updated 10/9/2008 1:26:15 PM ET 2008-10-09T17:26:15

COUNTDOWN

October 8, 2008

THIS IS A RUSH TRANSCRIPT.

THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

Guest: Bob Herbert

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

The Freudian campaign: After a debate like that, maybe you could get the feeling you were just some kind of-I don't know, prisoner of the election.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R-AZ) PRESIDENTIAL CANDIDATE: Across this country, this is the agenda I have set before my fellow prisoners. And the same standards of clarity and candor must now be applied to my opponent.

(END VIDEO CLIP)

OLBERMANN: Citizens, senator, not prisoners.

(BEGIN VIDEO CLIP)

MCCAIN: This is the agenda I have set before my fellow citizens.

(END VIDEO CLIP)

OLBERMANN: The schizophrenic candidate: The McCain leak, the candidate will take the higher road will not focus on Ayers or Wright. Then the campaign releases a statement from a man whose house was firebombed by Weather Underground and McCain answers with gusto an interview question about Ayers.

And he and "governor demagogue" are again introduced by a man, this time, the Republican Party chair of Lehigh County, Pennsylvania who uses Obama's middle name. Steady there, Sparky, the feds are now investigating the last guy who do that.

(BEGIN VIDEO CLIP)

MIKE SCOTT, LEE COUNTY SHERIFF: Barack Hussein Obama -

(END VIDEO CLIP)

OLBERMANN: That sheriff of Lee County, Florida might lose his job for campaigning while in uniform. The U.S. Office of Special Counsel now investigating Sheriff Mike Scott.

Why you should now be investigating this-McCain's tacit support for a woman who had shot an abortion doctor. A woman of whom the sentencing judge said, quote, "You are a terrorist." The senator sat at a 1993 fundraiser beside another woman who defended her. The other woman wound up a McCain delegate to the GOP convention last month.

And never mind Obama over McCain. The other great debate: Robert Gibbs, Obama's communications director, over Sean Hannity, fixed news munchkins (ph).

(BEGIN VIDEO CLIP)

ROBERT GIBBS, OBAMA COMMUNICATIONS DIRECTOR: Why am I not to believe that you are not anti-Semitic?

SEAN HANNITY, FOX NEWS HOST: I put-let me.

GIBBS: Why am I not to believe that everybody who works for the network is anti-Semitic?

HANNITY: Here's the answer. Here's.

GIBBS: Because Sean Hannity.

HANNITY: Mr. Gibbs-Mr. Gibbs.

GIBBS: . gave a platform to somebody who thinks that Jews are.

HANNITY: Mr. Gibbs, I'm a journalist.

(END VIDEO CLIP)

OLBERMANN: Thus, inspiring a special ode to Sean Hannity composed for us by the legendary John Cleese.

All that and more: Now on COUNTDOWN.

(BEGIN VIDEO CLIP)

HANNITY: I would-I'm Sean Hannity.

(END VIDEO CLIP)

OLBERMANN (on camera): Good evening. This is Wednesday, October 8th, 27 days until the 2008 presidential election.

On the day that Senator McCain's campaign pretended to be suspended, it ran 1,300 campaign ads. On the day that Senator McCain's campaign pretended it will no longer focus on William Ayers, today, it released a statement about William Ayers.

And the senator himself as well as his running mate, both are responding with gusto to a question about Mr. Ayers in a joint interview with FOX News.

Our fifth story on the COUNTDOWN: The Republican nominee, an apparent prisoner and a word he's chosen deliberately of his own mixed messages. The McCain campaign claiming this morning to a quick cold turkey on its Ayers attacks.

Politico.com quoting McCain aides as telling them that going forward, the senator and governor, quote, "wouldn't focus on the former domestic terrorist." But that did not stop Governor Palin from focusing on whether the trumped up ties between Obama and the rehabilitated '60s radical represent a failure of judgment by the Democrat during a joint interview on fixed news. And even that latest burst from the demagogue from Alaska did not stop Senator McCain from urging voters to demand answers from his opponent, begging voters might be more accurate.

(BEGIN VIDEO CLIP, FOX NEWS)

MCCAIN: I think they should care about Senator Obama's truthfulness. I don't care much about an old terrorist and his wife who were still unrepentant. The American people understand whether Senator Obama has been truthful and candid about his entire relationship with Mr. Ayers and with others, very frankly.

(END VIDEO CLIP)

OLBERMANN: So much for not focusing on the former domestic terrorist.

The McCain campaign also releasing a news release this morning with a gentleman named John Murtaugh, says, quote, "When I was 9 years old, the Weather Underground, the terrorist group founded by Barack Obama's friend William Ayers, firebombed my house. Barack Obama's friend tried to kill my family."

And if the implication there was not clear enough that Obama, at the time, himself, a child, was somehow involved in the firebombing.

For a second consecutive day, someone on a deuce (ph), at a McCain-Palin rally making a crack about the Democratic nominee's middle name. Reporters not catching the remark on camera because they just had entered the venue but the gist of what William Platt, chairman of the Lehigh County, Pennsylvania GOP said was this: "Imagine if you woke up on November 5th and Barack Obama, Barack Hussein Obama," he said, "was our new president and you knew you could have volunteered to prevent it."

A McCain spokesman putting out a statement saying, quote, "We do not condone this inappropriate rhetoric which distracts from the real question of judgment, character, and experience that voters will base their decisions on this November."

