updated 3/25/2009 9:48:11 AM ET 2009-03-25T13:48:11

Guest: Eugene Robinson, Jane Hamsher, Ana Marie Cox, Matt Taibbi, Kent Jones

High: President Obama holds prime-time news conference.

Spec: Politics; Government

KEITH OLBERMANN, MSNBC ANCHOR: Here is Rachel Maddow.

Good evening, Rachel.

RACHEL MADDOW, HOST: Good evening, Keith, thank you. And thank you at home for staying with us for the next hour for this special post-presidential press conference edition of the show.

Gene Robinson of “The Washington Post” will be along in just a moment to talk about tonight‘s big news. Jane Hamsher is here to talk, Evan Bayh and the conservative Democrats organizing against President Obama in the Senate. Ana Marie Cox will be here to talk about Republicans publicly turning on Dick Cheney.

And as Keith said Matt Taibbi has a must-read article in “Rolling Stone” about what is really going on with the economy. He is here to spit some proverbial nails.

All that and more coming up. But first, President Obama has wrapped up the second primetime conference of his 64-day-old presidency. It was the culmination of a six-day media blitz originally intended to sell his $3.6 billion budget proposal.

Then came a week of fury about the AIG scandal and a day or two of TARP bailout mania. But tonight, amid a series of questions about the general poor health of every vital organ of our economy, the president did, in fact, return to his core message, that his budget is a vital part of snatching survival from the jaws of economic doom.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I want to see health care, energy, education, and serious efforts to reduce our—budget deficit. And there are going to be a lot of details that are still being worked out. But I have confidence that we‘re going to be able to get a budget done that‘s reflective of what needs to happen in order to make sure that America grows.

(END VIDEO CLIP)

MADDOW: The president modulated his combativeness at the press conference tonight to match the combativeness of the questions that were directed at him. And the media did come out firing on projected deficits and expected debt and spending. And of course, AIG, which led to, perhaps, the one, oh, no he didn‘t moment of the night.

(BEGIN VIDEO CLIP)

ED HENRY, CNN: Why did you wait days to come out and express that outrage? It seems like the action is coming out of New York and the attorney general‘s office. It took you days to come public with Secretary Geithner and say look, we‘re outraged? Why did it take so long?

OBAMA: It took us a couple of days because I like to know what I‘m talking about before I speak. Yes?

(END VIDEO CLIP)

MADDOW: Nervous laughter.

Ultimately, after touching on Middle East peace and Mexico and stem cell research and race, among other topics, Obama delivered the central message of his first two months in office. The overall big picture and it is this—he either does not own a magic wand or the one he has is on the fritz. So anyone who is expecting miracles will be disappointed. In other words, patience people, patience, please.

(BEGIN VIDEO CLIP)

OBAMA: That whole philosophy of persistence, by the way, is one that I‘m going to be emphasizing again and again in the months and years to come as long as I‘m in this office.

We‘ve been in office now a little over 60 days. What I am confident about is that we‘re moving in the right direction. And I think that you look back four years from now, I think hopefully people will judge that body of work and say, this is a big ocean liner. It‘s not a speed boat, it doesn‘t turn around immediately, but we‘re in a better place because of decisions that we made.

(END VIDEO CLIP)

MADDOW: That ocean liner not a speed boat message is, of course, intended for the D.C. press corps and for his Republican and Democratic colleagues in Congress, but also for the American people directly. The audience he has been trying to speak directly to during this whole six-day media blitz.

By Sunday night it seemed—Obama had seemed to have run the gamut of media possibilities, everything from ESPN to radio to town halls to Jay Leno to math (ph) e-mails and the Web video to the people of Iran, plus a spot on “60 Minutes” that reached 17 million people all at once.

And then yesterday, it‘s like he just started showing off in terms of media ambition as best as I can tell. First it was the under the radar White House meeting with regional newspaper reporters from states where he could use some congressional support for his budget, like say, Arkansas and its two conservative Democratic senators, or Maine with its two moderate Republican senators, or North Dakota with its budget chairman senator.

And then today, incredibly, we learned that President Obama also penned an op-ed that appeared in more than 30 international newspapers which means officially that today this media blitz thing went worldwide.

How could he possibly be anywhere else?

(BEGIN VIDEO CLIP)

OBAMA: (INAUDIBLE) years.

UNIDENTIFIED MALE: All aboard the International Space Station, we‘re joined with our international group from the space shuttle Discovery. Welcome aboard. Glad to hear your voice. We hear you loud and clear, sir.

(END VIDEO CLIP)

MADDOW: OK. Fine. Fine, I give up. It‘s an inter-galactic media blitz. What do you want from me?

President Obama has officially taken his message out of this world. He called the astronauts on board the Space Shuttle Discovery today. After all of that direct to the people communicating, the question is, strategically, has the president‘s direct appeal to voters, to the constituents of both his allies and his adversaries, have these directs appeals given him enough political capital to legislatively get done what he wants to do?

Joining us now is MSNBC political analyst, Eugene Robinson. He‘s a columnist and associate editor at the “Washington Post.”

