updated 12/8/2008 4:56:51 PM ET 2008-12-08T21:56:51

Guests: Mark Shaiman, Jack Black, John C. Riley

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

He said the "R" word. He said the "R" word.

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PRES. GEORGE W. BUSH, UNITED STATES: Today's job data reflects the fact that our economy is in a recession.

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OLBERMANN: Wow. That means it must really be a depression. Five hundred and thirty-three thousand more jobs vanished in November. And the chairman of the Financial Services Committee says, we must save Detroit and its jobs now. And he criticizes for dragging his feet-the president-elect.

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REP. BARNEY FRANK, (D) HOUSE FINANCIAL SERVICES COMMITTEE: My problem is, at a time of great crisis, with mortgage foreclosures and autos, he says we only have one president at a time. I'm afraid that overstates the number of presidents we have.

(LAUGHTER)

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OLBERMANN: Former Labor Secretary Robert Reich joins us. Mr. Bush with another stunner, in a speech in Washington, he says Saddam Hussein was not connected to the 9/11 attacks. Did you tell Cheney? Senator Kennedy? Senator Caroline Kennedy? O.J. Simpson gets up to 33 years in jail.

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O.J. SIMPSON, FORMER NFL STAR: And I realized that I was stupid.

JACKIE GLASS, CLARK COUNTY COURT JUDGE: I have to tell you now-it was much more than stupidity.

(END VIDEO CLIP)

OLBERMANN: Bests: The unbelievable irony of just where Henry Paulson will be holding the annual Treasury Department holiday party. Worsts: The atheist sign posted near the nativity scene in the Washington State Capitol at Olympia. The one Billo has lost his mind about is stolen. State police investigating. Can you charge O'Reilly with accessory before the fact, huh? And the Boston Homeland Security honcho in charge of keeping illegal aliens out, she hired three illegal aliens as housekeepers. "Prop 8: The Musical" revisited. We're joined tonight by creator Marc Shaiman and stars John C. Reilly and Jack Black.

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(MUSIC)

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OLBERMANN: All that and more: Now on COUNTDOWN.

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UNIDENTIFIED MALE: See you later, sinners.

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OLBERMANN (on camera): Good evening. This is Friday, December 5th, 46 days until the inauguration of President-elect Barack Obama. If even the man he will replace has broken the strained, agonized, tortured refusal of his White House employees to ever use the word and call this a recession. Then, in our fifth story-we're screwed. "Today's job data reflects the fact that our economy is in a recession," said President Bush today after the data arrived -- 533,000 more workers laid off last month. Not his fault, of course. The staggering number of newly unemployed in George Bush's America, far more even than analysts had predicted, the biggest monthly carnage since December 1974. This year, Americans employers, having done away with 1.8 million jobs. The unemployment rate shooting up from 6.5 percent in October to 6.7 percent last month. That is the highest it has been since October of 1993. Translate that number into actual people, and 10 millions are now looking for jobs, jobs that simply do not exist. Then, those who are so-called "under-utilized"-those who have become too discouraged to keep looking for work. Their unemployment benefits having already ran out. As well as part-time workers who want full time work but cannot find it. That section of the labor force is jumping to 12.5 percent last month from only 8 percent in October. Speaking of part-time workers, at the White House, this man will be not facing true unemployment for another six weeks.

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BUSH: Today's job data reflects the fact that our economy is in a recession. This is in large part because of severe problems in the housing, credit, and financial markets which have resulted in significant job losses. I'm concerned about our workers who've lost jobs during this downturn.

(END VIDEO CLIP)

OLBERMANN: President-elect Obama, his economic team already in place, ready to hit the ground running on January 20th, putting out a statement on the latest job numbers, viewing the crisis as opportunity. "Now," he says, "it's the time to respond with urgent resolve to put people back to work and get our economy moving again. At the same time, this painful crisis also provides us with an opportunity to transform our economy, to improve the lives of ordinary people by rebuilding roads and modernizing schools for our children, investing in clean energy solutions to break our dependence on imported oil, and making an early downpayment on the long-term reforms that will grow and strengthen our economy for all Americans for years to come." Meanwhile, despite the fact that Mr. Obama is not in the Oval Office yet, even Democratic Congressman Barney Frank albeit with the great deal of humor, believing that the president-elect could and should be doing a great deal more.

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FRANK: And I know what he says is, "Well, we only have one president at a time." My problem is, at a time of great crisis with mortgage foreclosures and autos, he says we only have one president at a time. I am afraid that overstates the number of presidents we have.

(LAUGHTER)

(END VIDEO CLIP)

OLBERMANN: On that note, let's turn to our own Jonathan Alter, also, of course, senior editor at "Newsweek" magazine.

Jon, good evening.

JONATHAN ALTER, MSNBC POLITICAL ANALYST: Hi, Keith.

