updated 1/23/2008 4:31:39 PM ET 2008-01-23T21:31:39

Guests: Howard Fineman, Craig Crawford, Rachel Maddow, Harvey Levin

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

Substance or submarine warfare: The Obama campaign unveils the South Carolina “truth squad” against the Clintons.  President Clinton asserts he‘s already pretty chilled out, then, conducts his own news conference about the campaign.  Good thing there‘s a truce.

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON, (D) PRESIDENTIAL CANDIDATE:  You talked about Ronald Reagan being a transformative political leader.  I did not mention his name.

SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE:  Your husband did.

CLINTON:  Well, I‘m here, he‘s not.  And -

BARACK:  OK.  Well, I can‘t tell who I‘m running against sometimes.

(END VIDEO CLIP)

OLBERMANN:  Senator Clinton leaves South Carolina to campaign elsewhere suggesting a revised strategy to concede that state to Obama to concentrate instead on Super Tuesday.

And oh, by the way, the stock market: It plummeted 464 points for getting back up here at the surface.  And the government made an emergency cut in the federal funds interest rate and it feels like they are going to be giving away houses soon when your fill up at the gas station.

What exactly actually, do the candidates have in a way of economic plans?  What exactly do we have planned to upset the corruption of America‘s youth?

And: Police in New York suspect it might be drug-related.  Heath Ledger, co-star of “Brokeback Mountain,” dead at the age of 28.  All that and more on COUNTDOWN.

(on camera):  Good evening, this is Tuesday, January 22nd, 287 days

until the 2008 presidential election.  If the first Clinton campaign for

president in 1992 was defined by its war room, the current one might wind

up being remembered by another candidate‘s truth squad.  Our fifth story on

the COUNTDOWN tonight: The South Carolina truth squad to be precise,

established today by the Barack Obama campaign.  It was the infamous news

commentator, Boake Carter who observed that in war, truth is the first

casualty.  If you didn‘t already realize it in politics, truth is not only

not a casualty but it multiplies.  Where the Democrats go from here predicated on understanding where they went last night. 

On the very day in which the same candidates had paid tribute to the nonviolent movement led by the late Dr. Martin Luther King, Jr. and in whose honor the congressional black caucus had sponsored this debate.  At times, it was a debate; at others, it looked like a pressure cooker with the lead blowing off.  The severing dispute between the Clinton‘s, plural and Senator Obama, singular—boiling over.  In the debate‘s first hour, the issues of the campaign largely ignored, so the two front-runners could instead “duked it out.”  Senator Edwards, a mere bystander at times as was Senator Obama‘s message of hope.  How many times did he get out the word hope last night?  Twice in two hours.  That also the measurement of how truth was out there compared to normal - twice. 

Any voter having to put in considerable work just to discover what was actually said by whom and when in that valley of charges and countercharges.  To that end, the Obama campaign today, announcing the formation of its so-called: South Carolina truth squad in order to, quote, “Respond forcefully,” to quote, “The credible distortions that are coming from the Clinton campaign,” end quote.  Respond forcefully being exactly what both candidates did last night, possibly to their detriment.  More on today‘s fallout presently but we begin with a refresher on exactly what happened at the Palace Theater in Myrtle Beach, not long after the bell rang at the debate when Mr. Obama was asked to respond to criticism for Mrs. Clinton over his remarks last week that Republicans have been the party of ideas over the last 10 to 15 years.

(BEGIN VIDEO CLIP)

OBAMA:  Let‘s talk about Ronald Reagan.  What you just repeated here

today is -

CLINTON:  Barack -

OBAMA:  Wait. No. Hillary, you just spoke -

CLINTON:  I did not say anything about Ronald Reagan.

OBAMA:  You just spoke for two minutes.

CLINTON:  You said two things.

OBAMA:  You just...

CLINTON:  You talked about admiring Ronald Reagan and you talked about the ideas...

OBAMA:  Hillary, I‘m sorry. You just...

WOLF BLITZER, DEBATE MODERATOR:  Senator...

CLINTON:  I didn‘t talk about Reagan.

OBAMA:  Hillary, we just had the tape. You just said that I complimented the Republican ideas. That is not true.

What I said—and I will provide you with a quote—what I said was is that Ronald Reagan was a transformative political figure because he was able to get Democrats to vote against their economic interests to form a majority to push through their agenda, an agenda that I objected to.  Because while I was working on those streets watching those folks see their jobs shift overseas, you were a corporate lawyer sitting on the board at Wal-Mart.

(APPLAUSE)

OBAMA:  I was fighting these fights. I was fighting these fights. So -

but I want to be clear.    So I want to be clear. What I said had nothing to do with their policies. I spent a lifetime fighting a lifetime against Ronald Reagan‘s policies. But what I did say is that we have to be thinking in the same transformative way about our Democratic agenda.

We‘ve got to appeal to Independents and Republicans in order to build a working majority to move an agenda forward. That is what I said.

(APPLAUSE)

OBAMA:  Now, you can dispute that, but let me finish.

Hillary, you went on for two minutes. Let me finish.  The irony of this is that you provided much more fulsome praise of Ronald Reagan in a book by Tom Brokaw that‘s being published right now, as did—as did Bill Clinton in the past. So these are the kinds of political games that we are accustomed to.

