updated 12/8/2008 5:04:08 PM ET 2008-12-08T22:04:08

Guest: Ron Suskind, Douglas Brinkley

RACHEL MADDOW, HOST: Good evening, Keith. Thank you.

(LAUGHTER)

MADDOW: And thank you at home for staying with us for the next hour. We are broadcasting live again tonight from San Francisco. And we actually begin with some big deal, breaking news. NBC News right now is confirming that Democratic leaders in Congress have agreed on a short-term rescue plan for the Big Three automakers. Apparently, we are going to still have an auto manufacturing business in the United States, at least in the short term. One of the key leaders in Congress, Banking Committee Chairman Barney Frank, the man at the heart of this breaking news, will be joining us live in just one moment. (voice over): Do we have a deal? The heads of the Big Three automakers go back to Capitol Hill and get a more positive reception, as one key congressman says America's carmakers must be saved.

(BEGIN VIDEO CLIP)

REP. BARNEY FRANK, (D) HOUSE BANKING COMMITTEE CHAIRMAN: For us to do nothing to allow bankruptcies and failures in one, two or three of these companies in the midst of the worst credit crisis and the worst unemployment situation that we've had in 70 years, would be a disaster.

(END VIDEO CLIP)

MADDOW: Barney Frank joins us live tonight on the new momentum on the day they announce the worst American job losses in 34 years. And, as the way America works now, that the American president, on no authority other than his own, can find someone inside this century and locked that the person up indefinitely forever, for life-with no trial? Jonathan Turley on the newest Supreme Court case and why it may be the most important of them all from the Bush years. Yes, the Bush years-indefinite imprisonment, cuts in tax (ph), and a foreign policy of which nightmares are made.

(BEGIN VIDEO CLIP)

PRES. GEORGE W. BUSH, UNITED STATES: The Middle East in 2008 is a freer, more hopeful, and more promising place than it was in 2001.

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MADDOW: Huh? Author Ron Suskind on the president who is still today pushing the discredited, disastrous Bush Doctrine of preventive war. Plus.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Oh, no, I never drink.

UNIDENTIFIED MALE: Oh, come on.

UNIDENTIFIED FEMALE: Well, maybe just a sip of yours.

(END VIDEO CLIP)

MADDOW: Happy Repeal Day to you. Seventy-five years today, prohibition ended. I wasn't around then, but I can promise I would have been for it. Historian Douglas Brinkley on the problems we get into with legislating morality. Cheers to that.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Isn't it cozy?

(END VIDEO CLIP)

MADDOW: All that, plus-is happiness contagious?

(BEGIN VIDEO CLIP)

(SCREAM)

(END VIDEO CLIP)

MADDOW: Let me have that commemorative cocktail first and we'll talk.

THE RACHEL MADDOW SHOW starts now.

(on camera): We begin with breaking news tonight. Democratic leaders in Congress have agreed on a plan to help the struggling Big Three automaker with what they are calling a short-term rescue plan. And they hope to vote on this plan next week. In a moment, we will talk live with the key committee chairman, Barney Frank. This very welcome news comes five days after the number-crunching gurus at the National Bureau of Economic Research declared this recession of ours official. They actually declared it official and declared it a year old at the same time, which means we are already in the longest recession since the Great Depression. Today, President Bush, the man who is technically still in charge of the federal government finally, for the first time, took the plunge and actually said the "R" word.

(BEGIN VIDEO CLIP)

BUSH: Today's job data reflects the fact that our economy is in a recession.

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MADDOW: And it has been for a year. So, what was the job data that finally prompted the president to say what top economists and, you know, regular folks who've been living through this have been saying for months? It was the news that 533,000 Americans lost jobs last month. That's would be roughly the population slightly less than the population of Seattle. It would be roughly the population of the state of Wyoming, all of it. The Bureau of Labor Statistics commissioner is not exactly trying to sugar-coat that info today.

(BEGIN VIDEO CLIP)

KEITH HALL, BUREAU OF LABOR STATISTICS CHAIRMAN: This is maybe one of the worst job reports that the Bureau of Labor Statistics has ever produced.

REP. ELIJAH CUMMINGS, (D) MARYLAND: Ever?

HALL: Yes.

CUMMINGS: And how long has the bureau been around?

HALL: One hundred and twenty-four years.

