updated 10/24/2008 11:23:49 AM ET 2008-10-24T15:23:49

THE RACHEL MADDOW SHOW

October 23, 2008

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

Guests: Rosa Brooks, Henry Waxman

RACHEL MADDOW, HOST: Thank you, "Keith the Colleague."

And thank you, the TV show audience, for staying with us for the next hour.

Barack Obama has now left the campaign trail until Saturday. What does Senator McCain have planned in Obama's absence and what does Sarah Palin have planned just, in general, since she sort of seems like she's on her own now?

(voice over): With John, the guy running second off on his "Joe the Plumber" tour of "Florida the State," Barack the frontrunner takes leave of the campaign, with a family crisis at hand, but the political winds at his back. Senator Obama buoyed in the homestretch by the effectiveness of his consistent six-month-old disciplined message.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D-IL) PRESIDENTIAL CANDIDATE: Senator McCain thinks the economic policies of George W. Bush were just right for America. In the Senate, he's voted with George Bush 90 percent of the time.

(END VIDEO CLIP)

MADDOW: So far, "George the Unpopular President" has done much of "Barack the Senator's" political work for him-except "John the Slow-learner" seems to have finally identified the fact that he should fight back against the message that's sinking his chances.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R-AZ) PRESIDENTIAL CANDIDATE: Spending, the conduct on the war on Iraq for years, growth in the size of government, larger than any time since the Great Society.

(END VIDEO CLIP)

MADDOW: Just when you thought it was safe to write off the McCain campaign, the candidate finally remembers to shred the president. Is he in a "too little, too late" scenario or is it better late than never in tossup states like Florida, Virginia and Ohio?

Virginia Governor Tim Kaine and Senator Sherrod Brown from Ohio, joining us with live reports from those critical, contested battlegrounds.

Having ditched President Bush, will McCain run away from Sarah Palin now, or is she already running away from him? Rosa Brooks (ph) on the possibility that "Sarah the '08 Running mate" is working on becoming "Sarah the '12 Nominee."

And the McCain-Palin explanation for the financial crisis gets blown out of the water today by Republican officials and the conservative icon they called the "maestro" takes the fall.

(BEGIN VIDEO CLIP)

HENRY WAXMAN, U.S. CONGRESSMAN: You were the perhaps the leading proponent of deregulation. My question for you is simple. Were you wrong?

ALAN GREENSPAN, FORMER FEDERAL RESERVE CHAIRMAN: Possibly.

(END VIDEO CLIP)

MADDOW: Representative Henry Waxman, the symbol of tenacity in the Congress joins us fresh from his grilling of Alan Greenspan. And the newest James Bond identifies the newer James Bond and their soap with caffeine in it? Could there be a bigger news day?

THE RACHEL MADDOW SHOW starts right now.

(on camera): If you read the presidential polls like a Red Sox fan like me reads the box scores every day, overreacting to everyone, you probably feel as if this race is stacking up pretty nicely for Barack Obama. And, you might be right.

The just released "New York Times"/CBS News Poll puts Obama ahead 52-39, nationally, 13 points. Senator Obama himself, before leaving the campaign trail to see his ailing grandmother, campaigns today in the unlikely battleground of Indiana. He sounded like a candidate with the wind at his back.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D-IL) PRESIDENTIAL CANDIDATE: Indiana, in just 12 days, you have the chance to elect your next president. You'll have the chance to bring the change we need to Washington. That's the good news.

But we're going to have to work. We're going to have to struggle. We're going to have to fight for every single one of those 12 days to move our country in a new direction. It's not going to be easy, but I'm hopeful about the outcome.

(END VIDEO CLIP)

MADDOW: As Obama drops off the trail now for 48 hours, Senator McCain is making his final move, reducing his advertising in Colorado, New Hampshire, Wisconsin, Maine, and Minnesota, that's according to Democrats who monitor ad spending. In Colorado, the Republicans cut their spending from McCain by 46 percent.

Now, these are signs of defeat or resignation? Not necessarily. In fact, they could be seen as signs of a final offensive. The McCain campaign is starting to focus broad withdrawals of money elsewhere, free up, say, a couple million bucks for McCain to spend in Pennsylvania, Ohio, and Florida.

Tomorrow, with Obama off the trail, McCain will spend all day in Colorado and time in New Mexico on Saturday.

Meanwhile, the Obama is casting a wider net. Joe Biden will spend the next few days in West Virginia and Virginia, Virginia. And Obama will stop in Nevada and North Carolina on Saturday.

What does this tell us about who's going to win the election and how? That reminds us because we all know this, but it's easy to forget-it reminds us that there is no such thing as a national election and national poll numbers are essentially just a beauty pageant. You can win nationally by a mile and still lose the presidency by a mile if you don't win the right states.

McCain is going all out for the electoral votes he needs to pull off an offset, targeting Florida today, launching a Joe the Plumber tour. He had breakfast with "Tom the Contractor," "Tim the Sports Pub Owner," "Patricia the Kitchen Supplies Purveyor," and "Richard the Florist."

(BEGIN VIDEO CLIP)

MCCAIN: Whether it's Joe the Plumber in Ohio, or Joe over here, thank you, Joe. Joe, thank you. There's Joes all over here.