CLINTON:  Now, wait a minute.

Wolf, wait a minute. Wait a minute. Just a minute.

BLITZER:  Senator Edwards, let them wrap up. Then I‘m going to come to you.

Yes?

CLINTON:  I just want—I just to clarify—I want to clarify the record. Wait a minute.

EDWARDS:  There‘s a third person in this debate.

BLITZER:  Wait a minute, Senator Edwards. Hold on.  There has been a specific charge leveled against Hillary Clinton, so she can respond. Then I‘ll bring in Senator Edwards.

CLINTON:  I just want to be sure...

OBAMA:  Go ahead and address what you said about...

BLITZER:  We have got a long time to. You‘ll have a good opportunity.

CLINTON:  We‘re just getting warmed up.

(APPLAUSE)

CLINTON:  Now, I just—I just want to be clear about this. In an editorial board with the Reno newspaper, you said two different things, because I have read the transcript. You talked about Ronald Reagan being a transformative political leader. I did not mention his name.

OBAMA:  Your husband did.

CLINTON:  Well, I‘m here, he‘s not.  And -

BARACK:  OK.  Well, I can‘t tell who I‘m running against sometimes.

(APPLAUSE)

CLINTON:  Well, you know, I think we both have very passionate and committed spouses who stand up for us. And I‘m proud of that.

But you also talked about the Republicans having ideas over the last 10 to 15 years.

OBAMA:  I didn‘t say they were good ones.

CLINTON:  Well, you can read the context of it.

OBAMA:  Well, I didn‘t say they were good ones.

CLINTON:  Well, it certainly...

OBAMA:  All right, Wolf.

CLINTON:  It certainly came across in the way that it was presented, as though the Republicans had been standing up against the conventional wisdom with their ideas. I‘m just reacting to the fact, yes, they did have ideas, and they were bad ideas.

OBAMA:  I agree.

CLINTON:  Bad for America, and I was fighting against those ideas when you were practicing law and representing your contributor, Resco, in his slum landlord business in inner city Chicago.

(APPLAUSE)

OBAMA:  No, no, no.

BLITZER:  Hold on one second. Hold on.

Senator Edwards—Senator Edwards has been remarkably patient during this exchange. And I want him—I don‘t know if you want to get involved in this, Senator Edwards.

EDWARDS:  What I want to say first is, are there three people in this debate, not two?

(APPLAUSE)

EDWARDS:  And I also want to know—I also want to know on behalf of voters here in South Carolina, this kind of squabbling, how many children is this going to get health care?  How many people are going to get an education from this?  How many kids are going to be able to go to college because of this?

(APPLAUSE)

EDWARDS:  We have got to understand—you know, and I respect both of my fellow candidates—but we have got to understand this is not about us personally. It is about...

(APPLAUSE)

...what we are trying to do for this country

(END VIDEO CLIP)

OLBERMANN:  Former President Clinton, either disproving or proving Senator Obama concern that he can‘t tell who he‘s running against sometimes by today directly responding to the Illinois Democrat on that point.

(BEGIN VIDEO CLIP)

BILL CLINTON, FMR UNITED STATES PRESIDENT:  I don‘t know.  I thought he was ready to get me in Nevada for awhile when he said Republicans had most of the new ideas and the challenge of conventional wisdom in the ‘90s.  I thought we challenge the conventional wisdom in the 90s.

(END VIDEO CLIP)

OLBERMANN:  In response to Congressman Clyburn having recommended that President Clinton chill out a little bit, he answered today that he is, quote, “Pretty chilled out already.”  Mr. Clinton also responding to Senator Obama‘s charges that his attacks have been less than truthful.

(BEGIN VIDEO CLIP)

B. CLINTON:  I think that there was nothing specific said that I said which is inaccurate which I thought that was interesting too.  And I try to be very careful what I say and not use too many adjectives - factually accurate.

(END VIDEO CLIP)

OLBERMANN:  I hope he‘s try to put this debate in the context. Let‘s turn to our own Howard Fineman, senior Washington correspondent for “Newsweek” magazine.  Howard, good evening.

HOWARD FINEMAN, MSNBC POLITICAL ANALYST:  Good evening, Keith.

OLBERMANN:   This is a hell of a truce.  Were there any winners last night?  John McCain, Mike Huckabee, Mitt Romney perhaps?

FINEMAN:  Yes, well, the whole thing reminded me of the fact that I think professional wrestling is often the most highly rated show on cable television.  Just like when everybody running into the ring and running around and slugging everybody else, I think the winners were number one, John Edwards who came off as the soul of reason and focus and the Republican Party which would like nothing more than the kind of irreparable divisiveness that the Democrats were on the edge of right now.  It‘s getting very, very nasty out there.

OLBERMANN:  Yes, to that point, just before the debate, Senator Edwards released this statement—a letter of encouragement that he had Martin Luther King the third in which the Reverend‘s son applauded the senator‘s focus on poverty, urged him to stay in the race for president.  Is that now more of a possibility than it was because of this debate because Senators Obama and Clinton did everything but pick up a folding metal chair and hit the other the head with it?