Mr. Robinson, thanks for joining us. Great to see you.

EUGENE ROBINSON, THE WASHINGTON POST: Great to see you, Rachel.

MADDOW: Tonight‘s press conference was intended to be the culmination of this media blitz to sell the budget. How would you assess President Obama‘s sales job on that specifically?

ROBINSON: Well, I don‘t think we know yet what it‘s done to his polling numbers in outer space, but in terms of selling the budget, you know, I think they have to be pretty exalted at the White House this evening in the sense that he got basically as much time as he wanted without a lot of serious specific challenge from the press corps to be able to set out his basic budget message, which is, yes, we have the economic crisis and it‘s costing a lot of money and it‘s difficult and it‘s painful, but we have to make these investments through the budget in education and energy and health care if we are to put our economy on a path of sustainable growth.

And he said that again and again and again. He said it about 10 different ways during the course of the hour. And that‘s the message he was trying to get across. And I think, you know, he was pretty successful at it.

MADDOW: The president did have one little sort of mano-a-mano moment with CNN‘s Ed Henry when Ed Henry pushed him repeatedly on the AIG bonuses. I wondered, Gene, if that said anything to you about how he‘s approaching confrontation and his level of confidence on defending some of the most sort of dicey and complicated and politically charged of this economic recovery stuff.

ROBINSON: Yes, it did say something. It—certainly watching the encounter, you got the sense that, number one, he might have been ready with that line. It was quick. It‘s a very good line.

And second, I think we‘ve seen in a couple of occasions that if you push the right button on the president, you know, he snaps back in a kind of learned and quick witted way but with a sting. And that was clearly intended to sting. But to make the point, too, that this is who he is and you know, he‘s not rash.

He‘s spent a lot of time, as a matter of fact, this evening, projecting that image or reality of not rashness, persistent, we have to be patient, this is going to take a while. I want everybody to know we‘re headed in a constructive direction. That was a big message. And again, he came back to it again and again.

MADDOW: I was struck by that moment right at the beginning in his opening statement where we had a complete poker face and he said no one is as angry as I am. And I thought.

ROBINSON: Right.

MADDOW: Really, you‘re an incredible actor.

(LAUGHTER)

ROBINSON: Really. Really, because.

MADDOW: Yes, that angry? Yes.

ROBINSON: Right. I mean, I hate to see you when you‘re chilled out, you know, so.

MADDOW: Exactly.

ROBINSON: Right. No one is as angry as I am. But you know, that‘s -

that was an interesting moment around them, though, because he also said, you know, we can‘t demonize every and any investor or entrepreneur who seeks to make a profit. And—so one question that perhaps could have been asked was something more specific about the House legislation on AIG, the Senate and whether it‘s going to act on AIG and what qualifies as demonization and what qualifies as reasonable curbs on excessive compensation and perks, but we didn‘t really get into that.

MADDOW: Gene, one last question for you. The president came into office with, of course, what was expected to be a pretty long honeymoon given how high his numbers were when he got elected and thereafter. Lately he has faced some tougher head winds particularly from sort of the beltway media.

I wonder that when he said at the send that sort of bear with me, persistence, this is going to take a long time moment, is that a call for his honeymoon, for his grace periods to be extended?

ROBINSON: You know, he—in response to that question about race, he said it lasted about a day. And I think that‘s pretty accurate. You know, I think the American people have been much more kind of patient and far sided in terms of realizing he‘s only been in office 64 days and these things take time, much more than the media here in Washington, certainly much more than Congress.

We‘re all impatient. We‘re on this, you know, kind of four-hour news cycle and want things to happen and want things to happen now. I think there‘s more of a realization in the real world that—it does take time to fix an economic crisis and to launch an economic recovery.

And so, in a sense, that message might have been more directed at the people in that room than the people in the country who by and large may already get that.

MADDOW: Yes. If the poll numbers are anything to go by, it seems like that is true.

Gene Robinson, a columnist and associate editor at the “Washington Post,” it‘s always great to see you. Thanks for your time tonight, Gene.

ROBINSON: Great to see you, Rachel.

MADDOW: I like your glasses, too. I think that was a good move.

All right, so who could sink Obama‘s budget? The Republicans? Ha. Run along now, the adults are talking. The real opposition is actually from conservative Democrats. Appreciate it, Senator Bayh.

Coming up next, Jane Hamsher from FireDogLake, will join us to talk strategy and the conserve-Dems.

And later the Republican Party would suddenly like Dick Cheney to (INAUDIBLE). Ana Marie Cox joins us to discuss-dey (ph).

(COMMERCIAL BREAK)

MADDOW: We heard message discipline from the Obama campaign. No drama, never off message? Except for Joe Biden sometimes. Well, message discipline was back today on Capitol Hill as Treasury secretary, Tim Geithner, and Federal Reserve, Ben Bernanke, faced the House Financial Services Committee.

Both men want the government to have more power to regulate complicated financial companies. Both men oppose China‘s idea to replace the dollar with a new global currency.

