updated 1/9/2007 12:04:40 PM ET 2007-01-09T17:04:40

Guests: Jonathan Alter, Jack Jacobs, Ellen Tauscher, Amy Argetsinger

TUCKER CARLSON, HOST:  Greetings from south Florida.  And welcome to a brand-new week in the news. 

There were more rumblings from presidential contenders over the weekend thanks to old reliable senator Joe Biden. 

The House of Representatives took a day off today, but the country is, at the moment, primarily anticipating President Bush‘s speech on his new way forward in Iraq.  We now know that speech will be Wednesday night at 9:00 in the East. 

Here to try to make sense of and lend perspective to the president‘s plan and the possible opposition response, Jonathan Alter, “Newsweek” senior editor, and MSNBC military analyst and Medal of Honor recipient, retired Army colonel Jack Jacobs. 

Welcome to you both. 

JONATHAN ALTER, SR. EDITOR, “NEWSWEEK”:  Thanks, Tucker. 

COL. JACK JACOBS (RET.), MSNBC MILITARY ANALYST:  Good to be here.

CARLSON:  Jonathan Alter, are we certain that 20,000 troops is what the president is going to call for? 

ALTER:  No.  That‘s what the leaks are indicating in the press accounts. 

But, you know, we don‘t know for sure until he makes a speech. 

He has talked about a series of benchmarks.  We don‘t know exactly what those benchmarks are. 

There is a lot of internal debate about what the numbers should be on

troops.  John McCain thinks it should be much higher than 20,000.  But

there are a lot of people within the military who think that our readiness

and Colonel Jacobs can speak to this—is not such that we could afford to send more than 15,000 or 20,000. 

CARLSON:  Colonel Jacobs, what is the maximum, do you think, the U.S.  military could spare at the moment in Iraq? 

JACOBS:  Well, it depends on what you‘re willing to give up and how long you‘re talking about deploying them to Iraq.  I mean, the fact is that we could probably deploy 100,000 troops, 150,000 troops.  If we‘re willing to take people out of Korea, where we have 37,000 troops, turn—turn sailors into infantrymen and trainers of Iraqi ground units and so on, we could contribute large numbers of troops.  But, of course, we‘re not going to do that. 

And as John was mentioning, readiness is the thing that‘s vitally important here.  Part of the problem around the world is that we have denigrated our capability worldwide for other missions because we have made such a commitment to what‘s taking place in Iraq.  And on top of that, the equipment is not doing very well. 

The Army needs $75 billion right now to fix all the stuff that‘s broken.  So I—despite the fact it would take—it really would take a large number of troops to really do the job over an extended period of time, I think a small number of troops, 20,000 to 30,000 or so is probably all that‘s going to be coughed up. 

CARLSON:  John, I mean, I have heard what Colonel Jacobs just said repeated by a lot of people knowledgeable about the situation in Iraq, that 20,000 troops is likely to be not large enough to do much of anything. 

Where did the president arrive at that number?  Do you have any idea? 

ALTER:  You know, I don‘t know.  I guess it‘s probably General Petraeus‘ recommendation, because he‘s the one who‘s holding the cards now, you know, within the military.  General Casey has been pretty thoroughly discredited.  They‘re even dumping on him anonymously in the newspapers. 

And so I assume that he‘s listening to General Petraeus, but that‘s just my assumption.  I don‘t know for sure where he is getting the numbers from. 

But it does make you wonder, Tucker, why chase good men after more good men in a mission that doesn‘t really seem to at those troop levels have much prospect for success?  It does get you back to that old John Kerry line from when he testified during the Vietnam War—who wants to be the last man to die for a mistake? 

JACOBS:  You know...

CARLSON:  Wait, hold on.  For our viewers who haven‘t been following this as closely, sum up, if you would, briefly what we think we know about what the president is going to say the day after tomorrow in his speech about this. 

ALTER:  Well, as I understand it, he is going to basically say, look, the stakes here are so high that we simply cannot give up on Iraq.  And in order to, you know, provide some of the security that‘s necessary for political change—and he will stress political and economic reform—we need what he calls a surge in order to secure Baghdad and the Anbar region. 

And then at that point, he will—you know, he will pivot in his speech and he‘ll talk about the reconstruction efforts and what some people are calling a new deal for Iraq to, in other words, give some of these unemployed young men on the street who are causing so much trouble a paycheck with some of these economic projects. 

But Tucker, that‘s going to be very controversial, because you‘ve already got people like Rahm Emanuel who are saying, hey, wait a minute, before we start addressing human needs and economic needs in Iraq, let‘s look at the United States. 

CARLSON:  Yes.  What about that, Colonel Jacobs, this war on poverty, this Lyndon Johnsonesque idea that‘s been leaked to the paper as President Bush paying for a jobs program for indolent Iraqis? 

Explain what that might mean in real terms in Iraq.  You have been there a lot.  What would that mean.

JACOBS:  Well, part of the problem has been that we have always viewed—certainly the administration has viewed the exercise in Iraq as strictly a military exercise.  And we all know that the military is a blunt instrument.  It‘s one of the things that actually Petraeus has been harping on for some time and says that you can‘t just—in this environment, unless you‘re going to have an objective of unconditional surrender, throw all of your might against the bad guys and kill all of them and all of that stuff, if you‘re actually going to fight something less than total war, that you have to include somebody in addition to the Defense Department. 

