updated 11/26/2008 4:04:09 PM ET 2008-11-26T21:04:09

Guests: Chris Hayes, Paul Krugman, Chris Cillizza, Candace Gingrich

KEITH OLBERMANN, HOST (voice over): Which of these stories will you be talking about tomorrow? Gates at the barbarians. Breaking news: Mr. Bush's secretary of defense to remain such in the Obama administration, for at least a year. "That's been a done deal for some time," a source tells our Jim Miklaszewski. "No other name has been seriously floated as a possible candidate." "And a dream team selected for Gates," says the source. But, is a Bush carryover a nightmare for the base? A new budget director who knows where the bodies are buried.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT-ELECT: Budget reform is not on option. It's a necessity.

(END VIDEO CLIP)

OLBERMANN: Paul Krugman on the reality of how much budget fat there is to cut. The campaign is over but the melody lingers on, John McCain is running again-for Senate in 2010. And he'll make Arizona Governor Janet Napolitano the secretary of homeland security.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, ® ARIZONA: I've already talked with her and look forward to moving her nomination as quickly as possible through the United States Senate.

(END VIDEO CLIP)

OLBERMANN: Just a moment there, Sparky. She hasn't been nominated yet, nor has she.

(BEGIN VIDEO CLIP)

MCCAIN: I think that Governor Palin's future is very bright in the Republican Party.

(END VIDEO CLIP)

OLBERMANN: Perhaps that's why a political action committee is going to run ads thanking her on Thanksgiving Day? Thanksgiving-for the turkeys? Startling polling from California. Eight percent of those who voted for the same-sex marriage ban, Prop Eight, now say they have changed their minds. That might be just enough to overturn the ban at the next election. Activist Candace Gingrich, the sister of the former speaker of the House, joins us. Best: The petition to pardon former Congressman Duke Cunningham. You will not believe how many signatures are on it-or aren't on it. Ann Coultergeist: Reportedly, her jaw is broken and has been wired shut. I had nothing to do with it. All that and more: Now on COUNTDOWN.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Thank you, Sarah Palin.

(END VIDEO CLIP)

OLBERMANN (on camera): Good evening. This is Tuesday, November 25th, 56 days until the inauguration of president-elect Barack Obama.It is a done deal. The man whose campaign for president began with the idea that he alone among the major candidates stood against the invasion of Iraq will be keeping President Bush's war chief as his own. Our fifth story on the COUNTDOWN: Sources telling three different news organizations, including this one, that Robert Gates will remain as secretary of defense for at least one year. According to the source who spoke to our own Pentagon correspondent, Jim Miklaszewski, it has been, quote, "a done deal for sometime. No other name has been seriously floated as a possible candidate." According to the source, the deal was sealed for Gates when former Marine Corps candidate, Jim Jones, was mentioned as the probable candidate for National Security Adviser, former commander of NATO. Politico.com reporting he is, in fact, in. Former Admiral Dennis Blair was named as the likely pick for the director of national intelligence, the source calling that a "dream team" that Gates could work with. ABC News reporting that President-elect Obama is expected to rollout his entire national security team after the Thanksgiving holiday. Not just Gates, Jones and Blair, but also, Senator Clinton as secretary of state, and Dr. Susan rice, an Obama foreign policy adviser during the campaign as ambassador to the United Nations. Time now to call in our own Howard Fineman, senior Washington correspondent for "Newsweek" magazine, and not in the new cabinet. Good evening, Howard.

HOWARD FINEMAN, MSNBC POLITICAL ANALYST: Hi, Keith.

OLBERMANN: Does this appointment, presuming this is correct, that it's so widespread-one has to assume it is-does it say more about Obama or about Rumsfeld, or should we be focusing on how different a defense secretary Mr. Gates has been from Mr. Rumsfeld?

FINEMAN: Well, I think it says a lot about both Obama and Gates. Barack Obama was advised many, many months ago, especially as the economy deteriorated, that he needed to focus on that and he would use some continuity at the Pentagon. And that's what he's done here. He's got enough to deal with, with trying to rescue the economy. He's going to leave things pretty much alone, at least, beginning at the Pentagon. But it was that new team and it was the fact that Gates has been in many ways, the anti-Rumsfeld. He's talked about scaling back the expansive duties of the Pentagon. He's talked about realism in foreign policy and defense deployment-in many was, the opposite of what Rumsfeld enabled as Gates is kind of managed first the surge and then the beginning of what is going to soon be a wind-down.

OLBERMANN: As he obviously would help the president-elect in establishing a relationship with the military structure, with the brass, the hierarchy with the complex, if you will, does it also help protect him in a more cynical sense against whatever might go wrong in Iraq?