OLBERMANN: The "Washington Post" reported tonight, the Obama transition team is in those meetings on the Hill between the treasury officials and lawmakers. And the goal is to try to free up some of the second half of the $700 billion bailout package for some sort of immediate use. But realistically, what is it that Barney Frank and other people who have been, at least, frustrated if not critical of Obama, expect a president-elect to do right now?

ALTER: It sounds like he expects him to send his people in there and bodily remove George W. Bush from the Oval Office, which is not going to happen. All they can really do, if they have any kind of a role in this is, is on advisory basis. They have no authority.

And Obama is trying to avoid responsibility when he doesn't have authority. The problem is, when you're talking about trillions of dollars, it could be that by the time he actually gets in on January 20th, the cupboard is bare. So, he wants to inject himself and should inject himself a little bit more now into the fine print of how these billions and billions of dollars are being spent.

OLBERMANN: But why is it more of the frustration of people like Congressman Frank aimed at President Bush and his administration. It's as if they were, again, just sort of bystanders to this. It's almost a free pass.

ALTER: Yes. Well, they've advocated, you know. And so, at a certain point, going after the old king doesn't make a tremendous amount of sense. Now, he's down there scuffling with James Buchanan for the lowest rung on the presidential ladder. And so, I'm not sure there's any place for Barney Frank to kick him. He can't really go any lower at this point.

OLBERMANN: Yes, I'm just-I'm having an image of the Buchanan-Bush fight. And the two of them standing there.

ALTER: Yes.

OLBERMANN: .. both refusing to throw a punch. There are several economists who are suggesting today that we are looking at unemployment growing through next year, right in the end of 2009, and perhaps topping off at 10 percent. How does that impact-and how do the numbers today, is it credible, 533,000 new unemployed in November-how do these numbers impact the politics of the proposed auto bailout or taking some of the big bailout and sending it to the auto industry?

ALTER: Well, it's one of the great stories that we're not clear about it at all. And it's going to be fascinating to watch how it unfolds. I think the debate is shifting from Wall Street to Main Street and below Main Street. And, you know, a senator, Sherrod Brown, made an interesting point the other day. He said, "We're showing a lot of concern for people who take showers before work, how about some concern for people who take showers after work?"

OLBERMANN: Yes.

ALTER: And so, I do think the debate is moving that way. That's part of what Barney Frank was talking about when he wants Obama to focus more on some of these home foreclosures. And you could see some pressure on both the lame duck Congress and then the new Congress which comes in on January 6th, and has a couple of weeks before Obama takes over to actually get things in the hopper and ready for the new president to sign immediately. And the Obama people are telling me that they are hoping and expecting that he will be able to sign a major legislation on his first day in office.

OLBERMANN: But G.M., Chrysler, and Ford might not be there his first day of office.

ALTER: Yes.

OLBERMANN: Has that actually shifted as much as it seems to have in the last 24 hours, the prospect that there will be some sort of help for them from whatever sources?

ALTER: There's going to be help. But I think the most likely outcome is that there's a sort of a bridge loan to get them into January and February when President Obama can then be in a position to figure out some sort of, if not a pre-package bankruptcy-I'm sure he's not going to want to use that word-some sort of a settlement. And that's what presidents are supposed to do, is come in when there's a very ticklish situation, a difficult situation with merit on both sides in the argument and come up with some kind of a solution that works.

OLBERMANN: Innovative restructuring, I think.

ALTER: Yes. Well, remember, Franklin Roosevelt called it a bank holiday.

OLBERMANN: Yes, a bank holiday.

ALTER: The more festive term.

OLBERMANN: We closed the banks. It's a holiday.

ALTER: Yes.

OLBERMANN: For them, perhaps.

Jonathan Alter of MSNBC and "Newsweek"-great thanks for coming in. Have a great weekend.

ALTER: Thanks. You, too, Keith.

OLBERMANN: The premise of our nightly segment analyzing the transition, "What do we do now,"-all that the Obama administration will face when it takes office on the 20th of January. Tonight, the unemployment news, as well as Congressman Frank's comments, demanding perhaps a far more literal interpretation should the "now" in "What do we do now," actually be now? For more on the urgency of the economic crisis, time to call in former Clinton Labor Secretary Robert Reich, also, of course, the author of "Supercapitalism," and an economics professor at Berkeley. Thank you again for your time tonight, sir.

ROBERT REICH, UNIVERSITY OF CALIFORNIA, BERKELEY: Well, good evening, Keith.

OLBERMANN: Losing jobs at a rate of 500,000 a month and the underutilization rate that's double the unemployment rate, consumers who don't seem to be spending very much this holiday season, and a president who finally admits, way too late, that we're in a recession. Might it be time to start wondering if we need to bring out the really heavy-duty economic tools and try to phrase this as-we have to avoid a depression?

REICH: Well, we have to definitely come out with the heavy-duty economic tools. The word depression depresses people and it scares people. There is no official definition of a depression, but it certainly looks like in terms of the job losses we're suffering, the fall in Wall Street, just the-the capital crisis that we are experiencing, it certainly looks like the beginnings of a depression, a mini-depression.

