updated 7/30/2009 10:20:24 AM ET 2009-07-30T14:20:24

Guest: Amy Robach, Andrea Mitchell, Chris Jansing, Sen. Sherrod Brown, Laura Flanders, Arianna Huffington, Eugene Robinson

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HOWARD DEAN, GUEST HOST (voice-over):  Which of these stories will you be talking about tomorrow?

Let‘s make a deal meets the blue dog Democrats.

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REP. MIKE ROSS (D), ARKANSAS:  We have reached an agreement that will allow health care reform to move forward.

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DEAN:  Is the deal a breakdown or a breakthrough?  And as we try to expand coverage for Americans, why is the Senate trying to take health care away from kids?  Tonight: Inside the negotiations on Capitol Hill with Democratic Senator Sherrod Brown of Ohio.

The health care message war: Why is fear winning out over facts?

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BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  These folks need to stop scaring everybody.  Nobody is talking about you forcing—to have to change your plans.

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DEAN:  Tonight—why GOP scare tactics keep working?

Smearing the stimulus: The DNC has had enough of Republican hypocrisy and they‘re taking to the airwaves.

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NARRATOR:  They supported the Bush policies that sank our economy into recession.  They broke it.  Now they refuse to fix it.

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DEAN:  The bonus battle on Wall Street.  The House makes sure financial execs don‘t cash in on risky money moves.  Arianna Huffington joins me on the return of her book “Pigs at the Trough.”

Hollywood and hard times: When this is happening on TV.

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CARTOON CHARACTER:  An economic crisis has hit South Park and the nation like never before.

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DEAN:  . you know the recession has taken a deep hold.

And—Obama‘s beer diplomacy.  His meeting tomorrow with Professor Gates and Sergeant Crowley still sparking controversy.

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GLENN BECK, FOX NEWS:  This president, I think, has exposed himself as a guy, over and over and over again, who has a deep-seated hatred for white people or the white culture.

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DEAN:  The race debate, and expectations on tomorrow‘s meeting from Eugene Robinson.

All that and more—now on COUNTDOWN.

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DEAN:  Good evening from New York.  I‘m Howard Dean.  Keith Olbermann has the night off.

If you don‘t like what we already know about the health care bill that‘s being worked out behind closed doors by the Senate Finance Committee, consider this: its final deal could be even worse.

Our fifth story on THE COUNTDOWN: Some Democrats say they fear the committee will take away health insurance from the 11 million children who already have it just to keep Republicans happy.  First, the public option, and now, SCHIP.  Dare we ask what‘s next?

At least things appear to be going much better in the House where most of the blue dog Democrats on the Energy and Commerce Committee say they‘ve reached an agreement with the leadership and the White House.  The deal leaves intact almost everything that both sides wanted.

But in the Senate, Democrats, like Jay Rockefeller, say they‘re unhappy about the concessions Democrats are making to keep a few Republicans onboard.  Senator Rockefeller told “The New York Times” that SCHIP could be on the table.

The president‘s campaign to reform health care in this country is taking a hit on his poll numbers.  More Americans now disapprove than approve of how the president‘s handling health care reform according to the latest NBC/”Wall Street Journal” poll.

But once people are given more details about the kinds of things that President Obama wants this plan to do, a clear majority are in favor of it.  At a supermarket in Virginia, the president tried to clear up more of the confusion that‘s been created by Republican spin.

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UNIDENTIFIED FEMALE:  Rumor has it that if we get this new health care system in, that we won‘t get the health care, our doctors and all that we have now, that virtually people, older American citizens would just be put out to pasture.  Please tell me that isn‘t so.

OBAMA:  It isn‘t so.  I mean, I don‘t know, look.

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OBAMA:  Nothing burns me up more than hearing some of these scare tactics directed at seniors.

UNIDENTIFIED FEMALE:  Is this a plan that you would be willing to put your family on?

OBAMA:  Yes.  I mean, as I said, this is a plan that‘s similar to what I had when I was a member of Congress.  You know, the federal employees benefit plan is—the way it basically works is, is that you have sort of a menu of options.  You can choose the plan that you think is best and then, you know, you pay your premium.

I also think one of the choices that you should be able to choose from is what‘s called a public option.  Now, this has gotten a lot of people riled up because, “A-ha, see, this government run.”  When you hear people talking about us wanting to create a government-run health system, all they‘re really talking about is what we were—what we proposed is to have an option that is not-for-profit, it‘s set up by the government, and can keep administrative costs low and can keep insurance companies honest, because if you—if the insurance companies started jacking up their rates real high, then you could go into the public option and, you know, those private insurers would start losing a lot of people so they‘d have to compete for you.

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DEAN:  Lots to talk about tonight with Senator Sherrod Brown, Democrat of Ohio.

Sherrod, welcome to the show.

SEN. SHERROD BROWN (D), OHIO:  Thanks, Howard.  Good to talk to you. 

Thanks.

DEAN:  Sherrod, the House has come up with a pretty decent compromise.  Why is the Senate having so much trouble doing the same thing?

