updated 10/3/2007 11:36:53 AM ET 2007-10-03T15:36:53

Guests Jeremy Scahill, Drew Pinsky

KEITH OLBERMANN, MSNBC HOST (voice-over):  Which of these stories will you be talking be tomorrow? 

With 69 percent of Americans demanding cuts in funding for the war in Iraq, with 46 percent of Republicans demanding those cuts, three Democrats suggest a way we all put our money where George Bush‘s mouth is.  The Obey-Murtha-McGovern Iraq Funding Tax, 12 to 15 percent tax surcharge on the wealthy, 2 percent on everybody else.  The White House scoffs. 

(BEGIN VIDEO CLIP)

DANA PERINO, WHITE HOUSE PRESS SECRETARY:  Do they wait for al Qaeda wave a white flag and then those taxes are going to go away? 

(END VIDEO CLIP)

OLBERMANN:  The White House faults into action on the latest Blackwater disaster in Iraq.  Blackwater chairman telling the Waxman Committee his people abide by the same rules of engagement the U.S.  military does, except when he is wrong about that. 

(BEGIN VIDEO CLIP)

ERIK PRINCE, CHAIRMAN & CEO, BLACKWATER, USA:  Yes.  They are essentially the same. 

UNIDENTIFIED CONGRESSMAN:  OK.  So you have? 

PRINCE:  Department—sorry, Department of Defense rules for contractors.  We do not have the same as a U.S. soldier at all. 

(END VIDEO CLIP)

OLBERMANN:  The comedian Rush Limbaugh scandal.  Now it proves he doctored his phony soldier comment for the armed forces radio version of his show.  And Congressman Udall introduces a resolution to honor the armed forces and condemn Limbaugh. 

The vets at votevets.org are taking this personally. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED VETERAN:  Rush, the shrapnel I took to my head was real.  A traumatic brain injury brain injury was real and my belief we are on the wrong course in Iraq is real.  Until you have the guts to call me a phony soldier to my face, stop telling lies about my service. 

(END VIDEO CLIP)

OLBERMANN:  Sex, lies, and videotape in the case of Britney Spears. 

Responded to the loss of custody of the kids by going to a tanning salon. 

And now has to fend off a report that there is a sex tape of her out there. 

And the so-called Dick Cheney pipe dream—war with Iran. 

(BEGIN VIDEO CLIP)

STEVE COLBERT, HOST, “COLBERT REPORT”:  That is completely unfair.  Everyone knows Dick Cheney‘s fondest pipe dream is driving a bulldozer into the “New York Times” while drinking crude oil out of Coleman‘s skull. 

(END VIDEO CLIP)

OLBERMANN:  All that and more, now on “Countdown,” 

(on camera):  Good evening.  Amid reports tonight that the first State Department report about the alleged killing of Iraqi civilians by Blackwater contractors was written by a Blackwater contractor, a sobering conflation of the old Benjamin Franklin bromide about nothing being certain except death and taxes.

Our third story on the “Countdown,” three Democrats proposing something that might actually stop the madness, an Iraq war tax. 

The burgeoning Blackwater scandal in a moment.  First the proposed answer to the president‘s four and a half year fraud—the idea that the war in Iraq would pay for itself.  A war surtax to shift the latest $190 billion Bush price tag for the fiasco from the vague future of the national debt to the immediacy of the national spotlight.  Congressman David Obey, Jack Murtha and Jim McGovern, to add 2 percent to the tax bill of middle income tax payers and 12 to 15 percent for wealthier Americans. 

House Speaker Nancy Pelosi against the Iraq tax just as she is opposed to the draft, she is opposed to a war surtax.  On that last part, Ms.  Pelosi would seem to have a lot in common with White House Press Secretary Dana Perino. 

(BEGIN VIDEO CLIP)

PERINO:  We‘ve always known that Democrats seem to convert to type.  They are willing to raise taxes on just about anything.  There is no need to increase taxes.  The president has shown how, if we prioritize, if we get the spending bills done in a clean way, we can have a surplus in our budget by 2012.  We don‘t see any need to raise the taxes. 

(END VIDEO CLIP)

OLBERMANN:  2012?  Twenty thousand twelve?  Of course, without Speaker Pelosi‘s support it unlikely the surtax would pass.  Even if it did pass, Ms. Perino‘s box would veto.  That kind of inaction, responsible for the deep dissatisfaction most Americans now feel for the president, his policies and for lawmakers of both parties.

Most Americans against fully, granting the president‘s $190 billion demand for the coming year of war in Iraq and Afghanistan; 43 percent of those surveyed by the “Washington Post” looking for sharp reductions in war spending; 23 percent want partial cuts.  Only 27 percent believing all money should be approved. 

The president‘s job performance ratings at only 33 percent, tying his career low in this poll.  Democrats in Congress 38 percent approval and Republicans in Congress at 29 percent. 

Let‘s turn to our own Howard Fineman, the senior Washington correspondent at “Newsweek” magazine. 

Howard, good evening. 

HOWARD FINEMAN, SENIOR WASHINGTON CORRESPONDENT, “NEWSWEEK”:  Good evening. 

OLBERMANN:  Let me get this straight.  Most Americans oppose fully funding the war.  Most Americans don‘t believe Congress has gone fall enough to opposing the war.  But the Senate, Democrats included, vote 92-3 to pass a defense policy bill authorizing another $150 million for Iraq and Afghanistan? 

FINEMAN:  I think that‘s 150 billion, Keith. 

OLBERMANN:  Thank you for correcting me on that. 