Something they could have said Monday when the sheriff of Lee County, Florida also invoked Senator Obama's middle name at a McCain-Palin rally. He is now under federal investigation because officials of the U.S. Office of Special Counsel are looking at whether or not Sheriff Mike Scott used while wearing his uniform his public office to influence a political election, something that is against the law. Whether his office might lose federal funding or he might lose his job for violating the Hatch Act. You would think a sheriff would know about that.

Back on the campaign trail today in Florida, Senator Biden criticizing the McCain-Palin ticket for its outrageous inferences and attacks, saying that instead of choosing in an intellectually honest manner, the opposition has chosen the other option.

(BEGIN VIDEO CLIP)

SEN. JOE BIDEN, (D) VICE PRESIDENTIAL CANDIDATE: There's one other option, the one they have chosen-is to appeal the fear with the veiled question, who is the real Barack Obama. Ladies and gentlemen, to have a vice presidential candidate raise the most outrageous inferences, the ones that John McCain's campaign is condoning, is simply wrong.

(END VIDEO CLIP)

OLBERMANN: Let's call in Chris Cillizza who writes "The Fix" for WashingtonPost.com.

Good evening, Chris.

CHRIS CILLIZZA, WASHINGTONPOST.COM: Good evening, Keith.

OLBERMANN: Campaign suspended except for the campaigning, nothing more on the economy, and then everything on the economy. No more Ayers, questions and press releases about Ayers. The polite word for all of this in a campaign would be "disconnect." Which is the impolite word, chaos or window-dressing?

CILLIZZA: I think it's a function, Keith, of the fact that we are now 27 days from an election. That in the last 14 or 15 days, John McCain had seen the race go from what looked like essentially a jump ball, both nationally and key battleground states, to a race that is clearly now favoring Barack Obama in both of those measures.

And I think what you are seeing is a campaign trying to cope with a very fundamentally-changed race while noting that every day they countdown is one day closer to the election. And I think you're seeing a lot of things being thrown at the wall, talking about the economy, now, we're going to move beyond the economy, not talking about Ayers, yes, talking about Ayers, casting Obama as a liberal tax-and-spender.

You're seeing a lot of different strategies; McCain has to settle

on one. Whatever that one may be, between now and November 4th

OLBERMANN: And to that point, what Senator McCain and Governor Palin are attempting to do is paint the Ayers history as a matter of judgment. Is there not a kind of fatal irony to this because what kind of judgment is in play when either, (A), you know, people are focusing on past associations when a lot of the country is drowning financially, and (B), if they keep veering back from poll to poll and changing campaigns virtually entirely, every day?

CILLIZZA: Well, Keith, I think your first point is really, really important. The McCain campaign, I believe, knows that it cannot go on television, paid television advertising with William Ayers because they know that people are going to say this happened 30 to 40 years ago. I can't pay my mortgage. I can't put food on the table, and he's talking about something that happened when Barack Obama was eight or nine years old.

They need it to be a peripheral message. Whether it's an outside group, as you mentioned, the statement put out today, Sarah Palin talking about it.

But if you noticed, in the debate last night, John McCain never said the word Bill Ayers. And in his appearance today in Bethlehem, Pennsylvania, he didn't mention Ayers.

So, I think they are trying to run sort of a two-tiered campaign. On sort of very public level cast Obama as tax-and-spender and as a liberal. And then on that more peripheral, that undercurrent level, hope that the Ayers stuff penetrates.

OLBERMANN: But what about the poll to poll stuff. I mean, in the closing minutes of the debate last night, McCain said the next president has to have a steady hand on the tiller. This doesn't look like a candidate with a steady hand.

CILLIZZA: No, and two, I think Obama's credit, they have done a very good job over the last 15 or 16 days. You hear the word "erratic" quite a bit from Barack Obama and from his surrogates basically saying, look what Barack Obama has done over the last 15 days to try and handle this economic crisis, generally, relatively, sort of a sober and calm approach. And John McCain has, in some ways, listed from thing to thing, suspending the campaign, now, he has some proposal about housing and buying up bad mortgages.

It's an attempt to draw that contrast. If you didn't think Barack Obama is ready to handle a crisis, look how he's handled this last two weeks versus how McCain has handled it.

OLBERMANN: Why the leak today so prominently played that obviously, it was legit and obviously, it came out of the McCain campaign, and obviously, it was meant to? Why come and say, you know, we're not going to focus on Ayers, we're just not going to do it, and then focus on Ayers-is one of those two things just a mistake?

CILLIZZA: You know, Keith, I don't think so. I think they are trying to differentiate for themselves the difference between what they are doing in paid communication-and we know how powerful television is, putting those ads on the air what John McCain says in his appearances-

John McCain says in his appearances.

That's important because, I think, they are drawing a line, a demarcation saying, well, Sarah Palin is going to talk about it. We're going to put out press releases in hopes of driving news coverage and having people, like we're doing right now, talking about the statement that was put out.

But they are not putting money behind it which gives John McCain, I think, in his own mind, a way to rationalize it and say, we are not running a lowest common denominator campaign, while, in fact, making sure that Ayers information is out there.

OLBERMANN: Wow. I know you can't go through one good day without one really juicy rationalization. But that's a pretty big one because the people at home don't have any idea the difference between those two things.

Chris Cillizza of the "Washington Post," as always, sir, it's a pleasure. Thank you.

CILLIZZA: Thank you, Keith.

