updated 12/23/2008 2:08:49 PM ET 2008-12-23T19:08:49

Guests: Harold Ford Jr., Pat Buchanan, James Inhofe, Dr. Sean Wilentz, Chrystia Freeland, Lawrence O‘Donnell, Linda Hirshman

DAVID SHUSTER, HOST:  Tonight, is it a slice, a hook or straight down the middle?   As Obama golfs in Hawaii, his transition team prepares to take a swing at a few issues still simmering back East en route to 1600 PENNSYLVANIA AVENUE.

Twenty-nine days until the inauguration of President-elect Barack Obama.

Welcome to the show, everyone.  I‘m David Shuster.

The president-elect has settled into vacation mode.  Today he hit the gym.  Yesterday he spent five hours playing golf. 

Coming up, we‘ll have the latest pictures of the president-elect and bring you up to speed on his transition team.  Tomorrow they will be detailing their contacts with Illinois Governor Blagojevich when he was trying to sell Obama‘s vacated Senate seat. 

Meanwhile, Obama continues to generate heat over his controversial decision to have Pastor Rick Warren give the inauguration invocation. 

(BEGIN VIDEO CLIP)

REP. BARNEY FRANK (D), MASSACHUSETTS:  I think Rick Warren‘s comments comparing same-sex relationships to incest is deeply offensive and wildly inaccurate.  We‘re talking about singling somebody out for a great honor.  And I think the president-elect made a serious mistake in doing that. 

(END VIDEO CLIP)

SHUSTER:  Later, Vice President Cheney, he was asked for his highest moment the last eight years. 

(BEGIN VIDEO CLIP)

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES:  Hmm, highest moment in the last eight years.  Well, I think the most important, the most compelling was 9/11 itself. 

(END VIDEO CLIP)

SHUSTER:  That was a high moment?   Good grief!

Plus, is Caroline Kennedy tough enough for the job of New York senator?   Now she is being tested by Republicans. 

(BEGIN VIDEO CLIP)

REP. PETER KING ®, NEW YORK:  And the last thing we need is a

“People” magazine celebrity as a United States senator, especially someone who has no experience, who, as far as I know, has never held a real job. 

(END VIDEO CLIP)

SHUSTER:  Ouch. 

And tonight, in our segment called “The Grill,” Oklahoma Senator James Inhofe, he hates the auto bailout and calls global warming a media myth.  We will grill him about both. 

Plus, what on earth was the president-elect eating yesterday on the golf course?   It consisted of Spam and a fried egg on a bed of rice?   Yes, sushi made of Spam.  Come on, he‘s the president-elect.  Was there nobody to get him some real meat or fish?  

We begin this hour with the big challenge facing the president-elect on his vacation.  And here‘s the headline: “Two Controversies Remain.”

First, Barack Obama‘s transition team says they will release the report tomorrow on their contacts with Illinois Governor Rod Blagojevich.  Obama has promised that all questions will be answered. 

Second, Obama‘s decision to have Pastor Rick Warren to give the inauguration invocation continues to generate frustration among the Democratic left. 

Today, Congressman Barney Frank called it a serious mistake and hammered Obama‘s judgment. 

(BEGIN VIDEO CLIP)

FRANK:  I think he overestimates his ability to take people, particularly our colleagues on the right, and sort of charm them into being nice.  He talks about being post-partisan, but I‘ve worked, frankly, with Newt Gingrich and Tom DeLay, the current Republican leadership.  The current Republican leadership of the House repudiated George Bush.  I don‘t know why Mr. Obama thinks he is going to have them better than George Bush.

(END VIDEO CLIP)

SHUSTER:  Joining us now from Washington is Pat Buchanan, former Reagan White House communications director and Nixon speechwriter, and an MSNBC analyst.  And Harold Ford Jr., chairman of the Democratic Leadership Council and an NBC News analyst. 

Pat, I see you laughing over there, so I‘m going to go to Harold first, because I think I know where you‘re going. 

Harold, first, on the Rick Warren controversy, it‘s not letting up.  Was it a mistake, in your view, for Obama to invite Rick Warren, of all people, to deliver the invocation? 

HAROLD FORD JR., NBC NEWS ANALYST:  You know, I don‘t.  Senator Obama

President-elect Obama ran his campaign as senator on building coalitions, bringing people together.  And even after the election, the appointments the administration demonstrate, a willingness to reach across the center right and center left and bring the country together by nominating or selecting a group of nominees to various and important cabinet spots... 

SHUSTER:  So what Barney Frank just said was wrong?  Barney Frank is wrong? 

FORD:  Where I disagree with Barney—Barney is right, in large part, and I think I disagree with him on a major part. 

There are parts in Warren‘s approach to politics and public policy that the president-elect agrees with.  From climate change to health care, they agree on issues.  When it comes to the issue of gay marriage, President-elect Obama is closer probably to Warren than he is perhaps Congressman Frank.  That being said, Congressman Frank and the president-elect agree on civil unions. 

I think Obama‘s campaign, his approach to governing thus far in selecting people to the cabinet, demonstrate not only what he campaigned on, but he is bringing life to the notion of reaching across the aisle, bringing people together, and finding ways to not be hateful or disagreeable just because you may disagree on a few issues. 