OLBERMANN: How bad do you think it could get? I mean, what is the momentum like right now with numbers like these in terms of six weeks before Obama takes office?

REICH: Well, Keith, I don't want to be doomsayer, but certainly, unemployment could reach up to 8 percent or 9 percent. But you mentioned underemployment. That's something that people have not been paying enough attention to. It's people who are too discouraged to look for work, and also, people who are working part-time, who'd rather be working full-time. The new numbers we have today from the Bureau of Labor Statistics show that we have a kind of a 45-year record level of people who are basically working fewer hours than they would like to work.

OLBERMANN: Yes. It basically went up 60 percent in a month, which is terrifying. Is that-most of those jobs turn out to be, most of those people on that list turn out to be rather being underutilized turnout to be not utilized at all. Are they headed towards the unemployment role? Is this (INAUDIBLE).

REICH: Well, a lot of them, if this is like any, if this is like -

kind of the pattern in a very severe recession, yes, a lot of those people are headed toward unemployment. A lot of those people are headed toward sort of a lot of part-time jobs. They call themselves consultants or they'll be independent contractors, but they are going to be hurting and they are hurting, and unemployment insurance does not reach them.

OLBERMANN: The president-elect, today, talked about infrastructure as a means of getting things going or priming the pump. Obviously, it worked in the '30s. But would it be quick enough now? Are there other things that he could be planning that would help even more in the short-term once he gets the wheel?

REICH: Well, this is just my view. But there are some very, very quick infrastructure projects. A lot of the states and localities have one their shelves high priority infrastructure that needs to go do, you know, needs to go right away-bridges, and roads and, mass transit systems that are falling apart. They know what needs to be done. It can be, really, a matter of a month or five weeks before these things are up and running. So, we don't have to worry about the speed. I think the real issue here is the multiplier effect. How many new jobs will we actually get fast? And the size of that stimulus package has got to be big enough, given the magnitude of the economic calamity we're now facing to really make a difference, and which means, probably, in my view, around $600 billion a year.

OLBERMANN: All right. So, if the goal is how many new jobs can you make fast, obviously, the first goal is to have to prevent more jobs from being put on the wrong side of the balance. Did those economic numbers today, in a perverse way, was that the best news the automakers could have gotten this week?

REICH: Yes, it was very perverse news in a very perverse way. Yes, automakers make their claim to Congress and Congress is getting huge pressure from constituents back home to do something about the job situation. So, as Jonathan Alter said, yes, there probably will be a bridge loan I expect in January or February. The automakers will extract something, you know, that looks like a bailout. Maybe $1 of taxpayer money from every $2 that comes from all of the stakeholders, the UAW, and the executives, and the shareholders, and the creditors of the autoworkers. It's not going to be exactly a Chapter 11, you know, bankruptcy. Nobody is going to call it bankruptcy. Call it liverwurst (ph), but it's going to be something like that.

OLBERMANN: And what about bridge leadership? What should the current president be doing that he's not doing now between the time of his -- at this point and the time he leaves?

REICH: Everything. One of the problems here, Keith, is that and one of the great ironies, let us, you know, go back historically. In 1932, in December of 1932, Herbert Hoover was sitting there, saying just about what George W. Bush is saying, which is just about nothing, and Franklin D. Roosevelt, unlike Barack Obama did not put his economic team in place, did not appear on radio, you can't appear on television then, did not very say much, didn't want to be involved at all.

Barack Obama is taking a much more activist approach. This is not, hopefully, like 1933, but it is looking more and more like it could be.

OLBERMANN: Robert Reich, former Clinton labor secretary, author of "Supercapitalism," with us once again. Great thanks to you and have a good weekend.

REICH: Thanks, Keith.

OLBERMANN: Not only did Mr. Bush actually used that word "recession" today but also he gave a speech today in which he insisted Saddam Hussein had nothing to do with 9/11. Understand that prior to that, he sent Dick Cheney to a secure, undisclosed location, one that was soundproof.

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OLBERMANN: President Bush's insistence that Saddam Hussein had nothing to do with 9/11 and that had nothing to do with whether or not we should have invaded Iraq on the implication that Saddam had something to do with 9/11. That's next.

Billo the Clown may have crossed the other line. The atheist holiday sign. In the state capital building in Olympia, Washington, the one he demanded should be taken down-it was stolen today. And, maybe it's a little tacky for the Treasury Department to still hold a holiday party in this, of all years (ph), but exactly where they are to hold it makes the mind reel. Best and Worst Persons ahead here on COUNTDOWN.

