updated 9/8/2009 12:34:37 PM ET 2009-09-08T16:34:37

Guests: Joe Sestak, Joe Courtney, E.J. Dionne, Joseph Stiglitz, Stephen A.

Smith, Michael Medved, Jeff Santos, Maria Teresa Kumar, Kinky Friedman,

Lizz Winstead

ED SCHULTZ, HOST:  Good evening, Americans.

I‘m Ed Schultz.  This is THE ED SHOW, live from Minneapolis tonight.

As we head into this Labor Day Weekend, I want Americans to think about where we are.  You‘re going to be spending time with friends and family this weekend, and I think we should have this conversation for the weekend.

We‘re kind of in the Twilight Zone when it comes to this health care issue.  Here‘s President Obama, he‘s got a huge election victory, he‘s got sizeable majorities in the House and the Senate.  The guy is popular.  People like him, despite what you hear on the Right.

He saved the country from an economic depression.  Even conservatives admit that.  And now here he is caving in to the birthers and the “deathers” and selling out his principles for support of one senator, Olympia Snowe?

Got to talk about that tonight.

Senator “Snake in the Grassley,” he‘s running rings around the president.  Grassley, look at what he has done.  He basically has rallied to the defense of the insurance industry.  He‘s gotten the GOP to do that, circle the wagons, the right wing, get all these wagons together, and let‘s face off against the poor, the sick, the elderly, and middle class in this country when it comes to health care. 

Folks, you can‘t make this conversation up.  It is the Twilight Zone. 

And now there‘s some talk about some half-brained kind of trigger option. 

What?  More confusing terms.  It‘s nuts. 

Here‘s what people need to know. 

The government option is achievable.  The progressive movement is on fire to make this thing happen.  This is the only true key to health care reform in this count try. 

Liberals, progressives, Democrats, do not give up this Labor Day Weekend. 

I‘ve said this before.  The right has engaged in intellectual terrorism. 

If President Obama caves, he is going to lose support of allies, respect of his enemies, and his political and moral mandate.  There is no government option coming.  If there isn‘t, there is no reform, and the terrorists on information win.  And that‘s basically what they‘ve been doing, terrorizing the information that‘s out there with all the misinformation.

Barack Obama, what will happen, he will become politically crippled, irrelevant, and possibly a one-term president. 

I want to you get your cell phones out tonight.  I want you to tell us what you think. 

I want to know, if President Obama scraps the public option, will you change your vote in 2010? 

Text “A” for yes, “B” for no to 622639.  We‘ll bring you the results later on in the show. 

I mean, how much does this really mean to you?  And when we get together on weekends like this, we‘ve got a couple, three days to get together to talk it over, it will be interesting to see how much misinformation comes from your family members on this.  But are you willing to change your vote based on what happens on this issue? 

Joining me now, Congressman Joe Sestak and Congressman Joe Courtney of Connecticut.  Both gentlemen are not in the Progressive Caucus, but they are strong supporters of the public option. 

Gentlemen, Happy Labor Day Weekend.  Let‘s start it off with a smile tonight.  I can‘t wait to catch a fish in Minnesota this weekend. 

(LAUGHTER)

Gentlemen, there‘s a lot of talk about what‘s happening in the White House.  A couple of different factions.  Some are for the public option, some want to really negotiate out of this just to cut any political deal. 

Congressman Sestak, is there wiggle room on your part in the House on this? 

REP. JOE SESTAK (D), PENNSYLVANIA:  To get out of the public health care plan option?  I hope not.  I‘m going to have a very difficult time voting for any plan that doesn‘t have a public option. 

Look, we have a responsibility to cover everyone, but we also have a requirement to do reform, to get prices down, so in the future we can afford health care as a nation, and that‘s what the public option is.  It‘s an absolute economic requirement. 

The moral necessity of covering everyone coincides with an economic requirement so we can afford to do so.  And I hope the president and I hope every Democrat comes back with strong needs, not with a buckle (ph), and standing up to fight for it. 

SCHULTZ:  Joe Courtney, how do you view the mindset of the Democrats right now going back to Washington?  Do you sense a determination having talked to some of your colleagues before you go back to work next week?

