updated 11/11/2008 12:19:29 PM ET 2008-11-11T17:19:29

Guests: Steve Clemons, Bill Wielechowski, David Sirota

RACHEL MADDOW, HOST:  Thank you for staying with us this hour.  Did you see Barack Obama and George Bush showing each other pure courtesy at the White House today?  I saw something like that but also something a little bit different.

(voice over):  The first couple with the expiring lease greets the new tenants at the White House.  The good news?  Both men apparently received and understood the memo about wearing the Perry Winkle tie.  The difficult news?  Obama leaning aggressively into this first meeting, making sure the news wires were alive today with news of how Obama plans to do what Bush says he‘s not capable of—a power play from the president-elect.

We‘ll be joined by NBC News‘ Andrea Mitchell.

And what‘s to become of this guy?  He campaigned for John McCain.  He campaigned for Sarah Palin.  He even spoke at the Republican convention.

(BEGIN VIDEO CLIP)

SEN. JOE LIEBERMAN, (I) CONNECTICUT:  What, after all, is a Democrat like me doing at a Republican convention like this?

(END VIDEO CLIP)

MADDOW:  What were you doing there, Senator Lieberman?  And why on earth does the president-elect want to keep you in the Democratic Party?

And just what in the name of Stewart Foley (ph) is going on in Alaska?  A Senate election that just won‘t end, shady business counting the vote, and a governor who used to be hard to get in front of a camera who now can‘t pry herself away.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN, ® ALASKA:  Those guys are jerks.

(END VIDEO CLIP)

MADDOW:  Does Sarah Palin have her eyes on Ted Stevens‘ Senate seat in Washington?

Plus, Proposition Eight protests spontaneously erupts from San Diego to Salt Lake City.  And, a plague of Steves breaks out in congress.  Steves?  Steves.  I‘ll explain.

THE RACHEL MADDOW SHOW starts now.

(on camera):  Imagine you are thinking of buying a house.  You‘re ready to enter the treacherous world of homeownership.  You start driving around looking at places you might want to bid on.  And you realize pretty quickly that the first walk up to the front door can tell you a lot about the place.  Shutters falling off to fixer upper.  Big gold knocker, it‘s a little tacky.  Fire house next door could be loud.

Well, what if when you showed up to look at a place, there was a crowd of about 1,000 people outside cheering your arrival?  That‘s what Barack and Michelle Obama found today as they arrived at their big, new, fancy White House.  An estimated crowd of 1,000 people gathered at 1600 Pennsylvania outside the White House gates, to cheer them as they arrived.  Imagine being a Secret Service agent after working for president now having to get used to friendly screaming crowds.

In any event, that was President-elect Obama‘s welcome to his new home today, as “Mr. 70 percent Approval Rating” came to Washington to meet “Mr.  Worst Approval Ratings than Richard Nixon.”  The Obamas arrived 11 minutes early for their first ever peek inside the Oval Office.  Both the president and the president-elect demonstrating that the Perry Winkle tie thing is going to be mandatory from now on in Washington, matching ties for these two.

We also saw a gentle alpha dog hand on the back from Obama; a gracious “right this way” from President Bush as well.  Now, I am not much of a body language definer, I can barely tell waving from drowning, honestly—but I do recognize political power when I see it wielded.  And wielded it was today by Senator Obama.  Underneath all of the pretty pictures and warm smiles today, what can only be described as a bold, political power play by Obama in advance of today‘s meeting.

Before this afternoon‘s meetings, it was leaked to the “Associated Press,” that Obama‘s transition team is considering plans to close down Guantanamo.  Plans, in other words, to get undo one of the worst legacies of Bush‘s presidency, plans to get done what even Bush himself says he would like to do but he just can‘t figure out a way to do it.  The Obama team just released a statement tonight saying that no decision has been made about how or where to try Guantanamo‘s prisoners.

But is it coincidence that on the same day Obama was scheduled to meet with President Bush, Obama‘s legal advisor, Laurence Tribe, was saying this to the press quote, “We can‘t put people in a dungeon forever without processing whether they deserve to be there.  In reality and symbolically, the idea that we have people in legal black holes is an extremely serious black mark.  It has to be dealt with,” end quote.

Dungeons?  Black holes?  Black Mark?

Nice to see you too, Mr. President.  How‘s Barney?  Did you read the newspapers today?  I can‘t wait to clean up your mess.

That was the message sent loud and clear by President-elect Obama today, playing the part of the aggressive, competent guy.  I‘m the popular one.  I was sent here by the people largely because of your incompetence and unpopularity and I‘m happy to clean up even your messes that you want to clean up and but you just can‘t figure out how.  Nice tie, by the way.  Fabulous job.

Today‘s power move may or may not have been intended to rock President Bush back on his heels for this first meeting, and inevitably, this first negotiation.  But it was a clear signal from Obama of aggression toward the Bush legacy—a clear signal to expect more than just four more years of things not getting worse.

Joining us now is NBC chief foreign affair correspondent, Andrea Mitchell.

Andrea, thank you so much for coming back onto the show.  It‘s always a pleasure to have you here.

ANDREA MITCHELL, NBC CHIEF FOREIGN AFFAIR CORRESPONDENT:  Yes.  It‘s my pleasure.

