updated 1/13/2009 4:04:32 PM ET 2009-01-13T21:04:32

DAVID SHUSTER, HOST:  Tonight, the embattled governor of Illinois gets impeached, goes for a jog, and then conducts one of the most remarkable news conferences you will ever see. 

Plus, President-elect Obama tries to stay above the crossfire over fixing the economy, but Republicans and Democrats are now pulling him hard in different directions amidst the worst jobs report in 60 years. 

Later, the demonstrations against Israel are growing.  We will jump into the debate over the role of anti-Semitism. 

And now that Obama has unveiled his intelligence team, the debate is on again over torture, something he and Leon Panetta strongly oppose.  And Sarah Palin‘s filmmaker. 

(BEGIN VIDEO CLIP)

JOHN ZIEGLER, DOCUMENTARY FILMMAKER:  You are a joke.  Did you not watch the clip?

SHUSTER:  What‘s a joke is the fact that you and Sarah Palin—you and Sarah Palin...

ZIEGLER:  Did you not watch the clip? 

SHUSTER:  ... didn‘t take any responsibility...

ZIEGLER:  This is clearly...

(END VIDEO CLIP)

SHUSTER:  He will be live on our air again in this hour for round two. 

All tonight, on 1600 PENNSYLVANIA AVENUE. 

Eleven days until the inauguration of President-elect Barack Obama. 

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

The man who allegedly tried to sell Barack Obama‘s vacated Senate seat to the highest bidder was impeached today by the Illinois legislature.  During the vote, Rod Blagojevich led reporters and camera crews on a lengthy jog.  If that wasn‘t strange enough, Blagojevich formally addressed the media late today and accused Illinois lawmakers of trying to punish him for helping cancer survivors. 

(BEGIN VIDEO CLIP)

GOV. ROD BLAGOJEVICH (D), ILLINOIS:  The House‘s action today and the causes of the impeachment are because I‘ve done things to fight for families who are with me here today. 

(END VIDEO CLIP)

SHUSTER:  Let‘s bring in our panel: Lawrence O‘Donnell, MSNBC political analyst; Michelle Bernard, president of the Independent Women‘s Forum and an MSNBC political analyst; and John Harwood of CNBC and “The New York Times.”

Michelle, let‘s start with you.

What was your reaction to this today? 

MICHELLE BERNARD, MSNBC POLITICAL ANALYST:  I thought it was hysterical.  My initial reaction was political theater part two, part three.  When will it ever end? 

Then as you start paying closer attention, as a woman, I was thinking that it seemed a bit bizarre that his message was, don‘t indict me, don‘t put me in jail, I am the person who is at the forefront of cancer research for women in Illinois.  You know, I‘m making sure that women get mammograms, I‘m making sure that women don‘t get breast cancer.  If they do, you know, I‘m going to take care of it.  Don‘t put me in jail. 

All of a sudden, you know, wheeling out of the person in the wheelchair and the ill.  It was just very, very strange. 

SHUSTER:  John Harwood, the reason we care, of course, is because of the connection to Barack Obama.  It was Obama‘s Senate seat he was trying to sell.  Obama clearly didn‘t know about that.  But to the extent that Blagojevich looks like some sort of bizarre character, does it hurt Barack Obama and the Illinois crowd, or does it help Barack Obama because it creates even more separation just because of how strange this guy is? 

JOHN HARWOOD, CNBC CHIEF WASHINGTON CORRESPONDENT:  Well, first of all, I think it sounds like Michelle Bernard doesn‘t care about people who are hurting in Illinois. 

(LAUGHTER)

HARWOOD:  I‘m teasing. 

Look, Barack Obama has got plenty of separation from Rod Blagojevich.  I think it helps that the Illinois Supreme Court removed a roadblock to Roland Burris‘ appointment today by saying that the secretary of state doesn‘t have to sign that piece of paper and that Burris can be seated.  That is going to happen.  And the quicker that happens, the more distance Barack Obama gets. 

Look, Blagojevich, from that clownish jog that he was doing in the—in the snow, to this preposterous press conference—you know, I was watching before there.  We were on the air waiting for him to come out.  It was more outlandish than anything I could have expected, for him to come out and try to play that card, say the Illinois House was impeaching him because they didn‘t agree with his policies. 

I think he becomes a story unto himself.  It becomes less about Illinois, less about Barack Obama and all about Rod Blagojevich. 

SHUSTER:  We‘re going to play a montage of Blagojevich in just a second. 

But Lawrence, I want to bring you in here first.

As far as Roland Burris, there were some reports that he did have some contacts with Blagojevich.  Is there any question or any hindrance there to him actually getting the seat because of these reports, is it just a done deal, he‘s going to be the senator, that‘s it? 

LAWRENCE O‘DONNELL, MSNBC POLITICAL ANALYST:  You know, I don‘t think it‘s a done deal.  I think this is a day-to-day deal.  It might have felt like a done deal yesterday, and now with the Illinois Supreme Court confusing things, it seems to me, by saying you don‘t need the secretary of state‘s signature, that doesn‘t really move anything forward.  So it‘s not clear to me how that‘s going to work out. 

You know, I agree with every adjective used about the press conference today so far.  But let‘s remember something else about it.  It showed Blagojevich‘s personal political performance skills, which are very good. 

You can now understand in the rest of the country how this guy got elected twice statewide in Illinois.  That was, context aside now, completely context aside, the most perfectly performed press announcement I have ever seen a politician do. 

(LAUGHTER)

O‘DONNELL:  It was done—this is important because there‘s an important lesson for voters in this.  It was done without notes.  He used the names of people he had just met that day without looking down and reading anything. 

