updated 12/5/2007 12:33:26 PM ET 2007-12-05T17:33:26

Guests: Steve Elmendorf, Cliff May, A.B. Stoddard, Nicole Gelinas, Stephanie Cutter

TUCKER CARLSON, MSNBC ANCHOR:  The latest national intelligence estimates suggest that the Iranian nuclear threat is neither clear nor present, though President Bush says Iran is still a threat and that his policies are succeeding. 

Welcome to the show. 

At a morning news conference, President Bush face half a dozen different questions about new intelligence that concludes Iran seized its nuclear weapons program back in 2003 and is still eight years or so from acquiring the bomb. 

The president responded by pointing out that Iran is still enriching uranium.  It could be eventually be used to make a nuclear weapon.  Asked about his own tough words on Iran, including his mention of World War III back in October, in light of the new report, the president said he‘d gotten the NIE last week.  And asked about taking the military option out of the Iran policy mix, he held his ground this way. 

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  The best diplomacy, effective diplomacy is one in which all options are on the table.

(END VIDEO CLIP)

CARLSON:  And online foreign policy expert Cliff May will join us to answer some of the many questions rising from the new assessment of Iran.  How reliable is this report?  Is the Bush administration responsible for what appears to be good news?  Where does American foreign policy go from here?  Answers in a minute. 

We‘ll also examine Iran‘s effect on the 2008 presidential candidates.  Her competitors have criticized Hillary Clinton for her vote in favor of the Kyle-Lieberman act.  If the new NIE is accurate and Iran is less a threat than it previously was believed to be, how effectively will her opponents - Senators Dodd, Biden and Obama - use Clinton‘s get-tougher vote against her? 

And hits keep coming for former White House strategist Karl Rove.  He recently said the Democrats rushed this country into the Iraq invasion and two days ago advised Barack Obama on how to beat Hillary Clinton.  Mr. Rove now says that Republican candidates will put themselves in electoral peril if they shun President Bush while campaigning. 

Will Republican still listen to the man who was once “the man.”

We begin with the National Intelligence Estimate on Iran‘s pursuit of nuclear weapons.  Joining me now is former “New York Times” reporter and now president of the Foundation of the Defense of Democracies, wow, Cliff May. 

CLIFF MAY, FDN. FOR THE DEFENSE OF DEMOCRACIES:  Easy for you to say. 

CARLSON:  Not so easy for me to say. 

Is the military option off the table in light of this report?

MAY:  Realistically it‘d be very hard for President Bush using military action now because he doesn‘t have the wind of the intelligence community behind him.  They‘re saying that in 2003, Iran, which had a nuclear weapons program, didn‘t abandon it but suspended it.  Now here‘s some interesting question in which the NIE does not quite address: what happened in 2003 that might make Iran think, hmm, maybe this is not a great time to develop nukes? 

And it could be international pressure - those tough French and Germans, and British and the international agencies of the U.N.  But maybe, just maybe, they look across their Western border and saw Saddam Hussein being toppled by American military forces.  And they said, maybe under this president, we don‘t want to be developing nuclear weapons. 

CARLSON:  So you‘re suggesting that this is similar to what we think happened in Libya with Muammar Qaddafi, who looked over and said, you know, “Bush is crazy.  I‘m afraid I‘m going to do what he wants.” 

MAY:  Very possibly that the consequences of the invasion of Iraq war that‘s - Iran decided to freeze this nuclear weapons program.  Libya decided to give up its nuclear weapons program and the international proliferation schemes of the A.Q. Khan network were unraveled and revealed and stopped.  These are all beneficial things. 

CARLSON:  So Iran is still enriching nuclear material. 

MAY:  Well, that‘s.

CARLSON:  And its explanation is, “We need it for energy,” which is. 

MAY:  That‘s right. 

CARLSON:  .a country that sits atop one of the world‘s great oil reserves. 

MAY:  That‘s right.  They are in violation of international law, enriching uranium, and their story, and they‘re sticking to it, is, “We may need a lot more air conditioners in Tehran in a few summers and we can‘t possibly fuel that another way so we need this for electricity.” 

It‘s not very likely.  Also, if you read the NIE reasonably carefully, you‘ll see that Iran is continuing to develop everything else it could possibly need in order to have nuclear weapons.  But it‘s not putting it all together.  It‘s a little like, your mother says, “Are you smoking?”  And you say, “Absolutely not.  It‘s just a coincidence that I‘ve got tobacco and rolling papers and matches in my pockets.  But they‘re in different pockets, so don‘t get suspicious.” 

CARLSON:  Is this less than the likelihood that Israel will Iran? 

MAY:  It‘s harder for Israel to do this technologically than it is for us because they don‘t have the kind of air force capabilities we have.  It makes it harder for Israel to do because people will say, “But the American intelligence services said that Iran is not closer to developing, is not actively determined to develop nuclear weapons.” 

But the Israeli intelligence services actually don‘t agree.  They don‘t think that Iran has stopped developing nuclear weapons, although it may well be that, and the NIE says this as well, they are holding back a little bit until, say, 2009 when America has a different president, and that‘s when they could go full steam, and according to the NIE by the end of 2009, they could indeed have the physical material they need in order to put the weapons on the warheads and the missiles and do it all. 

CARLSON:  So after four years of publicly debating the credibility of American intelligence and the consensus in the press appears to be well, you can‘t (INAUDIBLE) it‘s all politicized.  We all seem very anxious to believe this at face value.  Is it believable? 