BROWN:  Well, we have a good bill that came out of the Health, Education, Labor and Pension Committee—you know, strong public option, employer mandate, everybody needs to be in the plan, very strong consumer protections for all people who have insurance and for those newcomers that are just getting insurance.  The Senate Finance Committee is not coming up as good of a plan, as Senator Rockefeller said.

But we‘re not—we‘re not going to do things like exclude the 11 million children who are now in SCHIP.  We‘re not going to accept a weak public option or a non-existing public—existing public option.  Those are the president‘s priorities.  That‘s what every Democrat on the Health, Education, Labor and Pension Committee voted for.

We‘re not going to lay down and come up with some sort of phony co-op that some few number of number of Democrats seem to want.

DEAN:  And in fairness to your committee‘s bill, it is a great bill.  And one of the things that I want to spend a little time talking about is the option, is the part for small businesses.  Can you talk to me a little bit about what you do for small businesses?  Because this is the first big break the small businesses would ever have gotten from the federal government.

BROWN:  Yes, everybody is going to get—if your workers are—if people are lower income, they‘re going to get some subsidies to be able to afford insurance.  It goes up to literally 400 percent of poverty.  So, if somebody—a family is making $80,000, they‘ll get some—they‘ll get less help than somebody making $20,000 or $30,000.

A lot of these insurance reforms will help small business.  Those small businesses now that are not able to—where insurance has gotten so expensive in part because they‘re not just covering their own employees, they‘re covering people who aren‘t insured because of cost shifting, that burden will be taken off.  So, that will stabilize insurance premiums for those companies because everybody will be in the insurance plan and the so-called gateway.

President Obama said, people are going to have a wide menu of choices.  They can go into a public option.  They can go with Aetna.  They can go with Medical Mutual in Ohio, which is a—which is a mutual company.  They can go into a for-profit or not-for-profit company like Kaiser.  Or as I said, they can go into the public plan but that‘s the choice.  That‘s the choice businesses will have, that‘s the choice individuals will have.

DEAN:  Sherrod, you must get this question all the time from your voters in Ohio.  Why is it that your colleagues appear willing to give away so much just to please a few Republicans who may not be interested in passing health care reform of any kind?

BROWN:  I wish I could answer that question better, Howard.  I—I go back to 40 years ago when the Medicare bill passed.  People like Bob Dole, Strom Thurman, Donald Rumsfeld, Gerald Ford, as members of Congress, they all opposed it.  The fact is, in those days, the Democrats moved forward.  They didn‘t worry about we have to have X number of Republicans.  Their mission was we‘re going to get a good Medicare bill.

That‘s what they did.  That needs to be our—that needs to be our charge.  Not we need a bipartisan bill—though I hope it is bipartisan, I hope Republicans vote for it—but our mission, our charge is we need a strong bill that works for the middle-class, that works for people in the country that don‘t have insurance, and it works for people that already have decent insurance.

And our bill that came out of the committee in the Senate is exactly that.

DEAN:  What was going to be the reaction in the Democratic Caucus in the United States Senate if the public option is not in the deal that comes out of the finance committee?

BROWN:  You know, people are going to be unhappy and there‘s going to be a lot of pressure on Leader Reid to adopt the bill, that‘s much more mainstream Democratic bill like the health committee but also mainstream American bill.  I mean, the country overwhelmingly, as you know, wants a strong public option.  When these numbers for President Obama have been declining, it‘s largely because the public is not seeing the strong public option, the strong pro-consumer bill that they saw out of the health committee.

When we passed our bill, the president‘s numbers about how he was handling health care were much stronger than they are now because the public is not reading about these compromises and these “bringing along conservative Republicans with their values,” about weakening the public option, about kowtowing too much of the insurance industry and the drug companies.

So, if we write a strong, progressive bill, that‘s where the public is, that‘s when President Obama‘s numbers go up, particularly when he starts talking about it, like he did in the fruit and vegetable section in Virginia today, in that supermarket.

DEAN:  Senator Enzi said that he wanted a guarantee that anything the committee agrees to ends up in the final legislation.  That is not how the Senate works.  Well, how can he possibly ask for something like that and still really have any intention—real intention of working for a bill?

BROWN:  Well, he can ask for whatever he wants, but that‘s not going to happen.  I mean, first of all, our bill, we had—we had 11 days of markup.  That‘s longer than any bill I‘ve ever worked on in 16 years, 17 years in the House and Senate.  It was—we explored every option.  We accepted 160 Republican amendments.

Senator Enzi is the ranking member on that committee.  He lost some, he won some.  He lost most of the big issues on the public option and some consumer protections, but the fact is that the Democrats are in the majority.  The public voted for a strong health plan, not a bill written like the old Medicare bill.

You remember—Howard, you remember very—several years ago, you ran in part on this issue, how the drug companies and the insurance companies wrote the Medicare law that George Bush pushed through Congress.  It was a betrayal of the middle class.  It was a betrayal of consumers and patients because the drug companies and insurance companies had their way.  Those days are gone.

