘s against it.  On all those issues, major politicians in the Republican Party tend to blow in the wind a little bit, you know it as well as I do. 

And he‘s blowing in the wind on that already,  I don‘t think those social issues  will hold him back. I think the reason that he does have a good chance is I think that he is very much like bush. I think  that he would be a continuation  of the bush legacy type of candidate, and I think the republicans are likely to do that.

CARLSON:  I think that is going to be a disaster, I think a continuation of bush is  what we don‘t need, a liberal  masquerading rating as a conservative, which is what Bush is...

MADDOW:  A liberal? 

CARLSON:  Yeah, Bush has the most liberal foreign policy since Woodrow Wilson, I don‘t think there‘s anybody contesting that, we invaded another country... 

MADDOW:   Preemptive war?

CARLSON:  The idea that  -- look, the doctrine of preemptive war has been  understood by every civilization since the beginning of time.  That‘s not new.  The idea that you invade a country to save its people and to bring them democracy, that is kind of radical.

MADDOW:  That‘s not why we invaded Iraq.

CARLSON:  That is absolutely the rationale from the Bush administration.

MADDOW:  Come on, we invaded Iraq to make them  a beacon of democracy, you really believe that? That‘s why they went? No.  That‘s how they‘re justifying it to a liberal country. They didn‘t go for that reason.

CARLSON:  Actually, I don‘t think Americans buy that because they‘re not stupid.  I certainly don‘t.  I think more Americans—well, we‘re off of the Iraq thing.  I am just saying that  despite the left‘s attempt  to paint Bush as some kind of right-wing  maniac, he does not hew to conservative principles down the line at all. He is actually quite liberal in many  ways, and I think it‘s  destroying his party.

MADDOW:  the way Giuliani is like  bush, is all the important political reasons.  They have wrapped him up in 9/11, he has got this carefully-cultivated tough-guy image.  Like Bush he is much  more, and he has always been much more about PR than actual policy, and he has turned into a political...

CARLSON: He is pretty tough, you‘ve got to admit. 

MADDOW:   He has a  tough-guy image, just like Bush has a tough-guy image.  He also has all the cronyism and corruption problems that Bush has on the  bad side. They had to un-name the jail in Manhattan, the federal jail after Bernie Kerik this weekend. 

CARLSON:  Well, it‘s not his fault.

MADDOW:   His housing commissioner, the head of housing development—two  other corrections guys - all of these guys have pled  guilty to corruption in his  administration, he is just like  Bush.

CARLSON: Rachel, as usual, you dislike people for all  the wrong reasons. 

MADDOW:  Because of corruption?  Yes, I hate that.

CARLSON:  You know what, you‘ve got to spend more time around government.  We don‘t have a very corrupt system. I don‘t think Giuliani was an especially corrupt governor, rather, mayor, and I don‘t  think that‘s the issue. The issue is that he is a copy  of Bush in his beliefs, and in  the end beliefs are what matter, beliefs are what determine where the country goes, and I think that they  have believes that are too  liberal for the country. 

MADDOW:   One closing thought, Tucker.  I totally disagree with you, of course.  The one  reason that I think that Giuliani will not be president is because he is  physically hideous. 

CARLSON:  Well, I think he‘s a very handsome man.

MADDOW:   Of course you do.

CARLSON:  On that upbeat note, Rachel Maddow. Thank  you very much. 

MADDOW:   Thank you, Tucker.

CARLSON:  On your critique of the former mayor‘s physique.

While north Korea‘s missile test sparks a new global hot spot in the nuclear armed arena, half a century ago, there were only two contenders for that prize, the US and the Soviet Union, and neither nation was afraid to next it‘s ‘s nuclear muscle when political push  came to Cold War shove. In tonight‘s “Top Five,” some too-close-for-comfort showdowns that nearly led to a Superpower nuclear meltdown.

(BEGIN VIDEOTAPE)

CARLSON (voice-over): We are all familiar with Hollywood‘s frightening  scenario of nuclear Armageddon. 

UNIDENTIFIED MALE SPEAKER:  Two great cities may be destroyed, millions of innocent people killed. What do we say to them, Mr. Chairman?  Accidents will happen?