MAY:  Yes, that - and I‘m afraid for much of the media, this intelligence is totally believable even though other intelligence was not.  Keep in mind that the American intelligence community got wrong in the past.  Its evaluation of the nuclear weapons programs of Libya, Iraq on two occasions and both directions, North Korea, Pakistan and India, and also Syria, by the way.  We haven‘t gotten it right in the past. 

CARLSON:  But how about the fall of the Soviet Union, which they sort of missed as well. 

MAY:  They missed that as well and we can go through a very long list.  I‘m talking about just nuclear weapons programs that we weren‘t able to evaluate. 

CARLSON:  Right. 

MAY:  So I would say you got this sort of grain of salt, but this at least we know, if there - if it is true at all, that the threat of military force and other strong pressure, made Iran decide, “Let‘s not develop nuclear weapons now,” the last thing you want to do is what is being proposed, remove all the pressures, reverse the one policy that in more than 30 years, or almost 30 years, has actually had some successes with Iran, which is threatening the hell out of them. 

CARLSON:  Sanctions.  Everyone seems to be in favor of sanctions.  The president today, I thought, made a really interesting point about why sanctions haven‘t worked or it may not work.  Here he is. 

(BEGIN VIDEO CLIP)

BUSH:  Many companies are fearful of losing market share in Iran.  To another company, it‘s one thing to get the government to speak out.  It‘s another thing to convince private sector concerns that is in our collective interests to pressure the Iranian regime economically.  So I spend a fair amount of time trying to convince our counterparts that they need to convince the private sector folks that it is in their interests and for the sake of peace. 

(END VIDEO CLIP)

CARLSON:  So Bush is saying that there are company—pretty much European companies out there—undermining sanctions, intentionally or not, in the pursuit of profit.  I believe that‘s true.  It‘s disgusting. 

Why doesn‘t the Bush administration give us a lit of these companies? 

MAY:  I think that would be a good idea.  I think that would be helpful.  I think he is right that that‘s happening.  But by the way, China and Russia, on a governmental basis, I need to say that.

CARLSON:  Right.  That‘s right. 

MAY:  .have been against serious sanctions.  And I‘m afraid this NIE will lead them so say, “You see, we don‘t need serious sanctions.  What we‘ve been doing is enough.  Iran is not building weapons at this point.  It‘s not determined to build them as you thought as recently as two years ago so we don‘t need more pressure.” 

CARLSON:  But why aren‘t—I mean Democrats are about, you know, holding, you know, the corporate chieftains accountable for their misdeeds.  Why haven‘t Democrats in Congress has (INAUDIBLE) with the list of the French, and say German companies, Russian companies that are doing business with Iran? 

MAY:  That‘s true.  And by the way, people on the left, Democrats, Europeans, who don‘t want to see military force used against Iran, the smartest thing they can do is to be for very tough sanctions, very tough isolation diplomatic pressures, because if you do that, you may not need to use military force.  Instead, it‘s just the opposite.  They want to make nice. 

CARLSON:  Yes. 

MAY:  They want to say, “Oh see now, will this mean we can sit down and talk with them and we can address their grievances.  We don‘t need to worry anymore.”  Frankly, we‘ve been talking to them all along here.  The Europeans have been talking to them all along.  The only thing we know, we don‘t really know for sure, is if they have reigned in their nuclear programs, it started in 2003 after the U.S. invaded Iraq. 

CARLSON:  Cliff May, I appreciate it.  Thank you. 

MAY:  Thank you. 

CARLSON:  Hillary Clinton says she will be the Democratic nominee for president.  She will be.  And that worries some Democratic lawmakers and Republican-leaning states. 

Could Hillary Clinton‘s run for the White House jeopardize Democratic control of Congress?

Plus Karl Rove has some advice for his Republican friends.  He says President Bush may be down but not out, so shun him at your peril. 

We‘ll be right back. 

(COMMERCIAL BREAK)

CARLSON:  Hillary Clinton is still the frontrunner for the Democratic nomination for president in national polls anyway, and that terrifies some of her fellow Democrats.  We‘ll tell you why they‘re afraid.  Coming up. 

(COMMERCIAL BREAK)

CARLSON:  Well, for what seems like years, maybe decades, Hillary Clinton has been considered a lock to win the Democratic nomination for president but what a difference a few weeks can make. 

Today‘s “New York Times” has a front-page story suggesting that not only may Hillary‘s coronation be in trouble but that she may be a drag on Democratic candidates all over the country were she to be nominated by her party. 

Joining me now is Democratic strategist and a Hillary Clinton supporter, Steve Elmendorf. 

Steve, thanks for coming on. 

STEVE ELMENDORF, DEMOCRATIC STRATEGIST:  Hi, Tucker.  How are you? 

CARLSON:  I‘m doing great. 

The piece in “The New York Times” today I know infuriated the Hillary Clinton campaign.  It didn‘t have a lot of people quoted on the record, but there‘s no getting around poll numbers like these which I think tell pretty much the same story. 

NBC News/”Wall Street Journal” poll, middle of the last month, among Democrats, is Hillary Clinton honest and straightforward?  Only 49 percent said yes, 20 percent said no. 

Again, among Democrats same question asked of Barack Obama.  75 percent said he was honest and straightforward, 10 percent did not. 

That trust number is essential.  Democrats don‘t trust her the way they trust her opponents.  That‘s just true. 

