updated 11/11/2008 10:08:43 AM ET 2008-11-11T15:08:43

COUNTDOWN

November 6, 2008

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

Guests: Jonathan Alter, Chris Hayes, Christian Finnegan

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

The president-elect's first hire: Rahm Emanuel is the chief of staff. The president-elects first controversy: Is Larry Summers on the treasury list? Is that a good idea? The president-elects first house warming gift:

Mr. Bush tells White House staff to make sure Obama's administration hits the ground running.

(BEGIN VIDEO CLIP)

PRES. GEORGE W. BUSH, UNITED STATES OF AMERICA: I will be honored to stand with you at the finish line. May God bless you.

(APPLAUSE)

(END VIDEO CLIP)

OLBERMANN: And the president-elect's first PDB, briefed on security by Director of National Intelligence McConnell, leading to our second, what do we do now? Restoring and controlling the intelligence agencies with Roger Cressey.

Is now Senator-elect Merkley of Oregon? There are now missing votes in the Chambliss-Martin race in Georgia. Franken's deficit is now down to 337 in Minnesota. Overtime continues in the Senate races while Joe Lieberman's days dwindled down to a precious few.

GOP sources: Sarah Palin didn't know which countries signed NAFTA. GOP sources: She refused to give up time for a briefing before the Couric interview: GOP sources: McCain fired Randy Scheunemann last Friday for supporting Palin. But wait, there's more.

(BEGIN VIDEO CLIP)

VOICE OF FOX'S CARL CAMERON: And she didn't understand, McCain aids told me today, that Africa was a continent and not a country.

(END VIDEO CLIP)

OLBERMANN: Open hunting season on Caribou Barbie. But the hidden question: Why is it the Republicans who are doing the hunting?

Worsts: Thirty percent drop in income at News Corp, firings across the board at the house of Australian pirates, "I'm not prepared to say how many people. I know, but I don't want the headlines about it." Too late.

And the president says nice things, the secretary of state says nice things, but as President elect Obama looms, not everybody in the Bush administration is going gently into that good night.

(BEGIN VIDEO CLIP)

(INAUDIBLE)

UNIDENTIFIED MALE: I got bit by Barney.

(END VIDEO CLIP)

OLBERMANN: Bad Barney.

All that and more: Now on COUNTDOWN.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Barney's not feeling good.

(END VIDEO CLIP)

OLBERMANN (on camera): You watch, President Bush will do that before Christmas.

Good evening. This is Thursday, November 6th, 75 days until the inauguration of President-elect Barack Obama.

The election maybe over but the short sharp shots for the Republican Party are not. It was at Guilford County, North Carolina that Alaska Governor Palin first implied that some parts of this nation were more patriotic, more American than others. This just in-turns out that Sarah Palin's real America was also in the tank for Obama. He took Guilford County in a landslide. Obama for president in real America: 59 to 41. As goes Guilford County, so goes the Tar Heel State.

NBC News having today declared President-elect Obama the projected winner of North Carolina's 15 electoral votes, the first Democrat to win that state since Jimmy Carter in 1976. That puts the electoral count at 364 for Mr. Obama, 173 for Senator McCain. One electoral vote in Nebraska is still to be allocated.

President-elect Obama also with a new chief of staff at this hour, officially naming fellow Illinois lawmaker Rahm Emanuel to one of the most powerful jobs in government this afternoon, saying in a statement that he believes the Chicago congressman has what it takes to carry out his agenda, quote, "No one I know is better at getting things done."

Mr. Emanuel, chairman of the Democratic caucus, said the dream of being speaker of the House, apparently willing to sacrifice that dream for another end, quoting him, "I'm leaving a job I love to join your," Obama's "White House for one simple reason-like the record amount of voters who cast their ballot over the last month, I want to do everything I can to help deliver the change America needs."

House Republican Leader John Boehner calling Emanuel, quote, "an ironic choice for a president-elect who has promised to change Washington." But just how much off-orbit the Republican's planet has spun, indicated by the fact that Senator McCain's arch-supporters, Senator Lindsey Graham, putting out a statement that stepped all over Boehner's, quote, "This is a wise choice by President-elect Obama. Rahm knows Capitol Hill and has great political skills. He can be a tough partisan but also understands the need to work together. He is well suited for the position of White House chief of staff."

Now, for the transition speculation du jour: Chief campaign strategist David Axelrod rumored to be Obama's senior advisor and Robert Gibbs, Obama's campaign communications director, looking to be his choice as White House press secretary.

The president-elect and his wife, Michelle, to travel to Washington Monday to go to the White House, she to tour the private residences with the current first lady, Laura Bush. He to meet with President Bush in the Oval Office, hopefully each avoids Barney.

This morning on the south lawn, Mr. Bush is directing hundreds of federal employees to make this transition as seamless as possible.

(BEGIN VIDEO CLIP)

BUSH: While the honor is great, the work is temporary. This is true for many of us here today. This peaceful transfer of power is one of the hallmarks of a true democracy. And assuring that this transition is as smooth as possible is a priority for the rest of my presidency. We face economic challenges that will not pause to let a new president settle in. So, for the next 75 days, all of us must ensure that the next president and his team can hit the ground running.