REP. JOE COURTNEY (D), CONNECTICUT:  I think Joe Sestak is absolutely on target that, you know, we‘ve had this extra ordinary month where—and I know Joe is out there working hard, talking to town halls and business groups and labor groups and individuals about the problems that are out there.  And what I do think is that our supporters and the president‘s supporters were probably a little complacent going into this month, but clearly there was a wake-up call that was out there.

And when people are pulling out those cell phones, Ed, you know, I hope they‘re also calling their members of Congress and calling the White House, because—and I think Joe probably had the same experience.  I mean, there was this sort of deluge of input coming into our offices of just staunch opposition. 

SCHULTZ:  Well, I want to talk to you about that, because, Congressman, that‘s not going to stop.  I mean, these birthers—or should I say that these Tea Party Express, these folks are going to be showing up next week.

This is one comment from Brendan Steinhauser, who was organizing this group with Dick Armey, this Freedom bunch that‘s going to be showing up at your doors.  And I think these are some pretty ominous comments. 

“There will be chaos.  There will be some yelling.  Some individuals visiting the Speaker of the House might even call her an evil monger.  We do our best to guide them to the Hill,” but he says, “They‘re individuals and there‘s no guarantees.”

Gentlemen, what does that mean?  Do you know what you‘re going to be facing when you go back to Washington?

Congressman Sestak first. 

What do you think?

SESTAK:  Well, it‘s interesting.  I walk out of here and go into my 10th town hall in Upper Darby this evening.  And look, I‘m a Navy admiral.  I‘ve seen a lot of things being thrown at me. 

And Joe is up there protecting a strong Navy in Groton.

Look, here‘s the issue.  We know that there‘s some organization.  But Joe hit it right on the nose. 

There was also a failure upon the Democratic caucus to be prepared to come out and understand that we should have been out there battling from the very first moment.  So, look, yes, they are going to roll in.  But if the Democrats understand it‘s not about them, it‘s about Americans that absolutely cannot wait another 15 years since the Clinton effort failed, we will stand strong. 

SCHULTZ:  It‘s about—you are—Congressman, you are so right. 

This is about courage at this point. 

SESTAK:  Absolutely. 

SCHULTZ:  This is about addressing a moral issue.  The American people have spoken within the last year on an election. 

Here‘s what Nancy Pelosi has to say about a public option coming out of a House bill.  “A bill without a strong public option will not pass the House.  Eliminating the public option would be a major victory for the insurance companies who have rationed care, increased premiums and denied coverage.”

SESTAK:  Absolutely.

SCHULTZ:  Congressman Joe Courtney, what else has to be said at that point?  I mean, those statements are facts.  Her statement is factual.  This is what the insurance industry has done to the American people, denied coverage. 

Would you accept anything short of a public option? 

COURTNEY:  You know, it‘s impossible for me to imagine us passing a bill in the House, certainly the first time through, without a public plan.  And Joe has sat through the caucuses, as have I.  And I just don‘t think the votes are there.

But what I would again emphasize to your listeners and viewers is that this is not a spectator sport right now.  People—you know, the best answer to problems of democracy is more democracy, as Al Smith once said.  And if people are going to go to the streets in Washington to oppose this, well, then our folks have to do the same, and we have to show that our numbers are bigger and that our voices are louder in terms of the need for our country to not drop the ball for this generational challenge, as Joe points out. 

This is a historic test for all of us in terms of whether or not we can get this done. 

SCHULTZ:  Congressman Joe Sestak, Congressman Joe Courtney, thanks for your time tonight.  You guys, I know you‘re going to be working this weekend, but enjoy the Labor Day Weekend.  And we‘ll see you in Washington next week.  Appreciate your time.

SESTAK:  And keep battling, Ed.  Thank you.

COURTNEY:  See you next week, Joe. 

SCHULTZ:  We‘re going after it.  Thank you, gentlemen.  Thanks for being here. 

Let‘s turn now to “Washington Post” columnist E.J. Dionne.  We‘ll talk about what‘s happening in the Senate.

E.J., I‘m going to give you a minute here tonight to sell me on why I should cave in off the public option.  Where do we go from here? 

E.J. DIONNE, “THE WASHINGTON POST”:  I don‘t think you should cave in

by the way, Happy Labor Day, Ed.

SCHULTZ:  Yes.