ELMENDORF:  Well, that‘s not what “The New York Times” story was about.  That‘s a whole different subject but I‘d say on that subject that Hillary Clinton is known by more people than anybody else who‘s running for president.  So I don‘t think this is about—you know, I think when you put her up against the other candidates and when the other candidates are as well known as she is, they all have negatives, too, because that‘s the nature of the modern campaign world is you—the better known you are, the more the other side defines you negatively and that will happen to Barack Obama if he‘s the nominee, it‘ll happen to Chris Dodd if he were the nominee, it‘ll happen to any other Democrat. 

CARLSON:  Yes.  Well, you‘re right.  I mean you‘re absolutely right.  Here‘s the difference though:  Hillary Clinton has reached, as you just said, saturation level in terms of notoriety.  You know everything about Hillary you‘re likely ever to know.  People have made up their minds about her and huge and scary percentages of Democrats say they don‘t like and don‘t trust her. 

So if you‘re a Democrat who really wants to win back the White House, why wouldn‘t those numbers terrify you? 

ELMENDORF:  Because I think they‘re premature.  I think you‘re going to have a campaigning days where she is going to run for president against somebody else.  She is not going to be running on just Hillary Clinton.  It‘s going to be Hillary Clinton versus a Republican candidate with all of George Bush‘s baggage, with all of the baggage that Republicans have in this environment, and in that environment her strength and experience are going to carry the day and she‘s going to win. 

CARLSON:  OK. Well, just in the past week, you‘ve seen just how nasty the Clinton campaign can be.  All campaigns can be nasty.  Hers seems especially nasty.  I get a sense talking to Democrats here in Washington that, boy, this is a flashback to the 1990s. 

Isn‘t this the central weakness of the idea of Hillary Clinton as president, that it will bring us back to the really bitter partisan warfare of 1998?  People don‘t want that. 

ELMENDORF:  Well, I talked to—I hope I talked to more Democrats than you do, Tucker, is what I think. 

CARLSON:  I don‘t know if you do.  I talk to a lot. 

ELMENDORF:  And, you know, I think people are very comfortable with Hillary as the nominee and I think she‘s going to be the nominee and I think, you know, we‘re in a stage in every campaign when you get near the end when there is going to be contrast.  When people are going to talk about their records and talk about their opponent‘s records and they‘re going to show voters what the choice is and that‘s what she is doing and what the other candidates are doing. 

You know, we‘re coming up to a big event in Iowa and then we‘re going to have other big events in other states, and there is going to be more contrasts as we get closer. 

CARLSON:  But here‘s the bottom line.  Look, Democrats took back the Congress last cycle in ‘06 partly by running people like Heath Shuler and Jim Webb and Senator Casey, you know, in North Carolina, Virginia, and Pennsylvania.  Kind of states that are either Republican or swing states.  They ran culturally conservative Democrats and they won. 

There is no way Hillary is going to carry North Carolina.  I doubt she carries Virginia.  I mean, she is not going to be an effective as Obama or an Edwards in those purple states.  There‘s just no way. 

ELMENDORF:  Well, I think we have—look, in John Edwards‘s case we have a record of him as vice president and he didn‘t put any of those states into play.  But we‘re four years later and I think Hillary has a record in New York of appealing to people in purple and red areas and I think Hillary is the best candidate to put some of those states in play.  I think Virginia, you‘re wrong that‘s not going to be in play.  We saw Virginia increasingly turn blue with Mark Warner on ticket.  I don‘t care who the Democratic nominee is.  I think Virginia is going to be in play. 

CARLSON:  So we keep hearing that Hillary Clinton is the candidate of experience.  She‘s going to hit the ground running.  You know, she‘s ready to lead.  But really I‘ve been thinking about this all week.  We don‘t know too much about her.  We know about her failed health care plan.  We know that she supported NAFTA.  We know she went to a huge number of ceremonial dinners as the first lady.  We don‘t know—I‘m serious.  We don‘t know a lot more because we don‘t have the records, the White House records, most of them of her time as first lady. 

What specifically are the Clinton people talking about when they say she has these many years of experience?  I don‘t know what experiences they mean. 

ELMENDORF:  Well, I think she has a lot of experience, you know. 

CARLSON:  Like what? 

ELMENDORF:  I think she‘s been very straightforward about health care, for instance, that she learned a lot about that experience. 

CARLSON:  Right. 

ELMENDORF:  Sometimes you don‘t—you fail at things and obviously that didn‘t work and she learned a lot from that and she‘s come up with a new health care plan and she‘ll be a better president for having gone through that experience and learning from it and from having been a senator for as long as she‘s been a senator.  So I think she‘s got, you know, the strength and the experience to be president, and I certainly in comparison to her prime opponent she‘s got governmental experience that stacks up quite well. 

CARLSON:  But why not release the records and let the voters decide for themselves?  Why isn‘t more information better?  Why not just give us the record—and the Clintons could do it and you know it tomorrow and we can decide whether she has the experience or not? 

ELMENDORF:  Look.  I think they‘ve smoking to that issue and that‘s not the issue.  I think there‘s plenty information. 

CARLSON:  Of course, it is. 

ELMENDORF:  Tucker, there‘s plenty of information about they‘re—about the time in which Bill and Hillary Clinton lived in the White House.  There‘s more information frankly than anybody needs or wants.  The press is over it 24/7.  Every little, you know—that‘s not the issue. 

CARLSON:  But I don‘t know what she did.  No, I know, I don‘t know. 

ELMENDORF:  The issue is the future.  The is her strength and experience to be president of the United States.  She is going through a process now in the primaries, in the caucuses where voters are going to see her close up and ask her questions about everything they want answers to in Iowa, in New Hampshire, and South Carolina and beyond, and I think she‘s going to stand up well in that process and I think so far in that process she has shown herself to be a candidate of real strength and I think she is going to do really well. 