(END VIDEO CLIP)

OLBERMANN: Tomorrow, bringing the first Obama news conference since the election. Today, in the absence of cameras, the vice president-elect is telling reporters that the Obama administration will need everybody's help on Capitol Hill, even, especially, Senator John McCain's.

(BEGIN AUDIO CLIP)

JOE BIDEN, VICE PRESIDENT-ELECT OF THE UNITED STATES: John's still my friend. I say, John, I need you. We need you. This is an opportunity. We really mean what we said. I mean, Barack and I met yesterday and we'll be meeting every day for a while until we flesh out this cabinet and everybody else. And, but, we really mean it. We've got to reach out, man, you can't, you can't get from here to there with just Democrats. You can't do it.

(END AUDIO CLIP)

OLBERMANN: Time now to call in our own Richard Wolffe, senior White House correspondent for "Newsweek" magazine.

Richard, good evening.

RICHARD WOLFFE, MSNBC POLITICAL ANALYST: Good evening, Keith.

OLBERMANN: The vice president-elect reaching out to Senator McCain;

Senator Graham praising Congressman Emanuel as chief of staff. If it is a honeymoon period, if it is at spirit of bipartisanship, did John Boehner get that memo or are the Republicans really still in a kind of shocked chaos that they're coming out with two of their remaining leaders saying entirely different things?

WOLFFE: Well, there's a state of shock there for Republicans, and certainly, a lot of chaos for them to work through. I don't think there's much strategic thinking that's going on here. You have a newly-elected president-elect who has a clear mandate from the people.

And Republicans have to figure out, especially leadership in Congress whether they are going to play nice for a period, whether they're going to oppose him from the get-go and the problem here is that Rahm Emanuel, while he has a clearly hard-driving reputation, also has a lot of Republican friends out there and Lindsey Graham is one of them.

So, the idea that whether it's John Boehner or anyone else, the RNC put out its own statement can sort of demonize this White House before it gets together is shortsighted, I think. They need to figure out a strategic path when stuff happens, not before it does.

OLBERMANN: Speaking of bipartisanship and graciousness, truly, President Bush evinced both of those things today at that session with the staffers inside the White House. Why couldn't the last eight years have been more like this or even occasionally like that?

WOLFFE: Well, it's a great question and certainly one that's been uppermost in the minds of some of the Texas folks who traveled to D.C. with President Bush eight years ago. I think there are two sides to President Bush here. There is the sort of above the fray, bipartisan, uniter not a divider guy, and that's his self-image.

So, this transition planning has been shaped by the kind of president he thinks of himself as being and would like to be. In fact, there is this other President Bush that we've seen all too often, the one who put the sort of Rovian politics into everything from the war in Iraq on down. And that guy who didn't grasp the moment of the disputed election of 2000 to really build something bipartisan is may be the one who had too much power and the other Bush is the one coming back now.

OLBERMANN: Looking forward to Rahm Emanuel's chief of staff. During the Clinton administration, he was said to have once designated a political enemy and sent him a rotten dead fish. The nickname "Rahmbo" is not a pun. This would be quite a difference from President-elect Joe Cool over here.

Is the idea that Emanuel gets to be the bad cop to Obama's good cop?

WOLFFE: Yes. He's also known to wave his finger-one of his fingers in the air, where he had an accident that lost part of his finger. So, this is a guy who does have a forthright, robust style.

I actually asked people inside the Obama circle today about the "good cop, bad cop" idea. They really think that's kind of overplayed. Their idea here is that this is a guy who knows Washington at both ends of Pennsylvania Avenue. He can get stuff done.

And most of all, he and Obama are personal friends. Their families are friendly. And it's someone that, in the end, President Obama trusts his judgment and wants to spend time with him. That's a very important piece of this job because the chief of staff is velcroed to the president.

OLBERMANN: As we look towards the cabinet, we can spend half an hour on rumors already. But let's just focus on one of Lawrence Summers. There's opposition research, I mean, just opposition, never mind opinion research. There seems to be some opposition raised to the prospect of him going in as treasury. Is there a reason that the stories are all out there? Is he being tested, floated? What's going on with Summers?

WOLFFE: Well, Summers has lots of enemies because it's just as well he's not running for secretary of state here. He's not a diplomatic guy but he is a brilliant economic mind, a talented, gifted, maybe the best in his generation when it comes to an academic economist. He has got enemies out there, though, whether it's from his tenure in Harvard or some of the impolitic things he said about the third world, about pollution.

I don't think this really has an impact on his position with Obama though. Obama trusts him for his judgment on the financial crisis. He worked very hard to brief the president-elect now. And so, I think the relationship will be intact despite of these stories.

OLBERMANN: Richard Wolffe of MSNBC and "Newsweek"-as always, sir, great thanks. Have a good night.

WOLFFE: Thank you, Keith.

OLBERMANN: If the economy is the top concern for the Obama administration in waiting, next on the list would have to be national security. A subject tonight of the question we will ask nightly until the inauguration: What do we do now?