OLBERMANN: Some of the harshest reviews of Senator McCain's debate performance coming today from the conservative members of his own party. The right-wing blogosphere left wondering where the Republican was, the quote, "wanting (ph) last night's debate." And worst for them that Senator Obama did not come off looking like a terrorist sympathizer.

Andy McCarthy of "National Review Online," quote, "Memo to McCain campaign: someone is either a terrorist sympathizer or isn't. Someone is either disqualified as a terrorist sympathizer or his qualified for public office. You help portray Obama as a clearly qualified presidential candidate who would fight terrorists."

And it wasn't just Governor Palin that John McCain failed to mention last night, Bill Whittle on the same blog, quote, "Nothing tonight on abortion, on corruption, on associates. This was not a great night for our team. It's up to the 527s now, I think. I don't know how else to get the negatives about Obama out of there."

And Kathryn Jean Lopez, also at "NRO" taking more of the glass half-full approach, quote, "The good news, I doubt too many people sat through this whole debate."

Actually, it was 63 million, a little more than their first debate watchers.

Let's turn now to MSNBC political analyst, Lawrence O'Donnell, also, of course, a contributor to "Huffington Post."

Lawrence, good evening.

LAWRENCE O'DONNELL, MNSBC POLITICAL ANALYST: Good to be with you, Keith.

OLBERMANN: Continuity, staying on message. Are those right-wing critics right in terms of structure-if you're going to descend into the slime, using Bill Ayers, you can't just use it at the rallies, you have to bring into the debate, you have to have the audacity to say it to Obama's face and take the consequences?

O'DONNELL: What you just read, Keith, is some of the sharpest criticism I have heard of the McCain campaign. And, of course, the problem with taking it to the Tom Brokaw-moderated town hall environment is that it would have looked really terrible and there wasn't obviously, in that audience, they have their questions. None of them have questions about Bill Ayers. It wasn't something they're going to be interested in hearing. And so, the way they had been playing it, seems to be the one that make sense to them.

Now, as much as McCain would like to say, we're not going to talk about Bill Ayers, the second you agree to a Sean Hannity interview, as they did today, that's not going to be about anything else. To say Sean Hannity is obsessed with Bill Ayers is an understatement. And there's now way-they knew that going into that interview. They absolutely knew they're going to be talking about it.

OLBERMANN: Yes, well, on the other hand, if Robert Gibbs could clean Hannity's clock last night, I imagine, even John McCain could stand up and say, no, we're not going to talk about it.

But this is a bigger question. My old partner in sports crime used to say, just because dad has the power tools out doesn't mean the kids get to use them, too. Are these issues, is this particular thing, the Ayers story, the Wright story, are they power tools and did McCain just managed to cut off his base while not adding independence by not using these tools?

O'DONNELL: It does seem to be isolating him to his base in the sense that it is not appealing to independents. We have polling on this. This is no longer guesswork. We know this is not working. And the polls have produced exactly-the voters are saying exactly what they want to hear about.

Overwhelming majority, the number one issue is the economy. That's what they want to hear about. They don't care about these issues, and so to continue to drill them as the McCain campaign is, is to make the campaign seem less and less relevant to the voters they might be able to get-the swing voters, the independent voters. It really is isolating this campaign down to the base.

There are Republicans who are alienated by the Palin message in this territory. Some, however, really love it. That's where they get the cheers at the rallies. But if you are playing for cheers at the rallies.

OLBERMANN: Yes.

O'DONNELL: . that is not the way to win the independents.

OLBERMANN: Is the jury in or out on the governor's usefulness? I mean, David Brooks equated her to cancer to the GOP because she's not just about the rejection of liberal ideas, he wrote that she's about the rejection of ideas, period.

O'DONNELL: All we have to do is look at polls. The "Washington Post" Poll last week showed decisively that Palin is a drag on the ticket. All polls are showing a dramatic increase in her negatives. Her disapproval rating is skyrocketing. There is no conceivable case you can make using polls to indicate she helps this ticket.

A majority of respondents to polls say she is not ready to be president, that-those same people say Joe Biden, for example, is, of course, ready to be president. Obama is ready and McCain is ready.

So, I don't see what you could possibly point to in the polls to indicate that Palin is a positive for this ticket.

OLBERMANN: So, I don't want to wish bad luck on you, but let me say, let's assume now that something changes in Mr. McCain's mind and he turns to you and says, "I need you to run my campaign the rest of the way," if you possibly could do that morally, what would you tell him to do at this point?

O'DONNELL: I think the only thing you can do is take the guidance from the voters on this. They're telling you-you know, look, John McCain, your instinct was right when the Wall Street crisis broke. Your instinct was, I've got to be a man of action. I'm going to do something about it. Your instinct was right, your behavior wasn't and your public statements weren't.

But he's got to zero in on this and try to win this on the issue that voters care about most. There's no other strategy. And for them to be a campaign that says, "If we talk about the number one issue that voters care about, then we will lose." That is the definition of a hopeless campaign. McCain has got to overrule his advisors on that one.

OLBERMANN: So, buying the mortgages, the idea he sprung last night was not a bad idea, but was just three weeks too late?

O'DONNELL: It is probably both a bad idea in policy terms and how it could be executed. I mean, you know, my house, by the way, John McCain, is worth less than it was a year ago. Do I get in on this deal? I mean, exactly how you would define who belongs in this deal seems, to me, legislatively impossible, having worked on some legislation in my time in the Senate. I don't see how he could write it accurately.

But what it does seem like, at this point, is the kind of thing the voter would like to hear more of.

OLBERMANN: Yes.