SHUSTER:  Pat?

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  Oh, there‘s no question about it, Obama has helped himself tremendously with the mainstream evangelical community, and even conservative evangelicals, by reaching out and picking Rick Warren, who is a mainstream evangelical.  He reaches a community he did not win. 

It‘s a reassuring gesture.  It‘s a gesture out to moderate conservatives and conservatives, and it‘s a winner.  And quite frankly, having Barney Frank get up there and say this is an outrage is not a loser for Barack Obama. 

What that does, it centers him.  It puts him in the center as a centrist president, which is where he wants to be.  But Barack Obama as president is going to take some steps to antagonize the right and alienate the right, and they‘re going to please Barney Frank.  And that‘s what a centrist president does, and that‘s what he is trying to make himself.

SHUSTER:  All right.  The other thing that he is trying to do is he‘s trying to deal with this whole Blagojevich controversy. 

BUCHANAN:  Right.

SHUSTER:  The Obama campaign is going to issuing a report tomorrow.  We don‘t know what for.  But they‘re going to be saying yes, of course there were contacts between Rahm Emanuel and others and the governor‘s office over Barack Obama‘s vacated Senate seat.  But there was nothing improper, nobody from the Obama squad did anything wrong or engaged in this pay for play. 

Is that the end of it?

BUCHANAN:  I‘m astonished Barack Obama‘s staff has exonerated Barack Obama‘s staff.  What Barack Obama is doing is exactly right.  He‘s out there on the golf course somewhere in Hawaii eating a Spam sandwich, and he says, drop this during midnight mass on Christmas Eve or something.  But what the report‘s going to do, it‘s going to clearly exonerate Barack Obama‘s staff, and hopefully they can move up and away from this Blagojevich mess, this stinking mess out there, as they come to Washington, and no links will be tied to them. 

However, I‘ve got to say this, David.  If somebody on Barack Obama‘s staff has got himself a lawyer or herself a lawyer, and if they have got to go into the grand jury and if they‘re members of the White House staff, that could really prove itself a problem down the road.

I mean, Fitzgerald hasn‘t spoken.  I mean, I would expect, would you not, if they‘re going to not only take an open book test, but grade their own paper, they‘re all coming in on the dean‘s list? 

SHUSTER:  Well, and Harold, this is one of the most curious things I‘ve ever seen, because there has never been any evidence at all that they‘ve done anything wrong, and yet they‘re sort of in this—I don‘t know, I suppose it‘s the political wise people who say whenever there is any hint of scandal, even if you did absolutely nothing wrong, hold all of your information, don‘t release any of it until you know exactly what sort of a playing field you‘re talking about. 

Is that the reason why they simply wouldn‘t even say, oh, of course Rahm Emanuel had conversations with him?  I mean, they haven‘t said anything. 

FORD:  Look, the one person who has a complaint against him who has been charged is Rod Blagojevich.  The one person who many believe will be indicted—I think there‘s unanimous agreement will be indicted—is Rod Blagojevich.  The one person who has not answered these charges other than to say that he is innocent and won‘t walk through them is Rod Blagojevich. 

No one else has been accused of anything.  It‘s unfortunate that Rahm finds himself in the position of having to defend himself against things he has not been accused of.  But all of these kind of innuendoes and implicit accusations are out there.  The great thing about it is this has not distracted Obama at all from his task. 

I agree with Pat in large part.  You would not only expect the staff to do this, but if there were anything different, Pat, you would imagine that Fitzgerald would make clear that someone on that team, someone on that staff would find themselves in trouble. 

This is a lot to do about nothing.  And I hope that at some point we move off of it and get back to dealing with car bailouts, get back to dealing with the mortgage issue and whether or not the Obama team should buy mortgages, whether they should urge for the second lease of the $350 billion. 

These are the bigger things that I think Barack is going to have to deal with.  And frankly, he‘s moved on from this not only on the golf course, but in the gym today. 

BUCHANAN:  But David, you‘ve got an excellent point.  Why in heaven‘s name didn‘t Rahm Emanuel, when all this—I mean, obviously, he had contacts with him.  He had to.  He‘s the chief of staff.  He would be derelict in his duty if he didn‘t. 

Why didn‘t he come out and say, look, we‘re going to have a report in a week or 10 days, but let me say for the record, yes, I talked to the governor once.  Yes, I talked to his chief of staff.  No deal was solicited.  No deal was offered.  And this will be revealed when we have our report, but I just wanted to let you know that so you can go do something else, fellows to the reporters, and that would have stopped it. 

Why didn‘t he do it?   I don‘t know.  I think the communications of this operation were a mistake.  And obviously, the reporters are cutting him a lot of slack, which they should do, but I don‘t think they handled this first one well. 

SHUSTER:  Harold Ford, ,do you think that they‘ve learned something from this?   I mean, it is a test case.  It doesn‘t really have any sort of staying power.  But did they learn something on that very point about this?  

FORD:  I think they had to.  You know, they are in this transition phase.  You won‘t have this luxury after January 20th

I know Rahm Emanuel.  I served with Rahm Emanuel.  I believe Rahm Emanuel to have not done anything wrong here. 

