updated 3/9/2009 10:17:05 AM ET 2009-03-09T14:17:05

Guest: Greg Mitchell, Ana Marie Cox, Jayne Miller, Kent Jones

RACHEL MADDOW, HOST:  And thank you for staying with us at home for the next hour.

Ana Marie Cox will be here shortly to talk about those voodoo economics, the Republican Party‘s homage this week to the presidency of Herbert Hoover.  Do I have my puppet anywhere?

Also, RNC chair for now, Michael Steele, was an odd combination of defiance and apologetic today.  And we‘ve got reporting on some potential trouble bubbling up for him from his failed Senate campaign in 2006.

There‘s also some amazing muckraking reporting out today about our food supply.  There are lots to come, including our regular Friday W-E-A-K, Weak in Review.

But, first, the Republican Party appears to have settled on an idea, on a policy for coping with the economic crisis.  Sure, President Obama has his highfalutin‘ stimulus package and budget proposal, but now, Republicans in Congress have something that they want to say to that besides just no.  They seem to have come to a consensus today that they will continue to say—no—to the president‘s economic plans, but they will also propose taking action in the opposite direction.

Here‘s the top Republican in the House, Minority Leader John Boehner.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER, ® HOUSE MINORITY LEADER:  I think we can help our economy, or we can send a strong signal to the American people by extending this spending freeze through September 30th.

(END VIDEO CLIP)

MADDOW:  By extending—what did you say?  Can we play that one more time?

(BEGIN VIDEO CLIP)

BOEHNER:  I think we can help our economy by extending this spending freeze .

(END VIDEO CLIP)

MADDOW:  Spending freeze?  That‘s what the Republicans are calling for?  The brand name policy of economic fundamentals misunderstanding endorse by more conservatives than any other proven policy failure on the market today.  Spending freeze—really?

John Boehner was just one in a parade of Republicans to sing the praises of the spending freeze on the floor of the House today.

Here was Congressman John Culberson of Texas with his spending freeze sales pitch.

(BEGIN VIDEO CLIP)

REP. JOHN CULBERSON, ® TEXAS:  We, fiscal conservatives, are offering an alternative to freeze federal spending for the remainder of the fiscal year with a continuing resolution.  It‘s called freeze current spending.

(END VIDEO CLIP)

MADDOW:  Ah, freeze spending.  Of course, we also can‘t leave out the stirring spending freeze speech of Indiana‘s Mike Pence.

(BEGIN VIDEO CLIP)

REP. MIKE PENCE, ® INDIANA:  For the rest of this year, let‘s freeze federal spending in virtually every area of the government.  Let‘s say no earmarks in the year 2009.

(END VIDEO CLIP)

MADDOW:  Congressman Pence, the front-runner in the spending freeze spokes-model talent search.  After that rousing call for this inexplicable economic policy this morning on Capitol Hill, Mr. Pence took time out to push the spending freeze, again, this afternoon on the TV machine.

(BEGIN VIDEO CLIP)

PENCE:  Republicans today voted overwhelmingly for a spending freeze.  This is just simply not the time to be doing spending as usual.

(END VIDEO CLIP)

MADDOW:  Now, back in September, the GOP‘s very own first runner-up to the presidency, John McCain, advocated a spending freeze, also when it totally didn‘t make sense.  He proposed a spending freeze again on Tuesday of this week.

You know, Senator McCain lost the debate over what to do about the economy during the campaign.  He then spectacularly lost the election.  Had he won either, we might at this moment be facing the real threat of a spending freeze during a historic economic downturn.  And we do actually have empirical evidence about how that plays out.

You know who else had the excellent idea to freeze government spending during a recession?  This guy—H.H., President Herbert Hoover.  His fundamental misunderstanding on how to shore up a failing economy was so celebrated that the great armies of homeless and jobless Americans gave him naming rights for the shanty towns where they all lived in cardboard boxes and burnout cars during the Great Depression—Hoovervilles.  Hoovervilles.

And now, John Boehner and congressional Republicans are advocating the same policy.  If Boehner gets his way with the spending freeze, I wonder if the 21st century shanty towns could be called Boehnervilles, which, of course, could get very ugly if folks take to using the phonetic pronunciation of his name.

Today, we learned that the unemployment rate in this country shot up to 8.1 percent, after 651,000 Americans lost their jobs last month.  When you add in the underemployed, the people who have taken part-time jobs but need full-time jobs, and the people who‘ve stopped looking for work or who‘ve just given up, you got the, perhaps, more accurate and definitely more scary real unemployment rate.  How does 14.8 percent sound?  Wow.

You know about supply and demand, right?  Supply is stuff that is for sale, demand is people buying stuff.  We‘ve got plenty of supply.  Stuff for sale is piled up everywhere.

We‘ve got tons of stuff for sale, but we‘ve got no one to buy anything.  It‘s the demand side of the economy that has come to a halt because of the credit disaster and other things besides.  We have supply, we have no demand.  No one is buying.

And when no one is buying, companies that pay people to make stuff can‘t afford to keep those people on the payroll anymore.  So, there are layoffs.  And then those laid off people can buy even less stuff than they could before because they‘re laid off.  That makes the no-demand problem worse, which causes more layoffs, which causes less demand, which causes more layoffs, which causes less demand, which—it snowballs.  It keeps getting worse.