O'DONNELL: Not just one sentence. Concentrate on it. Keep coming back to it. If you really have a good idea there, keep coming back to it during the debate and throughout the campaign.

OLBERMANN: Or even if it's a bad idea, just make it look good.

Lawrence O'Donnell, the contributor to "Huffington Post" and MSNBC. Of course, thank you as always, sir.

O'DONNELL: Thanks, Keith.

OLBERMANN: Why Senator McCain should not have gone with or should have gone with that original thought, no Ayers? Another grim association from his past surfaces. Why did he support a woman who had already been arrested for and would shortly be convicted of shooting an abortion doctor?

And, the end of Sean Hannity as we know it.

(COMMERCIAL BREAK)

OLBERMANN: They warned the senator, picketers or Republican Senate colleague, don't go to that far right fundraiser, but he did and wound up saying nothing as the woman sitting next to him praised another woman who just shot an abortion doctor. More of John McCain's past associations come tumbling out on his head.

And speaking of that, McCain in the Membrane. The senator says he'll cut entitlements, especially Medicare and Social Security, and Sarah Palin says, "John McCain and I will protect the entitlement programs that Americans depend on and above all, Social Security." Governor, you got to start attending those rehearsals. That's next.

This is COUNTDOWN.

(COMMERCIAL BREAK)

OLBERMANN: Why do William Ayers and the Reverend Jeremiah Wright matter? The answer, we are told, has to do with Barack Obama's judgment and character, judgment in choosing to associate with them, judgment in choosing to serve on a board with Ayers, character in choosing not to walk out on Wright's rhetoric.

In our fourth story: What we learn applying this litmus test to John McCain.

We told you last night about the U.S. Council for World Freedom on whose board John McCain sat for years. But while Ayers was a rehabilitated terrorist when Obama served on a board with him, what about McCain's fellow board members in the '80s?

What about fellow board member, Anthony Bouscaren-a veteran of the Pioneer Fund, a eugenics group researching white superiority? Or fellow board member, Jay Parker, a registered foreign agent for the apartheid government of South Africa in the late '70s?

And if board co-membership is so toxic, what about McCain's list of endorsements today, including Leonore Annenberg, widow of philanthropist Walter Annenberg, who created the project on which both Ayers and Obama served?

And what of Obama attending sermons by the Reverend Jeremiah Wright, never mind the fact that the teams of opposition researchers have yet to produce any evidence that Obama witnessed any of Wright's critics of America? If that tells us anything, what does August 30th, 1993 tell us? On that day, McCain attended a fund-raiser for the Oregon Citizens' Alliance. He can't claim he wasn't warned going in 30 protestors picketed him for endorsing the anti-gay group.

Prior to McCain's appearance there, a Republican senator, a colleague of his, Mark Hatfield, warned Senator McCain not to do it. McCain's own staffers called it "The invitation from hell," the Oregonian newspaper reported. An Arizona newspaper column previewed the speech with this headline, quote, "Hate Group Finds Friend in McCain."

And yet, McCain went, sat silently, offered no rebuke during or after the remarks of this woman, Marilyn Shannon, who praised a local woman who had just shot a doctor less than two weeks earlier. A doctor who was a former Navy flight surgeon, a sonogram pioneer, was shot in both arms because he performed legal abortions.

Unlike Ayers, who did not endorse terrorist activities during his meetings with Obama, this woman, Shannon, said of the shooter, as McCain sat there, quote, "She's a fine lady." A judge later sentenced this "fine lady" for a campaign of, yes, bombing women's clinics said, quote, "Though, I am loathed to call anyone a terrorist, you are a terrorist."

And Marilyn Shannon, who defended that terrorist, who later said her praise did not mean she approves of others doing what that terrorist did, as McCain renounced her even, she was a Bush delegate in 2004, seen here with a purple heart bandage, mocking the American combat veteran, John Kerry. This year, last month, she was a delegate for John McCain.

Judgment and character.

The senator's hopes of election may be dwindling but that's not because George Bush is not willing to suspend American policy so it adheres to McCain's blinkered isolationism. Another edition of Bushed ahead.

And, do you have a lap dance for that, monkey? I mean, I know the service industry is gone to heck, but this is ridiculous.

But first, the most outrageous or untrue thing said by or on behalf of the Republican presidential nominee John McCain-McCain in the Membrane.

Number three: McCain lobbies for his lobbyists. The administration is talking about sending Taiwan $6 billion worth of weapons. Senator McCain wrote President Bush yesterday demanding he go further to also send submarines and F-16s that were left out of the deal, quote, "I urge the administration to reconsider this decision."

Why did he do? Well, because since 2005, the company co-owned by McCain's top foreign policy advisor, Randy Scheunemann, has had a contract to lobby on behalf of Taiwan. Scheunemann's partner just renewed this deal in June to the tune of $200,000 a year.

Senator, did you just try to make the influence-peddling not look like influence-peddling?

Number two: A surprise for "governor demagogue." Sarah Palin telling Florida voters, "John McCain and I will protect the entitlement programs that Americans depend on, above all, Social Security. So, let be no misunderstanding, John McCain has always kept his promises to America. And as president, he will keep America's promise to our senior citizens."

Honestly, governor, you need to phone into to those campaign conference calls. Sunday: The announced its plan to cut $1.3 trillion out of Medicaid. And in the debate last night, McCain said he planned to cut Social Security.