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OLBERMANN: Traditionally, one waits until reality becomes history before one rewrites the history. In case of Mr. Bush however, as he embarks upon his legacy-building efforts, we have a presidency that boasted of actually creating reality as it went along. And thus, in our fourth story: At a speech tonight about his legacy in the Middle East, Mr. Bush rewrote history to match the reality in his mind-if any. Among the highlights, U.S. failure in Iraq would have unleashed chaos, widened violence and given safe havens to terrorists, all of which, of course, happened anyway. Thanks to our invasion of Iraq. Mr. Bush has also decided that the Iraq war got Muammar Gadhafi to end his nuclear program in Libya. In fact, that was well in the works before and pushed largely by European diplomacy. He claims the war marginalized Iran rather than, of course, what really happened, removed its biggest check and gave it a new friend. And the war also got Iran to end its nuclear program. A development that did not prevent Mr. Bush, in the same speech, from warning of the nuclear threat from Iran. "And Al Qaeda," Mr. Bush says, "has failed to take over any nations,"-as if unashamed that there is still an al Qaeda. And just one paragraph after Mr. Bush referred to the Hamas victory in Palestine. He claim the Iraq war was made necessary by 9/11 after which, quote, "We realized that we are in a struggle with fanatics pledged to our destruction." Something history will probably note he was supposed to realize after the first World Trade Center bombing, the embassy bombings, the USS Cole attack, al Qaeda's open declaration of war, and the August 7th president's daily briefing. But on the same day, Mr. Bush first used that word "recession" to describe the economy status for the last year, it will be his flirtations with fallibility that fuel the headlines.

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BUSH: As with any large undertaking, these efforts have not always gone according to plan, and in some areas, we have fallen short of our hopes. For example, the fight in Iraq has been longer and more costly than expected.

(END VIDEO CLIP)

OLBERMANN: Not longer and more costly than I expected than I told you, and tragically remote from a simple "Got it wrong." With us tonight, Chris Hayes, Washington editor of "The Nation" magazine. Good evening, Chris.

CHRIS HAYES, THE NATION MAGAZINE: Hi there, Keith.

OLBERMANN: Mr. Bush has made this bizarre argument before that 9/11 changed everything. And maybe just sort of conceived to him that for lay people, most lay people, OK, sure, they were not expected to know that 9/11s were conceivable, but isn't he essentially admitting that he failed before 9/11 to recognize the threat despite numerous attacks and more numerous warnings?

HAYES: Yes, although, I think, in the hierarchy of sins of George W. Bush, I mean, that might be pretty low in terms of the whitewashing he is doing. I mean, the fact of the matter is, whoever was going to be president during 9/11, if 9/11 had happen, and we don't know how preventable it was ultimately-you know, that was going to create some sort of reorientation in nation's foreign policy. What the real disaster was, was what they chose to do with that. And what's so sort of bizarre and offensive in certain respects is that he continues to believe that the path that was taken in response to that was somehow the right path when it's become so obvious that it wasn't.

OLBERMANN: The rate of women being killed in Bosnia right now for the so-called honor offense against their family has risen 70 percent in the last year. And as we know, Mr. Bush sacrificed 4,200 Americans to swap a contained dictator for this fractured democratic theocracy that's friendly to Iran. And we're supposed to say, "Yes, OK, those are reasons to go through all this in the last seven years"?

HAYES: Yes. And we should also add that the amount of civilian casualties in Iraq since the war started is anywhere between 150,000 and to as many as over 1 million. It's very difficult to get the right number. But the lower bound is around 150,000 -- a tremendous, tremendous mass of human suffering and death that has come in the wake of our actions there.

And I still think that, not only the Bush administration, but in some respects, the entire country still hasn't quite looked that in the face. I mean, what exactly is the legacy of what we have done there is. And, you know, we're not going to get that kind of reconciliation or that kind of catharsis from Bush-it's clear-but we're going to have to do something as a culture, I think, and as a polity going forward to really wrestle with what happened there.

OLBERMANN: And as Mr. Bush tries to wrestle with the historians and he says, "Look how I cleaned up the Middle East," which was the gist of this text today.

HAYES: Right.

OLBERMANN: I mean, based on how it flies with, you know, people who have both eyes, both ears working now, is that a good guess of how it's going to fly with historians?

(LAUGHTER)

HAYES: No, look, we have achieved tremendous consensus on the Bush administration. I mean, it's really remarkable to track it when only, you know, crazy lefties were saying these things early on, and certain people on television such as yourself, that this was really a disastrous and failed presidency. I mean, that's consensus now. I mean, it's very difficult to find anyone, I think, in the country-you know, his approval ratings are somewhere around 22 percent.

But historians, commentators-I mean, the war that's going to be engaged is why it failed. But the fact that it failed, that it was a disaster, I think is beyond dispute at this point.

OLBERMANN: And lastly, my point about saying that he's always said that 9/11 had nothing to do with Saddam Hussein. Did they lock Cheney away or stuff cotton on his ears before they made that speech today?

HAYES: You know, the weirdest thing about that is that it just-it seems antique in a way. I mean, it really seems like, you know, that he hasn't been-that they've sort of taken him out of suspended animation to give these speeches. And things are happening so quickly in the world, there such a vacuum of leadership in Washington. It almost seems like we go into these time machines every time he pops up to go back and throw out the same old justifications for the war. You know, you always want to be - - you know, you really want to turn the page. And I think the country really feels like that can't happen fast enough right now.