And both men apparently agree on what is the best tie in the whole world. Two out of two financial big wigs testifying to Congress today agree. Blue stripy day. Who do you think made the I-see-you-got-the-memo joke first?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: Some of those Republican critics have a short memory. Because as I recall, I‘m inheriting a $1.3 trillion deficit, annual deficit from them. And we haven‘t seen an alternative budget out of them and the reason is because they know that, in fact, the biggest driver of long-term deficits are the huge health care costs that we‘ve got out here that we‘re going to have to tackle.

(END VIDEO CLIP)

MADDOW: President Obama has spent the last week trying to sell his budget plan to the American people. Which Americans assuredly will not buy, no matter what he‘s selling? That would be the tiny little minority of Americans who are Republican members of Congress. Those good folks today went war-metaphor crazy. Dare I say it? Congressional Republicans had a collective war-metaphor-gasm trying to make the president‘s budget seem scary.

(BEGIN VIDEO CLIP)

JOHN BOEHNER ®, HOUSE MINORITY LEADER: It‘s very difficult to deal with the aircraft carrier that he‘s proposing when we‘re suggesting a destroyer would probably do the job.

JOHN ENSIGN ®, NEVADA: He‘s waving a white flag of surrender on the deficit.

UNIDENTIFIED MALE: And he puts us on the path over 10 years for a very different kind of country, one with less freedom.

(END VIDEO CLIP)

MADDOW: No matter how persuasive they are that the president‘s budget is an advancing foreign army or it‘s surrendering American soldier or a bad aircraft carrier or whatever, the political reality is that the Republicans are such a tiny minority in Washington right now, they have so little power of any real kind in the political system, that it just doesn‘t matter what they think.

Mathematically, the Republicans don‘t really matter. If the president does actually have political trouble passing his budget and his other priorities it will not be because of anything Republicans have done. They are essentially politically irrelevant now.

If the president can‘t pass his budget and his agenda, it won‘t be because of Republicans. It will be because of this guy, Evan Bayh. He‘s a Democrat. Evan Bayh waited through George W. Bush‘s two terms in office. He waited until a Democratic president was elected and then he formed a group of conservative Democrats in the Senate to oppose his own party‘s agenda.

Under Senator Bayh‘s leadership, eight conservative Democrats have written the White House saying they are siding with the Republican minority in saying that they want it to take more than a majority vote to pass legislation like health care reform and global warming legislation.

They, as conservative Democrats, want it to be harder for the president‘s agenda to pass the Senate.

Do I need to say that with friends like these lines, or are you already thinking it?

Today a group of progressives launched a new initiative to pressure Evan Bayh and the conserva-Dems off their course of opposing the president‘s agenda.

Joining us now is one of those progressives, Jane Hamsher, founder and publisher of the very influential blog, FireDogLake.

Jane, thanks very much for being here.

JANE HAMSHER, FIREDOGLAKE.COM: Thanks for having me, Rachel.

MADDOW: So who are you working with to target Evan Bayh and the conserva-Dems and what‘s the campaign going to be like?

HAMSHER: Well, we‘re working with Campaign for America‘s Future and also USAction, trying to take a look at what‘s really going on in the states and the districts that these people live in.

Evan Bayh and others use the cloak of coming from semi-conservative areas in order to justify taking enormous amounts of lobbying money and then blocking legislation—that President Obama says the country needs, in his case, states where Obama won handedly.

MADDOW: Now that‘s—alleging that this is because he‘s taking lobbying money. He‘s not necessarily alleging corruption, but you are essentially alleging that he‘s being paid to pursue this agenda. Is there a reason to think that he wouldn‘t pursue it otherwise even without this campaign donations?

HAMSHER: Well, Evan Bayh has a huge foreclosure crisis in the state of Indiana and yet right now he is evidently crafting a bill to compete with the crammed down bill that passed the House. That bill would have allowed—bankruptcy judges to write down the value of mortgages and keep people in their homes.

It was estimated that it would have kept people in their homes -- 20 percent of foreclosures at absolutely no cost to the taxpayer. Evan Bayh, on behalf of the banks, is trying to write legislation that won‘t allow that to happen because they‘re sitting on the sidelines hoping they get paid much more handsomely by the U.S. government.

So he took $123,000 from Goldman Sachs between 2003 and 2008. He took $1 million from securities and investments firms in donations from 2003 to 2008. So, yes, people are going to be asking that question. When you‘ve got a real bad problem in your state, that could be solved without spending taxpayer money but the banks don‘t want it, how come you‘re the one that are going to do this?

MADDOW: Jane, the only member of the moderate Democratic caucus that I have talked since the group was formed is Senator Mark Begich of Alaska and he wouldn‘t commit either way on whether he‘s in favor of letting Republicans filibuster things like health care reform and the global warming legislation.

Aside from that issue of what is subject to the filibuster and what could just pass with the majority vote, do you feel like you know at this point what else they‘re going to be taking the Republican side on, what else these conservative Democrats are going to do?