It was very specific about governing policy.  It included very important governing policies and political policies.  And it was performed flawlessly. 

Now, at this same moment, we are, in the New York press and elsewhere, criticizing Caroline Kennedy because she lacks a certain kind of verbal facility that we‘re used to in politicians.  Let‘s remember when we‘re in that discussion that there is no one better at verbal political presentation than Rod Blagojevich.  So if we judge our public servants by their verbal presentations, we could be making some very serious mistakes. 

SHUSTER:  Well, let‘s all judge it.  And here‘s a montage of Rod Blagojevich‘s greatest hits from this remarkable press conference this afternoon. 

Watch.

(BEGIN VIDEO CLIP)

BLAGOJEVICH From the very moment of my reelection, I‘ve been engaged in a struggle with the House to try to get things done for people. 

We‘re joined here today by several families who benefited by some of the programs and some of the initiatives because I wouldn‘t take no for an answer from a House that was designed to block everything. 

And by the way, there‘s a bill that passed the Senate that the House has yet to act on.  And I would suggest that while they‘re busy trying to throw me out of office, they may actually want to stop families from being thrown out of their homes. 

Ought to be able to follow a simple lesson that I was taught to believe in, in Sunday school called the Golden Rule, that you should do unto others as you would have others do unto you. 

(END VIDEO CLIP)

SHUSTER:  The Golden Rule, cancer survivors, the House isn‘t doing its job.  Is any of this going to help him, John, in terms of, I don‘t know, convincing the Senate in Illinois from not actually finding him guilty in this impeachment trial? 

HARWOOD:  I highly doubt it.  Look, I disagree with Lawrence.  I don‘t think that he is an unequal political communicator.  I think that‘s minor league Bill Clinton stuff, in part because, for it to be a major league performance, you have to have some measure of credibility.  There is not one thinking human being on this planet who buys any of what Rod Blagojevich was saying. 

The other thing, Lawrence, I just wanted to ask you—I‘m not sure why you think the Illinois Supreme Court ruling is not significant since the signature of Jesse White is what the Senate Democratic leadership was saying was preventing him from getting seated. 

O‘DONNELL:  Well, because the Illinois Supreme Court doesn‘t control Senate rules.  The Senate has a rule saying we need the secretary of state‘s signature.  Now the Illinois Supreme Court seems to be saying, we can send you to Washington without the secretary of state‘s signature.  I don‘t know how that gets resolved, John.

HARWOOD:  Right.

O‘DONNELL:  I don‘t see how this moves it forward. 

HARWOOD:   Yes, but I just think it takes away a pretext that Democrats were able to park behind...

O‘DONNELL:  But they still have their rules. 

HARWOOD:  ... and say this is why we‘re not going to seat him. 

O‘DONNELL:  But they still have their rules. 

HARWOOD:  Yes, they still have their rules, but as you know better than I do, the Senate can waive their rules and do whatever they decide is expedient when they want to.

O‘DONNELL:  Yes.  That‘s true.

SHUSTER:  And shouldn‘t they waive it now?  I mean, given that you had the ruling, given that—I mean, Harry Reid, ,just because he wants to, can say, OK, fine, Burris is the senator for two years. 

Michelle.

BERNARD:  They need to just dispense with it.  One of the most important things that happened with the Blagojevich press conference today was, clearly, there is an enormous difference between Roland Burris and Blagojevich. 

If anyone ever thought there was any sort of pay to play or that there was some sort of weird connection between the two of them, you saw in terms of character today that they are two very different men.  Senator-designate Burris testified yesterday.  No pay to play.  He‘s clearly qualified. 

Harry Reid and the rest of the members of the Senate need to let this go, seat the man, and move forward, and allow the politics and the theatrics of Chicago to just disconnect themselves from it. 

HARWOOD:  It may be time for Burris to call his mausoleum contractor and get the new etching for the Senate seat.

SHUSTER:  John, Michelle and Lawrence, we‘re going to ask you to stick around. 

And still ahead...

O‘DONNELL:  It does take a vote in the Senate to overrule that rule. 

SHUSTER:  That‘s true.

O‘DONNELL:  The Senate has to vote on it. 

SHUSTER:  Lawrence, John and Michelle, stick around. 

Still ahead on 1600...

(BEGIN VIDEO CLIP)

BARACK OBAMA (D-IL), PRESIDENT-ELECT:  Let me be clear, today‘s job report only underscores the need for us to move with a sense of urgency and common purpose. 

(END VIDEO CLIP)

SHUSTER:  ... the president-elect pledges to improve the economic crisis. 

The question is, can anyone agree on how to get it done? 

Plus, while announcing his new intelligence team, the president-elect is talking about change you can believe in.  but this time, it‘s change on the gridiron. 

(COMMERCIAL BREAK)

SHUSTER:  Welcome back.

Today, the U.S. government came out with a jobs report showing more than 500,000 jobs were lost in December, making 2008 the worst year for job losses since World War II.  Unemployment now stands at 7.2 percent, and most analysts believe it is headed toward double digits.

That has ratcheted up the political and economic drama now playing out here in Washington.  President-elect Obama again today pleaded with Congress to act quickly on his massive stimulus plan.

(BEGIN VIDEO CLIP)

OBAMA:  The statistics we see flashing on the screens are real lives, real suffering, real fears, and it is my job to make sure that Congress stays focused in the weeks to come and gets this done. 