And I tell you this, I‘ve got to think that he‘s even going to work to ensure that this communication strategy and this approach is a little different when they take office.  The good thing about it, hopefully we‘ll be beyond this come tomorrow afternoon.

SHUSTER:  Harold Ford Jr. and Pat Buchanan, thank you both.  We appreciate it. 

FORD:  Happy holidays, Pat and David.

SHUSTER:  Happy holidays. 

Coming up, Republican Senator James Inhofe says he has outraged the Bush administration, bucked Congress and the bailout.  But was he worried about executive overreach in July when he said that the unitary executive concept would promote more effective rule making? 

I guess it‘s a little like this... 

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  If this were a dictatorship, it would be a heck of a lot easier, just so long as I‘m the dictator. 

(END VIDEO CLIP)

SHUSTER:  We will put Senator Inhofe on the grill when 1600 PENNSYLVANIA AVENUE returns. 

(COMMERCIAL BREAK)

SHUSTER:  Welcome back. 

President Bush‘s decision to bail out the U.S. automakers with $17 billion in loans has outraged many of his fellow Republicans.  Some of them reject the idea that the big three were headed towards a disorderly bankruptcy or deserved any government help.

That is one of our topics tonight for “The Grill,” a segment where I cross-examine, interrogate and otherwise give the third degree to a guest. 

And our guest this evening is somebody who fires back very well, Oklahoma Senator James Inhofe. 

Senator, welcome. 

SEN. JAMES INHOFE ®, OKLAHOMA:  Well, welcome, David. 

You‘ve got the wrong outrage though.  I‘m not outraged about the president.  What I‘m outraged about is the member of Congress, the House and the Senate, who gave Henry Paulson and/or the president $700 billion to do what they want.  Then they turned around and complained because he used two percent of that for the bailout on the auto industry. 

You know, people have lost sight of the fact that the problem was voting for the $700 billion bailout. 

SHUSTER:  Well, you know what?  Let‘s start with that very point then. 

Here‘s what “The New York Times” has said about the TARP.  They write, “Under the requirements of the bailout legislation that Congress passed on October the 2nd, the Treasury automatically receives the second $350 billion if it asks for it—unless both houses of Congress vote to disapprove the request within 13 days.”

You are floating a bill to force Congress to vote on the second trench, and I want you to know that I applaud that.  I think that‘s terrific. 

But I also know that it‘s convenient for member of Congress not to take responsibility by voting.  So you‘re a realist here.  How many votes are you going to get for this thing? 

INHOFE:  Oh, I think I‘ll get a lot.  In fact, this will shock you, David, because I talked just recently to Bernie Sanders, who is one of the most liberal members of the Senate.  He is with me on this.  He is co-sponsoring this. 

It‘s Senate Bill 3697.  And what it does is freeze the second $350 billion.  Paulson has already gone through the first $350 billion. 

Now, if those people who voted for the $700 billion bailout, if they want to redeem themselves, then jump on this bill and you can save half of what we shouldn‘t have given away in the first place. 

Does that make sense? 

SHUSTER:  It does make sense.  And again, I applaud you for forcing a vote. 

But as far as the automakers were concerned, you‘ve been saying that they were not facing a disorderly bankruptcy.  President Bush said they were.  Was he lying? 

INHOFE:  Well, no.  The president wasn‘t lying. 

My point has always been, as far as they‘re concerned, is you‘re not going to force reorganization—and I‘m talking about the labor unions, as well as the management—unless they have to go through bankruptcy.  I believe that, and I think that some kind of a middle of the road thing isn‘t going to work because they‘re not—we‘re going to be right back where we are today six months from now if we just forego this thing. 

SHUSTER:  All right.  Let‘s talk about global warming. 

You‘ve issued a report that cites 650 experts to back up the claim that global warming is either a hoax or that it‘s not created by human activity.  I‘ve looked at the list and it includes engineers, geographers, economists, TV weathermen, none of whom have hardly any scientific expertise on climate change. 

Furthermore, one of the theoretical physicists that you cite, a man by the name of Freeman Dyson (ph), he has suggested powering rocket ships by detonating nuclear bombs.  So clearly Mr. Dyson (ph) doesn‘t know anything about rocket science either. 

Senator if there is a hoax, isn‘t it this report of yours? 

INHOFE:  No, it‘s not.  As a matter of fact, let‘s look at what the issue really is, David. 

It‘s not, is there global warming?  It‘s our manmade gases, CO2, methane, antipogenic (ph) gases the cause of global warming.  And I believe that is a huge hoax, because now the scientific community has turned around and said it‘s not. 

And I‘m not—all right, what about Claude Allegra (ph) in France, David Bellamy (ph) in the U.K., Nira Shaviv (ph) in Israel? 

SHUSTER:  Well, in one of those reports...

INHOFE:  Those are top, respected...

SHUSTER:  Sure.  One of those reports you suggested looked at how much the sun is contributing to global warming.  And it found that yes, while the sun was contributing to global warming, that in the industrial age, over the last 150 years, it has been CO2 that contributes the most to global warming, not the sun.  And CO2, as you know, is a byproduct of industrial activity. 

INHOFE:  Well, see, I disagree with you.  And when they come forward with something—and they‘re going to try to do it again. 