CARLSON:  All right.  Well, for the record, I know a lot about her husband but after health care I have almost no clue what she was doing in the White House all those years.  So, I would love to know.  E-mail me if you know.  Steve, thanks a lot for doing this.  I appreciate it. 

ELMENDORF: Good to be here. 

CARLSON:  Hillary Clinton is on the attack, of course, against Barack Obama.  At the moment, Obama simply shrugs off her aggression.  Who comes out ahead when the Democratic race gets nasty as it has? 

Plus, the Iraq war was supposed to be the dominant issue in this upcoming election but the candidates somehow aren‘t even talking about it anymore.  Why is that? 

This is MSNBC.  We‘ll return in a minute. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED REPORTER:  Senator, would you like to respond to Mrs.

Clinton‘s attacks on you today? 

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE:  No. 

UNIDENTIFIED REPORTER:  She said some surprising things about your record in the legislature. 

OBAMA:  It‘s—excuse me, I understand she‘s been quoting my kindergarten teacher in Indonesia. 

(END VIDEO CLIP)

CARLSON:  That was Barack Obama dismissing Hillary Clinton‘s latest string of attacks with just a few words and a smirk.  Clinton has been attacking shots at Obama on every level, even attacking his kindergarten dream of becoming president. 

Well, John Edwards entered the debate today.  He admitted that when he was a boy, he wanted to be not just a cowboy but Superman. 

Did the Clinton campaign miscalculate with this one?  Have their attacks began to backfire? 

Joining us now, the associate editor of “The Hill,” my favorite editor of “The Hill,” A.B. Stoddard. 

A.B., this is really—this is so bad.  Do you know how bad this is?  This is so bad Mark Penn went on “Morning Joe” this morning with Willie Geist and Joe Scarborough and said this.  We‘ve got a sound bite of it.  It‘s just—it‘s right here. 

(BEGIN VIDEO CLIP)

MARK PENN, CHIEF CLINTON STRATEGIST:  He put out an attack on her trying to say that she had some 20-year plan and at the end of a long thing as a joke, the campaign put out that he always wanted to run from kindergarten.  It was a joke and then the spin machines here are so hyped up here about Senator Clinton and her campaign that someone would take up on a joke like that and actually treated it as though it was serious.  You guys are so spinnable. 

(END VIDEO CLIP)

CARLSON:  Yes, it‘s the media‘s fault.  Did you get the e-mail from Hillary Clinton? 

A.B. STODDARD, “THE HILL”:  And how was George Walker Bush mocked when he blames the media as well? 

CARLSON:  Yes. 

STODDARD:  It‘s an old trick.  But they sent this out.  I mean, and they did, yes. 

CARLSON:  I knew this existed was—I got an e-mail from the Hillary

Clinton campaign—please don‘t take me off your e-mail list, by the way -

that attacks Barack Obama for wanting in kindergarten to be president.  I mean they sent this out. 

STODDARD:  They did and it‘s just—you can never call those things a joke afterwards.  The Clintons don‘t joke first of all and they don‘t joke in press releases.  And I‘m not saying she wrote the press release. 

CARLSON:  No. 

STODDARD:  But this is the kind of thing that she‘ll remember when she‘s 95 in her rocker. 

CARLSON:  Does this seem a turning point to you? 

STODDARD:  I think—well, first of all, I want to say there‘s this very interesting piece I read today by Marc Ambinder in “The Atlantic” about—all about Barack Obama‘s actually changing his mind about putting off a presidential run many, many years in the future and deciding—he did not enter the Senate with plans to run for president and Mark Penn and Hillary Clinton and Hillary Clinton camp did their due diligence and their intelligence bore this out that John Edwards last spring in ‘06 was the only rival they saw on the horizon. 

They—the Barack Obama candidacy surprised them and kind of kicked them off their track, according to this piece. 

CARLSON:  So they knew this was BS. 

STODDARD:  And they knew it and they didn‘t—I mean, Barack Obama had not sent out signals that the Clinton camp would have known about.  I mean, they really only saw John Edwards as a foreseeable, I guess at the time, Mark Warner as well, potential rival.  And the article was all about how his candidacy, his rapturous reception, his financial prowess, took them by such surprise, and that she didn‘t really get her footing until they had this readiness argument over foreign policy. 

CARLSON:  It seems to me if you‘re going to run as, you know, the presumptive candidate, if you‘re going to try and stage a coronation, which is—you know, Bush did it in 2000, it‘s a common strategy and it often works, you don‘t want to get down into the weeds with attack like this. 

STODDARD:  She has—I really she was amazing just spending the entire year on the high road and taking this exit ramp is the biggest mistake because you saw the pleasure that Barack Obama took today in saying apparently—even when he said the word Indonesia—like he can hardly contain his glee because with each more petty—the pettier she gets, the better he looks and feels, the more people think, I don‘t want to hear—it remind everyone of the Clinton fatigue. 

They don‘t want to hear about any persecution (INAUDIBLE) coming from the Clintons anymore.  And she was so holier than Barack.  I thought she did a very good job at just never picking on her rivals and only criticizing President Bush and the Republican playbook and it worked. 

CARLSON:  Well, if you‘ve already been crowned, you don‘t need to, you know, stoop to, you know, fight with commoners.  It seems to me there are many accounts of Hillary Clinton taking the lead and attacking all these poor women during the 1990s who were reputed to have had relationships with her husband, really being at the center of their rapid response teams and savaging the hell out of some these poor women. 