(END VIDEO CLIP)

MADDOW: Yes. This was a far bigger loss of jobs than economists were expecting, like 200,000 more lost jobs than they were expecting. This was the highest single month job loss since 1974. Remember that recession? Well, buckle up. Economists say this one is going to be longer. Workers in virtually every industry are vanishing. Manufacturing jobs down 86,000. Construction, down 82,000. Retail jobs down 91,000, during the time of year they should be going up. And there's a scary little detail buried in this already really bad report which is the number of people who don't have jobs and have stopped looking for work. In other words, unemployed Americans who have given up trying to find work, that number rose by more than 400,000. There's even bad news for people who do have jobs. The number of people working part-time because they can't find a full time job, or their hours have been cut, that's up by more than 600,000. This year, American employers have fired 1.9 million workers. Wow. Today would have been an awesome day to tune out everything out and eat Cheetos and obsessed on the O.J. Simpson verdict. I was tempted, believe me. But instead, we have to worry about trying to save the industry that makes cars in America. All eyes are on the Big Three trying to get themselves a lifeline in Washington today. Well, most eyes were on that. Not Republican Senate Minority Leader Mitch McConnell. McConnell told the "Louisville Courier Journal" in an interview today, that regardless of what's going on with the Big Three, the foreign-owned non-union factory that makes Toyotas in his state is doing fine. He said, quote, "We also have other auto manufacturers who are doing quite well." He said, "It happens to not be American companies and that is sad. But it's not like we don't have success in the auto industry, we do." We do. If you by "we," you mean Japan. Actually, Japan is not even doing all that great, either. ThinkProgress.org today points out that Toyota's stock is down more than 50 percent since the beginning of this year. The problem, even for the foreign-owned, Kentucky subsidizes, non-union plants that warm Mitch McConnell's heart, is that no one is buying cars, because no one has got any credit or any cash or jobs of their own. If the auto industry isn't going to be allowed to die, a big part of the debate now is where the money would come from to keep them alive. President Bush who has another six weeks until his unemployment kicks in, he weighed in on that issue today.

(BEGIN VIDEO CLIP)

BUSH: I am concerned about taxpayer money being provided to those companies that may not survive.

(END VIDEO CLIP)

MADDOW: So says the lame duck president. And we keep hearing that there's only one president at a time. But that lame duck president's Treasury Department asked officials from Barack Obama's transition team to please sit in on its meetings with Congress, to try to get access to more of the bailout money to spend. House Financial Services chairman, Barney Frank, who chaired today's hearings, says he thinks that President-elect Obama should be doing more.

(BEGIN VIDEO CLIP)

FRANK: He's going to have to be more assertive than he's been. 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)

FRANK: And I think we got to-I think we got to-he's got to remedy that situation.

(END VIDEO CLIP)

MADDOW: Joining us now is House Financial Services Committee Chairman Barney Frank. Congressman Frank, thank you very much for your time tonight.

FRANK: I'm glad to be here.

MADDOW: What can you tell us about this breaking news we're just hearing that there is a deal, unless among Democratic leaders to bailout the Big Three?

FRANK: Well, we've had several hearings. We talked to a lot of our colleagues. And Speaker Pelosi and Majority Leader Reid, we had a conversation today, those two and Senator Dodd, the chairman of the banking committee of Senate, and myself, we all felt for some time that it was important, in any case, to keep these companies from going under, but it's especially important in the context of this jobs report. We are in the worst economic situation by far since the Great Depression. And if we were to sustain now the kind of losses in jobs and suppliers not getting paid, and all the car dealers have (INAUDIBLE) people off, that would come from bankruptcy from these companies, you would start getting close to the Great Depression, although we wouldn't get to that depth. There has been a debate about where to put the money. Now, Speaker Pelosi, I want to give a lot of credit to her for some compromising, we passed a bill in the last session of Congress to advance $25 billion to the auto industry, the American manufacturers essentially, to upgrade their technology, to get the kind of efficiency that's suppose to be good environmentally and good marketing. We then said, "OK, now, let's lend them $25 billion," and the Democratic position was that it should have come from this $700 billion rescue plan, the TARP as it's called. And you just heard the president say, "Well, I don't want to put taxpayer money into an institution that might fail." If it wasn't for the fact that you've supplied the context-I would have assumed he was talking about AIG.

(LAUGHTER)