FINEMAN: Well, sure, Keith. You know, this discussion was held briefly about Hank Paulson. Do you keep him on? The answer was "no" with a capital "N." You don't want to own Hank Paulson in any way. But the opposite is the case with Gates. Gates has been widely viewed as a very successful follow-on to the disasters of Rumsfeld in terms of management, in terms of outlook, and so forth. He's done a good job by all accounts. But if something does go wrong as Obama begins to draw down the number of troops in Iraq and try to transfer some to Afghanistan, you want to have somebody else to blame and cynically, if necessary, that would be Gates. But I don't think that's going to happen. In part, because the key here are the other names you mentioned, Jones and Blair and others-that is viewed, within the Pentagon, as a "dream team" and are viewed around town, including by Democrats on the Hill that I talked to. These aren't the lefties but they these are the establishment Democrats on the House side and elsewhere, this is a very strong team and the man to watch is Jones, because he's really going to be calling the shots from inside the White House.

OLBERMANN: Is it curious, Jim Miklaszewski's source phrase that he used, "No other name has been seriously floated as a possible candidate," that all of what we heard about Senator Hagel or Senator Reid, or former Navy Secretary Danzig, that he went right to Gates and settled there, or at least it seems that-what does that mean? How curious is that?

FINEMAN: Well, that's very interesting. It means that Obama is for both competence and continuity when that makes sense. I mean, the old notion of conservative that personnel is policy, that it's key whom you pick because of their predetermined policy views, is not the way Obama views the world and that's not the kind of people he's picking. I know Senator Evan Bayh, among others-I spoke with Senator Bayh a little while ago-he said that he advised Obama many months ago to keep Gates for continuity purposes, because the economy was deteriorating, because the war need to be wound down in Iraq. Keep that guy there who's won ride respect around town and on the Hill at least for a year.

OLBERMANN: And how does "at least for a year" fit into this equation? How does the secretary seem or avoid seeming like a lame duck?

FINEMAN: Well, the word on the Hill is that he would love to leave town, that he's building a home out in Seattle, that's where he'd like to be. He's staying on as a matter of duty and at the president-elect's call. The way he avoids being a lame duck is by helping Obama manage the construction of a new Obama Pentagon and a new Obama defense and foreign policy outlook that will include a lot of strong-minded people-General Jones, Admiral Blair, Susan Rice, Hillary Clinton, and Bob Gates-he'll be in on the construction of the new Democratic Obama Pentagon.

OLBERMANN: Our own Howard Fineman of "Newsweek"-as always, Howard, great thanks, and if we don't speak, Happy Thanksgiving.

FINEMAN: Same to you, Keith. Thank you.

OLBERMANN: President-elect Obama ran, of course, for office on the message of change. So, flatly, how on earth does keeping the current secretary of defense equate with change? Bob Gates has only served President Bush since December 2006 but he was the first Bush's last director of central intelligence and he was what might be called an accessory to Iran-Contra. All of that would be plenty to upset the Democratic base. As one former Clinton official told Mark Perry of the "Asia Times" when he heard about the mere possibility of keeping Gates in office, quote, "The election was a clean sweep and that includes Bob Gates. It's called a changing government." We're joined now by Chris Hayes, Washington editor of "The Nation" magazine. Chris, thanks for your time tonight.

CHRIS HAYES, THE NATION: Thank you, Keith.

OLBERMANN: To the point of that former Clinton official's named or unnamed point, how is-you know what I mean-how is Obama going to reconcile the campaign message "change" with, at the Pentagon, absolutely no change whatsoever, same guy from the key reform, if you will, guy from the Bush administration?

HAYES: Well, I think, in some ways, that ship has already sailed. I mean, even before we got to Gates, it was already clear when you're talking about people like Lawrence Summers, when you're talking about Senator Clinton at State, it was already clear that change was not being conceptualized from the perspective of the Obama people as a massive sort of clean slate, sweeping of the personnel. That we're going to essentially see a lot of familiar faces. Gates is the most cute example of that because, as you know, he's actually a Bush administration official. But we already have been introduced to that. So, there's nothing disruptive about this specific instance. What's disruptive is getting one's head around what role personnel is going to play in the administration generally.

OLBERMANN: Many on the left have said they don't care who the appointee is so long as they carry out a policy that Obama puts in place. Is that likely to be the main reaction to this news? I mean, this is obviously not a surprise, but here it is apparently in stone.

HAYES: I don't know what the main reaction is going to be. I do think that that's true. Look-progressive people on the left, you know, we care about outcomes, right? We want peace. We want security. We want justice. We want broadly shared prosperity. These values are what's driving people's concerns and seeing an administration that implements policies that further those values is ultimately what it's all about. Right now, we're kind of guessing in the dark. Everybody is sort of reading the tea leaves because they're worried about an administration that doesn't pursue the policies and the outcomes that we want to see. And so, I think everyone would agree that if Robert Gates is the man to end the war in Iraq and bring our troops home, and manage a successful and peaceful transition out of occupying that country, then people aren't going to care that it's Robert Gates. The question is, you know, is that policy going to be what's pursued and there's reasons to start worrying that it won't be.