FINEMAN:  I think the Democrats are not paying attention to other numbers in that poll, including ones about their own party‘s attitudes.  Four out of five Democrats, I think, are very unhappy with the Democratic leadership‘s lack of leadership on the war.  They want the Democrats to go full bore against the president. 

I was talking to Democratic leaders this afternoon on the Hill.  And they told me they are going to make their big push against the war and spending for the war in January and February.  That‘s when they think Republicans are going to begin peeling away from the president as the election season begins. 

They sounded, for all the world, to me like some kids on the school yard who are afraid to go out there and confront the big guy and keep telling themselves, well, we are going to take them on next semester. 

OLBERMANN:  By that point the Wig party and the Federalists may be the number one and two parties in this country. 

FINEMAN:  True. 

OLBERMANN:  This Murtha, Obey, and McGovern surcharge, this is what, a poison pill to make people awaken to the financial reckoning here? 

FINEMAN:  I have got to hand it to the Democrats.  They should have the upper hand on the politics of the war.  If you look at that poll, there is only one area where the Republicans are even in the ballgame and that is on the rather abstract question of dealing with terrorism.  But, as far as Iraq is concerned, the American people want the troops to begin coming home.  There couldn‘t be anything more clear.  The Democrats just can‘t seem to find a way to do it. 

And I have got to say, given their history, politically, calling for a tax increase, while it‘s a great idea on paper, politically, is not the way to force George Bush‘s hand.  They need to vote to deny the funds.  And they are simply afraid to do it. 

OLBERMANN:  Dana Perino on the subject of tax, making it sound like American taxpayers now were not paying for the war in Iraq, as if it were falling out of the sky somehow.  Could that be the scariest parts of this tax surcharge proposal in terms of the White House?  That as much as it might recoil against the Democrats—oh, the tax-and-spend Democrats, blah, blah, blah.  Americans might sit there and say, wait a minute, we are paying for this, those are $190 billion of our dollars and if we are not paying for it, then the next generation of Americans will. 

FINEMAN:  Well, the Democratic leaders I talked to said their theory is they are going to match up the continued war spending against the domestic needs that are not being met, whether it‘s for expansion of health care for kids, whether it‘s for more education spending, money for roads and bridges, you name it, they are going to try to weigh those in the balance. 

You know what‘s going to happen, Keith?  The Congress is going to vote money for those programs, in some cases, perhaps, over a presidential veto, and vote more money for the war at the same time.  And you wonder why the dollar is declining in value on the world stage. 

OLBERMANN:  Howard Fineman of MSNBC and “Newsweek,” always good value for money as they say.  Thank you. 

FINEMAN:  Thank you, Keith. 

OLBERMANN:  In an administration in which the White House wrote the purportedly independent Petraeus report about Iraq, it should come as no surprise that CNN is confirming a talkingpoints.com revelation that the State Department‘s initial report of last month‘s incident in which Blackwater guards were accused of killing Iraqi civilians was written by a Blackwater contractor.  That does not make the story any less egregious. 

The chairman of Blackwater, Erik Prince, defending his private security firm, rejecting charges that his employees acted like a bunch of cowboys, immune to legal prosecution, while protecting State Department employees in Iraq.  He went so far as saying Blackwater has, quote, “acted appropriately at all times.” 

The chairman of the House Oversight Committee, Henry Waxman, wondering aloud if they are acting as Blackwater‘s enabler, especially in light of a memo released by Mr. Waxman revealing that, of the 195 escalation of force incidents, Blackwater has been involved in, in Iraq since 2005, Blackwater security forces fired first in more than 160 of them.  In other words, 84 percent of the time. 

Mr. Prince admitting his forces do not need to abide by the same rules of engagement the U.S. military does. 

(BEGIN VIDEO CLIP)

PRINCE:  Every time they launch on that mission, before they go in the morning, they get the mission brief and what they are going to do, who they are protecting, and where they are going, the intelligence, what to be on the lookout for, where have there been particularly bad areas in the city, and the use of force continuum, those rules of engagement. 

UNIDENTIFIED CONGRESSMAN:  Use of force, is that dictated by the Department of State. 

PRINCE:  Yes. 

UNIDENTIFIED CONGRESSMAN:  You use their rules of engagement—the commonly used term? 

PRINCE:  Yes, sir. 

UNIDENTIFIED CONGRESSMAN:  That‘s similar to the Department of Defense rules of engagement? 

PRINCE:  Yes.  They are—they are essentially the same. 

UNIDENTIFIED CONGRESSMAN:  All right.  OK, you had...

PRINCE:  Sorry.  Department of Defense rules for contractors.  We do not have the same as a U.S. soldier at all. 

UNIDENTIFIED CONGRESSMAN:  OK. 

(END VIDEO CLIP)

OLBERMANN:  Surprise, Congressman. 

Let‘s turn to Jeremy Scahill, investigative reporter with “The Nation” magazine and author of “Blackwater, the Rise of the World‘s Most Powerful Mercenary Army.” 

Mr. Scahill thanks for your time tonight.

JEREMY SCAHILL, AUTHOR & INVESTIGATIVE REPORTER, “THE NATION:  Thanks, Keith. 

OLBERMANN:  Give me your reaction to this idea that the first State Department report on the Blackwater shoot-up in Baghdad was written for the State Department by a Blackwater contractor named Darren Banner?  I mean, this is beginning to sound like Milo Minder Binder from “Catch-22” who privatized the Army. 

