THE RACHEL MADDOW SHOW
December 10, 2008
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
Guests: Kent Jones, Mike Viqueira, Frank Rich, Joe Lyons, Elizabeth Warren, Brian Hardwick
RACHEL MADDOW, HOST: That is true. We are going to have a little Christmas, terrifying, not very alternative energy, fun this evening.
KEITH OLBERMANN, "COUNTDOWN" HOST: I'm looking forward to it.
MADDOW: Thank you, Keith.
And thank you for staying with us for the next hour.
Breaking news tonight, as Keith just reported, the House has passed an emergency rescue plan for the American auto industry. But that plan faces an uncertain future in the United States Senate where Republicans are already digging in their heels and threatening to kill it even though the White House is behind the deal. We will have more details later on what has been a very, very another big new day of news.
(voice over): Say what you will about Rod Blagojevich, the man doesn't even take the obvious opportunities to take the day off. Handcuffed yesterday, back in the office today. And today was even his birthday.
The president-elect says the birthday boy should resign. Republicans say they'd like to try to tie Blagojevich to Obama. I bet they would. "New York Times" columnist Frank Rich on Republicans' breathless efforts to try to make this an Obama scandal.
Read the Chicago papers lately? The hometown folks use words like "sociopath," "delusional" and "compulsive" to describe their governor. Could it be that the Gov is not well? Is this an awkward question? Illinois legislator Joe Lyons pulls no punches about what really makes Rod Blagojevich tick.
Meanwhile, on un-corruptible Capitol Hill, the House passes the auto industry rescue plan. But Senate Republicans threaten to say no.
(BEGIN VIDEO CLIP)
SEN. RICHARD SHELBY, ® ALABAMA: Unless Chrysler, Ford, and General Motors become lean and innovative and competitive in the marketplace, this is only delaying their funeral.
(END VIDEO CLIP)
MADDOW: With all the drama over $15 billion for the Big Three, how about that other bailout-the $700 billion one? Who's keeping track of that much more gigantic effort? Well, since you asked, it's a woman named Elizabeth Warren, and she's our guest tonight.
On lame duck watch, President Bush's lame idea to power the future is with so-called "clean coal" which doesn't exist, although the industry would like to you believe it not only exists, but it sings Christmas carols as well.
MADDOW: It's more than just sacrilegious, it's also totally fake.
MADDOW: THE RACHEL MADDOW SHOW starts now.
(on camera): The awkward day after. Maybe you had too much to drink at the office Christmas party, and you know, stuff happens with your co-worker, or the coffee machine, or both. The next day, back at work, it's awkward, right?
Well, no matter what you've ever done the night before, you don't know awkward office days like Illinois Governor Rod Blagojevich does-yesterday, cold busted in handcuffs. The transcripts of his wiretap phone calls teaching all of American new creative ways to use the "F" word, the Cubs, and the word "appreciation," all in the same idea.
Today, Governor Blagojevich was back at the office. Hey, everybody, how's it going? Bulls beat the Knicks, huh? Also, an awkward day today for whoever was aliased as "Senate Candidate Number Five" in the criminal complaint against Blagojevich. Candidate number five was the one who allegedly had an emissary discussing raising somewhere between $500,000 and $1.5 million for Blagojevich in exchange for the Senate seat.
Law enforcement sources say now, that "Senate Candidate Number Five" was Congressman Jesse Jackson, Jr., who today, vociferously denied that he had offered or had anyone offer anything for that seat.
(BEGIN VIDEO CLIP)
REP. JESSE JACKSON, JR., (D) ILLINOIS: I want to make this fact plain. I reject and denounce pay-to-play politics and have no involvement whatsoever in any wrongdoing. I did not initiate or authorize anyone at any time to promise anything to Governor Blagojevich on my behalf. I never sent a message or an emissary to the governor to make an offer to plead my case or to propose a deal about a U.S. Senate seat, period.
(END VIDEO CLIP)
MADDOW: Period. Congressman Jackson has joined President-elect Obama, and several state legislators in Illinois, all 50 current Democratic senators and the "Chicago Tribune," among others, in calling for Rod Blagojevich to resign his governorship. President-elect Obama also endorsed a move initiated by Senator Dick Durbin to order a special election to fill the Senate seat rather than leaving it to "governor shakedown" or whoever might replace him.
Now, all the available evidence, and there is a lot of it that has been presented by Patrick Fitzgerald, shows Obama and his team coming off as well as one can when one is mentioned in a criminal complaint against a sitting governor. According to Fitzgerald's investigation, team Obama rejected pay-to-play politics and all other manner of Blagojevich's proposed shenanigans.
How do we know this? Well, on one recording, Blagojevich appears to call the president-elect a very bad name, initials M.F., and he says of the Obama camp, quote, "They are not willing to give me anything but appreciation. Bleep them." Frankly, that is exactly what you want the guy in handcuffs to be on record saying about you on his wiretap at a time like this.