Nobody talks about that anymore to her benefit.  People are going to start talking about it if she doesn‘t pull back a little bit. 

STODDARD:  I was again.

CARLSON:  But does she want a reputation as mean?  Does she want that? 

STODDARD:  No, and I actually think it‘s a risky strategy in Iowa.  It‘s a—I mean Chris Matthews actually said something tonight about maybe there‘s an internal poll that shows her in much deeper trouble than we all know.

CARLSON:  I think that‘s right. 

STODDARD:  .because it‘s so desperate.  But if you look at the support for John Edwards in Iowa and the support for Biden and Richardson and Dodd, I mean, are they going to go?  Are those supporters in the second round going to support Hillary Clinton or are they going to go with Barack Obama? 

CARLSON:  I had always thought that. 

STODDARD:  It‘s a huge problem if she is devastated in Iowa not just second but really wiped out.  How is she going to win New Hampshire?  Is it going to be over?  And so I wonder—I just have no idea why she is doing this.  She doesn‘t—Iowans don‘t like mean campaigning.  They don‘t like negative.

CARLSON:  I have the answer.  I know the answer.  The answer is because that‘s who she is and that‘s who her campaign team are.  That‘s who they are.  They can‘t help it.  They are—they get right back in your face.  I mean they are—I‘m not even attacking them.  I‘m just telling you I know a bunch of them.  That‘s who they are. 

Democrats won the mid-term elections because of the Iraq war pretty much and conventional wisdom has been that the war will be the central issue of this upcoming presidential election.  But for the moment, Democrats appear to have stopped talking about it.  Why? 

Plus, Hillary Clinton still holds the lead in national polls among Democratic rivals but Obama is gaining momentum.  We‘ll define the meaning of the latest numbers fresh today. 

You‘re watching MSNBC. 

(COMMERCIAL BREAK)

(NEWS BREAK)

CARLSON:  Former President Bill Clinton knows exactly why his wife‘s campaign has descended from inevitable into a serious fight for the nomination.  It‘s our fault, the media.  According to President Clinton, speaking today in New Hampshire, the press does not pay enough attention to the candidates‘ public records, but instead focuses on the pure shallow day-to-day politics.  If public policy records were better covered, he says, the campaign might be in a different place today. 

Well, is that true?  Joining us now, the associate editor of “The Hill.” A.B. Stoddard and Democratic strategist Stephanie Cutter.  You know what, why characterize the former president?  Why not just read it verbatim, just for the sake of accuracy.  Here it is.  This is Bill Clinton‘s day in New Hampshire; “67 percent of the coverage of the campaign is pure politics.  That stuff has a half life of about 15 seconds.  It won‘t matter tomorrow.  It‘s very vulnerable to being slanted and rude and it won‘t affect your life.  One percent of the press coverage was devoted to their record in public life.  No wonder people think experience is irrelevant.” 

Now part of what he says is true.  We are bad at covering campaigns. 

We do follow stuff that‘s irrelevant. 

CUTTER:  That‘s right. 

CARLSON:  I would agree and I‘m guilty.  But for Bill Clinton to say the record is what matters, and stand in the way of our, in the press—our ability to get that record, all of these records of her life as first lady inaccessible to us because of him.  How dare he criticize us. 

CUTTER:  They will be out in January. 

CARLSON:  January?  Why aren‘t they out right now? 

CUTTER:  They‘re going to come out in January.  It takes time to work with the National Archives.  But that‘s one point.  The second point is that there is a public life, a record, of which you guys can go investigate yourself and report yourselves, and you don‘t do that.  Look at what‘s in the papers today.  It‘s the horse race.  It‘s who is up, who is down.  It‘s how much you‘re paying for a haircut, what kind of cheese you‘re putting on your cheese steak. 

CARLSON:  Actually, I‘m not sure—look, I‘m not defending—I think the press is awful in a lot of ways.  We waste a ton of time.  I work here.  I know.  Not just on MSNBC, but in general.  We‘re negligent.  On the other hand, the Clinton campaign has zero interest in telling us about the details of her eight years as first lady, none.  They‘re running on her time in the White House.  They haven‘t told us squat about what she actually did, so who is keeping the truth from the public, us or them? . 

STODDARD:  She has even major policy addresses and they‘ve all been covered, and when she‘s been doing well in the polls, she has touted her record and people—reporters have come and covered her events, and I think she‘s been to a lot of debates, and been able to debate her record with the other contenders.  And this is just—Bill Clinton really should hold his fire, I think.  I think he‘s doing her no favors in joining this sort of pile on in the Clinton campaign. 

CARLSON:  Maybe that‘s the point.  I‘m not a reflexive defender of the press.  I really do think we deserve to get whacked for our silliness a lot of the time.  But does this help on a political level?  Does this help her when Clinton comes and says stuff like this? 

CUTTER:  He‘s pointing to a Pew Poll that looks at the coverage of this race. 

CARLSON:  But he‘s interpreting the poll. 

CUTTER:  No, he‘s not.  The Pew Poll says that, you know, politics and not substance is being covered. 

CARLSON:  He‘s saying it won‘t matter tomorrow.  It‘s vulnerable to being slanted and rude.  It won‘t affect your life.  That‘s a subjective judgment. 

CUTTER:  Iowa caucus goers don‘t care if Hillary is at 44 percent nationally and Barack is at 41 percent.  They just don‘t care. 

CARLSON:  Of course they do. 

CUTTER:  What they would be interested in is a comparison of the energy policies between the candidates.  No one is covering that. 