OLBERMANN: Yes, the president was just notified this morning that the Boston Red Sox won the World Series in the end of this week in 2004.

(LAUGHTER)

OLBERMANN: Chris Hayes of "The Nation"-as always, many thanks.

Have a good weekend.

HAYES: Yes. Have a good weekend, too.

OLBERMANN: Ice, ice baby. Unless this is performance art, I think this guy has had a major malfunction. Speaking of which, OK, your job is keeping illegal aliens from entering Boston. So, giving three illegals jobs in Boston accomplishes this how exactly, madam? Worsts Persons is ahead on COUNTDOWN.

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OLBERMANN: Bests in a moment. And no way the Treasury Department is not holding its holiday party in that of all of its rooms-no way.

First, in the exact timeline and this is a little sketchy, but apparently, it was on or about this date, December 5th, 1950, that the Chicago radio announcer named Paul Harvey began filling in on the ABC radio network newscast anchored by venerable reporter H.R. Baukhage. By the following April, the newscast was no longer Baukhage's, but it was Paul Harvey's and has remained so ever since.

And, say his colleagues, Harvey has never taken his full allocation of vacation time nor permitted any of his fill-ins, like me, to stick around very long for fear that somewhere out there, there was somebody ready to play Paul Harvey to Harvey's H.R. Buakhage. And now, you know, the rest of the story.

Let's play oddball.

We begin on the Internets where an ice artist is just about to finish a magnificent creation after a 132 hours of non-stop scalping. Now, all he has to do is remove that last support and his masterpiece will finally be ready for everybody to enjoy all winter long. Let's wait for the excitement-oh. How about that magnificent display of ice cubes, everybody?

And speaking of cold, here we are in Berlin, Germany where a cute, popular, baby, little polar bear brought hundreds of thousands of visitors to the Berlin zoo, has grown up into-from that to this-a distinctly uncute two-year-old bear who is so big the zoo, says, it can't afford to keep him. I got an idea here. (INAUDIBLE) run for governor of Alaska.

How about another Senator Kennedy of New York. That's the latest version of the "who will replace Hillary saga" and there are developments in this story breaking at this hour.

And speaking of sagas, Prop 8, the musical, Jack Black and John C.

Riley will join us.

These stories and the first time countdown (inaudible) best persons in the world, number three, Judge Jackie Glass. This would be a video best.

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JACKIE GLASS, JUDGE: Earlier in this case a bail hearing. I asked, I said to Mr. Simpson - I didn't know if he was arrogant or ignorant or both. And during the trial and through this proceeding I got the answer. And it was both.

O.J. SIMPSON: Well, I'm sorry, I'm sorry for all of it.

GLASS: I hear what you said and what Mr. Galanter said which is, "I didn't intend to do anything wrong so I must not have done something wrong, so there was not criminal intent. It was just all stupidity." I have to tell you now, it was much more than stupidity.

(END VIDEO CLIP)

OLBERMANN: And then Judge Glass who we're proud to say used to work in TV sentenced Sentence to up to 33 years in jail, parole possible at nine.

Number two, best gift that keeps on giving. Governor Palin just as that eye popping figure of $150,000 republicans spent on her and her wardrobe turned out to be low. It was more like $180,000. The original $59,000 for hair and make-up for the Gov was also a low ball. Latest data submitted to the federal election committee $68,000 for the travelling make-up woman and $42,000 for the hair gal. That's $110,000.

And number one best on intentional gallows humor, Treasury Secretary Henry Paulson. In the middle of the meltdown, the treasury department is still convening its annual holiday party next Thursday at 5:00, at the department headquarters in the cash room.

The cash room? What was the bailout lounge already booked?

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OLBERMANN: We believe that we will know the identity of the next senator of Minnesota before we will know the next senator for New York but maybe not. Our third story tonight, more developments in Al Franken's bid to unseat Norm Coleman. First a week after Robert Kennedy's son took his name out of consideration for appointment to succeed the secretary of state nominee. The name of his cousins seem to jump to the fore. After a day of varying reports in the media, confirming there was a conversation from one to the other. We're not sure who, between Caroline Kennedy and Governor Patterson. Tonight the governor has put some of that speculation to rest. The governor telling New York One News that he has in fact had a conversation with Ms. Kennedy. That she called him Wednesday night and that the subject of Clinton's senate seat did come up.

Governor Patterson will of course appoint the next senator to serve through 2010. The remainder of Senator Clinton's term. A spokesman on behalf of Patterson himself finishing another's term said that he has not initiated any discussions with anyone, quote. The governor has not yet reached out to any potential candidates. He has been approached by several candidates. Any discussions related to that selection are private and the governor will not comment about speculation before a decision is made. Other than the comment he then made.