SCAHILL:  Blackwater USA is the official mercenary company of the Bush administration.  It‘s like an armed wing of the White House.  It‘s headed by a politically connected guy with very close ties to the Bush administration, major campaign contributor to Republican causes and the radical religious right. 

Specifically, about this revelation that a Blackwater operative may have written the initial State Department report, let‘s remember that the administration and Blackwater keep telling the American public and the world lets the State Department do the investigation and make a decision.  What does it say if Blackwater itself is the entity that‘s writing its own investigation? 

OLBERMANN:  To these hearings today, the chairman, Mr. Prince, claiming that Blackwater has acted appropriately at all times.  Given the shooting by a drunken Blackwater employee after the Christmas party 2006, that 28 Blackwater staffers in Iraq have been fired for weapons-related incidents and 25 more have been sacked for drug and alcohol violations, this is—his claim of appropriately at all times, is that impossible, if not blatantly false. 

SCAHILL:  It‘s patently false.  The fact is that Blackwater for four years of U.S. occupation of Iraq has been at the center of escalation of blood and violence and conflict in that country.  Its misconduct has had a blowback effect on the official U.S. military forces in the country.  It‘s had a devastating impact on Iraqi civilians, who have so often lost their lives.  Perhaps most importantly, it‘s fueled the Iraqi resistance that still haunts U.S. Iraqi occupation forces to this day. 

More than any other private actor in the operation of Iraq, Blackwater has had negative impact on events on the ground.  I should say the most negative impact is on the Iraqi civilians, who suffer every day at the hands of these cowboys. 

OLBERMANN:  The commanding general of U.S. forces in Iraq, Lieutenant General Ray Odierno, told an audience at the National Press Club today that the recent formation of a committee—a commission to investigate the private security contractors in Iraq, Blackwater and the other ones, is overdue.  Is there conflict between military forces in Iraq and the mercenary forces?  And could the military have found that the cowboys are making it tougher for their guys to get their jobs done and keep themselves alive. 

SCAHILL:  Absolutely.  We have been hearing consistently for years now from military commanders that forces, like Blackwater, are hurting the counter insurgency efforts in the words of one commander.  U.S. military officials say they have been run off the road by Blackwater contractors.  Also the fact that these guys get paid exponentially more than regular soldiers has impact on the morale of the official duty military. 

I think we are going to be hearing a lot more of that kind of commentary coming from the military. 

The fact that this commission was proposed by Jim Webb and Claire McCaskill, freshman Senators, is a commentary on the lack of action that the Congress has taken on these private forces deployed by the Bush administration. 

OLBERMANN:  You and I spoke last month about the other kind of killing here, the monetary killing that Blackwater has made off these extraordinary contracts in Iraq, about a billion dollars thus far.  He was asked about Blackwater‘s earnings today and Mr. Prince replied, “We are a private company and there is a key word there, private.” 

Could money be ultimately how Blackwater winds up getting punished?  Is there a way for us, the taxpayers, to wind up not paying off on those contracts? 

SCAHILL:  Ultimately, I think what the Congress needs to do is what it has failed to do for four years and that is examine a system in this country where  corporate profits have been linked to escalation of war and conflict.  And Blackwater has been incredible beneficiary of this system that encourages these countries to have a bigger footprint.  The worse it gets in Iraq the better for Blackwater‘s business. 

OLBERMANN:  Jeremy Scahill, author of “Blackwater.”  Great thanks once again for your time, sir. 

SCAHILL:  Thank you, Keith. 

OLBERMANN:  Comedian Rush Limbaugh caught doctoring the tape in which he calls servicemen who protest the war phony soldiers.  A soldier injured in Iraq blasts Limbaugh in a new ad.  Limbaugh makes fun of the injuries.  And breaking details tonight, Limbaugh‘s employers have just responded to the criticism. 

And putting the fun in fundraising.  The fun is when you move from second place to first not in the ballot box, but in the cash box.  You are watching “Countdown” on MSNBC. 

(COMMERCIAL BREAK)

OLBERMANN:  First, Rush Limbaugh denied troops who questioned the war, their status as real soldiers.  Yesterday some Democrats in Congress stuck up for troops and criticized Limbaugh.  Tomorrow, in tonight‘s fourth story on the “Countdown,” a new voice enters the debate—real soldiers.  Preview of the striking video in a moment. 

First the background.  Comedian Rush Limbaugh has stuck to the standard scripture for fringe extremists, never apologize, attack anyone who criticizes you. 

This time, Limbaugh claims that Senate Majority leader Harry Reid, who went to the floor yesterday asking Limbaugh‘s boss to repudiate his comments, took those comments out of context.  It is the standard claim, debunked easily enough by listening to it.  Something Limbaugh has denied his own listeners the ability to do when he later played an edited clip in his defense. 

We will play the unedited clip in a moment.  When you hear it, keep in mind, Limbaugh later claimed he was referring to one soldier whom he did not mention until two minutes after the clip you will hear has ended. 

And the caller he speaks with, specifically says prior to this clip that he called as a, quote, “retort to the previous caller,” an antiwar Republican military veteran. 

Keep in mind, also, that you will hear Limbaugh agree with a definition of real soldier, which confirms the obvious interception of the term phony soldier. 

(BEGIN VIDEO CLIP)

LIMBAUGH:  What is the imperative for pulling out?  What‘s in it for the United States to pull out?  They—I don‘t think they have an answer for that other than, well, we‘ve got to bring the troops home?

MIKE:  Yeah, and, you know what?

LIMBAUGH:  Keep the troops safe or whatever.  It‘s not possible intellectually to follow these people.