CARLSON: But what you may not know is how close life has actually come to imitating art.  In 1961, our nation‘s aerospace  defense command, NORAD for short , suddenly lost  touch with its missile centers.  Initially, the soviets were believed responsible and US military forces shifted to high alert. Eventually though, the problem was traced to a mere mechanical  failure.  Tensions between Washington and Moscow reached a boiling point in the early 1950s over US military intervention in Korea.  When the Soviets threatened to get involved, too, we responded with Operation Shakedown, a plan to nuke Moscow and Leningrad. Cooler heads prevailed, though, and the dispute was settled  without the use of nuclear  warheads.

By the mid-1980s, it was clear the  Soviets were losing their military grip in Afghanistan, partly due to clandestine assistance the CIA was providing Afghan rebels.  Moscow shot back with a threat of war against the  United States, but the Soviets  eventually backed down and in 1989 they pulled out  of Afghanistan completely. 

1979:  NORAS alerts the Pentagon that the Soviets have launched a  nuclear assault on the United  States. American military forces scrambled to High Alert immediately, but it‘s just another snafu.  Apparently a NORAD employee accidentally stuck a training video  into the communications system.

October, 1962: President Kennedy and Soviet leader Khrushchev bring their countries to the brink of nuclear annihilation in a frightening  face-off known as the Cuban Missile Crisis.

JOHN F. KENNEDY, FORMER PRESIDENT OF THE UNITED STATES:  It shall be the policy of this nation, to regard any nuclear missile, launch from Cuba against any nation in the Western Hemisphere, as an attack. 

CARLSON:  Washington wanted soviet warheads out of Cuba.  Moscow ordered the removal of American missiles from Turkey.  After twelve days of tense negotiations, both sides surrendered to one another‘s demands.  It doesn‘t get any closer than that, except in Hollywood.

(END OF VIDEOTAPE)

CARLSON (on camera):  Coming up on “THE SITUATION,”  five-year-old girls are  supposed to be playing with their dolls, not chasing robbers out of their homes in the middle of the night.  We‘ve got the amazing story of a pint-sized crime  stopper.  And don‘t forget “THE SITUATION” voicemail is  back tomorrow night.  The number, 1-877-TCARLSON, call and let us know what is on your mind.  We might play it on the air, so  be sober. We‘ll be right back.

(COMMERCIAL BREAK)

VANESSA MCDONALD, “THE SITUATION” PRODUCER: Coming up, another attack on the English language. We‘ll tell you why some schools  want to teach kids to spell  words incorrectly.  Plus, a five year-old girl confronts a blood-soaked burglar.  Guess who won?

CARLSON:  My money‘s on the little girl.  “THE SITUATION” is back in just sixty seconds. 

(COMMERCIAL BREAK)

CARLSON:  We turn now to a man who can make the absurd seem  reasonable and vice versa, and we mean that as a compliment.  He is “The Outsider.”  ESPN Radio and HBO Boxing host, Max Kellerman.

MAX KELLERMAN, “THE OUTSIDER”:  tucker, I am sorry about this, but I‘m chomping at the bit.  The flag  burning thing?  If the Torah or the New Testament were guarantors  of freedom of expression, then to burn them would be to honor them, but they‘re not.  The flag is. 

CARLSON:  It‘s not to honor it, though.  It‘s allowed, and I am not arguing it ought to be illegal,  I am merely arguing to torch it, to desecrate it, is not to honor it any more than  beating your wife is to honor  her 

KELLERMAN:  I‘m not responding, because we have to get on to the  topics. 

CARLSON:  I know, you‘re right.  I could not control myself.  All right.  Should people infected with the HIV virus be able to sue the  sexual partner who gave them  that virus?  In California, the answer now is yes. 

The California Supreme Court has  ruled that people who transmit  the AIDS virus can be held liable even if they did not know they had the disease.  The ruling stems from a case in which a woman sued her husband for giving her HIV. The man was having sexual relationships with men during their marriage. 

Well, if you can sue McDonald‘s for spilling coffee on yourself, it seems to me you ought to be able to sue someone for giving you a deadly disease, whether it‘s HIV or any other deadly incurable disease.  And Max, the point here is that - and I can‘t believe I‘m coming out for the right to sue someone because I  hate lawsuits, even in this  case - but it seems to me that  there has to be some sanction  against people who pass on a deadly disease. Sorry.

KELLERMAN:  I think the answer is you should not be able to sue McDonald‘s for spilling Coffee  on yourself, even if it‘s a billion degrees.  You spilled it on yourself. In this case, you know what the logical  extension of this, Tucker, is? That Ralph Camden could sue Ed Norton for high blood pressure.  I mean, any contact you come into with someone else, and it results in something bad for you, you can sue them.  That a parent can sue their kid for passing on a cold that they caught in the playground.  I mean, what happens? 

