updated 11/11/2008 11:27:16 AM ET 2008-11-11T16:27:16

Guests: Maria Bartiromo, Mort Zuckerman, Joe Lockhart, Scott McClellan, Eric Schmidt, Nick Summers, Darren Briscoe

MIKA BRZEZINSKI, HOST:  Tonight, Barack Obama‘s first news conference as president-elect.  He shed light on how he plans to deal with the global economic crisis.  Will he be the redistributor in chief? 

Sarah Palin speaks out about campaign aides throwing her in the gutter. 

She says, by the way, she is not a shopaholic. 

And an MSNBC dog block.  News on Barney, the White House snapper, and the new pooch coming to 1600 Pennsylvania Avenue.

Seventy-four days to the inauguration of President-elect Obama.  Welcome to the show.  I‘m Mika Brzezinski, in for David Gregory.  My headline tonight, “Confronting the Crisis.”Just three days since delivering his victory speech, Barack Obama calls for a stimulus package to be passed if not now, soon after he takes office.  It was one of several revelations from his first news conference as president-elect in which he vowed to confront the greatest economic challenge of our lifetime “head on.”

A rescue plan for the middle class is how he‘ll pull the country out of this mess, calling on swift action to stabilize the financial industry on a day filled with bad news from the auto industry and high unemployment figures coming in.  President-elect Obama said it‘s not going to be easy, but flanked by his team of economic heavy hitters, including Eric Schmidt, the CEO of Google, who will join us at the half-hour, he spoke with confidence that there is a path to recovery. 

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT:  I do not underestimate the enormity of the task that lies ahead.  We have taken some major action to date and we will need further action during this transition and subsequent months. 

It is not going to be quick, it is not going to be easy for us to dig ourselves out of the hole that we are in.  But America is a strong and resilient country.  And I know that we will succeed if we put aside partisanship and politics and work together as one nation.  That‘s what I intend to do. 

(END VIDEO CLIP)

BRZEZINKSI:  Joining me now, Maria Bartiromo, anchor of CNBC‘s “Closing Bell.”  Maria is also the anchor and managing editor of the nationally syndicated “Wall Street Journal Report.”

Maria, thanks so much for joining me this evening. 

MARIA BARTIROMO, ANCHOR, “CLOSING BELL”:  Hi there, Mika.  Good to see you. 

BRZEZINKSI:  Good to see you.

The headlines, let‘s get the headlines out of this news conference.  What have we learned about how Barack Obama will be approaching this economic crisis as president? 

BARTIROMO:  I think we did learn a fair amount today, actually.  I thought it was interesting that he began his first news conference ever saying, I am not the president yet.  You know, the market—the stock market sold off when he was talking.  It actually ended up stronger than it was going into this speech.  But while he was talking, it was up 200 and it actually when he finished talking, it was up only 100. But at the end of the day, as you see, it was up 248.  So overall optimism there. 

But he began it by basically saying, I am not the president yet, and I have to respect the person in charge, President Bush.  And so you got the feeling that he‘s not going to necessarily come out with programs and ideas right away in order to get us out of this. 

I think that‘s what the market read into that and that‘s why it sold off initially.  But then at the end of the speech, you learned that he gave himself some wiggle room.

He gave himself some wiggle room on those tax increases he‘s been talking about.  He said we will look at the economy in January.  We will look at the data, and what is happening will dictate where we go in terms of our policies. 

He did stick to the idea that he‘s going to cut taxes for the middle class, try to help small businesses thrive in this uncertain economic environment.  But of course, this on a day that we got more job losses today.  We got an unemployment rate that moved higher.  He was very measured, and he did leave the door open for changes as we look at the economic news of the day to dictate. 

BRZEZINKSI:  That‘s fair, as it is a crisis that‘s changing by the day.

He did also talk about a stimulus package.  Explain to our viewers exactly what that means, how that would work.  And in a way, I wonder if throwing money at the situation is exactly what got us here.  So what‘s the concept?

BARTIROMO:  Well, it‘s interesting, because what he said about the stimulus package is that we need one, and we need one either before he takes office.  Or if not, he will implement one as soon as he takes office. 

A stimulus package is basically giving money to consumers so they go out and spend it.  Remember six months ago we were talking about President Bush‘s rebate check coming in the mail for people, and they got their $350 or $500 check?  And then they went out and spent it.  That‘s basically what the stimulus package he‘s talking about would entail, giving money to people. 

I don‘t necessarily think that it‘s the same as what got us here.  That was these low interest rates and the idea that we were in this euphoric environment where you could borrow, borrow, borrow, borrow and it wasn‘t going to have any repercussions. 

And by the way, we had a stimulus package, and I don‘t think it had all that much of an impact.  So I suspect a stimulus package is only going to be job one.  He‘s going to have a lot of other proposals that he‘ll need to implement. 

BRZEZINKSI:  Yes, for sure.  And with 240,000 jobs lost month, and unemployment at its highest in 14 years, this could be a long road. 

Maria, thank you very much. 

BARTIROMO:  Thanks, Mika. 

BRZEZINKSI:  All right.  Have a good evening. 

BARTIROMO:  You too.