MADDOW:  Andrea, this meeting today was obviously held in private.  But I understand, you have learned some of the details of what was discussed behind closed doors.  What did you learned?

MITCHELL:  Well, first of all, Barack Obama came with an agenda.  And this was not just small talk.  And, you know, how is the mattress, and which bedroom do you like, and where we‘re going to put the kids.  This was serious business.

He talked about the economy and he talked about the fact that the auto industry needs more money, that the $25 billion set aside needs to disperse more quickly, that there needs to be an economic stimulus package now during the lame duck session, and this means that the tax cuts for the middle class—all targeted for the middle class before he takes office.  He also talked foreclosures and the fact that people with adjustable rate mortgages now face more foreclosures, and with more defaults, the economy will continue to slide downward so that there should be some sort of housing program.  All this before he even takes office.

So, he‘s basically coming into the living room and the office of the current lame duck president and saying this is what I want before January 20th.  A pretty aggressive move.

MADDOW:  This does strike me as remarkably aggressive and sort of surefooted, it shows a real confidence.  I know you‘ve covered a number of these presidential transitions.

MITCHELL:  Absolutely.

MADDOW:  Is this strikingly aggressive to you?  And do we know anything about how President Bush is responding?

MITCHELL:  Well, we‘re told that he did not commit himself to anything, just listened.  And certainly, this has been the most cordial, congenial welcoming ever by any White House that I can recall, to welcome the newcomer.  So, it was the quickest call, the fastest invitation.  The welcome that certainly was put out for Michelle and Barack Obama, Laura and George Bush could not have been more gracious in what they did.

And, in fact, what Barack Obama can say is, you know, I meant it about change.  And this is a crisis.  And I think that it would have been a little disconcerting and perhaps hypocritical to be simply polite in arriving here, given everything he‘s campaigned on.  I don‘t think he was lacking in grace and I don‘t think he was overly aggressive.  I just think that he certainly laid down the markers of what he thinks needs to be done because the world is in crisis and the United States is in crisis.  And that is most likely why he got elected.

MADDOW:  Does it strike you as significant in terms of the timing that President-elect Obama‘s team made overtures, even though there were sort of unauthorized leaks today about shutting down Guantanamo?  And they made sure those were in the press before Obama arrived at the White House today.  Did that strike you as deliberate timing to coincide with this meeting?

MITCHELL:  I‘m not sure about that because they are denying, Denis McDonough is in-charge of the foreign policy team, and although there is a very wide group of advisors.  And Obama is—the signature of Obama is that he has a lot of different advice until he decides it isn‘t policy.  That‘s the kind of administration, I think, you‘re going to see.  Rather than having everything sort of filter through one person, whether it‘s the vice president or a powerful defense secretary, he wants to hear from a lot of points of view.

Clearly, he has made a commitment to close Guantanamo.  And this is something dearly wished by all of the foreign leaders with whom he will meet and has met so far.  But whether that is the first thing he will do, I‘m not sure because Denis McDonough who is in-charge of this process says it is clearly something that he is committed to, but that no decisions have been made.  And I don‘t—I‘m not sure that that was the deliberate signal, Rachel.  We don‘t really know enough about what is in his mind, at least, as far as we‘ve been briefed.

I do think it‘s very interesting, though, that his advisors were all out on television, talking about executive orders that they would reverse and being very specific about it.  And even though they say that no decisions have been made, it‘s very clear that there are several things they are going to do on day one if not day two.

And that is—reverse the ban on family planning and counseling.  You know, pushing counseling to international family planning groups that get foreign aid from the United States, and reverse the ban on federal aid to stem cell research.  This is something that a lot of Republicans, Nancy Reagan among them believed very strongly in.  And do something to stop further exploration and gas drilling in Utah and areas that environmentalists say are environmentally fragile.

MADDOW:  NBC chief foreign affairs correspondent, Andrea Mitchell—thank you so much for your time tonight.  It‘s great to have you on the show.

MITCHELL:  My pleasure.  Good to be with you, Rachel.

MADDOW:  Senator Joe Lieberman traveled the world, not to mention the country, to campaign for John McCain and Sarah Palin this year.  One might imagine the Democratic Party saying, “Thanks but no thanks” to Mr.  Joementum him after he showed that political turncoat behavior.  One might imagine that.

One would be imagining that wrong though (ph) as it turns out.  President-elect Obama and former President Clinton apparently think Joe Lieberman should remain a Democrat in good standing in the U.S. Senate.  Wow.

What does a Democrat have to do to get in trouble with his own party anyway?  Got convicted of a felony?  Oh, no—wait.  That‘s what it takes to lead a tight Senate race in Alaska these days.  But, you know, it‘s not in the bag yet for the felon in question, Ted Stevens.  Vote counting is still going on tonight.

Ahead: We will go live to Alaska for the latest on this surreal election.  Could we actually end up with Senator Palin from Alaska when all this is done?

But first, we got just one more thing about the impending Obama presidency.  Have you thought about going to the inauguration?  Have you thought about how cool it would be to say you were there when the US of A inaugurated our first black president?  Even if you love McCain and you can‘t stand Obama, you got to admit, history.  Come on.