(BEGIN VIDEO CLIP)

MCCAIN: My friends, we are not going to be able to provide the same benefit for present day workers that we are going-that a present day retirees have today.

(END VIDEO CLIP)

OLBERMANN: Golly, governor. That kind of makes you look like you are lying.

Speaking of, number one: One man's treason is another man's Pentagon internal investigator. Remember the psycho who interrupted with the shout of "treason" Governor Palin's harangue about Obama and the U.S. military air raids that had resulted in the deaths of women and children in Afghanistan? The military's internal investigation into the August 22nd air raids over Azizabad in Afghanistan, finds the army lawfully underreported the civilian deaths there. It was not five or seven.

Air Force Brigadier General Michael Cullen says, it was more like 30 -- more than 30, in fact.

So, "governor demagogue" and the ventriloquist dummy in the crowd, I'm guessing you think this brigadier general is a traitor, too.

Also, the guy who said this, "In the most obscene chapter in recent American history is the conduct of the Kosovo conflict when the president of the United States refused to prepare for ground operations, refused to have air power use effectively because he wanted them flying. He had them flying at 15,000 feet where they killed innocent civilians because they were dropping bombs from such in-high altitude."

That was said about American air raids on a different country, Kosovo in 2000, but the construction is similar, the remarks are even stronger than Obama's. And that most obscene chapter remark-that was by John McCain.

(COMMERCIAL BREAK)

KEITH OLBERMANN, HOST: On this date in 1943, Cornelius Crane "Chevy" Chase was born, meaning he's 65 and you're not.

Let's play "Oddball."

We begin in Bristol, England, with "Oddball's" dumb criminal of the week. Inside one of these police bait cars set up to lure thieves, we see 21-year-old Aaron Evans (ph), springing the trap. After rummaging around and grabbing some merchandise, Evans initially got away, but police were eventually able to find and arrest him after putting a name to his face, because his name was tattooed under his face. That's his name "Evans," and his birth date underneath: 19, 9, the British way of doing things, 9-19-87.

Let this be a lesson to you kids out there. Neck tattoos always seem like a good idea at the time, but every once in awhile they will come back to haunt you.

To a tavern outside of Tokyo, where a simian-based work force is stealing more and more human jobs. Damn dirty apes! This is the Kayabukiya Tavern, where patrons order their sake from a monkey. Fuku-chan and Yat-chan work just two hours a day. They get boiled soybeans for good service. The owner says people love ordering drinks and getting warm towels from the new staff.

One customer is using the monkeys to sort out some problems at home.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE (through translator): These guys are really adorable. They're like my kids. Well, actually, better. My son doesn't listen to me, but Yat-chan will.

(END VIDEO CLIP)

OLBERMANN: Why won't my son bring me a beer?

Finally, in Moscow, it's the unveiling of the new instructional video, "Let's Learn Judo with Vladimir Putin." Now you can learn to strike and thrust from the man with a black belt in half-naked fishing and a black belt in deep soul stares with President Bush.

In the video, Russian Prime Minister Putin executes several deadly moves, repeatedly throwing opponents to the ground. Experts expect the Putin DVD to do big numbers and easily surpass the sluggish sales of the previous Russian president's ill-fated instructional video, "Herky Jerky Dancing with Boris Yeltsin."

Health care and the debate. A right, a responsibility, a new Republican way of ripping you off?

And hello, good evening, and welcome to the end of Sean Hannity's career. Hannity, pwned [SIC] by Robert Gibbs of the Obama campaign.

(COMMERCIAL BREAK)

OLBERMANN: John McCain is right. If elected, he will get you a $5,000 health care tax credit. He didn't mention if you don't have a family, though, the credit will only be $2,500.

He also didn't mention that you'll probably have to give most of that back anyway to pay for the new taxes he'll sock you with if you get health benefits at work, which is considered income.

He also didn't mention that his plan is so top heavy scholars at four major universities concluded that this conservation will be academic for as many as 20 million of you, because a McCain presidency would eliminate their health care anyway.

Our third story on the COUNTDOWN, John McCain may be hazardous to your health, as he revealed in last night's debate. As Bob Herbert put it in "The New York Times," "Taxing employer-paid health benefits is the first step in the transition, the equivalent of injecting poison into the system. It's the beginning of the end."

Senator Obama's latest TV ad.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: John McCain on health care.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: I want to give every American a $5,000 refundable tax credit.

UNIDENTIFIED MALE: Here's the truth.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: He says that he's going to give you a $5,000 tax credit. What he doesn't tell you is that he is going to tax your employer-based health care benefits for the first time ever. So what one hand giveth, the other hand taketh away.

UNIDENTIFIED MALE: John McCain, instead of fixing health care, he wants to tax it.

OBAMA: I'm Barack Obama, and I approve this message.

(END VIDEO CLIP)

OLBERMANN: Let's bring in the aforementioned Bob Herbert, columnist for "The New York Times."

Good evening. Welcome.

BOB HERBERT, COLUMNIST, "THE NEW YORK TIMES": How are you?

OLBERMANN: Obama was succinct there: what one hand giveth, the other hand taketh away. Was he being too gracious, under the circumstances? Is it a possibility you're not even going to break even with this?

HERBERT: You know, the country won't break even with this. I'm surprised this story hasn't gotten better play. This is a really radical plan. And I think that if the electorate understood it well, it would not be in favor of it. The health care that you get on the job, for the first time, you know, it will be taxed under a McCain plan, so that when you look at-just like you see tax from Social Security in your paycheck every week or every month, you'll look in there, and there will be a tax for whatever the value is of your health benefits.