BRZEZINKSI:  All right.  I want to turn now to two of the best in the business.  With me here in New York, Mort Zuckerman, editor-in-chief of “US News & World Report,” chairman and publisher of “The New York Daily News,” as well.  And joining us from D.C., my early morning other half, host of NBC‘s “MORNING JOE,” Joe Scarborough.

Good evening, gentlemen. 

OK, Joe.  First of all, was Barack Obama specific enough in his first press conference?  Did he talk more specifically about the family dog, as opposed to his plans for the economy?  Or did he strike the right balance? 

JOE SCARBOROUGH, HOST, “MORNING JOE”:  Well, perhaps he struck the right balance.  You know, he did state he is not the president of the United States yet.  He talked about the fact that he was going to offer a stimulus package. But Wall Street and the rest of the markets are going to be looking at who he selects as treasury secretary. 

Larry Summers is a man that I would guess the street would like the most.  And most—I think most people that understand the economy would want Larry Summers to also get the position.  This is going to be great indicator of what type of president Barack Obama is going to be. 

If he selects Larry Summers, a man who most people believe would make the best secretary, treasury secretary, that sends a great signal.  If he doesn‘t, the only reason he wouldn‘t would be because some of the most extreme elements of the feminist movement don‘t like Larry Summers. 

So we‘re going to see whether he is going to listen to the markets or listen to the extremes of his open party.  And I think what he decides will be very telling about what type of president he is going to be over the next four years. 

BRZEZINKSI:  Mort, I want to play a sound bite from the news conference today about his intent to prioritize when it comes to the stimulus package. 

Here is Barack Obama. 

(BEGIN VIDEO CLIP)

OBAMA:  A fiscal stimulus plan that will jump-start the economic growth is long overdue.  I want to see a stimulus package sooner rather than later.  If it does not get done in the lame duck session, it will be the first thing I get done as president of the United States. 

(END VIDEO CLIP)

BRZEZINKSI:  Mort Zuckerman, prioritizing effectively will potentially be key to getting us out of this.  Is that a good priority?  Is that a good way to start? 

MORT ZUCKERMAN, EDITOR-IN-CHIEF, “US NEW & WORLD REPORT”:  It is one of the things that we‘re going to have to do.  We‘ll have a very, very difficult deep problem.  And I think a fiscal stimulus program of the right kind is very important. 

I think the administration, when they passed the previous fiscal program, gave us the wrong kind, because people did not spend more than 20 or 25 percent of that money.  And the whole idea of a fiscal stimulus is for people to spend the money. 

So, number one, I think what we have to do and what we should do is provide funding for state and local governments to get their infrastructure programs under way right away.  He did refer to extending unemployment benefits.  That is money that will be spent.  But if we just provide tax relief for tax rebates, that money will not be spent any more than the consumers are spending their current income because they‘re so concerned about their futures. 

BRZEZINKSI:  No.

ZUCKERMAN:  So that would not be effective. 

BRZEZINKSI:  So Joe, do you agree with that?  I mean, I guess the concept of pouring more money into the situation is the one thing that confuses me about it because that is, to an extent, what got us here. 

SCARBOROUGH:  Well, we just pumped over $1 trillion into the economy.  The president, the current president, tried a stimulus package that didn‘t work.  These stimulus packages usually don‘t work. 

I go back to 1993, when Bill Clinton made the difficult decision not to put a huge stimulus package out there because he wanted to be fiscally responsible.  And yet here we are $11.7 trillion in debt.  If we‘re worried about the next two or three months politically, then yes, let‘s throw more money at the problem.  But he‘s got a lot bigger problems than this. 

He‘s got the problem of a country that‘s in fiscal quicksand right now when you look at Social Security, Medicare, Medicaid, how much we spend on servicing the debt.  These obligations are exploding, and we need to step back and have a leader that‘s going to say how do we not only get out of this mess, but how do we set America up for success over the next five, 10, 20 years?  And a little stimulus package is just an expensive $100 billion gimmick, in my opinion. 

BRZEZINKSI:  Mort?

ZUCKERMAN:  Well, I do agree with that.  But I think there are different kinds of stimulus programs at work.  But let me just go to what he did today. 

He really put together a list, an assembly of the most credible sort of Democratic players in the whole world of the economy.  And he stood up there, the first press conference.  And what is he addressing?  He‘s addressing the principle issue facing the country, which is the declining economy.  And at an accelerating rate, I might add. 

So I do think in a sense politically what he is trying to do is to build confidence that this new administration will address the issue.  And I agree with you completely, Joe.  I think the best person to do it in term of the financial markets, both here and abroad, and the guy who would understand it the best is Larry Summers. 

I think he is brilliant and I agree with you in every way that you describe his choice.  He is the right person for the job at this time.

Now, one other thing I really do have to say here.  The problem that we are facing is not that money was being thrown at the problem.  The problem that we are facing is that the country went into an orgy of debt.

Homeowners went from 20 percent of a $4 trillion GDP in 1980, to 100 percent of GDP today with a $13 trillion GDP.  And the financial world went from 20 percent of GDP to 120 percent.  So the debt has just exploded.

BRZEZINKSI:  Yes.

ZUCKERMAN:  And it is that which is crashing down on everybody today.  We have too much debt and too little equity.  And that is not going to go away. 

Everybody did well on the way up.  But on the way down, we‘re all getting crushed.  And this is what we have to find a way to deal with, because otherwise, this economy could just crack. 