The Defense Department can‘t do it all.  You have to have diplomacy involved.  You have to have economic development involved. 

Indeed, when Petraeus was commander of the 101st Airborne Division, when he took over his area at the Battle of Baghdad, one of the centerpieces of his small success was the integration of economic development in his area of operations.  And he maintains and there are lots of people who maintain that the only way we‘re going to get out of there at all is if we make it easier for the government of Iraq to not only control the security situation, but the economic situation as well.  But we‘re now three years later than we were before. 

CARLSON:  Exactly.

JACOBS:  It‘s much more difficult now than it was back then. 

CARLSON:  Exactly.  Yes, I think that‘s right.

ALTER:  You know, the problem here, Tucker, is that you just—you‘re trying to get the toothpaste back into the tube.  And it‘s just awfully late to be doing this, as Colonel Jacobs indicated. 

So you really have to wonder—you know, the definition of insanity is doing the same thing over and over again, expecting a different result.  Unless we‘re really going to go with the McCain plan, really ramp up, go up to, you know, 75,000, 100,000, try to make a really big difference, how can we expect a different result there? 

So it might be time—and I think you‘re going to hear Joe Biden and people like this talking about this—to rethink it in a more profound way, talk about partitioning Iraq, bigger ideas that might actually move us forward. 

CARLSON:  On the other hand, you never know.  I mean, having covered Bush, you know this is a president who delights in fooling people in surprises, in coming out with ideas that people didn‘t anticipate.  Whether they‘re good ideas or bad, it doesn‘t matter.  But, I mean, there may be things in this speech that we don‘t know about now. 

So we‘ll see. 

Coming up, what can Congress do to affect President Bush‘s war policy?  Plenty, according to the new speaker of the House, Nancy Pelosi, including using the power of the purse.  Would Democrats actually dare to de-fund this war? 

Plus, what did NBC News ever do to Bill O‘Reilly?  His hair is on fire and he can‘t stop talking about NBC.  We‘ll try to understand what he‘s talking about when we come back. 

(COMMERCIAL BREAK)

CARLSON:  House Speaker Nancy Pelosi says President Bush is going to have to jump through hoops to get funding for more troops in Iraq.  Does she control the purse strings now?

That‘s coming right up.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER:  If the president wants to add to this mission, he is going to have to justify it.  And this is new for him, because up until now, the Republican Congress has given him a blank check with no oversight, no standards, no conditions. 

(END VIDEO CLIP)

CARLSON:  That was the new speaker of the House, Nancy Pelosi of San Francisco, yesterday morning voicing her resistance to the president‘s expected proposal of an increase of 20,000 troops in Iraq.  She and some fellow Democrats are even going so far as to hint they might try and stop further funding for this war, but is that even possible, de-funding a war?  Can you do that? 

Here to help us with that question, Democratic congresswoman from California, Ellen Tauscher. 

Congresswoman, thanks for coming on. 

REP. ELLEN TAUSCHER (D), CALIFORNIA:  You‘re welcome, Tucker. 

CARLSON:  Can you do that?  Can you de-fund a war?  Can you actually stop the president in his prerogative of sending more troops? 

TAUSCHER:  Well, the president as the commander in chief has the authority to do anything he wants.  Clearly, he‘s done it for quite a long time without our authority and without the American people supporting it. 

The real issue really is, are we going to support an escalation of this war?  And I will tell you that Democrats certainly will not.  And the issue of funding is an interesting one. 

You know, up until now, the Republican Congress that went away last week has asked not one single question of the president, has not made the president put the funding for Iraq, which is about $8 billion a month now, inside the current budget. 

CARLSON:  No, you‘re right.  Wait, but hold on Congresswoman.

TAUSCHER:  But we did that last year.

CARLSON:  I agree with you.  OK.  But wait a second.  You just began your sentence by saying the president can do whatever he wants. 

What‘s the point of having a Democratic Congress then, if you‘re starting your term, starting this new Congress by conceding you‘re powerless?  Why would I vote Democrat?  I mean, what‘s the point? 

TAUSCHER:  Well, first of all, we‘re not powerless, but the president‘s authority as commander in chief is one thing.  Our authority as the Congress and certainly as the majority is another.  And for the first time, this president will be held accountable for the money that he‘s asking for to prosecute the war in Iraq. 

CARLSON:  OK.

TAUSCHER:  Up until now, the Republicans have given him whatever he wanted.  He has had effectively two checkbooks, the regular budget of about a half a trillion dollars a year for the defense budget...

CARLSON:  Right?

TAUSCHER:  ... and kind of an Enron accounting checkbook full of supplementals that are without anybody being able to audit them, understanding where the money is going to, to the tune of half a trillion dollars for the war in Iraq and Afghanistan and the war on terror.  Most of that money going to Iraq, by the way. 

And what we can do in the Congress is, for the first time, hold the president accountable for the mission the troops are on.  We are deeply committed in the Congress and certainly as Democrats to protecting the troops.

CARLSON:  Well, wait, Congresswoman.  I‘m sorry, I‘m missing—I‘m missing the meat of what you‘re saying here. 

How exactly will you hold the president accountable?  The president gets up on Wednesday night at 9:00 and says, I want 20,000 more troops for Iraq, it‘s going to cost this much money.  I call on Congress to give me that money. 