The last bill was the Warner/Lieberman bill.  That would have been about a $350 billion tax increase for America. 

Now, here‘s the problem.  Let‘s assume that you believe that CO2 caused, as you obviously do, causes...

(CROSSTALK)

SHUSTER:  Well, and as those scientists that you cited, they believe it.  But go ahead. 

INHOFE:  No, the scientists do not believe it.  The majority of them do not believe it. 

But let‘s assume that that is true.  If we unilaterally in America decide we‘re going to have a cap in trade where we‘re putting a heavy tax on Americans, all that would do is take our manufacturing base, send it over to places where they have no emission restraints, such as Mexico or China or India, and it‘s going to have a net effect of increasing, not decreasing, CO2. 

That‘s how ludicrous this thing is.  I was a believer at one time. 

Eight years ago... 

(CROSSTALK)

SHUSTER:  Look, Senator, you make a great point.  And I think it‘s a great policy debate about, do we want to put a cap in trade?  But the fact of the matter is, when we talked to the scientists that you named, some of those scientists say that CO2 is the cause and that you‘re misrepresenting their report.  And a couple of them have said, hey, I don‘t want to be part of Senator Inhofe‘s list, and they‘ve asked you to remove it and you haven‘t.

But in any case, Senator...

INHOFE:  Well, no.  If you could only come...

SHUSTER:  Go ahead.  You get the last word.

INHOFE:  If you could only come out with four names out of 650, I would say I‘m probably right. 

SHUSTER:  Well, I can go through a whole—I can go through a lot more.  We just don‘t have time. 

But Senator, you‘re a good support to come on.  I always appreciate having you on.  Thanks for coming on tonight.  And happy holidays. 

INHOFE:  Thank you, David. 

SHUSTER:  OK.

Up next, President Bush and the first lady get a parting gift from the staff.  And by proxy, a former president.

We‘ll explain next in “The Briefing Room.”

(COMMERCIAL BREAK)

SHUSTER:  We are back with a look at what‘s going on inside “The Briefing Room.”

President-elect Obama is in Hawaii enjoying his final getaway before taking office next month.  Over the weekend, he enjoyed a leisurely game of golf, spending about five hours on the course.  No word on his score, but we here on 1600 don‘t really care what he shot, how many birdies he had, of if he finished under par, or whether he was out of bounds. 

What struck us was his snack choice halfway through his round of golf.  On his tab were two hotdogs, two passion orange sodas, one POWERade and one Coke, and two Spam musubis.  The total was just under $18.  For those of you curious about the Spam thing, Spam musubi is a Hawaiian delicacy and consists of spam and a fried egg on a bed of rice held together with dried seaweed. 

I appreciate this is probably something he grew up eating.  Nonetheless, Spam on sushi or anything else is simply disgusting.  And it‘s almost as disgusting as that congealed gelatin thing that floats in the can of Spam.

So, Mr. President-elect, please don‘t bring that Spam stuff with you to Washington.  It‘s nasty. 

Next up, successful acting career—check.  Not so successful run for the presidency—check.  Radio show—check. 

Radio show, that‘s right.  That‘s the newest edition to Fred Thompson‘s resume.  He‘ll be replacing Bill O‘Reilly on the airwaves in March. 

It will be a two-hour show featuring Thompson sharing his views of politics, pop culture and water cooler stories.  He‘ll have guest interviews and take calls from listeners.

Another familiar face in the Republican primary, Rudy Giuliani, who was also said to be in the running to take over O‘Reilly‘s radio time slot but a deal was never struck.  Maybe the radio folks got nervous when they did a little background check on Giuliani and dug up this gem of an interview from Giuliani‘s weekly call-in show back when he was New York City mayor. 

(BEGIN AUDIO CLIP)

RUDY GIULIANI ®, FMR. PRESIDENTIAL CANDIDATE:  There is something really, really very sad about you.  You need help.  You need somebody to help you. 

This excessive concern with little weasels is a sickness.  Something has gone wrong with you.  Your compulsion about it, your excessive concern with it is the sign of something wrong in your personality. 

I know you‘re really angry at me and you‘re going to attack me, but actually you‘re angry at yourself.  And you‘re afraid of what I‘m raising with you.  You know?  You need help.  And please get it. 

(END AUDIO CLIP)

SHUSTER:  And finally, it‘s the season of giving.  And thanks to his senior staffers, President Bush and the first lady now have the equipment they need to settle into that slower-paced lifestyle he‘s told us he is looking forward to—rocking chairs. 

They were presented to the Bushes at a reunion dinner for his current and former cabinet staff.  One chair is made from an oak tree from their Crawford ranch.  The other from an oak tree planted by Benjamin Harrison in 1892 that fell on the White House lawn last December. 

The chairs will enable Mr. Bush to sit back and kick off his shoes. 

Shoes? 

Sorry.  We could not resist. 

By the way, the Iraqi journalist involved in that incident has now received marriage offers from several families.  A man in Egypt offered his 20-year-old daughter, and the daughter told the Reuters news agency, “This is something that would honor me.  I would like to live in Iraq, especially if were attached to this hero.”

Up next, the most unpopular vice president in recent history reflects on the past eight years.  He‘s Vice President Cheney on whether there should be checks on presidential authority. 