BRZEZINKSI:  And Joe, that is what we call on “MORNING JOE” a money party that ended very badly. 

SCARBOROUGH:  Ended very badly, and of course it happened under eight years of Republican rule.  But you also had Democrats that were very reckless, a lot of Democrats that were pushing the subprime markets and pushing banks, financial institutions, to provide loans to people who could not afford them. 

The default rates exploded.  That created a domino effect that has caused real problems in this economy. 

So I just hope that we have a president that‘s coming in that understands the markets, that understands what he needs to do to reassure the markets, and that understands, as Mort said, we have to start paying down this national debt.  It‘s at $11.7 billion.  When George W. Bush got in, it was at $5 trillion. 

We need to start paying down the debt.  And if the president can‘t—if the president-elect can‘t balance the budget in four years, then let‘s come up with a plan to balance it in six years or seven years or 10 years.  Just come up with a plan that will show some fiscal restraint, that will assure the markets, and also assure Americans that we‘re going to be good stewards of their money. 

ZUCKERMAN:  And to go back...

BRZEZINKSI:  Real quick.

ZUCKERMAN:  ... to the first year of the Clinton administration, he introduced in the first month after he came into office, in February, a fiscal program to reduce the deficit, taking $250 billion out of our expenditures and adding $250 billion in taxes.  That was one of the things that kicked off some of the best years that our economy has enjoyed.  So I think in that sense, we have a fiscal situation that is completely out of control. 

BRZEZINKSI:  All right.

Mort Zuckerman, Joe Scarborough, have a good weekend. 

I‘ll see you Monday morning.  Should I book Mort while he‘s here? 

SCARBOROUGH:  Book him.

BRZEZINKSI:  All right. 

You‘re on.

Mort Zuckerman, thanks very much.

Joe, see you Monday.  Thanks for coming on.

SCARBOROUGH:  Thanks, Mika.

BRZEZINKSI:  Coming up next, who will be joining President Obama in the West Wing?  We‘re going to be talking about the pros and cons of the new chief of staff, Rahm Emanuel, and some other top players being considered with former press secretaries Joe Lockhart and Scott McClellan when 1600 PENNSYLVANIA AVENUE returns. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA:  We only have one president at a time, and I want to be very careful that we are sending the right signals to the world as a whole that I am not the president and I won‘t be until January 20th.

(END VIDEO CLIP)

BRZEZINKSI:  It‘s been just three days since Barack Obama became this nation‘s president-elect.  He hasn‘t wasted any time getting his transition started.  So far, he has selected his chief of staff, formed an economic advisory team.  And just this afternoon held his first press conference, taking questions that ranged from how he plans to fix our financial crisis, to how he‘ll deal with threats from Iran, to what books he‘s been reading lately.  So how did he do?  Joining me now with their assessments are two seasoned veterans of the White House press gallery: Joe Lockhart, who served as White House press secretary under President Clinton; Scott McClellan, President Bush‘s former White House press secretary.  Gentlemen, thanks for joining me. 

JOE LOCKHART, FMR. WHITE HOUSE PRESS SECRETARY:  Sure.

SCOTT MCCLELLAN, FMR. WHITE HOUSE PRESS SECRETARY:  Good to be here.

BRZEZINKSI:  Let me just ask you both first, real quick, grade him.  How did he do in his first press conference?   Joe, you go first.

LOCKHART:  I think he did very well.  I think there wasn‘t really an upside to a president-elect in a press conference.  It is all peril. 

As he stated very explicitly, there is only one president.  And the last thing the president, the economy, the national security issues need is someone second-guessing someone who right now is probably the second most powerful person in the world. 

So just getting through it, going through this sort of ritual of meeting the press, claiming victory, and then getting out was very important.  He did really well, made no mistakes, and sort of walked that fine line that he had to do pretty expertly. 

BRZEZINKSI:  And has to respect that there is a president.

Scott McClellan, go ahead. 

MCCLELLAN:  Yes, I agree.  He was reassuring and he set the right expectations that we‘re in a deep hole, it‘s going to take some time to dig out of that, there are going to be some tough choices that need to be made. 

And he also made clear that the economy will be the immediate priority for the foreseeable future.  And he‘s going to continue to focus on that.  During the transition, I suspect he‘ll do that when he probably names a treasury secretary and economic team up at the front of his announcements.  There‘s some symbolic value to that as well. 

But I agree with Joe that there were no mistakes and he came across as reassuring.  And he was very deliberate and thoughtful and pragmatic in his approach, which is something that he has shown throughout the campaign as well. 

BRZEZINKSI:  And flanked by a pretty impressive and large economic team. 

Joe Lockhart, I want to read to you from Politico about the choice of Rahm Emanuel.  “The choice of Emanuel is also a deliberate departure from the culture of Obama‘s cool, Chicago-based campaign, a willingness to fully embrace the new Washington milieu Obama spent two years deriding.  Obama‘s campaign was deliberately low-key and hermetically sealed from leaks.”

“The Emanuel era arrived with a jolt before election day when word leaked that he had been offered the job.  Indeed, the unusual leaks from Obama‘s expanding camp are part of one of Emanuel‘s greatest assets: He talks to everyone.  Emanuel knows more than most in Washington about what‘s happening in both parties and in the media because he is in constant touch with all sides.”