HAMSHER: Well, Ben Nelson himself has said that he is going to oppose a provision in the budget that would take the $4 billion that normally goes to student loan underwriting and give it directly to student loans. As it is now, bank entities like Sallie Mae and Nelnet get $4 billion a year essentially for doing nothing.

They not—they write student loans but then the federal government guarantees them. So if any of them go bad, we pick up the tab. So President Obama has rightfully said, let‘s just take that money and apply it to student loans and stop giving it to a middle man. And they have decided that this absolutely has to be there, gone is the language that was used during the auto bailout where an industry had to be self-sufficient in order to be viable and couldn‘t depend on government money.

But that‘s exactly what they‘re defending. So I don‘t how it qualifies as fiscal responsibility. But it is very much something that the banks want.

MADDOW: You know, once upon a time Republicans felt like they had to answer to their conservative base, and Democrats didn‘t feel like they had to answer to their liberal base, I think that‘s over.

Jane Hamsher, founder and publisher of FireDogLake, thank you for coming on the show tonight.

HAMSHER: Thanks for having me, Rachel.

MADDOW: Dick Cheney‘s public criticism of Obama is causing a backlash from other Republicans. Apparently Republicans like Dick Cheney in theory but not so much the actual Dick Cheney alive talking into actual live TV cameras. Ana Marie Cox joins us next.

(COMMERCIAL BREAK)

MADDOW: Now that the national freak-out over the AIG bonuses is sort of dying down, we can get back to freaking out about what the really—about what really created the cozy hand basket we are all riding to economic Hades.

Matt Taibbi, the most envied, most abrasive and most incisive political journalist of his generation says we are now at risk that the whole rest of this economy will get as stupid as AIG was. Ouch. Matt Taibbi joins us in just a moment.

But first it‘s time for a couple of holy mackerel stories in today‘s news. First, a quick programming note, not a programming note for this show or this network even. Actually it‘s a programming note for the radio station WLF in Chicago where the regular morning hosts, Don Wade and Roma, are taking the day off tomorrow.

WLF has therefore brought in a fill-in. So tomorrow morning from 7:00 to 9:00, it‘s Rod Blagojevich, who is not going to let a little thing like being arrested on federal corruption charges and being impeached and removed from office stand in the way of staying famous.

You might recall WLF was the station that offered Governor F word his own regular show if he agreed to resign as governor. Mr. Blagojevich did no such thing. They had to force him from office. But he now still gets the radio show, at least for a day.

You know, from a man who still managed to appoint someone to Barack Obama‘s Senate seat even after being arrested for trying to sell that seat to the highest bidder, we perhaps should have expected that he would figure out a way to rig the getting a radio show gig, too. Right? Say what you want about Rob Blagojevich, the man knows how to get what he wants.

Someone like Guards Mt. Rushmore, don‘t they?

And big news today from the Obama administration that, frankly, is going to take a little getting used to. There is yet another new name we are supposed to use for the wars. In fact, we‘re not even supposed to call them wars any more.

OK, for a refresher, after 9/11 the Bush administration, of course, quickly declared a war on terror.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Our war on terror begins with al Qaeda but it does not end there.

(END VIDEO CLIP)

MADDOW: The war on terror, the war on terrorism. That‘s what we were first supposed to call American military action after 9/11. And if you want to get picky, a war on terrorism is a war on a tactic, it was kind of a hard thing to win, and a war on terror itself is a war on a bad feeling, the feeling of terror which is also sort of hard to declare victory over.

Eventually the word “global” was added to the phrase “war on terror.”

(BEGIN VIDEO CLIP)

BUSH: It‘s a victory in the global war on terror.

(END VIDEO CLIP)

MADDOW: So it went from a “war on terror” or a “war on terrorism” to a “global war on terrorism.” Then Donald Rumsfeld through a wrench in the works by stopping using the phrase “war on terror” at all. He instead started talking about a.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, FORMER DEFENSE SECRETARY: The struggle against violent extremism is going to take a long time.

(END VIDEO CLIP)

MADDOW: A global struggle against violent extremism. Mr. Rumsfeld even put an acronym on it, GSAVE, global struggle against violent extremism. He put that in writing a few times. GSAVE. The problem was, that phrase, global struggle against violent extremism, is all clunky and hard to remember. And sometimes trying to remember that you only partially recall can lead to really awkward make-it-up-as-you-go-along moment.

(BEGIN VIDEO CLIP)

BUSH: We‘ve rationally misnamed the war on terror. It ought to be the struggle against ideological extremists who do not believe in free societies who happen to use terror as a weapon to try to shake the conscience of the free world.

(END VIDEO CLIP)

MADDOW: That one didn‘t catch on either. the struggle against ideological extremists who do not believe in free societies who happen to use terror as a weapon to try to shake the conscience of the free world?

The acronym for that one was TSAIEWDNBIFSWHTUTAAWTTTSTCOTFW. And I kept getting that wrong. Despite how catchy the acronym was, it didn‘t catch on. To simplify, there was a brief effort to recast all of those things as simply the long war.