OLBERMANN: In addition to the Gates announcement, we're getting word today that John Brennan had withdrawn his name from consideration as director of central intelligence and that was seen as a victory for those on the left because Brennan had not spoken out forcefully on torture.

HAYES: Yes.

OLBERMANN: Is there just a coincidence here? Is there some mitigation of Gates by the Brennan sort of withdrawal? Is there sort of a tit-for-tat on this?

HAYES: You know, I don't think it's that. I mean, I would surprise if it were that thought out. I do think that Brennan withdrawal is a good thing and I do think that, again, I mean, it's easy when we start thinking about-because we're a little bit in a kind of dark space right now in terms of what actual decisions are going to be made by the administration because they're not in power yet-you know, it's easy to read a lot into personnel but it's important from-again, from the perspective of core value and someone who is not sufficiently outspoken in denouncing the torture regime was not allowed to be, you know, part of the administration's efforts to sort of transition in the intelligence agencies. So I think, again, that reaffirms something that a sort of core principle but I don't think it's useful to see it as a kind of tit-for-tat, you know, that the left wins one victory and maybe loses something on Gates.

OLBERMANN: Is there overall insurance for Obama in suggesting-having suggested that he would be bipartisan, certainly putting out feelers and hints that he would try to be bipartisan in office, that here's a shining example of that-you're putting as important a role as you could have in the hands of somebody who literally traced back to Iran-Contra?

HAYES: Yes. Look-strategically and I'm speaking purely strategically here, the most charitable interpretation, I think, of Obama's strategy vis-a-vis personnel early on, is a kind of sort of co-opting, embracing of the establishment. Now, the establishment in Washington, D.C. is very strong. It has-and I think that there's an awareness of how strong that is and that might prove to be useful going forward.

OLBERMANN: Chris Hayes, the Washington editor of "The Nation," tonight's representative of the angry left.

(LAUGHTER)

OLBERMANN: Thanks, Chris. Have a good weekend.

HAYES: I'm so not angry.

OLBERMANN: I know you're not. That was I'm saying, it's sort of-that was irony. I'm not pulling it off well tonight.

(LAUGHTER)

OLBERMANN: Have a good weekend if we don't talk.

HAYES: You, too. Happy Holiday.

OLBERMANN: And then there's the economy. The president-elect with news conferences now on back-to-back days and the third one scheduled tomorrow. This would have exhausted Mr. Bush. And, a new director of the budget today who, Mr. Obama says, "knows where the bodies are buried." Paul Krugman on whether there's enough trimmable budget fat to really make a difference. And a note on those news conferences, John McCain holding one today and a reporter actually began a question by saying, Governor-and, no, I don't know who keeps testing the lights on the Christmas tree here at Rockefeller Center that isn't supposed to be lit until next Wednesday, but, yes, for some reason you're getting a sneak preview right here on COUNTDOWN.

(COMMERCIAL BREAK)

OLBERMANN: Paul Krugman on the now daily Obama economic news conference. The first news conference for John McCain since (INAUDIBLE), including 97,000 question about Sarah Palin, plus a very Freudian slip from a reporter. Later: Who knew Dick Morris can be bought. And this is not from the onion, Coultergeist, reportedly, breaks her jaw and has had to have it wired shut. You're expecting me to make a joke about that? How could I possibly make that sound funnier?

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OLBERMANN: Jumpstart the economy, eliminate programs we don't need, and reduce the deficit. Our fourth story on the COUNTDOWN: We might, indeed, only have one president at a time, but the new guy is evidently capable of having more than one news conference a year and more than one economic goal at a time. Every night until the inauguration of the president, we are asking the question on the most urgent issue of the day: What do with do now? Today, more details from President-elect Obama on how he plans to fix the economy while attempting to shave the budget and reduce the deficit at the very same time. President-elect Obama announcing that Peter Orszag will be his budget director, a job he currently holds for Congress, a job for which he would seem to be uniquely qualified.

(BEGIN VIDEO CLIP)

OBAMA: Peter doesn't need a map to tell him where the bodies are buried in the federal budget. He knows what works and what doesn't, what's worthy of our precious tax dollars and what is not.

(END VIDEO CLIP)

OLBERMANN: With his budget director's help, the president-elect pledging to make budget restraint a priority in his administration, but only after the economic recovery is well-underway first.

(BEGIN VIDEO CLIP)

OBAMA: Budget reform is not an option. It's a necessity. We are going to have to jumpstart the economy and there's consensus that that requires a bold plan to make the investments in the future. But we have to make sure that those investments are wise. We have to make sure that ware not wasting money in every area.

(END VIDEO CLIP)

OLBERMANN: Instead of as a big government or a small government, the president-elect preferring that his government be thought of as a "smart government."