There needs to be an interruption in this awful cycle.  This isn‘t going to fix itself.  There needs to be a way to dump a whole bunch of demand into the economy, to buy a bunch of stuff, to spend a bunch of money.  To try to stop this cycle, there needs to be some spending—fast, a lot of it, right now.

But, you know, also, nobody like people or businesses, no one but the federal government really has the necessary cash to do a whole lot of buying right now.  In this context, the Republicans are proposing a spending freeze.  They‘re saying the government should stop spending.  Also, rather than put your house fire out with water, they‘re going to switch the liquid in the fire hose over to gasoline.  Does that seem like a good idea?

Joining us now is Ana Marie Cox, national correspondent for Air America and “Daily Beast” contributor.

Ana Marie, thanks so much for coming on the show.

ANA MARIE COX, AIR AMERICA NAT‘L. CORRESPONDENT:  It‘s good to be here.

MADDOW:  Spending freeze is a great short sweet slogan, fits on a button, fits on a bumper sticker.  It sounds like it‘s very responsible, you know, belt-tightening, telling those crooks in Washington how you feel.  It is completely ridiculous as economic policy.  Do they know that?

COX:  Well, I was actually thinking about this and how it‘s a little bit like, you know, with economics, much of which in environmental science, you can get experts or so called “experts” to say almost anything you want.  But in this case—and so, Republicans are weird about global warming, right?  They say they have experts that disprove global warming.

I think this is like we‘ve already been through global warming.  You know, it‘s almost—they‘re arguing about this deficit as though the signs have not already happened.  But we‘ve already had the planet catch on fire once before under Herbert Hoover.  Maybe that metaphor is a little bit too elaborate.  But I was really in love with it when I came up with it a second ago.

MADDOW:  I love this metaphor.  I think it‘s perfect.

(LAUGHTER)

MADDOW:  Keep going.  More about Hoover.

(LAUGHTER)

MADDOW:  Sorry.

COX:  It‘s just—you know, what I‘m talking about.  If they refuse to look at existing science, they refuse to look at history and see what‘s happened, and instead, they‘ve chosen to go with something that sounds very pretty.

MADDOW:  Yes.  And it‘s a political capital decision, not a policy decision.  And, you know, there is this GOP talking point.  I heard it from Tim Pawlenty the other day on the show.  This idea—we don‘t need new ideas, we just need to better articulate our old ideas.

But, is there anybody who is doing well politically in the Republican Party who actually thinks they do need new ideas?

COX:  Well, what‘s funny is, I actually think T-Pa, and I hope you call him as well, is one of the people who‘s coming up with new ideas.  I mean, I have interviewed him before as well, and he says that they don‘t need new ideas.  But back in Minnesota, he‘s actually doing relatively innovative stuff with the very liberal Minnesota legislature.

So, he‘s maybe a bad example.  I think, as far as Republican leaders who are doing—who are actually coming up with new ideas, there‘s not—I just can‘t think of a single one.

MADDOW:  You covered John McCain during the presidential campaign.  He was out proposing a spending freeze during the campaign.  He‘s proposing it again now.

I mean, does he remember how badly that went over during the campaign?  I mean, there ought to be common wisdom, lessons learned for the Republicans about that campaign and about how badly they got beat specifically on the economy, but I don‘t sense that they have learned those lessons.

COX:  I thought you‘re going to say, doesn‘t he remember Hooverville personally.  But, I won‘t go there.  Sorry.

I think that John McCain made a lot of—or made some political compromises during the campaign.  But I will give him this—he does certainly believe that spending freeze is a good idea.  He‘s wrong, but he believes it.  I don‘t know if you get more credit for actually believing something that‘s wrong.  But that‘s what think is the case with John McCain.

MADDOW:  It‘s sort of endearing if you‘re a cartoon character, but you probably shouldn‘t be given anything to run.

COX:  Yes.

MADDOW:  You know, it‘s the courage of my completely wrong convictions, like me, that makes you a very interesting character in fiction.  But John McCain, John Boehner, Eric Cantor, Mike Pence—these guys have been regarded as relatively serious Republicans.  I mean, these guys are not Jim Bunning or Michael Steele.  But now, they .

(LAUGHTER)

MADDOW:  They are advocating these economic policies that really don‘t—that really don‘t make sense, which makes me feel like, OK, maybe these guys aren‘t serious.  At least, they‘re not serious about policy.  Are there secretly other Republicans who we will be taking seriously six months from now?

COX:  Oh, yes.  There will - yes, definitely.  Because, you know what?  We‘re not going to be talking about economics necessarily six months from now.

There are plenty of middle of the road Republicans and Democrats from so-called “purple districts,” that on areas like education, healthcare and the environment, are going to be coming together to try and figure out something.  Because the White House is, I think, you know, pretty serious about at least trying for bipartisanship deals.  Sure.  They‘ll put something through if they don‘t have the Republican votes, but I think they‘re serious about listening to the Republicans.

