updated 1/30/2009 2:50:22 PM ET 2009-01-30T19:50:22

Guest: Matt Yglesias, Michael Isikoff, Dan Rather, Mary Mitchell, Kent Jones

RACHEL MADDOW, HOST:  I will.  Thank you for suggesting that, Keith.  And I have to say, as a fan of “COUNTDOWN,” it is very cool to see the two halves of your TV personality coming together like this.  It‘s been very fun.

KEITH OLBERMANN, “COUNTDOWN” HOST:  Thank you, kindly.

MADDOW:  Thank you, Keith.  Thank you.

And thank you for staying with us at home for the next hour.

A head-spinning day of news today.  The guy who was Governor Rod Blagojevich at 4:00 o‘clock today—is now just a guy in Chicago hoping he doesn‘t go to jail.

And—while the economy has us focused on the troubles here at home, the war in Afghanistan is sort of big trouble, too.  Mr. Dan Rather has just returned from that war zone.  He has a new documentary out about it and he will be with us tonight live here in studio.

But first, we‘ve had four straight months of unrelentingly bad economic news—news so bad it‘s scary.  What changed in the past week is not how bad the economic news is, what‘s changed is that we know a lot more about what the politics are going to be like around the government‘s efforts to fix how bad the economy is.  The fight over how and whether the government can cure us is on.  The diagnosis of what we need to be cured of, however, is sort of settled.

A new report out from the congressional panel that‘s overseeing the financial system bailout identifies the essential cause of our economy bleeding from the eyes for four straight months now as rampant deregulation.  Quote, “The current crisis should come as no surprise.  The present regulatory system has failed to effectively manage risk, require sufficient transparency and ensure fair dealings.”  In other words, in the bumper car world of capitalism and finance, the government took the bumpers off the bumper cars which turned the whole thing into a demolition derby instead.

Against that assessment of how we got ourselves into this measure, there were two fairly breathtaking news items today.  First, the “New York Times” reported that in 2008 -- in the year in which the Dow Jones Average lost 34 percent of its value, it lost $7 trillion in wealth—in 2008, Wall Street employees took home over $18 billion in bonuses.  That means, in the worst year for the Dow since 1931, it was the sixth best year ever for bonuses on Wall Street.

Now, I‘m no economist but that is, -- there‘s a technical term for this.  What is it?  Oh, yes, wrong—that‘s wrong.  President Obama called it “shameful” and the “height of irresponsibility.”

The other bit of breathtaking news on this latest bad economic news day is that today was occasion for a very awkward attempted victory lap for congressional Republicans.  They congratulated themselves publicly for coming up just 56 votes short in their efforts to block the economic stimulus plan from passing the House of Representatives—a victory lap for coming as close as they could come, as an otherwise powerless minority caucus to blocking the stimulus, trying to block the government from trying to save the economy by stimulating demand at the beginning of the second year of the sharpest recession since the depression.

Republican Minority Leader John Boehner put out a “hip, hip, hooray” memo about the vote.  He said, quote, “The vote last night sent a clear, powerful and bipartisan message to congressional Democratic leaders about the current version of the economic stimulus package.”  Apparently, the new definition of bipartisan is every single Republican voting against it.  If that‘s bipartisan, what‘s partisan?

After their victory lap, inexplicably, their victory lap about voting 100 percent no on something that passed anyway without them, House Republicans packed up their bags and headed to Hot Springs, Virginia, for a retreat, a weekend retreat to bask presumably in the glow of “no.”  They are apparently afraid of the “in the wilderness” headlines that a retreat to western Virginia will undoubtedly generate.

Well, now, it‘s the Senate‘s turn.  And Senate Republicans are indicating that they are really psyche to vote no as well.

(BEGIN VIDEO CLIP)

SEN. JIM DEMINT, ® SOUTH CAROLINA:  Every Republican in the House rejected this, and I think every Republican in the Senate might do as well.

(END VIDEO CLIP)

MADDOW:  So, huzzah for fighting against the economic stimulus.  Rally around the deflating balloon, everyone.

As they celebrate their legislative defeat, Republicans might want to notice what‘s going on across the aisle, where Democrats who made concessions to their Republican colleagues to try to get a bipartisan stimulus bill by adding in tax cuts, by taking out stimulus spending that Republicans decided to make fun of, they were rewarded by zero Republican reachback in the direction, zero votes.  Hell hath no fury like a majority party scorned.

Today, White House Press Secretary Robert Gibbs warned Republicans that while their no vote might have felt good ideologically, it may leave them with some major explaining to do back at home.  Quote, “There will be people in the districts all over the country that will wonder why when there‘s a good bill to get the economy moving again, why we still seem to be playing political gotcha.”  The White House reportedly plans to release state-by-state jobs figures to show exactly what sort of job creation plan each member of the House voted against.

A coalition of progressive groups has decided to take it a step further, launching an advertising campaign to pressure Senate Republicans to support the bill.  This is the ad, for example, that is targeting Republican Senator Chuck Grassley in Iowa.