Does that mesh with the Barack Obama who ran for president? 

LOCKHART:  Well, I think it does.  I think one of the things --  you know, a campaign is about rhetoric and about aspirations and talking about what you want to get done.  Governing is about actually getting it done.   And Rahm‘s real strength is his ability to understand where the power is, work with them, whether it‘s Democrat or Republican, and get thing done.  Being a shrinking violet generally when it comes to politics doesn‘t work very well.   The interesting thing  -- and I think that the story that you quoted was, I think, very accurate.  They also went on to talk about how Rahm is not an ideological person.  He is not to the far left or to the far right.  He believes in this idea of governing from the center, starting in the middle, and then working out from there.  And he was very effective.   The things that he worked on in Congress—you know, the GI Bill of Rights.  The SCHIP—going back to the Clinton administration, he was the guy who worked on the crime bill, Welfare to Work, things like that. 

BRZEZINKSI:  Yes.

LOCKHART:  He‘s not ideological and he‘s got a lot of friends on the Republican side.  I think it was a really good choice. 

BRZEZINKSI:  Scott, I want to ask about David Axelrod‘s role.  And there‘s some critical analyst from “First Read,” which is done by our political unit.  This is as written in “First Read.”

“David Axelrod, Obama‘s chief political strategist, is likely to work in the White House as an adviser to President-elect Obama.  But, perception-wise, is this potentially problematic?”

“Remember that Karl Rove followed Bush to D.C., and many thought that move overly politicized the White House, especially after Rove became deputy chief of staff after Bush won re-election in 2004.  Can Axelrod successfully not look political when he‘s dealing with a key policy issue?”

“That was always the problem Rove had.  Still, having Axelrod in the White House probably means that organizational and message discipline the campaign was known for will continue.”

Any potential repeat issues here?

MCCLELLAN:  Well, sure, there‘s potential there, but, you know, he can certainly succeed in that role as well.  I mean, any modern White House is going to have a strong political influence in it, whether the political adviser is inside the White House or outside the White House.  And you have got to calibrate for that. 

I think it‘s important Barack Obama has talked about ushering in not only new policies, but a new kind of politics.  And I think he‘s committed to both. 

We were just talking about Rahm Emanuel.  And he does understand the importance of governing to the center and he does understand the importance of politics being the art of compromise.

And it is Barack Obama that will set the tone.  And I think Barack Obama, as he said in his news conference today, we‘ve got to set aside the politics and the partisanship if we‘re going to succeed on getting thing done on the economy and other issues.  And I think that was the right message to send. 

Whether or not he will follow through on that remains to be seen.  I would like to see him demonstrate that he has got a plan in place to change the style of governing in the White House. 

You‘ll have that political influence there, but what are you going to do to make sure that you‘re also focused on bipartisanship, being an inclusive leader?  And we‘ll see what he does with his cabinet here soon to show that inclusiveness. 

BRZEZINKSI:  Yes.  We may see signs of that in that team, especially if it‘s extremely diverse ideologically, politically, in every way.  Joe Lockhart, Scott McClellan, thank you very much.  Appreciate it, gentlemen.  Up next, the briefing room, the dog house edition.  The latest on Joe Lieberman‘s future with the Democratic Party. First dog Barney biting a reporter. 

And the quest for that new member of the Obama family. 

(BEGIN VIDEO CLIP)

OBAMA:  I love you both more than you can imagine, and you have earned the new puppy that‘s coming with us to the White House. 

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BRZEZINKSI:  We‘re back with a look at what‘s going on inside the briefing room.

First order of business, Senator Joe Lieberman‘s future.  It‘s starting to look like a game of tug-of-war. 

Today he met with Senate Republican leader Mitch McConnell.  McConnell and other members of the Senate Republican leadership have said they would welcome Lieberman, an Independent, into their caucus.  And remember, just yesterday he met with Democrat Senate Majority Leader Harry Reid, where, according to a Lieberman aide, Reid wanted Lieberman to resign as chairman of the Homeland Security Committee. 

We‘ll follow that.And heading from the briefing room to the barking room now. 

First, an update on a story we first brought you yesterday.  First dog Barney.  Remember?  He bit Reuters reporter John Decker‘s (ph) finger.  Ouch.  Ooh.Yes, he was treated, Decker (ph) was, by White House physicians.  And yesterday he was told to return for a tetanus shot. 

We can report to you tonight that he did indeed go back today for his tetanus shot.  What does that say about Barney‘s shots?  Anyway, he received a note from First Lady Laura Bush as well thanking him for handling the situation so well. Woof. And in other dog news, at his first press conference, President-elect Barack Obama fielded questions about a promise he made to his daughters.  If he won the election, they would get a puppy.  And as we all heard in his victory speech Tuesday night, the girls are getting their puppy.  But we‘re all dying to know what kind of puppy the family will get. 

Well, here‘s how the president-elect answered that question today. 

(BEGIN VIDEO CLIP)

OBAMA:  We have two criteria that have to be reconciled.  One is that Malia is allergic.  So it has to be hypoallergenic.  There are a number of breeds that are hypoallergenic.