And also, I want to point out, that just because you‘re a showboater or just because you aren‘t serious about policy, it doesn‘t mean you‘re a serious contender for leadership in the Republican Party.  I think history showed us that.

MADDOW:  Who are you referring to with the showboating, Ana Marie?

(LAUGHTER)

MADDOW:  Am I going to ruin your Twitter feed now because all the Republican chairman candidates aren‘t going to friend you on Facebook and direct message you anymore?  It‘s all happening in public.

COX:  Maybe.

(LAUGHTER)

MADDOW:  Is it true .

COX:  Well, let‘s just say that the current leadership of the House Republicans are more interested about looking good than they are about creating sound, fiscal policy, I think.

MADDOW:  I‘m sure—

COX:  But also in the history of the Republican Party, and the history of the Republican Party has shown other people do the same thing, and Democrats, too.

MADDOW:  Sure.  I mean, when you‘re out of party, you have the leisure of not having to actually rent anything.  And so, you try to, I think, look better than you sound sometimes.

Ana Marie Cox, national correspondent for Air America, contributor to the “Daily Beast” and all around good sport, thank you for joining us.

COX:  Thank you, Rachel.

MADDOW:  Coming up: More on the continuing saga of RNC Chairman Michael Steele, the man who calls everyone “baby,” some odd financial doings during Steele‘s last failed Senate campaign are coming to light.  Baby, the Maryland reporter who broke this story will be with us next.

But, first, a little more scrubbing and rinsing of what was left behind by the Bush administration.

A senior administration official says that on Monday, President Obama will lift the Bush era restrictions on federal funding of embryonic stem cell research.  Once the executive order is signed, scientists will be able to request funding from the National Institutes of Health for stem cell research aim at finding cures for major diseases and spinal cord injuries, as they were able to do before President Bush signed the ban in 2001.  That is so sciency, queue to protest.

(COMMERCIAL BREAK)

MADDOW:  We‘ve got a big, serious update for you about a guest that we had on the show last night.  Former Alabama Governor Don Siegelman is apparently going back to prison.  He was on the show last to talk about Karl Rove‘s upcoming congressional testimony.  Governor Siegelman alleges that Mr. Rove unethically and illegally arranged the prosecution and conviction that sent Governor Siegelman to prison.  That was last night.

The governor on the show is very excited about Karl Rove‘s expected testimony.  And then today, a federal appeals court ruled on his case, against him mostly.  He was ordered to return to court to be sentenced again.  He already served nine months of his seven-year sentence before getting released to pursue his appeal.  His attorney will appeal again.

We will keep you posted and I will try to not think of myself as a legal bad luck charm.

(COMMERCIAL BREAK)

MADDOW:  One of the stranger details of Michael Steele‘s strange tenure as chairman of the Republican Party is that no one else works there now.  He fired almost all the staff of the Republican National Committee after taking over in January, but then he did not replace them.  Today, we learned that one person who had been kept on, the top Internet guy at the RNC, a man named Cyrus Krohn, he has resigned.  Politico‘s Ben Smith notes that Mr. Krohn did join a Facebook campaign aimed at keeping himself in his job, but then he quit.

Michael Steele has promised off-the-hook and beyond the cutting edge ideas, but losing the guy who out-innovated the Democrats on grassroots Web operations from the last campaign is probably on the hook and somewhat behind the cutting edge.  The RNC still has no political director, no communications director, no finance director, and no chief of staff.  They do, however, have a chairman who knows how to find his way to a microphone.

Today, he guest-hosted William Bennett‘s radio show where he indirectly responded to the call for his resignation heard from our guest last night, RNC member Ada Fisher.

Is Mr. Steele going to resign?

(BEGIN AUDIO CLIP)

MICHAEL STEELE, RNC CHAIRMAN:  Aww, trust me, not me, baby.  No, not happening, no way, no how!

(END AUDIO CLIP)

MADDOW:  Is it just me, or is Michael Steele undoing all the good that Telly Savalas and Barry White for the word “baby” in the 1970s?  You know, when he was elected head of the RNC?

(BEGIN VIDEO CLIP)

STEELE:  Get ready, baby, it‘s time to turn it on.

(END VIDEO CLIP)

MADDOW:  Will he punish moderate conservatives, moderate Republicans for voting for the stimulus?

(BEGIN VIDEO CLIP)

STEELE:  Oh, yes, I‘m always open to everything, baby, absolutely.

(END VIDEO CLIP)

MADDOW:  And of course, this gem from the Republican National Convention .

(BEGIN VIDEO CLIP)

STEELE:  Let me make it very clear—drill, baby, drill, and drill now.

(APPLAUSE)

(END VIDEO CLIP)

MADDOW:  Think about that, we got “drill, baby drill” because Michael Steele likes to say “baby” a lot.  I never put that together before today.

Anyway, WBAL in Baltimore, baby, has reported on thousands of dollars Mr. Steele allegedly paid to a commodity‘s trading firm during his failed 2006 run for the Senate.  It was more than $60,000, labeled as “political consulting fees” paid to a commodity‘s trading firm that had forfeited its license to operate in the state of Maryland.  It‘s a business that trades things—trades things like minerals and metal ores.  Their Web site lists, for example, ammonia, urea, phosphates, slags and sludges, and no mention of political consulting.