FRANK: Or any of the other financial institutions, into which he's put money. AIG already gotten, the big insurance company that got itself in trouble, more than four times as much as we are contemplating for the auto industry. The president was insisting that we divert the $25 billion that we put in there to make them more efficient and more energy-competent and used that money. He said, we ran into the deadlock. He is still the man who can veto things. You still, in this current Senate, 49 Republicans. So, you have a filibuster. If these were next year, and Barack Obama was in office and we had the 58 or maybe 59 Democratic senators, then we would be able to break the filibuster. So, we have to compromise. And I give Speaker Pelosi credit. She has said, "OK, we will compromise. We will use the money from the $25 billion that was put in there to make that money you're talking (ph). However, we will reserve the right next year, when we have a better president and the better Congress, to replace that $25 billion from the TARP. They won't be able to stop us then. We're not asking them to sign off on it. We're simply giving notice that that's something we always have the option of doing later so that we are able to keep them alive. We are talking about a loan. We are talking about the federal government. Not talking about-we are writing a bill whereby the federal government will be the first to be repaid when there is some money. We are also talking about working with them for restructuring. Now, we should note, that the UAW has been very, very responsible in this situation. They've already signed the contract that cuts back on some of the compensation going forward. They've now agreed to reduce some of the hard-won games over the years. The other point that we want to make is this, Rachel, and I know you would agree with this. This undermined the stupidity of America's health policy because General Motors, and Ford, and Chrysler pay more of them than their competitors-Mitch McConnell's Toyota and the others-because, historically, they have had to pay for the healthcare of the workers unlike more rational societies where the healthcare is not put on the backs of the employees. And in fact, we ask them, they will owe the three companies, over the next couple years far more money than they are asking for to be tied it over right now just to healthcare. And so, what I am hoping is that we will put this in a place, lend them the money, and during the next two years under the leadership of President Obama, we'll get a more rational healthcare plan on this country so you don't have healthcare on the backs of the workers that way.

MADDOW: The car companies have requested $34 billion, they started off asking a couple of weeks ago for $25 billion, it was up to $34 billion this week. Have you talked about a dollar amount that you are willing to be spent at this point?

FRANK: Yes, I think, we're at the $25 billion. The constraint here was that the president wouldn't sign a bill that did anything more than the money we've already voted for, the-for the energy efficiency. That's about $25 billion. There are some things that have to be done to make that fully available. So-but what you're talking about here when you talk about $25 billion or $34 billion is, how much time? $34 billion gets you further along. What we believe is that $25 billion will get us well into the next year. So, that again, we will have President Obama, we'll have a 58 or 59 Democratic-member Senate, and a largely Democratic House, and we'll be able to deal with this. And again, I mentioned before the idea, I want to say, one of the troubling things here was that there was strong evidence in the reaction of some of my colleagues and others in the society of a white-collar, blue-collar double standard. People have said, "Well, you know, those autoworkers get too much money." Did you hear anybody say that the average Citicorp worker gets too much money? Or the average AIG worker gets too much money? Because I guarantee you, that they get more than an autoworker. And this notion that we will take enormous risk and put in hundreds of billions of dollars to financial institutions, but we will have people troubled (ph) at trying to help this neo-physical part of the economy, in similar circumstances with similar terms is very troubling.

MADDOW: Do you expect that we're going to be looking at other industries coming to Washington with the same sorts of request? It's the auto industry now, could it be other manufacturing industries because if the other parts even maybe the service sector?

FRANK: It's unlikely.

MADDOW: Right.

FRANK: It's unlikely. People said-you know, where is it going to stop? And the answer is it stops when we think that it makes sense to stop. And this prediction that it's going to lead to a lot of others simply hasn't been true. We have not been flooded with a lot of others. There were some other financial industries like insurance industry and some parts of it, but that went for money under the TARP. But the point is that the automobile industry is an extraordinarily far-reaching industry. You've got the auto dealers. You've got the suppliers. You've got a whole range of things. And we're talking not about moral worth, we're talking about impact on the economy. And people are saying, "Well, you're bailing them out." But we're not bailing out the shareholders of these companies. If you were a shareholder of any of those companies some years ago, particularly the two that are still public corporations, Ford and G.M., you haven't done very well. What we are trying to do is to prevent the cascade of further problem that come if they default. And the car dealers have to lay off people and the car dealers stop advertising in the local media. And the suppliers and small businesses that supply them-all crash. But we do not see, I don't see other industry that we'll have the same kind of reach and where the collapse would do the same kind of damage.

MADDOW: Congressman Barney Frank, congratulations on your hard work and arriving at something you could explain to us in short sentences, this impressive that you've done come this far in this short of time. Thanks for your time tonight.

FRANK: You're welcome. Thank you.

MADDOW: Today, President Bush tried to claim he never said Saddam Hussein had anything to do with 9/11. And that, dear viewers, is why we do something called "lame duck watch." Coming up. And, hooray, checks and balances alive and well. The Supreme Court says it will rule on whether the American president can lock somebody up without a trial forever. Legal scholar Jonathan Turley joins us next. Plus, why are these soldiers dancing and dancing so well? I will tell you why in just a moment.