On the other hand, our preference would be to get a shelter dog.  But obviously a lot of shelter dogs are mutts like me.  So whether we‘re going to be able to balance those two things I think is a pressing issue on the Obama household. 

(END VIDEO CLIP)

BRZEZINKSI:  Oh, good.  Get the rescue.

Coming up, inside Obama‘s economic meeting today with Google CEO Eric Schmidt, adviser to the president-elect, when 1600 PENNSYLVANIA AVENUE returns. 

(COMMERCIAL BREAK)

BRZEZINSKI:  Tonight, the president-elect meets the press for the first time since his victory and vows quick action on the economy.  We‘re going to talk with Google CEO Eric Schmidt, part of Obama‘s economic advisory team in just a moment, right here on 1600 PENNSYLVANIA AVENUE.

Welcome back to 16000.  Today, as unemployment hit a 14 year high of 6.5 percent, President Elect Obama held a closed door meeting with a team of 17 high profile economic advisors.  Obama made it clear, he knows the months ahead will not be easy. 

(BEGIN VIDEO CLIP)

OBAMA:  Tens of millions of families are struggling to figure out how to pay the bills and stay in their homes.  Their stories are an urgent reminder that we are facing the greatest economic challenge of our lifetime.  And we‘re going to have to act swiftly to resolve it. 

(END VIDEO CLIP)

BRZEZINSKI:  Joining us now to talk about Obama‘s plans for the economy, a man who was at that meeting and standing behind the new president-elect at his first news conference today, Google CEO Eric Schmidt.  Mr. Schmidt, welcome.  Good evening. 

ERIC SCHMIDT, GOOGLE CEO:  Thank you for having me on your show. 

BRZEZINSKI:  It‘s great to have you.  Give us some bullet points here.  What are Barack Obama‘s top three plans to turn the economy around?  What did we get out of this news conference and can you take it further? 

SCHMIDT:  Well, they‘re still working on it.  They‘ve only been roughly in elect mode for maybe three days.  There is a real sense of urgency.  They‘re particularly concerned about retail spending, job losses, a lot of concern about what‘s going on in the automobile industry.  There is a sense that Congress will act, perhaps during the lame duck session, and a discussion about, is that right or not, and what should they do? 

BRZEZINSKI:  Well, the auto industry had bad news today.  Unemployment at a 14-year high, I believe.  We had 240,000 jobs lost last month alone.  We‘re in bad shape.  What do you expect?  What do you advise Barack Obama to do in the first 100 days?  What are the priorities here? 

SCHMIDT:  Well, at the moment, remember, he is still not president.  He is president-elect.  So it is incredibly important to remember we still have a current president, and a current Congress, and they‘ll have to work that out.  Certainly, President-Elect Barack Obama, soon to be President Obama, indicated that he would move incredibly quickly, literally his first action, to address this with a series of actions at the executive level, and working with the Congress. 

And again, my own guess is that it will be a significant stimulus package that involves the things that the campaign has talked about for quite some time. 

BRZEZINSKI:  OK.  Do you expect him to raise taxes, the taxes on the rich that were debated so much throughout the campaign?  Will that be happening?  Do you see that in the future? 

SCHMIDT:  We certainly did not talk about that.  If you look at his campaign, any tax increase would apply to the top five percent.  And on aggregate, taxes actually go down.  And certainly for people who are in the 95 percentile, which is the vast majority of Americans, will see taxes decreases under his plans.  I would expect the Obama administration to implement those policies, obviously with the Congress. 

BRZEZINSKI:  Certainly, key to the success of trying to get out of this cleanly and quickly—and it could be a while, certainly, looking at the numbers coming in to us about the state of the economy—will be the treasury secretary.  Barack Obama‘s team of 17 advisers—you‘re one of them.  It is a list of heavy hitters.  Is there someone you‘re leaning towards?  Larry Summers is a name that comes up.  Tim Geithner, Robert Rubin, Paul Volker; are these men potentials for treasury secretary? 

SCHMIDT:  I think every one of them is incredibly talented.  And I‘m not privy to the choices and the decision making.  I‘m sure that President-Elect Obama and his team will name such an individual.  The other people—

BRZEZINSKI:  Would you—of the 17, would you all be advising him on that choice?  I would think that would be key. 

SCHMIDT:  We were not asked today.  My guess is these personnel decisions are kept pretty close to the chest. 

BRZEZINSKI:  You‘ve emphasized the green economy.  What would you like to see the president accomplish?  Will it be realistic given all the different stresses on the economy that may just need quick decisive action? 

SCHMIDT:  Look, we have these huge problems.  We‘ve got unemployed auto-workers.  We‘ve got people in the construction industry with nothing to do.  Why don‘t we take all that labor and get them working on things which have a real investment value?  So, for example, lets have a program -this is my argument—that basically helps people insulate homes. 

Provide some money or loan guarantee to get the people who aren‘t building houses to help make houses more efficient.  Saves money, works on climate change, clearly good for everybody. 

Let‘s do something about cars and employment.  There are all sorts of new ideas around battery technology.  Battery plants being built, for example, in Michigan.  So in plants that are being shut down because the old technology people don‘t want anymore—with a little bit of work, incentives and stimulus packages, we can get two problems solved at once.  We can get the country moving again, get jobs created, get people back to work.  But we can also solve some of the systemic problems. 