Joining us now to try to make some sense of this is Jayne Miller, chief investigative reporter for WBAL.  She has taken the lead on this “consulting fees” story.

Ms. Miller, thank you very much for joining us.  Good evening.

JAYNE MILLER, WBAL-TV, BALTIMORE:  Good evening, Rachel.  How are you?

MADDOW:  Great.  Thanks.

This all happened during Michael Steele‘s ‘06 campaign for Senate.  He appears to have paid a commodity‘s trading firm for political consulting.  Have you been able to figure out if this firm actually does political consulting in addition to trading sludges and urea and stuff?

MILLER:  Well, what we know about this firm is what‘s listed on its Web site and also what‘s in its papers of organization when it organized in the state of Maryland.  And no, we cannot find any public description of it that it does anything like political consulting or a variety of other political activities that other Republican accounts paid it in the waning months of the 2006 campaign.  So, that‘s been one of our questions.

We have asked both the owner of Allied Berton.  We have asked Michael Steele that question and we‘ve asked former governor Bob Ehrlich‘s campaign as well.  He was the other side of the Republican campaign in Maryland in 2006.  A very contested campaign, with a sitting governor, Bob Ehrlich, the Republican, and Michael Steele, who was the lieutenant governor in Maryland who was trying to claim the open U.S. Senate seat in Maryland.  So, it was a very contested, heavily-financed campaign in the state in that year.

MADDOW:  And both of those candidates paid political funds of some kind, paid for some sort of political service from this mysterious company.

And, Jayne, I know that you were—sorry, go ahead.

MILLER:  Well, I was going say the total amount that came out of four Republican accounts including Steele‘s Senate account to this firm Allied Berton was $417,000 in a three-month period.

MADDOW:  Wow.

MILLER:  One of the questions we asked, of all of them, what was the payment really for.  You know, the whole idea of campaign finance reporting is to be transparent so that the public can see who‘s giving money to a candidate and where a candidate‘s spending money.  And so, the question becomes, well, if this is political consulting, why is it going to a firm that calls itself a commodity‘s trader?

We know the man behind the Allied Berton firm is a close supporter of Michael Steele, who also, during the Ehrlich administration, the Ehrlich gubernatorial administration in Maryland in 2004, was given the so-called “business status” needed at that time to do business at our airport, the Baltimore Washington International Airport.  So, he does have other businesses.

MADDOW:  I know that, Jayne, you were given some video from a Democratic operative that I think we can air and show right now.  What is this video and how does it relate to this—this mysterious money during that ‘06 election?

MILLER:  Well, what—the question that we asked was, OK, so what was this money used for?  And a former campaign official with the Bob Ehrlich campaign, in response really to our question, said that, quote, “It may well have been used to fund the bussing of people from Philadelphia, African-American men, to Maryland from Philadelphia on Election Day 2006 to do poll working for the Ehrlich campaign and the Steele campaign.”

This was a very controversial tactic and got quite a bit of press, both on Election Day in 2006 in Maryland and about a week later with some press, the Democratic Party stood up and was very, very—denounced this as a dirty trick.  There were about six or seven bus loads of African-American men that came to both Baltimore City and Prince George‘s County, which is the two jurisdictions in Maryland that have the larger African-American population.  They came here to work the polls in African-American precincts.

Many of the Democratic leaders denounced this tactic as being deceptive, trying to trick voters into thinking that these were a lot that these folks who were black supporters of the Ehrlich and Steele campaign from Maryland, when indeed, they had come from Philadelphia.  No one has ever said, “Yes, we did that,” “Yes, we paid to have this done.”

When we did this story last week and started asking these questions, when the former Ehrlich campaign official said to us this may well have been what this money was used for, it‘s the closest anybody has ever come to saying—yes, we did that.

MADDOW:  I remember from the reporting at that time in the “Washington Post” and other sources saying that part of the controversy about that, bussing those people from Philadelphia to Maryland was that what they were handing out were inaccurate sample ballots that described Governor Ehrlich .

MILLER: That‘s correct.

MADDOW:  . and Michael Steele as Democrats.  “The Post” said that

the flyers included fake endorsements from well-liked African-American

Democrats like Kweise Mfume.  Do we know that those—I mean, if that

happened, that‘s more—that‘s a bigger deal than just doing something,

moving people across state lines to impersonate supporters, that‘s actually

that seems like something that Michael Steele should maybe want to answer for.

       

MILLER:  That—well, and that was very much part of the controversy at the time.  There was a lot of attention paid to this both on Election Day as you can imagine, it was quite controversial in both Prince George‘s County and Baltimore City on Election Day, to have these busses arriving.  These guys got off the bus, they said they were from Philadelphia, that they were working for the Steele campaign, they‘re working for the Ehrlich.

And then you are correct, passing out this literature which we have seen, that this says that Ehrlich and Steel were supported by certain Democratic leaders in the state of Maryland who happened to also be African-American.  Those leaders very much denounced this tactic as very deceptive, because they were not supporting those two candidates.

MADDOW:  Jayne Miller, chief investigative reporter for WBAL in Baltimore, thank you for your reporting on this.  And thanks for taking time out of your Friday to join us.  I appreciate.