(END VIDEO CLIP)

MADDOW: "John the Senator" is working the map to try to win 270 electoral votes with wide disregard for the meaningless national popular vote. McCain has charted a new course to 270, with the trifecta of Florida, Ohio, and Pennsylvania-he can do it. Keep North Carolina, Virginia, Indiana in the Republican column along with the 21 other states Bush won, that aren't battleground territory-that would give McCain 270.

So, are the odds with Obama? Yes, they are. Can McCain eke out enough battleground squeakers to render Obama's big national lead totally irrelevant? Yes, he could. And it is clear now that that is McCain's plan.

Let's turn now to the governor of the great Commonwealth of Virginia, Tim Kaine.

Governor Kaine, it's so nice to have you on the show. Thanks for joining us.

GOV. TIM KAINE, (D) VIRGINIA: Hey, Rachel, I've been looking forward to talking to you.

MADDOW: Thank you.

As I see it, the McCain campaign is marshaling its resource, bulls-eye on the swing states, bulls-eye on the electoral vote. Do you see it shifting that way?

KAINE: Right. I do. The reports about him pulling down ads or cutting ads dramatically in many of the states means that he's just decided there's a certain number of states he has to win. And I think the ones you mentioned-Ohio, Pennsylvania, Florida and Virginia, are places he's going to be playing hard.

But we got a good feeling here. As you know, for Virginia to be a battleground state, it's pretty darn unusually. We haven't really been in play for a very long time, but Senator Obama is doing quite well here now.

MADDOW: The Mason-Dixon Poll has Obama ahead by two points in Virginia. "Time" magazine has Obama ahead in your state by 10. But, as you know well know.

KAINE: Right.

MADDOW: . polls in your state can sometimes be deceiving. Where do you see the state of the race right now?

KAINE: I would say it's close. There hasn't been a poll that's come out, I think, since the beginning of October that has had Senator McCain ahead. The Mason-Dixon Poll, which is a two-pointer, had Senator McCain ahead by three points when they did it right at the end of September. So, the movement has been favorable for Senator Obama.

But, what we tell everybody is, look, we haven't won electoral vote in Virginia for 44 years for a Democrat. So, no matter what the poll says, we got to believe we're the underdog until we can break that string. But the enthusiasm, the polling, the grassroots' energy, and the organization for Senator Obama are very strong right now. And we feel like we got a great chance.

MADDOW: I know that you appeared with Senator Obama, I think, as recently as yesterday in Virginia.

KAINE: Yes.

MADDOW: When he's making these multiple appearances in the state and I know, he's been all over the state and he's been going there for a very long time, what do you think that he has done well in terms of connecting with voters? And what does he need to do over the next 12 days to try to close the deal?

KAINE: Well, the senator is no stranger to Virginia. I endorsed his candidacy one week after he got in to the race in February of '07. He came to Richmond a week after he got in to the race and has been back often since. Just since he became the putative (ph) nominee in June, he or V.P. Joe Biden, V.P. nominee-have been here probably 10 times compared to just two or three times for Senator McCain.

So, it starts with presence. They have more than 40 offices open around Virginia. They are out-advertising the Republican ticket. But, I think, what he needs to do at the end is just, again, drill down on the two issues that Virginians care deeply about. We want a change in the direction of the economy, and Senator Obama's proposal to focus his tax relief on the middle class and on small businesses, that's where success is measured. How the middle class and small businesses are doing, that's a message that he hit hard yesterday and he needs to keep hitting.

And then second, we are a state that cares deeply about the military and national security, Rachel. As you know, you know, there's hardly a more military state than Virginia, one in 10 Virginians is a veteran. We've got active duties, National Guard, reservists, military family, DOD civilian employees.

The endorsement of General Powell last week in a state like Virginia cannot be overestimated. The rationale that he gave, that we've got to have a steady hand at the tiller as we're trying to deal with these big national security challenges so that we can be strong militarily but also have strong diplomacy and a strong moral example. And General Powell is vouching (ph) for Senator Obama in that way is usually helpful here in the final days.

MADDOW: On policy issues, on endorsement issues like that, what the Obama and Biden ticket have been doing? The way they have been asking for Virginians' votes is fairly clear. What we are seeing from the McCain/Palin ticket is a lot more discussion of character issues and association issues. A lot of robocalls, for example, painting a very unflattering and, in some cases, pretty nasty biographical portrait of Senator Obama, saying he is not who you think he is.

What about those personal issues, those character issues and how well they resonate at a time like this in a place like where you live?

KAINE: I think they are backfiring, big time, in Virginia.

The two biggest gaffes in Virginia recently have been, first, Senator McCain's brother Joe was campaigning in a public event in Virginia. He referred to Northern Virginia as the communist part of Virginia. Hey, this is where the Pentagon is, you know, that got attack on 9/11. It's where John McCain's national headquarters are, and where he lives. It's where 30 percent of Virginians live. That kind of talk really makes Virginians mad.

And a McCain spokesperson this week tried to diss parts of the state that were for Senator Obama, saying those aren't the real Virginia. And that kind of comment does not make Virginians feel warm and fuzzy. In fact, it's exactly the thing that caused Senator George Allen to lose his race in 2006, talking about the real Virginia and making comments disparaging comments about parts of the state where, you know, he didn't feel he was getting enough votes.