Even if you‘re not moved by the occasion, it does turn out that a lot of Americans are.  And how do I know this?  I know this because capitalism tells me so.  Senator Diane Feinstein of California is overseeing the inauguration.  She asks the Web sites today to stop selling scalped inauguration tickets after reports on prices online—it is as high as $40,000.  Feinstein says she will also introduce legislation to make it a federal crime to scalp tickets to the inauguration.

Officially, tickets get distributed by members of Congress to their constituents.  And those members of Congress only get those tickets to distribute the week before the inauguration.

So, $40,000 from some dodgy ticket-scalping Web site online?  Forget about it.  The tickets, in theory are free, even if they are as hard to come by as “I heart Sarah Palin” t-shirts at Tim Pawlenty‘s house.  The FAQ about how to get real non-scalped tickets to the inauguration from your member of Congress is linked at our Web site today which is Rachel.MSNBC.com.

(COMMERCIAL BREAK)

MADDOW:  It sounds like total redemption was all Howard Dean really wanted as Democratic Party chairman.  Dean, the head of the Democratic National Committee will be stepping down from his post in January.  That‘s according to sources in the DNC.  After his 2004 presidential bid flamed out, (INAUDIBLE) Dean was the architect of the hugely successful Democratic 50-state strategy which basically said to Democrats, “Don‘t give up on traditional red states like Indiana, Colorado and North Carolina.

We‘ve also learned today that Hillary Clinton‘s former campaign manager, the boundless energy that is Terry McAuliffe, he‘s exploring a run for governor of Virginia.  Enthusiasm will not be a problem for the man who campaigned for Clinton even after the primary race was done.

Remember now, Terry, if you win, you will have to govern all of Virginia, not just the real parts.

(COMMERCIAL BREAK)

MADDOW:  With Democrats like Joe Lieberman, who needs Republicans?  In 2006, freshman Senator Barack Obama campaigned for Joe Lieberman as Lieberman unsuccessfully tried to fend off an antiwar challenge in the Democratic primary in Connecticut from Ned Lamont.  Now, during that primary, Lieberman said he would abide by the results of the Democratic primary until he lost.  Whereupon, he fled the party and ran for Senate in the Connecticut for Lieberman Party ticket.   During that primary campaign, Lieberman said that Connecticut needed to send him back to the Senate in order to, quote, “elect a Democratic president in 2008.”  A prospect he said that Ned Lamont would hurt and he, Joe Lieberman, would help.

Then, John McCain earned the Republican presidential nomination and it became crystal clear that the Connecticut for Lieberman Party wasn‘t actually all that Democratic at all.  Lieberman not only endorsed John McCain, he became an attack dog against Barack Obama, calling Obama naive, saying in a radio interview that it was a good question to ask whether Obama was a Marxist.

He compared McCain and the Democratic nominee as follows, quote, “One candidate, John McCain, has always put the country first, worked across party lines to get things done, and one candidate has not.”  Lieberman stayed close to McCain‘s side all summer, traveling to the Middle East with McCain, famously correcting McCain about that whole Sunnis and Shia are different thing.  And at convention time, with McCain looking for a badly needed bounce in the polls, Joe Lieberman went to St. Paul to say a few words about the Democratic nominee.

(BEGIN VIDEO CLIP, SEPTEMBER 2)

LIEBERMAN:  Eloquence is no substitute for a record, not in these tough times for America.  He has not reached across party lines to accomplish anything significant nor has he been willing to take on powerful interest groups in the Democratic Party to get something done.  When colleagues like Barack Obama were voting to cut off funding for our American troops on the battlefield.

(END VIDEO CLIP)

MADDOW:  Thanks for playing, Senator.  Your political future may be bold and bright and it may have a deep, resinous, self-righteous tone, but forgive me for believing that it won‘t be a future in the Democratic Party under President Barack Obama.  Or will it?

Incredibly, tonight, “Huffington Post” reports that President-elect Obama is of no mind to punish Joe Lieberman for his party political sense.  Obama reportedly wants Senate leaders to allow Lieberman to caucus with the Democrats in the next Congress.  Former President Clinton is also reportedly making calls on Lieberman‘s behalf.

What do you have to do to get Democrats mad at you, anyway?  How big a political sin do you have to commit before you have to pay the political penance?

Here to try to Talk me Down is my friend, Steve Clemons, executive vice president of the New America Foundation.  Steve also has a very influential blog at the WashingtonNote.com.

Steve, thanks so much for being on the show.

STEVE CLEMONS, NEW AMERICA FOUNDATION:  Great to be with you, Rachel.

MADDOW:  Before you Talk Me Down here—clear on the details, that I‘m sure you‘re going to, right?  Lieberman wouldn‘t be senator number 60, right?  He‘s not the make or break senator for a Democratic majority, is he?  There‘s nothing secret like that I can‘t see, is there?

CLEMONS:  No, I mean, a couple of these close races have to fall there.  But he‘s not going to be right there at the breaking point.  So, it‘s really not about reaching 60, it‘s really about Barack Obama wanting to show that even politicians with massive identity crises are welcomed in his effort to be the unity president.