MILLER:  Thank you, Rachel.

MADDOW:  I should say that Michael Steele has not only rebuffed our repeated requests that he join us for an interview on this show, we now can‘t even get his office to answer our calls and e-mails requesting comments or confirmation on things that we are going to discuss on the show, that may have something to do with the fact that apparently, nobody works at the RNC anymore.

But, regardless, I want to say here for the record, Mr. Steele, we have been covering you a lot lately.  My personal guess is that you may be on the road to being forced out as party chairman.  If you want to come on the show to defend your record, to explain these financial questions, to explain what happened in 2006, to rebut or argue with me about anything that we talked about on the show, I welcome the opportunity for you to do that.

I promise you will get a fair opportunity if you choose to join us. 

At least start calling us back.  Come on.

(COMMERCIAL BREAK)

MADDOW:  We survived the spinach scare, then the meat scare, and we‘re just getting past the peanut butter scare.  You know who‘s making sure food companies are producing safe food?  Companies hired by the food companies.  Here‘s a whole bunch of money.  Offhand, would you say our food is good to go?  I‘ll explain in just a moment.

But, first, it‘s time for a couple of holy mackerel stories in today‘s news.  A country threatening war is always a scary thing.  That‘s always scary.  But when that country threatening war has nuclear weapons maybe and you also have nuclear weapons, what is being threatened is not just your run-of-the-mill war, what‘s being threatened is nuclear war—which is no fun even on a Friday.

North Korea is, apparently, very upset that South Korea is engaging in military exercises with us.  These joint military exercises, these war games, we do them every year with South Korea.  And every year, North Korea‘s dear leader, Kim Jong-il, gets his big green pants and a bunch over them.

This year, though, through their official news agency, the North Koreans have released a press release, one-upping they‘re usually outrage.  They are characterizing the exercise as, quote, “an exercise for invasion to trigger a nuclear war.”

You should also know that South Korean airlines are actually diverting passenger flights now after the North Korean government made the announcement that it could no longer guarantee the safety of South Korean passenger planes anywhere near its air space.  Wow, surly much? 

But South Korea is not backing down.  The joint U.S.-South Korean military exercises are still a go.  They have the ridiculous code names “Full Eagle” and “Key Resolve.” They start on Monday, they will last 11 days, unless they start a nuclear war, in which case they‘ll end sooner. 

Also, as you know, the United States has been holding a man named Ali al-Marri in custody on U.S. soil since December 2001.  He‘s the guy who sort of looks like Yanni, with a sad, sad very pre-war on terror mullet.  Mr. al-Marri is a native of Qatar, he was living in the United States legally when he was detained on terrorism allegations. 

In 2003 the Bush administration labeled him an enemy combatant.  Enemy combatant is, of course, the term the administration pulled out of its—thin air in order to justify imprisoning people indefinitely without trials the way the Constitution says you cannot. 

So what‘s happening with Mr. al-Marri‘s case?  As we have discussed on this show, he is still in a Navy brig in South Carolina.  We‘ve been waiting to hear whether or not the Supreme Court would hear his case.  It should be a no-brainer, indefinite detention was one of the most far-reaching, Constitution-shredding legal claims made by the Bush administration. 

The only issue here, the complication is that the Obama administration announced charges against Mr. al-Marri last week.  We covered that story with Jane Mayer of The New Yorker.  Moving him to criminal custody as opposed to whacky enemy combatant custody meant that Mr. al-Marri will get his day in court. 

He finally will have charges brought against him.  He will finally have the opportunity to defend himself.  He will also have the opportunity to be convicted if the evidence warrants. 

Taking that into consideration, the Supreme Court has now decided to not decide the enemy combatant case that was against him.  In other words, we are left without a Supreme Court ruling on the whole idea of a president being able to label somebody an enemy combatant and detain them indefinitely. 

This is probably good news for the Obama administration if they did not want to have to weigh in on the issue.  But it‘s probably bad news for anyone who was hoping that no American president would ever have the right to do this again, even if, like Barack Obama, you think that the president might not want to do that, relying on the good graces of whoever is president not to consolidate power in the executive branch, and therefore abuse power, I don‘t really want to trust anyone, not President Bush, not President Obama, not Captain Kangaroo with that kind of authority.   

(COMMERCIAL BREAK)

MADDOW:  Left, right and center, it‘s hard to find anyone who admits to being a fan of the news media.  On one of my favorite liberal blogs, Think Progress, the tag line they use is “brain dead media.” Talk radio host Rush Limbaugh uses the term “drive-by media.” The phrase “mainstream media” was adopted derisively by the right years ago, it‘s now often abbreviated as “MSM,” which is supposed to make you feel roughly as positive as other happy acronym epithets like “STD” or “VPL” or “AIG.” 

Amidst the gleeful cross-partisan media-bashing, there is the uncomfortable fact that big portions of the news media appear to be disappearing.  We have learned this week, for example, that this might soon be the only available version of The Seattle Post-Intelligencer. 

The PI‘s parent company, the Hearst Corporation, has made offers to the paper‘s staff to work on a Web-only version of the paper with presumably smaller revenues, lower costs and lower and fewer salaries.  The Seattle PI would be the first big city paper to go completely digital as a means of trying to save itself. 