(BEGIN VIDEO CLIP)

CHENEY:  The president of the United States now for 50 years is followed at all times 24 hours a day by a military aide carrying a football that contains the nuclear codes that he would use and be authorized to use in the event of a nuclear attack on the United States.  He could launch the kind of a devastating attack the world has never seen. 

He doesn‘t to have to check with anybody.  He doesn‘t have to call the Congress.  He doesn‘t have to check with the courts.  He has that authority because of the nature of the world we live in. 

(END VIDEO CLIP)

SHUSTER:  More on that.  Plus, why Vice President Cheney says 9/11 was the high point of his tenure, when 1600 returns. 

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to 1600 PENNSYLVANIA AVENUE.  Tonight, legacy building; the Bush-Cheney team facing the worst approval ratings since the beginning of polling, seems to believe that if you build it, Americans and historians will come around and rethink the war, the scandals, the economic collapse.  Here‘s what Vice President Cheney saw when he looked in the future on Fox News Sunday. 

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES:  We didn‘t set out to achieve the highest level of polls that we could during the course of this administration.  We set out to do what we thought was necessary and essential for the country.  That clearly was the guiding principle with respect to the aftermath 9/11.  I feel really good about a lot of the things we‘ve done in this administration.  I think that they will be viewed in favorable light when it is time to write the history of this era. 

(END VIDEO CLIP)

SHUSTER:  Joining us now is Sean Wilentz, presidential historian and Princeton University Professor.  And Dr. Wilentz, unlike President Bush, who has at least seemed reflective in this time, Dick Cheney offers no apology whatsoever, wouldn‘t do anything differently.  What do you make of it? 

SEAN WILENTZ, PRESIDENTIAL HISTORIAN:  -- I think the president is going to be holding on to his legacy.  Most presidents do try to cultivate whatever legacy they can when they leave the White House. 

SHUSTER:  But Dick Cheney is particularly unusual.  And a lot of people find him downright frightening.  And this bit of tape may explain why.  Here he was being asked about the highest moment of the Bush-Cheney administration.  Watch.

(BEGIN VIDEO CLIP)

CHRIS WALLACE, FOX NEWS ANCHOR:  Highest moment the last eight years? 

CHENEY:  Highest moment in the last eight years?  I think the most important, the most compelling was 9/11 itself, and what that entailed, what we had to deal with, the way in which that changed the nation and set the agenda for what we have had to deal with as an administration. 

WALLACE:  And I assume that‘s also your lowest moment. 

CHENEY:  Sure.  Yes. 

(END VIDEO CLIP)

SHUSTER:  Sure.  Yes.  Isn‘t that kind of creepy? 

WILENTZ:  Well, it‘s creepy, but it sort of makes sense in a way too.  Look, before September 11th, the attacks, the Bush administration was kind of adrift.  You know, it campaigned for compassionate conservatism.  But it was hovering around 50 percent approval rating.  It was going nowhere fast, and it was a real question as to whether the president was even legitimate, given the election—strange election of 2000. 

9/11 and the Bush administration‘s response to it, first of all, gave George W. Bush legitimacy as president.  No question about it.  His poll ratings went way up.  And I think, actually, he responded pretty well in those first couple week, after a momentary hesitation.  So in that sense, it was their finest moment.  The problem is that behind the scenes and then thereafter, they proceeded to squander that opportunity. 

SHUSTER:  A lot of us, though, remember that while George W. Bush was on Air Force one flying around the country for part of 9/11, and trying to figure out what was going on, there was Dick Cheney, in the special bunker in the White House, essentially calling the shots.  He was the one giving the orders to the aircraft to take out a commercial jetliner if they needed to.  Is it possible that in some strange psychological way, that for Dick Cheney to have that sort of power, that he himself looks back as that was my highest moment? 

WILENTZ:  I‘m not Dick Cheney‘s shrink, so I don‘t know.  What I would say though is that there was something—something did happen that day which galvanized all these guys.  The adrenaline was pumping like crazy.  And they had to make very fast, quick decisions.  They didn‘t know what was going on.  I‘m willing to give—I‘m very tough on the Bush administration.  But I‘m willing to give them fairly high marks for what they managed to do that day.  So they had one good day out of eight years. 

SHUSTER:  All right, well, in 2006, you wrote a piece in “Rolling Stone” called “The Worst President in History” about George W. Bush: “No two term president since polling began has fallen from such a height of popularity after 9/11 as Bush has to such a life.  No president, including Harry Truman, whose ratings sometimes dipped below Nixonian levels, has experienced such a virtually unrelieved decline as Bush has since his high point.  The Bush has been a profile in fairly steady disillusionment.” 

At the time you said it was too early to know what 2009 would look like.  What do you think of now? 

WILENTZ:  Well, things haven‘t gotten much better, have they, David? 

The surge in Iraq certainly stabilized, at least, the military situation.  But after September 15th or whatever date you want to choose, with the financial collapse, while that‘s not entirely the fault of the Bush administration, it is coming at the end of their time in office and they‘re going to have bear that burden as well.  It doesn‘t look any better. 

SHUSTER:  Sean Wilentz.  Sean, thanks for coming on.  I appreciate it. 