(BEGIN VIDEO CLIP)

BUSH: West Point has given you the skills you will need in Afghanistan and Iraq and for the long war with Islamic radicalism.

(END VIDEO CLIP)

MADDOW: As in the long war, hey, Muslims, we‘re going to stay in your countries for a long time.

So that one never really caught on either even though it‘s easy to remember. Now, after all of those etymological iterations, after all of those different brand names have been tried and found wanting, President Obama‘s administration has picked something new and they put it in writing.

Al Kamen in the “Washington Post” reports today that speechwriters and

other Pentagon staff have been notified by e-mail as of this morning that

per instruction from Obama‘s Office of Management and Budget, quote, “This

administration prefers to avoid using the term ‘long war‘ or ‘global war on

terror.‘ Please use “overseas contingency operation.‘”

Overseas contingency operation. From here on out, except for Iraq and Afghanistan and everything else? Overseas contingency operation. OCO. That‘s going to take some getting used to and probably some explaining, too.

(COMMERCIAL BREAK)

MADDOW: We‘ve been talking a lot about the president‘s big cross country pin-galactic multimedia economic policy agenda sales pitch lately. Lest we forget Republicans have their own views on the economic crisis and what they lack in political influence they so far more than make up for in sometimes inadvertent entertainment value.

Take the GOP big guns senator on the economy, Senator Charles Grassley of Iowa. He‘s the ranking Republican on the Finance Committee. His best known contribution to the economic crisis response thus far was his suggestion that some people should kill themselves.

Remember that? AIG executives should just off themselves?

He apologized. He has followed that up now with a lengthy in-depth interview with the conservative newspaper “The Washington Times.” Now remember this is the Republicans‘ top guy on the economy.

His analysis of what‘s going on. President Obama is a socialist, quote, “There‘s a big trend towards socialism with this budget. Whenever the government does more there‘s less for the private sector. That‘s a movement towards socialism.”

So Senator Grassley thinks if the president isn‘t a commie at least his budget is, duly noted. Senator Grassley‘s suggestion for how to get us out of the recession? You can probably say it with here, spending freeze. A three-year spending freeze. He‘s proposing in the middle of a recession, recession that‘s caused by and prolonged by not enough spending.

The Republicans‘ big dog on the economy, in other words, wants the government to enact an anti-stimulus plan for three years. It‘s like taking a joke that didn‘t get any laughs the first time and telling it again three times louder.

It‘s hard to make headlines when that‘s your material. Honestly, do you even remember the name of the senator I was just talking about for the last minute and a half? Grassley.

Yes. These guys just are not capturing the imagination. I mean calling people commies, it‘s just—it‘s not penetrating the news cycle. You know who that leaves room for for making news on the Republican side? News darlings like Dick Cheney who you could not get in front of a microphone with a crowbar while he was vice president but now he‘s Mr. Ubiquitous.

Remarkably there is also now a Republican backlash to Mr. Cheney. His recent attacks on President Obama‘s national security policies are generating a response from House Republicans they probably would not have dared to utter before January 20th.

Congressman John Duncan told “The Hill” newspaper, quote, “It would probably be better for us politically if he wouldn‘t be so public.” Congressman Zach Wamp said, quote, “With all due respect to former vice president Cheney he represents what‘s behind us, not what‘s ahead of us.”

An anonymous House Republican agreed and added, quote, “I could never understand him any way.”

Hey anonymous, call me. I think we have a lot in common.

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

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

ANA MARIE COX, AIR AMERICA NATL. CORRESPONDENT: Hello-wey, A-chel-rey? (ph)

MADDOW: I think I don‘t actually do pig Latin right but that doesn‘t stop me from doing it all the time.

COX: Well, let‘s not, let‘s not push it. That‘s not what I‘m going to try. I‘m not very fluent in pig Latin myself.

MADDOW: All right. We‘ll work on it together. All right.

If some liberal group or some Democratic operative somewhere offered you the job right now, there was a lot of money in it, would you become Dick Cheney‘s publicist for the benefit of liberals everywhere?

COX: Well, it‘s funny as—I actually that thought had crossed my mind before. And I was thinking, if you could prompt me to get paid no matter, like, as long as his approval rating didn‘t get lower, I‘d take money from either side. Because I feel like, it‘d be really hard to get him below 19 percent. You know? Like I feel like I could keep it at 19 pretty easily.

But the thing is, the problem with doing a deal with Cheney is if you want to get out of it, like it was a fiddling contest or something, right? Like he has those contracts in blood with the soul and what not? So I don‘t know if there‘s enough money, really.

MADDOW: You have to meet him at a crossroad somewhere.

COX: You have to meet him at a crossroad somewhere, there‘s fiddling involved.

MADDOW: Yes.

Anonymous House Republican did give the best Cheney quote to “The Hill” today. But there are serving House Republicans who have used their names who are now on the record criticizing Dick Cheney. When Republicans criticize Rush Limbaugh there has to be the big public climb down. So far it does not seem like Cheney is commanding that sort of public grumbling from anyone.