When will a decision be made in Minnesota and who will make it? The recount was officially due to end today. But a Minneapolis precinct keeping its recount officially open until 133 missing ballots are found. Those once thought to be hiding somewhere in storage at this warehouse are not. Election workers coming up empty after scouring the 8000 foot facility going through trash. Climbing atop of 6 bookcases that contained the actual voting booths. BY 2:00 central time, Minneapolis elections director Cindy Rickerd should be Minnesota Elections Director Cindy Rickerd, it called off the search where witnesses from both camps were present. Meantime yesterday, Norm Coleman's lead recount attorney was dubious about their existence at all. Telling the "Pioneer Press" newspaper, "we do not know that there are any ballots missing and it is premature and simply irresponsible to suggest that they are."

As of late this afternoon according to the Secretary of State Mark Ritchie, Coleman holds a 687 vote lead over Franken. There are 6,665 challenged ballots. A couple more caveats at the "Minneapolis Star Tribune" puts Coleman ahead by 192. Their count includes the incomplete precinct. Meantime according the Franken camp's internal numbers which include those challenged ballots, he is up by 4 votes.

More tumult comes on December 12th when the state canvassing board meets to deal with absentee ballots mistakenly rejected and on the 16th when they begin ruling on the challenged ballots.

And then comes the song. Prop 8 The Musical. Stars Jack Black are here to explain why and how.

And we all enjoy Bill O. the clown but did he just insight something to steal something? From Washington state capital, and then laugh about it on the air?

But first because they're not going away soon enough, the headlines breaking in the administrations 50 running scandals Bush.

Number three, the body's not even cold yet gate. Night before last, the annual holiday party for the lobbyist Quinn, Gillespie and associates, co-hosted by co-founders Jack Quinn and Ed Gallespie even though Ed Gallespie is also a counselor to President Bush. It was in that capacity that he sent last spring a bitchy letter to his company complaining about Mr. Engle, Mr. Matthews and myself. A battle which he obviously won in route to a war he and his collaborators here obviously lost. And now they're all going back to their day jobs. Mr. Gallespie about two months before ethics suggests that he should. Then again, he doesn't have any.

Number two, U.S. Attorneys gate as the special prosecutor begins to circle Alberto Gonzales (ph) one of the unsung villains in the piece. He's refusing to leave the stage. Mary Beth Buchanan, the U.S. attorney in Pittsburgh appointed by President Bush in 2001 says she is not planning to tender her resignation to President Obama, even though it is a time honored custom for all the U.S. attorneys to submit their resignations when the White House changes hands. "It just doesn't serve justice", she told the "Pittsburgh Post Gazette", "for all the U.S. Attorneys to submit their resignations all at one time." Well, you can see where this one's going can't you? Buchanan is going to refuse to resign force Obama or Attorney General Holder to fire her, and then the republican head co-chamber is going to say "see he did it too, free Gonzo." Ms. Buchanan incidentally is the woman who first hired Monica Goodlink so honestly she should be the first of Mr. Bush's U.S. Attorneys to resign. Like on Monday.

At number one, round up gate. In the debate of the Bush presidency, Carl Robe and his sycophant William Crystal fought with journalist Simon Jenkins over what happened to Muslims in America during this administration. "What have we done to Muslims in America?" Crystal asked rhetorically, "what has happened?" "Arrested them", Jenkins replied. "Incarcerated them without trial."

"Rounded them up?" asked Robe incredulously. "Rounded? Rounded them up? Name one. This is on the border of lunacy with all due respect."

Well, yes it is Carl but not the way you think. After 9/11, 83,310 foreigners in this country, a vast majority of them from 24 predominantly Muslim nations were ordered by Attorney General John Ashcroft to register with the government. As of last count, 13, 740 of them were ordered into deportation proceedings. And those are just the ones who stayed within the legal framework of this country. Jose Padea (ph) was held for three years before anybody charged him with anything. And the Supreme Court today agreed to hear the case of Ali al Mari (ph) from Cutter, who came to this country in September 2001, was arrested on credit card and ID fraud charges in December 2001. But a month before his trial was supposed to being in 2003, he was declared an enemy combatant by President Bush. Ali Al Mari (ph) has been since June 23, 2003 in the U.S. Navy Brigg at Charleston, SC. No charges, no trial. Whatever else he is or is not, he would seem to adequately fulfill Carl Roves (ph) the man that Mr. Jenkins name one Muslin who has been rounded, rounded, rounded up.

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OLBERMANN: The logical disconnect of Bush fans is a farewell song, "He Kept Us Safe", long as you don't count 9/11. The homeland security chief charged with keeping illegal aliens out now accused of keeping them in. In her employ.

On (inaudible) versus Billow who may have inspired a robbery at a state capitol building. An epic night in worst person's cat. Then John C. Reilly, Jack Black and the creator of "Prop 8 the musical". Join me live.

You're watching THE COUNTDOWN on MSNBC.