(BEGIN VIDEO CLIP)

OBAMA: I think what the American people want more than anything is just commonsense, smart government. They don't want ideology. They don't want bickering. They don't want sniping. They want action and they want effectiveness.

(END VIDEO CLIP)

OLBERMANN: In order to achieve his ambitious, theoretically contradictory agenda, Mr. Obama promising to consult with Republicans along the way, never mind the massive amount of political capital he's seemed to have accumulated according to the Bush standard.

(BEGIN VIDEO CLIP)

OBAMA: I don't think that there's any question that we have a mandate to move the country in a new direction and not continue the same old practices that have gotten us into the fix that we're in. But I won 53 percent of the vote. That means 46 percent or 47 percent of the country voted for John McCain. And it's important as I said, on election night, that we enter into the new administration with a sense of humility.

(END VIDEO CLIP)

OLBERMANN: Let's turn now to Paul Krugman, professor of economics at Princeton University, op-ed columnist at the "New York Times," author of the new book, "The Return of Depression Economics and The Crisis of 2008," to out early next month, since he was last kind enough to join us, announced as winner of the 2008 Nobel Prize for economics. Dr. Krugman, congratulations, belatedly, and thanks for your time tonight.

PAUL KRUGMAN, 2008 NOBEL PRIZE WINNER: Thanks, Keith. Yes.

OLBERMANN: The implication of Mr. Orszag and buried bodies in the budget, that you can work a very minor, perhaps, economic miracle in trimming the fat, is that true? Is there validity to it?

KRUGMAN: It depends. You know, the old waste fraud and abuse thing is everybody who is serious knows it's not a big deal. I mean, of course, there's wasted dollars, there's bureaucrats doing nothing much on salary, but that's not a big thing, that's trivial. What Peter Orszag has done-he's, you know, a great choice for the job. He's talked about the big things, things like Medicare spending a lot of money on treatments that don't actually improve people's health, huge disparities on what Medicare spends in different parts of the country. There are things like overpaying the drug companies for the Medicare drug program. I'm hoping that an Obama administration, together with Congress, can actually start bargaining for fairer prices on those drugs. So, there's a bunch of stuff. Now, it's nowhere close to saving the amount of money that's going to be needed, you know, to ultimately pay for all the things we're doing to rescue the economy right now.

OLBERMANN: There was a poll from ABC News today that suggested that 67 percent of Americans like the way Obama is handling the transition. That has got to be, in part, about his high profile during it. Three days in a row, there will be new press conferences about this subject and, obviously, it's got to be in part about putting his face and neck out there in terms of the economy. Is he right to do it that way and this way? Is there any other option?

KRUGMAN: I don't think so. I mean, we actually-the economy is in terrible shape. We're probably losing, you know, 300,000 jobs a month or so at the moment. So, things are falling apart pretty fast. Confidence is falling apart pretty fast. It would be nice if we could have collaborative work between the outgoing administration and the incoming administration. We're not actually going to get that. So, the best that you can do on the economy is, at least, to convince people that help is on the way. You know, the cavalry is coming. Look at these great guys I got. Here's my team. We have-we're putting a plan together. So, no, I think, in some ways, the management of economic policy is already in Obama's hands and he's got to do it now.

OLBERMANN: In addition to the original $700 billion in the bailout, today it appeared that Secretary Paulson was trying to pull another $600 billion from the Fed for Fannie, Freddie, Ginnie, is there the prospect still here that the lame duck administration can still do a lot of damage to the economy in the next 56 days?

KRUGMAN: There is, although, this one is actually, this is just a-there's nothing wrong with this. You know, we own Fannie and Freddie. They've been nationalized. Effectively, the U.S. government is now having the Federal Reserve buy up the debt of a piece of the U.S. government. It's fancy footwork. It's crazy that they haven't just said, look, this stuff is guaranteed by the full faith and credit of the taxpayers. So, this is actually a good move, just done in a funny way. I have no problem with that. There's also another $200 billion for things like to credit card debt which is much dicer but these are not the moves that worry me. I just worry about the just lack of direction, the sort of chaos, and the fact that the deals for private sector for places like Citigroup don't look that good.

OLBERMANN: And, has this-I asked this question last night and let me rephrase it-this $700 billion amounted to-we sort of left it on a table outside the Treasury Department and said "come and get it"?

KRUGMAN: It's not quite that bad. I mean, it's not been invested all that well but it's not all that badly, either. You know-it's not $700 billion gone. First of all, actually only about $250 billion has been laid out so far. So, it's not like the whole thing. Look, this could have been done much better and it's really bad that it's being mishandled. But the main thing I'm worried about is not what they're doing but what they're not doing. The fact that we don't have a stimulus program getting ready, that we don't have a better coordinated bank financial system rescue getting ready. It's just-you know, it's like it's-well, as I've written it's 1932, Hoover is still in the White House, we're waiting for Roosevelt to arrive, and meanwhile, the banks are failing.