I want to work with Republicans.  I want a bipartisan bill.  I got a lot of Republican votes when I was elected to the Senate in ‘06, but the votes I got were not people saying, “Hey, play along with the drug industry and the insurance industry and do what they want in health care.”  That‘s exactly the opposite message I took.

DEAN:  Sherrod, do you think the president needs to do more with the Senate to get a good bill passed?  Has he got to step in here more?

BROWN:  Yes, the president needs to do a couple things.  And I think he‘s begun to hit his stride listening to those clips that you just played in that supermarket in Virginia.  The president needs to be out talking, you know, not through the screen of the drug industry or the pharma—or the insurance industry, but the president needs to go directly to the American people, talking about why this is good for them, if you already have insurance we‘re going to protect what you have.  We‘re going to fix what‘s broken.

Second, the president needs to unleash all of those—all the people on—that are—that have been supporters of his, the way that you build up your list five years ago, the way he did in his ‘08 race—all the people out there that believe in a progressive government, that believe in this president, that believe a Democratic majority in both houses will move us forward on health care.  Those people need to start calling and writing their congressmen and senators in both parties.  I think that will make the other difference.

So it‘s the president hitting his stride and getting out there speaking directly to people, and it‘s about all the people that support the president starting to write and call their members of Congress.

DEAN:  One last question.  The inside-the-beltway media is writing about the idea that the Republicans have gained control of the message war and Democrats are losing just like what happened in 1993.  I think, my own my own view of this is, that may be true and it‘s partly because the media only wants to seem to cover the Republican negative message and not the positive message.  How do we change this around?  It‘s not going to be easy.

BROWN:  Yes, you‘re right.  I don‘t—I don‘t see a lot of parallels between now and ‘93.  My first year in the House was that year.  I sat on the health committee and it turned out to be a disaster for a lot of reasons.  And I think that the Republican message is easier because it says, stop, vote no, slow down—all the easy things to communicate to the public.

But I think, once the president‘s out there, once we have a bill he can talk about, similar to the bill that came out of the health, education, labor and pension committee, once he‘s got that, then we‘re going to see these numbers go back up and we‘re going to see—we‘re going to be on the offensive and we‘re going to let people know that this bill is good for the middle-class in this country.

DEAN:  Senator Sherrod Brown of Ohio.

BROWN:  Thank you, Howard.

DEAN:  . thanks so much for being on the show.

BROWN:  My pleasure.

DEAN:  Health care, of course, is not the only battleground for the two parties today.  Democrats are hitting back on the GOP stimulus attacks.  We‘ll show you the video they put out.

And can a beer heal the nation‘s racial divide?  Or will the nation once again split over an age-old conflict?  Tastes great, less filling.

Next on COUNTDOWN.

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DEAN:  Coming up on COUNTDOWN: Their leader is gone, but now, President Bush‘s allies in Congress are blaming Democrats for the economy.  But today, Democrats are striking back.  And a new law would stop companies from awarding executives for taking bad risks that jeopardize the companies and the economy.  So now, the economy is fixed, right?

We‘ll get some answers from Arianna Huffington—up next.

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DEAN:  First, Bush Republicans broke the economy.  Then, Bush Republicans opposed fixing it.  Then, Bush Republicans blamed Mr. Obama for not fixing it quickly enough.

Now—in tonight‘s fourth story—payback time.

The Bush generals who led the GOP Congress in blindly following Bush-onomics off the cliff are: Senate Republican Leader Mitch McConnell and House Republican Leader John Boehner, Senate Republican Whip Jon Kyl and House Republican Whip Eric Cantor.

In a new national ad airing today, Democrats not only refute their claims about the Obama recovery but reassert how these Bush Republicans made it necessary.

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NARRATOR:  He said we should cancel the Recovery Act.

He falsely claimed no projects had been awarded in Ohio.

He opposed the Recovery Act but then took credit for a project in his district.

And he led the fight against the Recovery Act that is boosting Kentucky‘s economy.

They supported the Bush policies that sank our economy into recession.  They broke it.  Now they refuse to fix it.

Tell Republican leaders to stop playing politics with our economy.  The Democratic National Committee is responsible for the content of this advertising.

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DEAN:  Congressman Boehner‘s office responded, saying, quote, “Democrats can‘t run away from the fact that the stimulus has failed to provide the immediate jolt to the economy and prevent unemployment from climbing above 8 percent as the administration promised.”

This is the moral equivalent of an abusive guy who puts his wife in the hospital and then gets mad at the doctors who can‘t send her home as soon as they had hoped.

Joining me now is Laura Flanders, author of “Blue Grit” and host of “GRITtv” at GRITtv.org.

Thanks so much for your time tonight.

LAURA FLANDERS, AUTHOR, “BLUE GRIT”:  Oh, it‘s great to be with you, Governor.

DEAN:  What is the point of targeting the leadership who are in safe seats rather than the followers who are vulnerable in the next election?