FINEMAN:  Well, I would say, if you can string together that kind of a thing from last night for a month.  Edwards would be ahead by the end of it.  And I think that they were—they have been this campaign‘s inner circles had been seriously examining what to do.  I think they decided even before the results from Nevada that they‘re going to try to hang in there and accumulate delegates.  He‘s got to get 15 percent in various districts.  I won‘t bore you with the math.  But if he can get above that 15 percent threshold, he can end up with a few hundred delegates and he can play peacemaker or kingmaker or both at the convention even if he can‘t win the race and I think most voters find him a refreshing break from the fisticuffs going on all around him.

OLBERMANN:  About those fisticuffs, the campaign, the idea that his

campaign has to compete both with Senator Clinton and former President

Clinton in the process, did Senator Obama miss an opportunity in last night

in this debate to raise a point of sort of that might have been external to this sort of “cat fight” when she said, we both have very passionate and committed spouses who stand up for us and I‘m proud of that, could he have then said, well you know, that‘s true, Senator Clinton but I haven‘t heard my wife talk about you at all in this campaign?

FINEMAN:  Well, not only that, he might have said, not only has my wife not been talking about you, she hasn‘t been telling untruths about you.  I mean, what Obama is saying is not only that Bill Clinton is sullying the image and the idea of the presidency by getting down in the trenches like this, that Bill Clinton is saying things that are untrue about him.  Now, Bill Clinton says, I would never distort a specific, you know, I stick to the facts.  And there are people who questioned his commitment to that over the years.  But the fact is he knows how to shade things, he knows how to say things in a very conning political way without actually telling a flat out lie and that‘s what he did on the comments about Ronald Reagan.  I mean, Barack Obama was not really praising the substance of Reagan‘s ideas, he was saying that Reagan was transformative figure who could reach across party lines, and he, Obama was the same kind of guy.  That‘s all he was saying.

OLBERMANN:  But to be fair, he also did say that the Republicans had all the good ideas in the last 10-15 years which just happened to include the Clinton presidency.  So, he seemed to step away from those remarks. 

So, I think there‘s a little this going in - I think everything here is

going in both directions.  And this race -

FINEMAN:  I agree with that.

OBLERMANN:  The next point here, the fighting in the campaign, when the media fixes on it, we‘re often accused of ignoring the issues but in the real sense, the fighting is an issue.  And to that point, the largest newspaper in South Carolina, “The State,” endorsed Senator Obama this afternoon.  Let me quote from this editorial at length - “The restoration of the Clinton‘s to the White House would trigger a new wave of all-out political warfare.  That is not all Bill and Hillary‘s fault - but it exists, whomever you blame, and cannot be ignored, Hillary Clinton doesn‘t pretend it won‘t happen; she simply vows to persevere in the hope that her side can win.  Senator Obama‘s campaign is an argument for a more unifying style of leadership.  In a time of great partisanship, he is careful to talk about winning over independents and even Republicans.  He is harsh on the failure of the current administration - and most of that critique well-deserved.  But he doesn‘t use his considerable rhetorical gifts to demonize Republicans.  He would be a groundbreaking nominee.  More to the point, he makes a solid case that he is ready to lead the whole country.”

Howard, in light of what‘s written there, it seems that there are three possibilities of what are actually going on here in the run up to the South Carolina primary.  One is: The Clintons are trying to run Obama out of town via dirty politics.  Two is: Obama is trying to run Clinton out of town saying, I‘m a victim of dirty politics and moreover, if you nominate her, she‘ll be the victim of dirty politics by Republicans.  And the third thing is - third possibility is—this is all nonsense.  And media is simply treating a minor detail like a prize fight.  Which is close?

FINEMAN:  Well, I don‘t think it‘s a minor matter.  I agree with you.  It‘s about the character of both of them.  And what the Clintons are trying to do is bring Barack Obama down off that pedestal that “The State” newspaper put him on in that editorial.  What the Clinton is saying is:

Look, this guy is no saint.  This guy is no different from the rest of us.  He‘s a politician who shades the truth, who shapes his own biography to suit his purposes, who has shady people that he deals with back in his hometown.  And they are wading into it and they‘re going to keep throwing accusations to Obama and make him answer everyone, hoping that some of them stick and hoping that even if they don‘t stick, that they would bring him to this level.  That‘s what‘s going on here and it‘s up to Obama to try to fight it every inch of the way, every step of the way.  That‘s how it‘s going to be from here on in.

OBLERMANN:  Our own Howard Fineman, senior Washington correspondent and political columnist with “Newsweek.”  As always, Howard, great thanks for joining us.

FINEMAN:  Thank you, Keith.

OLBERMANN:  In a sense, Senator Obama has now gotten what he wants.  He is competing against only one Clinton in South Carolina.  The ex-president is there, the senator is not.  Is she perhaps conceding that state?

And: Is the economy about to turn the entire presidential campaign upside-down.  Is that John Edwards message about speaking for the financially-squeezed in the middle, suddenly, the message?  You are watching COUNTDOWN on MSNBC.

(COMMERCIAL BREAK)

OLBERMANN:  Hillary Clinton leaves South Carolina to campaign on the Super Tuesday states.  If Barack Obama was not right before about competing with Bill Clinton, now, he is.  Where the Democratic campaign goes from here and where all the presidential candidates go economically from here as the world‘s stock markets wobble.