(BEGIN VIDEO CLIP, CAMPAIGN AD)

PRES. BARACK OBAMA, UNITED STATES OF AMERICA:  We start 2009 in the midst of a crisis unlike any we have seen in our lifetime.  That is why I have moved quickly on an American Recovery and Reinvestment Plan, a plan I am confident will save or create at least 3 million jobs.  The first job of my administration is to put people back to work and get our economy moving again.

ANNOUNCER:  Tell Senator Grassley to support the Obama plan for jobs, not the failed policies of the past.

(END VIDEO CLIP)

MADDOW:  According to the HuffingtonPost.com today, the goose egg that House Republicans put up on the board yesterday when the House voted on the stimulus—it may be leading to a revolt among Democrats in Congress as in, why should anything that was added into this bill against the interest of what Democrats thought was right for the country, why should anything that was added into the bill just for the purpose of attracting Republican support, why should anything like that still be in the bill now as though Republicans are going to support it anyway?

From “Huffington Post” today, quote, “‘That‘s what my members ask me,‘ said Speaker Pelosi.  ‘It wasn‘t something that was suggested by Democrats. 

It was a heavy lift for our members.‘”

So, did the retreating House Republicans actually do Democrats a favor by voting against the stimulus bill?  Might it now be stripped of the tax cuts, injected with more infrastructure spending, might it become a new and improved stimulus bill that is both good policy and good politics?

Joining us now is Matt Yglesias, fellow at the Center for American Progress.

Matt, thank you so much for coming on the show tonight

MATT YGLESIAS, CENTER FOR AMERICAN PROGRESS:  Thanks for having me.

MADDOW:  Republican Senator Jim DeMint predicted today with a big grin that zero Senate Republicans will support the stimulus bill just as zero House Republicans did.  Bipartisanship assumes two willing parties if you look at the definition of it.  Are Republicans going to object no matter what is in this bill?

YGLESIAS:  Well, it seems clear that most of them will.  I think in the Senate, you know, most senators, at least, have more competitive districts than you have in the House.  So, there‘s a chance that some of them will come around, go with the Democrats, and support President Obama.

But I think the House Republicans made it clear that even though several concessions were made to them, both in advance and then during the debate over the bill, that still, none of them voted for it.  You see that, as a party, as an institution, the Republicans and the conservative movement are not really interested in cooperating on this.

MADDOW:  Well, have they now given Democrats an opening to drop all of the measures that Democrats added because they thought they would make Republicans happy, things like tax cuts, things like taking out some of the spending.  Have they given Democrats an opening to just go all out on things like infrastructure investment and other things that the Republicans had objected to?

YGLESIAS:  I think they have.  I mean, there‘s room for tax cuts in the stimulus bill.  And many of these tax cuts are targeted carefully at low income people, at working people.  And I think that‘s good policy, it‘s good stimulus policy and it‘s equality policy.

But there‘s a lot of business tax cuts put in there which would put in with the idea of making it more palatable to Republicans.  But then, I think, most Democrats and most progressives don‘t think are the best possible policy.  And If Republicans aren‘t going to support it no matter what you do, then it makes a lot of sense to look at that and look at putting more infrastructure projects in, look at more tax cuts weighted at working people and less of this kind of business stuff, some of these corporate tax breaks that would really put in as sweeteners for the GOP and that‘s gotten them nothing.

MADDOW:  Well, despite Jim DeMint‘s predictions, we are seeing pressure on individual Republican senators, three of whom are going to up for re-election in the next round of—in the next elections in two years from these outside groups.  Are Republicans susceptible to advertising like that in their districts or will that be used as a badge of honor by these Republicans to defend what they‘ve done?

YGLESIAS:  Well, you know, there are several Republican senators who are representing states that Barack Obama won last November.  And President Obama is more popular now than he was back then.  So, I think, those senators, at least, will have to think long and hard before kind of standing with Rush Limbaugh and their House colleagues on this.

MADDOW:  Matt, one of the things that we expect after the stimulus, we‘ve seen the TARP debates through this Congress, we have seen the stimulus debate which is ongoing.  It will take some more time.  The next big thing we expect on the economy, in all likelihood, is a big round of financial regulation.  And that‘s where we get into the really big, huge, thorny ideological fights between the left and right, between Republicans and Democrats.

Is there anything that we can anticipate about the fight over financial regulation based on what‘s happening politically around stimulus?

YGLESIAS:  Well, I think, we can see that it‘s just going be very difficult to make the sort of bipartisan legislation that the president has hoped for.  That, you know, the Republicans, I think, they look at 1993 and ‘94 when they just opposed everything.  They opposed health care reform; they opposed the budget plan that brought us that great prosperity of the 1990s.  And they were rewarded politically.  They made President Clinton out to be a failure in that first legislative term.  And obstructionism was rewarded in the ‘94 midterms.

And I think we‘re going to see an effort to repeat that—that almost no matter what Obama puts on the table, I think, the majority of Republicans will oppose it.  You know, Rush Limbaugh has said that, you know, he hopes Obama fails, that they should vote no on everything.  So far, the House Republicans are really marching in lockstep behind those orders.  And I think a lot of the senators will, too.

MADDOW:  Is there anything the Democrats can do to make obstructionism not fail for the Republicans?