CARLSON:  Those are probably established in tort law  already, though I don‘t know but I  would assume that they are. But look, the point is, lawsuits such as this, especially ones for  damages are designed to send a message, to create a precedent for behavior in society.  Here is the message we ought to  be sending: if you think you may have this  disease, for god‘s sakes, don‘t  pass it on. And that‘s the message we haven‘t sent very well. 

KELLERMAN:  But the law says whether or  not you know, if you pass it on,  you can be sued based on your  past sexual history.  And then because of the way the  courts are, people can extort  money from their partners, from their wives or husbands, based on just the  threat of taking them to court and exposing their sexual  history in the public record. Not such a good idea.

CARLSON:  I hadn‘t thought that through.  Give me time to think about it Max, and we‘ll take this up again tomorrow.

Here is some twisted logic for you.  Teaching children how to spell words incorrectly will cause illiteracy rates to drop in this country?  Makes sense? Of course it doesn‘t make sense.  But the American Literacy Council  is just one of the growing lists of groups pushing for phonetic spelling to be  taught in schools.  The idea is if you just let kids  spell the words they sound, they  will learn faster.  It will be wrong, of course, but it will be faster.  The example is already in common use for spellings for night (“nite”), and throughout (“thru”). I am not sure I understand how this works, max.  Let‘s just learn the language that we have, it is an admirable language, an idiosyncratic language, but still a language worth learning.  And look, the idea that people  have trouble with the language,  so you change the language or  make it dumber. This is a subtext in 1984, which is a book worth re-reading, by the way, and...

KELLERMAN:  “Newspeak.”

CARLSON:  Exactly right, “newspeak.”

KELLERMAN:  You know what, Tucker? Here  is the argument.  There are so many Spanish-speaking people in this  country, which is—it‘s  phonetically spelled, it is going to make them easier for them to learn English. 

CARLSON (laughing): You have got to be kidding?

KELLERMAN:  I am.  I was just fishing, Tucker.  I am just kidding. 

CARLSON:  What you‘re doing, what you tried to do is hack me off.  “We‘ve got so many illegal aliens that we really ought to change the language. If not adopt Spanish as our national language, then just make our language so moronic that people who study can speak it...

KELLERMAN:  Have you ever read The Canterbury tales?  Have you ever read Chaucer?

CARLSON:  (unintelligible). Yes.

The point is, I had to  memorize that.  I hated it, but I did. 

KELLERMAN:  What language was that  written in?

CARLSON:  That was Middle English, I believe. 

KELLERMAN:  OK. Middle English.  Language evolves.  Tonight used to be hyphenated.  Language evolves. We just don‘t like it when it  evolves too fast.

CARLSON:  But this isn‘t evolution.  This is an artificial attempt to  create a dumber language, like Esperanto, and  like Esperanto and the metric system, it will go down in  flames

KELLERMAN:  Yes, I agree.  But dumber or easier to use? Or  are those things synonymous?

CARLSON:  They‘re synonymous.  And how do you spell that?  I won‘t ask. Max Kellerman.

KELLERMAN: Tucker Carlson.

CARLSON:  Thank you, Max. 

Still ahead on “THE SITUATION” tonight, we take you to the most disgusting 4th of July  barbecue you have ever  seen. Wait until you hear how many hot  dogs the legendary Kobayashi  put away  yesterday.  I get indigestion just thinking about it, but we have those numbers, and we‘ll give them to you in just a moment. 

(COMMERCIAL BREAK)

CARLSON:  Tomorrow on “THE SITUATION,” live at 11.  North Korea, the Stalinist hermit kingdom clearly wants war.  The question is, should we give it to them? We‘ll tell you.

WILLIE GEIST, MSNBC CORRESPONDENT:  Tucker, we‘re moving the show to the afternoon so we‘re going to take a nostalgic look back at all the late-night madness we just can‘t pull off anymore.  Think Mikey the Chimp.

CARLSON:  Holy smoke, Willie.  Don‘t miss that.  Tomorrow, 11pm eastern.

Ladies and gentlemen, do you  know what time it is? 

GEIST:  Yeah. 

I thought you were talking  to me 

CARLSON:  It‘s time for Willie Geist and “ The Cutting Room Floor.”