President-elect Obama receiving his very first presidential briefing today from top intelligence officials, similar to the one that President Bush gets daily. As the official Democratic nominee, the senator was entitled to and did receive one intelligence briefing from Bush administration officials. Vice President-elect Biden will also get a PDB briefing, although for him, it did not just begin today.

Let's turn to MSNBC terrorism analyst, Roger Cressey, former counterterrorism coordinator of the National Security Council staff.

Roger, good evening.

ROGER CRESSEY, MSNBC TERRORISM ANALYST: Good evening, Keith.

OLBERMANN: Like all Democratic candidates, Obama was attacked during this campaign of being soft on terror; the electorate obviously didn't buy that. Is there a sense yet of the view inside the intelligence community on how an Obama administration is likely to be able to handle the security apparatus of the nation?

CRESSEY: Well, a lot of it is going to depend on the people he brings in. If he brings in seasoned national security experts, centrist in their orientation, I think that will be reassuring. I think if someone like Secretary Gates is kept on, that will also send a signal.

Within the intelligence community, the greatest fear is that when the new team comes in, they're going to try and reorganize yet again. And greatest concern is if there's any type of massive reorganization, then time is lost, focus is lost, and that's not the thing to happen right now.

So, they are going to be looking to see what the president-elect does in terms of how do you change the existing structure? What do you do to the DNI's office, do you make it smaller? How do you bring in the national kind of terrorism center put more into the fold? Things like that. So, it's on the margins, I think, is where you're going to see the real change.

OLBERMANN: Anything in terms of an overall tone? I mean, we leave the structure in place and say, look, we need to emphasize human intelligence as opposed to interrogation. We need to have, we need to infiltrate, we need to do all the gum shoe work that was so dismissed especially in the years right after 9/11. Is that the likeliest outcome? And what will the response of the intelligence community be to that proposition?

CRESSEY: Well, they'd be very receptive to it. But the challenge, of course, is, when you're developing human intelligence capability, it takes years, sometimes decades to put in place. So, it's not something you can just sign in an executive and see it happen. I think it's going to be a balance. A balance between renewed emphasis on human intelligence assets, something that's started in the past few years, better use of that technological, capability but much of it, Keith, is about policy and process as it is the actual capability.

So, they are going to look to the Obama White House and say, how do you take this vast capability we've deployed already, use it better, focusing on the right issues, the right priorities, and therefore we get the right type of intelligence products so we can make smart policy decisions.

OLBERMANN: Roger, what-would some sort of statement about we're going to officially and consciously depoliticize everything, render it completely out of the realm of politics and never let politics be a factor in any of this? Is that-is that what the intelligence community needs to hear and is there some sort of action behind a statement like that that would make it stick?

CRESSEY: I was with a group of intelligence people today and I think a lot of them believe that the most important thing is for a president to say, we've got your back, that we want you to be proactive, we want you to take risks. Obviously, risk that conform with our law and our values as a country.

But what the intelligence community is afraid of more than anything is the game of gotcha which is, if they make a mistake, a well-intentioned mistake, the White House doesn't support them. They're left out to dry. Congress crushes them, and then you get into the risky mentality that we saw for awhile.

So, that is what they want. They want support. They want that the president is going to be behind them but also that he's going to lead them.

OLBERMANN: Be a little speculative for me and leave out anything that you think we should know about. What do you think that essential PDB that Obama got today told him? What were the highlights and lowlights?

CRESSEY: That PBD, of course, the good news, the bad news. The good news is, you're the president-elect. The bad news, you're the president-elect and here's what you have to deal with.

It probably deals with a couple of different things, Keith. It's the immediate operational issues. What's going on in Iraq, what's going on in Afghanistan, looking at some of hot spots around the world, be Africa, Asia -- political issues and economic issues. What's going on with Western Europe and Asia and Russia? What are some of the leaders around the world saying?

I think, also, you're going to see-the real question is: What type of covert activities that are now underway? And there's a lot going on that the new president is going to be briefed on. And how much will he get to see and know about that before he's inaugurated. Part of it is, you want him to be as up-to-date on everything that's going on in current, so that when he is inaugurated, he hits the ground running. Yet on the same time, he's not in a position to take any action on this information for another 75 days.

OLBERMANN: Our own Roger Cressey, former counterterrorism coordinator of the National Security Council staff, always a pleasure, Roger. Have a good night. Thanks.

CRESSEY: You bet. You, too, Keith.

OLBERMANN: The president-elect has at least one new ally in the Senate tonight, maybe more. Meanwhile, it's pretty apparent now that Governor Sarah Palin is lucky if she has one ally anywhere-maybe in the nation of Africa, or in one of those countries that signed the NAFTA agreement. If only she knew which ones they were. But amid them is one vital but unaddressed question tonight: Why has the Republican power structure hunted, caught, gutted, and cleaned the governor's reputation, yet again?

(COMMERCIAL BREAK)

OLBERMANN: Fifty-five and counting for the Dems in the Senate as Mr. Merkley of Oregon goes to Washington. How about Minnesota, Alaska, and are we sure those are all the votes in Georgia?