YGLESIAS:  Well, we‘ll see.  I mean, the president can use the bully pulpit.  He is extremely popular now.  The crisis facing the economy is palpable.  I mean, I think, people realize that they are losing their jobs, their neighbors are losing jobs.  Stores are closing.

So, you know, he can bring a sense of urgency and a sense of sharpened distinctions to this.  His first instinct has been to try to reach out, but, of course, if that hand just gets slapped away, then you need to fight back.

MADDOW:  That‘s exactly right.

MADDOW:  Matt Yglesias, fellow at the Center for American Progress, great insight.  Thanks for being here tonight.

YGLESIAS:  Thanks for having me.

MADDOW:  Karl Rove has been subpoenaed to testify before Congress—again—to tell what he knows about possible misdeeds in the Bush administration.  Now, up until now, Karl Rove has refused to cooperate with congressional inquiries.  But this time, he doesn‘t have President Bush to back him up, or does he?  “Newsweek‘s” Michael Isikoff will join us next to talk about some shocking news about President George W. Bush‘s latest attempts to muzzle his own troops.

And, as President Obama ponders sending 30,000 more troops to Afghanistan, I am pleased to be joined by a veteran journalist who knows more about that increasingly scary part of the world than almost anyone, at least by virtue of the fact that he has just returned from there.  Dan Rather will be right here with me later.

But first, one more thing about a flat-out crisis that tax cuts can‘t fix but smart-spending could.  As of today, 1.3 million American homes and businesses are still without electrical power, in states like Oklahoma, Arkansas, Kentucky, Illinois, Ohio and Virginia.  Some customer could reportedly be waiting for the lights to come on until mid-February.  Mid-February?

It‘s all because of the shocking surprise attack of a winter storm in winter.  You know, I have been crunching the numbers all day and I think I can safely say now, correct me if I‘m wrong here, but I think I can safely say that among the zero Republican members of the House who voted against the stimulus and its infrastructure funds to, I don‘t know, upgrade the electrical grid, among those zero Republican “yes” votes were precisely zero Republican members of Congress from states where our aged electrical system got knocked out this week by ice and snow.

So, congratulations zero Republicans.  I‘m sure your constituents will be psyched once their electricity comes back on next month and they learn how you voted.

(COMMERCIAL BREAK)

MADDOW:  It has been nine days since Barack Obama was inaugurated as our first African-American president.  Congratulations are surely still coming in to the new commander-in-chief from all over the world but not from the Arkansas House of Representatives.  A majority of members of the state agencies committee in the Arkansas House, this week, rejected a symbolic resolution congratulating President Obama on his election.

Why no way to go from the “Land of Opportunity”?  Well, apparently, the no voting members objected to language in the resolution that referred to the U.S. as, quote, “a nation founded by slave owners.”  Now, admittedly, that is objectionable.  I mean, it is really objectionable that founding fathers like George Washington and Thomas Jefferson and Ben Franklin owned slaves.

But they can‘t seriously mean that it‘s objectionable to admit that, to admit that those guys owned slaves.  They can‘t seriously think that, can they?

(COMMERCIAL BREAK)

MADDOW:  Despite tinfoil, hat-wearing conspiratorial predictions from jerks like me, former President George W. Bush did not issue any sort of last-minute preemptive pardons before he left office—pardons for people in his administration who might expect to be investigated and maybe even criminally prosecuted for breaking laws while they held in office; people, who‘ve, say, directed policies like spying on people without warrants, torturing prisoners, illegally politicizing the administration of justice using federal prosecutors for political partisan end.  Well, no preemptive pardons before Bush left office.

But, according to a brand new exclusive record from “Newsweek‘s” investigative correspondent, Michael Isikoff, with four days left in office, then-President Bush did issue preemptive immunity.  Preemptive immunity?  Yes, preemptive immunity to his former aides Harriet Miers and Karl Rove.

How can the new government clean itself of the stains left by the last government if the last government has immunity-granting power from the afterlife?  It‘s time for THE RACHEL MADDOW SHOW special series on President Obama‘s cleanup missions: Scrub, Rinse, Repeat—because this is going take a while.

John Conyers, the chair of the House Judiciary Committee subpoenaed Karl Rove, the man known as Bush‘s brain, to testify about the Bush administration‘s firing of nine U.S. attorneys and the allegedly partisan motivated prosecution of Democratic Alabama Governor Don Siegelman.  Now, this was Karl Rove‘s second congressional subpoena.  And, for the second time, Mr. Rove is claiming that George W. Bush has directed directing him not to appear.

According to Mr. Isikoff‘s reporting in “Newsweek,” on January 16th, Bush‘s White House counsel, Fred Fielding, sent a letter to Mr. Rove‘s lawyer, relaying this message, quote, “The president continues to direct him not to provide information to Congress.”

Now, again, I did a little calculating in the commercial break and if my math is correct, I think that George W. Bush isn‘t president anymore.  So, since he is not president anymore, he‘s just citizen George W. Bush, how can he immunize anyone from anything?

Joining us now is Michael Isikoff, “Newsweek‘s” investigative correspondent.