So, these kinds of personal attacks, robocalls, and then these efforts to disparage parts of the state are going over like a lead balloon here.

MADDOW: I asked former Governor Wilder this week, how those issues that you just described were playing in Northern Virginia, he said, "I hope they play and play and play and play."

KAINE: Right.

MADDOW: That it benefits Senator Obama.

KAINE: Yes.

MADDOW: That's exactly right. Sorry, go ahead.

KAINE: When you're on our side and you hear those, you don't know whether to groan or just them to keep saying them all the way through Election Day because they are definitely pushing undecided and independent voters who want to hear about solutions, they're pushing them into our camp.

MADDOW: Yes, probably best for the next 12 days, just put them on the loop on the outgoing answering machine.

KAINE: Yes, absolutely.

MADDOW: Virginia Governor Tim Kaine, thank so much for being on the show tonight, sir. I really appreciate it.

KAINE: You bet, Rachel.

MADDOW: Frustrated by his many failed thus campaign tactics, John McCain tried out a new one yesterday. He acted like a Democrat or like a smart Republican. In a new interview, the senator ripped into the presidency of George W. Bush, or as I prefer to think of him, the softest target in all of modern American political history.

What took McCain so long? I do think it's a smart move by the McCain campaign. Could it sway the still undecideds in the closed battleground states in the final days of campaigning? Senator Sherrod Brown from the ultimate swing state of Ohio will try to Talk Me Down, next.

And, what's Sarah Palin up to? I mean, really, what she up to?

Could she be looking past V.P. in 2008 to the top of the ticket in 2012?

But first, one more thing, Senator McCain proclaims that he is a maverick, a reformer, a not your everyday politician. And yesterday, he kind of over-proclaimed.

(BEGIN VIDEO CLIP, WUSA WEDNESDAY)

MCCAIN: What am I changed on? They can't name a single issue or they'll name an issue and it's false.

(END VIDEO CLIP)

MADDOW: What have you changed on? Let me think-torture, abortion, immigration, Social Security, Bush's tax cuts, gay marriage, campaign finance, offshore drilling, more troops in Afghanistan. You know, Senator McCain even opposed Martin Luther King Day before he supported it. This might not be the right challenge you have thrown down, senator.

(COMMERCIAL BREAK)

MADDOW: On FOX News Channel today, Karl Rove was asked for his interpretation of today's volatile swings in stock prices. Was it today's depressing jobless claims report? Weaker than expected corporate earnings? The unsettling comments from former Fed Chairman Alan Greenspan? You know, stuff that actually moved markets? Nope, Karl Rove blames market volatility on-surprise-Barack Obama.

(BEGIN VIDEO CLIP, FOX NEWS CHANNEL)

KARL ROVE, FORMER WHITE HOUSE ADVISOR: This volatility maybe people's concerns about what would happen if Barack Obama, who's had a lead in the polls and has been deemed by the media to be the likely next president of the United States, what would happen to the economy and their portfolios if he were to become president.

(END VIDEO CLIP)

MADDOW: You know, in other news, Karl Rove has a stuffy nose this week, it's Barack Obama's fault. I heard (ph) this thing (INAUDIBLE).

(COMMERCIAL BREAK)

MADDOW: So, John McCain has identified his targets on the electoral map. He's zeroing in. His campaign finally appears to be making sharp decisions under deadline. Another long delayed moment of clarity? McCain's message. So far, the senator has pitched his experience, his country first-ness, his maverick-itude (ph), his loathing for earmarks, his un-socialist nature-despite the bailout thing.

The McCain campaign messages this year have been legion. Well, today, it seems like he may have stumbled on the message he should have had from the beginning, like a stage actor, turning around and noticing that although he's dressed for the "Lion King," the set he's on was built for "spam a lot (ph)," McCain seems to have finally figured out that he can run against George W. Bush. Not just rebutting Obama's charge that McCain is like Bush, but actively campaigning against the most unpopular thing in American politics-George Bush's legacy.

Here's Senator McCain with the "Washington Times" on what's wrong with the current presidency.

(BEGIN AUDIO CLIP)

MCCAIN: Spending, the conduct of the war on Iraq for years, growth in the size of government, larger than any time since the Great Society, laying a $10 trillion debt on future generations of America, owing $500 billion to China. Obviously, failure to both enforce and modernize the regulatory agencies that were designed for the 1930s, certainly not for the 21st century.

(END AUDIO CLIP)

MADDOW: OK. Leaving aside how funny it is for McCain to champion regulation with the "dark angel of deregulation" Phil Gramm poking out of his pocket protector, the important thing here is that McCain has just hit upon this genius idea to run against Bush, now -- 12 days from the election.

He did say he was not Bush at the last debate. But it wasn't until today that McCain got specific. The question is, how is John McCain's big strategic epiphany, his "big duh" moment-has it come too late to win him a state like Ohio?

Right now, Obama leads Ohio by an average of six points in this last week of polls. But almost 7 percent of Ohio voters remain undecided -undecided, still? After looking at the menu for almost two years?