MIKE:  No, it‘s not.  And what‘s really funny is they never talk to real soldiers.  They like to pull these soldiers that come up out of the blue and stuff. 

LIMBAUGH:  The phony soldiers?

MIKE:  The phony soldiers.  If you talk to a real soldier, they‘re proud to serve.  They want to be over in Iraq because they understand their sacrifice.  And they‘re willing to sacrifice for their country.

LIMBAUGH:  They joined to be in Iraq.

(END VIDEO CLIP)

OLBERMANN:  Real soldiers joined to be in Iraq. 

Tomorrow, a real soldier responds in this TV ad from the group votevets.org. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED VETERAN:  More and more troops and veterans of Iraq believe George Bush‘s military policy has been a disaster.  I‘m one of them.  Rush Limbaugh called vets like me phony soldiers for telling the truth about Iraq. 

Rush, the shrapnel I took to my head was real.  A traumatic brain injury was real and my belief that we are on the wrong course in Iraq is real.  Until you have the guts to call me a phony soldier to my face, stop telling lies about my service. 

(END VIDEO CLIP)

OLBERMANN:  Today, Limbaugh compared that soldier to a suicide bomber, claiming other people strapped lies to him and sent him out.  In another, example of Mr. Limbaugh‘s unceasing tone deafness about this country and its people, that soldier‘s real injuries, suffered in service to our country, were caused by a real suicide bomber. 

Let‘s turn to a different radio voice, Rachel Maddow, whose program airs on Air America radio. 

Rachel, thanks for your time tonight. 

RACHEL MADDOW, RADIO SHOW HOST, AIR AMERICA:  Hi, Keith. 

OLBERMANN:  Whatever you feel about the war, denying soldiers their status as soldiers, and then condescending to one who almost died fight the war you claiming to support, using as metaphor the literal thing that almost killed him, this outrage seems to beggar description even when we are talking about an idiot as transparent as Rush Limbaugh. 

MADDOW:  Using the suicide bomber metaphor is unbelievable.  I‘m a talk radio host and I know that in talk radio we absolutely traffic in outrage.  Most shows will have something outrageous on them every single day.  Tonight I spent a lot of time talking about the hooker-related filings in the Duke case.  That‘s outrageous.  That‘s what talk radio is. 

There‘s two things that make this different for Rush Limbaugh.  One is the fact that he was part of the right wing and Republican pile on, on MoveOn.org, for their ad criticizing General Petraeus and his history of stretching the truth about Iraq. 

But the other part of this, secondly, that MoveOn pile on created an overt standard for congressional intervention or congressional condemnation for certain speech about soldiers.  Rush has just barreled head long into that. 

OLBERMANN:  And the water carrier announcement from last November—he has branded himself as what he is.  We have also discussed this, this exchange.  The question was in response to a Republican caller who said I am against the war.  And just as Limbaugh denied that soldiers are real soldiers if they are against or even opposed to some of the policies regarding the war, he also said the caller couldn‘t possibly have been a Republican because he opposes the war. 

Do you understand that any of the thinking that might be clouded in here, hidden in here, this obsession that denying that real soldiers, real Americans, real Republicans might have, gee, real disagreements about this? 

MADDOW:  Well, it reminds me of one of the more recent Ann Coulter outbreaks that we had in the last couple of years.  When her last book came out, you will recall that she had said that she was very angry that 9/11 widows were among the people criticizing the Bush administration.  She wasn‘t angry because of the arguments that they were making.  She was angry because of who they were, because it, at least momentarily, interrupted her strategy of fighting. 

And the strategy that I think a lot of right wing commentators use, which is not to take on the argument, but instead personally attack the people who are arguing against you. 

So, Ann Coulter, for a minute, felt like she couldn‘t attack the 9/11 widows and then went on to attack them. 

Similarly, with Rush Limbaugh and other people I think who are on his side of the war question right now, it‘s a lot easier to attack people who want to bring the troops home as, you know, French men, commie, pinko, liberal, lesbians or whatever they are going to call us, rather than actually making an overt pro-war case for keeping the occupation going forever. 

OLBERMANN:  You can‘t share any of my opinions because that might mean my other opinions are as wrong as my opinion is on this one. 

MADDOW:  Yes. 

OLBERMANN:  Senator Reid called on Clear Channel, which distributes this program, the Limbaugh show, to repudiate his remarks. And the Mays family, which runs Clear Channel—coincidence—good friends with the Bushes.  Their CEO Mark Mays has answered tonight, in a letter to Reid, that he would be offended if Limbaugh said what he said, but he accepts the denial.  He also adds—let me read this exactly from the letter.  “I cannot speak with authority as to whom exactly Mr. Limbaugh‘s comments were directed or what was his intent.”

Is there something in there?  Is there a refusal on this man‘s part, on this corporate goon‘s part, to stand 100 percent next to Rush Limbaugh? 

MADDOW:  I should say that I am, in part, distributed by clear channel as well.  Most people in talk radio are at this point because they are such a huge part of the industry. 

OLBERMANN:  Right.

MADDOW:  And Clear Channel has an Imus calculation to make here, just like MSNBC did and just like CBS Radio did, which is Rush Limbaugh enough of an asset that his role as an asset for the company outweighs the embarrassment that he causes the company and potentially advertisers. 

Now, Wesley Clark and other people have been highlighting the fact that Rush is distributed on the armed forces radio network and asking Congress to yank him off that network.  If that happens, that might go some distance towards changing the overall image of how advertisable Rush‘s show is. 