GEIST:  You finally got to use The Canterbury Tales. 

CARLSON:  Yes, I did.  Yes,  I memorized that in 1983 at St. George‘s School in Newport, Rhode Island, and I never had cause to repeat it in public until  tonight. 

GEIST:  And you thought school wasn‘t good. It paid off tonight, my man.

CARLSON:  In a very small way.  A very minor dividend, but, you know, welcome nonetheless.

GEIST:  Oh wait, one more reminder, let me just say one more thing.  Monday,  4:00 p.m.  and 6:00 p.m., new time, Monday.  That‘s July 10th.  We‘re on at 4:00 p.m. and 6:00 pm, by the way. 

CARLSON:  That‘s right.  From now on we are on at 4:00 p.m. and 6:00 p.m., mostly 6, but also 4. 

GEIST:  One more night of late night tomorrow night, and then we go to 4 and 6 on Monday. 

CARLSON:  Don‘t miss that show.

GEIST: Yes.

(BEGIN VIDEO CLIP)

CARLSON (voice-over) : Well, in what is becoming as much a Fourth of July tradition as fireworks and barbecues, Takeru Kobayashi won yesterday‘s Nathan‘s Famous Hot Dog Eating Contest in New York‘s Coney Island.  Kobayashi set a new world record by devouring 53  and ¾ hot dogs in just 12 minutes.  It was the Japanese phenom‘s sixth straight title in the event.  Much ballyhooed American Joey Chestnut - his real name, by the way - finished 2nd with 52 dogs.  .

GEIST (voice-over):  Tucker, we are looking at history.  History is not always pretty, as you know.  Sometimes it‘s about to throw up, like right  there.  But Michael Jordan won six titles. Kobayashi now has six hot dog titles. Equivalent athletes.

CARLSON:  You know what bothers me, though, is Michael Jordon was from this country.  Michael Jordan was—is as American  as anybody and that‘s why we love Michael Jordan. Because this Kobayashi character is from a distance foreign land, and he  comes here and shows up

GEIST:  That‘s what Joey Chestnut is  all about.  Next year.  He is an up-and-comer.  Keep your eye on Chestnut.

(END VIDEO CLIP)

CARLSON:  I agree.  Well, it‘s time.  It‘s time for the American to win back the title. 

While England‘s celebrated soccer team, led by international dreamboat David Beckham, disappointed its fans by losing to the underdog team Portugal in the World Cup last week—who writes these scripts? Willie, I think you do—there was perhaps no Brit more  disappointed than pop diva Elton John. During a concert the other night, Sir Elton called the British team a disgrace and said English fans have been, quote, “let down by the team and let down by people earning œ125,000 a week. 

GEIST:  Tucker, that‘s unfair.  We did not call him a  disgrace when he wrote that horrible song about Princess Diana.  He should not be  criticizing other people.

CARLSON:  I totally agree.  I never even mention his wig.

Forget that expensive alarm  system. If you really want to protect your home, just call  five year-old Jacqueline Castillo. The little girl chased a blood-soaked burglar out of her family‘s home in Colorado the other night.  As her family slept, she woke up to see  the crook standing over her.  She got out of bed, escorted the man to the  back door and said, “get  out of the house.”

When asked why she confronted the burglar, she said, quote, “because he can‘t put blood in our  house.” That‘s why.

GEIST:  Good enough reason as any, Tucker.  Why was he soaked in blood? I think burglary might have been the least of his problems.

CARLSON: I agree.

GEIST:  And turn in your burglar card if you‘re getting run off by a five year-old.

CARLSON:  And if you‘re bleeding at the scene.  Unless you‘re a hemophiliac or have some very good reason for bleeding on the scene...

GEIST: Bad burglary.

CARLSON:  I totally agree.  Willie Geist.

GEIST:  See you tomorrow.  Thank you sir.

CARLSON:  That‘s “THE SITUATION” for tonight.  Thank you for watching, we‘ll see you back here tomorrow, and after that remember, next week 4 and 6, that‘s us.  See you then.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

END   

Copy: Content and programming copyright 2006 NBC.  ALL RIGHTS  RESERVED. Transcription Copyright 2006 Voxant, Inc.  ALL RIGHTS  RESERVED. No license is granted to the user of this material other than for research. User may not reproduce or redistribute the material except for user‘s personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon NBC and Voxant, Inc.‘s copyright or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.

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