What are you going to do about it?  I mean, are you not going to give him the money?  I mean, what specifically can you do to, as you put it, hold him accountable? 

TAUSCHER:  Well, as everyone has said, we‘re not going to deny our troops the money it takes to sustain them and keep them protected and to keep them secure.  So this is not about withholding money for the troops, but this is certainly about holding the president accountable if he intends to escalate this war and ask for more money to do it. 

In this new budget coming forward, he is going to ask for $100 billion for 2007, which brings the total to almost $200 billion for Iraq.  He has never been asked one single question about where that money is going or how he is going to use it. 

We have hearings on the House Armed Services Committee where I serve as a subcommittee chairman on Thursday with Secretary Gates.  Second Rice is coming up to the Hill to be able to answer questions.

CARLSON:  Right.

TAUSCHER:  So we‘re going to do everything we can as the Congress to make sure that we‘re asking all the right questions and hold the president accountable for not only the money, but to make very clear that we‘re with the American people.  We don‘t want an escalation to this war and more troops added. 

CARLSON:  OK, but what does that mean?  Congresswoman, I don‘t understand what that means.  OK, so you‘re going to have hearings.

TAUSCHER:  Yes.

CARLSON:  And you‘re going to have Bush administration officials come up, and you‘ll give them a hard time.  And good for you.  And I think you should, and I‘m all totally for that. 

But if they give you answers you don‘t approve of, you‘re still not really going to do anything about it, are you?  I mean, the bottom line is, you give the president the money he needs to prosecute this war.  Is there any chance you won‘t give him that money? 

TAUSCHER:  Well, I certainly think there will be questions.  If this is about escalating the war and if this is about more money to do that, I think there will be lots of questions about that. 

As I said, we are in a bind.  We are going to support the troops, especially the troops that are on the ground in Iraq, 160,000 of them.  And we‘re not going to deny the money it takes for them to be sustained and to be secure and to have the kind of things that they need to be home sooner and safer.  But at the same time...

CARLSON:  So you‘re saying at the outset—hold on.  You‘re saying at the outset, even before this debate has actually begun, you don‘t know what the president is going to say on Wednesday, but you are conceding even before you know that you‘re not going to cut off funding for the troops.  Since you have already conceded that, you don‘t really have any leverage, do you?  And if you do, what is it? 

TAUSCHER:  Well, we have the leverage of the ability to be the Congress.  And we certainly have future funding abilities to look at what he is going to ask for, if he‘s going to add more troops, what more money he is going to ask for. 

We‘re certainly committed to the troops on the ground.  But if he is going to add more troops and needs money to do that, I think that‘s a different story. 

And I think that the Congress is going to be much more involved in oversight, in investigations, and making sure that we get straight answers out of the administration.  I don‘t think anybody wants to escalate this war that has been bad policy, that has not brought us the kind of peace and security in the region that the president promised. 

CARLSON:  OK.  So you think—so you think—just cutting through it all, you think there is a chance Democrats, the newly elected Democratic majority, would say to the president after this Wednesday‘s speech, I‘m sorry, we will pay for the troops in Iraq, we‘re not paying for an additional 20,000 or 30,000, or however many thousand?  We‘re not paying for that. 

You think there is a chance Democrats will say that? 

TAUSCHER:  If the president asks us for money for more troops to go into Iraq, I certainly won‘t support that.  But I think we have to listen to what the president has to say, see what he says on Wednesday. 

I understand it‘s going to be a lot more comprehensive than just adding a few -- 10,000 or 20,000 troops.  It‘s going to include some things about the region and about some Iraqi things that they have got to do to make sure that they are stepping up to the plate. 

We‘ll see what the president‘s rhetoric is, but I think that the president has to understand that we understand the mandate we got from the voters in November, and it is to bring our troops home sooner and safer.  And it is about responsibility for the Iraqis.  And if that includes adding more troops, we want to know what the mission is and how we make sure that our troops are not just targets on the ground in Iraq. 

CARLSON:  All right.  Congresswoman Ellen Tauscher, Democrat of California.

Thanks a lot.  I appreciate it. 

TAUSCHER:  Thank you.

CARLSON:  Coming up, he may look like a Ken doll, but he doesn‘t want people to see him that way.  Not surprisingly.  Presidential hopeful former senator John Edwards takes to the Internet and assumes the roll of a regular guy—in jeans, a work shirt, on his private plane. 

Plus, Bill O‘Reilly lambastes NBC News and lashes out against Andrea Mitchell in the process.  How come?  We‘ll tell you.

Stay tuned.

(COMMERCIAL BREAK)

CARLSON:  Wednesday night it is.  That‘s when President Bush will be rolling out his new Iraq plan in a White House speech.  The plan is expected to include a 20,000-troop surge, goals for the Iraqi government, and a jobs program for Iraqis.  It will all cost hundreds of millions of dollars. 

But House Speaker Nancy Pelosi is coming out swinging.  She says she and other Democrats in the Congress will not give the White House “a blank check” for the ramping up war effort. 

Can she actually do that, withhold the check? 

Back with us, our panel, Jonathan Alter, “Newsweek” senior editor, and MSNBC military analyst and retired U.S. Army colonel Jack Jacobs.

Welcome to you both. 

Jonathan Alter, I‘m sure you heard my interview with Ellen Tauscher.  Nice woman, congresswoman from California.  Wouldn‘t answer the question, what are you going to do, or the more profound question, why did people vote Democrat anyway last month or last November?  I mean, they voted Democrat because they are dissatisfied with the war.  Democrats come to power and announce they can‘t do anything. 