Others haven‘t survived.  Denver‘s Rocky Mountain News died last week.  After 150 years, it is gone.  The newspapers still open for business are in big trouble.  Since December, the Tribune Company, parent of The Chicago Tribune and The Los Angeles Times, they have declared bankruptcy, so has the publisher of The Minnesota Star Tribune, same goes for The Philadelphia Inquirer.  The whole McClatchy chain of newspapers, (INAUDIBLE) The Miami Herald and The Sacramento Bee, they have reportedly laid off a quarter of their workforce. 

The biggest paper in New Jersey, The Star-Ledger, paid buyouts to nearly half of its editorial staff in October.  Scores of newspaper veterans, reporters, photographers, editors, no longer working in news, presumably. 

Now there‘s no reason why a free press cannot be evident online instead of in print newspapers and print magazines, but one thing a free press needs is people actually ferreting out the news, reporters and editors and photographers on the payroll, full-time preferably, a democracy cannot thrive by blog alone.  Can it? 

I think I need a talking down.  Joining us now is Greg Mitchell, editor of Editor & Publisher.  He‘s also the author of “Why Obama Won: The Making of a President 2008.”

Greg Mitchell, it‘s nice to see you.  Thanks for being here. 

GREG MITCHELL, EDITOR & PUBLISHER:  Thank you. 

MADDOW:  Can democracy thrive by blog alone?  I mean, is there a reason that we need professional journalists working in the field full-time instead of just spunky volunteer citizen-journalists?

MITCHELL:  Well, I think we do.  I think your show and other TV shows, radio shows, get an awful lot of—your stories come out of newspapers. 

MADDOW:  Yes, all of them. 

MITCHELL:  Now I‘m a big critic of newspapers, I‘m also a big supporter of them.  I see the tremendous work they do every day to expose things as real watchdogs.  I‘m also a big supporter of the new media.  In fact, my book that you mentioned really cites new media as one of the real key reasons that Obama won. 

However, there‘s only so much they can do.  There‘s a lot of terrific Web sites now that are doing original reporting like Talking Points Memo is a good example, that are doing original reporting.  And it‘s very important and very heartening. 

However, there is only so much they can do and there certainly is an important role in our democracy of real reporters and in foreign bureaus as well.  One of the saddest things is the cutback in foreign bureaus, the cutbacks in coverage of Iraq and Afghanistan, which I know you have talked about a great deal in the past. 

Massive cutbacks in Washington bureaus, even as we have all of these crises in Washington, there are far fewer reporters in Washington to do it.  So—and I‘m very critical of much of the mainstream media, so I don‘t want to sound like a cheerleader.  However we really do need some of the great reporters too. 

MADDOW:  But why has newsgathering become so much less economically viable in the last few years? 

MITCHELL:  Well, part of it is that newspapers have been very profitable.  In fact, most newspapers are still profitable.  That‘s sort of the dirty secret.  They are still profitable, but they have tremendous debt loads.  They have been hurt very badly by the Web, partly because almost none of them charge for the material there. 

And so all of these wonderful blogs and Web sites link to the tremendous work that the newspapers do, they don‘t get a dime out of it.  So it‘s a very bad business model right now.  But it‘s not like these newspapers are not making any money, they‘re just making far, far less than they did.  And they‘re cutting back in the newsroom which could further their decline. 

MADDOW:  Exactly.

MITCHELL:  Because they‘re not getting the amount and the quality of stories that they need? 

MADDOW:  Well, Greg, are there realistic models out there that newspapers will implement to survive?  I mean, today, the chairman of The New York Times told CNBC that they will, quote, “consider anything.”  Are there good, viable models that are emerging? 

MITCHELL:  Well, a lot—it‘s revealing that only in the past few weeks has there been a great debate about this.  It always was the newspapers would say, we can‘t really go there because people are too used to getting things for free.  Of course, we used to hear that with music too, downloading free music.  Of course, iTunes came along and has done fairly well. 

But newspapers haven‘t really wanted to talk about it because the theory is that people will never go back to paying for something.  However, in the last few weeks we have seen a whole range of things, people paying a penny per click, people who want to link to The New York Times would have to pay The New York Times a small amount of money. 

Over the course of a year, that money would add up in the millions and millions, theoretically, whether you or anyone else would want to go along with that remains to be seen, so. 

MADDOW:  You know what I want to go along with?  I want go along with the country still having a free press and a lot of professional journalists and editors. 

MITCHELL:  It‘s incredibly important.  It really is.  But I do love the new media as well.  And I‘m very heartened by a lot that‘s going on there. 

MADDOW:  Greg Mitchell, editor of Editor & Publish, author of the new book “Why Obama Won: The Making of a President 2008,” thank you so much for being here.

MITCHELL:  Thank you, Rachel.

MADDOW:  Coming up on “COUNTDOWN,” Keith Olbermann has actually booked the Washington Wizards fan who got into a really public trash-talking back-and-forth with Obama at a game last week, did you see that?  I know. 