WILENTZ:  My pleasure.  My pleasure. 

SHUSTER:  Let‘s put all this to our panel.  Joining us now are Chrystia Freeland.  She is the U.S. managing editor for “Financial Times.”  Lawrence O‘Donnell, MSNBC political analyst and former chief of staff for the Senate Finance Committee, and still with us is Pat Buchanan, former Reagan White House communications director and Nixon speech writer and also an MSNBC analyst. 

Lawrence, let‘s start with you.  That clip, again, of Dick Cheney in the highest moment in the last eight years being 9/11; does that creep you out.   

LAWRENCE O‘DONNELL, MSNBC POLITICAL ANALYST:  No, David.  I think this presidency can only be understood in terms of what happened that morning on September 11th.  This is only vice president in history who had to get on the phone and ask the president for the authority to shoot down civilian airliners.  And as you pointed out, the president granted him that authority.  He is the only president in history who had to be physically run through the White House to a point of physical safety, because they were afraid of the integrity of the building, afraid that the building could blow up, be hit by an airline. 

SHUSTER:  Why would that be a high? 

O‘DONNELL:  I‘m not saying it is the high.  I‘m saying this defined every acting action and every thought that that vice president took from that moment forward.  You have friends of his from previous work in government, previous administrations, saying, after—a couple years after that, they didn‘t recognize him.  They didn‘t know who he had become.  To ignore what happened to both president and the vice president on 9/11, and to not take it as the defining psychological and emotional condition through which they proceeded, is a mistake.  It is hugely important. 

Bob Woodward‘s minute by minute accounts of that day, I think, show—and others—show very clearly how important this was.  It doesn‘t surprise me at all that he would go back to that day and say, in effect, that was the most intense moment on the job, and that‘s the moment on the job where he thinks that he and the president rose to their highest levels of doing what they are charged to do, which is protect the American people. 

SHUSTER:  So, Pat, George W. Bush and Dick Cheney, intensity equals highness? 

BUCHANAN:  I think, maybe highest moment, he probably should have said the fall of Saddam Hussein, dragging down that statue and the victory.  But I agree with Lawrence 100 percent.  This is the most dramatic, historic moment of the Bush presidency, the defining moment, the road to Damascus moment.  I think steel went into the spine of President Bush.  He became an entirely different man, an ideologue devoted to this neo-conservative ideology of democratizing the world.  And he got his mission. 

And I think for Cheney being there—and that fourth plane might have gone to the White House. 

SHUSTER:  Here‘s the issue, Pat.  I agree with you and I agree with Lawrence.  I think a lot of American look at the fact we were hit on 9/11, after the president had been warned in the daily briefings, “Bin Laden determined to strike in the United States” --  The fact that this was allowed to happened, a lot of Americans would say,that is one of the lowest moments in U.S. history.  Sure, it was a turning point, gave them a lot of power.  Chrystia Freeland, the fact that we were hit, the fact that a lot of people see 9/11 as something so horrific and so embarrassing, in terms of the security lapses; does that perhaps then explain—again, here we have yet another disconnect between Dick Cheney and most Americans who view this situation? 

CHRYSTIA FREELAND, “THE FINANCIAL TIMES”:  Yes.  I think it does reveal a disconnect.  I think also, maybe what he was trying to express was that that was the most consequential moment of the Bush presidency.  In those terms, I think he is absolutely right to pick 9/11.  What I think a way in which his verdict on what happened after 9/11 and the verdict of probably most Americans today, and maybe the verdict of history would differ, is that was really the moment when it became possible for George Bush to be a truly great president.  It was clearly a turning point in world history and in American history.  And I think immediately afterwards, it looked as if maybe George Bush would rise to the challenge.  The world was ready for that.

If you look back on that, remember, that was the moment when even the

French were saying, we‘re all Americans today.  I think the real tragedy,

when you look back on that moment is how much America and George Bush

squandered, the loss of America‘s standing in the world, the inability then

with hindsight, the inability to set American energy policy on a much wiser course, which was possible then when the American economy was robust.  I would say it is the most consequential moment of the Bush presidency, and, with hindsight, maybe the most tragic one, the moment when opportunities began to be squandered. 

BUCHANAN:  I think where Bush broke it—I think the whole country was with him for four months.  When he got up there in that State of the Union, and after he had taken down the Afghan Taliban regime—we had driven al Qaeda out.  We had missed bin Laden.  But he got up and said there is an axis of evil in the world and he virtually declared war on three countries.  And you said, what in heaven‘s name—awful as these three regimes are, what did they have to do with the war being waged against us? 

I think the diversion began there.  And the going into Iraq—I will say this for Cheney; the contention upon the outcome of Iraq—if that turns out to be a tremendous success, which I doubt that it is, then there will be a second look, as there was a second look at Truman.  But if it turns out to be a disaster, I think it‘s the legacy of George Bush. 

SHUSTER:  I want to move on real quickly from legacy to dynasty.  The other big issue we‘re talking about, of course, is few Americans of a certain age will ever forget the image of Caroline Kennedy holding her mother‘s hand at her father‘s funeral in 1963, or kneeling beside her father‘s coffin.  Now that Caroline Kennedy has decided to campaign for Hillary Clinton‘ Senate seat, and take up some of these issues, there is something about the tension between the iconic Americaness of the Kennedy legacy and yet the un-American idea of governing by birth right.  It‘s all stirring up a national debate.