U.S. attorney, Patrick Fitzgerald, also went out of his way to say in his news conference, quote, "We make no allegations that he, Obama, was aware of anything." More suggestion that Obama and Blagojevich were decidedly not in cahoots, well, the "New York Times" reports today that Obama's call for passage of an ethics bill in the Illinois state legislature a few months ago contributed to the downfall of the governor. Among the allegations against him, are that he was trying to grab as many unlimited campaign contributions as he could before the limit kicked in because of that new Obama-supported law on January 1st.
There's also that report from a local Chicago news station that Obama's chief of staff, Rahm Emanuel, tipped the Feds off to Blagojevich's wrongdoing.
Still, Republicans are busy trying to link Obama to the scandal trying to fold him into Blagojevich's ethical quicksand.
In a joint interview with the "L.A. Times" and the "Chicago Tribune," President-elect Obama said, quote, "I have not discussed the Senate seat with the governor at any time."
Now, a report by a local station in Quincy, Illinois, from November 5th, claimed that Obama was planning to meet with Governor Blagojevich that afternoon to talk about the Senate seat. That report has since been removed from the station's Web site. And when we contacted the station today to ask them why, they said they took it down because they actually have no idea if that meeting took place.
Nevertheless, the GOP is using that and other things, and swinging at the president-elect. RNC Chairman Mike Duncan called Obama's statement "unacceptable" and suggests that it was, quote, "carefully parsed and vague." South Carolina Republican Party chairman also called on Obama to "immediately release all records of discussion about the appointment of Obama's successor." That's Katon Dawson, the South Carolina Republican chairman.
Now, the new GOP House whip, Congressman Eric Cantor, suggested the investigation of Blagojevich, quote, "raises questions about Obama." The conservative Web site Power Line said, quote, "Obama has been a loyal soldier in the Democrats' corrupt Cook County machine." And a Newsmax headline-Newsmax is another conservative Web site-they headlined an article, "Blagojevich Scandal: What Did Obama Know and When Did He Know it?" Meanwhile, the Illinois state Republican chairman, Andy McKenna, even called on Obama to keep U.S. attorney, Patrick Fitzgerald, in his job even though Obama already called for that months ago.
It may still turn out that Barack Obama is somehow knee deep in the proverbial Blagojevich here, but at this point, based on what we know about the story, it seems that the GOP is screaming four-alarm fire about one extinguished match stick. Does Barack Obama, whose approval rating of his transition in tonight's NBC News/"Wall Street Journal" poll is 73 percent, does he have something to worry about here?
Joining us now is "New York Times" columnist Frank Rich.
Hi, Mr. Rich. Thanks for being here.
FRANK RICH, NEW YORK TIMES COLUMNIST: Glad to be here. How are you?
MADDOW: I notice you laughing out loud at some of the transcripts.
Still funny a day later, isn't it?
RICH: It's still funny. It's going to be the gift that keeps on giving, I think, for quite a while, unless something else happens to disrupt it. But the attempts to link Obama to it is almost as laughable as the transcripts themselves.
MADDOW: Yes. I mean, Patrick Fitzgerald went out of his way to say overtly, Barack Obama is not implicated in this case. We haven't seen any evidence that he is. But Republicans wanted to-for obvious reasons, they want to tie Blagojevich to Obama like an anchor.
RICH: Right. But they won't work. First of all, to have a president who's sitting in the White House who, the NBC poll tonight, found 79 percent of Americans won't miss him when he's gone. So, it's a way to change the subject from that. Their last standard bearer, McCain, was insulted by Joe the Plumber this week, saying he was appalled by him and embarrassed by him. So, this is something to change the subject but I just don't, I don't think it's going to work. It's definitely not going to work.
MADDOW: Well, Blagojevich himself, obviously, innocent until proven guilty, this is all alleged at this point.
RICH: Absolutely, all alleged. Yes, absolutely.
MADDOW: But, honestly, nobody is standing by him. Nobody is saying, you know, I'm with Rod on this one. We think. I haven't heard directly.
RICH: You have to see the videotape, yes.
MADDOW: Yes. Do you think this is a sort of a nonpartisan accountability moment? Nobody is standing up saying this is a witch-hunt, Blagojevich ought to be left alone here, and we think he's a good guy. Is that a good sign just in terms of American political accountability?
RICH: Yes, I think it is a good sign. And, by the way, the same thing happened with the last Illinois governor, George Ryan, who was Republican. Again, it was a bipartisan feeling that he should go and, in fact, he's now in jail. So, I think it is a good thing.
And I think that also, Fitzgerald gives it a tremendous amount of credibility because he's not known as a partisan guy, and his last most famous target was, after all, a member of the Bush White House team.