DIONNE:  I don‘t think you should cave in on the public option, but I think you should cheer up about the overall situation.

Number one, Senator Grassley and Senator Enzi have basically taken themselves out of the negotiation.  That means there is no longer this drift away from anything that looks like health care reform.  So, I already think that we are setting (ph), if you will, in a much better place than where the Finance Committee looked like it was going.  It was almost on a road to nowhere, it looks now.

Secondly, I think the issue that we need to worry about most is whether there is enough money in this plan to make sure that everybody has health insurance.  One of the things I‘ve respected about you is you‘ve fought for working people, lower middle class, middle class working people.  And that if this plan ends up with a mandate in it, without enough money to support, you know, the kind of help people need to buy insurance, it‘s not going to work. 

So, I know I‘m for the public option.  I think it would be better with a public option.  But if I‘m going to sort of lay down some fire, it‘s to defend, make sure the rules are tough on the insurance companies, and to make sure there‘s enough money on this bill.  They are talking about cutting it to $50 billion a year instead of $100 billion. 

Fifty billion dollars sounds like a lot of money, but not where health insurance is concerned.

SCHULTZ:  No, no, no.  You‘re exactly right. 

The liberals in this country do not want hamburger.  We want the filet mignon on this thing. 

DIONNE:  The New York strip is OK with me.

SCHULTZ:  Well, no, no.  We want the best possible cut on this deal.

And I‘ve had my issues in the past with former President Bill Clinton, but I‘m going to tell you, he‘s got it right on this one.  President Clinton said that President Obama has got to keep going forward on this.  He says, “I wouldn‘t worry about the Republicans.  Obama is doing the right thing even though he‘s jamming a lot of change down the system.” 

Now, I think that‘s the approach that has to be taken.  I also think that when you take a look at this talk of a trigger, a trigger is going to be nothing but a big taxpayer, money falling from the sky for the insurance industry. 

But the strategy, as I see it right now, E.J., from the White House is that they are going to do anything they possibly can to get one Republican to possibly turn on this and hopefully some others will follow.  And I think this trigger is the way that the Obama administration is going to try to do it.  If they can get one Republican, they‘re going to call it a victory.

What‘s your take on that? 

DIONNE:  Well, you know, I think it‘s progress.  The trigger was totally out.

We were talking before about a bill without a public option.  And I think the real issue is, what does this trigger look like? 

Olympia Snowe is the one Republican who really is still in the mix.  And maybe if she went, she could pull along Susan Collins, the other senator of Maine.

Olympia Snowe is the one Republican who has actually said good things about a public option.  If it‘s a fake trigger that would never come into being, that‘s not good enough for me.  But if it‘s a real trigger, where everything that is progressives say about the insurance companies turns out to be true, the trigger is going to come into effect and we will have a public option.

So, I think the fight is about whether it‘s a real trigger or a fake trigger. 

SCHULTZ:  Well, now, the trigger is this—what they would do is that they would force insurance companies to cover people with a pre-existing condition, and then the insurance companies would raise their rates, say $3,500 a month.  They‘d have to go back to the government to get a subsidy, and then there‘s taxpayer dollars going right to the insurance industry right there.

And if they don‘t cover them, then, of course, the trigger is a date.  That‘s when the public option would kick in and do it.  It is complicated, but if you follow it every day, you see a lot of different things and the maneuvering that‘s going on. 

Here‘s the bottom line, folks.  The American people want a government-run system that is going to definitely, not kind of sometimes trigger, but definitely go into compete with the private sector to force these rates down.  It‘s small businesses that should be just cranking. 

Notice how you don‘t see any interviews out there of these psycho Tea Partiers saying, hey, I‘m a small businessman and I really love the rates I‘m getting from UnitedHealthcare.  I‘m a small businessman, and I just can‘t wait to pay Aetna what they‘ve been charging me lately. 

This is coming from those who are riled up, that are informationally challenged in this country.

E.J., I‘m on a roll.  I‘m looking forward to visiting with you at your class next week. 

Thanks so much. 

Have a great Labor Day Weekend, my friend. 

DIONNE:  I hope you catch a lot of fish.  Thanks.  Good to be with you.

SCHULTZ:  It‘s all catch and release. 

Thanks, buddy.  I appreciate it.