MADDOW:  But why would Joe Lieberman still be welcomed among Democrats when he not only campaigned for his friend, John McCain, but did his darndest to tear down Barack Obama?  I mean, what we just heard him say about voting against funding for the troops, saying it‘s a fair question to ask if he‘s a Marxist, calling him naive, the way that he campaigned for Sarah Palin, somebody we had no personal connection with, the way that he did John McCain.

Why do the Democrats need him?  Is one additional vote in the Senate worth that much betrayal?

CLEMONS:  Well, you know, Joe Lieberman went on stage and campaigned for Sarah Palin said, you know, “She‘s so strong, she‘s so capable, she‘s so competent,” and actually stood on stage while Sarah Palin, you know, talked about Barack Obama‘s terrorist friends and he didn‘t walk off stage, he didn‘t look disturbed by that.  So, on your side of the equation, that would play to it.

Harry Reid, recently, had breakfast with some bloggers and we asked him about this, “Why are you, guys, not doing something to sort of, you know, clearly make him walk the plank?”  And Harry Reid made the same statement then that he made yesterday which is—Joe Lieberman votes with Democrats more often than Reid does on a lot of issues, particularly on domestic issues.  That‘s why I recommend keep him in the caucus.

But the guy is a fearmonger and he‘s been wrong on Iraq.  He‘s been trying to push buttons, not just in the Senate but he‘s vice chairman with Jon Kyl of the committee on the present danger, and he‘s been out fearmongering.  So, remove those national security and domestic security roles and give him education or give him something to do with technology, which is another favorite of his.  Joe Lieberman has strengths and I don‘t think you are seeing them right now, but he does have strengths.  But remove him from the areas in which he went to war with the Democratic Party.

MADDOW:  Lieberman has said that if he were removed as chair of the Homeland Security Committee which, obviously, sort of the big enchilada for him in terms of the Senate responsibilities, that would be putting politics ahead of national security.  That, to me, is incredible for a man who has put politics in front of national security even in his equation when he campaigned for Sarah Palin to the extent that he did.  And forgive me for making that blunt, but that is the way that he spelled out what national security advocacy would mean.

Could the Democrats keep him in the caucus, but strip him of all committee chairs - all his committee posts?  And if they just took him off on homeland security and as you suggest, put him somewhere else, somewhere -- on less hot button issues for him, do you think that he would bolt and go to the Republicans?

CLEMONS:  Well, I think he would bolt if he lost all of his assignments and was really stripped down so badly.  I think you need to find—I know this disturbs you, I think you need to find a face-saving way out, and teach people a constructive lesson that he is not going to have any latitude in a chairmanship role on homeland security or national security.  He‘s not going to be able to continue to use this foundation as a way to batter other Democrats that want a smarter national security policy.

But if you want to keep him in the caucus, and I can see the value in that, particularly in the kind of president Barack Obama is trying to be, reaching out—the fact that Joe Lieberman was such a, you know, pain in the, you know, rear end on this, is that that enables Obama to show how magnanimous he is to the other side.  And so, it‘s actually Obama using Lieberman rather than Lieberman exactly getting what he wants.  I just don‘t think it‘s tolerable to leave him in any of these national security rolls.

I think if he did bolt to the Republicans, though, and caucused with them, Joe Lieberman would be out of a job soon.  You know, and that is what a lot of the folks on the political left and even some of his conservative friends might hope, because the Republicans will probably run a strong candidate against him in the race because he won‘t be able to deliver for his constituents in Connecticut.

MADDOW:  I guess, the big political question is whether or not Barack Obama looking magnanimous to some for doing this, outweighs him looking like a wasp to others for letting Joe Lieberman get away with it.

CLEMONS:  I don‘t know if I talked you down but giddy.

MADDOW:  Not at all, but I really enjoy talking to you about it anyway.  Thanks, Steve.  I appreciate it.

CLEMONS:  Thanks, Rachel.

MADDOW:  Steve Clemons of the New America Foundation.  He‘s publisher of the WashingtonNote.com.  And if you‘re not already reading that everyday, you probably ought to be.

OK.  So, it turns out that Sarah Palin loves talking to the media.  Friday‘s humdinger at her office was only the beginning.  She‘s on the “TODAY SHOW” tomorrow.  She‘s doing some cable tonight.  She‘s doing more cable the night after the “TODAY SHOW.”  She‘s so ready to talk.  You would think she was rolling out a presidential campaign or something—or a Senate campaign maybe?

In the event that Ted Stevens does win re-election in Alaska, and then gets kicked out of the Senate for being a convicted felon, and there‘s a special election and could it be Senator Palin?  Is that what all of this is about?

(COMMERCIAL BREAK)

MADDOW:  About a month ago, you will recall that the Great Depression was going to happen immediately.  If the big, scary Wall Street bailout plan thing didn‘t happen immediately.  Be afraid, don‘t ask questions.

Well, while we were all afraid and looking in one direction because we were afraid, the Treasury Department very sneakily and very quietly, way over here, gave banks $140 billion of your money.  Here‘s $140 billion, good job burning down the financial system.  Well, now, they‘re saying the treasury can‘t take back what they did because, of course, that will start the Great Depression.  Are you starting to sense a theme here?  I‘m going to need a talking down, again.