CARLSON:  No, but their policies are actually—we cover it and they seem pretty similar.  But hold on, isn‘t it the Clinton campaign that has run from the very beginning, saying we‘re inevitable.  Look at our poll numbers.  People love us.  You can‘t vote against us.  All the cool kids are on our side.  They have used that coverage to their advantage. 

STODDARD:  She has been going after Barack Obama‘s health care plan, saying it doesn‘t mandate coverage, it doesn‘t cover everybody, and the press writes about it every time she says it.  I don‘t understand. 

CUTTER:  That‘s an attack though.  The difference is that when you cover something and you lay out the differences between the plans and how they impact average Americans‘ lives, that‘s real coverage that‘s going to affect how people are going to vote; instead of covering the back and forth, the tit for tat, the attacks, who is up, who is down.  That‘s covering politics.  That‘s the point that he‘s making. 

Whether or not it helps?  I think it doesn‘t help them for him to be pointing to her past record, the stuff that‘s stuck in the archives.  But it does help her to point out her experience, because that‘s where her strength is. 

(CROSS TALK)

STODDARD:  Barack Obama doesn‘t have enough negatives to go after.  He has a lot of problems.  But in terms of the voters of Iowa, he doesn‘t have ethical scandals.  So he missed the Iran vote in the Senate?  I think he‘s done a lot of things that I would call mistakes.  But generally as a candidate he just doesn‘t have a lot of negatives.  And they find themselves in this moment when they‘re scrambling to regain the momentum.  And, by the way, they have a month and it‘s a long time.  They just find themselves really struggling. 

It‘s hard to go after Barack Obama, I think.  And so you get to this point where you just say you don‘t like your coverage. 

CARLSON:  But going after the coverage even when it‘s fair—and sometimes it is fair—a lot of times it‘s fair—it‘s always the mark of a losing campaign.  It‘s Bob Dole in late ‘96.  I‘m not attacking Dole, but I was there.  The media sucks; OK, we do, fine.  But you‘re saying that because you‘re losing.  That is what losers say. 

CUTTER:  I happen to know that the Bush campaign went after the media on a daily basis to affect their coverage every single day.  They weren‘t a losing campaign.

CARLSON:  You‘re right.  What do you think, by the way, of the fact that Iraq—wasn‘t Iraq the most important subject of the millennium.  It was like everything was hanging on Iraq.  Democrats haven‘t said a lot about Iraq since Jack Murtha returned from Iraq and said the surge was working.  Why is that, I wonder?  And how humiliated are they now that the leader of the anti-war movement in Congress—no, but, Jack—this is like an Onion headline; Jack Murtha endorses Bush‘s surge.  He didn‘t endorse it, but he said it was working. 

CUTTER:  You‘re taking that out of context a little bit.  First of all, I don‘t think you can link Jack Murtha‘s trip back from Iraq to what the Democratic presidential candidates are saying.  I think you can look at the housing credit crunch, the rise in energy costs, people making less than they were just a couple years ago, the difficulty they have sending their kids to college, the upcoming holidays, all of these things matter to the American people. 

CARLSON:  The upcoming holidays—

CUTTER:  It‘s not just Iraq, it‘s how they‘re going to make ends meet. 

CARLSON:  But I thought—the whole idea of the ‘96 election was there‘s this misbegotten war started by this lunatic, this smirking chimp in office who didn‘t know what he was doing, and we‘re going to set that right.  And not only have they not—not only have the Democrats not made good on that promise, they have failed even to remind us of the tragedy of Iraq.  I don‘t—what is going on? 

STODDARD:  There is good news out of Iraq. 

CARLSON:  Exactly. 

STODDARD:  It‘s not just that they failed to come up with the votes for withdrawal or change the policy.  It‘s a combination of the fact that there is some stability and good news, some movement at a civilian level in Iraq, a lot of different pockets of good news.  Not all—I‘m not going to hang my hat and say it‘s permanent.  But I‘m also not the Republican panelist here, who is countering what Stephanie is saying. 

If it was desperate right now, they would be talking about it.  Even without the votes to change the policy, we would be hearing about it if there was more bad news coming out of Iraq.  We just would be hearing about that. 

CUTTER:  I agree with you and it‘s also—it‘s also a reflection of where the country is.  The point that I was making before is that there‘s a lot of challenges facing average Americans right now, and Iraq probably seems a little more distant to them than it was just even six months ago.  Part of that is because you‘re not seeing the deaths on the news every night. 

CARLSON:  So Iraq has improved. 

CUTTER:  The violence has improved, but let‘s remember the reason that we—you know, the president promoted the surge in the first place, to give the Iraqis the room and the space to forge the political resolutions that they needed.  That was the reason to have the surge and that—

(CROSS TALK) 

CARLSON:  Hold on.  But the bottom line has always been—I agree with you that his claims about democracy taking root are probably never going to come to fruition.  But the horrifying thing about Iraq was how many people were dying, and fewer are.  So why aren‘t Democrats getting up and saying, this is great? 

CUTTER:  We‘re glad that people aren‘t dying. 

CARLSON:  We‘re glad that Iraq is better.  It‘s improved.  No?  No one can say that? 

CUTTER:  Has anybody? 

CARLSON:  I don‘t know.  I probably should. 

CUTTER:  I think what they‘re also saying is that our troops aren‘t any closer to coming home than they were six months ago, or the Iraqis aren‘t any more capable of taking care of themselves than they were six months ago.  And those are the real questions in Iraq.  It‘s not just whether the violence is down.  

CARLSON:  It‘s true, but I don‘t hear Democrats campaigning on that. 

Do you?   

STODDARD:  No. 