Let me tell you that if we can solve our dependence on fossil fuel with an investment in green technology, which is, by the way, solar, wind and enhanced geothermal—if we can do all of that, then all of a sudden, we can get oil prices going down, which is good for the economy.  We can make it less likely that we‘ll end up in an oil war.  And we can really, really address the climate change issue, which is the defining problem for the next 50 years. 

BRZEZINSKI:  Well, I hoping—here‘s to hoping you can meld those long term goals with the short term needs.  I wish you the best of luck as part of the economic transition team.  Eric Schmidt, thank you very much for joining me this evening. 

Coming you next, the knives are out for Governor Sarah Palin.  What is behind the vicious post mortem attacks from McCain staffers?  And looking at Palin‘s future; will the governor make another run for 1600 PENNSYLVANIA AVENUE? 

(COMMERCIAL BREAK)

(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 allegations. 

(END VIDEO CLIP)

BRZEZINSKI:  Welcome back.  That was Governor Sarah Palin speaking out about the post-election blame game being played right now with some of the most scathing charges being directed against her.  Attacks like former McCain staffers telling reporters that she was a diva, didn‘t know what Africa was—was it a continent or a country?  Describing the governor and her family as, quote, Wasilla hill-billies. 

For more on this, let me bring in our panel of MSNBC political analyst Richard Wolffe, “Newsweek‘s” senior White House correspondent, Lawrence O‘Donnell, Emmy winning “West Wing” producer and former chief of staff to the Senate Finance Committee, and Pat Buchanan, former Reagan White House communications director, Nixon‘s speech writer and presidential candidate himself. 

Pat, I‘ll start with you.  Stand up for her.  Does this say more about the campaign than it does about Sarah Palin?  I have to tell you, none of this smells good to me. 

BUCHANAN:  I think it says very much about the people who are doing it.  It is very petty, vicious.  It is anonymous.  And I think it is an attempt to destroy her and put the blame for McCain‘s loss on her.  It is probably working with some people.  I think she is very wise to stay out of this battle.  It is a disgusting fight, but I think it hurts McCain‘s advisers far more, the people that are doing this, because their names are surfacing now. 

And I think it hurts Senator John McCain, who quite frankly—I mean, he lost his own election and he probably lost it that week the markets collapsed and he handled it so badly. 

BRZEZINSKI:  Richard Wolffe, do you work for “Newsweek?”  What do you know about the campaign, who they are, why they‘re doing this? 

BUCHANAN:  Tell us who they are, Richard. 

BRZEZINSKI:  Come on, reveal it.  The towel story, I mean, some of this stuff is really—it is ridiculous. 

WOLFFE:  Ridiculous, but very familiar in losing campaigns.  Sarah Palin—you can start the clock with the financial crisis.  But if you look at the poll numbers, Sarah Palin hurt the ticket, and she lost altitude very quickly.  The truth is that the back biting, the in-fighting was going on well before this election was over.  And yes, it‘s every man and woman for themselves right now. 

I think Governor Palin is still a very effective—look at what she‘s doing here in these sound bites we‘re getting.  She is saying, I don‘t want to play the blame game.  But everyone who is after me is terrible.  I‘m not going to comment on this, but these people are bitter and nasty and twisted. 

BRZEZINSKI:  Well, they are!

WOLFFE: She is doing the back-biting and in-fighting herself.  That‘s why she is an effective politician, and why she probably has a future as a contender, at least, come four years time. 

BRZEZINSKI:  OK.  Richard, you lead me to my question for Lawrence.  Late today, she responded to some of these allegations, especially those about the clothing, insisting that she is not a shop-aholic.  Here she is with the latest on exactly what happened with the clothes.  Take a listen. 

(BEGIN VIDEO CLIP)

PALIN:  The RNC purchased clothes.  Those are the RNC‘s clothes.  They‘re not my clothes.  I never forced anybody to buy the—I never asked for anything more than maybe a Diet Dr. Pepper once in a while.  I never asked for anything.  These are Sarah Palin‘s clothes.  We don‘t take anything with us.  Until that stuff is cleared up by you guys doing your job, what else can I say?  What else can John McCain say about all this, except these are false allegations. 

(END VIDEO CLIP)

BRZEZINSKI:  You know, I don‘t know why she would lie about this at this point, Lawrence.  And I have to tell you, I think it is ridiculous that she has to answer these questions.  It seems extremely demeaning for someone who was dropped into the vice presidential running mate position out of Alaska, and handled herself pretty damn well, given the situation she was put in.  I know not everyone agrees with me on that, but come on. 

O‘DONNELL:  Well, I don‘t think she handled herself well as a candidate.  I was never a big fan of the notion of Sarah Palin as a helpful vice presidential candidate.  The polls showed she was a disastrous vice presidential candidate.  She hurt the ticket.  Her negatives sky-rocketed over time.  There is some very, very important news here in this story.  As to whether the Republican party firmly believed the clothes make the man or clothes make the woman, which is possible, the more important thing is, the stories about what Sarah Palin knows and doesn‘t know are very important.  They seem to be telling us that we live in a country where our political system can deliver to the vice president of the United States someone who does not know the countries of North America, someone who does not know the countries of Africa, doesn‘t know that Africa itself is not a country. 