Later in Worst: It‘s one thing for anonymous e-mailers to claim or in forward claim that Senator Obama was sworn in on the Koran, and is really a Muslim.  It‘s something else for Republican Party officials to do so.  All ahead on COUNTDOWN.

(COMMERCIAL BREAK)

OLBERMANN:  The contentious debate between candidates, Clinton and Obama was heated enough, the prospect of another big primary in just four days is pouring more fuel on a raging fire.  Our fourth story: Both candidates throwing more punches at each other today, the mix metaphors, one by a long distance.  Senator Clinton portraying Senator Obama‘s mood last night as spoiling for a fight while groping for a new strategy and frustrated over his early primary losses.

(BEGIN VIDEO CLIP)

H. CLINTON:  I think what we saw last night was that he‘s very frustrated and I believe the events, Senator Obama is very frustrated.  The events of the last 10 or so days, particularly the outcomes in New Hampshire and Nevada have apparently convinced him to adapt a different strategy.  So, he clearly came, he telegraphed it, he talked about; he clearly came last night looking for a fight.

(END VIDEO CLIP)

OLBERMANN:  All right.  With the polls showing, Obama with a 10 point lead in South Carolina, Senator Clinton was in Washington, California, Arizona and New Mexico today, not in South Carolina.  Meantime, Obama was accusing the Clinton campaign of, quote, “Fudging the truth,” unquote.  At a rally in Greenwood, South Carolina, he accused the Clintons of abandoning their earlier charge that he‘s too inexperienced.

(BEGIN VIDEO CLIP)

OBAMA:  You know, the American people, they‘d rejected that argument because they understand—they understand that you know, the biggest gamble would be to have the same old folks doing the same old things over and over again, playing the same old Washington games as somehow expecting a different result.  That‘s a risk we cannot take, that‘s a gamble we cannot afford.

(END VIDEO CLIP)

OLBERMANN:  Craig Crawford of CQPolitics.com joins us now for some analysis of this and where we go from here.  Craig, good evening.

CRAIG CRAWFORD, CQPOLITICS.COM:  They are keeping us awake now.

OLBERMANN:  Yes, perhaps not like insomnia or neighbors downstairs banging on the ceiling.

CRAWFORD:  All right.

OLBERMANN:  What is the expiration-gate on the banging on the ceiling stuff, on the container of sour cream, how long can these two campaigns go on like this before they combine to seriously damage the winner, not just the loser?

CRAWFORD:  It‘s starting to stick.  I would say, not too long after super duper Tuesday, February 5th going into the spring, that‘s going to be a real problem for the party.  You know, it‘s almost reminding me, Keith, going way back in time to Jimmy Carter‘s re-election when Ted Kennedy, the party‘s leading rival ran against him.  They had a bitter battle that was never resolved even at the convention and even after the convention and that is one of the reasons Ronald Reagan was elected.  Democrats have to start thinking about that possibility if this goes on that far.

OLBERMANN:  Right.  Paul Begala told THE TODAY SHOW today that Bill Clinton has gotten stuck inside Obama‘s head, that the senator is making a mistake tangling with the man who has 83 percent approval rating among Democrats.  Does that put Senator Obama in the damned if you do, damned if you don‘t position - if he acts as if he is under attack by President Clinton, or if he simply ignores him?

CRAWFORD:  I think he‘d be more damned if you do and if you do respond.  I think ignoring him would be better.  You nailed it earlier in noting that he does not—Obama did not get his message out in this debate.  How many times was he able to get that “hope” message out a little bit in the second half of the debate, I think.  That was where Obama really shines.  I think the problem is after Obama lost New Hampshire, we saw more of real politician, getting down in the fray, almost down in the dirt really with the Clintons.  And you know, you learn more about politicians, I‘ve always believe, when they lose, than when they win.  And I think Obama changed his campaign persona, to an extent much more of a night fighter after New Hampshire and lost a lot of that glow that he had when he won Iowa.

OLBERMANN:  To any degree is this whole fight, something of a smoke screen for the Clinton campaign.  I mean, Hillary Clinton‘s already left South Carolina; she‘s concentrating in these the big Super Tuesday states.  Has she refocused away from North Carolina but left the president there not only as this proxy figure but also as kind of cover?  Everybody watches him, nobody notices if she has indeed conceded the victory Saturday in South Carolina.

CRAWFORD:  They‘ve got Obama chasing the decoy.  Bill Clinton is the decoy here and he‘s the snapping right after him.  And I think it‘s a mistake for Obama.  Yes, Senator Clinton is going to concede in South Carolina in effect, she won‘t say it, you know, outright, but I think that‘s probably a smart strategy for her.  They figure they can get away with losing South Carolina.  It will be written off the exit polls when we talk them Saturday night, will probably show if Obama wins South Carolina that he did it on the strength of African-Americans voters.  That‘s how the Clintons will write that off and then, the focus will suddenly be in 22 states around the country where African-Americans voters and Hispanics voters aren‘t really as much of a factor. And it will be a much broader swath of voters and that‘s where she‘s focusing now.