My hunch is that a lot of voters in the middle are done with Bush, but they don't like Obama, and they are looking for a new reason they haven't yet heard to vote for John McCain. A couple weeks of John McCain whacking the proverbial pinata that is the president, could that be enough to turn the close battlegrounds around? Seriously? Somebody Talk Me Down?

Joining us now is Ohio Senator Sherrod Brown, who is supporting Barack Obama for president.

Senator Brown, thank you so much for joining us tonight.

SEN. SHERROD BROWN, OBAMA SUPPORTER: Rachel, glad to be with you.

Thank you.

MADDOW: Here's your chance to try to Talk Me Down. What are those 7 percent of undecided voters in your home state waiting to hear?

BROWN: I was today in Chalicopy (ph) and Zanesville, and Habra (ph) near Newark, Ohio and what Ohio voters have asked for, you know, they hear that 90 percent of the time that John McCain voted with George Bush. Now, they are hearing John McCain attack George Bush.

But, really, all they wanted to hear this whole campaign was on one major economic issue that John McCain was going to do something differently from George Bush. Tax cuts for the rich-John McCain wants to do more of them. Job-killing trade agreements-John McCain wants to do more of them. Deregulation, the Bush deregulation-McCain wants to do more of it.

So, there's nothing out there, what he's going to do in the future different about the economy that would lead Ohioans to think that this is a new day that John McCain will actually break with George Bush.

MADDOW: Can you pull the wool over people's eyes, though, by not necessarily talking about the specifics of policy, and instead just saying the phrase "Joe the Plumber" all the time, creating the impression that you're going to do something for the middle class and working people even if you don't get to the policies that really don't follow through on that idea?

BROWN: No, people see through that.

I actually, today-believe it or not-when I was I in

Zanesville, I met Mr. Bates (ph), who, actually, is a plumber. He's in his 40s. He inherited his business from his faster. He's doing well. You know, he was at an Obama rally. He was at a rally that we were doing for Obama.

And he was on there because he knows that the Obama tax cut will help the middle class. He opposes these trade agreements that he knows cost jobs in places like Portsmouth (ph) and Mansfield and Finley and all over my state. He knows that Barack wants to do the right things with regulation, not deregulate Wall Street and privatize Social Security and all the other things that McCain wants to do. He's a solid middle class voter than understands that Barack Obama will fight for the middle class.

And that John McCain, again, it's all about the oil industry, and the drug companies, and the insurance industry. And he knows where John McCain would take the country, down the same road as George Bush did.

MADDOW: Why hasn't Barack Obama pulled away, cleanly in Ohio by now? Obviously, the way that you were talking about-policy issues, the stark policy difference on economic issues between the two candidates-that's how you won your seat in Ohio in a year and in a place when people didn't necessarily think you'd be able to pull it off and you did very well for yourself. It sounds like you hear the same things coming from Barack Obama that brought you a victory in Ohio.

How come he's not further ahead than he is now?

BROWN: Well, there's a bit of a transformation in the last two weeks, probably three weeks in Ohio, in rural areas, in suburban areas where voters have increasingly become more comfortable with Barack. You're seeing that movement in the polls now.

I mean, look, Rachel, Ohio is a fairly conservative state. Voter in Ohio are older than in the national average. And it's taken awhile. But we are ready to go in this race. It's not over by a long shot. I'm optimistic, but I'm not overconfident.

But I'm seeing in the small towns, where the governor and I, especially, are spending a lot of time, I'm seeing a movement towards Barack Obama because they really do understand that John McCain can change his strategy every two or three days. I have trouble keeping up with this new strategy that he has every two or three days. And they are seeing a very different course that Barack Obama is going to take. And that's what people want to hear in Ohio and that's what they are going to hold us to after the election.

MADDOW: The poll numbers look better for Barack Obama in Pennsylvania, and in Michigan, in Wisconsin than they do in Ohio right now. We are seeing some volatility in Ohio. Do you want to make any predictions about how things are going to go on November 4th?

BROWN: Yes, we're going to win Ohio. And we're not as Democratic of a state as those-Pennsylvania and Wisconsin and Michigan. And we've always known that. We have to work harder.

Ohio, I heard Governor Kaine talked about the offices that Barack Obama has in Virginia. In Ohio, he has more 100 offices. And I've never seen the kind of grassroots excitement in this state ever in a political campaign and the kind of organization. And we're just seeing people that were never involved wanting to be involved this year, working, talking to people, going door to door. All the things in grassroots politics are so important.

And that's why we are going to win the state. We have a candidate that's a strong leader in contrast to a candidate, John McCain who's a bit erratic and changes his views and changes his message and changes his strategy every few days. And it's pretty clear that voters are going to choose the leader in this race and that's Senator Obama.

MADDOW: Sherrod Brown, senator from the great state of Ohio-thanks for coming on the show. We're happy to have you here.

BROWN: It's a pleasure. Thank you, Rachel.

MADDOW: So, John McCain finally jumped ship on George Bush. But the good ship McCain has sprung a few weeks of his own. Conservative columnists bailed (ph) a few weeks ago, now staffers are writing each other out in the pages of the "New York Times"? And what about Sarah Palin-is it just me or is Sarah Palin kind of hugging the spotlight a little bit and drifting off-message like somebody angling for her own run in four years? Is this just $150,000 dress rehearsal?