Mr. Isikoff, nice to see you.  Thank you for your time tonight.

MICHAEL ISIKOFF, NEWSWEEK:  Good to see you, Rachel.

MADDOW:  Four days before he left office, you are reporting that President Bush specifically instructed Karl Rove to refuse to appear before Congress.  What did he say and can he do that?

ISIKOFF:  Well, very good question about whether he can do it, and we certainly didn‘t see this one coming.

As I discovered today, there was this letter sent by Fred Fielding, the White House counsel, on January 16th, instructing Rove in anticipation of that he might receive future subpoenas, the president wanted him to know that he should not honor such subpoenas.  He should not appear before Congress.  He should not turn over any documents that he—the president was still asserting executive privilege over anything Rove did in the White House, and that the president wanted to assert this in perpetuity even after he leaves office.

I talked to some constitutional scholars today who say, as far as they know, this is unprecedented for a president about to leave office to make such a sweeping claim to extend to his former aides after they are no longer in the government.  But it is part of the aggressive assertions of executive privilege that the Bush White House exerted throughout its tenure.

MADDOW:  I am not an expert on this stuff, but what this sounds like to me is that President Bush is saying that anybody who works for the president is immunized and they‘re immune from having to respond to congressional subpoenas not only for the time that they are working for the president but for the rest of their lives.  That‘s what he‘s saying?

ISIKOFF:  Well, that seems to be what they‘re saying.  And what‘s key here is immunity.  There‘s nothing unusual for presidents to assert executive privilege about conversations, particular conversations that they might have had with senior aides.  But what the Bush White House asserted was—and a version of executive privilege that went considerably beyond that—that aides had total, absolute immunity.  Not only could they not talk about particular conversations, they didn‘t have to show up at all in response to a congressional subpoena.

And so, you saw Harriet Miers not show up, Josh Bolten not show up when they got subpoenaed, and Karl Rove himself.  In fact, in one case, Karl Rove was flying off to give a speaking engagement in the Ukraine, I believe, when he was supposed to be appearing before Congress to testify.  So, this assertion, this interpretation of executive privilege goes considerably beyond what previous presidents have asserted and is now the subject of a court challenge in the case of Harriet Miers and Josh Bolten.

I think that the disclosure that Fred Fielding had sent this letter, sort of joins the battle and shows just how far the Bush White House went and it‘s now—what‘s going to be particularly interesting here is in that court battles before the U.S. Court of Appeals, the Obama Justice Department—whose attorney general is not yet confirmed, but will probably be on Monday—has to provide a position in the next couple of weeks about what its position is, the new president‘s position on executive privilege.  And I think it‘s a safe bet it‘s not going to go as far as the Bush White House went.

MADDOW:  Yes, it‘s one thing to “L‘etat, c‘est moi,” it‘s another thing to have the power to prevent everybody else in the country from laughing at you when you assert that.

ISIKOFF:  Right.

MADDOW:  It‘d be fascinating to see how the Obama administration responds.

Well, Mike, congratulations on the scoop, and thank you for joining us tonight.

ISIKOFF:  Thank you.

MADDOW:  Michael Isikoff is “Newsweek‘s” investigative correspondent.

Just a few hours ago, the Illinois State Senate voted 59 to zero to impeach Governor Rod Blagojevich, ousting him from office and ending one of the most compelling and dramatic falls from bleeping grace in modern political history.  Before the curtain came down, the now ex-governor delivered his “swan song,” a heart-tugging hour long aria of innocence falsely accused.  We will review the ousting of Blagoro (ph) later.

(COMMERCIAL BREAK)

BLAGOJEVICH:  Coming up in just a few moments: Dan Rather will be here to discuss his new hour-long documentary about what exactly it is that we are doing in Afghanistan.  Trust me, you will want to see this.

First, though, it‘s time for a couple of underreported holy mackerel stories in today‘s news.  We have been chronicling the Obama administration‘s efforts to scrub and rinse some of the proverbial stains left behind by the Bush administration.  And today, we got our first indication that after scrubbing and rinsing, repeating might be in order.

Remember that executive order that President Obama signed on his second day in office last week, the one that halted all Guantanamo military tribunals for 120 days, while his administration determine what to do with the remaining detainees?  Well, in a serious blow to those plans, a judge, Army Colonel James Pohl has rejected the order delay, finding its reasoning, quote, “persuasive.”  Colonel Poll instructed the government to proceed with the case of Abd al-Rahim al Nashiri, a prisoner accused of planning the attack on the USS Cole in the year 2000 that killed 17 U.S.  service members and injured 50 more.  Nashiri will face capital charges at his February 9th tribunal appearance.

The Judge Pohl wrote, quote, “The commission is unaware of how conducting an arraignment would preclude any option by the administration.  Congress passed the Military Commissions Act which remains in effect.  The commission is bound by the law as it currently exists not as it may change in the future,” end quote.

Obama‘s options?  Well, Nashiri‘s Pentagon-appointed defense lawyer said that the prosecutor could dismiss charges against Nashiri to comply with the president‘s request for a freeze, or President Obama could release Mr. Nashiri—that one is probably unlikely, or the tribunal could go ahead despite the president‘s order.