OLBERMANN:  All right.  I have two questions to ask you and only time to ask one.  So, one I‘ll simply state as a statement here about that debate format - it‘s not to criticize Wolf Blitzer, but I‘ve been there trying to moderate these things is like, you know, trying to teach meeting to a bunch of drunks.  When you have a crowd there and they‘re getting - everybody‘s involved, they‘re all talking the same time, I think the format served no one well last night.  But I got, let me ask you about the Republican development of the day in the presidential race.  Fred Thompson has cleared his throat for the last time at the presidential candidate.  He‘s out of the race.  What happens now?  Is he going to come out and endorse McCain?  Where is he go from here?

CRAWFORD:  To matter, he‘s got to endorse before the Florida primary, Tuesday, I think but that‘s when it would mean the most to whoever gets it.  If he picks right, and that person is the nominee, Fred Thompson will be high on the list I think as a running-mate choice.  If he picks well and that person wins the nomination ultimately, John McCain is an old buddy of Thompson‘s and that‘s probably where he‘ll look first for an endorsement.

OLBERMANN:  Oh, he can‘t go anywhere but McCain, can he?  Wouldn‘t he be looked at as a traitor if he went anywhere but McCain?

CRAWFORD:  He might but he doesn‘t endorse McCain before next Tuesday, then I think something else may happen.  He might be waiting to see if Romney emerges.

OLBERMANN:  Wow.  Oh, boy.  Talk about real politicians.  Our own Craig Crawford of CQPolitics.com, thank you Craig.

CRAWFORD:  Get a dog, if you want a friend in politics.

OBLERMANN:  So, it might be a recession, it might be a panic, it might be stagflation.  Whatever the economy is doing, what do the candidates intend to do about it?

And some of us never get tired of hearing that phrase “Worst person in the world.”  Ask the guy on the couch.

But first: The breaking headlines in the administration‘s 50 scandals

Bushed.  Number three:  Waterboarding-gate.  More evidence that there were more than just two torture sessions accomplished by and taped by the CIA.  Attorneys for terror detainee, Matthew Khan (ph) filed a complaint challenging the CIA claim that recording stop in 2002.  Mr. Khan‘s says, his interrogations were recorded and he wasn‘t captured until 2003.

Number two: Screwing up prosecutions-gate.  Another reason not to torture or deny food if few people detained.  The government wanted a convicted would be dirty bomber Jose Padilla to get life.  The Florida judge noting he was held in hard conditions.  The government argued that I could not take that it into consideration, I disagree.  That judge had sentenced him to 17 years, not life.

And number one: Gonzo-gate.  The old attorney general has long gone but the investigation by the Justice Department, the Office of Professional Responsibility and especially, the House and Senate Ethics Committees continues and targets.  According to the newspaper “The Hill,” examining whether Congressional Republicans, including one running for the Senate this year, improperly interfered with the investigations.  Whether people tampered with witnesses preparing to testify to Congress, one politico interviewed by Justice according to “The Hill,” then, New Mexico Republican Party chairman, Allen Weh, who responded people don‘t care about this.  This is yesterday.  Oh, you‘d be surprised, Mr. Weh.  Yesterday, all your troubles seemed so far away.

(COMMERCIAL BREAK)

OLBERMANN:  One quick real time example of the fog of primary debate.  Earlier, I said, I‘m not sure what I said.  That‘s how confusing the stuff between Obama and Clinton is at the moment.  Senator Obama said, “They had,” meaning the Republicans, “all the ideas in the last 10 to 15 years.”  If that‘s not what I said, I apologize.  You can probably figure out why I didn‘t say that, that‘s what he said.

Fifty one years ago today, early this morning, at the end of a story that should make you think about what terrorism really is, New York City police detectives announced the arrest of George Matesky (ph) and his confession to a series of crimes that had plagued and unnerved the city dating back to 1940.  Over the 17 year span Matesky left 32 small yield pipe bombs around New York City.  In Radio City Music Hall, in Grand Central, Penn Station, at Macy‘s, in this very building from which we do this newscast, revenge in Matesky‘s mind against the city‘s main utility company, Consolidated Edison in whose employ he had been when he was severely injured in an accident in 1931.  It later proved Con Ed misled detectives who suspected that the so-called mad bomber might have been a disgruntled employee saying all pre 1940 records of its former workers had been destroyed.  On that happy note, let‘s play “Oddball.”

We begin in Bobaneshwar (ph), India where fresh off his record-breaking achievement of smashing 72 coconuts in one minute Muhammad Zekir (ph) has managed to crack 200 coconuts in three minutes using only his elbow.  Ow, ow, ow, ow.  How, impressively pointless.  Although clearly his elbow is not pointless.

And I don‘t know if you ever noticed this, we make Bill ORLY, Bill O‘Reilly of Fox Noise our worst person in the world.  I‘m thinking like twice a year.  Once a week.  Once a week, really.  Well, I never noticed.  But judging by this YouTube video, one of our younger viewers, Aden Brandon (ph) noticed.

(BEGIN VIDEO CLIP)

OLBERMANN:  You are the evidence that might be true.  Bill O‘Reilly.

UNIDENTIFIED MALE:  Bill O‘Reilly.  Worst person in the world.

(END VIDEO CLIP)

OLBERMANN:  The zero to three-year-old demographic.  COUNTDOWN kill ins that.  We‘re always looking for guest hosts.

Now the last Bush talking point, the economy is great for investors has self-destructed what are his would-be successors proposing to do when they inherit the imminent Republican recession.

And the initial report, an old story claiming another young actor. 