ALTER:  Well, you know, Nancy Pelosi answered your question over the weekend.  She is to the left of Ellen Tauscher, who didn‘t vote for her—who didn‘t vote for her candidate, Steny Hoyer—John Murtha, excuse me.  Tauscher voted for Hoyer, just to get our congressional politics straight here for a second. 

So, Tauscher and Pelosi are not exactly on the same page.  And Pelosi and Joe Biden are not on the same page. 

Pelosi is basically saying, look, you can draw a distinction between not funding the surge and continuing to fund the troops on the ground right now, staying loyal to those troops already in place.  Whereas Joe Biden is saying, that‘s like taking apart a Tinker Toy, he said on “Meet the Press.”  You can‘t do it. 

So we‘re going to see, Tucker, in the next couple of weeks this distinction between Democrats who say, hey, our hands are tied, we really—we really can‘t cut the purse strings, and Pelosi and those on the left in the Democratic Party who will say, we can cut the purse strings when it comes to this surge, surge protection. 

CARLSON:  Is there—is there, Jack Jacobs, a way to disentangle the funding?  I mean, could you isolate the money the president is hoping to spend on new troops?  Not fund that and not hurt in the process troops already on the ground? 

JACOBS:  Well, in terms—technically, in terms of appropriations, you could do that, because—depending upon how the bill was worded, because there is a separate line item for each funding item.  But the Republicans are not going to permit that to happen when they submit the—when they submit the appropriations in any case. 

At the end of the day, I think Joe Biden is right, because no matter how hard the Democrats try to make it look like they are for the troops but they are against the surge, at the end of the day, the Republicans are saying, well, just go ahead and make my day.  Keep talking about that, because when ‘08 comes around, I‘m going to be able to point to the Democrats and say, you need to get the Republicans—keep the Republicans in the White House and put the Republicans back in charge in the Congress because this is what the Democrats did, they wouldn‘t fund the troops on the ground. 

The public is not going to be able to make that distinction. 

ALTER:  Right.  And the Democrats, a lot of Democrats, are really worried about that. 

CARLSON:  But wait a second.  Wait, hold on.  I‘m sorry, I hear—let me just interject and just say to you, Jonathan Alter, everybody says I understand that as a political calculation.  On the other hand, isn‘t there a role for courage in this, and don‘t Democrats have the mandate they need to make a decision that difficult? 

Sure, the Republicans will demagogue it.  Everybody demagogues everything in Washington.  But that‘s not the point.  The point is, they were elected to do something about the war and they are not doing anything. 

ALTER:  No.  Well, first of all, they just came in, Tucker. 

CARLSON:  Right.

ALTER:  So I think they will do something about it.  They will de-couple these—the current troops on the ground from the escalation. 

They will be able to do that, particularly in the House.  It‘s much dicier to do it in the Senate, but remember the appropriations begin in the House.  So they can start that process. 

Pelosi has indicated she‘s going to do exactly what you‘re suggesting.  There is a lot of support out in the country for doing that because, remember, Tucker, this war is tremendously unpopular. 

George W. Bush is at 30 percent in the CBS poll.  That is down in Nixon land during Watergate.  You have a state like Utah, the reddest of the red states, where support for his policy is at 40 percent. 

So the Democrats have a lot of running room here to try to not just ask tough questions, but actually affect the policy.  And I think they are going to use it. 

CARLSON:  Jack Jacobs, in the minute we have left, sum up what you think, based on your conversations, some of them presumably private with the people who run the U.S. military, what do they think of President Bush? 

JACOBS:  Well, I mean, they‘re not particularly enthralled with his capabilities as a worldwide strategist, but at the end of the day, what he is going to be talking about in a couple of days is going to be to—a lot of them have bought on to.  And that is this: Insinuate a relatively—relatively small number of troops into specific areas in Baghdad.  Secure them, and instead of, like, doing what they did in the past, getting out of there, holding on to it. 

Hold on to it long enough to increase their capability economically in

these neighborhoods in Baghdad.  And furthermore, long enough to bring

qualified Iraqi units—for example, the ones up near Tikrit, for example

bring them down and replace American units on site in Baghdad so that the United States can then say everything‘s OK.

ALTER:  They want to put Kurds in there.  They want—they want us to interject our young men and women in this civil war.  And then the other idea which seems kind of wacky is to bring the Kurds down there and put them between the Sunnis and the Shiites.  That doesn‘t exactly sound like a recipe for winning this war, Tucker. 

CARLSON:  I don‘t know.

JACOBS:  Yes, that‘s not going to work.

ALTER:  So we‘re sort of piling up one bad idea on top of another, and I think the American people have kind of had enough, and they are not going to respond well to the president unless he comes up with something that‘s pretty creative. 

CARLSON:  All right.  Well, we‘ll see.  We‘ll see if Democrats have the courage to parlay that sentiment into action. 

Coming up, we weren‘t 12 hours into the so-called first 100 hours before the House of Representatives took a day off.  What were they thinking?  We‘ll try our best to figure it out when we come back. 

Plus, it‘s not only a great way to make money, it‘s the American way.  But when the failed CEO of Home Depot gets a check for $210 million for getting fired, is it time to do something about executive compensation? 