Next here, Teddy Roosevelt meets rat sausages meets Ronald Reagan meets salmonella.  I‘m now going to stop saying the word “meet.” 

But first, “One More Thing,” an example of government responding to concerns first raised in the press.  This week the Senate Intelligence Committee, the committee that oversees all of our intelligence agencies, they announced that they review the CIA‘s euphemistically named “Detention and Interrogation Program,” much as the Senate Armed Services Committee, which oversees the military, did last year.  

Now the Senate Armed Services Committee found that high level defense officials in the Bush administration authorities were responsible for and complicit in the detention and torture of prisoners in the United States—sorry, prisoners in United States‘ custody since 2001. 

Now the Senate Intelligence Committee will review the CIA‘s program to see how it operated, how the CIA chose who to interrogate, whether the CIA lied to the government about the program, whether the program was legal and whether they got any useful information out of these interrogations.  That‘s the good news. 

The bad news is that the whole process is expected to take about a year.  A year?  Anybody mind if we extend the statute of limitations on this stuff so that we don‘t run out of time to prosecute if need be? 

(COMMERCIAL BREAK)

MADDOW:  It‘s time for another episode in our tragicomic chronicle of the “GOP in Exile.” Former House Speaker Newt Gingrich is floating the idea of running for president.  Not some new Newt Gingrich, it‘s the old Newt Gingrich, the one from the ‘90s.  Mr. Gingrich told The Richmond Times-Dispatch that he and his wife are looking seriously at the possibility of him making a run for the presidency in 2012. 

He told the paper: “I see the party moving toward a whole new generation.”  Awkwardly, I sort of see the whole old generation still hanging around. 

(COMMERCIAL BREAK)

MADDOW:  I just spoke with Editor & Publisher‘s Greg Mitchell about what is starting to feel like the collapse of the American news industry and about how worried we all ought to be about whether it is still possible for a lot of people, a lot of smart, ambitious, talented Americans to make a living as reporters. 

No reporters, no accountability.  No accountability, no real democracy, eek.  We now pivot from that eek to something that will warm the hearts of any real news geek, a really stupendous piece of investigative journalism in today‘s New York Times.  Now here‘s the context. 

In February 1906, Upton Sinclair published a book called “The Jungle,” which he wanted to have the effect of rallying the country to the cause of the poor and mistreated workers in Chicago meat-packing plants.  Instead, he rallied the country to the cause of the disgusting stuff that came out of those plants. 

I will assume you do not want to hear the details of the rat droppings and rat poison and whole poisoned rats in the sausage, let alone what they cooked and bleached and sold as canned chicken.  I know for a fact you do not want to hear about what happened when workers fell into the rendering vats. 

Sinclair said about his book: “I aimed at the public‘s heart and by accident I hit it in the stomach.” Within four months of “The Jungle” being published, a national Upton Sinclair-induced bout of nausea and outrage led President Theodore Roosevelt to sign the Food and Drug Act.  It set up a system of federal inspections for food and drugs, as well as labeling laws. 

Big business hated it but it passed.  Since every consumer couldn‘t have perfect information about everything going into the products on sale in America, market forces alone were not enough. 

Sure, no one would buy rat sausages if they knew that‘s what they were, but how were folks supposed to know unless there were inspections?  So the companies had totally economically rational reasons for maximizing their profits, and that‘s fine. 

But in addition to that private interest in profit, there is also a public interest in Americans not eating tasty sausages secretly made out of rats and dead meatpackers, under the Food and Drug Act, the government said, OK, the companies can look after their private interests, but it‘s the role of the government to look after the public interest. 

We‘re going to inspect and regulate and ensure the safety of our food supply.  Yum.  That basic idea of the government‘s regulatory role is anathema to the conservative movement. 

(BEGIN VIDEO CLIP)

RONALD REAGAN, 40TH PRESIDENT OF THE UNITED STATES:  Government is not the solution to our problem, government is the problem. 

(END VIDEO CLIP)

MADDOW:  That was the whole big basic idea of Reagan conservatism.  This darn regulation stuff is impinging on our freedom, our freedom to unknowingly eat rat sausages.

(BEGIN VIDEO CLIP)

MITT ROMNEY ®, FORMER PRESIDENTIAL CANDIDATE:  The right course is the one championed by Ronald Reagan 30 years ago, take a weed-whacker to excessive regulation. 

SEN. JOHN MCCAIN (R-AZ), FORMER PRESIDENTIAL CANDIDATE:  I believe in less government regulation.

(END VIDEO CLIP)

MADDOW:  Darn regulations.  During the Bush administration, the anti-regulation ethos of the conservative movement, manifest in part by the number of Food and Drug Administration inspectors being slashed.  For good measure, a lobbyist for the cattle industry was installed as the chief of staff at the Agriculture Department. 

So now we are in a place as a country, 103 years after Upton Sinclair‘s disgusting meat-packing expose, in which our system of ensuring the safety of the nation‘s food supply appears to no longer be up to the task. 

I don‘t have reason to believe that we‘re back in unknowingly eating rat sausages territory, but, well, April ‘08 salmonella outbreak from jalapenos; December ‘07, Listeria bacteria in milk products; October ‘07, salmonella in chicken and turkey pot pies; September ‘07, E. coli in ground beef; August ‘07, salmonella in spinach; June ‘07, E. coli in beef.      