(END VIDEO CLIP)

SHUSTER:  But the president-elect is started to get hit from both sides.  Republicans want more tax cuts.  Many Democrats in Congress want more spending and say the Bush tax cuts need to be repealed. 

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER:  Put me down as clearly as you possibly can as one who wants to have those tax cuts for the wealthiest in America repealed.  I couldn‘t be more clear.  Put me down as one in favor of repeal as soon as possible. 

(END VIDEO CLIP)

SHUSTER:  Still with us, Lawrence O‘Donnell, MSNBC political analyst;

Michelle Bernard, president of the Independent Women‘s Forum and an MSNBC political analyst; and John Harwood of CNBC and “The New York Times.”

John, is it tax cuts or government spending that‘s going to get us out of this economic rut? 

HARWOOD:  Well, some kind of stimulus is the consensus solution by economists on both sides.  There‘s disagreements over the composition, disagreements over the size of the stimulus.  So it‘s going to happen. 

You‘ve got a separate political question from the economic question about, how do you get the votes to do it?  The people who advise Obama on the economy—and Obama won the election—say that spending, direct spending, has the greatest multiplier, the greatest bang for the buck.  And so that‘s where the bulk of the spending is going. 

They have business tax cuts.  He ran on some of them in the campaign.  They‘ve expanded that portion.  And we‘re going to have a debate over the next few weeks over exactly what that mix is. 

But I don‘t think at this point, David, that we can draw the conclusion that this is seriously problematic for Obama.  I think he‘s going to get a package, it‘s going to be a big package, and he‘s probably going to get it pretty quickly. 

SHUSTER:  One of the most intriguing arguments I have seen is that it‘s not big enough.  And Paul Krugman, the Nobel Prize-winning economist, criticized Obama for saying that the size matters.  Here‘s what Krugman said today. 

“Only about 60 percent of the Obama plan consists of public spending.  The rest consists of tax cuts—and many economists are skeptical about how much these tax cuts, especially the tax breaks for business, will actually do to boost spending.” 

Today, on his own, Obama addressed the Nobel Prize-winning economist.

Watch. 

(BEGIN VIDEO CLIP)

OBAMA:  I want this to work.  This is not an intellectual exercise.  And there‘s no pride of authorship.  If Paul Krugman has a good idea in terms of how to spend money efficiently and effectively to jump-start the economy, then we‘re going to do it. 

(END VIDEO CLIP)

SHUSTER:  Lawrence, your reaction?  And is Krugman correct that $1 trillion is not going to be enough? 

O‘DONNELL:  Boy, that is a columnist‘s and economist‘s dream, to have the president say that about you in a press conference. 

Listen, I agree, we have experience that indicates the Krugman approach is more correct than this tax cut approach in that we had a—you know, we tried one of these stimuluses through the Treasury last year.  It didn‘t work.  Nothing happened. 

We had an enormous stimulus, you would think of, cutting the price of gasoline by $2, cutting it in half down from $4, close to $5 here in California.  And nothing happened.  That was real money going into consumers‘ pockets and it did nothing to stimulate the economy. 

What is absolutely true, and it‘s not really arguable, is that there is a multiplier effect from public spending, and from virtually any spending there is a multiplier effect.  And that‘s why Paul Krugman and others and people on the Obama team want to see much more of the public spending than on the tax cutting.  And the particulars of the tax cutting that they‘re talking about, some of them are very, very inefficient ways to try to stimulate the economy. 

Just one example, a tax credit for hiring workers can be gamed, as they say, in the tax business very easily by employers.  If you show me that I‘m going to get a $3,000 tax credit for hiring a worker in, say, April of 2009, I just might fire that worker in March and hire that worker three weeks later. 

(LAUGHTER)

O‘DONNELL:  No, don‘t laugh about that.  In the Senate Finance Committee, where I used to work and we write those laws, constantly trying to figure out how to stop that kind of maneuver, and it‘s impossible to stop it all. 

SHUSTER:  No, and I don‘t mean to laugh, but, I mean, obviously, I think that‘s one of the things that‘s going to be the first to go. 

But Michelle, in terms of the political courage, does Barack Obama have the political courage, does his team have the courage to say, you know what, Krugman and the others are right, we need to err on the side of spending on these big infrastructure projects, and if that causes us to go above $1 trillion, so be it? 

BERNARD:  I think that they have the political courage to do it.  I think that the president-elect is being sincere when he says he wants this to work.  But what they don‘t have the political courage to do, and I think where they will be politically savvy, is making sure that they don‘t enter this administration engaging in some sort of class warfare. 

You know, to end the Bush tax cuts, as Nancy Pelosi was arguing today, from the perspective of many people is to increase their taxes.  And you start to engage in a class warfare, and you say to a lot of people who are the engine of the economy that, we dislike you, we don‘t trust you, you‘re not paying enough money.  And some of those people might just say, then, we‘re going to discontinue hiring people. 

So they‘ve got to be very careful about how they do this and not penalize people who right now are still the engine of the economy. 

SHUSTER:  John Harwood, you sat down with Barack Obama this week.  You get the last word.  When he talks today about being open minded, any idea is a good idea if you can prove to me that it works, explain how that works when you‘re dealing with him on one-on-one. 

HARWOOD:  Well, I think he means it.  He is somebody who is trying to take ideology out as much as possible, be very pragmatic, build on this 80 percent approval rating he has right now. 

Nancy Pelosi is going to lose that argument because Barack Obama made crystal clear that he is not interested in pushing that fight in 2009.  And on Paul Krugman‘s point about the thing growing, he also told me that this package was built to grow.  He said, we decided to propose on the low side, and we‘ll see what happens in the legislative process.  That‘s code for we can buy some votes by making this package bigger. 