Heath Ledger, dead.  Drugs suspected.

These stories ahead but first time for COUNTDOWN‘s top three best persons in the world.

Number three, best coincidence.  Tran Thi Kham, a Vietnamese woman moved to Taiwan three years ago to look for her biological father who lived there.  She brought with her a bag of personal items the man gave her mother in the sixties.  When she changed jobs as an in-home nurse, she accidentally left those personal items in the house of the man for whom she was working.  The man opened the bag and began to weep.  He had given her mother the Tran Thi Kham‘s mother the items in the bag.  He, the guy she was working for was her father.

Number two best old disaster people keep recreating even though we keep telling them not to.  The owners of a home in Galveston, Texas, well it used to be home.  Then they, as so many before them, thought if one pest fogger worked, wouldn‘t six of them work better?  They blew the roof off the joint.

And number one, best dumb criminal, Benjamin Jorgensen and Donna Hayes of Melbourne, Australia sentenced to eight and seven years in jail respectively for a hold up.  A lot of mistakes here.  Number one, they thought they were leave the diner with a big bag full of money.  Actually it was a bag full of dinner rolls.  Number two.  Their ill-fated stickup was at the cuckoo restaurant.  Number three, it took place on April Fools Day.  And finally, number four, Mr. Jorgensen was high at the time and accidentally shot his partner Ms. Hayes in the ass.

(COMMERCIAL BREAK)

OLBERMANN:  A year after the Democratic Congress took power, they and President Bush agreed on something.  The forecast from Wall Street, we‘re screwed.  In our third story tonight, Mr. Bush tries to deny but the recession debate has become not if but when if not already.

So what do those who want to succeed him do about it, already?  Mr.  Bush, whose fondness for borrowing from other countries to finance tax cuts here and deregulating the industries whose risky investments helped midwife the housing crisis and the resultant credit crunch met with members of Congress today agreeing not on a plan to rescue the economy, but on an agreement to come up with one some time in the next three weeks or so.  Since that worked so well for President Hoover, we look forward to that.

Among the problems ahead, while the Federal Reserve just cut interest rates again to encourage borrowing, a lot of people don‘t want to borrow right now and at any rate some lenders don‘t have the cash to lend at any rate.  Not to mention the lack of serious proposals to re-regulate the Wild, Wild West get rich quick businesses that got us here.

Mr. Bush‘s favorite remedy - no fair if you guessed it, tax relief in the form of rebates.  And the presidential candidates, joining us now to try to help answer that question MSNBC political analyst Rachel Maddow whose radio program airs every weekday on Air America Radio.  Good to see you.

RACHEL MADDOW, AIR AMERICA:  Hi, Keith.

OLBERMANN:  John Edwards was first out of the gate with this stimulus plan.  Does he now look like a freaking genius because everybody and the world and the news cycle has come around basically to his point of view?

MADDOW:  Edwards does benefit as long as we‘re talking about the economy.  Not only was he first on talking about the stimulus package as mentioned but he‘s also been the populist guy on economics.  He‘s the guy who has been most willing from the beginning to actually identify bad guys in the economy.  To say let‘s be patriotic about something other than war.  Let‘s be moralistic about something other than sex.  Let‘s talk about corporate irresponsibility and corporations that don‘t serve the people who work for them or the consumers.  Let‘s actually identify un-American, bad behavior in the economy and that kind of, I think real forceful approach to the issue is going to place him in good stead right now.

OLBERMANN:  In a surprise development in the Obama-Clinton part of the campaign, Senator Obama hit Senator Clinton today for leaving out workers and seniors from her tax relief proposal, her first one.  Is that fair?  And what more or less in understandable terms is Obama proposing?

MADDOW:  The stimulus package which is my most favorite economic term of all.  The most titillating of all economic terms.  The whole idea of a stimulus package is you want to get money to the people who are definitely going to spend it.  Who are going to put the money back into the economy. 

So the idea is to get it to people who don‘t have extra money.  Get it to

people at the lower end of the economic totem pole.  So yeah, criticizing

Clinton for leaving out workers and seniors in her plan makes sense in

economic terms that that would be the criticism.  I think there‘s something

there‘s an opportunity in addition in addition to just a rescue plan we need here.  There‘s an opportunity that I‘m surprised that Obama and Clinton haven‘t jumped on more forcefully.  And that is you and I have talked about it before.  Our infrastructure in this country is made of sugar.  We are in desperate need of real investment in roads and schools and bridges, communications, our power grids, all of these things, our sewage systems, our water treatment systems.  That kind of spending works too, to counter recessions.  Yeah you need to talk about rebates targeted to people at the lower end of the economic scale, but that kind of spending and that part of the fiscal plan needs to be part of the discussion too.

OLBERMANN:  The Works Progress Administration Jr. in other words.  What Roosevelt did.  Which also prevented any fear of unemployment growing and in fact began to knock unemployment down.

MADDOW:  After Hoover failed, that‘s how FDR didn‘t fail.

OLBERMANN:  Speaking of Hoover, the party that used to be known for fiscal conservatives.  Senator McCain confessed, I don‘t know much about the economy.  Which puts him in our league.  Mitt Romney boasts of his experience with a company that made its money by laying people off.  Is there a GOP approach to this other than saying we can make the economy work by giving money to the corporations?