First, though, it‘s time for a few underreported holy mackerel stories in today‘s news.  California‘s Proposition Eight, a constitutional ban on same sex marriage passed on Tuesday night, thanks to a 52 percent of the vote, thanks largely to a $38 million campaign to rebuke the incumbent rights of gay couples.  Since then, there has been a public pushback in a very big way.

In San Francisco on Friday night, about 1,000 people gathered in the streets in protest.  In Los Angeles on Saturday, 12,000 people converged in the Silver Lake neighborhood.  And in more conservative San Diego, also on Saturday, another 10,000 people took to the streets.  On Sunday, about 2,500 protestors gathered on the steps of the state capitol in Sacramento to protest at a three-hour rally against the marriage ban.

And it‘s being Sunday and all, hundreds of people gathered to have their voices heard outside the Saddleback Church, the evangelical megachurch in Orange County, California, that pushed for the ban after hosting the presidential candidates this summer.  About 400 people assembled outside Oakland, California‘s Mormon temple, protesting that church‘s involvement in the campaign for Prop Eight as well.  Church members contributed an estimated 40 percent of the individual donations made to the $30 million “Yes on 8” fund.

More than 3,000 marches filed past the Church of Jesus Christ of Latter Day Saints church headquarters and Mormon temple in Salt Lake City, Utah. 

And in Chicago on Saturday night, hundreds of people gathered to speak out against Dr. James Dobson, in town for his Radio Hall of Fame induction.  Dobson vocally supported the passage of Prop 8.  Protestors said he uses the airwaves to spread hate and that he therefore should not have been honored by the hall of fame. 

According to a former spokesperson for the “No on 8” campaign, the protestor being organized grassroots style via Facebook and MySpace and Craigslist postings and even text messages. 

And even though the ballot measure passed, California Gov. Arnold Schwarzenegger has said, quote, “It‘s unfortunate, obviously, but it‘s not the end.”  True that.  ACLU has filed a petition with the California Supreme Court to overturn Prop 8.  My layman‘s reading of the law is that they‘ve got a pretty darn good case. 

Still, though, looking at five straight days of huge, spontaneous protests all over the state and beyond, it‘s a good reminder of how galvanizing it can be to have an existing right taken away, no matter who does the taking.

And finally, winter is still officially six weeks away.  But in Colorado‘s fourth Congressional district, it‘s getting awfully chilly already.  Incumbent Republican Congresswoman Marilyn Musgrave lost her seat convincingly to her Democratic challenger, now Congresswoman-elect Betsy Markey. 

Even though the fourth district has thought of this as pretty safe Republican territory, Musgrave lost her seat by a lot - 56 to 44 percent, 12 points.  But in the six days that have elapsed since the election, Marilyn Musgrave still has not conceded nor has she called her opponent to congratulate Markey on her win. 

Markey‘s campaign told us this afternoon that they exchanged phone numbers with the Musgrave campaign so Ms. Musgrave does have a way to contact her successor.  When the lovely, intelligent RACHEL MADDOW SHOW producer Anthony Terrell(ph) today reached out to Marilyn Musgrave‘s campaign by calling her campaign headquarters, he was told there was nobody left in the office to answer any questions. 

Anthony asked about the Denver first reporting that Musgrave hadn‘t conceded or congratulated her opponent.  And the person on the phone responded by hanging up on him - on Anthony, who‘s a really very nice person.  A follow-up call to Marilyn Musgrave‘s Washington, D.C. office was not returned, which tells us, if nothing else, that Betsy Markey deserved to win that race on manners alone. 

(COMMERCIAL BREAK)

MADDOW:  How did Alaska politics get so weird so fast?  I mean, the state is only 49 years old.  People drive cars older than that, and those cars need far less repair work. 

Start with Alaska‘s Senator Ted Stevens, who is, despite being convicted on seven federal corruption felonies is leading his reelection bid against Democratic challenger Anchorage Mayor Mark Begich.  Now, he‘s only leading by just over 3,000 votes.  With more than 90,000 ballots left to be counted in the coming days, anything could happen.  Stevens could still lose. 

Imagine that, a convicted felon losing an election for United States Senate.  If Sen. Stevens does get reelected, the Democratic leader Harry Reid has made clear that no matter what the people of Alaska want, a convicted felon will not be welcome in the U.S. Senate.  Small mercies. 

So who would go to the senate from Alaska if it isn‘t Begich and it can‘t be Stevens?  We‘re going there.  Where else can we go? 

Say hello to the senator from “I can see Russia from here.”  At least maybe.  This being Alaska, there‘s confusion about whether a vacated Stevens seat would it be filled by a special election or by an appointment from the governor and how long that appointment would last. 

If there was a special election and Gov. Palin decided the one, that could be her ticket back to Washington.  And that sort of a political strategy might explain why we are seeing so much of Gov. Palin on the TV machine these days. 

She has done a blizzard of recent interviews, including telling the “Anchorage Daily News” and KTUU-TV recently that running for vice president was good for Alaska because, quote, “I believe that, with tens of millions of people seeing kind of a different face of Alaska, and again, not me personally, but what we represent, hardworking, unpretentious, conservationists.  All these things our administration and my family, all that we embody has been good for Alaska.  And the eyes of the nation are on Alaska.  They‘re going to be on us for a long time.” 