Lawrence, what do you make of Caroline Kennedy and what she is up against?  Do you think it is a wise idea? 

O‘DONNELL:  Well, she is up a difficult climate for Senate appointments.  The reason we appoint senators when there is a vacancy is we consider those seats so valuable and so important that we can‘t wait.  If a Congressman dies, we do nothing.  We just say OK, let‘s have a special election or let‘s just wait until the next election.  But a Senate seat is considered so important that we rush in with an appointment.  So, in the age of Blagojevich, these appointments have become very messy looking things.  So there is a huge reaction now, that we‘ve never seen before, against the very concept of someone being appointed. 

Then, because Caroline Kennedy hasn‘t, as some people say, paid her dues, as if there is some prerequisite to be a senator that you have been in elected office previously, which of course there isn‘t, there comes in certain circles a prejudice against her because the appointment process just seems too easy for her.  Within that context, she is trying to do something that we‘ve never seen anyone try to do before or be forced to do, which is publicly advance the notion of her candidacy, as it were, to be a senator, in a framework for which there is no way to campaign.  So it‘s a very odd process to have to watch. 

SHUSTER:  Absolutely.  Pat, Lawrence, Chrystia, stay with us.  We‘re going to get back to this.  Coming up, recipients of the 700 billion dollar bailout say they are declining to disclose how they are using the money the tax payers put up to save their butts.  That‘s next on 1600.

But first, there‘s at least one group of people mourning the end of the Bush-Cheney era. 

(BEGIN VIDEO CLIP)

JAY LENO, “THE TONIGHT SHOW”:  In today‘s newspaper, an interview, “President Bush looking back on his terms in office.”  He said he didn‘t strive to be popular.  That‘s what he said.  He didn‘t strive to be popular.  To use his own words, mission accomplished. 

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to 1600.  Here‘s your outrage story of the day.  The Associated Press wanted to know how the 700 billion dollar bailout fund was being spent.  So the AP call 21 banks that received at least one billion dollars of taxpayer money.  Here‘s what they found out: “after receiving billions in aid from US tax payers, the nation‘s largest banks say they cannot track exactly how they‘re spending the money, or they simply refuse to discuss it.”

Back with us, Chrystia Freeland, Lawrence O‘Donnell and Pat Buchanan. 

Pat, this is outrageous. 

BUCHANAN:  Look, the Congress of the United States voted five percent of the entire Gross National Product to give it to Mr. Paulson basically, no questions asked.  He gives it to the bank.  The banks can‘t tell us what they‘re doing with it, and neither can the Department of the Treasury.  It is really an abdication of Congress.  And I really commend the Republicans who had the courage in that panic in the fall of this year to vote no to the 700 billion twice. 

SHUSTER:  Lawrence O‘Donnell, this does belong—the fault does belong with some of these Democrats, especially the ones who are not having hearings.  Why aren‘t the CEOs of these banks having to testify the way the auto makers were, and being for forced to explain what they did with the money? 

O‘DONNELL:  That wasn‘t part of the requirements of the package.  I do have some sympathy for them, because accounting is done in the aggregate, which is to say, if I have a pool of water here, and I take a gallon jug and pour a gallon of water into the pool, and then I take a gallon out, you cannot say which gallon that was that I took out.  Money is fungible.  That money went into the giant pool of money that is used in the capitalization of those banks, and it is not that easy to say, here are the dollars that I used for that.  So I have a certain sympathy for the complexity of the question. 

SHUSTER:  Well, Chrystia Freeland, here‘s what JP Morgan spokesman told the Associated Press, quote, “we‘ve lent some of it.  We‘ve not lent some of it.  We‘ve not given any accounting of here‘s how we‘re doing it.  We‘ve not disclosed that to the public.  We‘re declining to.”  

What‘s keeping them from giving the same explanation we just heard from Lawrence? 

FREELAND:  I think the dirty secret of what has happened with the TARP money is actually the banks are hoarding most of that capital, and they‘re hoarding it for a very good reason.  The reason that it was such an emergency, that Hank Paulson went to the Congress and said, look, if I don‘t get this money, we could be in the throws of a new Great Depression; the financial system could collapse, is we were really at a moment when the financial system could collapse.  And we were at a moment when it turned out that America‘s biggest financial institutions, or at least many o9f them, were severely under-capitalized.  That means they needed the money just to sort of be stable, just to not go broke.  They‘re really worried that going forward into an economic recession, their balance sheets are going to take more hits.  So really they need to hang on to the capital.

What‘s tricky for them, what was trickier for the Treasury, what‘s going to be tricky for Barack Obama is that‘s not something that the American people want to hear.  They don‘t really want to hear, yes, the banks needed 350 billion dollars just in order to keep it so they don‘t go broke.  What people want to hear is the banks got that money and they‘re going to lend it to us. 

SHUSTER:  Right, they were not supposed to hoard the money.  That was the point, right?