(COMMERCIAL BREAK)

MADDOW: Could you imagine living in a country where the head of the government could just decide to pick anyone off the street, anytime of day, no matter what, and just put that person in prison, for life, indefinitely without trial, and it would be legal? Could you imagine living in a country like that? Welcome to the United States of America in the era of George W. Bush. You know, the phrase "enemy combatant" is one of those bits of war on terror jargon that has stopped really meaning anything to us when we hear it anymore. It's just one of those terms that we keep repeating without really reflecting on what it means. But what I just described, that the president having that kind of power, that's what it means, indefinite detention at the pleasure of the president at his discretion. This approaches now under consideration, finally, by the Supreme Court. Oh, checks and balances, nice to see you again. The Bush-Cheney, post-9/11 world view has been essentially, we get to do whatever we want. And that executive assertion is at the heart of a new case the Supreme Court has agreed to hear. The case of the man named Ali Almari, the only person we know of who is currently being detained on U.S. soil as an enemy combatant. The details are pretty simple. He came on September 10th, 2001, with his family, on a student visa. He was arrested in Peoria, Illinois a few months later during the FBI's post-9/11 investigation. Now, initially, he was indicted for credit card fraud and lying to authorities, for which he faced possible conviction and jailing, like a normal criminal in a normal country. But in 2003, President Bush declared Almari an enemy combatant, which, in this case, meant he was sent to a naval brig in Charleston, South Carolina where he has been for 5 ½ years in virtually isolation. Almari's lawyers argue that the president should not be allowed to lock him up indefinitely without a trial. President Bush, of course, argues that he can do whatever he wants because he is President Bush. Well, now, it's up to the Supreme Court to decide, which means there's now a chance that the Bush era massive assertion of the power of the president will either be ratified by the court, and therefore, made sort of permanent or it will be struck down and rendered part of the Bush-Cheney era deviance from what we used to think it meant to be the United States of America. Joining us now is Jonathan Turley, professor of constitutional law at George Washington University Law School. Thanks for coming on the show, Jonathan. Nice to see you.

JONATHAN TURLEY, GEORGE WASHINGTON UNIVERSITY: Hi, Rachel.

MADDOW: Did I describe the Almari case accurately there? This is the president saying he has the power to pick somebody up in the U.S. and lock them, no questions asked, for as long as he wants to?

TURLEY: Well, you are absolutely accurate. And you are also accurate in the fact that this runs against every aspect our constitutional system. It is, in fact, the very definition of tyranny. And you don't hear that term much, but this is how tyranny is defined. It's the ability of a single individual to strip someone of their right to counsel, access to court, and to hold them indefinitely at their own whim. And that is at issue now. And it's perhaps the most important issue that we have, the most important unanswered question from the Bush administration. And the reason this case was accepted, the expectation is, is that the liberal justices believe they have a fifth vote, probably Justice Kennedy, to finally put a stake in the heart of this theory.

MADDOW: We know that the Bush administration did not want this case to go to the Supreme Court. Does that mean that they expect to lose this case?

TURLEY: I think they do expect to lose it. And it may also mean that they will pull off Padilla. When Jose Padilla was ready to go to the Supreme Court, they found a very technical violation, literally a caption problem in the case, that they were able to get the right wing of the court to send the case back. It was, in my view, an outrageous act-so, that the court did not rule on this theory. When Jose Padilla was ready to go back to the Supreme Court, the Bush administration which also claimed that they were going to fight this one and prove they were right, changed his status. And that may happen here. The Bush administration may have a very good reason to put him into the criminal justice system. They don't want a ruling on the merits of this claim and they don't want the claim necessarily litigated by an Obama administration.

MADDOW: There is something of a catch here in terms of the politics and the timing, and the transition. Because this case won't actually be argued until at least March, it sort of means that President Obama might be able to make very important decisions about this, unless they act within the next 45 days to get this guy out of that brig into the criminal justice system as you say, right?

TURLEY: Yes, that's exactly right, Rachel. That's the interesting thing. For several libertarians, this could be a big (ph) victory, because if Obama truly is all about change and civil liberties, he would probably come in and say that he's putting an end to the enemy combatant doctrine and move this individual into the criminal justice system. That would moot the case. And for some libertarians, that would be a very bitter pill because they don't want just a change of policy, because if it just a change of policy and not the creation of president.

MADDOW: Right.

TURLEY: . then God help us, a President Palin could come back and reinstitute this very same principle.

MADDOW: And the only way to get the president set is to have a Supreme Court ruling saying this is plainly unconstitutional.

TURLEY: That's right. You have to preserve the case. And while he would have more in the enemy combatants, let his solicitor general argue it and kill it with faint praise and allow the Supreme Court to destroy this pernicious doctrine.

MADDOW: Wow. Jonathan Turley, professor of constitutional law at George Washington University Law School, thank you for your insight. Thanks for joining us.

TURLEY: Thanks, Rachel.

MADDOW: A Happy Repeal Day, everybody. Seventy-five years ago today, Congress wisely overturned prohibition, once again making it legal to enjoy a drink in this United States. Actually, it was the ratification of a constitutional amendment, which means it came down to Utah making prohibition illegal. And how poetic perfect is that? What's the right way to celebrate this date other than a perfectly forged sasorek (ph)? Well, obviously, it's to complain about how dumb it is to try to legislate morality. That will be straight up and straight ahead.