Later: If the Democrats have said this about Sarah Palin a week ago, they would have been called "sexist," "elitism," "inside the Beltway," "Joe the Plumber-hating intellectuals." So, why are the Republicans dishing all the dirt on Palin? Dirt which is, by the way, hilarious.

Ahead on COUNTDOWN.

(COMMERCIAL BREAK)

OLBERMANN: Another day, another new Senate seat for the Democratic Party with three Senate races still unresolved.

And in our fourth story on the COUNTDOWN: As the Dems inch toward a filibuster-proof majority or something close enough to it perhaps, the urgency rises about what to do with the senator from Connecticut, Mr. Lieberman.

In Oregon, Democrat Jeff Merkley has now defeated his Republican incumbent, Senator Gordon Smith who conceded this morning. Votes from primarily Democratic area is uncounted as of yesterday, put Merkley ahead this day, 49 percent to 46 percent. That brings the new Senate to 55 Democrats and 40 Republicans. If all three unresolved Senate seats were to go the Democrats' way and if Senator Lieberman continued to caucus with the Dems along with the other independent senator, Mr. Sanders of Vermont, then the Democrats would achieve that mystical number of 60.

As for those three pending Senate seats: in the Georgia race, a December runoff is still expected since the GOP incumbent Saxby Chambliss did not reach the required 50 percent mark. And there may be thousands of early and absentee ballots left to count.

Meantime, voter turnout in Georgia increased only fractionally from the last time out when many local experts expected there'd be a far greater increase. Thus some local political analysts are so carefully watching for the complete tally. But with 99 percent of the votes officially counted, the challenger, Jim Martin is focusing on the runoff, having already contacted President-elect Obama about campaigning for him.

In Minnesota, Republican Norm Coleman's lead over Al Franken has dwindled to 336 votes. The automatic recount is still a certainty. And while the convicted felon-Alaska Senator Ted Stevens leads Mark Begich by about 3,400 votes. Should his lead hold, Stevens might be expelled from the Senate if he chooses not to resign and a special election, not the governor-whoever that is-would fill his seat.

As for Senator Lieberman, he met with the Senate Majority Leader Harry Reid today, both men saying afterward, no decisions had been made. The key issues, whether Lieberman would be removed as the chairman of the homeland security committee, and whether he would still caucus with the Democratic Party at all. And presumably, though nobody is confirming this: whether either party could actually trust him as far as they could throw him.

Let's turn now to "Newsweek" magazine columnist and senior editor, our own Jonathan Alter.

Good evening, Jon.

JONATHAN ALTER, NEWSWEEK: Hi, Keith.

OLBERMANN: This possible issue in Georgia. Without getting overwhelmed by math, the turnout was expected to be overwhelming compared to previous years because early voting was so much higher. Then again, turnout Election Day in some counties was down. But, is it the turnout increase of 0.6 percent worthy of further investigation?

ALTER: Absolutely. You know, actually, some people think it's going to be more than that. WSB, the TV station in Atlanta thinks that there are serious irregularities in Fulton and Gwinnett County.

So, might some of the votes go over to Jim Martin in a runoff with Saxby Chambliss? Absolutely. And if you get Barack Obama down there campaigning hard for Martin, Obama got 47 percent of the vote in Georgia. He didn't campaign there. You can see that helping Martin in a runoff. So, while you have to give the edge to Chambliss in a run off, it's conceivable that the Democrats could pick up that seat.

OLBERMANN: Before we go back into the specifics, the general thing here-how important is it actually for the Democrats to hit 58 seats and two leans? Is not 57 enough for the, you know, combined working super-majority on issues where you could peel off two or three moderate Republicans or even more?

ALTER: Well, I think, what it will be is that, on some issues, you get some Republicans like the two senators from Maine-you know, Olympia Snowe and Susan Collins are both moderate Republicans. Arlen Specter of Pennsylvania, a moderate Republican. And then, you have these states that have gone from red to blue and Republicans in those states, say, somebody like Chuck Grassley from Iowa, that's now a blue state. He's got to be careful about defying the president of the United States.

So, by redrawing the map, Obama has gotten himself some more options to get to 60 votes in the Senate. So, he doesn't have to have 60 Democrats, necessarily, to have a working majority.

OLBERMANN: Which brings us back to Lieberman. Is there really incentive to keep him inside the Democratic caucus especially after the spectacle he made of himself in St. Paul at the GOP convention?

ALTER: Sure. You know, you want as many votes as you can-because sometimes these big key votes just do come down to one. So, they don't want to throw him out of the caucus. But they have to punish him somehow.

And, you know, it was one thing for him to endorse John McCain, it was another for him to campaign for Sarah Palin and for the down ticket Republicans all across the country, which is unforgivable on some level. But, you know, as my dad reminds me, you don't want revenge to be too expensive, even if it's emotionally satisfying, you have to figure what's really the best thing for President-elect Obama in this situation.