Now he says that, you know-and he's correct-there will be a $5,000-per-family tax offset, a tax credit to help you with your health care. But that study you referred to said, because of this McCain plan, an estimated 20 million people will lose employer-covered health care.

If you lose your health care and you've got $2,500 a person or $5,000 a family, you will not be able to purchase the equivalent health care. The equivalent health care for a family would cost about $12,000. This is-this is something that is extremely odd to not be a big deal in the course of this...

OLBERMANN: We're not talking traumatic stuff, big ticket stuff.

We're talking about ordinary health care.

HERBERT: This is the way most Americans get their health care. And most Americans who get health care on the job, they're satisfied with that health care. Also, if you're among the 20 million or so estimated to lose your health care on the job, think about what that would do to your family. That is traumatic.

OLBERMANN: The-the infamous article, the contingencies article that John McCain wrote when he wrote an article for the "Actuarial" magazine reader, that we need to do for health insurance what we've done for the banking industry.

Just-we'll step away, just for a moment. Throw out the economic collapse that resulted from doing that. Even taking him at his word that he only meant the interstate commercial part of letting you shop for a better health care plan in Arizona if you live in Michigan, is there any way that won't end in disaster?

HERBERT: No. That will be guaranteed to end in disaster, because what he wants to do is essentially deregulate the health-care insurance industry. So what happens is you bought-a health insurance company sets up in the state that has the least regulations.

OLBERMANN: Right.

HERBERT: So what happens now is, if you purchase private health care, you may have a plan that says that you get breast examinations that are covered or you're covered if you have a preexisting condition, or you're covered for an ordinary annual check up.

Well, if the company is set up in a state that says you don't have to provide that coverage, well, guess what? Do we think that they're going to provide it? No, they're not going to provide it. So you're going to get health care that is of a much lesser value.

This is exactly what they want to do, though. I mean, this is an ideological thing. They want health care to go into the marketplace. They don't want health care provided on the job, and they don't want government-sponsored health care. They want everybody out there in the marketplace.

OLBERMANN: As you point out, not a proven strategy, and Obama has, instead, individuals and employers shifting to a new national plan. How is that better, succinctly?

HERBERT: Well, it's better in a lot of ways, because one, it expands by a great deal the number of people who would get health care. The big question with that plan is it would be very expensive.

If you're going to cover a lot more people with health insurance, you're going to have to pay for it. The government will be on the tab for a lot of that money. And given the environment, there's going to be an awful lot of naysayers who say, "We're spending so much government money now, you know, guess what? We can't afford to buy health care for people."

OLBERMANN: Unfortunately, your options are to do something about it that way or to do something about it in the way of a-of a...

HERBERT: In this particular instance, Obama's plan is a much superior plan.

OLBERMANN: It's comparing it to a self-tonsillectomy kit, is really what it is.

Bob Herbert of "The New York Times," thank you for coming in.

HERBERT: Thanks so much, Keith.

OLBERMANN: A performance so overwhelming, so career-changing that it has inspired a special poem, composed for us by John Cleese of "Monty Python" immortality. The end of Sean Hannity using his own techniques against him.

And a McCain county chair who writes in a newspaper columnist, saying if elected Obama would, quote, "hire the rapper Ludacris to paint the White House black," unquote.

"Worst Persons" ahead, but first the headline breaking in the administration's 50 running scandals, "Bushed!"

Appeasement-gate. You'll recall that, while the president and the Republican nominee were beating up Senator Obama for "appeasing," for calling for diplomacy with people like the despots in Iran, Mr. Bush was arranging such appeasement, arranging diplomacy with people like the despots in Iran.

The No. 3 man in the State Department went to Tehran to talk. And then came word that this nation would set up not an embassy but an American interest section, like an embassy junior, in Iran.

Well, not any more. The Associated Press, quoting two administration officials, reports now that the interest section has been cancelled. Why? To quote the report, "The Bush administration has shelved plans to set up a diplomatic outpost in Iran, in part over fears it could affect the U.S. presidential race or be interpreted as political meddling."

So a good idea-talk before you bomb-has just been shelled. So Bush administration foreign policy, and the interests of this nation do not conflict with the petty political manipulations of Senator John McCain. Country first, my...

(COMMERCIAL BREAK)

OLBERMANN: Last night, he got a stake through his heart, provided by Obama communications director Robert Gibbs. Tonight he gets, by way of eulogy, an ode composed by no less a figure than John Cleese. Sean Hannity, R.I.P.

First, the worst, how members of the Baltimore Coalition Against the Death Penalty wound up on a watch list for violent terrorists.

And the McCain county leader who writes that, if elected, Obama would hire Ludacris to, quote, "paint the White House black."

"Worst Persons" next on COUNTDOWN on MSNBC.

(COMMERCIAL BREAK)

OLBERMANN: For the second time in a week the Clarence Darrow joke applies. Nothing is funnier than the sight of the fisherman pulled into the water by the fish. Sean Hannity, meet the water.

Rachel Maddow on the end of the munchkin's career. That's ahead.

But first, time for COUNTDOWN's No. 2 story, "Worst Persons in the World" for this evening.

The bronze for the "National Review's" MSNBC-obsessed online editor, Kathryn Jean Lopez, who wrote of the network's post-debate coverage, quote, "Keith Olbermann just manically pointed out that McCain incorrectly said Petraeus is chairman of the chiefs. No one in his right mind thinks McCain doesn't know who Petraeus is."