And of course, there‘s the Peanut Corporation of America, which shipped out salmonella-frosted peanuts for zillions of different food items.  So far nine people are believed to have been killed.  More than 20,000 people have gotten sick. 

In today‘s New York Times, Michael Moss and Andrew Martin report that the Peanut Corporation of America plant in Georgia was assessed to have a quote, “superior level of food safety.” Superior, that was nine months into the time when we now know they were shipping out salmonella. 

Another audit a month later gave the infested plant a 91 out of 100, A-minus.  Remember, this is the plant where the people who worked there say they regularly saw mice and rats and roaches and mold. 

Who were these geniuses who were certifying the health and safety status of that plant?  They were private auditors, private inspectors, private?  Yes, hired because the industry—hired by the industry, because without enough government inspectors to do this work any more, the industry has developed its own private for-profit voluntary inspection system to maybe, conceivably ensure safety, but at least to give them a big blue ribbon, look, ma, I passed, that they can point to if they get sued. 

Says The Times today: “With government inspectors overwhelmed by the task of guarding the nation‘s food supplies, the job of monitoring food plants has in large part fallen to an army of private auditors.  An examination of the largest food poisoning outbreaks in recent years in products as varied as spinach, pet food, and a children‘s snack, show that auditors failed to detect problems at plants whose contaminated products later sickened customers. 

So, yes, maybe it‘s time to go back 103 years to the part where we had figured out that industry will rightly pursue its private interest which is both profit and these days not getting sued.  They will pursue their private interests. 

But it is the role of the government to look after the public interest.  So it‘s through public means that we‘re going to make sure that we inspect and regulate and ensure the safety of what we eat. 

Private inspectors?  Feh.  Michael Moss and Andrew Martin at The New York Times, keep it up.  Somewhere in muckraker heaven you have just made Upton Sinclair‘s day.  

(COMMERCIAL BREAK)

MADDOW:  Now it is time to look back on the last seven days of public lame-itude.  Here now is my friend Kent Jones with the week in review.

Hi, Kent.  What have you got? 

KENT JONES, MSNBC CONTRIBUTOR:  Good evening, Rachel.  Well, first up, the quote of the week, Republican Senator Jim DeMint promoting an amendment to prolong D.C.‘s school voucher program.  Said today: “If you send a kid to public school in D.C., chances are they will end up in a gang rather than graduating.” Weak. 

Rachel, nearly 70 percent of D.C. students graduated last year.  While in South Carolina, the rate was 56 percent.  That would be his home state. 

Next up, database error of the week in Crestview, Florida, a woman named Opal Blackwell Walker received a FedEx letter from a Marine recruiter asking if she had the right stuff to join the Corps.  Opal Blackwell Walker is 79 years old.  Weak. 

(LAUGHTER)

MADDOW:  You know, when I get carded for buying beer, I‘m kind of impressed.  You think I could be under 21? 

JONES:  Thank you.

MADDOW:  Hopefully it was a compliment for her.

JONES:  Seventy-nine, let me at them!  Next, literary pretension of the week.  According to a new survey, two out of three people in England have lied about reading books they have not read.  Most popular lied-about books: “1984,” “War and Peace,” “Ulysses,” the Bible, and in ninth place, Barack Obama‘s “Dreams from my Father.” Lying about reading, weak. 

MADDOW:  Lying about reading Obama‘s book? 

JONES:  Yes.

MADDOW:  Wow.

JONES:  Apparently so. 

Here they are proud not to read. 

MADDOW:  I was just going to say. 

JONES:  Opposite problem. 

(CROSSTALK)

JONES:  Right, I‘ve never read a book ever.  Finally, international dance craze of the week.  What you‘re watching is called “techtonic (ph),” an electro-dance thingy born out of the mostly white middle class southern suburbs of Paris, where apparently it is the thing in France right now.  Incroyable (ph)!  Tres weak. 

(LAUGHTER)

MADDOW:  This has been kind of a ‘90s week.  This is truly.

JONES:  A little bit, yes.  Apparently they all want to be boy bands of some kind. 

(CROSSTALK)

MADDOW:  All right.  Cocktail moment for you, Kent.  Now this is a little treat for both the techie and the artsy among us.  You remember we had the Flight 1549 landing-in-the-Hudson animation, right, that was so incredible? 

JONES:  Unbelievable. 

MADDOW:  We have found another fantastic aviation animation thanks to wired.com.  This is the work of an artist named Aaron Koblin using real time air travel information, this shows the flight paths of thousands of planes tracked over North America.  How cool is this? 

JONES:  That can‘t be cooler.

MADDOW:  Thanks to the clock there, you can see how the air traffic slows down overnight before starting to pick up after dawn on the East Coast.  It then picks up across the country as the sun moves westward.  How cool is that? 

JONES:  It‘s an organism, it‘s alive. 

MADDOW:  I know.  Thanks, Kent.

Thank you for watching tonight.  We‘ll see you back here on Monday. 

“COUNTDOWN WITH KEITH OLBERMANN” starts right now.  Have a great weekend. 

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

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