OLBERMANN: Yes, you can't yell at the calendar to hurry up.

KRUGMAN: Yes.

OLBERMANN: Last question here. You and the other Nobel winners yesterday visited the White House. Was there anything in that moment there with the president, any chance that he revealed his plans for the economy in his last weeks in office? If not, was it difficult to shake that hand?

KRUGMAN: Oh, you know what are you going to do? My wife made small talk with him about her childhood in Texas. This is not a moment to try and change policy, you know.

OLBERMANN: Well, I'm sure the thought crossed your mind. Nobel Prize winner.

KRUGMAN: I just want him to know my nickname.

(LAUGHTER)

OLBERMANN: He's out of the nickname business, I suppose.

KRUGMAN: Yes.

OLBERMANN: Nobel Prize winner, Paul Krugman, also author, as we mentioned, of the upcoming book, "The Return of Depression Economics and The Crisis of 2008." Again, great thanks for your time tonight, sir.

KRUGMAN: Thanks a lot.

OLBERMANN: Here's a stimulus package: The annual promise of the jetpacks that they would soon be in service. This is the what -- 48th anniversary of the first promise. This guy flies over something and lands somewhere else. And what do you mean they wired Ann Coulter's jaw shut? Shouldn't she have auctioned this privilege off for charity? You are watching COUNTDOWN on MSNBC.

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OLBERMANN: Best in a moment and 13 signatures in three years. That's a convincing petition. First, on this date in 1900 was born Helen Gahagan, singer, Broadway and Hollywood star, wife of actor Melvyn Douglas, purported mistress of Lyndon Johnson, congresswoman from California, and in 1950, the Democratic opponent. When Richard Nixon ran for Senate in California, the one on whom he tried out his smear tactics, calling her communist-leaning and fellow traveler, and infamously, pink right down to her underwear. However, it was Congresswoman Helen Gahagan Douglas who had the last laugh. She called him the name which history still uses: "Tricky Dick" Nixon. Let's play Oddball. We begin with an update on the lost NASA tool bag. Last week, an astronaut was out lubing up a solar panel when an untethered case containing two grease guns went rogue and flew off into orbit. Well, Saturday, high above Ontario, amateur astronomer Kevin Felder shot this footage of a white dot moving from right to left across your screen. Felder thinks that is the tool bag and I have to agree. After all, I know tool bags. I work with a few of them. OK. NASA is also keeping track of the space debris. And if they need more grease guns, we'd like to remind them about the new Home Depot that opened up between Neptune and Uranus. To Canyon City, Colorado, where dare devil Eric Scott used a jet pack to span the 1,500 foot Royal Gorge in just 21 seconds. Apparently, he didn't see that bridge over there. Scott used hydrogen peroxide to fuel his jet pack. He didn't use a net or a parachute while crossing the gorge, which is over 1,000 feet deep. The gathered spectators were thrilled by the stunt. One person said, quote, it's like something out of the future. I guess that guy hasn't seen the NFL films of the rocket belt guy from the first Super Bowl in 1967.

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OLBERMANN: John McCain is running again and praising Sarah Palin and apparently ready to confirm one of President-Elect Obama's nominees, even though she's not been nominated yet. And three weeks since the vote, has public opinion in California changed just enough that the same-sex marriage ban would now not pass? Candace Gingrich joins us. These storied ahead, but first time for COUNTDOWN's top three best persons in the world. Number three, best dumb criminal, this guy. He stole 15 electrical transformers from an advertising billboard in Auckland, New Zealand. Fortunately, it was daytime, so he was not fricasseed. But he was photographed. So the guy who owns the billboard company put the thief's picture up on four of his billboards. Number two, best evidence that it's quiet, too quiet, Coulter-geist. The report, quote, "the leggy reactionary broke her jaw and the mouth that roared has been wired shut." Of course this is from Page Six in the "New York Post" so she probably actually broke a toe nail. Number one, best pardon petition of President Bush, on behalf of former GOP Congressman Randy Duke Cunningham, the former House king of corruption and hookers. The online plea for clemency is bursting with literally more than one dozen signatures; 13 people have signed it. Then again, the petition has only been available online for three years.

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OLBERMANN: The Mac is back; John McCain's first news conference since his presidential election loss three weeks ago. In our third story on the COUNTDOWN, the campaign may be over, but the problems are not, like people having forgotten what he does for a living. It wasn't just that reporters had almost as many questions about Sarah Palin as they did about McCain. It was also the subtle indications that already the media response to Senator McCain is becoming you ran for who of the what, now? Like this one.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Governor-

SEN. JOHN MCCAIN ®, ARIZONA: I'm a senator.