FLANDERS:  Well, first off, it‘s a great ad, can we just say?  You know, it‘s good to be reminded that some of these Republicans shouldn‘t be trusted any more when they talk about money than some of them should be trusted when they talk about their marriages, you know?  So, I mean, I think there is something to be said for going on the offensive, going on the attack and a lot of the Democratic base is going to be happy to see the DNC showing some sign of life and really pushing back.

It‘s outrageous.  I mean, it‘s an epidemic—the Republicans who are now claiming credit for some of the stimulus money that they, themselves, opposed.

I saw a picture the other day of Bobby Jindal in Louisiana.  He went to the region to present them with this huge, jumbo check, you know, with his name at the bottom.  The check was partly at least thanks to federal stimulus funds.  It should have been the federal government‘s name at the bottom.  He opposed that money and now wants credit for it.

So, you know, the question you‘re asking is an important one.  Do the Democrats need to get—start getting really smart about the upcoming midterms?  Absolutely.  They have not won as you know in these national television contests, they won at the base, at the local level, how much work gets done.

But you know what?  I think that the—going on the offensive is good, the attack is good.  The accomplishments will be better.  What will really win the midterms for Democrats is going to be actually coming through on what they‘ve promised to their folks.

DEAN:  Laura, the fed today reported that most of its 12 regions have either stabilized economically or that the pace of decline has started to level off.

FLANDERS:  Well, that‘s.

DEAN:  If the public starts sensing the worst is over, what do Republicans have left?

FLANDERS:  Well, I have to say, you know, that‘s kind of like telling New Yorkers right now that it‘s not going to rain all of August.  It‘s only going to rain some of August, you know?  I‘m not better yet by knowing that the pace of decline after a 30-year decline has slowed a bit.

And frankly, the only people I see up there experiencing any kind of recovery are the private health insurers.  They‘re really just the profit insurers.  They‘re going up to the ceiling with what they‘re getting out of this moment.  But most of the people I know aren‘t yet feeling any real change.

You‘re right, though.  The Republicans, you know, are making hay out of saying that the stimulus isn‘t working.  It was never supposed to work in the first two seconds.  We need to recall that.  But they haven‘t got anything to solve the problem either.  They‘re trying to go with, you know, “drill, baby, drill” and “we won‘t let you have an abortion.”  I don‘t think that‘s going to really play.

Again, though, the Democrats can‘t just sit back and say the GOP is in trouble.  They‘ve got to come through.  And most importantly, they‘ve got to come through with health care and with the public option that you were just talking about.

DEAN:  The Republican National Committee is meeting today in San Diego, getting to know Minnesota Governor Tim Pawlenty who is a possible candidate for president in 2012.  Can Pawlenty or anyone win both the nomination that requires base support and then a general election that requires mainstream support?

FLANDERS:  Well, I wonder how well the RNC is going to get to know Pawlenty there.  I mean, it seems to—seem to remember from the last sort of primaries, this is a guy who came out against Darwin.  He‘s a creationist.  There‘s going to be a pretty hard sell as a presidential candidate, somebody who believes so much bunk about science is really going to save our economy.

But, you know, yes, you‘re right.  They‘re facing the problem, can they get a general audience, can we get a general audience and get the extremes as well?  It‘s interesting, though, isn‘t it, Howard, and you know all about this, that on the Republican side they‘re busily trying to curry favor always with the people at their margins.

On the Democratic side, we tend to kind of run away from the—from the margins even when they represent majority views like the peace vote, you know?  These are interesting times.  It‘s OK for the Republicans to go for the people at their flanks.  I just wish the Democrats wouldn‘t be going for the Republican votes, too.

DEAN:  Laura Flanders, host of “GRITtv”—a pleasure to talk with you.  Thanks for being on.

FLANDERS:  You, too.

DEAN:  Coming up: From the stimulus and the bailout, the House taking a new action to make sure your taxpayer dollars are not abused by padding executive bonuses.

And, you know times are tough when recession talk makes it into the cartoon world.  Pop culture and the pain in the pocketbook collide—next on COUNTDOWN.

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DEAN:  When asked how the entertainment industry deals with recession, pop culture expert Elayne Rapping said, “The recession is like the elephant in the room.  You can‘t avoid it.”

So, it‘s not surprising that with our economic tales well into its second year, the continued hard times are finally reflected in our popular culture.  Here is NBC‘s Chris Jansing.

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CHRIS JANSING, NBC NEWS CORRESPONDENT (voice-over):  Call it recession TV.

UNIDENTIFIED MALE:  I had to kick the renters out and move into my parents‘ house where I grew up.

JANSING:  On the new HBO series “Hung,” the leading man is underpaid, uninsured, and newly divorced.

UNIDENTIFIED MALE:  Now, all I ever seem to do is try not to drown.

JANSING:  In the world of bank bailouts, automaker bankruptcies, foreclosures, and frauds, art is reflecting life.

MICHAEL LOMBARDO, HBO PRES. OF PROGRAMMING:  Entertainment at its best, like a television show or movie, is grounded in reality.  So—I mean, there is no way good writers aren‘t looking at what‘s going on today.