MADDOW: Sure. I guess I'm asking about accountability because I've been thinking about it in broader terms, in the last couple of weeks, as it has emerged that President Bush is going to spend the waning days of his presidency really polishing up his legacy. He went back to West Point yesterday where he first articulated the Bush Doctrine of preventive war and started arguing for the war in Iraq all over again like it was 2002.
To me, it feels like a heck of a contrast, you know, to see someone get nailed so publicly for this type of corruption, while the giant swindle that was the Iraq war is still an applause line for this president.
RICH: Well, I completely agree with you. In fact, I think accountability and the lack of it is an enormous issue of this entire decade, and not just in the Iraq war but on Wall Street. And so, it sort of is good to see someone in public office held accountable, but the truth is, compared to things that people have not been held accountable for, what he's accused of is relatively minor. It's not good and it's bad for the people of Illinois but-so it's a small stuff (ph) really compared to the big stuff going on in the past 10 years.
MADDOW: One last quick question: Is everyone who was ever considered a possible candidate for the Senate seat now-are they now guilty by association? Is Patrick Fitzgerald the only person who could be appointed to that Senate seat?
RICH: Possibly Andrew Cuomo if he doesn't get it in New York.
RICH: No, you're right. I do feel guilt by association which has been a big feature of this political year is going too far, and Jesse Jackson may have been tarred unfairly and probably was, based on what we know, at least, based on his denial.
RICH: And who's going to-they have to-the Republican Party is going to have to bring back Allan Keyes, ship him back.
MADDOW: Oh, please.
MADDOW: Oh, please. That would make my job a lot more fun.
Frank Rich, "New York Times" columnist, it's very nice to see you.
Thanks for being here.
RICH: Nice to see you.
MADDOW: If you read the Chicago press about this Blagojevich thing, the one thing they are saying about the governor that isn't really being said nationally yet, is that Blagojevich might be crazy. Coming up next:
We will be joined by an Illinois state representative who has had the pleasure of working with the governor for years. We will get his take on that admittedly very sensitive subject.
And, on Capitol Hill, the House votes to pass the emergency loan program for the Big Three automakers. Senate Republicans, however, are pumping the brakes. Will there be the same slippery problems with this program as there have been with the $700 billion financial industry bailout? The woman keeping track of where all the money's going, Elizabeth Warren, will join us in just a moment.
But first, just one more thing about the Illinois governor's bleeping valuable bleeping golden scandal. We noticed one awkward detail about the ongoing discussions among Illinois politicians and public officials about what to do if the governor continues to insist that he will not resign. There are plans to reconvene the state legislature, which means that impeachment proceedings could get under way against the Gov, but the House speaker, Michael Madigan, has as yet not committed to push for impeachment proceedings.
The state's attorney general has publicly floated the idea that if the governor won't resign and somehow avoid impeachment, she will invoke a little known Illinois Supreme Court rule that allows the state's Supreme Court justices to remove a sitting governor from power by deeming him unfit for office. So, maybe a little tension there between those officials, a little zing of the strings between the state's attorney general and the speaker of the House, right?
Want to know why it's really awkward? Because the speaker of the House is the attorney general's dad. Yes. Michael Madigan-dad-is speaker of the House. Lisa Madigan, state attorney general is his daughter. Illinois, you are getting to be almost as fun to cover as Alaska.
MADDOW: When a super, red hot, crazy, unbelievable freak show of a political scandal happens outside the Washington, D.C. beltway, the first thing a lot of people do is hop on their Internet machines to get a close-up local media view of the players involved-the hometown story. "Anchorage Daily News," you know the page views were off the charts during trooper-gate, right? Larry Craig in a wide stance in an airport bathroom? Click on over to Idahostatesman.com. You know you did.
In the case of Illinois Governor Rod Blagojevich, it's the Chicago media's turn in the spotlight. The "Chicago Tribune," "The Sun-Times," the "Chicago Reader," "Chicagoist," the "Chicago Defender." You know what I'm noticing is different about the Chicago press coverage of Blagojevich as compared to the national press? I'm noticing that in the local press, what you find over and over and over again, are suggestions, innuendos, and even direct statements that Governor Rod Blagojevich is, (WHISTLE), mentally unstable, cuckoo.
Here's one example-from Mark Brown, columnist for the "Chicago Sun-Times." He says, "The federal government's secret tape recordings confirm what a lot of people have been saying about him for a long time now. He's utterly mad, completely and totally off his rocker." Off his rocker?
How about Steve Rhodes writing on the NBC Chicago Web site under the headline, "Is Blago Insane?" He writes this, quote, "This isn't a joke; it's been serious fodder coming from close observers who see in Rod Blagojevich behavior that is often described as erratic and delusional."
And how about a profile of the governor in "Chicago Magazine" from earlier this year even before the scandal? Quote, "Privately, a few people who know the governor describe him as a 'sociopath,' and they insist they're not using hyperbole." Michael Sneed, "The Sun-Times" reporter who the complaint says Blagojevich leaked stories to, she told the "Chicago Readers'" Michael Miner today, quote, "There are times I wonder if he has some sort of bipolar disorder."