And so, they might figure out some compromise where they take his committee chairmanship away from him, but let him stay in the caucus, maybe have some minor subcommittee that he gets to continue to chair. And that's what they are working out right now with Harry Reid.

OLBERMANN: All right. Let's leave the visions of revenge to 2010, I suppose, or something later on.

ALTER: Yes. Revenge a dish best eaten cold, right? So, we can wait awhile.

OLBERMANN: Certainly, until it gets colder. But speaking of cold, in Minnesota, Norm Coleman still insisting Al Franken should drop the recount even though without a recount, the lead has dropped from 725 votes to 336 in the last day and a half.

ALTER: Yes.

OLBERMANN: Where do we stand in Minnesota? Is this going to go on for a long time?

ALTER: Well, you know, since both of the candidates are Jewish, I can say that it shed some excessive chutzpah on Norm Coleman's part in an election this close to suggest that somehow they shouldn't have a recount which is-by the way stipulated by Minnesota state law.

So, they are going to have a recount. The Franken people are actually fairly confident that even in clean Minnesota, there were enough irregularities to make up a tiny, infinitesimal difference of just a few dozen votes. So, it's entirely possible that we could-call me Senator Al. That's still quite possible in Minnesota.

OLBERMANN: And finally, it might become the Al Franken decade.

Our own Jonathan Alter of "Newsweek," thank you, Jon.

ALTER: Thanks, Keith.

OLBERMANN: Shock of shocks. Waves of newborns in Kenya are being named Barack. The ones that they're naming Michelle, that's the fun story.

And, presumably grief-stricken after hearing the Obama's are to bring a new puppy into the White House, Barney the dog attacks a reporter. Ahead on COUNTDOWN.

(COMMERCIAL BREAK)

OLBERMANN: Bests in a moment and how to invent a new cliche. The man was literally using a blow torch on a cobweb.

First, what a day for history and anniversaries. November 6th, the day Lincoln was first elected president, Teddy Kennedy first elected senator. The inventors of basketball and the saxophone born were on November 6th. Catherine Crier was born, so too the great Mike Nichols, who's done everything from working at the Howard Johnson's in Times Square, to being half of the breakthrough comedy team of Nichols and May, to directing the "Graduate," Catch-22" and "Charlie Wilson's War," to winning an Oscar, an Emmy, a Tony and a Grammy. Happy birthday to Mike Nichols and happy birthday to Catherine Crier.

Let's play Oddball.

(BEGIN VIDEO CLIP)

OLBERMANN: And we begin in Kenya, where it took all of about five minutes after the election of President-Elect Obama for people to start naming their newborns after him. So far, there are at least six babies named after the future first family. Boys called either Barack or Obama or both. Little girls called Michelle. And in a nod to Sarah Palin, one kid named Zamboni.

To Buffalo, where the future president has been immortalized in creamery, sugary goodness. A fan baking 1,200 cupcaked and artfully arranging them into a portrait of Barack Obama. We're assuming the giant McCain bundt cake has been turned over to city harvest.

(END VIDEO CLIP)

OLBERMANN: Speaking used McCain goods; she didn't know Africa was a continent and she refused a mock interview before the Couric interview. Just as interesting, why are Republican sources revealing all this about Sarah Palin.

And financial hemorrhage over to Rupert's house. Worst persons, ahoy, matey. But first time for COUNTDOWN's top three best persons in the world. Theme warning tonight, world's best parents.

Number three, best parents international, those in Finland willing to ignore the director of the Finnish board of Film Classification, which has slapped a ban for under 18 sticker on the new DVD release of the American TV series "Little House on the Prairie." No, you didn't miss something. All DVDs get the sticker unless the producer is willing to pay the government to review it and give it the OK for the kids.

Number two, best parent in absentia, Daniel R. Stewart of St. Petersburg, Florida. Arrested because he left a seven-year-old girl and six-year-old girl home alone, but told them he was leaving them with some things with which they could defend themselves in the event of an emergency. According to the little girl, a hunting knife, a hatchet and a baseball bat.

Number one, best parent in the house, Galen Winchell of Sargent, Georgia. He was doing a little fall cleaning up by the eves and the gutters and noticed some cobwebs. Three emergency vehicles raced to the scene and everybody had to be evacuated. The billowing heavy smoke was a problem, but once they switched off the power everybody and everything was OK, even though Mr. Winchell had been removing the cobwebs with a blow torch.

(COMMERCIAL BREAK)

OLBERMANN: She doesn't even get to keep the clothes. Our third story in the COUNTDOWN, Sarah Palin might have been nicknamed the barracuda, but the Republicans who do not like her turn out to have been piranha. With the second day of not very carefully placed leaks, they have picked her bones clean.

The visceral joy that America did not elect a vice president that didn't know Africa was a continent, not a country, balanced somewhat by the question, why did the GOP hierarchy move so quickly to bury her? And she doesn't even get to keep the clothes.

The "L.A. Times" quoting a McCain staffer who says, an RNC lawyer is headed to Alaska to repo whatever she might still have of that six figure wardrobe. This nugget on the high heel of yesterday's word that the governor had underlings used their personal plastic for some of those purchases.