I wonder if that says anything salient about power in the party.

COX: It does. It does quite a bit. For one thing, I think what‘s important now that 19 percent—I‘m not actually sure it was 19 percent, it might be even lower than that at this point, his approval rating, but no one—no House Republican, no sitting House Republican is going to suffer at the midterms from criticizing Dick Cheney. Right?

MADDOW: Yes.

COX: Whereas criticizing Rush Limbaugh, and Rush Limbaugh decided to go after a House Republican, a sitting House Republican even if he‘s in a swing state or a purple state, as we say, he might have to answer for some things. He would definitely have trouble raising money.

But at the same time, I think we talked about this before. It—for the White House it works out great. If Rush Limbaugh is a thing that like Republicans are most afraid of, you know, I mean he‘s not even elected. He can—it gives them so much room to play.

I feel like, as you said before, it‘s sort of almost sad to look at sort of the irrelevance we had of this other party. I kind of like the two-party system personally.

MADDOW: Yes. That‘s—I mean there is something to be said for there being valuable policy outcomes that come from meaningful debates.

COX: Yes.

MADDOW: And there really isn‘t meaningful debate right now. I mean I don‘t think of Charles Grassley as—I mean he‘s not James Inhofe. I mean he‘s not Jim Bunning. He‘s not somebody who you‘d wonder about. He seems to be somebody who knows what he‘s talking about and that‘s why he is the top budget guy on the Republican side.

But saying that this is—that we‘re becoming a socialist country and we ought to have a spending freeze, I mean that‘s not even participating in the debate. That‘s essentially just bomb throwing. And I know you sort of like Senator Grassley.

COX: I do.

MADDOW: So are you disappointed that this is what he‘s doing?

COX: I am a little bit. However, I have to say that Grassley, one of

the reasons I like him so much is he‘s very much not a posturer. He‘s not

doing this to get attention. I think, if anything, he‘s probably is

reflecting a genuine feeling and that maybe a frustrating one for you and

I. We might find it hyperbolic.

But I do think he‘s being honest. He‘s not doing these kind of things that Boehner and Cantor do when they use this kind of rhetoric just to generate attention. So I kind of really value Chuck Grassley‘s bluntness even though it gets him to trouble sometimes.

MADDOW: Wait. You really think that he thinks we‘re becoming commies?

COX: I feel like in the moment he said that, he felt it.

MADDOW: Wow.

COX: But I also think that he‘s someone who has, in the past and you know this as well as I do, has worked with Democrats and who is willing to talk with people.

MADDOW: Right.

COX: I mean he sort of has a temper to him or an edge to him. He‘s not unlike my other favorite Republican, John McCain.

MADDOW: John McCain.

COX: But I like them both. They were kind of crochety old guys who Twitter. So they‘re really fun that way. But I do think that he is not the problem so much as the people that are throwing those verbal bombs for publicity‘s sake only, who aren‘t even interested in rebuilding their own party or working with Democrats.

MADDOW: And crochety old guys all across America have now noted the way to your heart is through Twitter.

Ana Marie Cox, national correspondent for Air America, columnist for the “Daily Beast,” nice to see you. Thanks for being on the show.

COX: Good to see you.

MADDOW: Matt Taibbi from “Rolling Stone” is here next. The only man in America who can put the economic crisis in perfectly clear perspective through the use of a long elaborate, borderline offensive, metaphor about the Pope, a gay neighborhood in Manhattan, a math binge and a credit default swap.

The man, the master, Matt Taibbi joins us next.

(COMMERCIAL BREAK)

MADDOW: Time for another look at the Republican search for meaning in the political wilderness. A volcano erupts in the United States. When was the last time you considered that possibility? Could it have been last month when Louisiana governor Bobby Jindal rebutted the president‘s address to Congress by going after the stimulus bill?

Remember this? He mocked $140 million for something volcano monitoring? Now why would a volcano need to be—there she blows. Yes. This is one the first shots of a still smoldering Mt. Redoubt in Alaska hours after it first erupted on Sunday night. In the last two days Mt. Redoubt has erupted six times sending ash 10 miles into the sky, wiping out visibility, grounding flights in Anchorage 100 miles away.

Closer to home, next week we‘ll mark the first ever test of something called a tsunami warning system off the Gulf Coast near Louisiana.

Does Governor Jindal think that‘s pure pork, too? Or is it just exploding mountains that don‘t scare him?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: Ann Compton. Hey, Ann. You sound surprised?

ANN COMPTON, ABC NEWS: I am surprised. Could I ask you about race?

OBAMA: You may.

COMPTON: Has the last 64 days been a relatively color blind time?

OBAMA: I think that the last 64 days has been dominated by me trying to figure out how we‘re going to fix the economy. And that‘s affects black, brown and white. And, you know, obviously, at the inauguration, I think that there was justifiable pride on the part of the country that we have taken a step to move us beyond some of the searing legacies of racial discrimination in this country, but that lasted about a day.