Are you noticing a trend here? I know this is an awkward subject, but is this an important part of explaining this story?
Joining us now is Illinois State Representative Joe Lyons, a Democrat who has worked with Governor Blagojevich for years.
Mr. Lyons, thank you so much for being on the show tonight.
STATE REP. JOE LYONS, (D) ILLINOIS: Rachel, thanks for having me.
It's a privilege.
MADDOW: In 2007, you were quoted saying this about the governor. Quote, "We have a madman. The man is insane." This was not in the context of this scandal. It was 2007. It was in the context of a totally different political fight. But why did you choose those words specifically? Was he really behaving like he was crazy?
LYONS: Well, Rachel, to put it in context, we were in a special session in Springfield. Now, he set the record for all Illinois governors for calling special sessions. So, we were at a weekend special session where Speaker Madigan decided, "Let's call this in at 10:00 o'clock. If some of the people want to go home for the weekend, if they have a wedding, if they have a graduation party"-this was around the 5th, 6th, 7th of July-"let them go home on Saturday afternoon and get back here Sunday night. We'll re-adjourn on Sunday night at, you know, 7:00 o'clock or 8:00 o'clock."
Well, the governor found out we were called into session at 10:00 o'clock and before we could get out of the chamber, he called a second special session on the same day for 2:00 o'clock that afternoon, for the sole purpose of making it impossible for us to run home, see our families, and come back to Springfield. So, I looked at the press box and I said, "This is the act of a madman. This is what you call insanity."
And, of course, they ran with that and I was on every page of paper on Sunday morning throughout the state of Illinois. So, thanks for putting that in context. That's not a recent statement of mine, not that it might not be appropriate now.
MADDOW: Well, I wonder if you might think that those comments are appropriate now. I mean, you would be in good company right now to say them again. I am struck by the repetition of these phrases that don't seem to be like a figure of speech. And maybe I don't understand Chicago figure of speech as well as I should, but people are saying this, a lot right now, in reaction to this scandal and I wonder if it is something that people have been whispering about for a long time?
LYONS: Well, Rachel, some of his reactions to different things besides calling the special session twice in one day, case in point, last spring, we had a gross receipts tax that the governor put forth for the legislature to look at. So, on the day that we had it in the House of Representatives, it lost 107 to nothing. His quote being in Chicago, and not even being in Springfield, "I think today is an up. I think today is an up."
Now, first of all, who would phrase it that way and, second of all, how do you turn a 107 to nothing defeat on a bill you sponsored into any kind of an up? So, I mean, things that are said, are said that, you know, make you wonder anyways.
But for all the people that are using words that are better equipped to use it, I think there's been all kinds of people in professional, sociologists, psychologists, people that are trained to make some decisions, I used it in frustration in a situation that I just explained. Other people are using it for reasons they're a little more credible and have the background and education to make determinations using those strong words.
MADDOW: Some of the details in the criminal complaint, make him seem, and I use this in a colloquial sense, make him seem a little delusional that he thought he'd be candidate for president in 2016, that he'd get named to Obama's cabinet this year, that Warren Buffett would give him some sort of magical job that would pave his way to riches for life. It does seem not just like a guy who plays political hardball but like a guy who doesn't understand the way things work.
LYONS: Well, believe it or not, before I came in the studio here in Chicago, Scott Turow was on another channel and did an interview. And Scott and I, who has written certainly novels that everybody is familiar with, had a little conversation. And we had-we came to the same conclusion. If we were trying to think up a scenario for a novel, this stuff would get thrown off the page. This is too ridiculous for the things he was trying to propose: a Senate seat, "Chicago Tribune," children's memorial hospital, a contractor bid.
If you brought that in to a copyrighter and said, "What do you think of this?" They'd say, "Get the heck out of here. This would never sell. You couldn't make this stuff up."
MADDOW: Illinois State Representative Joe Lyons, good luck with impeaching him and thanks for coming on the show tonight, sir. I appreciate it.
LYONS: Thank you, Rachel. Thank you.
MADDOW: It's the holidays and the coal industry has a weird little gift for you.
LYONS: OK. Thank you.
MADDOW: Happy anthromorphic lumps of carbon singing holiday tunes get you to embrace clean coal? Do you want a lump of it in your stocking? We'll have more on that later in tonight's lame duck watch.
MADDOW: The House has just voted to pass the emergency loan program for the Big Three automakers. The vote was 237 to 170. But it does look like Senate Republicans are going to shoot it down. We'll have a live report coming up from Capitol Hill.
And we'll dig into a new congressional report card that gave the Treasury Department a big fat "F" for misleading Congress over how the money is being spent on the $700 billion financial bailout. According to one congressman, Congress was lied to and bamboozled. And we thought everything was going so well. Elizabeth Warren will be here. She testified before Congress today about the bailout. She's got a key role in overseeing it.