FREELAND:  But actually I don‘t entirely agree with that.  I think what think the Treasury was worried about at that particular moment, and probably quite rightly worried about, was not so much are people going to get mortgages, are people going to get credit cards.  They were really worried that the banking system would fail.  Part of the intent was to recapitalize the banks, just so they would survive. 

I think the really scary story is it might actually take more capital to recapitalize these banks.  We‘ve already seen that Citi, which had to come back and get even more money. 

BUCHANAN:  The problem there is that there is bailout fatigue and there is bailout backlash.  You got it right here with Mr. Inhofe, the senator from Oklahoma, whose views are probably far more popular in the country than any disposition to support that second trench.  My guess is, if he comes back to block that second 350, he‘ll get an awful lot of Republican support.  Look how many Republicans refused to give two percent of it to save General Motors. 

FREELAND:  I think Pat is absolutely right. 

SHUSTER:  Lawrence, the politics of it, there may be perfectly, but that doesn‘t matter in a political environment.  They now have to convince these politicians, here‘s what we‘ve done with the money, if simply only to could them, here‘s why we need more. 

O‘DONNELL:  Yes, I agree with Chrystia.  This was really about crisis aversion.  You can—the only way they can politically get more is to present at least as grave a crisis circumstance as they presented the first time.  And so—and that‘s not the image they want to convey publicly, because they want to have confidence among the depositing class and among, possibly, new borrowers that they might try to attract. 

Listen, David, I‘m suggesting that there is at best a half reasonable explanation for what they‘re doing. 

SHUSTER:  Fair enough.

(CROSS TALK)

SHUSTER:  Their communications skills are almost as bad as their skills at trying to figure out whether these Ponzi schemes—

BUCHANAN:  Lawrence did a better job than any of these big banks did. 

SHUSTER:  Lawrence, you‘ve got to be CEO of one of these institutions. 

In any case, Lawrence O‘Donnell, Chrystia Freeland, Pat Buchanan. 

O‘DONNELL:  I can‘t do it for the dollar a year though. 

SHUSTER:  Coming up next, is President-Elect Obama‘s stimulus plan bad for women?  We‘ll talk to one columnist who says yes when 1600 returns.

(COMMERCIAL BREAK)

SHUSTER:  Welcome back.  Over the weekend, President-Elect Obama‘s transition team revised their job creation goal for the next two years, raising it from 2.5 million jobs to three million.  The change came after Obama‘s top economic advisers warned him the economy was in a deeper recession than previously thought, and that the incoming administration‘s stimulus plan would need to be even bigger than previously envisioned.  The price tag of the job creation program is going to be huge, but there are some concerns about who may benefit and who could be left behind. 

Joining us now with a fascinating concern is Linda Hirshman, “New York Times” op ed contributor and the author of “Get to Work and Get a Life Before It‘s Too Late.”  Linda, you‘ve raised the issue of gender inequity, the idea that the money spent on infrastructure and construction will primarily benefit men.  Explain. 

LINDA HIRSHMAN, AUTHOR “GET TO WORK”:  Right.  My theory is that Obama‘s people must have been watching Bob the Builder too much, because they created—they proposed at first a job stimulus plan, the jobs in which we‘re going to be essentially 90 percent male.  Most of the job for building highways and bridges and even the creation of alternative fuels fall into the categories of construction, which is heavily male.  It is only nine percent female at best.  And engineering, which is 88 percent male and 12 percent female. 

So, initially, the proposal seemed like it was going to take money from all the tax payers—you know, half the tax payers in America are women—and give it to several million men. 

SHUSTER:  But now it looks like there is a lot of money that will go to school and that sort of thing, right?  Are you happier with where this is going?

HIRSHMAN:  It would have been hard for me to be less happy.  So I am

in fact happier.  I read in the paper yesterday that the most recent

version of the plan, which seems to change every day, included an element -

we don‘t know how large or anything—for education for teachers, specifically, which is a heavily female job category, and for early childhood education.  So that would be a great first step, because women are mostly found in job categories that create human infrastructure, like teaching children and nursing and social work.  So the more that the stimulus plan creates human infrastructure, the more equitable it will be for women. 

SHUSTER:  Is there something specific?  Never mind the education that you just talked about.  Give us an example of the human infrastructure. 

HIRSHMAN:  OK.  My favorite program—as you can imagine, after my piece appeared in the “New York Times,” I was inundated with people suggesting things they would like to have the money for.  So my favorite program is—came from the librarians.  The American Library Association has asked for 100 million dollars to keep libraries open and to equip them with computers and stuff.  Since the downturn in the economy, people are going to the libraries to use their computers, because they can‘t afford to do it any other place.  And they go—

SHUSTER:  Linda, that is—I agree with you.  I think if there is a trillion dollars that‘s going to be spent, they could certainly find 100 million dollars for the libraries and upgrading libraries, a place where a lot of people go in this down turn.  Linda, thanks for joining us.  We appreciate it.  Interesting peaceful, and we appreciate you coming on. 

HIRSHMAN:  Thank you for having me. 

SHUSTER:  That‘s the view from 1600 PENNSYLVANIA AVENUE tonight.  I‘m David Shuster.  Thank you for watching.  We‘ll see you back here tomorrow night, same time, 6:00 p.m. Eastern.  “HARDBALL” starts right now.

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