I find it difficult to read Sarah Palin quotes with appropriate cadence, so please forgive me.  Of course, her hard times in national polls kind of started when the eyes of the nation first really focused on Alaska.  So, what‘s her view of the Senate race again, and Ted Stevens and the question of whether or not he ought to resign? 

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R-AK), FORMER VICE PRESIDENTIAL CANDIDATE:  The Alaska voters have spoken.  And me, not being a dictator, won‘t be telling anybody what to do.  A governor, especially one that‘s not going to be a dictator in all this doesn‘t have control over that. 

(END VIDEO CLIP)

MADDOW:  So we have a Senate race too close to call at this hour, and an incumbent who is leading, who would likely be forced out of Washington if he were reelected.  And we‘ve got an emphatically, non-dictatorial governor who seemed to take a shine at the Lower 48, and lately to as many TV cameras as present themselves.  Where is all this leading, exactly? 

Joining us now is Alaska State Senator, Bill Wielechowski, live from the Last Frontier.  Sen. Wielchowski, many thanks for joining us again.  I appreciate your being here. 

SEN. BILL WILOKOWSKI (D-AK):  Hi, Rachel.  Good to be back. 

MADDOW:  Where does the Alaska Senate race stand right now in terms of the votes counted and whether it‘s still seen as a toss-up? 

WIELECHOWSKI:  Well, Sen. Stevens is ahead by about 3,300 votes.  However, there‘s about 91,000 votes that are still outstanding.  And that‘s about 29 percent of the total number of ballots that we expect to be cast in this election.  So there‘s still a huge, huge number of ballots that are out. 

And Mayor Begich, mayor of Anchorage, who was running against Sen. Stevens had done very well in absentee voting and very well in early voting.  So there are some people out there who say that the race is not over yet, including interestingly enough, Sen. Stevens pollster who predicted just a day or two ago that Mayor Begich would come back and win this race.  So, it‘s going to be interesting in the next few days. 

MADDOW:  Sen. Stevens - just to be clear, Sen. Stevens‘ pollster is saying that Begich is going to win? 

WIELECHOWSKI:  He is, actually.  He just came out on a TV show a night or two ago and he‘s run some numbers.  And also he called the race on election eve after the polls closed.  He actually predicted, according to his polls that Mayor Begich would win the race by about eight percent.  And that was in line with every other pollster in the state had been predicting about 4.8 spread for Mayor Begich. 

So it was surprising when the numbers came in the way they did.  And people are saying, well, because Mayor Begich did so well in the early voting and the absentee voting, that they expect him to really pick up a lot of votes, once all the votes are counted, later this week. 

MADDOW:  There are a number of strange things going on, when you compare the polls, not only for the Stevens and Begich race, but also for the Don Young‘s House race, also for the presidential race.  There‘s big differences between, at least, the results thus far and what we‘ve seen from the polls. 

There‘s also actually just really strange numbers in terms of turnout.  Alaska was lower by double digits in terms of turnout this year compared to 2004 which seems weird with the state‘s governor on the presidential ballot and two really hotly contested congressional races. 

What do you make of those anomalies?  Do you think when the ballots are finally counted that some of those things will actually be closer to their predictions? 

WIELECHOWSKI:  It‘s hard to say.  The results are very unusual.  The number of people that turned out really has surprised a lot of people.  And the results, quite frankly, have surprised a lot of people.  Rasmussen polls conducted polling in every senate race in the country and they were accurate in every single one except this one and Alaska. 

The pollsters here in Alaska all had called Mayor Begich winning.  They all had called Ethan Berkowitz winning the House race.  A lot of the pollsters had predicted that the presidential race was even narrowing to about four points or five points.  So it was really surprising on election eve to see that the huge spreads that we have. 

Even more surprising was the low turnout.  Right now, we all have actually a lower turnout than we would have had in 2004, the presidential election.  And if the numbers stay the way they are, we don‘t expect there‘s that many ballots out there.  This will actually be about the second lowest voter turnout in the history of Alaska in a presidential year. 

And it just really has a lot of people wondering how that is possible when we had a governor running as vice president and we had Barack Obama who really had a huge inspirational elect on a lot of the Democrats in the state and really increased the number of people who attended the caucuses here in Alaska by huge, huge percentages.  And there are also massive, massive get-out-the vote efforts on both sides.  So it just really has a lot of people scratching their heads trying to figure out why exactly the vote totals were so low. 

MADDOW:  And I can tell you, as you are explaining that right now, there are people who are election protection activists and people who worry about the integrity of the vote coast to coast and beyond, who are adjusting their tinfoil hats right now, myself included, wondering what‘s going on. 

It just seems like too many different factors to have gone so weird, and I guess to the extent that everybody is keeping a close eye on things we ought not to worry about this being stolen in some way.  But it just does seem strange. 

But let me ask you one last question, which is if Alaska could forgive seven felony convictions for Ted Stevens, it seems reasonable that would be possible to overlook some of Palin‘s political problems over these past few months.  If Gov. Palin did end up running on a special election for Ted Stevens‘ race - now, I realize it‘s getting ahead of the game a little bit.  Do you think she would actually win? 