First, though, it's time for a couple of underreported holy mackerel stories in today's news. A T-bill in Wall Street's speech (ph) is a "treasury bill." When the government wants to borrow money, one of the ways it can do it is to sell T-bills to investors. They are very safe investment. You pay the government money, and after a set amount of time, the government gives you back that money plus whatever interest you agreed to when you bought the T-bill. It's a very safe investment if not a very exciting one.
And you know what investors are looking for right now in this economy? Safety. They are emphatically not looking for excitement, which has pushed demand for T-bills so high that something sort of crazy happened with them this week. Yesterday, the government sold four-week T-bills at an interest rate of zero. They promised, in other words that buyers of those bills in four weeks will get back from the government exactly what they paid with no interest. Wow. What a deal.
But, wait, it gets better by which I mean it gets worse. That blue-light special zero interest rate yesterday was apparently still too exciting for some investors. After the government sold some of its own T-bills at zero percent, there was a secondary market as well where investors trade T-bills that they've already bought from the government with each other.
That secondary market pushed the rate on three-month T-bills into negative territory. Negative 0.01 percent, to be precise-which means that if you are lucky enough to have had, say, $1 million to invest in three months T-bills yesterday, at the end of your three-month period, the government would give you back your $1 million minus $25.56, like it was a shipping and handling fee or something.
That is how scared investors are right now. That is how sober and serious and un-risky they want to make their portfolios look by the end of the year. They are willing to pay the U.S. government to hold their money so as to save themselves the trouble of hiding it in a flower pot.
One silver lining here is that, remember, T-bills are the way the government borrows money, which it's going to have to do a lot of if we keep bailing everything out and if we need to fund some ginormous infrastructure stimulus package. So, at these rates, the government is literally paying zippo, zero, nada interest on the money it's borrowing. So, that's kind of nice, sort of.
And finally, if you think you have had a long day or even a long year, it is going to get just a wee bit longer on December 31st at precisely 6:59:60 p.m. to be exact. The International Earth Rotation and Reference System Service-I'm trying to become a member, they have decided that we needed a time adjustment and the world's atomic clocks will need to add an extra second this year in order to keep in sync with the earth's rotation.
The earth's rotation is slowing down apparently, which is presumably fodder for your next existential crisis. So to take account for the slowing rotation of the earth, 2008 is getting one second longer this year. And the official clocks, the atomic clocks - they need to be adjusted accordingly.
Where are the United States atomic clocks kept? Actually one-third of all the atomic clocks in the whole world are kept at Dick Cheney's house, the U.S. Naval Observatory. Think about that for a second. Cell phones, computers, the ball drop on New Year's Eve - everything that needs a point of reference in time depends on things that are kept in Dick Cheney's house.
Does this mean he could be vice president for as long as he wants to? Should we check to make sure he hasn't stashed a flux-capacitator somewhere up there, too?
MADDOW: Breaking news tonight - just minutes ago, the House passed the emergency auto industry rescue plan by a vote of 237 to 170. The vote comes after a day of high-stakes political chicken in Washington. On one side of this political fight - Democrats in the White House, the Bush White House. They are for the emergency rescue plan to save the auto industry.
On the other side, Congressional Republicans, many of whom are now in what the Associated Press is calling full revolt against this plan. The Senate is scheduled to vote on the bill on Friday.
Joining us now from Capitol Hill live is MSNBC congressional correspondent, Mike Viqueira. Mike, thanks for joining us tonight.
MIKE VIQUEIRA, MSNBC CONGRESSIONAL CORRESPONDENT: Hi, Rachel.
MADDOW: Why was this version of the auto bailout bill voted on in the House if everybody is saying this is destined to fail in the Senate?
VIQUEIRA: Well, the House went first and a lot of people did expect the Senate to go first. But they realized that the House had the vote to pass it. But even here, Rachel, it was touch and go all day long. Behind the scenes, Nancy Pelosi meeting not once but twice, closed-door meetings with the entire House Democratic caucus.
They finally determined late in the afternoon that they had the votes to go forward to establish the office of this car czar with the sweeping powers. Of course, the auto companies will have, if this passes between now and March 31st, to submit some plans to restructure their entire companies if they want to see any further funds.
And the Republicans who oppose this bill say let's not give them a penny yet until they show us the restructuring plans beforehand. A lot of them feel this whole bankruptcy is the best option at this point as well as being simply ideologically opposed to have the government establish an office with this much power and essentially get into the car business.
And you're right, Rachel, it's the Senate where the pressure point is now, and perhaps this vote in the House now will try to encourage some of these senators who may be on the fence into voting for this legislation. The way it looks now, it looks very grim in the Senate. They're not expected to vote until Friday. And of course, they do have the 60-vote threshold that they need to cut off a filibuster, Rachel.