This is the same woman who two weeks ago made fun of Senator Biden for saying when the stock market crashed Franklin Roosevelt got on the television, which by Ms. Lopez' standards means she is not in her right mind.

By the way, Senator McCain also said General Petraeus just assumed his duties as the head of Centcom. He got that wrong, too. Lieutenant General Dempsey is still the acting commander.

The runner up, former Maryland police superintendent, Thomas Hutchins. His successor admitted to the state legislature that Mr. Hutchins took the names of 53 nonviolent activists and classified them as terrorists and added them to state and federal terrorism tracking databases and then sent undercover troopers in to infiltrate their organizations. Hutchins still insists he was right to do so. He called these activists fringe people.

Among the terrorist organizations, the Baltimore Coalition Against the Death Penalty. Hutchins says he doesn't believe, quote, "the First Amendment is any guarantee to those who wish to disrupt the government."

I, quote, don't believe Mr. Hutchins realizes he's not working for the government of Russia.

But our winner, Bobby May, McCain campaign chair in Buchanan County, Virginia, wrote an article for a local newspaper, supposedly a satire of the Obama campaign platform. Some quotes: "Obama would hire the rapper Ludacris to paint the White House black. That mandatory Black Liberation Theology courses be taught in all churches. That Obama would give a tax break for membership in NAMBLA." Why is it all the conservatives remember what NAMBLA was? "That Obama would raise taxes for free drugs for his inner city political base. That Obama would replace the 50 stars on the U.S. flag with a star and crescent logo," an Islamic symbol.

The McCain campaign promptly fired Mr. May, immediately after it was notified of the article by the "Los Angeles Times."

Well, good. So I'm assuming you're now going to remove all the other racists who, like Mr. May, are implying Obama is a Muslim, like that sheriff in Florida or the Republican chairman of Lehigh County, Pennsylvania, Bill Platt, who invoked his middle name to-who am I kidding?

Bobby May, until this week the McCain campaign chair in Buchanan County, Virginia, today's worst person in the world.

(COMMERCIAL BREAK)

OLBERMANN: When a hack bases an entire show around a quack, it may seem cartoonish, but it needs to be taken seriously, particularly by the communications director of the show's target, Senator Obama.

In our No. 1 story in the COUNTDOWN, the Obama campaign's Robert Gibbs delivered onto Sean Hannity a two-fer, deflating the argument about Obama's so-called associations and skewering Hannity's supposed investigation, all at once.

As we mentioned in yesterday's "Worst Persons," the supposed expert positing Obama at the center of a plot to-I don't know, sink the Titanic, it wasn't really clear. Anyway, the guy was a venerable lunatic and anti-Semite, presented as an author and journalist.

And he claimed that Senator Obama was basically a secret Muslim with a secret agenda to overthrow the government, with a political career engineered by William Ayers.

Mr. Hannity never raised any doubts. So last night, when Mr. Gibbs appeared on Mr. Hannity's post-debate show, Hannity asked him about Obama and William Ayers. Mr. Gibbs offered the usual reply that Ayers' deplorable acts were committed when Obama was 8 years old, that the two men had served together on a charitable board funded by a conservative Republican, that guilt by association was unreasonable.

And when that did not satisfy Mr. Hannity, Mr. Gibbs became the role model for all those with brains who actually choose to appear on the network of venality. He took over the show as the interrogator with the goods.

(BEGIN VIDEOTAPE)

ROBERT GIBBS, OBAMA CAMPAIGN COMMUNICATIONS DIRECTOR: Are you anti-Semitic?

SEAN HANNITY, CO-HOST, FOX NEWS CHANNEL'S "HANNITY & COLMES": Not at all.

GIBBS: OK. On your show on Sunday, you-the show that's named after you, the show where the centerpiece of that show was a guy named Andy Martin.

HANNITY: I know you're reading your talking points.

GIBBS: No, no.

HANNITY: When I interviewed-hang on a second. Answer the question. When I interviewed Malik Shabazz, when I interviewed Al Sharpton, when I interviewed all these controversial figures-you see, on FOX, we actually interview people of all points of view, whether we agree or disagree. The statement you're about to read I-I...

GIBBS: Andy Martin called a judge "a crooked slimy Jew"...

HANNITY: I totally completely...

GIBBS: ... "who has a history of lying and deceiving, common to members of his race."

HANNITY: Let me ask you...

GIBBS: Martin went on to write that he understand better why-better why the Holocaust took place, given that Jew survivors are acting...

HANNITY: Here's my answer to you. I find those comments despicable.

But wait a minute.

GIBBS: You put him on your show.

HANNITY: We put Malik Shabazz on the show. I put Khalil Mohammed (ph) on my show.

GIBBS: Why am I not to believe that you're anti-Semitic?

HANNITY: Let me-here's the answer.

GIBBS: Why am I not to believe that everybody on the network is anti-Semitic?

HANNITY: Call the American people.

GIBBS: Called the Jews slimy and understands the Holocaust better because of the way...

HANNITY: I'm explaining to you-can I finish first?

ALAN COLMES, CO-HOST, FOX NEWS CHANNEL'S "HANNITY & COLMES": We only have a short time.

HANNITY: I'm explaining to you.

GIBBS: ... if that's the way you view Jews. I can't believe you would give a platform to...

HANNITY: So you don't want me to interview anybody that I disagree with? Only-I can interview only people...

GIBBS: You built your whole show around him, Sean.