JANSING:  So, “30 Rock” has repeatedly mined the financial crisis for laughs.

UNIDENTIFIED FEMALE:  No, I never fired anybody in my life.

UNIDENTIFIED MALE:  It‘s an acquired skill.

JANSING:  So has “South Park.”

CARTOON CHARACTER:  An economic crisis has hit South Park and the nation like never before.

JANSING:  . and “The Simpsons.”

CARTOON CHARACTER:  Here is your new monthly payment.

JANSING:  In a thriller for his new movie, Michael Moore asks for money.

MICHAEL MOORE, FILMMAKER:  Ushers will be coming down the aisles to collect your donations for Citibank, Bank of America, AIG.

JANSING:  And Ben Affleck‘s upcoming film is about the aftermath of corporate downsizing.

(on camera):  Hollywood and the entertainment industry have certainly produced memorable story lines from bad times before.  The Great Depression produced everything from “To Kill a Mockingbird” to “The Waltons.”  And the economic downturn of the ‘70s gave voice to rap and hip hop.

(MUSIC)

JANSING (voice-over):  But where there are reality checks, there is also escapism.  The top grossing movies of the year are “Transformers,” “Up,” and “Star Trek”—all in a galaxy about as far away from downsizing as you can get.

CHRISTOPHER HOLMES SMITH, USC-ANNENBERG SCHOOL:  It‘s also about finding stories that really stress universal themes, that really help people deal with tough times by telling them, what are universal values we can always adhere to?

JANSING:  The universal theme of love is giving romance novels their best year ever.

LEIGH COURT, ROMANCE AUTHOR:  If you‘re stressed or depressed, the bottom line is: romance novels are a lot cheaper than therapy.

JANSING:  But don‘t expect “Dynasty 2” any time soon—because these days, even in the high flying Hollywood world of entourage.

UNIDENTIFIED MALE:  What‘s wrong?

UNIDENTIFIED MALE:  What‘s right?  Have you seen my stock portfolio, Lloyd?

UNIDENTIFIED MALE:  No (ph).  What happened?

JANSING:  The recession has gone primetime.

Chris Jansing, NBC News, Los Angeles.

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DEAN:  Still ahead on COUNTDOWN: A House committee votes to keep Wall Street wages in check.  What else needs to happen to keep the financial industry from spinning out of control again?  Arianna Huffington joins me next.

And later: A single arrest sparking a national debate, from the president‘s assertion that the arrest was stupid to the far-right‘s cry that Obama is a racist.  We‘ll take a look at the stakes of tomorrow‘s White House meeting.

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DEAN:  One reason we‘ve had a housing bubble is that industry—finance industry executives were making millions in bonuses and other compensation by creating a whole new business of marketing even the worst mortgages as bright and shiny securities, putting their companies at long-term risk of collapse so they could make out like bandits in the short run. 

In our number three story tonight, a house committee has now voted—let‘s not do that anymore.  Specifically, Barney Frank‘s Financial Services Committee sending to the full House a bill that would ban big companies from paying executives enormous amounts of money for deals that put the company at, quote, inappropriate risk. 

Ranking Republican Spencer Bachus told the Associated Press, quote, “politically it was very difficult for my members to stand up and fight against this.” 

In part because executives now make up about 300 times what the average worker does, up from 35 times the average worker pay in 1978. 

Let‘s bring in Arianna Huffington, co-founder and editor-in-chief of the HuffingtonPost.com and also author of “Pigs at The Trough.”  Arianna, thanks for coming on tonight. 

ARIANNA HUFFINGTON, “THE HUFFINGTON POST”:  Great to be with you. 

DEAN:  Arianna, if we don‘t pay these guys millions of dollars, how will we continue to get the same caliber of leadership that has given us AIG and Citicorp and so forth and so on? 

HUFFINGTON:  Howard, that‘s exactly the question we should be asking ourselves, because the real issue here is how can we align the interests of executives with the interests of shareholders and the interests of the company, not to mention the interests of society at large?  That‘s really what has gone awry. 

I think it‘s important when we talk about this that it‘s not about limiting executive compensation in absolute terms.  It‘s about correcting all these wrong incentives that have been there, that, as you pointed out, have basically made it so likely that executives put the short-term interests of their compensation ahead of the interests of the company and the interests of the country. 

DEAN:  Will this bill work, not just in reducing big compensation packages, but also in shielding the economy from them? 

HUFFINGTON:  Well, it‘s only one piece of the puzzle.  I mean, we have a lot of work to do.  We basically need to put an end to companies that are too big to fail, because if they are to big to fail, they are too big to exist.  We cannot keep socializing losses and privatizing gains, which is what we have been doing, because the taxpayer is now on the hook for trillions of dollars. 

But it is definitely a good first step to align these different incentives.  Even if you go back to Ayn Rand, the high priestess of capitalism, the favorite of Alan Greenspan, she would have been completely opposed to what has been happening, which is basically decoupling performance and reward.  You had CEOs—and I read about them from what happened in 2003, with Enron and Worldcom, and then what‘s happened in the last year or so—who basically drive their companies into the ground and, in the process, become phenomenally rich themselves.  That was not what was intended by capitalism. 