Your guess is as good as mine as to how this is going to go next.  Scrub—check.  Rinse—check.  Repeat—yes.  This one is going to go around again.  Stay tuned.  We will stay on it.

And retired Admiral Dennis Blair was confirmed by the Senate as the new National Intelligence Director.  He‘s now the third intelligence director that we have had - at least we thought this was the third National Intelligence Director we‘d had. 

Spencer Ackerman at the “Washington Independent” points out today that Blair is actually fourth and most of us missed the very quick tenure of the guy who was third. 

It happened that the Deputy Director of National Intelligence Lieutenant General Ronald Burgess had to serve as Acting Director of National Intelligence for exactly one day, because on Tuesday, outgoing Intelligence Mike McConnell up and quit before his replacement was confirmed. 

Mr. McConnell sent a farewell letter to Intelligence employees but did not explain why he quit before the Senate confirmed his replacement.  There has to be a reason, right?  It can‘t be that McConnell had to take this job and shove it moment right at the end there, can it? 

Well, one as to his motivation may come from the press release put out by his once-and-future company, the giant defense consulting firm, Booz Allen, which announced that Mike McConnell will rejoin his old company as head of the firm‘s national security practice. 

Thanks to the one-day interim Intelligence Director thing, Mr.  Ackerman at the “Washington Independent” notes that if some congressional commission determines that the next 9/11 came to pass because of some critical intelligence error on January 28th, 2009, we will now know who to blame.  We‘ll know how to blame the guy who had that job for one day because McConnell couldn‘t wait one day to get back to making big bucks in the private sector. 

This also means that DNI for a day Lieutenant General Ronald Burgess, that name becomes a $2,000-question on the super-duper advanced, elite brainiacs-only version of “Jeopardy.”  Make a note of it. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DAN RATHER, HOST, “DAN RATHER REPORTS”:  America‘s hopes the basic mission here may still be achievable.  But wars are won by firepower, will power and staying power.  The United States and its allies have the firepower.  But do they, we, have the will power and the staying power for the long haul? 

(END VIDEO CLIP)

MADDOW:  That, of course, is Dan Rather reporting from Kabul, Afghanistan, as part of his new documentary for HD Net about the state of the war there.  Afghanistan is one of the poorest countries on the planet, and the place for the infant mortality rate is third-highest in the world, where fewer than one in three adults can read. 

But despite its challenges on modern things like health and literacy and clean water and electricity, Afghanistan does excel at something, and it has for more than 1,000 years. 

Afghanistan, of course, is known as the graveyard of empires.  Alexander the Great and the mighty armies of ancient Greece couldn‘t hold on to it nor could the British in the 19th century, though not for a lack of trying.  And after nearly 10 years, the Soviet Union fled in 1989. 

Here in America, we really paid a lot of attention to that because the Soviet‘s defeat in Afghanistan helped get rid of the other world superpower that was our rival.  Remember, back when there were two? 

And now, after seven years of us fighting there, the United States military is getting ready to double down, sending in 30,000 more troops to go with the 34,000 who are already there.  President Obama campaigned on the idea that Iraq - the war in Iraq diverted badly needed resources from Afghanistan from what he called the central funds in the war on terror.  But as Dan Rather found when he interviewed General David McKiernan, the man in charge of our military effort there, defining victory in Afghanistan isn‘t easy. 

(BEGIN VIDEO CLIP)

RATHER:  How will we know when we have, quote, “won?”

GENERAL DAVID MCKIERNAN, COMMANDER, U.S. FORCES AFGHANISTAN:  Tough question to answer.  I think we‘ve got to look at global terrorism and al-Qaeda which certainly has franchises outside of this region.  And we‘ve got to continue to work in an intelligence-driven way to see what their reach is, what their impact is, not only within the region, but globally. 

And over time, I think when we determine that they are marginalized, contained, perhaps even defeated, then we‘ll know we‘ve won. 

(END VIDEO CLIP)

MADDOW:  Marginalized.  Contained.  In fact, in Mr. Rather‘s documentary, it is almost jaw-dropping to hear the honesty from some of the soldiers who are under General McKiernan‘s command when they talk about their mission. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE SOLDIER:  It was definitely winnable.  It is not really a war.  I mean, you are not really fighting as people.  You are fighting as - you know, the Taliban is a way of life.  So it is kind of hard to fight that. 

(END VIDEO CLIP)

MADDOW:  Kind of hard to fight that anywhere, let alone in the graveyard of empires. 

Joining us now is Dan Rather.  He is the host and managing editor of “Dan Rather Reports.”  His program “The Commander” has just premiered on HD Net.  Mr. Rather, thank you so much for being here tonight. 

RATHER:  Thank you, Rachel. 

MADDOW:  It‘s great to see you.

RATHER:  It‘s great to be with you.  Thank you.

MADDOW:  When you asked General McKiernan, “When will we know we have won the war in Afghanistan?” in the rest of your interview, he answers you immediately.  He never stutters.  He never “uhms.”  He never “ahs.”  And you got this great pause out of him.  He waited a moment before he was able to respond.  How did you read that? 