(COMMERCIAL BREAK)

MADDOW: Today on Capitol Hill, Alan Greenspan said he made a mistake, assuming that banks would take care of themselves. Actually, Mr. Greenspan, they were taking care of themselves, quite nicely for awhile there. Congressman Henry Waxman grilled the maestro today. He will be here in a little while to talk about it.

First, though, it's time for a few under-recorded holy mackerel stories in today's news.

What would you think would be a good target number for a voter registration effort? What percentage of the eligible population being registered to vote would be something a state should be proud of? How about 98 percent? Ninety-eight percent of eligible voters in Michigan have now registered to vote in this year's election -- 98. So says the Michigan secretary of state.

Since the last election, 30,000 people have actually moved out of the state of Michigan but still, the voter registration numbers are up in that state by hundreds of thousands. Regardless of which candidate or party gets an advantage from this, it makes me feel very small "d" democracy proud of Michigan.

But since this is a campaign season, I do have to tell you that heavily Democratic Michigan counties reported higher increases in voter registration than heavily Republican counties. And the massively, totally registered electorate in Michigan is 53 percent women and 47 percent men. And we all know that women favor Obama in the polls by tons.

So, it's probably good Michigan news for Obama and for down ticket Democrats. But, as I said, mostly, it just makes me proud of Michigan.

Well, speaking of voting, if you are showing up early to vote in Florida to try to avoid lines on Election Day, the joke is on you. The people who are laughing might be the Republicans in the state legislature.

"The Miami Herald" report said in 2005, a roughly party-line vote in the Florida legislature, passed a Republican plan to limit early voting in Florida. Before the limit law passed, voter centers could stay open 12 hours every weekday. Now, that's cut to just eight hours.

Before that law, early voting centers could be open eight hours a day on the weekend. Now, they can only be open eight total hours across both weekend days. And early voting sites are now limited to libraries, city halls and election headquarters. That wasn't the case before.

What's the Florida Republican justification for making early voting harder in fewer places, over less time? They say it saved money. Maybe, but it's also resulted thus far in two-to-five-hour waits in line at early voting sites, so far. Senior citizens begging for chairs while they wait in extremely long lines and the heat and lord knows how many people effectively disenfranchised by virtue of being unable to afford five hours off of work to wait in the line to vote at a site that's required by law to shut down before the workday is done.

In Miami Dade County, early voting booths close at 3:00 p.m. Broward County is open until 6:00 p.m., but in order to achieve that feat, they can't open until 10:00 in the morning when most people already have to go to work. So I'm super-proud Michiganders getting 98 percent of their eligible voters registered and I am super-proud of Floridians waiting stand that long, to sacrifice that much to cast their ballots.

But am I proud of the Florida Republicans who purposely made it super-hard for Floridians to vote this year?

Let's move on, shall we? Because finally, we do have a little news from life during wartime. Tens of thousands of tribal fighters in Pakistan in the pulsing, throbbing center of the national security universe, the place Bin Laden probably is, the land of the edge of Pakistan and Afghanistan.

Tribal fighters there are the focus of a new plan by the new Pakistani government with the encouragement of our government. The plan consists of sending in a lot more guns. The hope is that by dumping tens of thousands of new Chinese-made AK-47s into the tribal regions, that will empower tribal militias called lashkars(ph) who will hopefully coordinate with the Pakistani military to fight the Taliban and al-Qaeda.

Never mind that the Pakistani government has virtually no authority in the tribal areas. But hey, if it doesn't work out, at least they will have accomplished one thing, which is, you know, dumping tens of thousands more assault weapons into one of the most violent places on earth. So there's that.

(COMMERCIAL BREAK)

MADDOW: How do you really know when a political campaign is imploding?

When it's down by double digits in the national polls? Not necessarily. President (UNINTELLIGIBLE)? When it loses out on the endorsement of the most respected member of the candidate's party in the whole country, a four star general, former secretary of state. Well, it's not a good sign, but not the seventh sign of the campaign apocalypse.

It turns out you know a campaign is in the deep (UNINTELLIGIBLE) when the campaign's own people start ratting each other out. In an article in "The New York Times" magazine this upcoming weekend, the McCain campaign aides - people on McCain's side - talked trash about how badly the campaign is being run.

On the subject of debate strategy, specifically Sen. McCain's widely-panned habit of treating Sen. Obama like an overly ambitious 12-year-old, one aide said this, quote, "The object wasn't to appear condescending at all. Really, the opposite. But you put a bullet in a gun, figuring it will get shot once. We had no idea it would be shot 10 times."

Well, there's the aide who said the June strategy meeting was called because, quote, "We still couldn't answer the question, 'Why elect John McCain?'" In June, not knowing why your own candidate should be elected is pretty bad. Admitting you don't know is really bad. Admitting you don't know to "The New York Times" before the election - that's called jumping from a sinking ship.

And it's not just the campaign staffers who are taking a nose dive off the straight talk shipwreck. It is also down-ticket Republicans Sen. McCain will be sharing a ballot with come November 4th. Take for example, Sen. Elizabeth Dole who running a campaign ad that assumes an Obama presidency. It essentially says to vote for Dole so that the Democrats won't win everything.