OLBERMANN:  We might add the armed forces version of the Limbaugh show regarding the phony soldiers had only the edited clip on it, not the original one.  They never heard the original one.

MADDOW:  I didn‘t know that.

OLBERMANN:  I didn‘t think asset was the word you were going to use there.  And if you had used the other one, I would have sent you $100 in cash. 

Rachel Maddow of Air America.  Thanks. 

MADDOW:  Thank you, Keith. 

OLBERMANN:  Iran in satire.  If you can believe this.  A Democratic candidate endorses no nukes pledge.  Republicans attack him.  It was sponsored by two iconic Republicans, and of Colbert, Cheney, Iran and me. 

And this man wants the other man‘s foot back.  It‘s a long story and

he says God is behind it, next on “Countdown,” 

(COMMERCIAL BREAK)

OLBERMANN:  On this date in 322 B.C.—well, maybe on this date—how in the hell do we know—the Greek philosopher Aristotle died of acute indigestion?  It has been said that he was probably the last man on earth who knew everything there was to know in his time, except obviously how to avoid acute indigestion. 

Let‘s play “Oddball.” 

We update a story we brought you last week out of Maiden, North Carolina.  Remember Mr. Shannon Wisenent (ph)?  He bought a second-hand smoker barbecue took it home and found amputated leg and foot inside?  The missing limb originally belonged to the smoker‘s previous owner who plans to be buried with it.  So in keeping with those wishes, Mr. Wisenent (ph) gave the leg to a local funeral home for safekeeping.  Now he wants it back, telling the local news station that tourists, nine of them to be exact, already paid him just to see smoker.  So he figures there is even more money to be made from the actual leg.  His rationale to claim ownership of someone else‘s body part, finders keepers, and divine providence, and none of this the shoe is on the other foot crap. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  If one person stands in my way, they are going to be some lawsuits flying around.  We just sort of look at it like it was heaven-sent what we run across.  We sort of got an extra left leg now, um-huh. 

(END VIDEO CLIP

OLBERMANN:  To Providence, Rhode Island, where seven local artists were found living in a mall.  They built a 750 square foot loft apartment in the parking garage at the Providence Place Mall using cinder blocks and a nondescript door.  Inside they made it cozy, as you see, sofas, chairs, lamps, TV and waffle iron.  The artists all shared the space, living there for up to three weeks at a time, while documenting mall life.  It seems like they were such good tenants, it took mall security a rather long time to figure out they were even there, four years. 

The dash for cash.  First she led in the polls, now she leads in the coffers. 

And Britney spears self-destructing, live before our eyes, except for the romp with some guy that is allegedly not live, but only on videotape.  These stories ahead, but first time for our goof balls and good guys.  Here are COUNTDOWN‘s top three best persons in the world.

Number three, best sportsmanship, Manager Bud Black and catcher Michael Barrett of the San Diego Padres.  Their season ended last night when one of the best, certainly one of the most respected umpires in baseball, Tim McClellan (ph), flat out blew a call in the 13th inning.  Colorado‘s Matt Holiday never touched the plate with the winning run, but McClellan missed it.  McClellan was defended by Bud Black, who said, quote, it looked to me as though Holiday did touch the plate, and by Catcher Barrett, who said, I have never second guessed Tim McClellan at home plate and when he told me he was safe, there was no argument in my mind.  Wow!

Number two, best Gene Dickson impression.  Fixed news commentator Dick Morris explaining that as Hillary Clinton‘s, quote, election gets closer, as it becomes more likely she is going to win, there is going to be a stock market crash.  When she wins, it is going to be black Wednesday. 

Mr. Morris is also predicting that Elvis will return next year from exile to marry Britney Spears. 

Number one, best substitution, the bank teller in Stone Lake, Wisconsin who had to fend off a masked guy in an all terrain vehicle.  Claimed he had a bomb, drove up to the bank‘s drive-in window.  She said she was very sorry, that all the money had been removed from the till and all she could give him was the bank supply of hard candies and lolly pops.  The alleged perp promptly, furiously drove off empty-handed. 

Sucker!

(COMMERCIAL BREAK)

OLBERMANN:  In the campaign for president, cash is king, except this year it appears cash is queen.  In our third story, the COUNTDOWN to 2008 and the surge of summer dollars for the leading Democratic candidates, including a startling 35 percent fund raising lead for one of them.  Senator Clinton has been ahead in the national polls, but had lagged slightly behind Illinois Senator Barack Obama in fund raising. 

So far her long, hot summer of intensive campaigning managed to remedy that.  The Clinton cash machine generating a whopping 27 million in contributions this summer.  It‘s normally a tough time to raise money.  Senator Clinton managing to sock away a total of nearly 80 million dollars so far this year. 

That equals the total cash raised in the same time by Senator Obama.  His summer contributions produced 20 million.  Still an impressive amount, but seven million less than Senator Clinton.  If you can‘t do the math yourself.  The two Democrats leaving every other challenger in the dust, money wise and poll wise.  In a significant barometer of the times, Democrats are now raising more money than Republicans. 

The latest numbers are a summer harvest.  Apparently two terms of George W. Bush would make potent fertilizer. 

Joining me now to read between the dollar signs of the campaign war chests, Chris Matthews, host of “HARDBALL,” and now author of a new book, just out today, “Life‘s a Campaign; What Politics Has Taught Me About Friendship, Rivalry, Reputation and Success.”  Chris, good evening. 

CHRIS MATTHEWS, MSNBC ANCHOR:  Thank you, Keith. 

OLBERMANN:  Do these campaign figures actually tell us anything, particularly senator Clinton‘s. or are they irrelevant. 