We‘ll bat that around.

Stick around.

(COMMERCIAL BREAK)

(MARKET REPORT)

CARLSON:  If you‘re watching this show, it means you can afford cable television, which means the free market has been relatively kind to you.  There aren‘t nearly as many channels available in China, for instance, or in Africa.  However, there are limits, and former Home Depot C.E.O. Bob Nardelli (ph) may have exceed them when he got a 210 million dollar severance package last week for getting fired. 

Joining me now to talk me down from my rage about all of this is our pal CNBC‘s Charlie Gasparino.  Charlie, welcome. 

CHARLES GASPARINO, CNBC:  Thanks for having me.  I can‘t believe I am going to have to defend 250 million dollars.  But go ahead, give me the question. 

CARLSON:  It‘s worse than that.  You are the most capable defender on this subject I have ever heard, but here‘s where it gets worse, OK, so the normal justification for this is, C.E.O. pay, apparently excessive C.E.O.  pay.  As well, look what the guy did for the company.  Let‘s take a look at what Mr. Nardelli did for the company. 

In 2001 the stock price 45.56.  In January 1st, 2007, 41 dollars and 7 cents.  It went down, and yet he gets 210 million.  Why? 

GASPARINO:  Let me make two pints here, number one, you have a contract, right?  I‘m assuming you have a contract. 

CARLSON:  Right. 

GASPARINO:  I have a contract with CNBC.  Suppose I came in in the

middle of your contract, and said you know Tucker, you‘re doing a lousy

job, ratings are down, I‘m going to cut your pay.  What would you say to

that?  I mean, the problem with this is

CARLSON:  If that happens—hold on, I can tell you, that happens all the time in television, yes.  But that happens to people all the time in TV. 

GASPARINO:  It happens when their contract renews, that either they don‘t renew it, or you have to take the pay cut.  But in the middle of the contract, you‘re not going to accept lower pay.  That‘s essentially what happened here.  Bob Nardelli had a contract.  The contract stipulated certain things, including apparently a golden parachute if they whacked him.  And you know what, unless Bob Nardelli does something criminal, unless he violates, and you know this, a morality clause in his contract, he gets caught going to strip clubs or with a prostitute which didn‘t happen, or gets caught doing something illegal, they can‘t violate the contract. 

And let me tell you something, it makes me really uncomfortable having to defend someone who gets paid a lot of money when the stock price goes down, but a contract is a contract in my view.  I don‘t want my pay lowered in the middle of my contract, neither do you, and Bob Nardelli has that right too. 

CARLSON:  Well, see, here is what I don‘t understand.  I think you‘re absolutely right that Nardelli isn‘t doing anything he is not legally entitled to do, and he hasn‘t broken any laws.  I‘m wondering why the company itself would right a contract like this, and why shareholders aren‘t doing anything about it? 

GASPARINO:  You see, now that‘s a better question.  You put Home Depot into context.  When Bob Nardelli took over, it was at the height of the bubble.  What did you say the stock was at, 50 dollars a share about?  That‘s in 2000, right?  That was the height of the bubble. 

CARLSON:  It was—yes. 

GASPARINO:  Give or take a few bucks, that‘s where it was.  That was the height of the stock market bubble.  If you notice, in March, 2000, the stock market bubble collapsed.  The markets went down.  And Bob Nardelli was sitting there with a company whose stock was deflating, much like George Bush was when George Bush took over as C.E.O. of the country, president of the country, the economy was floundering, because listen, we had a stock market bubble that occurred under Clinton, where it was taking effect when he first started. 

Now let me make one other point, Bob Nardelli came in at a very rough time at Home Depot.  Yes, the stock kept going down, but the company faced a lot of problems.  He did a pretty good job dealing with those problems.  There was a great analysis in the “Wall Street Journal,” I believe on the editorial page recently, which talked about how earnings have been up.  This is a company that makes a lot of money. 

I think the problem with Bob Nardelli was essentially public relations.  He did a lousy job communicating with the press.  He had no clue about what it was like to defend his pay amid all this stuff.  Listen, last year, when the corporate governance activists started questioning his high pay, given the fact that the stock kept going down, Bob Nardelli hid under a rock.  He didn‘t come and out and say, hey, this is why it‘s occurring.  This is my contract.  This is all the good things I did.

He didn‘t meet with investors.  As a matter of fact, I think he ducked out of the shareholder meeting.  So there are—

CARLSON:  But it‘s deeper than that, though, don‘t you think?  Aren‘t we as—look, Bob Nardelli is a symptom, rather than a cause, I don‘t mean to pick on him.  I‘m sure he is a decent guy.  But the point is there needs to be some connection between merit and reward.  When someone makes 210 million dollars, it‘s good for our society.  But point to something that he did that‘s worth 210 million dollars. 

GASPARINO:  You should blame the board.  The board brought him in and said lesson, we have a problem here.  By the way, the board is paying him to do a good job running the company.  Part of doing a good job is yes, keep the stock price up, but it‘s also to run the company in a much better way.  I can tell you, knowing something about Home Depot, it wasn‘t in great shape when he took over.  He took over at a market top. 

He took over when there were problems with earnings, problems with stores, problems with the management of the company.  The guy that had it before was one of the founding partners, a guy named Arthur Blank.  I think he is also the owner of the Atlanta Falcons.  Arthur Blank, from what I recall, wasn‘t doing a very good job managing the company.  They brought in one of the top managers in the country, a guy named Bob Nardeli, who was number two over at G.E., was essentially in the race to secede Jack Welsh.  He lost out to Jeff Immelt (ph).