(END VIDEO CLIP)

OLBERMANN: We couldn't decide between that version of that sound effect or another version, but fortunately McCain's news conference gave us more than one occasion to use it. So you can decide which one you prefer as you contemplate this subsequent visual indicator of the current level of interest in McCain, a media turnout that ran at least one deep. I know, right? I can't decide either. McCain did make some news, confirming he'll run for his fifth term as Arizona senator in 2010, praising Obama's appointments so far, including high praise for the rumored nomination of Arizona's Governor Janet Napolitano as Homeland Security chief, which if true would eliminate McCain's biggest potential competition for that 2010 race. But the most interest, intensely so still, was in McCain's choice of running mate, she already apparently on the road to 2012, picking up political IOUs with four campaign stops for Georgia Senator Saxby Chambliss yesterday, ahead of his run off, and subject of a two million dollar thank you ad from a conservative political action committee. What did McCain have to say about her future today?

(BEGIN VIDEO CLIP)

MCCAIN: I think that Governor Palin's future is very bright in the Republican party. By the way, I note that she's going down to campaign for Senator Chambliss, obviously, in a very tight runoff race. I think she did a great job of energizing our base. I'm very proud of her. It's one of the great pleasures I've had to get to know her and her family. I think she has a very bright future in leadership position in the Republican party. And I'm still extremely proud of the fact that she agreed to be my running mate.

(END VIDEO CLIP)

OLBERMANN: And the senator was right and I was wrong. Palin does campaign next Monday, not yesterday. Let's turn now to Chris Cillizza, White House reporter for the "Washington Post," and author of the Fix at WashingtonPost.com. Chris, good evening.

CHRIS CILLIZZA, "THE WASHINGTON POST": Good evening, Keith.

OLBERMANN: So one guy calls him governor and another asks if he's going to run for president in 2010. But mostly they wanted to know about Governor Palin. Obviously losing presidential candidates tend to fall off a political cliff. But is it always this bad and we just don't remember the past ones?

CILLIZZA: I think it's always somewhat this bad. I think we have a tendency in the sort of rose-tinted glasses to think that Bob Dole had this heroic end to his campaign. Usually, it's not the case. John Kerry the same. The loser is shunted aside in favor of the winner or, in this case, the fresh face, being Sarah Palin. The other thing with Senator McCain to remember is he is 72 years old. He's been in Congress and the Senate since the 1980s, in a party, in a media environment where they're looking for new, interesting story lines. John McCain's story line, politically at least, is somewhat coming to an end, though we don't know what the future holds. So they're looking for new story lines and Sarah Palin is that new story line.

OLBERMANN: Could he be developing a new story line here, by being sort of old-fashioned, because this prescription he put out for his party is fiscal discipline. Given the crisis we're in, the unkind way of saying that is, boy, that's really out of touch, and the other one is boy, that's a mavericky political rallying cry.

CILLIZZA: You know, Keith, I talked to a bunch of Republicans right after the election. They think-again, this is their supposition, but they believe that there is an opening on spending to draw contrast. The problem with the Republican party right now is very few people know what it stands for. They think that focusing on spending, being opposed to these sorts of bail outs, including the auto industry bailout, that could be a piece of the puzzle where they rebuild. Clearly, Barack Obama is saying, I think we should bail out the auto industry, with certain-we're not going to give a blank check, as he said in yesterday's press conference. But I think that's a place where you are going to see Republicans really try to highlight their difference between now and 2010.

OLBERMANN: McCain talked about Governor Palin as part of the future leadership of his party. To what extent is this the senator defending his own choice of his running mate, and to what extent is he really saying, no, I really want her to be, if not the leader, then one of the leaders of the Republican party?

CILLIZZA: It's a little of both, Keith. On the first matter of sort of defending his choice, I think John McCain has been ardently opposed to any idea that he had made a mistake in picking Sarah Palin. So it would be odd if his first press conference, post-president, would be where he said, man, I really screwed that one up. But I also think that John McCain-he said this in the press conference. He saw in Sarah Palin someone like him, in his own mind's eye, a reformer, someone who had fought the political system and won. Sarah Palin's story, elected beating Governor Frank Murkowski in a primary, taking on people like Ted Stevens and Don Young, incumbent members of her own party. I think that's the grain that-John McCain believes that they share that sort of DNA. So I don't think it's entirely simply just in hopes of coloring the history that he picked the right person. I also think he shares some kind of a common bond.

OLBERMANN: But a maverick would say, I screwed it up. Last point, Palin Monday in Georgia for Chambliss, four rallies that day. Is she actually campaigning for him or for somebody else?

CILLIZZA: She's campaigning for him, but she's campaigning for herself, Keith. There's no question. Look, if there was any doubt-I didn't have any, but a lot of people did-that she was somebody who wanted to be in the mix and would make sure she would put herself into the mix in 2010, that doubt should be erased. The RGA, the Republican Governors Association, where she gave a speech and a press conference, her series of television interviews, and now on the day before a very critical runoff election for the Senate, a number of stops in Georgia for Saxby Chambliss. She wants to be a player. She's doing everything she can to make that clear.