(COMMERCIAL BREAK)

MADDOW: Time for another edition of lame duck watch, the quack-itude continues. As President Bush keeps trying to erase America's hard drive of all the things he said leading up to the war in Iraq. Too bad we got something called the Google and even the video tape, awkward. More on that later. First, though, it's time for a couple of underreported, holy mackerel stories in today's news. It was only a month ago that a young, well-educated man with an exotic name prepared to lead his country. And yesterday, he met with John McCain, Lindsey Graham and Joe Lieberman. I'm talking, of course, about the 28-year-old king of Bhutan, Jigme Khesar Namgyal Wangchuck, also known as the Rachel Maddow's foreign monarch heartthrob. Sorry, Harry. McCain and company stopped into the teeny, teeny, teeny, tiny, tiny little country of Bhutan in the Himalayas right between India and China to visit the world's youngest democracy that still has a king. According to the Bhutan ministry of foreign affairs the congressional delegation was interested in observing the recent political changes there and Bhutan's pristine environment. They call their own environment pristine. I'm not vouching for it. That's just the way they describe it. Now, I can't help but wonder if maybe Joe meant to - and Lindsay and Mac just wanted to find out if the new king really is as young, Elvis-hunky as he looks in his PR shots. But I think we'll never know. Finally, awkward segue - the Web site of President-elect Obama, "Change.gov" includes his weekly YouTube addresses and blog where you can suggest ways to improve the government and the country. Here's the truly remarkable thing. Obama officials are apparently reading the comments on the blog and responding after last week, asking for feedback on what is most worrying about the healthcare system. This week, Obama's presumptive health secretary nominee, Tom Daschle - he posted a video response to the comments that had been put up on the Web site. And he's elicited more. He's received thousands. Now, they are asking for comments on how the economic crisis is affecting regular Americans. Do you want more contact with the Obama agenda? Well, next weekend, Obama's campaign manager, David Plouffe has called for Obama volunteers to hold house parties to work on ways to advance the Obama agenda, converting the campaign machine into a governing machine or something. Also, setting up the best offline dating opportunities in years - I'm just saying.

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MADDOW: On Wednesday of this week, President Bush took the day off entirely. No public events. It's not like there's not much going on in the country, in the economy or either of these wars or anything to keep him working every day. But he did get back to work yesterday, doing the all-important job of lighting the national Christmas tree. He thanked Santa for his attendance at the event. And in what's becoming sort of a going away reflection them for this president, he once again spoke with wistfully about how much he's going to miss having his own airplane, Air Force One. He asked Santa if maybe he has a spare sleigh that President Bush and Laura could use for getting around now. I'm not kidding.

With 45 days left of the Bush presidency, it is time once again for

THE RACHEL MADDOW SHOW's "Lame Duck Watch," because somebody's got to do it. The president today made remarks on the economy. Don't worry, the stock market survived and had time to recover. He spoke in the morning. Then, this afternoon, he gave a major speech on the Middle East at the Brookings Institution. The purpose of the speech is to make the Iraq War seem like it was a great idea, that it worked out just as we planned except maybe we spent a few extra bucks. But other than that, perfection.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, UNITED STATES PRESIDENT: With any large undertaking, these efforts have not always gone according to plan. 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)

MADDOW: That's the part that fell short of our hopes? That's it? It took a little long, cost a little much - that was the only disappointment? Other than that, a rip-roaring success? Really?

(BEGIN VIDEO CLIP)

BUSH: Iraq has gone from an enemy of America to a friend of America. The Middle East in 2008 is a freer, more hopeful and more promising place than it was in 2001. We acted with a coalition of nations to protect our people and liberated 25 million Iraqis as the fight in Iraq nears its successful end.

(END VIDEO CLIP)

MADDOW: Yes, what a rip roaring success this has been. Wait. Are we thinking about whether or not it was a good idea - why did we invade Iraq, again?

(BEGIN VIDEO CLIP)

BUSH: The reason I keep insisting that there was a relationship between Iraq and Saddam and al-Qaeda - because there was a relationship between Iraq and al-Qaeda. Before September the 11th, many in the world believed Saddam Hussein could be contained.

(END VIDEO CLIP)

MADDOW: All right. That was why we invaded Iraq. But that was then and this is now, and now's the time for revision of history, apparently. And our sitting president, trying to shine up his legacy, is hoping we just don't remember.

(BEGIN VIDEO CLIP)

BUSH: It is true, as I have said many times, that Saddam Hussein was not connected to the 9/11 attacks.