SHUSTER:  John Harwood, Michelle Bernard, Lawrence O‘Donnell, thank you all very much. 

We do have some hot debates coming up. 

And up next, former vice presidential candidate Sarah Palin blasts reporters in a new documentary, complaining that she was smeared and exploited and calls the media sexist and elitist.  I‘ll take on a filmmaker who agrees with Palin. 

Stick around.  1600 will be right back.

(COMMERCIAL BREAK)

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

First up, former vice presidential candidate Sarah Palin takes on the news media in an upcoming conservative documentary.  Take a listen to what she had to say about what she claimed was unfair treatment by the media. 

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN ®, ALASKA:  You know, I have the same question that perhaps you do and others who would participate in this documentary, even, trying to figure out, is it political, is it sexism?  What is it that drives someone to believe the worst and perpetuate the worst in terms of gossip, lies? 

(END VIDEO CLIP)

SHUSTER:  Earlier today, I talked to the filmmaker who created this documentary, John Ziegler. 

(BEGIN VIDEO CLIP)

SHUSTER:  When you interviewed her, did she ever express any responsibility for her own shortcomings?  Any? 

ZIEGLER:  I feel like this is O.J. Simpson interviewing the cops about the murders.

SHUSTER:  No, it‘s a yes or no answer.  It‘s a simple yes or no answer. 

ZIEGLER:  This is really, I‘m the cop and you‘re O.J. Simpson here.

SHUSTER:  Did she express any responsibility for her own shortcomings? 

ZIEGLER:  Yes.  Yes.

SHUSTER:  OK.  What?

ZIEGLER:  She did.  And if you would have watched...

SHUSTER:  What did she say?

ZIEGLER:  If you had watched the YouTube clip that we released, you would have already realized that. 

(END VIDEO CLIP)

SHUSTER:  John and I have had the afternoon to return to our respective corners and reload.  That‘s right, he‘ll be with us live again, coming up.  Round two, so to speak. 

Speaking of another round, President-elect Obama underscored again today that he isn‘t satisfied with college football‘s Bowl Championship Series.  The BCS concluded with Florida defeating Oklahoma in the big game, but the president-elect noted that a few other teams finished the season with the same record as the Gators. 

(BEGIN VIDEO CLIP)

OBAMA:  Congratulations to Florida.  I have to point out, if I‘m Utah, if I‘m USC, or if I‘m Texas, I may still have some quibbles.  And you‘ve heard my pitch. 

QUESTION:  Who‘s number one? 

QUESTION:  Who‘s number one?

OBAMA:  That‘s why we need a playoff. 

(LAUGHTER)

(END VIDEO CLIP)

SHUSTER:  All of us on this show agree.  And hopefully the NCAA is listening. 

As for Florida, enjoy your trip to the Obama White House, asterisks and all. 

This next story promises to improve morale in the military.  A sober memo gives U.S. troops stationed in Iraq a little bit of freedom on Super Bowl Sunday. 

Troops in Iraq will be able to celebrate Super Bowl 43 with beer.  Of course, there‘s a catch.  Only two beers per person, and only on Super Bowl night.  The whole idea is courtesy of the top U.S. commander in Iraq, General Ray Odierno, who happens to be a football fan himself. 

The last time the military ban on alcohol was lifted for troops in Baghdad was back in 2005. 

And a reminder.  Next week is Senator John Kerry Appreciation Week here on 1600 because all of us can relate to being left off a team or being left behind sometime in our life. 

Kerry, of course, endorsed Barack Obama‘s candidacy early in Obama‘s campaign fight with Clinton, and yet it was Clinton who got the job Kerry wanted as secretary of state.  So next week, as John Kerry is presiding over the Foreign Relations Committee confirmation hearing for Clinton, we‘re going to show Kerry some love and attention. 

Dust off your Kerry signs and stickers.  Hillary Clinton may own the news, but John Kerry is going to own the week, at least next week, here on 1600. 

Repeat after me, Senator Kerry, we appreciate you. 

Still ahead on 1600, Sarah Palin‘s not holding back. 

(BEGIN VIDEO CLIP)

PALIN:  The state of affairs in the world of the media today, mainstream media, especially, if they‘re going to rely on anonymous bloggers for their hard news information, very scary. 

(END VIDEO CLIP)

SHUSTER:  We‘ll talk to the filmmaker who sat down with Sarah Palin and got the interview everyone‘s talking about today.  Documentary filmmaker John Ziegler next on 1600 PENNSYLVANIA AVENUE.

(COMMERCIAL BREAK)

SHUSTER:  Still ahead tonight, former Vice Presidential Candidate Sarah Palin says she was exploited by a biased media and that it was a reason she and John McCain didn‘t reach their goal of getting to 1600 PENNSYLVANIA AVENUE.

Welcome back to 1600 PENNSYLVANIA AVENUE.  The first of several documentaries about the ‘08 presidential election is about to be released.  “How Obama Got Elected” is the work of film maker John Ziegler, a former conservative radio talk show host.  He has already posted interview excerpts of Alaska Governor Sarah Palin blasting the media and accusing the press of a double standard.  John Ziegler joins us now  from Los Angeles. 

John, let‘s start with a clip from your film.  Here‘s Sarah Palin talking about her disastrous interview with Katie Couric.  Watch. 

(BEGIN VIDEO CLIP)

PALIN:  I knew it didn‘t go well the first day and then we gave her a couple of other segments after that.  My question to the campaign was, after it didn‘t go well the first day, why were we going to go back for more?  And because of however it works in, you know, that upper echelon of power brokering in the media and with spokes persons, it was—told me, yes, we were going to go back for more.  Going back for more was not a wise decision. 