(BEGIN VIDEO CLIP)

VOICE OVER: These liberals want complete control of government in our time of crisis, all branches of government. No checks and balances, no debate, no independents. That's the truth behind Kay Hagan. If she wins, they get a blank check.

(END VIDEO CLIP)

MADDOW: In other words, forget John McCain. He's a lost cause. And there's one other person who might just be looking for a little separation from this chronicle of a lost foothold.

Remarkably, the other ship jumper may be John McCain's running mate. There's a fine line between maverickishness and plain old running a different campaign from your running mate. She has complained publicly that McCain wanted to abandon Michigan. She has complained publicly that he doesn't want her to talk about Jeremiah Wright. She has complained publicly about the robo-call strategy. And then there was the interview this week when James Dobson asked Gov. Palin if John McCain supports the Republican Party platform.

(BEGIN AUDIO CLIP)

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE: I am a - such a strong believer that McCain believes in those strong planks and we do have good conversations about some of the details too about the different planks and what they represent.

(END AUDIO CLIP)

MADDOW: The problems is those party planks are things like support a constitutional ban on all abortion, a constitutional ban on gay marriage, opposition to government-funded stem cell research. Those are not, in fact, Sen. McCain's positions.

Another possible sign of the political separation of governor and senator? Remember when she never took questions the press, participated in only a handful of formal sit-down interviews? It's been pretty clear that was part of a deliberate decision by the McCain campaign to keep her from the press.

Bt now, Sarah Palin is taking matters into her own hands and subverting the McCain campaign's decision. On Sunday, she deplaned in Colorado Springs and then immediately ditched her press handler, Roman holiday-style, to live it up with the media in an impromptu press conference.

The most entertaining part of this event is listening to Palin's purported spokesperson, Tracy Schmidt, trying her best to end the press availability. How many thank yous does it take to stop Sarah Palin from answering questions? Check it out.

(BEGIN VIDEO CLIP)

TRACY SCHMIDT, SARAH PALIN'S SPOKESPERSON: Thank you very much. Thank you. Thanks, everyone. Thanks, everyone. Thanks very much. Thanks, everyone.

(END VIDEO CLIP)

MADDOW: So campaign staffers stabbing each other in the back to the "New York Times." Republican senators leaving McCain for politically dead and Palin apparently running her own campaign without John McCain. What's going on here?

Joining us now is "L.A. Times" columnist and Georgetown University law professor, Rosa Brooks. Nice to see you again. Thanks for being here.

ROSA BROOKS, "L.A. TIMES" COLUMNIST AND GEORGETOWN UNIVERSITY LAW

PROFESSOR: Good to be here, Rachel.

MADDOW: McCain is talking openly now, sort of gleefully, about how the media has written him off. But do you think the pattern that I'm seeing about Republicans and his own campaign writing him off?

BROOKS: You know what? I was thinking that the Republican ticket is degenerating into a bit of really savage version of a reality TV show, you know, where everybody pretends they are on the same team, but in fact they are all trying to undermine each other on these subtle ways that are getting less and less subtle. You know, that's what it seems like. I mean, you know, Sarah Palin is just waiting for McCain to get voted off the island, so it will be her turn.

MADDOW: There's a theory among the staff on this show that what we are seeing in the McCain campaign right now is what we saw when the Hillary Clinton campaign started losing to Sen. Obama, that they started to do the same things, all the same symptoms. Are you seeing that pattern?

BROOKS: Absolutely. And it's at a point where, you know, they get desperate. They start doing crazier and crazier things. This is the equivalent - if you take the analogy of the reality show, this is where everybody starts eating rats to survive. And the problem for John McCain is he doesn't actually like to eat rats and it shows. You know, he eats a rat - he makes these robo-calls. He brings up Bill Ayers into the debate. And he looks like he's sick to his stomach while he's doing it because it doesn't come naturally for him.

Sarah Palin loves to eat rats. She's eating more rats. She's saying, "Here, John, have another rat." He gets queasier and queasier and she gets stronger and stronger. It's every pit bull for himself on the McCain-Palin ticket right now.

MADDOW: It's heck of an image.

BROOKE: Well -

MADDOW: (UNINTELLIGIBLE) but I think it works. Is Palin - I mean, with all the rat eating, is she doing more than just looking ahead to 2012? Is she actually starting her 2012 campaign now and at the expense of the McCain campaign?

BROOKS: You know, yes. Yes, definitely, to the first question. That's not strange, right? I mean, it is standard for the vice presidential nominee on the losing ticket to be looking ahead to their consolation prize, you know, thinking about being the frontrunner, you know, at the top of the ticket next time around.

So there's nothing weird about that. What is a little creepy about the whole thing, what does make it sort of appalling to watch is the, you know, savage element to it all which does - it does look like it's absolutely at John McCain's expense.

You know, normally, there's at least more of a pretense of saying, you know, "I'm plugging for him and I'll do what it takes." And then after the election, after we lose, then the recriminations are going to start. She's getting a little early start on this one.

MADDOW: Republicans like to pick the person who's the next obvious person in line. And if you are the vice president nominee of a losing ticket that might look to Republican voters like you're the next in line. Do you think she is actually a frontrunner for 2012 if she and McCain lose?