WIELECHOWSKI:  Well, I‘ll tell you, I think it would be a close race.  I think Gov. Palin is very popular in the state and Mark Begich is also extremely popular in the state.  And I think if that were the case, it would be a very close election.  I think it would be a very hard fought election.  And obviously, it would have a lot of national interest.  And I would expect a very interesting race to look out for. 

MADDOW:  Alaska state Senator Bill Wielechowski, I was interested in Alaska politics before Sarah Palin got on the ticket, but it just keeps getting more and more fascinating.  I‘m getting obsessed.  Thank you for your time, sir.  I appreciate it. 

WIELECHOWSKI:  Thank you. 

MADDOW:  Are you familiar, by chance, with Section 382 of the U.S. Tax Code?  No?  Well, join the club.  No one knowing what this is was what the Treasury Department was counting on when they secretly nuked it - or kind of secretly nuked it.  But they nuked it and nobody paid attention until it was too late. 

The Treasury Department was hoping people would not be paying attention to the bailout - excuse me, that people would be paying attention to the bailout of the banking industry and wouldn‘t notice that they were loot in the public coffer on their own to the tune of $140 billion.  We‘ve been robbed.  And they are counting on us being too dumb to figure out that we have been robbed.  That, I have to admit, I find very annoying. 

(COMMERCIAL BREAK)

MADDOW:  The great state of Ohio is used to being in the spotlight every election year.  But this time, the state is getting noticed at least at SwingStateProject.com and in my own head for their Steve problem.  Ohio has a Steve problem. 

The Ohio congressional delegation - well, it has a problem.  Three of their 18 congressmen are named Steve.  And it could become four if Republican Steve Stivers hangs on to his narrow lead of 146 votes against Democrat Mary Jo Kilroy.  We will have four Ohio congressmen named Steve in Congress at the same time. 

I don‘t have anything against Steve.  I love Steve Earl.  Who doesn‘t love Steve Benin.  My boss is named Steve.  What about Steve Clemens?  But for a state that voted for a guy named Barack for president, couldn‘t there be a little more variety in the House delegation?  It gets confusing when everybody‘s got the same name.  Just ask George Foreman and his sons - George, George, George, George and George. 

(COMMERCIAL BREAK)

MADDOW:  Way, way, way, way back in September, amid tanking numbers on Wall Street, sky-high unemployment and predictions of certain economic doom, Congress decided to give the banking industry an early Christmas present - $700 billion smackaroonees(ph).  No Great Depression, no “It‘s a Wonderful Life” remakes for the modern holiday season.

Remember that?  Lawmakers thought about it, John McCain fake-suspended his campaign over it.  The House failed it once, and then finally, after the Senate packed it full of pork, it was delivered to Wall Street with a bow on top.  But that‘s the bailout story you know about, the one that you can hold your member of Congress accountable for. 

It turns out there‘s kind of another one, a little addendum, a little side show with 10 zeros on the end of it and a dollar sign in front of it.  While the rest of the country was busy wrapping up that $700 billion banking bailout package for Christmas in September, the Treasury Department Undersecretary Henry Paulson was sneaking its own little gift under the tree.  It was no $700 billion, but this was a gift that keeps on giving. 

You see, once upon a time, there was a scrappy little law - we‘ll call him Section 382 of the Tax Code.  And little Section 382 told all the corporations that they couldn‘t avoid paying taxes simply by purchasing a failing company. 

But right in the middle of the bailout chaos, when apparently nobody was looking - I wasn‘t, were you?  The Treasury Department reversed little Section 382.  So merry Christmas, banks.  If you don‘t want to pay your taxes anymore, that‘s fine.  Just use that $700 billion we just gave you to buy some losing companies and then use them as tax shelters. 

“The Washington Post” with details on Paulson‘s secret Santa gift reports this today, quote, “The sweeping change to two decades of tax policy escaped the notice of lawmakers for several days, as they remained consumed with the controversial Bailout Bill.  When they found out, some legislators were furious, some congressional staff members have privately concluded that the notice was illegal.”

So nobody told Congress, and it might be illegal - and what else?  Oh, yes, members of Congress, even the ones who are steamed because nobody told them about it, even the ones who think it was illegal, many of them are afraid to say anything, much less do anything about it for fear of further antagonizing the economy. 

“The Washington Post” quotes an unnamed congressional aide who sums it up like this, quote, “We‘re all nervous about saying this was illegal because of our fears about the marketplace to the extent we want to try to publicly stop this we‘re going to be gumming up some important deals.”

Oh, and pay no attention to the $140 billion that just got sucked out of the taxpayers‘ wallets without debate and possibly against the law.  That‘s in addition to the $700 billion Uncle Sam already officially forked over.  For a record second time in one night, I need to be talked down. 

Here to try is syndicated columnist David Sirota.  Mr. Sirota, thank you for joining us tonight. 

DAVID SIROTA, SYNDICATED COLUMNIST:  Thanks for having me, Rachel. 

MADDOW:  Now, first of all, how did the Treasury Department sneak this through?  Had they been wanting to get this through forever and they just picked a time when they knew nobody would be paying attention? 

SIROTA:  It sure looks that way.  I mean, the Bush administration - you don‘t put anything past them.  And they issued a declaration, a sort of a five-sentence notice, saying that this is the way they were going to interpret this section of the tax code, which technically in the tax code, it is allowed to interpret it. 