(COMMERICAL BREAK)

OLBERMANN: Prop 8 The Musical stars John C. Reilly and Jack Black and creator Mark Shaiman (ph) join us. And do not worry, I will not sing. That's next, but first time on COUNTDOWN's number two story, tonight's "worst persons in the world".

The bronze to Peggy Noonan; guilty of a complete interruption in the flow of logic in a column in the "Wall Street Journal". In it she quotes a bunch of republican Christmas party goers who kept repeating, "Bush kept us safe, Bush kept us safe". Then she concludes, "There's a rough justice with the American people. If a president presides over prosperity, whether he had anything to do with it or not, he gets the credit. If he has a recession, he gets the blame. The same with war and terrorist attacks. We've not been attacked since 9/11, someone, someone's did something right".

Peggy, who was president on 9/11? Saying Bush kept us safe is as illogical as repeating an earlier president's re-election slogan in saying "Woodrow Wilson kept us out of war". George Bush did not keep us safe in 2001. In fact, he failed at that. Every President's task, more profoundly than did any of his 32 predecessors.

Our runner-up, Billow the clown. He's wasted America's time this week whining about an atheist sign posted near a nativity scene in the Washington State Capital at Olympia. Railing against Washington Governor Gregoire and the first amendment and how dare anybody protest religion during Christmas. Today somebody stole the sign. A guy walks into a Seattle right wing radio station and hands it to the receptionist and leaves. State police say they will investigate it as a theft. Is there such a thing as in sighting a theft? Put out an APB on Billow!

Also today he fulfilled his promise and ended his radio show with some of the greatest rationalizations of our time. "I know my show couldn't be any logical" he said "going up against Rush Limbaugh, "that would be suicidal. I was doing a show that was fact-based. It was more news talk." Yes, like the time he had been to a famous Harlem restaurant and quote "There wasn't one person in Sylvia's who was screaming MF'er I want more ice tea." Or the time somebody called in and mentioned my name and Billow announced on the air that he thought he could send the local police over to the guy's house. He added, "We've got to keep the TV show at the level we have it now, and that means more and more time to keep it competitive and fresh." Yes, we've beaten him twice this week in the ratings and he's beaten us twice. After the week he leads us by an average of 20,000 viewers a night. Thanks for keeping it competitive Billy, I couldn't have done it without you.

But our winner, Lorraine Henderson of Salem, Massachusetts. She is regional director of Homeland Security customs and border protection. Her primary responsibility, keeping illegal aliens from entering this country through the port of Boston. Ms. Henderson has been arrested for hiring a series of illegal aliens, at least three of them, to clean her own home. Elevating this base irony to biblical proportions, she's charged under one of those new xenophobic laws that were established along with the Patriot Act and the Department of Homeland Security, encouraging her Brazilian housekeeper to stay in the country illegally by paying her. Lorraine Henderson, for the moment, still the Boston regional director of homeland security. Today's worst person in the world!

(COMMERCIAL BREAK)

OLBERMANN: Its creator has described it as a viral picket sign, our number one story in THE COUNTDOWN tonight. Prop 8 the Musical. We showed it to you here last night and it's already been viewed on the web millions of times. The musical's outr' Mark Shaiman and two of its' stars, Jack Black and John C. Reilly will join me presently. AS the protests over the passage of Proposition 8 turned to further criticism and commentary, there's also the narrative of the injustice that occurred and how to grapple with that since obviously it's too late to affect the actual voting that happened on November 4th. So from the website Funnyordie.com a brief refresher.

(BEGIN VIDEO CLIP)

(SINGING)

JACK BLACK, COMEDIAN: The Bible says a lot of interesting things.

(SINGING)

JOHN C. RILEY, COMEDIAN: You know, here's another thought to wrap things up..

(SINGING)

(END VIDEO CLIP)

OLBERMANN: the full video is online and joining me now as promised, the Tony award winning composer of "Hairspray" and the writer of "Prop 8 the Musical", Mark Shaiman and together in Los Angeles, two actors who have been entertaining us greatly over the past many years including in this event, Jack Black and John C. Reilly and gentleman, welcome. And nice work to all of you.

BLACK: Thank you.

RILEY: Thanks a lot Keith.

OLBERMANN: I suspect, Mark, that's the composers nightmare right there. It's a 3 minute show and we cut it down to a minute. Right? How did it come about Mark?

MARK SHAIMAN, COMPOSER: Well, as you can tell from the video, it clearly started when I was born really, really gay. Fast forward to election night and America throws this great party and the gays are left off the list. And I wrote this impassioned, outraged email and sent it to a few thousand friends. And Adam McKay, who is Will Ferrell's partner at FunnyorDie, wrote me and said, well why don't you write a song about it? I'll put it on FunnyorDie.

OLBERMANN: John or Jack, how did you guys get involved in this project?

BLACK: I got the email from FunnyorDie (inaudible) and Mark Shaiman

was involved and that's all I needed to hear. It's a thing I've been really

felt strongly about for years so I wanted to do something and I didn't know what so it was perfect for me.