Another McCain staffer leak, a deliciously layered account given to Carl Cameron of Fox News, seen here with the governor. A, Palin was apparently baffled by the notion of South Africa as a sovereign state within the continent of Africa. B, she did not know which countries had signed NAFTA. Those would be those three toughies, the US, Mexico and Canada. C, she refused to take the time to prep for the Katie Couric interview, even though the campaign had done a strong job of guessing Couric's questions.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN ®, ALASKA: That's kind of a small, evidently bitter type of person who would anonymously charge something foolish like that, that I perhaps didn't know an answer to a question. So until I know who is talking about it, I won't have a comment on the false allegation.

(END VIDEO CLIP)

OLBERMANN: Oh, it's more than one of them. On goes the cascade. Both sides blame each other for the call from French President Sarkozy that was actually from two guys at a radio station in Montreal. A McCain adviser now accusing Governor Palin of keeping the call a secret, a charge her people deny, insisting it was on her schedule for three days. It wasn't their fault if nobody from the McCain side of things noticed.

New to the table, did Palin bring down McCain adviser Randy Scheunemann, accused of being the source of the story that Nicole Wallace had botched the Sarah Palin rollout, thus somehow siding himself with Palin. Scheunemann reportedly fired last Friday by the McCain campaign. But spokesman Michael Goldfarb says it's not true. They didn't fire him. They just took away his Blackberry and his e-mail because they were mad at him.

Let's bring in Chris Hayes, the Washington editor of "The Nation."

Chris, If you can stop laughing long enough, good evening.

CHRIS HAYES, "THE NATION": Good evening, Keith.

OLBERMANN: OK, so we laugh like hell, ha, ha, ha. But how on Earth did John McCain let this dim bulb get that close to the White House?

HAYES: Look, I think we should take all of this with a grain of salt. In the case of the NAFTA, Africa story, let's remember that's coming from McCain staffers to a Fox News reporter, which is kind of a zero times zero credibility effect. So I don't know, you know, if what they're saying is accurate. And there's no way to really back it up.

Whether it's accurate-if it's accurate, it reflects incredibly poorly on the McCain people, because of course they're the ones that not only chose her, but then went out and lied to the American people every day, by their own admission, saying she was ready to step in and be president if necessary. And if it's not true, then they're really saying some pretty violent slanderous stuff against a woman putatively they-was on their team for the last nine weeks.

OLBERMANN: The other point here-and you made that connection there

all of these stories come from Republicans about a Republican. It can't simply be revenge on the part of the McCain camp. Can it be limited to that?

HAYES: You know, I'm having a hard time parceling it out, because, frankly, there's no logic here. Someone-the people who are giving these blind quotes have to understand at some basic level this reflects poorly on everyone. No one is winning out of what is ensuing here. And it's getting so nasty between the two camps that I'm beginning to think there actually is actual real hatred and animus between the two camps that was created during the pressure cooker of the campaign, that they're kind of giving in to right now, even though everyone comes out looking small and petty and like pathological liars.

OLBERMANN: But obviously, McCain is not going to run for president again and the people immediately around him are unlikely find themselves-or very few are likely to find themselves back in a presidential race. Could this be about fear in the Republican structure, in the hierarchy?

Their constituency is clearly people who believe the party is Evangelical. They believe it's populist. They believe it's the party of plumbers, of hockey moms. But god forbid that it ever was run by Evangelicals or plumbers or hockey moms.

Is Sarah Palin being-don't mean to defend her, but is she being destroyed because she didn't understand she wasn't supposed to be one of those people? She was just supposed to use those people?

HAYES: You know, I think that really gets to something amazing about this entire chapter in Republican party history. The quote that stuck out to me was the blind quote calling her a Wasilla Hill Billy. You know, here you have The republican party, and they trot out Sarah Palin to do this whole kind of backlash, populist, working class reactionary schtick, this sort of, you know, populist minstrelsy, almost. And behind her back, they're calling her a hillbilly.

I really hope that every working class conservative in the country reads that quote, because the fact of the matter is every four years the Republican party dons the kind of mantle of Joe the Plumber, and as soon as the election is over, they go and kick the guy in the face. We're seeing that here. It's really kind of remarkable.

OLBERMANN: And as flat-footed as she seemed in response here in the last two days-she's been underwater. But is Palin's part of the party, if she's taking it lying down, are they not?

HAYES: No, they're not taking it lying down. In fact, today, there was a blog post on the blog RedState.org, which inaugurated a new thing called Operation Leper, which is to ferret out the people trying to take down Sarah Palin, the people giving blind quotes, the pundits and so forth and the op-ed columnists who have written disparagingly of her and to make sure that they're made into lepers of the conservative movement, that candidates that they get behind or work for become persona non grata within the establishment.

There's already a really intense polarizing effect around Sarah Palin. The irony is that she was a polarizing figure in the general election and now she's become a polarizing figure within her own party.

OLBERMANN: Yes, there are the lepers who didn't support her and, of course, the other lepers who did support her. Chris Hayes of "The Nation," this may be an endless source of amusement and entertainment for us. We'll talk to you again. Thanks.