RATHER:  I read that he‘s not certain himself what, quote, “win” would be, certainly not assured about what the exit strategy is.  Let me emphasize he is a terrific general.  He is exactly the kind of person one would want in the U.S. Military and commanding this very difficult situation. 

However, he knows, and the reason he paused, and it was very insightful for him - a long pause, because he wanted to give a truthful answer.  But he also wanted to give an answer that had at least some semblance of optimism in the answer. 

But I think it‘s clear that we‘re in a stage and I think we‘re still in this period - won‘t be for long - in which policy is being reviewed from the bottom up.  I think a new policy, a new strategy and some new tactics will be forthcoming. 

I would be surprised if they are not forthcoming fairly quickly.  That‘s part of what‘s doubling down, as you said, the troops.  And I like the phrase, because it‘s just about doubling the number of troops there is all about. 

MADDOW:  Thinking about a bottom-up review, looking at the very base level of what is happening on a person-to-person basis in Afghanistan and having its - having the strategy sort of evolve from that, rather than a top-down look.  In your documentary, your producers and reporters head out with American troops who are on the border, the border between Afghanistan and Pakistan. 

There is a group of about 30 troops who are in charge of patrolling an area that is 10 times the size of Manhattan.  And to me, that says two things - incredible bravery and ingenuity and the question of whether or not it is folly.  What can they accomplish? 

RATHER:  And believe me, the troops discussed this among themselves.  They do in our program.  They‘re very dedicated.  They‘re doing the thing asked of them.  But they know the size of this challenge.  They also know that while we, you and I here tonight talking about Afghanistan, the core problem the heart - the red, beating heart of this problem is in Pakistan, right across the border in those territories west of Peshawar. 

And I‘ll be surprised - I am constantly surprised if Richard Holbrooke, a very experienced American diplomat who‘s been appointed by President Obama to be his - to answer to him personally about it.  If Holbrooke doesn‘t say, try to make the case. 

Look, we need to do things inside Afghanistan.  But the gut problem is across the border in Pakistan.  And I think the bottom-up review of strategy and tactics won‘t have to do with it.  Once the snow clears in the mountain passes there is going to be a lot of killing done in that part of Pakistan. 

MADDOW:  Are there essentially two choices for American policymakers now?  I guess three - one is, end it, bring them home.  The other two are counterinsurgency, which is the way General McKiernan describes his mission to you.  Counterinsurgency, as you know, is a troop-intensive prospect.  That means essentially creating a legitimate government, a legitimate source of authority and a legitimate use of force in a country. 

The third option is counterterrorism, which is a much smaller, more targeted mission, which is not about building up a state - which is eliminating an enemy. 

RATHER:  That‘s right. 

MADDOW:  Are those the three choices? 

RATHER:  I think those are the three choices.  And I think number three is the basic choice.  You can say number three, which is to say try to defeat terrorism melded with some aspects of counterinsurgency is probably where it is going. 

MADDOW:  Well, it is hard to imagine the melding, because one of them is sort of a police action on steroids.  And one of them is a long-term occupation in a country that‘s never had a legitimate government. 

RATHER:  Well - and your point is so well-taken.  The ancient Greeks, the British and Soviets tried to do a version of what we are doing.  But I do feel obliged to say because it‘s true, that they all tried to colonize Afghanistan. 

We are not seeking to colonize Afghanistan.  The Soviets made no bones about it.  They were coming in to take over the country.  They wanted to run the country.  They wanted to be there 100 or 1,000 years from now.  That is not the case with what we‘re trying to do. 

But also want to underscore that for the troops who are asked to do what we are asking them to do in Afghanistan.  Imagine if 30 soldiers - 30 soldiers responsible for about 350 square miles of territory and this is wicked terrain.  We‘re asking them to do too much. 

MADDOW:  One last quick question for you.  As a man - as a veteran newsman, as a veteran of not only the war in Afghanistan, the current war in Afghanistan, the war in Iraq, the Soviet war in Afghanistan the ‘80s - you were there, how would you rate our national discussion about our security interests and what we‘re going to do next in Afghanistan.  Are we having the right debate?  Are we covering it enough? 

RATHER:  We are not having the right debate and we certainly are not

covering it enough.  I think not having the right debate that may be in the

process of changing.  But we have to keep in mind that with President Obama

he has this economic meltdown, the Middle East, Iraq, so many things. 

But I do think the area of Pakistan, where most of the trouble originates, is going to wind up to be high on his agenda, and he will start spending a good deal of time on that with Richard Holbrooke‘s help. 

MADDOW:  Dan Rather, host and managing editor “Dan Rather Reports” on HD Net, such a pleasure to have you here.  Thank you.

RATHER:  Such a pleasure to be here.  Thank you very much, Rachel. 

Thanks so much.

MADDOW:  Thank you.  Dan Rather‘s next new program is called “The Castle Doctrine.”  It premieres on Tuesday on HD Net.