MATTHEWS:  The irony of politics is the more you give to a candidate, the more likely you are likely to give in a future.  It‘s something Machiavelli figured out five hundred years ago.  They all act upon it.  The most valuable asset in a campaign is the contributors list.  So more money means more money in the future. 

OLBERMANN:  Flashback to 2003, about this time that year, we—literally, you and I are were talking about the political steam roll and the fund raising novelty and innovations of Howard Dean.  The caucus goers in Iowa had another idea.  Then the infamous scream, or the coverage of it anyway, knocked him out of the ballpark.  Is there any kind of bump in the road that could still face Senator Clinton now?  Or are we just talking about a disaster that would have to occur to knock her out? 

MATTHEWS:  Well, the reputation of Howard Dean hadn‘t been established yet.  So he was the new kid on the block and he was fragile.  The Clintons have been around forever.  I think they can take a couple bumps in the road.  I think they could take a loss in Iowa and still roll up the score down in Florida.  I don‘t know about you, but if I think some old lady down in the Gold Coast is going to change her mind because John Edwards wins in Iowa, I disagree.  I think they are going to stick with Hillary. 

I think that‘s because of the long years and years of cultivation of the Democratic party by the Clintons. 

OLBERMANN:  The Democratic field of candidates, in its entirety, has raised 80 to 90 million dollars more than the Republicans.  Does that say more about the strength of the Democratic party or planning?  Is it about malaise among G.O.P. voters?  Is it about malaise about the population in general?  Interpret it for us. 

MATTHEWS:  It‘s highly negative.  I remember growing up in Philadelphia that the best registrar of African American voters was Frank Rizzo, the nasty, many people thought anti-black, mayor of the city.  He got blacks to register.  I believe it‘s not the Clintons.  It‘s not Barack Obama or anyone else.  It‘s the fact that the Democratic people, four out of five according to that poll today, don‘t like this war.  They don‘t think the Democrats are being tough enough. 

They want deliverance.  They want somebody to get elected next year who is going to get us out of this rut we are in.  We are in a rut.  This war seems to be unending.  It seems like its inevitable we are going to war with Iran.  The public feels like we are stuck and they want somebody to get us out of it.  That‘s why these guys—even wealthy people are kicking in.  They want change and they‘re trying to get it from the candidates. 

I wish the candidates would get the message.  The reason people are giving to them so much is they really want big change. 

OLBERMANN:  All right, “Life‘s a Campaign; What Politics Has Taught me About Friendship, Rivalry, Reputation and Success.”  Third time I‘ve read the whole title by the way.   

MATTHEWS:  Read the book; you will love it. 

OLBERMANN:  All right, but if it is a campaign, what does your bumper sticker say? 

MATTHEWS:  It‘s grin when you fight.  I love to fight and I love to grin when I do it.  Winston Churchill taught me that one, my hero.  If you can‘t fight and enjoy the fight, you are not in the fight.  It‘s all about relishing the contest.  If you are right, and you believe you are right, like you do every night, you love the hell out of it. 

OLBERMANN:  Do you talk about your campaign in the book? 

MATTHEWS:  Which one? 

OLBERMANN:  Well, when you ran for office. 

MATTHEWS:  When I was in my 20s.  Yes, I talk all about it, what I learned from it.  Believe it or not, when you take on somebody bigger than you, like the Philadelphia Democratic machine, and even when you lose to them, your career just opens up.  I have learned the smartest thing you can do is take on somebody bigger than you.  Tip O‘Neill, my old boss, took on Ronald Reagan and became a folk hero.  Newt Gingrich took on Tip O‘Neill, and became, unfortunately, Newt Gingrich and speaker. 

You always benefit from taking on somebody above you, as I point out in my book.  You take on Bill O‘Reilly every night and you are very smart to do it. 

OLBERMANN:  Thank you. 

MATTHEWS:  It‘s in the book.  You are in the book. 

OLBERMANN:  Then I‘m going to get it.  Why don‘t—why does not this book have one of those electronic chips installed in every copy, so that when you open it up, it goes, “Ha!?”  Why didn‘t you do that? 

MATTHEWS:  I don‘t know.  I‘m not like Hillary.  I can‘t do the hack like she can do the cackle on command.  I can‘t do it. 

OLBERMANN:  We can take it off the recording of the show. 

MATTHEWS:   You got me doing it. 

OLBERMANN:  Maybe in the paperback. 

MATTHEWS:  Keith, I‘m your biggest fan. 

MATTHEWS:  Thanks, Chris.  Good to be with you.  The book is “Life‘s a Campaign.”  You saw the rest of it.  Go out and buy it.  Congrats on 10 years of “HARDBALL” my friend.

An unexpected celebration of my 10th anniversary here at MSNBC involving Stephen Colbert, the vice president and my skull.  OK?

What the Buffalo Bills football team has done about this severely injured player that injects them into the battle for tonight‘s worst person honors.  When COUNTDOWN continues. 

(COMMERCIAL BREAK)

OLBERMANN:  Democratic presidential candidate Barack Obama has endorsed a plan to create a world free of nuclear weapons, beginning by having the major powers reduce their own stock piles and research efforts.  He says it and sanctions are the best strategy to deal with any possible nuclear threat from Iranian President Mahmoud Ahmadinejad.  And when the Republican National Committee tried to slap Obama around for it, it wound up kicking itself in the tuckus.  Our number two story on the COUNTDOWN, Iran and satire, intentional and otherwise. 