(END VIDEO CLIP)

MADDOW: OK. Except for all the times you did say that there was a connection between - there's two things going on here with this remarkable revision is history tour the president has set out on in the past couple weeks. It is not getting a ton of above the full headline attention because nothing he does gets above the full headline attention anymore. But he's trying to do two things - one sad and doomed to failure, and one maybe not as sad as it is scary. The sad part is that he's trying to spin us about what he did and said while he was in office. That's why we're hearing him say that he didn't link Iraq to 9/11. Oh, come on. That's why we're hearing try to blame the economic collapse on Bill Clinton, of all people. That's the sad and simple and probably doomed to failure thing that Bush is doing in this revision of history. The other thing he's doing is more serious and not sad at all. It's more scary. It's an effort to put a retroactive happy face on the Bush doctrine. The Bush doctrine is the thing that Sarah Palin famously couldn't describe when she was asked about it by Charlie Gibson this campaign season - the idea that America won't just wage war if attacked. We won't just wage war to preempt imminent attack. We will rather wage war to prevent any country, anywhere from even developing the means of potentially someday posing a threat to us. That's the Bush doctrine - preventive war, America invading and occupying any country at anytime on the assumption that no one will ever turn that logic back on us. That's what Bush is defending now in his lame duck quackitude.

(BEGIN VIDEO CLIP)

BUSH: Some have called this idealistic. And no doubt, it is.

(END VIDEO CLIP)

MADDOW: I have a number of other adjectives in mind in mind, actually. Joining us now to assess the lame duck president's legacy lather-rinse-repeat cycle is Pulitzer Prize-winning author Ron Suskind. His latest book is "The Way of the World: A Story of Truth and Hope in an Age of Extremism." Mr. Suskind, thank you very much for coming on the show tonight.

RON SUSKIND, PULITZER PRIZE-WINNING AUTHOR: My pleasure.

MADDOW: Maybe you could help explain to me and to us and to Governor Palin what the Bush doctrine really is.

SUSKIND: Well, the Bush doctrine is prevention. It's essentially saying the United States will act unilaterally for whatever reason we decide to create a defensive screen. Even if a country has intent and maybe even nascent capabilities, we can act and act forcefully without any warning. You know, it's interesting because, you know, some of the neocons sort of whisper that the idea was to create what they called constructive instability around the world, instability that we could capitalize on. Obviously, it's anything but constructive. The world is vastly more dangerous by virtue of the way we set it on edge from essentially this doctrine of we're going to do it for good reason or bad reason or no reason that we articulate because that's what we do.

MADDOW: You famously, in an earlier book, described the "one percent doctrine" which vice President Cheney formulated, this idea that threats with even one-percent likelihood must be treated as certainties. Looking at the Bush doctrine, looking at preventive war, looking at the one percent doctrine, is anything left of the way that Bush and Cheney characterized risk and American power and the use of American military. Anything left of it that will survive into the next administration and into the future?

SUSKIND: Well, it's interesting, Rachel, because you know, the dilemma is really, in a way, don't change. The question is how we responded to them up to now and how that might change. You know, the fact is that people are terrified about terrorists getting WMD. Cheney's view is if there's a one-percent chance we need to act and thereby even suspicion might be the cause of action, action of the world's most powerful country. I mean, it's exactly that kind of attitude that, in a way, has encouraged many countries to say, "Now, hold on. Let's see how I can push back against this. Let's test what actually the parameters are of U.S. power. Let's push on the wall to see if they give." And what you have is, in many regions of the world, the United States is no longer looked upon as an honest broker, but rather as almost a reckless force. Certainly, that's what's happened over this time. And countries are saying, "Well, you know, the fact is that we're going to act entrepreneurially, geopolitically speaking, to see just precisely what we can get away with. You know, the upshot is that we are still going to be a strong country. We're never going to sort of give over our power, our military. But what do we match it with? That's one of the challenges that Obama will face, whether he can rebalance American power back to a model that we saw often after World War II, of great power and humble - humility, a notion that we will not only espouse certain principles, but frankly, we will abide by them ourselves first. We won't ask you to do anything that we won't do ourselves. All of that is the big struggle now. How does America restore moral authority which, of course, is the source of true power? And you know, that's really a very different model from what we have seen over the years. The difficulty is we've got to move quickly. I think everyone is wondering how to do that to show with the word indeed that it's not business as usual.

MADDOW: I think that - one of the things that frustrates me in discussions about foreign policy is they so often take place under the assumption that we are debate who we would to go back in history and replace the last president with, who we would like to go back and present a better model for how to live 2000 through 2008. The real debate that we have to have now is how to start from less than zero. What is the smartest way? Not just to act differently than George W. Bush would have, but to make better what he has done wrong by us in our international reputation. Do you hear constructive things coming from the Obama administration about how to undo some of what's been done wrong?