(END VIDEO CLIP)

MADDOW: In other words, yes, sure, I‘m the first black president and everything, but the race of the president, not the most important thing on anyone‘s mind if the country that person is president of melts.

The president tonight in his second primetime press conference trying not only to explain what‘s happened to the economy but what the plan is to save the economy and, not incidentally, asking everyone to understand just how hard it‘s going to be to succeed, which is a tall order when we are hard wired as a country to get mad about short-term relatively small scandals we can easily understand and can put on a bumper sticker if need be.

As an example, the AIG bonus outrage over the last couple of weeks was like stage two in the five stages of grief and loss about the economy. First there was denial. That would be the Bush era, quote, “recovery.”

Then there was stage two, anger, AIG bonuses.

Coming up next, stage three, bargaining. As in, please, we‘re sort of done worrying about this Great Depression stuff. Please we‘ll do anything. What do you want from us? This is where it might come in handy to actually have some idea of what we‘re talking about and what we‘re being asked to bargain away in our destination.

Matt Taibbi has a must-read explanatory piece on the mess that we‘re in in the next issue of “Rolling Stone”. Must-read. Do you want a taste?

Quote, “As complex as all the finances are, the politics aren‘t hard to follow. By creating an urgent crisis that can only be solved by those fluent in a language too complex for ordinary people to understand, the Wall Street crowd has turned the vast majority of Americans into non-participants in their own political future.

“There‘s a reason it used to be a crime in the confederate state to teach a slave to read. Literacy is power. In the age of the credit default swap and the collateralized dead obligation, most of us are financial illiterates.”

Matt Taibbi‘s article in “Rolling Stone” is called “The Big Takeover.”

Matt Taibbi joins us now.

Hi, Matt, thanks for being here.

MATT TAIBBI, ROLLING STONE: Hi, Rachel. How is it going?

MADDOW: Good. You think the Obama administration should break the financial companies that are in crisis down, stop letting them get so complex that they can‘t be understood and they can‘t be regulated. Why do you think that should happen?

TAIBBI: Well, first of all, I‘m obviously not an expert on any of this stuff, but I think this—on this one point and the logic here to me just doesn‘t seem all that hard to follow. If these companies are too big to fail, they are too big to exist.

In a capitalist society, we can‘t have a situation where all you have to do to stay in business forever is to get so big that whenever you screw up the government comes and bails you out. That‘s the reason we had the trust busting and the anti-monopoly laws back in the day and I think that‘s the reason we have to make sure that these companies are manageable. And that if they are incompetent or irresponsible that we can just let them fail.

MADDOW: Yes. Matt, let me ask you one specific thing. I‘m about as comfortable of the intricacies of the financial world as the next schlab.

TAIBBI: Right.

MADDOW: Which is to say not at all. But.

(LAUGHTER)

TAIBBI: Me, too.

MADDOW: But I think you‘ve done a good job explaining it in this article and I think you‘re right that we‘ve got a responsibility to figure it out because people who do understand this stuff are going to roll us otherwise.

TAIBBI: Right.

MADDOW: Or they already are. To that end, so to the point of explaining this so more people understand it, tell me about the Office of Thrift Supervision. This was supposed to be the office that was like the cop in charge of overseeing AIG.

How did they end up being the overseer?

TAIBBI: Well, first of all, the Office of Thrift Supervision was actually created in response to the savings and loan crisis of the ‘80s.

MADDOW: OK.

TAIBBI: Thrift is just another word for savings and loan. And in the wake of a series of deregulatory moves at the end of the ‘90s, AIG, like a lot of other companies, was allowed to basically choose its own regulator. All they had to do was opened a thrift in one state, in this case, AIG opened one in Delaware, and they were able to designate themselves to thrift and then choose the OTS as its regulator.

But the OTS is the smallest and weakest of all the government regulators. In fact in the entire organization they only have one insurance expert and this is a company that regulates, you know, AIG, Ameriprise, you know, these massive insurance conglomerates.

MADDOW: So AIG got to choose to be regulated. AIG is the largest insurance company in the world at this point.

TAIBBI: And the 18th largest company in the world.

MADDOW: Chose to be regulated by an agency that only had one insurance specialist on board.

TAIBBI: That‘s exactly right.

MADDOW: Yes, I‘d pick that agency, too.

TAIBBI: Right.

MADDOW: After the depression, the Glass-Steagall Act.

TAIBBI: Right.

MADDOW: . said that banks can‘t do insurance and vice versa and other things.

TAIBBI: Right. And commercial banks can‘t be investment banks as well.

MADDOW: So divisions between different types of institutions.

TAIBBI: Exactly.

MADDOW: Phil Gramm wrote legislation in the 1999 that killed that, right? And that was what allowed for the creation of this big, complicated, uber-companies?

TAIBBI: That‘s exactly right. The Gramm-Leach-Bliley Act, which was passed in 1999, essentially allowed Citigroup to be formed. It was a law that repealed the Glass-Steagall Act and allowed all of these companies to merge together. And that‘s why we have these companies that are so-called too big to fail companies, because now we have insurance companies and investment banks and commercial banks all merged together into these gigantic conglomerates like Citi and like Bank of America now.