This is a profound, shocking, hugely disturbing level of ignorance to have in any political candidate in this country.  But this person almost made it to the vice presidency.  And voters need to know—

BRZEZINSKI:  Hold on, Pat, I‘m coming to you. 

O‘DONNELL:  -- that they are being lied to by their politicians about their politicians all the time.  This is very important material. 

BRZEZINSKI:  OK, Lawrence, listen, I said, first of all, that she handled herself well.  Was she a success?  Was she effective?  Was she prepared?  Those are questions we can talk about and we can probably agree on.  But I‘ll tell you, Pat Buchanan, when you think about the situation she was put in, and how she was handled by the campaign, I‘m just saying dirty pool—this whole thing seems incredibly unfair at this point.  And I still think she‘ll come out on top. 

BUCHANAN:  I agree with you 100 percent.  Let me say, first, she was picked at the very end of the Democratic convention on a Friday.  It was a startling development.  And four or five days later, on a Wednesday night, she delivered that address.  McCain was about eight or ten points behind when Obama delivered his address.  Within two weeks, he was about two or three or four points ahead. 

She put him back into the game.  She was a sensation.  And that period then in mid-September was when the thing crashed.  Now she had a terrible interview with Katie Couric.  Undeniably, her numbers went down.  I think, had it not been for the crash, McCain and Palin might well have won this election. 

Her future, let‘s talk about that.  I mean, Lawrence and others are obsessed about her.  There‘s no doubt about it. 

O‘DONNELL:  I will confess to that.  That‘s absolutely true. 

BUCHANAN:  If she runs in 2012, she will have to show, if she runs for a year, that she does have knowledge and information on issues in all those debates or she won‘t do well.  There‘s no doubt about it.  The fact that Lawrence and these other folks are going wild on her now makes her ever more loved by the Republican right wing. 

BRZEZINSKI:  You‘re a good man, Lawrence.  Richard Wolffe, jump in.  Are you ready for your assignment covering the special election for “Newsweek” in Wasilla, Alaska? 

WOLFFE:  I‘m such a natural in Alaska.  Look, you know, the interesting thing—look, there are a lot of political reporters who are licking their chops at the idea of a Palin campaign.  The interesting thing is the exposure that you get.  You can be catapulted into that vice presidential campaign.  You have that whole apparatus around you.  The money is there, the travel, everything is done for you. 

And she didn‘t perform up to standard.  There was no way people thought she was qualified to be a heartbeat away from the presidency.  When you‘re exposed on your own, and you‘re running your own machine, then, as Pat suggests, either she is going to prove that she can do it or she cannot.  Frankly, if she had run in the Republican primaries this time around, she would never have made to it Iowa.  Let‘s see if she can prepare herself. 

(CROSS TALK)

BRZEZINSKI:  Lawrence O‘Donnell.  Question for you, even if she is an intellectual disappointment, even if she did fail the Katie Couric interview, even if she is proved to be by these campaign aides, who seem very sore and angry, to be—do you still think because of her technical ability and what she‘s been through, she could win that special election and become a senator for the state of Alaska and head to Washington? 

O‘DONNELL:  Anybody with a 65 percent approval rating in Alaska can definitely win a statewide race in Alaska.  That is what she should do in terms of developing her skills as a politician.  She would be able to go into the Senate.  She would be able to learn these things slowly over a reasonable period of time.  Be able to speak in a couple of years in a pretty convincing way about a international affairs and that sort of thing. 

I just love that we can sit here and have Pat Buchanan celebrate the notion, celebrate the notion that we could have a vice president who cannot name you the countries of North America.  That he thinks that‘s a great thing for this country. 

BRZEZINSKI:  Pat, there is still hope. 

BUCHANAN:  Oh, listen.  This is an extremely—what other woman in America, or man, could have been dropped into that speech and then—

O‘DONNELL::  You could have found—any restaurant in Wasilla could tell you the countries of North America. 

BUCHANAN:  How did she handle Joe Biden in the debate then with 70 million watching? 

O‘DONNELL:  Look at the polls, Pat.  She got killed in the debate. 

(CROSS TALK)  

O‘DONNELL:  Start to check the polls, Pat.  It‘s not just your opinion.  She lost everything.  She came close—she wasn‘t—she was a joke all the way through.  This is not news. 

BUCHANAN:  Tell me, Lawrence, what did the company fall in love with from August 29th to September 12th, when she was fresh before people like you -- 

(CROSS TALK) 

O‘DONNELL:  Pat, people like you fell in love with her. 

(CROSS TALK)

BUCHANAN:  What caused McCain to go up 15 points?  You name it.  First two weeks of September, went up ten, 15 points.  What caused him to go up? 

O‘DONNELL:  He was not—he was never 15 points ahead of Obama. 

BUCHANAN:  He was eight points behind—

O‘DONNELL:  You‘re making up numbers now, Pat.  Look, you come from a party that celebrates ignorance.  You‘re not allowed to even think about evolution in your party.  

BRZEZINSKI:  Oh, good lord.  Oh, man. 

O‘DONNELL:  If you‘re not allowed to think about evolution, that kind of ignorance is going to trickle down. 

BRZEZINSKI:  You know what?  I hate to end this. 