HAYES: Thank you, Keith.

OLBERMANN: Karl Rove, who led the charge to brand Obama a socialist, now says it didn't work because Obama is really kind of a conservative. OK, sure, Karl, worst persons ahead.

And when Barney's attack. Just when you thought this administration was all bark and no bite.

But first, because they're not going away soon enough, the headlines breaking in the administration's 50 running non-Barney scandals, Bushed.

Number three, I could write a book-gate. Rumors murmuring at the White House, having seen the success of predictor's tome, Mr. Bush wants to write his autobiography. Bill Clinton's publishers quoted as saying, given how the public feels about him right now, I think patience is something I would encourage. Curtis Sitinfeld (ph), who has already written a novel about Laura Bush, says she should write a biography and quickly. Personally, Sitinfeld adds, I would find a memoir by President Bush resistible.

Number two, international diplomacy-gate. President Medvedev of Russia not even waiting until the ink was dry on the Obama election to warn that if this continued Mr. Bush's plan to install a missile defense system in Eastern Europe, he will put short range missiles pointed at Europe on Russia's Eastern border. First, dude, chill, it's been two days. Second, wait a minute, did I misunderstand conservatives and Mr. Bush and all them there guys all these years? Ronald Reagan won the Cold War, remember? Russia can't be a problem forever and ever, remember?

Number one, ICE-gate. Like everything else they threw at him, it didn't stick and it got very little public attention. Just before the election, a, quote, federal law enforcement official leaked to reporters the fact that one of Barack Obama's aunts was living illegally in this country, information that most likely came from Mr. Bush's Department of Immigration and Customs Enforcement, ICE.

Guess who has suddenly handed in her two week notice of the assistant secretary of Homeland Security, chief of ICE? Julie Myers, the Bush appointee, who just happens to be the daughter of the former chairman of the Joint Chiefs. She was in charge when ICE arrested the family of a Vietnamese immigrant, who three days earlier had been quoted in a newspaper article as being critical of this nation's immigration policies. And she was also the clear-headed executive who awarded the most original costume trophy to a guy at the Homeland Halloween party last year who was dressed up like this, dread locks, black face, prison stripes. That's him on the left, by the way, and the ICE lady on the right.

There's your last Bush legacy, the head of ICE, little miss nepotism, little miss racial sensitivity, and very possibly the source of a last minute leak that was a clear violation of federal statute to try to fix the outcome of the presidential election. I've said it before and I'll say it again, this nation has survived the evil of the Bush administration these last eight years not principally because truth has prevailed, nor because of anybody's courage, but, rather, because most of the people in the Bush administration are about as nit-witted and careless as this Myers woman. Democracy saved because its enemies were too stupid to realize that they were stupid!

(COMMERCIAL BREAK)

OLBERMANN: Dog bites White House reporter. Dog tested to see if it's rabid. White House reporter tested to see if he's rabid. That's next, but first time for COUNTDOWN's number two story, tonight's worst persons in the world.

The bronze to Prime Minister Silvio Berlusconi, suggesting in Moscow that President Medvedev of Russia should be able to do business with President-Elect Obama; quote, I told the president that Obama has everything needed in order to reach deals with him. He's young, handsome and even tanned. It seems to be a good time to bring back that satirical video which does not depict Prime Minister foot in the mouth saying hi to a meter made.

Our runner-up tonight, Karl Rove of Fixed News, still a consultant to the members of the Republican party, all 37 of them. Rove saying of Obama, let's make it clear, he ran a center-right campaign. Now he says that. During the campaign, Rove said Obama was the most liberal member of the U.S. Senate and bandied about that word socialist. But as predicted from under the Landslide, The Far Right, Karl Rove and the other 36 guys is trying now to depict him as a centrist or even a conservative. Karl Rove is an idiot.

But our winner, Rupert Murdoch, not a good week for the Aussie captain hook. Bill-O gets pummeled in the ratings, McCain loses. Now word that Rupert's media monopoly News Corp reported income down 30 percent from last year. The stock price dropped 16 percent today. Says Rupert, "the televised guidance-excuse me, the revised guidance is a clear reflection," arghh, "of the fiscal environment. We expect that to continue through fiscal 2009 and be very challenging to the media sector," arghh. "A prolonged economic slump," arghh, "extremely challenging for media," my fine mates, shiver me timbers.

Oh, and he's going to shut down ten of the "Wall Street Journal's" 17 printing plants, and cut jobs across the board at his newspapers in Australia and the UK. "I'm not prepared to say how many people," arghh. "I know, but I don't want the headlines about it." Yes, well, tough, you got them anyway. Rupert Murdoch making his employees walk the plank for his own political misjudgment, today's worst person in the world.

(COMMERCIAL BREAK)

OLBERMANN: Presidential politics, the ultimate dog eat dog world. In our number one story on the COUNTDOWN, it turns out that can be taken somewhat literally. Ask Jon Decker, political correspondent for the Reuters News Service, or as he's called by Barney, the nation's lame duck first dog, lunch. This morning, 75 days before the moving vans arrive, a weepy President Bush gave an on-camera pep talk to the executive staff which helped him govern for two terms, kind of.