OLBERMANN: Chris Cillizza of the "Washington Post." Great thanks, Chris.

CILLIZZA: Thank you, Keith.

OLBERMANN: If they voted again today, new polling suggests Californians might just barely defeat Proposition 8. There would be no ban on same sex marriages after all. And if they had ethics, Fixed News would have already fired this man. It turns out he's been taking cash from a political action committee, then gone on Fox 14 times insisting people donate to that committee. First, because they're not going away soon enough, the headlines breaking in the administration's 50 running scandals, Bushed! Number three, how have the mighty fallen-gate. The "Las Vegas Review Journal" reports that the Freedom's Watch conservative advocacy group is going out of business. Its most prominent board member and its public face was Mr. Bush's first press secretary, Ari Fleischer. Between him and the 30 million dollars they spent on ads against nearly every Democrat and progressive cause, especially anti-Obama ads in Virginia and Pennsylvania, it managed to hand the Democrats the Congress, the Senate, the White House, and even the House district representing Vegas. Freedom's Watch was bank rolled by the chairman of the Sands Resort in Las Vegas. So next time you're in town, make sure you party somewhere else. Number two, down the memory hole-gate. Remember the coalition of the willing who we conned into going with us into Iraq? The Bush administration is apparently fudging the record of just who was and who wasn't in that coalition. The Cline Center for Democracy at the University of Illinois says the original White House online list of 45 coalition members on the eve of the invasion was altered to remove Angola and Costa Rica and add several others. Then Angola changed its minds and it, too, was re-added, and the number reached as high as 49. No problem with that, except that each time the list was changed online, the posting date remained the same, from March of 2003, implying that neither reality nor the list had ever changed in the slightest. He who controls the present controls the past. He who controls the past controls the future. Number one, pardon-gate. That first list of the president's down the stretch pardons, that was released yesterday, it includes some interesting names, but none more symbolic than that of Lesley Owen Collier (ph) of Charleston, Missouri. He's now officially pardoned for killing American bald eagles. In 1996, Collier pleaded guilty of having placed hamburger meat laced with a pesticide on land he was farming in hopes of stopping coyotes. Indeed, seven coyotes did eat the poisoned meat and died, but there was enough left over to also kill a raccoon, one opossum, one great horned owl, one red tailed hawk, and three bald eagles. I'm guessing here the president pardoned him as a possible precedent. Collier killed three symbols of democracy and he's now off the hook. Mr. Bush killed about 33 symbols of democracy, so-

(COMMERCIAL BREAK)

OLBERMANN: Prop 8, the same-sex marriage ban in California, startling news that polling indicates if the vote were held today, there would not be such a ban. Activist Candace Gingrich, sister of you know who, joins me next. First time for COUNTDOWN's number two story, tonight's worst persons in the world. The bronze to Cayton Dawson, candidate for chairman of the Republican National Committee. He's currently chairman of the South Carolina Republican Committee and formerly a member of the Forest Lake Country Club. So, well, Forest Lake is an 80-year-old facility whose original deed said and still says that only whites can be members. Mr. Dawson resigned from the club in September. Mr. Dawson said he had started trying to get the racist club's rules changed in August. Unfortunately, this was only after a local newspaper had reported the whites-only rules at Forest Lake and, unfortunately, it was a little while after Mr. Dawson had first joined the segregated club, in 1996. Number two, Mark Williams spokesman for a Looney Tunes operation called the Our Country Deserves Better Political Action Committee-Deserves Better-I don't even know what they mean by the title of the damn thing. He's the one accusing the president-elect of having bought the election and offering as a solution buying TV commercials to thank Governor Sarah Palin. The ads, he says, will be running nationally. In fact, they'll be running during football on Thanksgiving Day. Wait, you're running ads thanking Sarah Palin on Thanksgiving? You're running ads thanking Sarah Palin on turkey day?

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN ®, ALASKA: You need a little bit of levity in this job. I'll be in charge of the turkey.

(END VIDEO CLIP)

OLBERMANN: But our winner, Dick Morris of Fixed News. I'm afraid he may have bought the farm on this one. He is confirming reports that he has taken tens of thousands of dollars from a political action committee while going on Fox and insisting people should donate to that political action committee. You might consider that bribery. Or if you're a really forgiving guy, you might consider that a commission. But Dick says the GOP Trust simply bought at least $24,000 worth of advertising on his website. In no way did that lead him to violate even the minimal standards of Fixed News and go on and try to con its viewers into donating to GOP Trust 14 times since last month, in fact, as recently as last night. So Dick says he's not an influence peddler. Others say he is. Here's a simple solution that covers both options. If you hear Dick Morris express an opinion on TV, "give to this group," "support that candidate," assume he's getting paid to say it. I forgot one option. If you hear him say "use this prostitute"-Dick Morris of Fox News, today's worst person in the world!