(END VIDEO CLIP)

SHUSTER:  John, did Sarah Palin ever take responsibility, herself, for that interview?  I mean, I‘ve been poring over the transcript all afternoon and I don‘t see it. 

JOHN ZIEGLER, DOCUMENTARY FILM MAKER:  See what, exactly, David?  I‘m glad to see you finally did some homework.  Our first encounter was rife with errors, as was your tease into this particular interview.  Sarah Palin never blames the media for the loss.  You might want to take a look at the transcript of the interview for that.

SHUSTER:  Let‘s set up something at the start.  Do you acknowledge that you were not a fair and objective observer of Sarah Palin?  Do you acknowledge that, right? 

ZIEGLER:  I‘m not sure what your definition of fair and objective is.  Obviously, MSNBC has a monopoly on fair and objective when it comes to politics. 

(CROSS TALK)

SHUSTER:  Here‘s something you wrote.  Here‘s an editorial you wrote. 

You wrote, quote,

(CROSS TALK)

SHUSTER:  “of Sarah Palin from before she was ever named John McCain‘s vice presidential candidate.  The media assassination of her, her character and her family was one of the greatest public injustices of our time.”  One of the greatest public injustices?  In my view, that was segregation.  How can you put Sarah Palin‘s treatment by the media along side segregation? 

ZIEGLER:  That‘s exactly what I did, David, well done.  By the way, before we move on—

SHUSTER:  You were one of who called her one of the—

(CROSS TALK) 

ZIEGLER:  This was a character assassination perpetrated by the news media, and this network was at the forefront of that character assassination of this woman.  We will prove it in my movie, “Media Malpractice.”  Go to how ObamaGotElected.com to find out more information about the film.

SHUSTER:  Let‘s talk about character assassination.  Here are the list of Republicans who said that Sarah Palin was not qualified: David Brooks, George Will, Kathleen Parker, Senator Chuck Hagel, David Frum, Charles Krauthammer, Colin Powell, Ken Duberstein.  You want us to believe that all of them are wrong and you are right? 

ZIEGLER:  First of all, I would suggest that one of the more insidious elements of news media is that when a Republican starts to criticize another Republican, all of a sudden, they get booked on every TV show they want to get booked on.  That‘s a very enticing situation there.  It‘s almost a siren song.  I think it‘s remarkable that more Republicans didn‘t jump on that bandwagon in order to get booked on “Meet the Press” or whatever other TV show they wanted to be on. 

That‘s the way this thing works.  If it was a plea—

SHUSTER:  Why don‘t you answer the question?  You‘re right and all these Republicans are wrong, is that it? 

ZIEGLER:  I think that people can differ over a lot of different things.  And I have an opinion.  They have theirs.  I think the facts bear me out and I think my film will prove that. 

SHUSTER:  Here‘s what some of them said about specific reasons why she was not qualified.  David Brooks said “she hasn‘t engaged in national issues.”  Chuck Hagel, “she doesn‘t have any foreign policy credentials.”  Hagel also said, “She got her passport for the first time last year.”  Parker, “there‘s not much content there.  If BS were currency, she would bail out Wall Street yourself.” 

You fell for that BS, didn‘t you? 

ZIEGLER:  David, I‘m a little confused.  Could you help me for something, were those quotes about Sarah Palin or Barack Obama?  Other than the passport, I‘m not sure which ones go with Palin and which one go with Obama. 

SHUSTER:  John, you can try to avoid it.  We‘re talking about Sarah Palin.  We‘ve been looking through this transcript all day long.  At any point, did you ever ask her, do you take responsibility for these some of these stumbles?  Did you ever ask her that? 

ZIEGLER:  First of all, if you had done your homework, which you didn‘t the first time and now—

(CROSS TALK)

SHUSTER:  I was reading the transcript all afternoon. 

ZIEGLER:  Do you want an answer?  Do you want an answer?  David, do you want an answer or do you just want to keep talking?  The Youtube video of HowObamaGotElected.com is just over nine minutes.  The interview I did with Sarah Palin is 50 minutes long.  You ain‘t seen nothing yet with regards to the real content of this interview.  You won‘t until my film comes out in late February.

SHUSTER:  Why don‘t you say, oh, no, she did take responsibility, but we didn‘t feel the need to have to show it in the eight minutes we released to the media? 

ZIEGLER:  There are times in which—taking responsibility for what, exactly, David? 

SHUSTER:  Take responsibility for not being able to answer the question to Katie Couric, take responsibility for not understanding—

ZIEGLER:  She was—if you would watch the Youtube video, you would have the explanation on that.  But apparently you either didn‘t watch it or watched it with such a partisan view that you weren‘t able to see clearly.  If you—

SHUSTER:  John, we‘ve been looking at the Youtube clip.  We‘ve been looking at the transcripts. 

ZIEGLER:  She tells you what she reads. 

SHUSTER:  Right, she says “USA Today” and the “New York Times.”

ZIEGLER:  I‘m glad you did do your homework now, finally. 

SHUSTER:  Did you ask her if she could name what the front page story was today?  Did you actually try to figure out or did you just take her word for everything in this documentary? 

ZIEGLER:  I‘m going to use precious time in a 50 minute interview about an entire election campaign on what the front page story in the “New York Times” was that particular day. 

SHUSTER:  John, you know, here‘s the problem. 