HANNITY: Barack Obama...

GIBBS: I had to believe only that you agree with each and everything that Andy Martin says.

HANNITY: Listen, Barack Obama...

(END VIDEOTAPE)

OLBERMANN: You know those guys say you can photograph the exact moment the soul leaves the body? Well, there it was-oh, yes, that assumes Hannity has one.

Anyway, all of this inspired the great John Cleese of "Monty Python's Flying Circus," and to my continuing astonishment, our audience to offer up this poem about Hannity, which he has somehow entrusted me to read.

Lights, please.

"An Ode to Sean Hannity."

Aping urbanity, oozing with vanity, / plump as a manatee, faking humanity / journalistic calamity, intellectual inanity / FOX Noise insanity, you're a profanity, Hannity."

Let's turn now to Rachel Maddow.

Evening, Rachel. I just read something written for us by John Cleese.

What the heck, huh?

RACHEL MADDOW, HOST, "THE RACHEL MADDOW SHOW": And I was that lighting effect, too. Really bad. There's all sorts of stuff we could use that for.

OLBERMANN: Yes. By the way, that was not intentional.

All right. Apart from-apart from-back to Gibbs and Hannity. Apart from the sheer joy of the thing, was it a milestone? Was it meaningless? What was it?

MADDOW: It was a milestone for me, because I was very entertained. I was very entertained for that moment on that segment, watching that program.

In terms of the importance, though, I think it probably was important as an example that this thing went viral so fast. Within minutes of it airing on television last night, it was sent to me. It was everywhere today. So many people have seen it. So many more people than I'm sure saw it live, that I think it will become sort of a textbook, sort of an example of how to win in situations like this.

OLBERMANN: All right. Well, then analyze the methodology that Mr. Gibbs showed there. I mean, there's not a lot of truth at FOX, but there is a lot of skill. Gibbs beat that system. How did he do it?

MADDOW: He did it by showing, instead of telling. The way you would have told that is by saying, "Well, the analogy here is that you had a bad guy on your show. And you having a bad guy on your show is something that could make me accuse you of all sorts of exasperating things you don't believe in. And that's just like what you've done to Barack Obama."

He didn't explain it. He just did it. He just showed Hannity how exasperated he could become by making those accusations, based on what Hannity's guest had done.

And the more Hannity responded, the more exasperated and frustrated and unfair he thought it all was, the more he proved Robert Gibbs' point. It was-it was poetry. It was perfectly done.

OLBERMANN: So-so distill what can be pulled out of that for-for the benefit of future victims and/or guests on that program. It's what? You have to be able to use the structure of the-whatever the Hannity attack is back against him? That's the thing you've got to go in with?

MADDOW: Whenever you have the opportunity, show and don't tell. Demonstrate your point rather than explaining your point. I think that's one. But also, you know, pay attention to the way the argument has been framed before.

Pay attention to the way that Hannity has talked about the issue ahead of time. He will telegraph his punches. So be prepared. Understand the argument. And doing that sort of preparation in advance can tell you how you can turn it back on itself.

Usually, it's not a matter of having the perfect bit of research. It's just a matter of knowing what's coming and having a plan and sticking to it. One procedural thing, as well, is to remember that you have a microphone on. And even though it might feel in person like he's yelling over you and drowning out your voice and you can't be heard, you have a microphone on. And if you are speaking calmly and clearly, people in the TV machine will hear you.

OLBERMANN: That's right. And in fact, you can grab the microphone and move it closer to your mouth and do that, and then you'll sound really loud.

Briefly, the other "fixed news" news, apparently all remaining media appearances for Governor Palin will be either on with Hannity or with Greta Van Susteren. They will not even risk her on O'Reilly. Is this a death knell of sorts for her?

MADDOW: Well, I'm still holding out hope, Keith, that she is going to respond to your challenge.

OLBERMANN: Yes, OK.

MADDOW: That she will come on one of our shows. I thought it was very generous. No editing. She can be on for as long as she wants. I think that she would like us if she got to know us. So I'm hoping that she will change her mind. I think it's a sign of weakness. I think it's insulting of the McCain campaign to protect her this way. And I hope that she will change her mind.

OLBERMANN: Well, I mean, she might like you. I mean, she has that-you have that likeability score and the whole rest of that stuff. She's not going to like me, but, I can get her that lighting. And that would give that-I mean, that would then be that sort of messianic light over her head, which she clearly thinks is there, anyway.

MADDOW: That's quite a-quite a tease.

OLBERMANN: We'll throw that into the bargain.

Rachel Maddow, great thanks as always.

MADDOW: Thank you.

OLBERMANN: Back to work-back to work with you in the final 30 seconds of preparation for your show.

MADDOW: Indeed.

OLBERMANN: In the interim, that's COUNTDOWN for this, the 1,988th day since the declaration of "mission accomplished" in Iraq. I'm Keith Olbermann. Good night and good luck.

This is the weirdest part of my day. Our MSNBC coverage continues now with "THE RACHEL MADDOW SHOW."

Good evening, Rachel.

MADDOW: Good evening, Mr. Olbermann. Thank you, Keith.

And thank you for staying with us for the next hour.

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

END

Copy: Content and programming copyright 2008 MSNBC. ALL RIGHTS RESERVED. Transcription Copyright 2008 ASC LLC ALL RIGHTS RESERVED. No license is granted to the user of this material other than for research. User may not reproduce or redistribute the material except for user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon MSNBC and ASC LLC's copyright or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.

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