MADDOW:  That‘s kind of what we‘re hearing.  We‘re hearing corporate tax breaks.  We‘re also very specifically hearing the richest people who benefited from Bush‘s tax cuts should get a further tax cut in three years.  That‘s not going to do anything for the kinds of problems we‘re having now.  Those are the kinds of proposals we‘re getting.  Mitt Romney is also bragging in Massachusetts where he created fewer jobs than any state than Louisiana which had just been hit by Hurricane Katrina and which has the most notoriously worst economy in the country.  He is bragging on his Massachusetts record, I think he has to find a new story to tell.

OLBERMANN:  Like I keep saying, it worked for Hoover, it will work for these guys as well.  Our own Rachel Maddow, host of “Rachel Maddow Show” also of course on Air America.  We‘ll see you Saturday night after the primary in South Carolina.

MADDOW:  Indeed.  Thanks, Keith.

OLBERMANN:  Thank you.

MADDOW:  That is not a newfangled cowboy boot on Tom Brady‘s foot 13 days before the Super Bowl, all though later in the day, he wore a cowboy boot.  You can‘t see it but that‘s a protective thing on his foot.  Never mind, the point is lost.

What‘s he doing in worst persons?  Chuck Knoblauch.  Why does that name sound familiar?

(COMMERCIAL BREAK)

OLBERMANN:  In a previous, more cynical and less celebrity awestruck time, one might have thought that the lead story in our 90 seconds of celebrity news was an attempt to prevent gambling on the Super Bowl.  Right now everybody is drooling that it‘s Tom Brady and Giselle Bunchen.  But here is the little drama that played out in New York yesterday.  Brady, quarterback of the heavily favored New England Patriots walking around town with a injury protecting boot on his foot.  Only then to appear later in the evening, accompanied by supermodel Bunchen, not in protective boots, but in cowboy boots.

It is noteworthy that the spread on the Super Bowl has dropped from New England favored by 13.5 over the New York Giants to 12 which is still a lot considering the Giants have a very good chance of winning that game.

It is difficult to recreate the sense of wonder which the Beetles were greeted upon their arrival in this country in 1964.  It wasn‘t just about their music, but also about their startling self effacing humor.

This week a rare throwback glimpse of that as Paul McCartney sat down for a television interview with ITV Network‘s “News at 10.”  Nothing to do with his divorce, nothing to do with entertainment, just a discussion of theory that becoming a vegetarian might be a person‘s best individual response to global warming because raising cattle for food leads to the release of greenhouse gases.  All you need to know to get Sir Paul‘s vintage gag is that the ITV newscast is named “News at 10.”

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  Where can you go next?  It‘s OK to right a letter to the prime minister.  Or you‘re used to banging on about vegetarianism.  But have you considered any further action?

PAUL MCCARTNEY, MUSICIAN:  I think the best thing I can do is come on “News at 10” and I thought I should use my celebrity just to bring it to people‘s attention and then it‘s up to then whether they do anything about it.

UNIDENTIFIED FEMALE:  So you haven‘t got any big plan .

MCCARTNEY:  “News at 10.”  That‘s my big plan.

(END VIDEO CLIP)

OLBERMANN:  The shocker from New York tonight, the actor Heath Ledger found dead.  There are new details on this next.

But first, COUNTDOWN‘s worst persons in the world.  The bronze, Chuck Knoblauch, old friend of the family.  After he was accused of steroid use in baseball‘s Mitchell Report, the House oversight committee invited him to testify on February 13.  They sent him a letter and he never responded.  So they subpoenaed him.  My theory is Mr. Knoblauch got their invitation, wrote a letter back and then tried to throw it in a nearby mailbox and instead hit my mother.

The runners up, the members of the Republican Party Committee of Clark County, Washington who were nice enough to more or less transcribe that hate e-mail going around about Senator Barack Obama.  On the front page on their official Republican Web site, they quoted this.  “Takes great care to conceal he is a Muslim and adds, it‘s reported he swore his oath of office on the Koran and pictures have shown him standing for the pledge but not reciting it and holding his hands to his sides while others held their hands over their hearts.  This is chilling information about a candidate for the highest office in the country, especially given the radical Muslim claims that they will destroy America from the inside.”

Given that none of that is true, actually, it‘s chilling information about how unscrupulous and just as important, how stupid are the members of the Republican Party Committee of Clark County, Washington who incidentally spelled Obama‘s party “democrate,” d-e-m-o-c-r-a-t-e.

But our winner, Bill O‘Reilly.  This just reported to us from the middle of November long before he began his sadistic laughing at the thought there were actually 200,000 homeless U.S. military veterans in this country.  His insistence that none of them could really be sleeping under bridges, as John Edwards noted.

Associated Press, November 20th, 2007, the date line Iowa City, Iowa.

Quoting it, the homeless Vietnam veteran who‘s body was found beneath an Iowa City bridge was turned away days before from a veterans affairs center and the Johnson County jail.  That‘s according to the police reports Sunny Levino (ph) was found dead earlier this month under a bridge.  An autopsy says he died of hypothermia.

Well, Bill, you‘re right, this vet is not living under a bridge tonight.  He‘s dead.

Bill O‘Reilly, today‘s worst person in the world.