SUSKIND: Yes, I think they are trying to figure out the right first steps to be frank about it. You know what? The fact is his doctrine - you can get really doctrinal drift. Unless you repudiate them or replace them, frankly, they kind of echo forward. You know, and the fact is, one of the things that needs to be done is these Bush doctrines and there's so many of them, frankly, sort of webbed together, need to be challenged, repudiated and replaced with some other doctrine that Obama will champion. I don't think they are quite there yet. I think Obama is still trying to get his arms around some of the very complex and very new geopolitical challenges that we face. You know, talk about, let's pull up some past president and kind of, you know, refit him to this time. Well, the fact is the challenge that America faces now in a fast changing world are very different and very new. And it's really a time in a way for a kind of a new way of thinking and a new start.

MADDOW: Pulitzer Prize-winning author Ron Suskind, great to have your insight tonight. Thanks for joining us.

SUSKIND: My pleasure.

MADDOW: Belly up to the bar, everybody. It is the 75th anniversary of the repeal of Prohibition. You know what happens when the government tries to legislate morality? Bathtub gin - a very sober discussion with a story on Douglas Brinkley, next. But first, one more thing. The coalition of the willing, helping out the U.S. in Iraq got a little bit smaller this week as the small but proud and man-by-man actually quite hefty band of troops from Tonga bid Iraq farewell. Fifty-five troops from the south Pacific kingdom performed traditional Tongan songs and dances in a ceremony at one of Saddam Hussein's former palaces yesterday. The ceremony, one of the many being held this month as most coalition partners get set to leave the country. The U.N. mandate which allows nations to deploy in Iraq expires at the end of this year. We'll say under the terms of the country-to-country Status of Forces Agreement. But everybody else? There (UNINTELLIGIBLE). I wonder if there's still time for our troops to develop a national stomping dance to perform in a palace when it's time for us to finally get to leave.

(COMMERCIAL BREAK)

MADDOW: One of the sign that the economy is bad, like Great Depression-ish kind of bad, is the frequency with which politicians yell the word, "Hoover" at each other. Herbert Hoover was the Republican president from 1929 to 1933. And he was so disastrously wrong about how to deal with the Great Depression that we still today use his name as an epithet to attack someone's bad idea, particularly about the economy. I, for example, spent the morning yelling, "Hoover" at my laptop when I was doing research on politicians like Mark Sanford of South Carolina and Congressman John Boehner who insist now like Hoover did then that the federal government should tighten its belt and not spend any money now, even though that would have the same likelihood of improving the economy, that a bucketful of kerosene would have of putting out a fire. But to be fair to the much-maligned President Hoover, there really is one aspect of his legacy, another aspect that should get more attention, more remembrance from us. He was also the Prohibition president. Didn't that work out great as well? Al Smith ran against Hoover in 1928 as an anti-Prohibition candidate. He lost. Hoover won. But by the time Hoover got through disemboweling the economy and in his first term, when he was running for reelection in 1932, not only did he get beaten soundly by the anti-Prohibition candidate FDR, but the Democrats had an official anti-Prohibition plank in their platform that year. And 40 percent of the Republican delegates to the convention that re-nominated Hoover, they voted for a Prohibition repeal platform plank of their own. Prohibition was a disaster. Thirteen years of bootlegging, gangsterism, booze so bad it made you go blind and by that, I do not mean blind drunk. The art of bartending was a totally original, totally American invention that we lost almost forever because of that 13-year failed experiment. And it was on this day, December 5th, 75 years ago today, that Prohibition was officially declared a failure when the 21st amendment to the Constitution was ratified, the only amendment we ever passed to the Constitution just to un-pass a previous amendment. Today, groups like Law Enforcement Against Prohibition draw parallels between the modern failed war on drugs and the failed effort to ban booze 80 years ago. Their Web site on the subject has the great URL, "WeCanDoItAgain.com." As we head into a political season where everyone yells "Hoover" at each other, where the fear of another Great Depression looms over the country, it seems like there are two appropriate ways to commemorate repeal day, repeal of Prohibition day. Number one, bottoms up. Here's how - cheers, have a cocktail. And number two, make some time to think hard about the whole big dumb idea of legislating morality. Joining us now is Douglas Brinkley, presidential historian and professor of history at Rice University. Doug, it's happy repeal day to you, first of all. It's always a pleasure to have you on the show.

DOUGLAS BRINKLEY, PRESIDENTIAL HISTORIAN AND PROFESSOR OF HISTORY, RICE

UNIVERSITY: Back at you.

MADDOW: Was prohibition ever considered to have been a public policy success? They held on to it for 13 long years.