Now, they had hesitated to do that in the past, because they thought in public, it would look like too much of a corporate tax giveaway.  And so, you know, it‘s sort of the - what Naomi Klein calls the “shock doctrine.”  When everything is going crazy, they sort of slipped this in there and gave a $140 billion tax gift to banks.  

MADDOW:  Is there a safe way of reversing what Treasury did here?  I mean, even the congressional staffers who are complaining that they weren‘t notified.  They think it might be illegal.  Even they are saying we‘re not sure we want to blow the whistle on this because that could cause further chaos, right? 

SIROTA:  This is what I call the innocent bystander fable.  You hear this from particularly Democrats in Congress, but all members of Congress, that they can‘t do anything.  Chuck Schumer said earlier this week that he couldn‘t do anything about Wall Street using the $700 billion for bonuses. 

So it‘s not true.  Congress can write laws - that‘s what it‘s there to do.  The incoming Obama administration can certainly try to reverse this as well.  But Congress could act right now.  The question is, will they?  The question is whether they will allow this rip-off to continue. 

MADDOW:  In the last couple weeks we have learned about some of those things you just mentioned, using bailout money for stock dividends, using it for bonuses of all things.  What‘s a bonus for? 

Of course, none of this was the point of the bailout.  The point was for banks to start lending again.  And lawmakers say they are upset about it.  But if you were going to advise the Obama administration, the incoming Obama administration, to push for Congress to do one thing first, what would you push for them to do? 

SIROTA:  Oh, boy, I mean, that‘s a big question.  I mean, I guess on the financial crisis, it‘s to, at the very least, force the banks to start lending parts of the money that Congress and the taxpayers are giving them.  That‘s what the British did when the British pushed the bailout plan.  They forced some terms onto the banks. 

I would go further and say, you know, don‘t allow them to use this money for bonuses.  Don‘t allow banks that take this money, the taxpayer money to pay out dividends to shareholders.  That should be the bottom-line starting point.  

MADDOW:  Does the bailout, in its current incarnation, stand a chance at actually helping the economy?  We have seen credit loosen up a little bit in recent days.  

SIROTA:  Look, the big criticism of the bailout was that it gives a huge amount of dictatorial power to the president and to the Treasury secretary.  So Barack Obama can come in there and radically reshape this, because he will have almost total dictatorial power over that $700 billion or whatever remains of it.  So I think so.  I think it can be reformed.  

MADDOW:  David Sirota, syndicated columnist and all-around smart guy, thanks for being on the show tonight, David.  

SIROTA:  Thanks for having me, Rachel. 

MADDOW:  Coming up next, I get just enough pop culture from my friend, Kent Jones.  Want to know Obama‘s new secret service code name?  Mine is “Dork Nozzle.”

(COMMERCIAL BREAK)

Now it‘s time for “Just Enough” with Kent Jones.  Hi, Kent, what have you got? 

KENT JONES, POP CULTURIST:  Good evening, Rachel.  Well, a handsome, elegant Chicago couple enjoyed a quiet dinner Saturday night at a swanky Italian restaurant overlooking Lake Michigan, and their names - Barack and Michelle Obama. 

The Obamas celebrated Valentine‘s days and anniversaries and birthdays at the same restaurant in the years past.  You know, you it was a date night.  It was a chance for Barack and Michelle to move past all of the strain of the long campaign and just, you know, reconnect with each other.  In fact, the secret service detail that shadowed them all evening thought it was the most romantic meal they had ever been assigned to. 

And the veal?  Well - since last week‘s landslide, everything has changed for the President-elect.  Today, the secret service assigned cool special code names for Obama, Joe Biden and their families.  President-elect Obama is now known as Renegade.  Michelle Obama is Renaissance.  Malia Obama is Radiance.  Sasha Obama is Rosebud.  Vice President-elect Joe Biden is Celtic, and Jill Biden is Capri.  These names were determined by a secret agent known as Hopscotch, his wife Yatzi and their two children Petulance and Banobo(ph). 

And finally the world “Obama” seems to be entering our language in innovative ways.  The AP came up with this lexicon of so-called “Barack-isms,” like “Obamarama,” the hoopla surrounding the inauguration.  “Obamanos” a play on “vamonos” or let‘s go in Spanish.  Barack star, self explanatory. 

Some others I‘ve heard, but I‘m not entirely sure about the exact definitions, are “probama,” “lowbama,” “fauxbama,” “whoabama,” “snowbama,” flowbama,” “rambobama,” “burritobama,” “escrowbama,” “in uterobama,” “mojobama,” “jujitsobama,” “Rebecca Lobo-bama,” and “Baracket Science.”  It‘s just a few of them.  I guess there‘s probably more.  Still more of them in there.

MADDOW:  Thank you, Kent.  I really appreciate it. 

JONES:  Sure.

MADDOW:  And thank you for watching tonight.  We will see you here tomorrow night.  Until then, you can E-mail us, rachel@msnbc.com.  And you can check out our podcast.  Go to iTunes or to Rachel.MSNBC.com.  You can also hear my radio show, 6:00 p.m. Eastern coast to coast on Air America Radio.  “COUNTDOWN” with my friend, Keith Olbermann, starts right now.  Good night.

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