(CROSS TALK)

SHUSTER:  John, here‘s the problem.  When you were doing the documentary, when you‘re doing a documentary, when you‘re evaluating the credibility of someone, because you‘re going to spend a lot of time doing a documentary or a news story, isn‘t it important to at least try to test their credibility, as opposed to being taken in by their wonderful personality? 

ZIEGLER:  You will have to see the entire interview.  This was a tough interview from Sarah Palin, because there were things that she was hit with she had never seen before.  And at times she got emotional.  At times she got a little bit upset.  She sturdied herself and I thought handled herself in an excellent fashion.  I think people who look at it in an objective way, in other words, those that don‘t work for MSNBC, will see it exactly that way once the entire interview is available late in February with this film. 

(CROSS TALK)

ZIEGLER:  Palin was smeared. 

(CROSS TALK)  

SHUSTER:  Here are some of the preelection polls.  A poll taken in September about whether Sarah Palin, before the infamous Katie Couric video, 47 percent of voters said Palin was not qualified to be president if necessary.  Were all those voters wrong? 

ZIEGLER:  That‘s for history to decide.  I think my film will determine that they were wrong.  Mostly, what it will determine is that the media coverage was completely unfair to Sarah Palin.  By the way, I would urge you to take a look at similar numbers and polls about Barack Obama‘s qualification to be president, which, for some reason, this network and others never seemed that interested in. 

SHUSTER:  We looked at all those polls.  The fact of the matter is Sarah Palin‘s negative versus positives were the highest of any vice presidential running mate in U.S. history.  In any case, John, we look forward to seeing your film. 

(CROSS TALK)

SHUSTER:  Absolutely, we congratulate ourselves for helping you.  We think everybody, even if they‘ve already made up their mind about Sarah Palin, should see this documentary, read as much as you can, make your own decision.  We thank you for coming on again for a second time today, John.  Good of you to join us. 

ZIEGLER:  Anytime, David.  I‘m glad you‘d had the courage.  I‘m sure Matthews and Olbermann never would. 

SHUSTER:  Actually, they would, but that‘s a whole other debate. 

In any case, up next, is torture ever justified?  Is Barack Obama‘s choice of Leon Panetta to lead up the CIA the way to keep the country safe?  More on 1600 in a moment. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA:  I was clear throughout this campaign and have been clear throughout this transition that under my administration the United States does not torture. 

(END VIDEO CLIP)

SHUSTER:  Welcome back to 1600 PENNSYLVANIA AVENUE.  That was President-Elect Barack Obama, who rolled out his intelligence team today, naming former Clinton Chief of Staff Leon Panetta to lead the CIA and retired Admiral Dennis Blair to be director of national intelligence. 

Joining us now to talk about the changes that the Obama administration and this team are going to bring, specifically on the issue of torture, Democratic strategist Bob Shrum, and Heidi Harris.  Heidi is a radio talk show host at KDWN in Las Vegas.  First of all, to you, do you believe that people who are opposed to torture don‘t care if people die? 

HEIDI HARRIS, RADIO TALK SHOW HOST:  Well, no, I don‘t think they don‘t care if people die.  I think some people believe, and I can understand this.  I have heard this argument that—

SHUSTER:  Let me stop you right there.  I accept your answer there.  I want to play something that Bill O‘Reilly said.  Watch.

(BEGIN VIDEO CLIP)

BILL O‘REILLY, FOX NEWS ANCHOR:  Panetta knows all of what you said. 

You‘ve got Khalid Sheikh Mohammed.  You think an attack is imminent. 

You‘ve got to do what you‘ve got to do to save lives.  They know this, Mr.  Rove.  Yet they‘re saying, we‘re not going to do it.  We don‘t care if people die. 

(END VIDEO CLIP)

SHUSTER:  Heidi, given that you believe Bill O‘Reilly is wrong, I‘m wondering if you‘ll take the opportunity to publicly condemn here right here. 

HARRIS:  Wait a minute, I have no comment on what Bill O‘Reilly said. 

I do believe there are people—

SHUSTER:  It‘s a simple question. 

HARRIS:  I know, but I don‘t go after other hosts for any reason.  I don‘t know Bill O‘Reilly.  I just don‘t.  It‘s not—I don‘t do it on my radio show. 

SHUSTER:  What‘s the general principle? 

Bob Shrum, weigh in on this.  Bob Shrum, go ahead. 

BOB SHRUM, DEMOCRATIC STRATEGIST:  If you condemn Bill O‘Reilly‘s statement—by the way, I have to say, having watched the last segment, where I thought your guest was the verbal equivalent of water boarding, I‘m more against torture than I was before.  This is not a real issue in the campaign.  John McCain said if he was elected president there was going to be no torture.  Barack Obama said if he was elected president there was going to be no torture.  In a sense it‘s a non-issue. 

The problem with torture is, A, you have no reason to know you‘re getting reliable information, and, B, it does enormous damage to the United States and the world, in addition to the moral objections that people may have to it. 

SHUSTER:  Well, I agree it‘s not to be an issue in terms of the policy put in place.  It certainly seems to be an issue, given that when you listen to the Bill O‘Reillys—that‘s just one clip.  We could go chapter and verse, the numbers of Republicans, Heidi, who are saying, oh, Barack Obama is endangering the security of the United States because he‘s throwing out the way the Bush administration handled things, that‘s crazy, isn‘t it? 

HARRIS:  It depends on how you define torture.  I define torture water boarding as torture.  I define torture as going things like cutting off people‘s fingernails, some of the things they used to do in Medieval times.  That‘s what I call torture, putting people on the rack, stretching them.  Putting people on a board and getting them wet and making them feel like they‘re drowning, like Khalid Sheikh Mohammed, who was very much alive after that, that‘s to me not torture.  He was uncomfortable.  He was miserable.  He thought he was going to drown. 