Rod Blagojevich was unanimously ousted from the governor‘s office by the Illinois State Senate this afternoon.  Did he go quietly, humbly accepting the judgment of his peers?  Are you kidding me?  It is Blagojevich.  He did everything but shake his fist at the clouds.  Rod Blagojevich‘s last stand at his political Alamo, next.  

(COMMERCIAL BREAK)

MADDOW:   In Springfield, Illinois, on day three of Rod Blagojevich‘s impeachment trial in the State Senate, the governor finally took the stand at about 11:00 a.m. Blagojevich standard time. 

First, he made some news suggesting that White House chief-of-staff Rahm Emanuel should be fired.  Don‘t hold your breath.  News first, but then ultimately, he simply stuck to his guns. 

(BEGIN VIDEO CLIP)

GOV. ROD BLAGOJEVICH (D-IL):  You guys are in politics.  You know what we have to do to go out and run elections.  There was no criminal activity on those four tapes.  I didn‘t resign then and I‘m not resigning now because I have done nothing wrong. 

(END VIDEO CLIP)

MADDOW:  In the end, there was pretty much just one question left for the State Senate to answer.  Knowing all that could be known at that moment, did Illinois State senators think that Rod Blagojevich should be impeached? 

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  Yes. 

UNIDENTIFIED MALE:  Yes. 

UNIDENTIFIED MALE:  Yes. 

UNIDENTIFIED FEMALE:  Yes. 

UNIDENTIFIED MALE:  Yes. 

UNIDENTIFIED MALE:  Yes. 

UNIDENTIFIED MALE:  Yes. 

UNIDENTIFIED FEMALE:  Yes. 

UNIDENTIFIED MALE:  Yes. 

UNIDENTIFIED MALE:  Yes. 

UNIDENTIFIED MALE:  Yes. 

UNIDENTIFIED MALE:  Yes. 

UNIDENTIFIED MALE:  Yes. 

UNIDENTIFIED MALE:  Yes. 

UNIDENTIFIED FEMALE:  Yes. 

(END VIDEO CLIP)

MADDOW:  So the answer was yes.  It was unanimous, 59 to zero.  Rod Blagojevich convicted, thrown out of office and then for good measure, barred from taking any other political office in Illinois ever again. 

Almost immediately afterward, Lieutenant Governor Pat Quinn was sworn in as the state‘s 41st governor, instantly becoming the answer to a really good Illinois politics trivia question in the year 2028. 

Then at about 6:10 p.m., Blagojevich standard time, the former governor made his first statement as an ordinary citizen - well, an ordinary citizen under criminal investigation for corruption.  Mainly, the statement was his greatest hits, but there were a couple of bonus tracks thrown in for the fans.

(BEGIN VIDEO CLIP)

BLAGOJEVICH:  I‘m obviously saddened and disappointed, but not at all surprised by what the State Senate did today.  I love the people of Illinois today now more than I ever before. 

UNIDENTIFIED FEMALE:  I love you, too. 

BLAGOJEVICH:  Thank you.  And the fight goes on -

UNIDENTIFIED FEMALE REPORTER:  Governor, did you ever consider resigning? 

BLAGOJEVICH:  No, I did not.   Let me ask you a question.  If I ask you guys to come and cover me if I want to say something, will you do it?  Will you?  Or is it (UNINTELLIGIBLE).

(CROSS TALK)

UNIDENTIFIED MALE:  Will you play hoops with me in the summer? 

BLAGOJEVICH:  Absolutely, man.  Absolutely.

UNIDENTIFIED MALE:  You know, I think (UNINTELLIGIBLE) - I think it‘s in my right had.  You know that.

BLAGOJEVICH:  Let me say one more thing to the people of the Latino community.  Gracias por su apoyo.  Junto seremos nuestro estado mucho mejor para todos.  Si, se puede.

(END VIDEO CLIP)

MADDOW:  Si, se puede?  Joining us now is Mary Mitchell, editorial board member and columnist for “The Chicago Sun Times.”  Ms. Mitchell, thank you so much for coming back on the show tonight.  

MARY MITCHELL, EDITORIAL MEMBER AND COLUMNIST, “CHICAGO SUN TIMES”: 

Thank you for inviting me.  

MADDOW:  Even former Governor Blagojevich seems to have accepted the conviction in the Senate today.  But was the unanimous vote a surprise? 

MITCHELL: No, not at all.  Not at all.  One reason is because you got to look at this like - think about it in terms of a gang of thugs standing on the corner, all right?  As long as nobody is bringing heat, the thugs are going fine. 

But as soon as one of thugs starts bringing heat, that thug has to go.  And that‘s basically what happened in Springfield.  I‘m not saying that all Illinois politicians are corrupt.  But pay-to-play is an old game and former Governor Rod Blagojevich knew that people in that body that was sitting in judgment of him has played that game. 

So they had to get rid of him because he was an embarrassment, because he was bringing heat and attention and negative attention to the State of Illinois.  

MADDOW:  Are you saying that state senators had to vote unanimously to get rid of him in order to make it seem like he was the only one who ever engaged in pay-to-play in order to divert attention from their own selves? 

MITCHELL:  I‘m not saying they had to vote unanimously.  What I‘m saying they did vote unanimously because they were disgusted and fed up.  And there was no way to justify keeping a man given what they knew about pay-to-play. 