MADDOW: We are seeing a divide here between Congressional Republicans and the White House. Is it strange to see the White House so actively involved in this? After all, lame duck very unpopular president without much credibility with the American people on economic issues, yet the Democrats working very closely with the White House here.
VIQUEIRA: Well, it's almost as if the White House has more influence on this legislation with Democrats than they do with Republicans at this point. Of course, over the last two elections, congressional Republicans have been smacked around pretty badly, losing 32 seats and something like 23 seats in this last election in the House of Representatives alone.
There is very little influence, if any, that the White House has with Republicans. Plus, you look at the fact there's bailout fatigue throughout the country. You mentioned the hearing today with both Republicans and Democrats attacked the treasury official Neel Kashkari who is in charge of administering that entire $700 billion bailout.
Bailouts fatigue plus the fact that in the wake of those election losses, Republicans are trying to get back to their fiscally conservative roots and embracing it like it's a long lost friend. So it's sort of a perfect storm here in terms of Republican opposition.
They do have a fairly solid wall in the Senate opposing this. And there's a real question of whether or not this is going to make it through the Senate. And the fate of General Motors and Chrysler probably hangs in the balance, Rachel.
MADDOW: NBC's Mike Viqueira, live from Capitol Hill tonight. Thanks, Mike. Nice to see you.
VIQUEIRA: OK. All right.
MADDOW: It's been just two months since Congress gave that big turn of the national money spigot agreeing to spend $700 billion taxpayer dollars to bail out large financial institutions, the start of what Mike was calling bailout fatigue. That plan called TARP has an oversight panel, a Congressional oversight panel.
And today, that panel released its first report on how the money is being spent. Now, the report contains a series of questions that themselves, even just as questions, suggest how little we know about what has been spent so far, how it's been spent and even why it's been spent.
What is treasury strategy? What have financial institutions done with the taxpayers' money received so far? What is treasury doing to help the American family? How is treasury deciding which institutions received the money?
Two months in and we still don't have a clear picture of what was the Treasury Department's strategy with all that money or how treasury is helping families? Given the lack of clarity among the professionals here, it probably will not surprise you to hear that the latest NBC poll out just today on the subject shows Americans disapprove of the $700 billion financial bailout by a margin of almost two to one.
Now, when asked their opinion of the government providing emergency loans to the car industry, 46 percent approved and 42 percent disapprove which means that the proposed car industry bailout is way more popular among the average Americans than the financial industry bailout we already have. Does that financial industry bailout deserve its bad reputation?
Joining us now is Elizabeth Warren, chair of the Congressional Oversight Panel for the $700 billion financial bailout. She's professor at Harvard Law School. Professor Warren, thank you so much for coming on the show tonight.
ELIZABETH WARREN, CHAIR, CONGRESSIONAL OVERSIGHT PANEL FOR THE TARP FUND:
Thank you for having me.
MADDOW: You released the overnight panel's first report. You testified before Congress today. I'm sorry to have to can this so bluntly but have you figured out yet what the purpose of the bailout is, and whether there's any likelihood of achieving that purpose?
WARREN: We're still in the question mode here. We're asking the first questions but let me be clear here. You know, I only got this job 14 days ago, so I'm just getting started here. We don't have a fax machine. We don't have, you know, a phone yet.
But what we did is we thought we couldn't spend any time fooling around with that stuff. We needed to come right in and start asking the hard questions so we can start getting some answers. These are really not rocket science questions. These are - you don't have to be a fancy professor to ask this stuff.
It's really about, so what's the theory on why you gave the money? You can't just put money in bank vaults and kind of hope this means the world's going to look better. You really kind of need to both have a theory for it and you need to sort of track it through to see what happened.
MADDOW: Do you believe that the economic situation, the financial meltdown that they warned us about, was so dire that they had to act and spend those tens and hundreds of billions of dollars that they have already spent before they could answer those questions, before they could get everything in place so that we knew they were doing it rationally?
I'm going to say it slightly differently. I believe that the Secretary of Treasury persuaded Congress that that was the case. And, you know, it's pretty hard if someone who's very smart and deals with lots of money and has lots of technical terms to use, says do this or the economy dies. It's pretty tough and no one really will ever know.
Or, let me put it this way, it will be academics who will fight about this. We've created a whole new industry. There will be PhD dissertations written about this, you know, for three generations to come about whether or not it was really true.
But I do believe Congress believed it was true. The question is having believed that, having made it through that moment, how do we make the best out of it now?
There's a lot of money on the table here and someday, if we keep just sending it out, we will run out of money. So we have to spend the money that we're trying to use to set things right in a sensible way, in a way that's really effective. And that's what this oversight panel is about. We're trying to do that.
MADDOW: Given the way that Treasury has already spent the money that they have spent, do you think that this current crop of treasury officials and the people making decisions about the money thus far should be stopped from spending the rest of the money until there's a new administration in place, until Congress can get more involved, until oversight panels like yours can get more granularly(ph) involved in the actual decisions about where to put the money?