BRINKLEY: No, it never was. I mean, our country was forged on alcohol. I mean, you look at Sam Adams in Boston or Charles Thompson in Philadelphia, the whole sons of liberty, legislation made in taverns in early America. And our whole political system, alcohol seemed to always be an incentive to get out the vote. In 1840, for example, William Henry Harrison was - they were kind of accusing him of being a whiskey-drinking, log cabin-born president - the Van Buren people. And so a man in Philadelphia named Mr. E.C. Booze started giving free whiskey in log cabin jars at rallies so people would come for the whiskey, and hence, the word "booze" hit the parlance here in America. So if you can go for almost straight through and realize alcohol was part of things. But it became a religious movement. Methodists were very much against alcohol. Baptists were very much against it. And so by 1920, you've got Prohibition, but there was always a big backlash to it. And with the victory of FDR in 1932, one of the first things he did was make three-two beer legal. And by December 5th, you had now the repeal of the 18th Amendment and you had the 21st Amendment.

MADDOW: Well, by 1932, when FDR was running for president against Hoover, how had things changed? Were people just reacting to it having been a bad public policy? Or were there selling points of the anti-prohibition plank other than, you know, "Let's drink?"

BRINKLEY: There was anti-immigration attached to it. You know, you had a lot of Catholics coming over from Europe - from Ireland and Italy where alcohol was very prevalent. In fact, within the Catholic Church, they started having some priests actually create the Knights of Columbus in the late 19th century to get men, after working factory jobs, to go home and be with other men in a social way instead of drinking. But at Knights meetings they drank anyway. It just didn't work, you know. And largely, it became big cities. San Francisco and St. Paul were the hub of the speakeasies, underground gangsterism got created. Crime went up. And because everybody ignored Prohibition, people breaking other laws, too. So it was really a disaster after disaster. And it's kind of stunning that it stayed on the books as long as it did.

MADDOW: Looking at some of the parallels drug-war critics make now, particularly given our lousy economic state, did ending Prohibition give a boost to the struggling economy at that time at all?

BRINKLEY: Well, it did. Remember when you - you could start taxing alcohol. Many states in the country - I mean, you have very high taxes on buying alcoholic beverages, so it gives income to government. If it's in the underground, if it's black market the way, say, marijuana is today in this country, you don't get any revenue from it. So that helped. But, also, I think there's a feeling that it was - you know, alcohol is just part of life. It's part of culture where - in Europe, wine in pubs have been, you know, part of the western civilization tradition that have tried to ban it here in the United States was really fringe temperance people, industrialists who didn't like workers getting drunk. Henry Ford, who I wrote a book about once, used to - if you were caught in a - during Prohibition in a speakeasy or something, he would fire you on the spot. He would have spies look at if workers were trying to drink alcohol on the side. Incidentally, Henry Ford bought over every brewery during Prohibition. He took them over in Michigan and turned them into ethanol, alternative fuel factories, because he didn't believe in oil.

MADDOW: Douglas Brinkley, presidential historian and professor of history at Rice University, you've given me a lot of stuff to talk about with friends over drinks tonight. Thank you.

BRINKLEY: Thanks, Rachel.

MADDOW: Coming up next, I get just enough pop culture from my friend, Kent Jones - movie, drinks and Shakira. It is happy hour here.

(COMMERCIAL BREAK)

MADDOW: Now, it's time for "Just Enough" with my friend Kent Jones. Hi, Kent. Cheers. What have you got?

KENT JONES, POP CULTURIST: Cheers to you. Happy repeal day.

MADDOW: Happy repeal day.

JONES: No, don't need to tell anyone that the news lately has been one, long donkey ride through bummer town. Job losses, bailouts, and it goes on and on. So now seems like a good time to ask the question, are you happy? A new study just published in the "British Medical Journal" says a lot depends on how happy the people around you are. The study found that knowing someone who is happy makes you 15.3 percent more likely to be happy yourself. A happy friend of a friend increases your odds of happiness by 9.8 percent. A happy friend who lives within a half mile of you makes you 42 percent more likely to be happy yourself. Nonetheless, George W. Bush surrounded himself with happy for two terms, which has increased his odds of filtering out reality by 87.6 percent. And finally, speaking of happiness, which two industries would you say are doing just fine during this recession? Movies and booze. Movie theaters are seeing double-digit growth in box office revenue so far this quarter, thanks to movies like "Twilight" and "Madagascar 2" and "Bolt." And as for the fire water, Brown Forman, the makers of Jack Daniels and Finlandia Vodka also reported a robust quarter. Now, some movie concession stands are trying to capitalize on both trends by selling combos featuring popcorn and mixer. Don't kill him, Bella(ph). That guy's a vampire! Rachel, cheers.

MADDOW: Thank you, Kent. And thank you for watching tonight. Happy repeal day. "COUNTDOWN WITH KEITH OLBERMANN" starts right now.

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

END

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