CUTTER:  I think it‘s part of everybody‘s stump speech. 

CARLSON:  I haven‘t heard it in weeks. 

STODDARD:  I really don‘t know what the liberal Democrats, whose leadership won‘t change—can‘t change the policy, are saying on the stump.  I don‘t know what the red state Democrats, who took Republican seats and are trying to hold on to them, are saying.  There‘s got to be so many different Democrats on Iraq.  And Jack Murtha actually tried to sort of wiggle back on his own comments.  As Bush says, they have to get on one message. 

CARLSON:  Here is what Karl Rove said in the “Washington Times” about President Bush.  It was so interesting; “nobody can risk looking disrespectful to this president without paying a price, and they need to understand that.” 

He‘s talking about Republicans, that they can‘t distance themselves from Bush and not be punished by Republican primary voters, 80 percent of whom in Iowa support the president.  One of the untold stories—I‘m not endorsing Bush here—Republicans like the guy, though.  They really do, still, after all this.  Why is that? 

CUTTER:  You‘ve got me.  I have no idea. 

CARLSON:  Bush is not powerless, despite all this. 

CUTTER:  He‘s at 27 percent approval rating. 

CARLSON:  Not among Republicans, though. 

STODDARD:  Karl Rove also said the Republicans would hold the House and the Senate. 

CARLSON:  Yes, he did. 

STODDARD:  -- In the 2006 elections.  I just don‘t buy this. 

CARLSON:  You don‘t see Republicans attacking Bush, though, and I thought you would. 

STODDARD:  No, no, because they don‘t in the primary.  But I absolutely—I believe that the nominee of the Republican party is going to have to create some distance between himself and Bush.  The Republicans have a very good chance of losing the White House.  It doesn‘t look bad, it looks grim.  And so if you look at all of the trends, you look at the economy—if you look at all of the factors, Democrats are poised to take it, no matter who their nominee is.  And if I were a Republican nominee, to survive and to try to compete with that Democratic nominee—you don‘t just say bad things, but you do not embrace President Bush after February of 2008.  

CARLSON:  A.B. Stoddard, Stephanie Cutter, thank you very much. 

The White House hatches a plan to pull home owners out of the mortgage melt down.  But while it‘s providing hope to many, my next guest says it will spell disaster down the road. 

Plus, the summer games are months away in Beijing.  That‘s not stopping these girls from spreading some Olympic-sized cheer.  We‘ll tell you what that means.  We‘ll be right back.

(COMMERCIAL BREAK)

CARLSON:  The Bush administration is wading neck deep into the housing crisis, aggressively pursuing a plan to bail out lenders and troubled homeowners.  The plan is called Hope Now, but our next guest says it should be subtitled Worry Later.  Joining me now is the author of the piece entitled “Henry Paulson‘s Mortgage Mulligan,” Nicole Gelinas, a “City Journal” contributing editor and senior fellow at the Manhattan Institute. 

Nicole, thanks for coming on. 

NICOLE GELINAS, MANHATTAN INSTITUTE:  Thank you, Tucker, for having me. 

CARLSON:  Give me the three sentence, plain English explanation of what the administration is proposing to do here. 

GELINAS:  Sure.  What Treasury Secretary Paulson is proposing is that mortgage lenders freeze introductory teaser mortgage rates that about 1.5 million home buyers, mortgage borrowers, have.  Those mortgages are going to reset to much higher and, in many cases, unaffordable rates within the next year or so.  But the problem with this plan is that both the borrowers and the lenders knew that these rates would reset at this higher rate.  And, in fact, the lenders will not be able to—

The lenders borrow money themselves.  They will not be able to borrow at a rate that is lower than this teaser lending rate.  So they‘re going to take many, many more losses than they would have otherwise. 

CARLSON:  OK, so the basic plan is you sign the mortgage not under duress, of your own free will.  You knew what was in it.  And now other people get to pay for it. 

GELINAS:  Exactly, and what‘s going to happen is this is very similar to when countries like Venezuela nationalize their oil fields.  Future lenders demand a higher interest rate, because they see that this risk is greater than they had thought.  Future mortgage borrowers, a few years down the road, when the housing market has recovered—the lenders will demand a higher rate from everyone because they‘ll see that there is this political risk, that in times of perceived political crisis, the government will step in and strong arm the mortgage lenders to rewrite these private contracts. 

CARLSON:  Right.  So you make the point that, as in all cases of socialism in action—and that‘s exactly what this is—an effort to be compassionate ends up screwing the little guy down the road.  You make the point this artificially boosts the price of the housing stock and keeps young people who don‘t have much money from buying houses.  How does that work? 

GELINAS:  Yes, exactly.  If you—say you are a young couple.  You were looking to buy a house a couple years ago and said, you know what, these housing prices in my area are out of control.  I can sign this easy sounding mortgage now, but in two years the rate is going to double.  My monthly payment is going to double.  And I won‘t be able to afford it.  So, you know what, I will just wait until things go back to normal. 

Now that seemed like rational behavior, whereas it seemed irrational to buy a home that you could not afford.  But with this bailout, in the future that irrational behavior will be made rational.  You will think to yourself, even if I get in trouble, the government will come along and bail me out.  It‘s very similar to what we saw after Hurricane Katrina; through various insurance programs the government has encouraged people to live in places where they shouldn‘t be living and they expect a bailout.  We‘re doing the same thing with mortgages. 

CARLSON:  Yes.  It‘s weird that you have a president who has essentially embraced tenants of socialism and no one is noticing.  Everyone is still calling him a right winger.  Very upsetting. Nicole, thanks for coming on and explaining that.  I appreciate it. 