We assume he got all blubbery because he was sad about leaving. Now, there's a competing theory that the president has been held hostage in the White House for the past eight years by an abusive little dog.

(BEGIN VIDEO CLIP)

JOHN DECKER, REUTERS: Look over here, Barney.

UNIDENTIFIED FEMALE: Is Ms. Beasley sleeping?

UNIDENTIFIED MALE: Yes, nap time for her.

DECKER: How you doing?

(END VIDEO CLIP)

OLBERMANN: Finally, a Barney cam movie that's funny. After the president's speech, that was reporter John Decker of Reuters being attacked. Fellow reporter April Ryan shot the mauling on her flip camera. Barney drew blood from Decker's right index finger, which was treated by the White House doctor. Mrs. Bush has sent a note apologizing to Mr. Decker, who is now recovering and laughing about the incident. Well, that's because obviously he hasn't seen this attack in slow motion.

(BEGIN VIDEO CLIP)

DECKER: Hi, Barney.

(END VIDEO CLIP)

OLBERMANN: You're lucky to still have an arm, fellow. Joining me now, comedian and contributor to VH-1's "Best Week Ever," Christian Finnegan. Good evening, Christian.

CHRISTIAN FINNEGAN, VH-1: I'm sorry, Keith, I can barely hear you over the choir of angels that's been singing in my head over the past 48 hours. It's great to be here.

OLBERMANN: The point of this things, this sort of White House revenge they put up a genial front about the thrashing their man got by proxy on Tuesday. I'm thinking Barney didn't get the memo about going out nicely.

FINNEGAN: Keith, there's no doubt about it, Barney has gone rogue. Obviously, he heard Obama's victory speech, where he talked of getting Sasha and Malia a new puppy. Barney knows what time it is and he's not pleased. OK, the White House dog, that's a pretty good gig. Have you ever spent any real time in Crawford, Texas? Try finding organic truffle scented doggy treats at your local Pet Smart. Not going to happen.

OLBERMANN: Yes, it's tough for the little dog too in the humidity of Crawford. The first lady's media person said about the attack that Scotty's are notoriously moody and that Barney was done with the paparazzi. So to the last, they're going to blame those media elites, right?

FINNEGAN: Listen, you can never go wrong blaming the media, even if you are a dog. You know the paparazzi, always wanting to know whose leg you're humping, hiding in the bushes, trying to get a snap shot of you licking your own privates. These people are gutter snipes.

OLBERMANN: The-the White House-is the White House lucky that the person bit in this equation was an understanding member of the media elite? If it's all our fault, wouldn't the odds have been pretty good that after being bitten, any other reporter might have punted that dog like a football, perhaps?

FINNEGAN: Well, if this incident proves anything, it's that not all media is elite. OK, two days after the biggest political event of our generation, and poor John Decker is on Barney detail. Who do you have to piss off at Reuters to get stuck with that gig? Try impressing the ladies with that angle. You know, girls, I cover the White House. Sure you do, pal, I've seen the video.

OLBERMANN: See my wound, my scar here. About the election, broaden this out for me, what it means for you and your trade. Did America win and the world of comedy lose this week? I don't know who you supported.

FINNEGAN: Really?

OLBERMANN: As a professional, was Tuesday a complete loss for you?

FINNEGAN: That's been the big question facing my people. Can comedy survive an Obama administration? My feeling is the future is as bright as Joe Biden's veneers. Let me tell you, that guy is going to be so entertaining, he might as well riding a unicycle. It's only a matter of time before he tells an ambassador to pull his finger. I'm telling you, you think that he picked Biden for his foreign policy credentials? No, no, no, that was a gift to the comedy community.

In fact, as he stacks his cabinet, you're going to see him throwing some doozies just for us. I've got five words for you, Keith, Secretary of State Tara Reid.

OLBERMANN: Nice.

FINNEGAN: That is hope at its most audacious.

OLBERMANN: That, of course, would be second choice to-and I think perhaps we need to collectively-your business and mine, we need to take up a collection to make sure that Sarah Palin can live in the lower 48 and stay in front of a camera at all times for us. That would do the trick, wouldn't it?

FINNEGAN: Absolutely. You're a pretty powerful guy here at MSNBC, Keith, and I have a show idea I am hoping to pitch. It's called Ask Sarah. The concept is very simple. It's just me sitting across from Miss Barracuda with a stack of index cards and I say stuff like, OK, Governor Palin, the Magna Carta, go.

OLBERMANN: Yes, the Encyclopedia Britannica is a big thing. You could make it work.

FINNEGAN: It writes itself.

OLBERMANN: 10:00? Comedian Christian Finnegan, great thanks for joining us.

FINNEGAN: Great to be back.

OLBERMANN: That's COUNTDOWN for this the 2,017th day since the declaration of mission accomplished in Iraq. I'm Keith Olbermann, good night and good luck.

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

END

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