Bob Nardelli was a very good manager.  They brought him.  They had to pay him a lot of money because he was a good manager, to come in and, from I understand, fix a bad situation.  His problem was he came in at a market height.  That‘s number one, but number two, he just didn‘t do a good job defending himself, especially in recent months when these corporate governance activists—let me tell you something, these weren‘t the Fidelity—

(CROSS TALK)

GASPARINO:  Let me make this point.  These weren‘t the Fidelity investors, the big mutual funds.  These were union activists who began using him as a sort of example of overpaid executives.  Let me say something, it‘s not a complete absurd case.  The stock did go down under Nardelli.  I‘m sure there are many things he could do well.  But for him to be blamed for all this is ridiculous.  That‘s what I have to say. 

CARLSON:  I‘m a good manager.  No one is paying me 210 million dollars.  Charlie Gasparino, CNBC, thanks a lot Charlie. 

GASPARINO:  Thank you.

CARLSON:  Well, back again, everyone‘s favorite million dollar men, Jonathan Alter, “Newsweek‘s” senior editor and MSNBC military analyst and retired U.S . Army colonel, Jack Jacobs.  Let just me ask you one thing quickly, John, about this corporate compensation question.  This is something that—as much as I‘m appalled by this, offended deeply and I think it‘s terrible for America, it would be worse, I believe, if Congress attempted to regulate anyone‘s pay.  But they are going to try, aren‘t they? 

ALTER:  No, actually, Barney Frank and the other members of Congress who are in charge are not going to try to do that in any kind of a crude way, but there are some things they can do a little bit with the tax code, and on some of the deductibility issues and that kind of thing, that might at least send a signal that society doesn‘t approve of this. 

You know, Charlie Gasparino, good friend of mine, colleague, but I think he‘s kind of missing the boat on this, which is that this is obscene.  It‘s like, you know, the Supreme Court justice Potter Stewart, who said you know pornography when you see it.  This is corporate obscenity.  It‘s disgusting.  There has to be a connection between performance and compensation, and when that connection is severed, whether it‘s the board‘s fault, whoever‘s fault it is, we need to bring down a strong social sanction against the people who do that. 

We need to say to these boards, if you write these contracts that don‘t connect performance to compensation, we‘re going to throw you out as shareholders.  We‘re going to have shareholder reverse and all that rest.  And get people riled up about this.  Instead of rationalizing it and justifying it.  Maybe not in Washington, but in shareholder meetings and securities analysts and the rest of the financial community should be up in arms about this, because it‘s just wrong.  Sorry to be up on my high horse about it. 

CARLSON:  No, I‘m on mine, too.  We should both dismount.  Jack Jacobs, in addition to being a decorated soldier and a veteran of corporate America, you‘re also a student of human behavior.  And I wonder what you make of the meltdown occurring in public of Bill O‘Reilly.  I want to play you a clip.  This is an interview that he did with NBC‘s Andrea Mitchell.  It comes after a number of years of needling from Keith Olbermann.  Keith Olbermann has set out to drive Bill O‘Reilly crazy, and apparently he succeeded.  Take a look at this clip. 

(BEGIN VIDEO CLIP)

BILL O‘REILLY, FOX NEWS ANCHOR:  You‘re entitled to your public and private beliefs, you are.  And I don‘t have any quibble with that.  But if it‘s all one way, if it‘s all of them across the board, then I‘m saying where is the diversity? 

(END VIDEO CLIP)

CARLSON:  So Andrea Mitchell goes on.  That doesn‘t quite capture the intensity of this interview.  She goes on his show to sell her book.  Right in the middle of it he starts going crazy about NBC News is bad.  Here‘s my question to you, if year after year you‘re being needled, right, so Keith Olbermann is trying to get under his skin, aren‘t you wise to resist and try to ignore it and not take the bait? 

JACOBS:  Well, it depends on what you‘re after.  If you‘re after people standing around a water cooler saying that you, Bill O‘Reilly, are really a cool guy and you‘re even tempered and intelligent, and all the rest of that stuff, well, of course you hold back.  But at the end of the day if what you‘re after is viewers, then you—then you go by the old adage that says that any publicity is good publicity, and the more of a lunatic you act like, the greater the likelihood is that people will be watching you next time around.  So there is a little bit of showmanship in all of this. 

ALTER:  He has got a book out, Tucker. 

CARLSON:  I think in the end it helps MSNBC.  I think Bill O‘Reilly has helped this network quite a bit, Jonathan Alter, don‘t you?  And why don‘t the people at Fox, who are very smart, and some of them—no, I‘m not a huge fan of the network, but some of them are decent, and some of them actually are intelligent people.  Why don‘t they say to Bill O‘Reilly, stop, don‘t respond. 

ALTER:  They can‘t.  they tried to say that to him, Tucker, when he sued Al Franken.  Do you remember that whole thing?  They said to him you have no case, Bill.  Don‘t sue.  It just gives Al Franken publicity.  He wouldn‘t listen.  He is like the Macy‘s Day blimp, balloon in one of those parades.  He is so full of himself, he is so inflated.  It‘s coming out of his ears, he is so full of it, that they can‘t possibly bring him down to earth. 