WARREN: Well, I would hope that as long as the kinds of questions we asked are still open, that Congress would be pretty reluctant to turn loose of another $350 billion. Those questions are kind of central before you turn loose of more money.
MADDOW: Yes. It seems like it.
WARREN: It seems to me.
MADDOW: Yes. You testified today that the current plan will do nothing to help people who are losing their homes in foreclosure. Is there a way that we should be investing directly in American families and in American families in the most marginal economic positions rather than investing in institutions?
WARREN: You know, this is the part that really drives me crazy about what's going on here. The idea that we could save banks and not save the American family just - it isn't right. It doesn't work. It's only not right morally. It's not right economically. We've got a housing industry that is just - it's just sliding down. And the foreclosures just keep increasing.
The latest report from Credit Suisse is we're going to have eight million foreclosures in the next couple of years. This is going to be 16 percent; one in every seven households in America with a mortgage is going to be in foreclosure.
If we don't find a way to deal with that problem, you can't stuff enough money in the bank vault to repair this economy. It's got to start with the American family and it's got to be a comprehensive strategy. You can't fix a little thing over here and plaster up a thing over here and tweak on a thing over here. Somebody's got to step back and say, "Whoa, here's where the big problems are. We've got to stitch some solutions together and have at least a kind of comprehensive plan for how we're going to do this."
You know, no one wants to say that treasury's in bad faith or they're not trying to do a good job here. What you want to say is get us an idea what you're trying to accomplish. Give us something here we can work with.
MADDOW: Elizabeth Warren, chair of the Congressional Oversight Panel for the TARP fund and Harvard Law School professor. I have to say I'm not usually in the business of giving advice but I would say to you, please, just as an American who feels like I need to understand these things better, I would be happier if you did a lot more media and spoke on television as often as possible because we're all scared. But people very rarely are talking about these things in terms people can understand.
MADDOW: So thank you for joining us tonight. I hope you do it more.
WARREN: Thank you for having me. I appreciate it.
MADDOW: Some good news today, the Bush administration gave up on one of its last-minute regulation plans to let coal-burning plants pollute the air even more. Cue the caroling lumps of coal.
(BEGIN VIDEO CLIP)
CHORUS (sung): Technology, technology you make coal burn cleanly.
(END VIDEO CLIP)
MADDOW: You know, the only singing coal I believed in is named Nat King. Clean coal, not so much. We'll have more on that in tonight's "Lame Duck Watch," coming up next.
MADDOW: President Bush may no longer be a man on a mission, accomplished or otherwise, but he is a man on deadline. Just 40 days to get lots of stuff done - he's got to pack his things, gas up the U-Haul and try to salvage his legacy. You know, reselling the whole preventive war, let's invade Iraq idea.
And he's got to rush through all those anti-environment rules. That's why we present THE RACHEL MADDOW SHOW's "Lame Duck Watch: Quackitude," because somebody has to do it.
MADDOW: First, some good news. Today, the Bush administration's EPA finally gave up its eight-year campaign to dial back air pollution restrictions on coal-fired power plants. So coal industry, zero. People who breathe air, one.
But remember last week when the EPA ignored its own study and decided it's actually just fine to dump coal mining debris into mountain streams? They just decide that had doesn't violate the Clean Water Act? I guess that sort of means coal mining industry one, people who like water and valleys, zero.
But despite enjoying favorite son status at the White House, the coal industry is still fighting for the hearts and minds of the American people. Their newest weapon of choice in the epic PR battle aimed at convincing America the act of burning coal to make fuel is somehow clean - it's a choir of singing lumps of coal who blink too much and regale you with doctored versions of treasured Christmas carols promoting the many benefits of coal.
You want to see a really disturbing rendition of Frosty the Snowman?
Check this out.
(BEGIN VIDEO CLIP)
CHORUS (singing): Frosty the coal man is a jolly happy soul. He's abundant here in America and he helps our economy roll. Frosty the coal man, getting cleaner every day. He's affordable and adorable and helps workers keep their pay.
(END VIDEO CLIP)
MADDOW: You know, nothing warms the heart during the holiday season like the treasured children's holiday songs repurposed into a slightly disturbing animated marketing jingle.
But if they (UNINTELLIGIBLE) how about turning the most famous song in English about the birth of Jesus into a commercial for the coal industry?
(BEGIN VIDEO CLIP)
CHORUS: All day, every night, clean coal, provides the light.
MADDOW: OK. You guys know what that song was about before you changed the words to make it about coal, right? Where are all those war on Christmas people when you need them?
Joining us now is Brian Hardwick, spokesman for The Reality Coalition, a cooperative effort reaching between several environmental groups. Thanks very much for coming on the show tonight, Brian.
BRIAN HARDWICK, SPOKESMAN, THE REALITY COALITION: Thanks for having me, Rachel.