Now, coming up, I just can‘t believe how some parents in this country are reacting.  They‘re worried about the president.  They want to protect their kids from hearing the president of the United States on “Welcome Back to School Day.”

It‘s a message.  Stephen A. Smith is in the house.  He‘s going to be sounding off about that.

And also, our unemployment rate has hit the highest level since the Reagan years, 1983.  A Nobel Prize-winning economist will join me to talk about that in just a moment. 

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.

August job numbers came out this morning.  Things don‘t look so good. 

Another 216,000 people lost their jobs last month, and unemployment jumped to higher than expected, 9.7 percent.  That‘s the highest it‘s been since the Reagan years of 1983. 

Now, the silver lining is that the rate of job loss has slowed for the second month in a month.  That‘s the good news. 

Vice President Joe Biden tried to put the numbers into perspective today.

(BEGIN VIDEO CLIP)

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES:  We‘re making progress with substantially less job than we saw a few months ago.  The numbers reported today show 216,000 people lost their jobs last month.  Much too high, but roughly two-thirds of the job loss we saw on a monthly basis when we took office, and the lowest that it‘s been in a year. 

(END VIDEO CLIP)

SCHULTZ:  Let me bring in Joseph Stiglitz, professor of finance and business at Columbia University.  Professor Stiglitz received the Nobel Prize in economics back in 2001.

Professor, great to have you with us tonight. 

Have we done enough to jump-start the economy, or do you think that we have to do more?  Because the numbers are still in the negative zone.  They are not as bad as they were months ago, but do you think that we should have done more, or did we do enough? 

Where are we right now, Professor? 

PROF. JOSEPH STIGLITZ, COLUMBIA UNIVERSITY:  I think we should have done more, very clearly.  And, you know, things may get a little better in terms of GDP in the next two quarters, but the fundamentals in the labor market are very bad.

You quoted the number of 9.7 percent.  There‘s a broader measure of unemployment which includes the discouraged workers, those who have given up looking for a job, includes those who accepted a part-time job because they can‘t get anything better.  That more inclusive number is 16.8 percent. 

So, these numbers are real—it‘s the worst that it‘s been since those numbers started getting collected in 1994.  These are not good numbers, and we should have had a larger stimulus, we should have had a better designed stimulus.

SCHULTZ:  How about the stimulus being targeted?  Because I look at Ohio, I look at Indiana—I was just there over the weekend—they are losing jobs.  A Whirlpool factory out of Evansville, Indiana, is going to Mexico.  You look at Michigan, Michigan‘s got an unemployment rate that is far beyond, into the double digits.

What about, did we target this properly?  Because it seems like the manufacturing sector is still really lagging in this country. 

STIGLITZ:  Well, I think it‘s hard to target.  I think we could have done more. 

I mean, for instance, one of the other areas where there‘s a real problem are the states and localities that are cutting back.  Every day you see new reports of cutbacks and the state level.

That was predictable.  And we should have made up for the shortfall of the revenue.  You know, it was not as a result of anything that they did wrong.  It was just that with the economy slowing down, property values going down, revenues are plummeting, and they have to have balanced budgets.  They can‘t do what the federal government is doing.  And we should have been helping them so they didn‘t have to lay off their teachers. 

SCHULTZ:  Professor Stiglitz, I want to ask you this in a broader sense.  Do we have a new normal in this country?  I mean, I have car dealers tell me, we‘re never going to sell as many cars as we used to sell, there‘s not as many people in the market anymore.

You‘ve got productivity is up, but wages are down.  Health care is an issue.  Outsourcing is still taking place.

Are we just looking at the new normal in America and we‘re not going to have the kind of numbers that we used to have in this country?  Is that a possibility?

STIGLITZ:  We‘re not going to be back to normal for a long while.  But there‘s absolutely no reason why we need to accept a situation where people who want to look for a job can get it.  We have so many needs in our country, and this situation where we have people looking for jobs and we have so many needs, I think we should view as unacceptable.

SCHULTZ:  Professor, thanks for your time tonight.  I appreciate you coming in on THE ED SHOW.  Have a great Labor Day Weekend. 

STIGLITZ:  Thank you.  You too. 

SCHULTZ:  You bet.