The otherwise first.  Senator Obama signed on to what is being called a bipartisan plea for nuclear weapons abolition.  The RNC issued scathing insult filled release over the signature of a spokesman named Danny Diaz.  Danny says, quote, “In a world filled with terrorists trying to acquire nuclear technology, and with Iran and Syria threatening their neighbors, it is difficult to comprehend that a major presidential candidate wants to eliminate our nuclear arsenal.  This is yet another of Senator Obama playing to the fringe elements of his party, and failing to understand the threat America faces.”

Bad news, Danny.  The bipartisan plea for nuclear weapons was written by four men, including such Democratic fringe people as Reagan Secretary of Defense George Schultz and Nixon Secretary of State Henry Kissinger.  Just say oops and get out. 

Now for the intended to be funny part about Iran from our friend Stephen Colbert. 

(BEGIN VIDEO CLIP)

STEPHEN COLBERT, “THE COLBERT REPORT”:  Folks, you know, sometimes I don‘t think Congress has America‘s best interest at heart.  For example, when they convene.  But, every once in a while they pass a bill that restores my faith in the system.  Like Wednesday‘s Lieberman/Kyl amendment, which passed by a 76 to 22 margin, and calls on President Bush to declare Iran‘s Revolutionary Guard a terrorist organization. 

The president is prosecuting a war on terror.  This makes Iran the second front.  But not everyone supports our troops enough to give them the job security a war with Iran would provide.  People like Senator Jim Webb, who voted against the amendment calling it, quote, Dick Cheney‘s fondest pipe dream.  

Well that is completely unfair.  Everyone knows Dick Cheney‘s fondest pipe dream is driving a bulldozer into the “New York Times” while drinking crude oil out of Keith Olbermann‘s skull. 

(END VIDEO CLIP)

OLBERMANN:  Our nightly round up of celebrity and entertainment news, Keeping Tabs, begins with something all to familiar for fans of basketball‘s New York Knicks.  There was a court.  There was Coach Isaiah Thomas.  And they lost.  It‘s going to cost the team 11 million dollars.  This defeat for the Knick‘s hapless president and coach in a sexual harassment suit filed against Mr. Thomas by former team executive Anucha Browne-Sanders. 

Not only did the jury find Thomas had harassed her, it also found that the Knicks and their owners, Madison Square Garden, including Chairman James Dolan, permitted the continuation of a working environment in which Thomas could harass her.  Thomas continues to insist is he innocent and also that trading Shannon Fry and Steve Francis for Zack Randolph was not a stupid deal. 

And all of O.J. Simpson‘s machinations in that Las Vegas hotel room last month may have succeeded only in ensuring that all of what he says is his sports memorabilia has been made safe for Fred Goldman.  A superior court judge in Santa Monica, California has ruled that anything from the theft, altercation, rescue mission, whatever it was, that is ultimately determined to be legally Simpson‘s is now legally Goldman‘s. 

Also any royalties from a sports video game featuring Simpson and his watch, his Rolex watch.  Come on, turn it over.  And the metal in your fillings. 

Britney Spears, the analysis of television‘s dr. Drew Pinsky, and the latest story of the inevitable now Britney Spears canoodling tape.  That‘s ahead.  But first time for COUNTDOWN‘s Worst Persons in the World. 

The bronze to the NFL Buffalo Bills.  You may recall that in the first game of the season Kevin Everett of the Bill‘s special teams was partially paralyzed, an awful injury.  The Bills have done all they should have done for Everett.  A teammate even going so far as to pack up his belongings and ship them to where Everett is rehabbing in Houston.  Unfortunately, claiming a space crisis inside their stadium, the Bills also recently cleaned out Everett‘s locker and gave it to another player, not even moving it to someplace else to symbolically state that Everett has not been forgotten. 

Our runner up, Bill-O, will not let go being caught by the Media Matters watchdogs mumbling his racial prejudice on the radio.  Now attacking them for netting comedian Rush Limbaugh‘s “Phony Soldiers” diatribe.  Says O‘Reilly, now Media Matters is peddling that Mr. Limbaugh was denigrating soldiers who dissent from the Iraq war.  But that doesn‘t seem to be true. 

Seem?  You sound so confident.  Bill, nobody has called you stupid before.  But if you listen to the full clip, where he references phony soldiers several minutes before he even mentions this Macbeth guy, Bill?  And you still think he wasn‘t calling anti-war soldiers phony soldiers? 

You are pretty damn stupid. 

But the winner tonight, Pat Robertson‘s Christian Coalition, responding to John McCain‘s foot in mouth implication that Muslims, and maybe Jews as well, should never be elected president.  In a blog by Jim Backling (ph), quote, comments like America was founded on Christian principles by Senator John McCain just might make him president, unquote. 

All right, skip the Christian Coalition accidentally revealing its religious hatred in there.  You boys do realize that after McCain realized what he said, first he backtracked and then after the interview was over, he called the interviewer back to explain that he would gladly vote for a non-Christian if he was the most qualified candidate for president. 

Pat Robertson‘s Christian Collision—and we are suspecting that‘s a brand name.  They don‘t seem to understand very much about the teachings of Christ --  today‘s Worst Persons in the World. 

(COMMERCIAL BREAK)

OLBERMANN:  Just one day after losing physical custody of her kids, there is a chance Britney Spears may lose control over the use of her likeness in the worst conceivable way, as in reportedly a sex tape, which according to her paramour, quote, lasted for 25 minutes and then we passed out.  And her lip synching was apparently way off.  Made up the last part. 