Also, they are worried now about what‘s on those tapes.  We have four tapes.  We don‘t know what‘s on those tapes.  They don‘t know what‘s on those tapes.  So they wanted to make sure that they‘ve cast a vote to get rid of the problem.  And the problem in their eyes is the former governor.  

MADDOW:  We saw from Governor Blagojevich‘s public defense that he was a great name-dropper, saying he was going to call Rahm Emanuel.  He was going to call Ted Kennedy.  He was going to call John McCain.  He was going to call Kathleen Sebelius - in a sense, trying to bring all of these people into his orbit, presumably as some sort of political insulation. 

In Illinois as the Chicago - as the criminal trial looms here, are there people who are expecting, worrying that they are going to surface in that trial, that they might be dragged down with him? 

MITCHELL:  Well, I‘m pretty sure there are people worried about that.  And I‘m not going to say any of those people are the people that the former governor named today in his impassioned speech on the floor. 

But there are people.  There have to be people who made deals because pay-to-play is so common.  And I‘m not justifying that.  It‘s just common.  Everybody knows that in Illinois, if you want to get something done, you better put some money in somebody‘s campaign. 

And if you don‘t do that, things aren‘t just going to move.  Illinois works on campaign dollars.  So I think there are a lot of people sitting around right now who are afraid. 

And here‘s another thing.  I just don‘t see how some people are going to sleep tonight.  Because what they did - not all of them, but what some of those people who voted today did was act like hypocrites, act like they didn‘t know that this kind of behavior was going on, and that is so wrong.  But they‘ve engaged in that same kind of behavior.  

MADDOW:  President Obama released a statement today that said, “Today ends a painful episode for Illinois.  For months, the state had been crippled by a crisis of leadership.  Now, that cloud has lifted.” 

Has the cloud lifted, or does there need to be some big ethics initiative now to really clean up after this? 

MITCHELL:  Well, it needs to - you need to get a cap on campaign donations.  We have seen one governor go to jail for the same kind of stuff.  Now, a governor has been kicked out of office.  We‘ve seen dozens of aldermen go to prison because of this kind of fraud and corruption. 

So I don‘t think the cloud has been lifted.  People have just been able to hold it off for a little while.  

MADDOW:  One of those clouds just started raining, maybe. 

MITCHELL:  Right.

MADDOW:  Mary Mitchell, editorial board member and columnist for the “Chicago Sun Times.”  A real pleasure to have you back on the show.  Thanks, Mary.  

MITCHELL:  Thank you.

MADDOW:  Coming up on “COUNTDOWN,” Karl Rove says he won‘t show up to testify to the House Judiciary Committee despite a subpoena.  Keith asks Congressman Jerry Nadler, who sits on the subcommittee, what happens now. 

And next on this show, I get just enough pop culture from my friend, Kent Jones.  George and Laura Bush went to a basketball in Texas where they live now. 

(COMMERCIAL BREAK)

MADDOW:  Now, it‘s time for “Just Enough” with my friend, Kent Jones. 

Hi, Kent.  What have you got?

KENT JONES, POP CULTURIST:  Good evening, Rachel.  Private citizens, George and Laura Bush, are downshifting comfortably into their new life in Texas.  Last night, they went to a big women‘s basketball showdown in Waco between number four-ranked Baylor and number two-ranked Oklahoma. 

Here they are with Baylor coach Kim Mulkey, getting a standing O from the locals - still love him.  Before the game, Bush gave the Baylor team a pep talk.  And then, he and Laura sat behind the Baylor bench during the game, cheering on the Bayers(ph). 

So armed with all that support, the final score was Oklahoma 56, Baylor 51.  He‘s still got it.  Afterwards, the Baylor team asked the Bushes to come to Seattle to cheer them on for the final four which will be played in St. Louis. 

Meanwhile, over at Austin, Texas, you know those big signs that display traffic information like “Warning, construction ahead, or “Expect delays”?  Well, I‘m guessing you‘ve never seen one that says this. 

(SIGN READS:  Run for cold climates.  The end is near!)

(LAUGHTER)

Yes, Department of Transit officials still don‘t know who hacked into their digital road sign system recently.  Say what you want, but zombie attacks in the Austin area are down 70 percent.  Infrastructure, Rachel, so important you preach it every day.

MADDOW:  “Run for cold climates.”  I didn‘t know that was what you do in the face of an impending zombie attack.  

JONES:  Apparently, the zombies hate that.  So if they like it where it‘s warm, you go where it‘s cold and you‘ll be fine. 

MADDOW:  Yet another reason why I still live in New England.  I didn‘t even know that was it. 

JONES:  Exactly.

MADDOW:  Thank you, Kent.

MADDOW:  And thank you for watching tonight.  We‘ll see you here tomorrow night.  Until then, you can E-mail us at rachel@msnbc.com.  Check out our podcast at iTunes or Rachel.MSNBC.com.  You can also hear me coast-to-coast on Air America Radio.  “COUNTDOWN” with the inestimable Keith Olbermann starts right now.  Good night. 

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

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