RILEY: Yes, same here. I got an email from Mark and I just immediately responded like, what do you need me? When do you need me? And yes, this is a civil rights issue I think so it was real easy to make up my mind on doing it.

OLBERMANN: Plus Jack you got to play Jesus, does that constitute by definition something of a high water mark in one's career?

BLACK: Yes, it's all downhill from here.

OLBERMANN: Mark, in the reviews of this and all reporting on it, it's been pointed out that this was written in one day, recorded on the next day and shot in just one day. If all of creativity could be done with that rapidity, is social injustice a great motivator for creators and actors alike?

SHAIMAN: Exactly, I mean I had just been taught this terrible, bitter lesson about being lazy and so it was time to light a fire under my fat ass and try to do something even after the election because this is going to go on and on and on.

BLACK: Yes, it's never too late to education. That rhymes. I'm going to start saying that a lot.

OLBERMAN: Also you've got the sequel we have the opening number right there.

SHAIMAN: Very much.

OLBERMANN: John and Jack.

BLACK: You were talking about doing a full length version of this.

We could take it on to Broadway. Gay the musical.

RILEY: Open with the creation of gay. When the cells are splitting and you know.

BLACK: Yes, why limit it to just Prop 8? There's a bigger story here.

OLBERMANN: But I thought the only thing that sold on Broadway these days especially in a musical form was some sort of reworking of something that worked on Broadway in 1957. Isn't that the case? Mark can you bring this to Broadway as something brand new?

SHAIMAN: I'm starting to think maybe John is on to something. I mean the biggest.

RILEY: . Hairspray, Hairspray is not exactly -

SHAIMAN: I would love to continue to write things that finally make people understand that we are both - we, not these guys - but I and people like me are born gay. We don't choose it. We're born gay. God makes us gay and you should not hate us because of the way God made us. Because then you are questioning his taste and that's not cool.

OLBERMANN: That's a good one.

RILEY: You know, my parts in this was not to try to change religious people's minds or change people's beliefs you know. I just think that the government should not, should treat us all with equal rights and that's not what's happening in California right now for gay people. And I know gay parents that are trying to raise kids and couples that have been together for a long time and why shouldn't they deserve the same rights that me and my wife get? I'm not trying to change anyone's religion or church, you know? Your church is your church, you know? And you're entitled to your beliefs but you can't make your church's beliefs my government's beliefs.

OLBERMANN: And it's an interesting point about this, John, I think that you've got a situation where everybody wants kids to be raised by married parents, that's another thing from the far right and here we've just eliminated the chance for gay people to marry and raise their kids with all the legal protections that are involved in that. As the old line goes, what about the kids?

SHAIMAN: Well, there's a movement now to try to outlaw divorce in California.

OLBERMANN: Right.

RILEY: I mean anyone whose part of a minority group; you've got to be watching your back right now. Curly headed people, they could be coming for you next. If you allow referendums to change the rights of minority groups it's like, what's next?

OLBERMANN: Well, what is next about this? Do you expect - and I'll ask this of all three of you just sort of in order from what I'm seeing you, from left to right. And Jack you would be first. What do you think is going to happen now in California? Is this going to be another ballot initiative? Is the ground swell to get this overturned in the courts going to be sufficient? What do you think is going to happen?

BLACK: Well, I've heard, if the vote was taken again now, it would be the other way around, you know. And if it can flip one way, it can get flipped another way. If it doesn't get overturned in the Supreme Court then you can bet they'll be more - what's the smart term to say? Referendums?

OLBERMANN: Yes, it's all we need is more after this went so well.

BLACK: I feel passionately about it because, you know, I have a lot of openly gay friends and family that I've always looked up to and admired. And so I take it personal when I find out their equal rights are being messed with. That's when I want to get involved. And I think a lot of people feel the same. And I think a lot of it is really just fear of the unknown. When everybody gets educate to what's really happening, I think the right thing will happen. The truth will come out.

RILEY: Yes, the California Supreme Court already decided this, you know. This vote turned over their decision so, I don't know; if we allow a referendum on every issue, how many other rights are we going to take away from people? It's a slippery slope.

OLBERMANN: A superb point. Last question to Mark Shaiman. Some catharsis's in doing this? As you said, it was produced four weeks too late. Well, I mean I feel very guilty about that. People are writing online saying, oh you're just being a poor loser. No, I'm doing, I think, what every father teaches a son, which is get up after you've been hit by a bully and continue fighting back.

OLBERMANN: The actors, Jack Black and John C. Riley and the producer of this Mark Shaiman, congratulations on Prop 8, the Musical. I wish it did not have to happen but it was a great effort on everybody's part.

SHAIMAN: Thank you, Keith.

RILEY: Thank you, Keith.

OLBERMANN: Thank you. That's COUNTDOWN for this, the 2,036th day since the declaration of "Mission Accomplished" in Iraq. I'm Keith Olbermann, good night and good luck.

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

END

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