O‘DONNELL:  Do you believe in evolution, Pat? 

BUCHANAN:  Do I believe in evolution?

O‘DONNELL:  Take your time on that one. 

BUCHANAN:  I believe that got created heaven and Earth.  Do you believe you are descended from a monkey?  I would understand it. 

O‘DONNELL:  Here we go. 

BRZEZINSKI:  OK.  I really—

BUCHANAN:  He has a trip to Alaska.  Richard Wolffe is on his way.  I‘m on my way.  Pat is not over.  Lawrence, you‘re quite a guy to show up on the show today.  I appreciate it.  I really do.  And I just love hearing you two fight over Sarah Palin.  And I have to tell you, I think she‘s loving it too.  She‘s coming back, Pat.  Thank you, gentlemen. 

BUCHANAN:  Oh, yes. 

WOLFFE:  Thank you.

BRZEZINSKI:  I appreciate it.  Great way to round out the week.  Coming up next, behind the president-elect‘s success, we‘re going to look at some of the pot holes team Obama hit on the road to victory.  At least two of them are named Clinton.  The untold story of Obama‘s path to 1600 PENNSYLVANIA AVENUE right after this.

(COMMERCIAL BREAK)

BRZEZINSKI:  Welcome back to 1600 PENNSYLVANIA AVENUE.  Today, Obama‘s signature coolness was on display at his first news conference as president elect.  But even the sure-footed Obama team had its moments of worry, fury, and even the freak out during the campaign behind the scenes, particularly when it came to the Clintons.  It is all revealed in “Newsweek‘s” excellent “Secrets of the 2008 Campaign.”  In the latest issue, it is fascinating—all the Palin stuff is coming out in this.

Joining me now, contributors to “Newsweek‘s” special election edition, Nick Summers, who covered both the Obama and Clinton campaigns, and Darren Briscoe, who covered the Obama campaign.  Nick, I‘ll start with you, because I‘ll read a little bit from your reporting here.  It was interesting, the whole Clinton factor and whether or not she should be the VP choice.  “Obama was not inclined to choose Hillary, not so much because she had been his sometime bitter rival on the campaign trail, but because of her husband.  Still, from time to time, as Hillary‘s name came up in VP discussions, and Obama advisers gave all the reasons she should be kept off the ticket, Obama would stop and act, are we sure?” 

Give us the back story on that.  Why was he not sure? 

NICK SUMMERS, “NEWSWEEK”:  Well, I think you have to be go back to the

take us back to the Summer, when it wasn‘t clear that Obama was going to have as resounding a victory as he did on Tuesday.  The question of whether Democrats were going to unite behind him wasn‘t a sure thing.  And Hillary did have those 18 million voters.  When Sarah Palin came on as John McCain‘s VP selection—she did in the beginning—just in the beginning, she did break off a lot of female voters.  In the end, that ended up not—

BRZEZINSKI:  Panning out.  What was the Bill factor?  We talked about it on the morning show all the time, what the potential Bill Clinton factors were.  What were they pondering there about the problems that could arise? 

SUMMERS:  This is the great thing and the bad thing about the Clintons.  They‘re a package.  With Hillary, you get Bill.  With Bill, you get Hillary.  Vetting a VP is an intensive process, and it is very intrusive.  And sure, the Clintons have been in the public eye forever.  But there is a question of do we really want to put Hillary through this if she is not a serious contender, and with all the extra Bill stuff. 

BRZEZINSKI:  Darren, you report about Obama not necessarily being a willing candidate and having issues with the potential to run.  What were those issues? 

DARREN BRISCOE, “NEWSWEEK”:  You know, Senator Obama had—or President-Elect Obama, I should say, had a fairly high degree of ambivalence about running.  I had a conversation with him on a plane.  I interviewed him on a plane flight once from Oregon to Chicago, where we talked about this period in the summer of 2007, where Hillary Clinton was way ahead in the polls.  There were a lot of people saying that he was already too far behind and would never be able to catch up.  And there was starting to be a fair amount of sniping and criticism about the things that Obama campaign was supposedly doing wrong. 

And Obama not long after that sort of went to his people, went to his staff and said, look, we have to work through this and work through this.  And he actually said that he was feeling good about their prospects, because of the way the campaign was organized and he thought they had the right strategy.  But he told his staff, look, everybody has to dig a little bit deeper and we‘re going to to have ask a little bit more of ourselves. 

So I asked the senator at that point, I said what more did you ask of yourself.  And he stopped, and looked out of the window—I counted later on the tape-recording—he look out for about 17 seconds without saying a word.  Then he looked back at me and he said, I really just had to reconcile myself to the idea that I had a life that I really liked.  He really enjoyed—he had it pretty good before he started running for president, a family in Chicago.  He liked taking his daughters to the movies.  He said he just had to reconcile himself to giving up that part of his life. 

BRZEZINSKI:  Darren, Nick, thank you very much.  We have to wrap it from here.  I appreciate it, gentlemen.  That does it for 1600 PENNSYLVANIA AVENUE tonight.  I‘m Mika Brzezinski, in for David Gregory.  I‘ll see you Monday morning, 6:00 a.m. Eastern on “MORNING JOE.”  And, of course, 1600, 6:00 p.m. Eastern Monday.  Have a great weekend.

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

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