“In Touch Weekly” says their source, a guy on Hawaii‘s Big Island, says he romped with Spears on June 7th and videotaped it without her knowledge.  Nice guy.  He says he is reluctant to release it, only because he was disappointed by his own performance.  Quoting, it was just normal sex.  We didn‘t do anything crazy. 

As for the whole custody battle, Spears did deliver her two sons to Federline‘s body guard around noon yesterday after a trip to Carl‘s Junior, the burger franchise.  The handover was routine, part of her and Kevin Federline‘s normal visitation schedule.  According to a representative for Spears‘ attorney, it was a busy afternoon.  “US Magazine” says Spears went straight to her favorite tanning salon.  “People Magazine” says she went to the DMV to apply for driver‘s license. 

And her newest lawyer told “People Magazine” that the lack of a California license, and allegations that she had not complied with drug and alcohol tests contributed to yesterday‘s decision by a family court judge.  Ms. Spears topped off her fantastic day by checking into the five star Peninsula Hotel. 

Joining us now, psychiatrist, author and the host of the radio program “Love Line,” Dr. Drew Pinsky.  His new show on VH-1, “Celebrity Rehab with Dr. Drew,” premiers in January.  Thank you for your time tonight. 

DR. DREW PINSKY, USC SCHOOL OF MEDICINE:  My pleasure, Keith. 

OLBERMANN:  Not sure we want to go fully into the mind of Ms. Spears, but give it a shot.  Give us what you can see of the big picture.  What is animating this spiraling self-destructiveness? 

PINSKY:  You know, what I see is addiction.  We know she was admitted to an addiction treatment center.  In this state, certainly you have to meet criteria for addiction in order to be admitted.  She is, by definition, an addict.  There is evidence from her body guard that she continued to use after treatment. 

She ignored the recommendations of the treatment team.  She has maintained denial about the fact that she has a problem.  The court has stated explicitly that she has been maintaining continuous use of substances.  I have only one way of describing that.  I call that addiction. 

And so you have somebody with addictive disease.  That really distorts their motivation and their priorities.  People with addicts push away their family, lose important things in their life.  It‘s at least part of what we are seeing here, no doubt. 

OLBERMANN:  Tie that directly to this issue of the children.  You have done a serious study on celebrity narcissism.  What is it?  Is it the responsibility of the kids that she doesn‘t want or she‘s too self-centered to be bothered with it?  What is it the disconnect between what we expect in an ordinary motherhood situation? 

PINSKY:  I have not yet met a mother who didn‘t feel profound loss and very deeply when the consequences of their addiction or behavior results in the loss of their children.  I have not met that mother.  I assume she, too, is feeling things very deeply.  What my research showed, however, is that celebrities, particularly of high stature, may have difficulty empathizing with other people, and appreciating what her behavior in this case is doing to the kids. 

We see the kids in a car in chaos clutching one another.  There is absolutely no doubt these kids live in chaos.  The reality though is what they need to get better.  Kids are very resilient.  They need their mom in recovery.  They need their mom doing well.  They don‘t want to lose their mom.  But, as it is, they are going to if she continues on this path. 

OLBERMANN:  Give us the meaning behind the lawyers.  You can‘t really call it a defense, but kind of asterisk to this, saying that she did not submit to the drug and alcohol tests.  Not that she actually failed any of them. 

PINSKY:  Right.  In my world—I run an alcohol and drug treatment center.  If somebody fails to offer us their urine, or whatever testing we are asking for, or if there is evidence that they have adulterated it in some way, that‘s a positive test.  I have never seen someone who refuses to offer the test who wasn‘t using.  I just haven‘t seen that.  That is a positive test in essentially all cases.   

OLBERMANN:  Also, Drew, every day, or at least every week, she is in the tabloids, bizarre behavior often times.  This latest allegation that there is a tape from a one-night stand in Hawaii.  Is there an end to this cycle?  Is there a pattern that we can predict here?  Is there something that we need to be prepared for? 

PINSKY:  Well, yes, we do.  I think the pattern and the model is Anna Nicole Smith, guys.  Really, you are looking at somebody unraveling.  The other thing that happens, in my experience, when young women lose their children, they either A, get it together and get well and start getting treatment, as she would need long-term treatment.  Or they completely unravel by escalating their drug use and/or increasing self-destructive behaviors. 

I think in her case, suicide, impulsive behaviors, they are likely. 

OLBERMANN:  All right, this is not likely to happen, but to wrap this up, if she were to ask you for a few pieces of advice, what would your first couple on the list be. 

PINSKY:  It might have happened, had I not appeared on your show.  But now that I have been here with you, I guess it won‘t.  The fact is my advice would be to come in, have a full assessment.  She would need internal medicine services, detoxification services, psychiatric and psychological services, inter-personal and family therapies.  Get things stabilized and underway, and then she needs to go away for a long term, intensive inter-personal experience, preferably built around abstinence and 12 Step, very much like we see Lindsay Lohan doing. 

That‘s what‘s necessary for somebody like this to get well. 

OLBERMANN:  So it‘s not romps in Hawaii and the MTV Video Music Awards. 

PINSKY:  Not a massage. 

OLBERMANN:  Dr. Pinsky, host of “Love Line” on the radio and coming in January, his own show VH-1‘s “Celebrity Rehab.”  You will never be short of topics.  Thanks, Drew. 

PINSKY:  That‘s true.  My pleasure. 

OLBERMANN:  That is COUNTDOWN for this 1,616th day since the declaration of mission accomplished in Iraq.  I‘m Keith Olbermann, good night and good luck.

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

END   

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