DEAN:  OK, so we‘re now going to transform you into the secretary of the treasury.  You are presiding over what Hank Paulson and George Bush saw a year ago.  What do you do about it?  You have a company like AIG, which is 185 billion—has 185 billion dollars of taxpayers‘ money.  Do you let them fail?  Because if you do, you know what the consequences are. 

HUFFINGTON:  No, I would not have let them fail, but I would have driven a very hard bargain.  I would have attached many strings, which would have included breaking up the company, so it‘s no longer too big to fail, which it continues to be.  And I would have definitely driven a very hard bargain when it came to paying back the counter-parties. 

Remember, we gave 100 cents to the dollar.  That‘s why Goldman Sachs, for example, ended up getting 12 billion dollars from the government.  So when Goldman Sachs comes back now and says, look how much profit we are making, no they‘re not yet, because they‘re still living off taxpayer money and with taxpayer guarantees. 

DEAN:  Do you think Citicorp should be broken up? 

HUFFINGTON:  Absolutely.  Citicorp should definitely be broken up.  Citicorp is basically insolvent.  So we continue to subsidize a zombie bank.  And we are continuing to put the country at risk.  That‘s really the key issue here. 

DEAN:  Let‘s look at a bank that‘s not insolvent, JP Morgan Chase, but clearly enormously big, perhaps well managed now, but maybe not in the future.  Should that be broken up? 

HUFFINGTON:  I think the way we should handle that, Howard, is to bring back a form of Glass-Steagall.  Remember, the repeal of Glass-Steagall, which happened during the end of the Clinton years, was at the heart of a lot of this crisis we‘ve been facing.  As you know, it had huge consequences around the country. 

So the essence of Glass-Steagall is decouple all the different functions of banks.  It served us very well since the Great Depression.  We need to bring it back in some form that is compatible with our 21st century economy. 

DEAN:  What about regulating things like derivatives, these sort of mystical securities that nobody can really put their fingers on.  Wall Street claims they help make things more liquid and help capital.  But they‘re—without derivatives, I think AIG would still be solvent and a lot of the banks would not have—credit default swaps are another one.  That certainly drove AIG into bankruptcy.  What do we do about that stuff? 

HUFFINGTON:  I think there are two things we need to do.  First of all, we really need to reform the credit ratings agencies.  These agencies that kept giving perfect ratings to junk because they‘re basically paid by the people they are rating.  That has to change. 

The second thing we need to do is to bring back some real regulation, not the kind that the SEC was in favor of, which basically let Bernie Madoff get away with what he did, while the SEC was pursuing Martha Stewart. 

DEAN:  Arianna Huffington, perhaps the next secretary of the treasury. 

The book is “Pigs at the Trough.”  Nice to talk with you. 

HUFFINGTON:  Thank you. 

DEAN:  Coming up, President Obama is attacked as a racist for his remarks surrounding the arrest of Harvard Professor Henry Gates.  Why some are using this teachable moment to try to tear the country apart. 

On the lighter side, presidential getaways.  We‘ll show you where the Obamas might go for summer vacation ahead on COUNTDOWN. 

(COMMERCIAL BREAK)

DEAN:  If you‘re the leader of the free world, it‘s not easy to find the right place for your summer vacation.  But President Obama and his family may finally have found theirs.  They‘re reportedly going to be staying at the Blue Heron Farm, a 28 acre estate on Martha‘s Vineyard.  As Amy Robach reports, it comes with an apple orchard, a private beach, and required for this president‘s hoop dreams, its own basketball court. 

(BEGIN VIDEOTAPE)

AMY ROBACH, NBC NEWS CORRESPONDENT (voice-over):  As president of the United States, you get to vacation pretty much wherever you want.  But when you grew up in Hawaii, not exactly a shabby vacation destination, where do you go to get away from all this? 

REP. JOHN BOEHNER ®, MINORITY LEADER:  So, Mr. President, it‘s time to scrap this bill. 

REP. ERIC CANTOR ®, MINORITY WHIP:  This president has no one else to blame. 

ROBACH:  The White House says the Obamas will be spending the last week of August on Martha‘s Vineyard. 

UNIDENTIFIED MALE:  I think it‘s going to be one of the most exciting things to hit the island in a long time. 

ROBACH:  Carl McClauren (ph) and his family have been vacationing on Martha‘s Vineyard for generations. 

UNIDENTIFIED MALE:  I‘m thrilled, as I think a lot of folks here on the island are, and excited. 

ROBACH:  Presidents have vacationed on the island off the coast of Massachusetts before.  Bill and Hillary Clinton spent time there.  So did, that‘s right, Ulysses S. Grant.  Now it‘s the Obamas who will be tapping into an island which also has a rich history as a summer haven for African-Americans. 

For centuries, the town of Oak Bluff has been considered a center of black culture.  Martin Luther King wrote and swam there. 