GELINAS:  Thank you.

CARLSON:  I appreciate it.  Debra Lafave, the Florida school teacher convicted of having a sexual relationship with a student, is back for a repeat spin in the media spotlight.  Bill Wolff reports on the trouble brewing with teacher after this. 

(COMMERCIAL BREAK)

CARLSON:  Welcome back.  Here for our daily education report, MSNBC education reporter and vice president for prime time programming Bill Wolff. 

BILL WOLFF, MSNBC VICE PRESIDENT:  I‘m education secretary, Tucker.  The recent inter-office memo, you probably didn‘t get it.  But I am the secretary of MSNBC. 

Here we go, Tucker.  She is one of the unforgettable figures in recent cable news history, and she is reportedly back on this and many of the channels from 14 to 999 on your dial.  She is Debra Lafave, arrested in 2004, convicted in 2005 for having had an intimate relationship with a 14-year-old boy student at the school in Florida where she taught.  Lafave is, of course, notorious for some revealing personal photographs she took with her motorcycle. 

She is now under arrest again in Florida, this time for violating the terms of her probation.  The Hillsborough County sheriff‘s office—That‘s the Tampa-St. Pete area—says Lafave talked to a 17-year-old female co-worker—talked to a 17-year-old female co-worker at a restaurant where they worked and those conversations allegedly violated her probation, which states she cannot discuss non-work related issues, such as family problems, friends, high school, personal life, boyfriend issues and sexual issues with minors. 

Deb Lafave under arrest for talking to a teenager, Tucker. 

CARLSON:  I think we‘re prohibited by network regulations from giving the address of her legal defense fund.  Let me just say I‘m tempted. 

WOLFF:  I don‘t have the address or I‘d give it straight away.  It does seem like it‘s not really the spirit of the law, but the letter of the law. 

CARLSON:  It also seems deeply unreasonable.  I could name off the top of my head 15 people who ought to be in prison before Debra Lafave.  That‘s ridiculous. 

WOLFF:  You‘ll hear more about it tonight at 9:00 on “LIVE WITH DAN ABRAMS.”  Tune in.  The “New York Daily News” has furthered its service to the public this day by issuing its 50 stupidest celebrities list.  Yes, the list is the paper‘s response to “Entertainment Weekly‘s” list of the 50 smartest people in Hollywood, which is littered with your Steven Spielbergs and George Clooneys, your Meryl Streeps.  Yes, yes, yes. 

Now included on the list of 50 famous dummies, number 14 Britney Spears, who came in a bit lower than analyst expectations; number eight, Kiefer Sutherland, who makes it on the list because of his drunk driving recidivism; number seven, Jessica Simpson, who is so dumb she made about a zillion dollars off it.  And the number one dumbest celebrity, Lindsay Lohan, who is barely a celebrity at this point.  A special i-Team investigation, Tucker—this is true—headed by MSNBC‘s Izzy Povich of the COUNTDOWN program found that Paris Hilton did not make the list. 

CARLSON:  Because, you know, the truth is always more complicated. 

Paris Hilton actually has a masters from MIT in chemical engineering.  Richard Simmons lives in Jersey with his wife and five kids.  It‘s like never what you think it is. 

WOLFF:  OK, how hard have you worked in your life and how hard do you work every day and how much money do you make?  Now, take your basic celebrity.  What are the marketable job skills, what are the hours put in, and what are the wages?  Who is stupid? 

CARLSON:  Well, you‘ve got something there, Bill.  It‘s a good point. 

WOLFF:  It‘s my doctoral thesis.  I‘m a graduate student.  Tucker, cheer leading is the international language.  We all know it.  It shouldn‘t surprise anyone that nearly 1,000 peppy young people showed up in Beijing for the Olympic Cheer leading Competition.  The hopefuls ranged in age from college student to elementary school kids.  Tucker, this is a shameless plug.  This is just another reason to tune in to the 2008 Summer Olympics on your NBC Universal family of fine broadcast and cable networks.  The question, of course, won‘t the Chinese have an unfair advantage if they‘re the only team with its own pom-pom squad?  Seems unfair. 

CARLSON:  Yes, it really does.  Though somehow I think we‘ll prevail in any case. 

WOLFF:  Well, then the other obvious joke, did they test the pom-poms for lead paint? 

CARLSON:  That‘s right, or the date rape drug. 

WOLFF:  Well, I was holding out on that one.  Finally, Tucker, gratuitous surveillance video, in the fine tradition of this very fine show.  Dateline, Louisville (ph), Texas, where an ordinary Sunday was shattered by a fugitive kangaroo.  That‘s Maynard (ph).  It‘s just 18 months old.  He‘s a kangaroo.  He escaped from the home of Dr. Kyle Jones, a veterinarian, who wanted to let Maynard graze in his backyard. 

Now, I‘m not a licensed body language expert, but Maynard looks disoriented and unaccustomed to the absence of wide open spaces, toilets that flush counter-clockwise and giant beer cans that are native to his own Australia.  Worry not, Maynard was captured without taser.  He‘s going to wind up in a zoo where Americans will gawk at his floppy ears, his pouch, and his hopping locomotion.  They‘re creatures unlike us, Tucker.  They‘re kangaroos. 

CARLSON:  Run free, Maynard.  Run free. 

WOLFF:  Really.  Seriously. 

CARLSON:  Free Maynard.  Along with Debra Lafave, two heroes on today‘s show.  Thanks a lot, Bill.

WOLFF: My pleasure.

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

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

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