(COMMERCIAL BREAK)

OLBERMANN: As you know, three weeks ago tonight, California voters approved Proposition 8, banning further same-sex marriages in that state. But tonight, indications that after protests and pleas, if the vote were to be taken tomorrow, Prop 8 would be defeated. Our number one story in the COUNTDOWN, the push-back on Prop 8 in the courts, perhaps in the next election and evidently in the heart. The same institution that granted what turned out to be 18,000 couples the right to marry, the California Supreme Court, is agreeing to review the legality of the proposition that took those right as way. But it is an opinion poll by Survey USA that is turning the most heads; 500 California voters, 198 of them who told pollsters they voted for the ban. Eight percent now say the recent protests had caused them to change their minds, another two percent not sure. The margin by which Prop Eight passed was less than five percent, 52.3 to 47.7. Thus, with the caveats that they didn't ask anybody who voted against the ban if they had changed their minds, and it's just a poll, and there's no second vote scheduled, there is still some evidence that another vote might go the other way. I'm joined now by Candace Gingrich, who heads up the Youth and Campus Outreach Program for the Human Rights Campaign. Thanks for your time tonight.

CANDACE GINGRICH, THE HUMAN RIGHT'S CAMPAIGN: Thank you.

OLBERMANN: Does that poll number startle you? Do you assign any meaning to it?

GINGRICH: To me it just exemplifies the progress that's being made on people understanding what marriage equality is all about. It's been, what you said, three weeks since the election. But people have continued to have conversations about this issue. They've continued seeing the families that are affected by having their family, their marriage taken away from them. And the dialogue has continued. And that's a very powerful thing to not just stop the discussion after the votes been lost, but to continue it. And I want to thank you, Keith, because your rant was exactly, you know, what was needed. It was continuing that dialogue. You helped a lot more people understand the issue.

OLBERMANN: Thank you for saying that. It seemed so obvious to me. I still don't understand that there's any vote on the other side. But I'm sure you agree with me on that. Deconstruct what's happening in California. Is it mostly about conscience on the issue or is there also something folding into people's thinking here, the idea that Prop 8 might be a precedent to take almost any right away from any group?

GINGRICH: I think it's both of those things, Keith. On one hand, the conscience thing, people understand now more what Prop 8 actually did. You know, they know now that what it did was is took rights away from people. And once they realized that, that it wasn't about the things that the proponents of Prop 8 said it was about, they realized that they did the wrong thing and they would vote differently. And the second part of that is something that I think is chilling to all of California and maybe even America, this idea that you can put the rights of one particular group up to a popular vote. I mean that's scary.

OLBERMANN: Candace, how does the president-elect figure in this? He had said he defines marriage as one man, one woman. But he also said-let me read the quote-"I think my faith is strong enough and my marriage is strong enough that I can afford those civil rights to others, even if I have a different perspective or a different view." Where is he on this?

GINGRICH: Well, I think he speaks very clearly and very simply to what, you know, the fact of the matter is, is that, you know, marriage equality for gay and lesbian couples doesn't threaten anything or anyone's marriage. It is not something that people should have to fear. And he said very simply, you know, this is about, you know, people's civil rights, and they should be afforded to folks whether or not I, he personally, agree with them or not.

OLBERMANN: You wrote a particularly powerful letter to your own brother, Newt Gingrich, after he alleged there was-and I'll quote his part here, "a gay and secular fascism in this country that wants to impose its will on the rest of us." In your letter, you said that the world is changing, that using the gay community as a political weapon, to quote you, "so '90s." But if that's true, why did it work in the case of Prop 8, even as the Democrats swamped the Republicans in the same ballot in California?

GINGRICH: I think it goes again back to the idea that the issue of marriage equality is still a really new one. You know, all of America, I think, has a better understanding of what it means to protect gays from job discrimination, what it means to make sure that gay, lesbian, bisexual and transgendered people aren't the victims of hate crimes, or if they are, it's prosecuted the right way. Marriage is still a really, really new issue and the dialogue, the conversation continues on. One thing that we know that I think the election showed us, the presidential election showed us, was that America very soundly rejects this idea of kind of divide and conquer, this idea of fear mongering and scape-goating and, you know, the issue that one group of people should be denied a particular thing, you know, because of who they are should be denied a basic right, is one that with just the passing of time all of America will come to realize is one that we shouldn't support.

OLBERMANN: I hope you're right. I assume neither you nor I convinced your brother, however.

GINGRICH: Eh. The passage of time, Keith, the passage of time.

OLBERMANN: Candace Gingrich with the Human Rights Campaign, great thanks for your time tonight.

GINGRICH: Thank you, Keith.

OLBERMANN: That's COUNTDOWN for this the 2,026th day since the declaration of mission accomplished in Iraq. I'm Keith Olbermann, good night and good luck.

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

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