UNIDENTIFIED FEMALE:  Would it suffice to say the Oprah Winfrey of the world, the Spike Lee, the Lavar Burton, Branford Marsalis‘ of the world have good sense?  That‘s why they‘re coming to Martha‘s Vineyard. 

ROBACH:  But the Obamas may not be staying in Oak Bluff.  Vineyard veterans are reporting that the Obamas will stay at the 28-acre Blue Heron Farm, ten miles from Oak Bluff.  The White House won‘t confirm that, but similar places rent for between 35,000 and 50,000 dollars a week. 

Reportedly, the Obamas are treating this as a standard vineyard summer rental, from payment terms, down to questions about bringing the family dog.  Of course, that‘s assuming your standard summer rental includes dozens of staff and Secret Service going along with you. 

But after six months of this—

UNIDENTIFIED FEMALE:  He is not an American citizen.

ROBACH:  -- who could blame the president if he‘s looking forward to just a little bit of this? 

(END VIDEOTAPE)

DEAN:  Coming up, tomorrow‘s big meeting at the White House.  Sergeant Crowley and Professor Gates meeting face to face for the first time since that fateful arrest.  The expectations for Thursday‘s meeting and the heated racial conversations the arrest have sparked, next on COUNTDOWN.

(COMMERCIAL BREAK)

DEAN:  It started with a routine call about an assumed break-in; a black suspect arrested; a white police officer presiding.  But as the details came out and the president weighed in, the story became much more than that.  Our number one story, the continuing debate on race. 

Tomorrow, President Obama will meet with the Harvard professor arrested in his own home, Henry Louis Gates, and the man who arrested him, Sergeant James Crowley. 

Meanwhile, the woman who called 911 to report the suspected burglary spoke with reporters today, breaking her silence on the matter.  The incident has also prompted inflammatory comments from the far right, proving that two weeks after Professor Gates‘ arrest, there is still much to discuss.  Our correspondent is Andrea Mitchell. 

(BEGIN VIDEOTAPE)

ANDREA MITCHELL, MSNBC ANCHOR (voice-over):  Her call to police unwittingly triggered an incident that has ripped the scab off racial politics in America. 

LUCIA WHALEN, 911 CALLER:  The criticism at first was so painful for me and difficult I was frankly afraid to say anything.  People called me racist and said I caused all the turmoil that followed.  And some even said threatening things that made me fear for my safety. 

I knew the truth, but I didn‘t speak up right away, because I did not want to add to the controversy. 

MITCHELL:  Lucia Whalen, on a lunch break, called 911 to describe what she saw on that front porch in Cambridge, Massachusetts. 

WHALEN:  I‘m not sure if these are two individuals who actually work there—I mean who live there. 

UNIDENTIFIED MALE:  Do you think they might have been breaking in? 

WHALEN:  I don‘t know because I have no idea. 

MITCHELL:  Just the facts and, contrary to the police report, no mention of race.  She said today her parents taught her to be kind to strangers. 

WHALEN:  I do not judge people based on race, ethnicity, or any other feature, other than their character. 

MITCHELL:  But when the first African-American president criticized the police—

OBAMA:  The Cambridge Police acted stupidly. 

MITCHELL:  -- his political opponents, who have huge followings, were off to the races, and, for the commentators at least, it was all about race. 

GLENN BECK, FOX NEWS ANCHOR:  This president I think has exposed himself as a guy, over and over and over again, who has a deep seeded hatred for white people or the white culture. 

UNIDENTIFIED MALE:  Listen, you can‘t say he doesn‘t like white people.  David Axelrod is white.  Rahm Emanuel his chief of staff, right.  I think 70 percent of the people that we say every day are white.  Robert Gibbs is white. 

BECK:  I‘m not saying that he doesn‘t like white people.  I‘m saying he has a problem.  He has a—this guy is, I believe, a racist. 

MITCHELL:  Fox News said that was Beck‘s personal opinion.  But then there‘s Rush Limbaugh. 

RUSH LIMBAUGH, RADIO TALK SHOW HOST:  Let‘s face it, President Obama is black, and I think he‘s got a chip on his shoulder. 

MITCHELL (on camera):  This is happening while right wing bloggers and talk radio hosts are also challenging whether Barack Obama is even a natural born American, ignoring all the evidence that he is.  Their underlying reason, many say, the president‘s race. 

(voice-over):  So even though Barack Obama‘s election was a milestone for the country, we have a long way to go. 

COLIN POWELL, FMR. SECRETARY OF STATE:  It isn‘t quite post-racial.  We still have conflicts between African-American citizens, especially males, and the police department.  And we shouldn‘t wave that away or in any way minimize that kind of problem. 

MITCHELL:  Raising the question whether we live in a post-racial America in life or politics. 

Andrea Mitchell, NBC News, Washington. 

(END VIDEOTAPE)

DEAN:  Joining me now is the Pulitzer Prize winning columnist for the “Washington Post,” Eugene Robinson.  Good evening, Gene. 

EUGENE ROBINSON, “THE WASHINGTON POST”:  Good evening, governor. 