So, he‘s going to do this and it‘s going to help Keith.  I think it‘s great for “COUNTDOWN,” it‘s great for MSNBC.  He keeps feeding it.  His numbers keep going down.  Keith‘s numbers keep going up.  The status quo is great for MSNBC. 

JACOBS:  You know, this has developed over a period of time.  This developed over a period of time when O‘Reilly first popped on Fox.  I think it was 18 months to three years before he had any ratings that were larger than those that are usually reserved for watching a test pattern.  Roger Al (ph) stuck with him because he thought eventually the bombast would take hold.  It did, but, you know, there is a finite life to everything.  It is great news for Keith and for MSNBC. 

CARLSON:  Yes, and I think for the American people.  I wonder what you think, Colonel Jacobs, of the entrance into the presidential race of Senator Joe Biden of Delaware who, whatever his faults, he ran before in 1988, and because of a plagiarism scandal had to get out of the race, he is also a compulsive talker, but he is smart.  Do you take him seriously as a foreign policy thinker? 

JACOBS:  Well, yes, you have got to take him seriously as a foreign policy thinker, but at the end of the day, I‘m not entirely certain that that‘s enough to get him anywhere near the nomination.  I‘m reminded of Dwight Eisenhower.  I remember seeing the Republican National Convention.  I think it was the first convention that was ever broadcast on television.  I was relatively young, but old enough to watch it and remember what took place.  Eisenhower‘s campaign slogan wasn‘t Vote for Ike because he is going to do great things for the American farm subsidy program, or Vote for Ike because he won the Second World War. 

It was I like Ike, and nobody gets voted for unless people like him.  And at the end of the day, I don‘t think that people necessarily will do anything more than respect his foreign policy analysis.  I don‘t think they necessarily will like Joe Biden. 

CARLSON:  It‘s the old Al Gore problem.  Colonel Jacobs, Jonathan Alter, thank you both.  I appreciate it. 

ALTER:  Thanks, Tucker. 

CARLSON:  Coming up, what do pizza and illegal immigration have in common?  How about an American pizzeria accepting pesos instead of dollars for a slice?  Is nothing sacred?

Plus, the Bush twins have been spotted in and around the city of Washington.  If you live vicariously through the fabulous lives of celebrities you will never meet, who doesn‘t, stay tuned for the gossip next. 

(COMMERCIAL BREAK)

CARLSON:  We may have temporarily relocated to Florida.  That does not mean we‘re not staying on top of the water cooler talk swirling around the Capitol.  And for that I am joined by Amy Argetsinger.  She is the woman being the Reliable Source, the “Washington Post‘s” universally read gossip page.  Amy, good afternoon.  What‘s going on back there? 

AMY ARGETSINGER, “THE WASHINGTON POST”:  Oh, all kinds of stuff.  Basically, Monday is one big hangover from this weekend‘s parties.  Two big events, one, of course, was the inauguration of Mayor Adrian Fenty, at which there emerged some complaints later.  People said that you had to wait in line for a full hour.  Then, once you got in, there was no place to sit down.  All I can say is that whoever told these people that inaugural balls are supposed to be fun, they should know better than that. 

CARLSON:  That‘s a very good point. 

ARGETSINGER:  The night before, of course, was the big Gilbert Arenas birthday party.  This is the Wizards‘ star who is turning 25.  He threw himself a ginormous party at Love nightclub.  Estimates are that it could have cost 1 million dollars, 2 million dollars.  I was there.  Frankly, it could have cost 5 million dollars for all I know.  It‘s hard to tell you exactly who all was there, lots of V.I.P.‘s.  But basically this is a nightclub that‘s about the size of a Sam‘s Club, but it‘s spread out over five different levels. 

You keep getting text messages from people saying oh, my god, I hear that Halle Berry is here.  By the time you run over there, they say well, maybe it wasn‘t her. 

CARLSON:  That sounds like hell. 

ARGETSINGER:  I kind of enjoyed myself.  Free food, free booze. 

CARLSON:  Good for you. 

ARGETSINGER:  I don‘t know.  Lots of people who are two feet taller than me.  It was all a good time.  Anyway, so come in on Monday, here we are.  It‘s the feeling like, you know, when you have been to visit your one grandmother for Christmas and then you come home and you find that you still have presents from your other grandmother.  That‘s what it was like today when we had sightings of the Bush twins appear. 

The Bush twins have mostly been absent from D.C. this past year.  Barbara has moved up to New York City where she is working at the Cooper Hewitt Design Museum.  And Jenna, of course, has shipped off to Panama where she has been working with UNICEF, from what we understand.  So we‘ve been without them all these months. 

Now they are back in town, they were back at their old haunts.  They were sighted at Smith Point in Georgetown on Friday, and then at Town Hall, just up the hill on Saturday.  You know, it‘s good to have the Bush twins back in town. 

CARLSON:  Are they followed around by paparazzi?  Is there paparazzi, are there paparazzi in Washington? 

ARGETSINGER:  There really aren‘t that I know of.  I mean, you would think you would at least have amateurs with the cell phone cameras trotting around behind them, but not so much.  The best we can do is have our tipsters let us know when and where they are.  But no, the paparazzi do not turn out.  There are relatively few pictures of Jenna.  In fact, all of last year, the big story was that Jenna had cut her hair, but were there any pictures?  No.  Our fans, our readers, they let us down again and again.  They call us, they tell us, I saw Jenna and her haircut, and it looks great, but they never get a picture. 