BROOKS: I think it's a really open question and the big question is, what happens to the Republican Party if John McCain loses this election as he seems likely to do.

MADDOW: Right.

BROOKS: And here, I think there are two possibilities. There's the politics-as-usual possibility and there's the sort of version that says we are at an epochal shift in American politics.

You know, there's no question about it that Sarah Palin has really shored up the GOP base, that they love her and she loves them. And she's going to maintain their allegiance. Could she be challenged by somebody like Huckabee? Maybe. But I think - she got about as close to a lock on the GOP base as anybody could have going to this.

So the real question is just sort of whether the GOP base, the current GOP base, continues to dominate Republican politics, you know, or whether we're sort of at the moment when all of the Republicans who have fled the party this time around to vote Obama because they are sick of Bush, because they don't like McCain-Palin. Do they - after this election, do they gravitate back or do they say, you know, "Forget it. We're leaving permanently"?

Depending on which one of those things happens, you know, if they gravitate back - back into the Republican Party, if Obama has a tough time in his first term, there's a whole series of disasters. People start saying, "Oh, this didn't work out so well, these experiment-voting - Democratic that didn't work out.

You know, I think she could be in for a tough time because she'll have the little (UNINTELLIGIBLE) conservatives back, fighting it out in the Republican Party for dominance in the Republican Party.

But on the other hand, I think it's entirely possible that that could just kind of abandon the Republican Party permanently in which case Sarah Palin keeps the base, but it doesn't matter because they are a minority party for a pretty long time to come.

MADDOW: And then she can be as pure as she wants. And they can have her. Rosa Brooks, "L.A. Times" columnist, Georgetown law professor, thank you for joining us.

BROOKS: Pleasure, Rachel.

MADDOW: Next, Congressman Henry Waxman is manning the unforgiving microscope of Congressional oversight these days. Today's subject? Former Fed chief Alan Greenspan. The discovery, oops. Oops? Henry Waxman joins us in just a minute.

But first, just one more thing. Just last month, Katie Couric asked Sarah Palin if she considered herself to be a feminist. You have to remember, this was her response to Couric.

(BEGIN VIDEO CLIP)

PALIN: I do, a feminist who believes in equal rights.

(END VIDEO CLIP)

MADDOW: Last Night, with NBC's Brian Williams, the subject came up again.

Except this time, well -

(BEGIN VIDEO CLIP)

WILLIAMS: Governor, are you a feminist?

PALIN: I'm not going to label myself anything, Brian. And I think that's what annoys a lot of Americans, especially in a political campaign is to start trying to label different parts of America, different backgrounds, different - I'm not going to put a label on myself.

(END VIDEO CLIP)

MADDOW: Why was that horrible label OK last month, but now it's horrible?

Has it been a bad month for labels, Sarah the maverick?

(COMMERCIAL BREAK)

MADDOW: Today, the earth moved in Washington. The tectonic plates that define modern American politics and modern American thinking about our economy and what works for us and what doesn't. Those plates shifted.

Up until today, what we've heard most from the Republican Party is that the cause of the big giant financial mess we find ourselves in can be summed up in three words, Fannie and Freddie. John McCain has repeatedly railed against Fannie Mae and Freddie Mac on the campaign trail trying tong liberal- sounding could be blamed for the economic crisis, which brings us back to that earthquake we felt today in Washington.

It looked a little something like this. Alan Greenspan, who spent 18 and a half years as chairman of the Federal Reserve, a really quite conservative guy who Bill Clinton nevertheless held on to as fed chairman, thus shifting the center of gravity in American economics sharply to the right. The guy who made it mainstream and centrist descending to rail against financial regulation - then he was sitting before Congressman Henry Waxman of House Oversight Committee, admitting, quote, "shocked disbelief" that he was wrong.

(BEGIN VIDEO CLIP)

REP. HENRY WAXMAN (D), CHAIRMAN, HOUSE OVERSIGHT COMMITTEE: Do you feel that your ideology pushed you to make decisions that you wish you had not made?

ALAN GREENSPAN, FORMER FEDERAL RESERVE CHAIRMAN: Yes, I have found a flaw. I don't know how significant or permanent it is. But I've been very distressed by that fact.

WAXMAN: In other words, you found that your view of the world, your ideology was not right, it was not working?

GREENSPAN: Precisely.

(END VIDEO CLIP)

MADDOW: Greenspan, the high priest of deregulate everything so the free market can make it all right, did not blame Fannie and Freddie. He did not try to somehow blame Barack Obama. No, he admitted that his ideology, the free market, no regulation, conservative ideology was sort of wrong or at least misguided or at least had a big flaw.

And then the truly extraordinary happened. Apparently unable to accept what he was hearing, Republican Congressman John Mica of Florida inexplicably tried to go back to blaming the whole thing on Obama. And he was roundly rebuffed by Greenspan along with Republican appointees Christopher Cox and John Snow.

(BEGIN VIDEO CLIP)

REP. JOHN MICA (R-FL): Do you know who the largest recipient of campaign contributions is in 20 years from Fannie Mae and Freddie Mac, their political action organization? Do you know?

GREENSPAN: I do not.

MICA: Do you know?