MADDOW: That we can understand better. Too big to fail and that can‘t be effectively regulated.

TAIBBI: That‘s right.

MADDOW: Is the solution, broadly speaking, to stop believing that Wall Street guys, like Goldman Sachs guys, are the only ones who have the expertise to fix this, to just not defer our oversight to people who say they—we ought to trust them?

TAIBBI: I think it‘s—can be proven with scientific certainty that the one group of people that we know, absolutely, is not competent to lead us out of this crisis is that group of people.

MADDOW: Right.

TAIBBI: They got us into this mess and you know, they‘ve proven time and time again that their solutions to all of these problems are not the right solutions. I think we need a fresh look at this. I think we need to start doing—you know some kind of new approach. And we really haven‘t done that.

I think the Obama administration has chosen to pursue a policy that represents more continuity with the previous administration and Hank Paulson and all that crowd.

MADDOW: Yes. It would be nice to see cops in the cops and robber metaphor here.

TAIBBI: Yes. That‘s right. That‘s right.

MADDOW: Yes. Matt Taibbi, you have done the country a great service by reporting on this thing that I bet was no fun to report on.

TAIBBI: No. It was a nightmare.

MADDOW: Thanks for doing it.

TAIBBI: Thanks for having me on. Appreciate it.

MADDOW: Matt Taibbi, at “Rolling Stone”, his article on the financial bailout and the crisis that preceded this in the next issue of “Rolling Stone.”

Coming up, I get “Just Enough” pop culture from my friend Kent Jones.

Plus a true superhero cocktail moment.

(COMMERCIAL BREAK)

MADDOW: Hello, Kent Jones. What do you got for me?

KENT JONES, MSNBC CORRESPONDENT: Good evening, Rachel. The circus is in town. Ringling Bros. and Barnum & Bailey paraded their elephants, horses and ponies down 8th Avenue in New York early this morning to Madison Square Garden where their show will delight children of all ages until April 13th.

To ensure that he doesn‘t neglect a single popular communication venue, President Obama announced that he will deliver his economic message to circus goers and then be shot out of the barrel of the “Yes We Cannon.”

(LAUGHTER)

MADDOW: “Yes We Cannon.” Very good.

JONES: So corny.

Next, what are we looking at here? This is a 1948 (INAUDIBLE) type being auctioned by Sotheby‘s. Kentucky? Georgia perhaps? No, this is the upper west side of Manhattan.

MADDOW: No way.

JONES: (INAUDIBLE) which kind of looks like this now. Let‘s go back to the other one. Wow. Yes. You see on pictures here—picturing the real estate listing, sun drenched, tons of storage space, steps from Central Park and (INAUDIBLE), dogs, livestock, OK. Please no wigs or transventolist (ph).

MADDOW: That is amazing. Just incredible.

JONES: Yes, it‘s unbelievable. Finally, stink-free underpants.

MADDOW: What?

JONES: Such are the rewards humanity reach from space travel as a Japanese scientist is testing his line of odorless big boy briefs on the International Space Station. The astronaut testing the absorbent, bacteria-killing ensemble says he could confidently wear his high-tech underpants for more than seven days.

MADDOW: No!

JONES: His space station colleagues say, dude, five, if we‘re being really honest, four. OK?

MADDOW: I love that somebody has been working on underpants you can wear for a week.

JONES: Science.

MADDOW: Yes. I guess a lot of people have been working on that.

All right, I have a cocktail moment for you, Kent.

JONES: Very nice.

MADDOW: This is a story about an 8-year-old boy in Bangkok. It was his first day at a special needs school. And he got upset. First day of school, he‘s upset. The little has autism. He started crying. He climbed out of the classroom window on to a third floor ledge.

JONES: Oh my.

MADDOW: Yes, scary. The teachers got scared, they called the fire department. And then get this, the mother rushes there as well and the mother makes a remark about how her little boy loves comic book superheroes.

One of firemen rushes back to the station where he keeps a Superman suit in his locker.

JONES: Wow.

MADDOW: He uses it - sorry, Spider-man suit.

JONES: Spider-man.

MADDOW: He uses it to liven up fire drills in schools. Goes back to his locker, puts on the Spider-man suit and then comes back into the school, sticks his head out the ledge, just wearing the Spider-man suit, and according to local police, the sight of Mr. Sonchai Yoosabai, the firefighter dressed as Spider-man and holding a glass of juice for the little boy, brought a smile to his face. He promptly threw himself into the arms of the superhero.

JONES: Fantastic.

MADDOW: I know.

JONES: Friendly neighborhood Spider-man.

MADDOW: That‘s exactly right.

JONES: There it is.

MADDOW: And he didn‘t have to shoot him with his wrist web.

JONES: Thank god.

MADDOW: Thanks, Kent.

Thank you for watching. Coming up next “HARD BALL.”

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

END

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