(COMMERCIAL BREAK)

OLBERMANN:  Again, so many who crave and constantly exploit the limelight, the exceptions stand out.  Add to that a suddenly untimely death and you begin to understand the shock surrounding word tonight that actor Heath Ledger, age 28, was found dead this afternoon in a Manhattan residence believed to be his home.

Our number one story on the COUNTDOWN, a New York Police Department spokesman told the Associated Press that a housekeeper found Ledger in his Soho residence in Manhattan at 3:26 eastern.  He was dead with pills or pill bottles strewn about him.  The housekeeper had been trying to alert Mr. Ledger that a masseuse had arrived for an appointment.  Other reports were he was naked and suicide had not been eliminated as a cause.  Now there is a statement there was no obvious indication of suicide according to the NYPD.

TMZ.com reports it‘s much too early to determine if it was accidental or suicide, according to unnamed police sources.  Ledger, best known for his Oscar-nominated role in “Brokeback Mountain” and he will be appearing as the Joker in the upcoming Batman sequel “The Dark Knight.”  He has a two-year-old daughter, Matilda, with his former fiancee, the actress Michelle Williams.  Mr. Ledger‘s body has been removed from that residence in Soho in New York and the medical examiner‘s office plans an autopsy for tomorrow according to a spokesman.

Let‘s turn now to the managing editor of TMZ.com, executive producer of the TMZ television show, Harvey Levin.  Thanks for your time, tonight, Harvey.

HARVEY LEVIN, TMZ:  Sure, Keith.

OLBERMANN:  Your Web site has tried to fill in some of the details about the housekeeper finding him along with the masseuse.  Calling the paramedics who found him in full cardiac arrest.  What more can you tell us about this?

LEVIN:  Well, when we broke this story earlier in the day, what unfolded was just really this shocking scene where the housekeeper walked in shortly thereafter the masseuse came in.  They both discovered the body.  The cleaning lady called 911.  Interestingly, the masseuse called the body guard for the Olsen twins.  Because one of the Olsens lives around the corner and he was an EMT and this masseuse knew him.

So he came over and what they all noticed was, it looked like he had been dead for awhile.  That‘s the way it was put by people at the scene.  There was a pill bottle on the night stand and pill bottles around the apartment.  Yes, he was naked.  He was not on the floor as some reports say.  They actually found him on the bed.  They removed him to the floor to try to administer CPR.  But I can also tell you he had pneumonia at the time of his death.  He was really, really sick.  We don‘t know if that played a part in this.  But the cops are saying there does not appear to be any foul play here.

OLBERMANN:  We go into this gingerly, but if you find a scene in which there are pill bottles and reports he might have had a substance abuse problem, it‘s the thing people might jump to without there being any truth to it whatsoever.  What are your sources telling you about previous material like that?

LEVIN:  I can tell you.  He did have a substance abuse problem.  He did not go into rehab.  There were some bogus reports about that.  He did have a substance abuse problem.  People around him say he was clean for the last year, as far as they knew.  I can tell you the family has been in touch with us.  They are extremely upset with the buzz in the media that this might have been a suicide.  They are distraught over the death but the suicide thing is pushing them over the edge.  They are telling us the cops have been in touch and the cops told them it looks like an accidental death, that there is no evidence of suicide.  The cops have been clear on that.  Nobody knows for sure.  But that‘s what the family conveyed to us.

OLBERMANN:  The spokesman from the NYPD, the PIO involved, Paul Brown said there was no obvious indication of suicide.  So even the public statement is directing people away from that.

But one of the things about this that I guess emphasizes or contributes to the sense of shock, before he separated from his fiancee, the actress Ms. Williams, they had lived in Brooklyn together prior to that.  There were plenty of anecdotal reports of Heath Ledger spending time with his daughter in his neighborhood in Manhattan.

A lot of this, isn‘t this the fact that all of the celebrities and movie stars that you may see, this was a guy living a fairly normal life inside a big city.

LEVIN:  Yeah.  Absolutely.  Keith, we cover a lot of stories.  Some of them tragic.  There was an actor who died earlier this month and he had some troubles that we knew about.  When we heard about it, it was extremely sad, but it was not totally unexpected.  This blew me away.  When we got the call from somebody we know in law enforcement, my jaw dropped to the ground.  It‘s just there was no indication of this.  It was really stunning.  I remember writing it down and sitting there looking at the papers saying it can‘t be so.  It just seems bizarre.

OLBERMANN:  What is an answer at this point?  What do we have nothing on that might be the second day story on this?

LEVIN:  The toxicology report is going to be critical.  They are going to do an autopsy tomorrow and the toxicology report usually takes a month to six weeks.  But that will definitively say - theoretically definitely say exactly what caused his death, how many pills were in the system, why kind of pills were in his system, whether pneumonia played a part and anything else but I‘m guessing this will be a mystery for awhile.

OLBERMANN:  Harvey Levin, managing editor at TMZ.com and the TMZ TV show.  Thanks, Harvey.

LEVIN:  Sure, Keith.

OLBERMANN:  That‘s COUNTDOWN for this, the 1,728th since the declaration of “Mission Accomplished” in Iraq.

I‘m Keith Olbermann, good night and good luck.

Our coverage continues now with MSNBC‘s “LIVE WITH DAN ABRAMS.”  Dan, good evening.

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

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