That‘s not torture, not compared to what they do in the Middle East. 

SHUSTER:  Heidi, isn‘t a good thing for the United States that we‘re going to have a change of policy, that what happened at Abu Ghraib has been widely condemned?  Guantanamo is going to be closed down.  The renditions are going to be stopped.  The water boarding is going to end.  Isn‘t that a good thing for the United States? 

HARRIS:  No.  It‘s not a good thing, because if Khalid Sheikh Mohammed has information that we need to keep people alive, water boarding?  I‘m worried about to that?  Remember that when they get ahold of our men and women in the military, where do we find them?  We find them either floating in rivers or cut in little pieces and tortured on the streets. 

They don‘t care about the Geneva Convention.  They don‘t respect us for not torturing them.  I‘m not saying we should sink to their level.  Don‘t misunderstand me.  But the idea that we‘re going to follow the Geneva Convention, I think that‘s great, but they don‘t respect us for that.  We‘re talking about terrorists.  Terrorists don‘t respect people who treat them kindly.  They view it as weak behavior.  That‘s different than water boarding. 

SHUSTER:  Go ahead, Bob. 

SHRUM:  General Petraeus and Secretary Gates have both said the most fundamental and critical element of success now, for example, in Afghanistan is that we begin to win the hearts and minds of people.  We have to use soft power and not just hard power.  There‘s no evidence that any form of torture, and I think water boarding is torture—and I‘ll bet they don‘t open a water boarding ride out there in Las Vegas, because it‘s really uncomfortable.  It scares people to death.  There‘s no evidence that water boarding ever elicited anything from Sheikh Khalid Mohammed that made a difference. 

The United States has to set a standard in the world.  It‘s stronger when it sets that standard.  You don‘t see Secretary Gates objecting to this.  By the way, John McCain, who was tortured, who is one of those soldiers I think Heidi is referring to, is one of the strongest opponents of America using torture. 

HARRIS:  That is correct.  I happen to have two friends who were in the Hanoi Hilton, one more seven years and one for five.  They say the same thing that John McCain says.  They are completely against torture.  I go back to what I said.  I don‘t know that I define water boarding as torture.  A person walks away from that just fine, a little scared, a little annoyed. 

SHRUM:  You and Dick Cheney are the only people who think it‘s not torture. 

(CROSS TALK)

SHUSTER:  Heidi, including Christopher Hitchens, a journalist who actually went through it to test it out.  He said it was torture and everybody.  In any case, Heidi Harris, thank you for coming.  Also, Bob Shrum, thanks as always.  We appreciate. 

Up next, the war of words over the war.  As Israel continues its assault on Hamas, there‘s new criticism of the Jewish state.  Is it anti-semitism?  You‘re watching 1600 PENNSYLVANIA AVENUE.

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to 1600.  This was the 14th day of Israel‘s war against the Hamas terror organization in Gaza.  Over the past week, while the casualties have mounted, the protests around the world have been getting larger and louder.  In some instances, they have brought out blatant anti-semitism.  This week, for example, as Palestinian sympathizers confronted pro-Israel supporters watching a march in Florida, a man reportedly yelled to the Jews, quote, “go back to the ovens.”

In Britain, a spokesman for a group that monitors anti-semitism said there had been more than 20 incidents since Israel‘s campaign in Gaza began.  Are these isolated incidents or is there an element of anti-semitism driving some of the harsh criticism of Israel?  Joining us is Cliff May, president of the Foundation for the Defense of Democracy, and James Zogby, president of the Arab American Institute. 

Cliff, what‘s wrong with criticizing Israel? 

CLIFF MAY, FOUNDATION FOR THE DEFENSE OF DEMOCRACY:  There‘s nothing with criticizing Israel.  Israel is by no means above criticizing.  You‘re also right in what you say, that a lot of these demonstrations, including in the U.S., you have seen war are blatantly anti-Jewish hate speech, such things as “Jews to the oven,” “Hitler was right,” all that sort of thing. 

What disturbs is that in many cases, these weren‘t a lot of the people at the demonstrations.  The people who sit along side them didn‘t seem to be upset that they were there with people who were saying, let‘s have another Holocaust. 

SHUSTER:  James?

JAMES ZOGBY, ARAB AMERICAN INSTITUTE:  No, I don‘t think that‘s true.  The criticism is wrong when it takes that tone.  This does not characterize the majority, nor does it characterize even a passive acceptance of that kind of language.  It‘s wholly rejected by the overwhelming number of people who are involved in protests right now. 

Let me make the point, though, that as vile as the protest is when it takes that form, the protest, itself, and the reality of what Israel is doing is abominable and it really needs to stop.  There is no good going to come of this other than to inflame passions this way and that is wrong for everybody all the way around. 

SHUSTER:  Isn‘t it true that Hamas is more in line with those vile anti-semites than they are in line with the mainstream moderates that think people—

ZOGBY:  I‘m not a defender of Hamas and will never be a defender of Hamas.  The point is here, though, is that there are pathologies on both sides.  There is extremists in Israel who are sort of providing the impetus for this, and there extremists on the Palestinian side who are, in fact, part of the process as well.  The point is, there is no adult supervision.  No one is stopping this bloodshed.  The stories that are emerging today from Gaza are spreading horror and trauma across the entire Middle East. 

The result is, not only are individual innocents dying, but legitimacy of America and the friends of America in the region suffering as well. 