DEAN:  Gene, I had two African-American roommates when I was in college, my freshman year, the year Martin Luther King was assassinated and Bobby Kennedy was assassinated.  It took us a year to listen to each other‘s narratives, understand each other‘s narratives, and begin to trust each other.  Today, we‘re still friends. 

How can we possibly hope that this problem is going to be solved over a beer in the White House? 

ROBINSON:  Well, it‘s not going to be, governor.  You know, we‘ve been working on race in this country since 1619.  It is now 2009.  So it‘s not going to happen over one beer.  But this is how the discussion happens, I think.  We say we would like to have a full and frank and comprehensive discussion about race in this country.  I‘ve written that.  I‘ve said that.

But I‘ve come to realize that that‘s not going to happen.  We‘re not all going to sit down in a classroom.  We‘re not all going to be able to sit in the same dorm room and exchange narratives in that way.  But what happens is an incident like this one happens, and it‘s an incident with a lot of layers, and a lot of levels, and a lot of angles, and compelling personalities.  And in this case we‘re fortunate, an incident in which the only thing—only feelings and dignity got injured, but no one was hurt.  There is no tragedy we have to talk about. 

But it‘s a compelling story.  We look at it in different ways.  And at the heart of it are unprovable propositions.  I believe that if a white professor had been involved, there would not have been an arrest.  Others don‘t believe that.  I cannot prove it, unless I can get somebody like Larry Summers to participate in an experiment for me, and we can see where we can run it. 

But these propositions are unprovable.  And so we talk about it and we are really talking about our own feelings and our own experience of race and our own prejudices.  And it‘s a good conversation. 

DEAN:  In many ways, that‘s the whole point though.  We‘ve got to get people to listen to each other‘s feelings.  Maybe there‘s racism here.  Maybe there isn‘t.  I think most of us are now inclined to believe that maybe there wasn‘t.  But no matter what, it‘s not whether there was or wasn‘t racism in this particular incident.  It‘s you have two reasonably well respected people, one very well known, one not so well known, who have different narratives behind their whole history that caused this kind of problem.  How can we get at those narratives?  And how can we listen to each other‘s narratives, so we can understand each other? 

ROBINSON:  Well, we can put them out there.  And, you know, we can‘t make people listen who don‘t want to listen, who aren‘t of a mind to listen.  But, you know, I‘m writing about it.  Others are writing about it from different points of view.  I do not believe that the flame throwers like Glenn Beck and Rush Limbaugh are constructively contributing to the conversation.  But I do think enough people are paying attention to the story that, you know—again, you don‘t get all the way there on one story in one week.

But I guess I‘m optimistic, because I just think this is such a multi-layered story, in which you have not just race, but class and power and all sorts of things that have been happening in our society, that make it different from what it was 30 years ago. 

DEAN:  One of the most interesting things to me about this was watching President Obama, who has really been above the racial tension in this country for a long time.  For the first time, he seemed to kind of go into the narrative of the black community, the black male, who was historically and has been historically the target of abuse by white police.  We think—I think it‘s getting better.  I‘m an optimist.  It was so interesting to see the president of the United States of America say that, realize he shouldn‘t have said it, and now react by trying to get the conversation started in a constructive way. 

ROBINSON:  Governor, I don‘t know.  I don‘t believe I know a—personally know a black man in this country who does not believe that race was somehow involved in the fact of the arrest, who believes that, all other things being equal, had it been a white professor, an arrest would have taken place.  I‘m sure there may be people out there who do. 

And again, this comes from history.  It comes from experience.  It is not provable.  But it‘s strongly—it‘s a strongly held belief. 

DEAN:  Is there anything to be done about the kind of—you can laugh at Glenn Beck and Rush Limbaugh, but they are inflaming things and making them much, much worse.  Other than being punished at the polls, which they clearly will be by the under 35 generation that elected Barack Obama in the first place, what do you do about that?  It‘s not just harmless stupidness.  It‘s really dangerous incitement. 

ROBINSON:  It is dangerous incitement.  And I don‘t know what you do about it, because I‘m not a believer in some sort of new fairness doctrine.  You know, I believe in free speech.  I believe that there is a marketplace of ideas and rotten, putrid ideas ought to, you know, be discarded. 

But I take your point.  It is a problem.  Here‘s one thing I‘ve been curious about: where are the principled conservatives who believe in individual rights, who oppose intrusive police power, for example, or the abuse of police power?  Wouldn‘t it be smart politically for a few conservatives to come out on the side of Professor Gates and say, you know, he may not have acted well, but the man was in his own house and shouldn‘t have been arrested. 

DEAN:  If they‘re ever going to recover, they are going to have to learn that.  Eugene Robinson, Pulitzer Prize winning columnist of the “Washington Post,” thank you so much for your time.  That does it for Wednesday edition of COUNTDOWN.  Up next on MSNBC, “THE RACHEL MADDOW SHOW.”  I‘m Governor Howard Dean, in for Keith Olbermann.  Thanks for watching.

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

END   

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