GREENSPAN: I don't. No, I don't.

MICA: Do you know who it was? Sen. Obama, in less than four years.

WAXMAN: They were not the cause of the financial crisis. And I'd be interested to know if any of the three witnesses believe that Freddie Mae (sic) and Fannie Mac (sic) was the cause of our financial crisis. Dr. Greenspan?

GREENSPAN: I think it was a significant factor but not the primary cause.

WAXMAN: And Mr. Cox?

CHRISTOPHER COX, REPUBLICAN APPOINTEE: I would agree with that.

WAXMAN: Let me hear from Mr. Snow.

JOHN SNOW, REPUBLICAN APPOINTEE: I agree with that. There's no single cause of this.

(END VIDEO CLIP)

MADDOW: Joining us now is Democratic Congressman Henry Waxman. He is the chairman of the House Committee on Oversight and Government Reform. Chairman Waxman, thank you so much for joining us. I really appreciate it.

WAXMAN: You're very welcome. I'm pleased to be with you.

MADDOW: I have to begin by asking you about the extraordinary hearing you had today with former Federal Reserve Chairman Alan Greenspan. He admitted under your questioning that he had made a mistake in believing that the financial sector essentially would be able to self-regulate. How significant is that in American politics broadly? And how responsible do you think he is and his way of thinking for the crisis we find ourselves in now?

WAXMAN: We had Chairman Greenspan along with the head of the SEC and the department - former secretary of the Treasury. And what we wanted to hear from all three of these regulators is why nothing happened to prevent the economic mess that we're finding ourselves in.

And the prevailing view was articulated by Alan Greenspan, among others, that the markets worked perfectly. Government shouldn't intervene. Government shouldn't regulate. And that failure to regulate predatory lending, even though Congress told the Federal Reserve to regulate this, meant that the predatory lenders and others just went berserk with wild loans.

And they never suffered the consequence of their bad loans. They just sold them off to others. It was like a hot potato. They passed it on to others. So when the whole house of cards fell, somebody else got stuck. Well, you know who got stuck, the taxpayers of this country.

MADDOW: We did see something else remarkable happen on the committee, which is that a Republican member of the committee essentially tried to make the case that Barack Obama was to blame for the financial crisis because he had taken donations from Fannie Mae and Freddie Mac. That ended up sort of resolving in a dramatic fashion when you asked witnesses today whether they believed that Fannie Mae and Freddie Mac were the cause of the crisis. Can you explain what happened?

WAXMAN: Well, the Republicans wanted to politicize this whole hearing the way they like to use everything for their political benefit. And so they wanted to make the argument that the problems at Fannie Mae and Freddie Mac were the real reason we have the economic situation we're in today.

Now, it did play a contribution - a contributory role and we are going to investigate them. But they said, oh no, the Democratic chairman is not holding this hearing because he's trying to cover up the Democrats' connection with Fannie Mae and Freddie Mac.

Well, I pointed out this was not the central reason that we have the calamity that we're facing. And I went down the line with each the witnesses to ask them whether they thought this was the principal issue at stake and each one acknowledged that it maybe was a factor but not the predominant factor.

What's so annoying to me is we've got a serious problem to deal with. We need to understand what happened, how we got into the situation, so we can pass reforms to make sure that we correct these kinds of problems for the future. And the Republicans wanted to play politics with it.

MADDOW: Congressman Henry Waxman, chairman of the House Oversight Committee, the man whose picture will be in the dictionary someday, next to the word oversight. Thank you so much for your time tonight, sir. Appreciate it.

WAXMAN: Thank you. Bye-bye.

MADDOW: Next, I get just enough pop culture from my friend Kent Jones.

Sen. Obama, apparently, has a license to chill.

(END VIDEO CLIP)

MADDOW: Now, it's time for "Just Enough" with my friend, Kent Jones. Hi, Kent. What have you got?

KENT JONES, POP CULTURIST: Good evening, Rachel. So you're a 007 fan.

MADDOW: Yes, big time.

JONES: Daniel Craig who plays Bond asked by "Parade" magazine which presidential candidate more resembled James Bond. No contest. Quote, "Obama would be the better Bond because, if he's true to his word, he'd be willing to quite literally look the enemy in the eye and go toe-to-toe with them."

As for McCain, Craig said he was better suited to playing Bond's cranky boss "M." Said Craig, quote, "There is, come to think of it, a kind of Judi Dench quality to McCain."

A Judi Dench quality - that's a huge compliment, though I doubt he'd see it that way.

Finally in Key West, Florida, the wild annual blow out known as Fantasy Fest is underway. This year's theme is pirates, pundits and political party animals.

And we're not there. Why? Check out one of the winning entries, this lame duck George Bush headdress with a duck on it. A tad literal perhaps, but oddly presidential.

You know, looking at that duck dressed up in an Uncle Sam hat, I think I now know one element that's been missing from our political discourse - alcohol. Cuts right through the clutter, don't you think?

MADDOW: Thank you, Kent, of course. And thank you for watching tonight. We'll see you here tomorrow night. You can also hear me 6:00 p.m. Eastern coast to coast on Air America Radio. "COUNTDOWN WITH KEITH OLBERMANN" starts right now.

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

END

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