CARLSON:  And when the Bush twins go out, considering that for years there were so many Letterman and Leno jokes about their drinking, is it a sober outing now? 

ARGETSINGER:  The girls have really grown up.  People still joke about what bar flies they are, which really isn‘t the case.  Even when they were living in D.C., the past couple of years, they are more subdued.  They are 25 now.  Same age as Gilbert Arenas.  Gilbert Arenas doesn‘t go out to the clubs and neither do the Bush twins that much.  Jenna, of course, has had the same boyfriend for about two years.  So, I think they may be more of a Netflix type couple, staying home or going out with small groups of friends. 

Barbara has been out and about on the Manhattan club scene a little bit, but they are quieter, you don‘t hear any stories of misbehavior really anymore.  Which is too bad. 

CARLSON: That is good news.  Amy Argetsinger, a genuinely Reliable Source.  Thank you, Amy, I appreciate that. 

ARGETSINGER:  Thank you. 

CARLSON:  Well bad smell isn‘t normally news in New York City, so what was the foul odor that swept over the city and caused a momentary panic today?  Was it simply blowing in from New Jersey?  We‘ll look into it when we come back.

(COMMERCIAL BREAK)

CARLSON:  Welcome back.  Coming to you  live from South Florida.  We go north, way north, to NBC headquarters where the fort is being held down by Willie Geist.  Willie.

WILLIE GEIST, MSNBC CORRESPONDENT:  Hello Tucker.  We miss you up here my friend.  I would be remissed if I didn‘t mention the 72nd birthday today of one Elvis Presley.  Born on this day in 1935.  Elvis, I know you‘re watching down in Rio with (INAUDIBLE) and Tupac.  Happy birthday big guy.

Well Tucker, being a New Yorker myself, I can tell you it takes an exceptionally bad smell for people in the city to actually take the time to complain.  That happened this morning when the odor of gas swept over much of Manhattan. 

Several buildings were evacuated and part of the train system was temporarily shut down as the smell was investigated.  Air quality tests showed nothing irregular, and the Department of Homeland Security reports no indication of terrorism.  Seven people were, however, admitted to New Jersey hospitals, with problems related to the odor. 

Tucker, I don‘t know if you remember, like, about a year ago, year and a half ago, we had this same problem, but it was a syrupy odor.  The whole city smelled of syrup for a couple days.  It was fantastic.  Now we‘ve gone to the other extreme.  And it‘s kind of deadly and terrible, I guess, right?

CARLSON:  It smells like Brussels Sprouts boiling.  Are we sure this is actually happening though?  I mean, I remember with the Syrup story there was the implication maybe it was mass hysteria.  Does it really smell worse than usual?

GEIST:  You know what, I have to say, I live far enough north where I didn‘t get to smell it.  I didn‘t smell it this morning, but people downtown said yes, it actually did smell.  And the syrup thing was for real.  I can tell you, for about three or four days it smelled delightful.  It smelled like a Hershey‘s factory.  It was fantastic and we were all furious when they too it away, whoever they is. 

But I will say, it takes a lot to get a New Yorker‘s attention about a smell.  It had to have been legit.

Tucker, I‘ve got a story that‘s really going to warm your heart hear.  An American pizza chain called Pizza Patrone, which caters to Hispanic communities in Texas, Arizona, California, Nevada and Colorado, today began excepting Mexican currency, pesos, at all of its restaurants.  A restaurant spokesman said quote, we know that a large number of our customers travel back and forth between the U.S. and Mexico, and consequently have some Pesos left in their pocket, end quote.  Cashiers will use currency converters to make the transactions. 

Pizza Patrone plans to use the program through February but may extend it further.  We are becoming the European Union, Tucker.  This is unbelievable.  What do you think about this? 

CARLSON:  But they won‘t take the Euro. 

GEIST:  No they won‘t take the Euro sadly.  But I do have some Pesos left over from Spring Break a couple years ago I‘d like to use, if possible. 

CARLSON:  Yes, it would be nice to have some distinction between the U.S. and Mexico.  That‘s kind of what I‘m hoping for.  

GEIST:  It‘s a slippery slope, I know, but that‘s OK.  There‘s one other thing I want to mention to you Tucker.  You know that whole hundred hours thing from the new Democratic leadership?  It‘s supposed to start today.  Well, it turns out we are going to start that whole thing tomorrow, because of the National Championship game tonight, which pits Florida against Ohio State, one against two. 

It is a big game.  The Republican leader John Boehner called Steny Hoyer and asked that he please delay the debate and votes on these important subjects, like 9/11 recommendations, the minimum wage, Medicare, prescription drugs, delay that until Tuesday, so that they can fly out to Arizona and watch the game.  Hoyer agreed, and that‘s exactly what they‘re doing.  So the reason the House is not in session, college football.  So we know what is really important in this country, Tucker. 

CARLSON:  Yes, you know what Willie, I‘ll take Florida in the upset. 

That‘s my prediction. 

GEIST:  That means Ohio State is sure to win. 

CARLSON:  That does it for us.  Thanks Willie.  Willie Geist. Thanks for watching.  Up next, “HARDBALL” with Chris Matthews.  We‘ll see you back here tomorrow.  Have a great night.

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

END   

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