MAY:  Part of the problem is Hamas is not just anti-semitic.  Hamas is genocidal.  It is explicitly so.  As is Iran, which is Hamas‘ sponsor.  Hamas and Iran have as their project—let me put it this way, Hitler‘s project was a Europe without Jews.  Hamas and Iran have, as their project a Middle East without a Jewish state.  If Hamas or the Palestinians who would reject Hamas and say, look, the missiles have got to stop and we have to figure out a way to live with Israel; we don‘t think the borders, where they are, are any good; we want to negotiate that, this conflict could end.  But for 60 years it hasn‘t, because you have groups like Hamas, which don‘t recognize Israel. 

ZOGBY:  If Israel had behaved well in the beginning of this peace process, and if we had provided an opening for Palestinians to have their freedom—they did not.  The result is that Hamas wouldn‘t be around today.  If we want to defeat this extremism, we have to isolate it and create conditions for Palestinians to feel hope. 

You cannot have it both ways.  You can‘t strangle Palestinians and deny them daily sustenance, and then not have extremism emerge. 

MAY:  Israel ended the occupation of Gaza in 2005.  Every soldier left.  Every settler left. Every cemetery was pulled out.  Every synagogue was closed down.  The missiles kept coming.  If then The Palestinians had said, instead of choosing Hamas, which, by the way, has killed over 35 members of Fatah under the cover of this war in Gaza, as you know.  I would love to see some protest.  Members of Fatah, of the Palestinian Authority, are murdered, tortured, thrown off buildings right now. 

ZOGBY:  They are despicable. 

MAY:  There are no protests against that.  Look, Gaza could have been a model.  Instead, it became—

(CROSS TALK)

ZOGBY:  In 2005, let‘s get the history of 2005 right.  The U.S.  appealed to Israel to have a negotiated withdrawal, to work with the Palestinian Authority.  They did not.  They withdrew unilaterally, and left a void which ultimately was filled by Hamas.  They pulled their troops out and surrounded the border and closed it off. 

SHUSTER:  When the United Nations, as they did a few days ago, said that four out of five, 80 percent of the people who are being killed in Gaza, were Hamas, was the United Nations wrong? 

ZOGBY:  They did not say that. 

SHUSTER:  It was on the front page. 

ZOGBY:  The numbers were in the paper today, and it was 756, of which

of which about almost 250 were children and another 50 were women.  The result is that the number is far in excess of the number you gave.  It‘s almost 25 to 30 percent. 

MAY:  Do you know that Hamas locates its fighters, in schools, in mosques, in UN buildings.  It uses human shields.  I know you oppose that, because you‘re a principled man.  You know what they‘re doing. 

ZOGBY:  Overwhelming power has a responsibility to use that power responsibly. 

MAY:  The Israelis are trying to do so.  What is very important to

understand here is that so long as Hamas thinks it can win, A, by defiance

U.N. calls for a cease-fire, why didn‘t Hamas say, OK, we‘re stopping the missiles.  It would have been a smart thing to do.  You would have advised them to do it.

ZOGBY:  Why didn‘t Israel stop as well?

MAY:  Because the missiles have been coming.  This is meant to end the missiles.  Second, Hamas, what they do is they know very well they will have casualties.  They encourage those casualties and they parade them before the world to try to get sympathy.  They think that‘s how they‘re going to win this battle. 

SHUSTER:  Here‘s my issue.  Why the double standard for Israel, as opposed to all the other countries around the world that try to protect themselves?  Why is it that Israel gets blasted in the press around the world? 

ZOGBY:  I don‘t know another country in the world that has surrounded another country, cut off food, oil power, --

MAY:  All the electricity in Gaza—you know this—comes from where?  It comes from Israel.  There‘s no other country in the world—

ZOGBY:  The reason why is because in 2006, they bombed the power plant and they destroyed it.  They never let it get rebuilt.  It was an American owned power plant.  

(CROSS TALK)

SHUSTER:  The United States responded and went into Afghanistan after 9/11.  A lot of civilians were killed, a lot, perhaps even more than were killed in 9/11. 

ZOGBY:  We‘re paying price for it now.

(CROSS TALK)

SHUSTER:  Where were you condemning the United States for going into Afghanistan? 

ZOGBY:  We warned from the beginning about the conduct of the war in Afghanistan, how we were doing it and how we weren‘t doing it right.

(CROSS TALK)

MAY:  The fact is, I was just in Afghanistan.  Let me tell you this, our troops are trying to protect the civilians as best they can.  And the Taliban, when I was there, was throw acid into the faces of girls for going to school.  The Taliban and Hamas have the same ideology, as you know.  The Taliban, Hamas and al Qaeda have the same ideology. 

ZOGBY:  If we want to beat them, we have to behave better.  Let me make a point, if you will, I‘ve debated this issue now in 2006, when Israel did it in Lebanon, and in Gaza in ‘96, when they did it in Lebanon, et cetera, et cetera.  The constant way this takes place is that no one wins.  At the end of the day, the results are as predictable as—

(CROSS TALK)

ZOGBY:  The issue here is that do we want to move forward to peace or do we want to continue—

(CROSS TALK)

SHUSTER:  Thank you both very much.  We appreciate it.  That is the view from 1600 PENNSYLVANIA AVENUE tonight.  I‘m David Shuster.  Thank you for watching.  We‘ll see you back here same time Monday night 6:00 p.m.  Eastern on MSNBC.  Remember, you can go to Shuster.MSNBC.com to get a show preview.  “HARDBALL” starts right now.

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

END   

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