MADDOW: First things first. I've got to ask you, what is clean coal?
HARDWICK: Clean coal is an oxymoron to start with. It reminds you when the tobacco companies used to say, healthy cigarettes. What you said - it's a marketing ploy by the coal industry to try to convince people that coal is somehow clean despite the fact that it is the dirtiest way that we produce electricity currently in the United States.
And the global warming pollution coal puts out is equal to what cars and trucks put out. So it is just that - it's a bad marketing ploy by the coal industry.
MADDOW: I am struck, though, by the PR strategy of - this is a Web campaign that we are highlighting here because it made coffee shoot out my nose when I saw it this morning when I logged online and heard about it.
HARDWICK: You and me both.
MADDOW: Yes. But what strikes me is that this is a PR technique that is aimed at the American consumer. This is broadly trying to make Americans like the idea of coal and feel cuddly about it. Is this part of a broader PR strategy by the coal industry?
HARDWICK: This one, I don't really understand. I mean, this one is truly bizarre. The part I love about this Web game is that you get to dress up the lump of coal, like with scarf or hat. But the problem is no matter how you dress it up, coal is not clean today in America.
The reality is that it is the dirtiest way we produce energy. And our campaign at "ThisIsReality.org" is out saying, "Hey, look. Let's talk about reality, and reality is it doesn't exist today and we want to let the American people know that those are the facts."
MADDOW: Well, if you go to Barack Obama's Web site under the heading, "create millions of new green jobs," one of the planks in the plan is to develop and deploy clean coal technology. You're making the case that it doesn't exist. The coal company is marketing itself as not only clean but cuddly and the new Democratic president is using the terminology. It doesn't seem like you guys are winning the PR war against the coal industry on this.
HARDWICK: We just launched last Thursday, Rachel, but we - you know, I don't speak for the president-elect obviously. But as I understand it, what he means by clean coal technology would be technology that would be put in place that would capture all of the carbon pollution from coal-burning power plants.
And you know, we would agree with that. That would be great if coal could do that. But the bottom line is, today, it is an illusion and given what scientists tell us about the threat of global warming and how urgent the climate crisis is, we can't afford to create an illusion for the American people and hang our hat on an illusion and make it seem like coal is going to be part of our energy future when we're facing such an important climate crisis.
And so, you know, I think President-elect Obama is talking about some money for R & D for this technology. But you know, the coal industry also has to step up and do it. And if they can safely capture and store all the carbon pollution from the power plants, more power to them, they should be part of it. They ought to spend their money doing that and not on this multi-million dollar marketing effort.
MADDOW: Which is nonetheless, very exciting and sacrilegious and worthy of discussion on this program.
HARDWICK: That's right.
MADDOW: Brian Hardwick, spokesman for The Reality Coalition, thank you so much for joining us tonight.
HARDWICK: Thanks, Rachel.
MADDOW: Coming up next, I get just enough pop culture from my friend, Ken Jones. Some predictions for 2008 missed the mark, didn't they, President-elect Thompson?
MADDOW: Now it's time for "Just Enough" with my friend, Kent Jones. Hi, Kent. What have you got?
KENT JONES, POP CULTURIST: Good evening, Rachel. Who could have predicted this year, it's been nuts. "Foreign Policy" magazine made a list of the 10 worst predictions for 2008.
I've got a few gems here, "If Hillary Clinton gets a race against John Edwards and Barack Obama, she's going to be the nominee. Gore is the only threat her then. Barack Obama is not going to beat Hillary Clinton in a single Democratic primary. I'll predict that right now," Bill Kristol, Fox News, Sunday, December 17, 2006.
How about this one? "Anyone who says we're in a recession, or heading into one - especially the worst one since the Great Depression - is making up his own private definition of 'recession,'" Donald Luskin, "The Washington Post," September 14, 2008.
"New York Mayor Michael Bloomberg will enter the presidential race in February. He and Clinton split more than 50 percent of the votes. But Arizona's maverick Senator John McCain will end up the country's next president," "Business Week," January 2nd, 2008.
All right. We mock them but I've been wrong, too. How do we explain this?
(BEGIN VIDEO CLIP)
(on camera): If Barack Obama makes it to the White House, he'll have just one man to thank, that squeaky clean soft-spoken, selfless public servant, Rob Blagojevich. Keep an eye on him, America, he's got next, Blagojevich-Spitzer 2016. Write it down.
(END VIDEO CLIP)
JONES: I should never tell people to write it down.
JONES: It's really bad, you know. I believe in the singing coal, too. So I got taken in.
MADDOW: As a person who spent a lot of time reiterating my insistent belief that Hillary Clinton would stay in until Denver, I sympathize. I always sympathize with Bill Kristol. Thank you, Kent.
And thank you for watching tonight. We will see you here tomorrow night. "COUNTDOWN" with Mr. Keith Olbermann starts right now. Good night.
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