Coming up, Michele Bachmann.  Not only is she delusional, she‘s now a conspiracy theorist.  You won‘t believe who she thinks is trying to sabotage her and why.  That‘s the key.  Why would somebody try to sabotage the political career of Michele Bachmann?

Oh, she‘s a three-peater this week in “Psycho Talk.”  

Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  Oh, we‘ve got a special edition of “Psycho Talk” tonight. 

It‘s Minnesota madness.  That‘s right.

First, there‘s our favorite cutter (ph), Congresswoman Michele Bachmann.  Now, she has her own theory, her very own theory as to why Democrats would want to get her out of office. 

(BEGIN AUDIO CLIP)

REP. MICHELE BACHMANN ®, MINNESOTA:  They want to make sure no women

no woman becomes president before a Democrat woman.  And so they‘re doing everything they can to, I think, sabotage women like Sarah Palin, or perhaps women like myself, or similarly situated women, to make sure that we don‘t have a prominent national voice.

(END AUDIO CLIP)

SCHULTZ:  Wow.  She thinks that everybody‘s talking about her because she wants to be president and we want to stop her from being president?

Now, I hate to break it to you, Michele, but I‘m pretty sure that that‘s not the motive of the Democrats, and they‘re not really worried about it, although it would be worth the price of admission to see a Sarah Palin/Michele Bachmann in a Republican primary. 

(LAUGHTER)

Now, Bachmann has had her fair share of “Psycho Talk” moments on this program.  No doubt about it.  And it seems that it‘s starting to wear off on some other Republicans here in the state of Minnesota, like Governor Tim Pawlenty.

On the president‘s speech, the governor said the speech, it‘s uninvited.  And he‘s worried about the students being asked to write the president of the United States. 

(BEGIN AUDIO CLIP)

GOV. TIM PAWLENTY ®, MINNESOTA:  There‘s concerns about the content and the motive.  They‘re asking students to apparently write the president.  And so there‘s going to be questions about, well, what are they going to do with those names, and is that for purposes of a mailing list? 

(END AUDIO CLIP)

SCHULTZ:  Now, hold it right there.  I pay a lot of property tax in Detroit Lakes, Minnesota. 

Governor Pawlenty, I don‘t ever want to see you in Detroit Lakes, Minnesota.  Especially, I don‘t ever want to see you on public school grounds.  And don‘t you dare go in to talk to those kids in Detroit Lakes, because you might be trying to indoctrinate them.

Folks, this is just unacceptable “Psycho Talk.”  

First of all, the White House has said they are no longer planning to ask the students to write the president.  And even if they were, questioning the president‘s motives like that is absolutely appalling. 

I would hope a sitting governor would have more integrity and self-respect than to kowtow to the crazy right-wing conspiracy theorists. 

Now, I have a special place in my heart for Minnesota, as you know.  But some of the stuff coming out of the state elected officials is just flat-out “Psycho Talk.”  

Coming up, Kinky Friedman finally saw the light and joined the good guys.  He‘s now trying to take over Texas as a Democrat. 

Oh, Kinky. 

Plus, Tuesday‘s back-to-school talk concerning some parents.  In fact, they are going to keep their kids at home.  They‘re going to play hooky.  They are afraid of the dangerous things that the president might be saying to them on their welcome back message. 

I‘ll get into it with Stephen A. Smith on that coming up.

Stay with us.  You‘re watching THE ED SHOW on MSNBC.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW folks, the Republicans war against the President‘s back to school welcome to the school kids, folks is out of control.

School districts in six states: Texas, Illinois, Virginia, Wisconsin, Missouri and my home state of Minnesota.  They are refusing to air the president‘s address and in some cases they are with conditions.  And today Republican state Senator Steve Russell of Oklahoma made some of the most outrageous comments that I‘ve ever heard about the President of the United States speaking to kids.

He says, “This is not civics education—it gives the appearance of creating a cult of personality.  This is something you‘d expect to see in North Korea or in Saddam Hussein‘s Iraq.”

Well, actually, it looks like something you‘d see right here in the United States of America Mr. State Senator.  Here is Ronald Reagan addressing the students back in 1988.  And let‘s not forget George Bush 41 talking to the kids in 1991.  And of course let‘s not forget Bush 43, in the classroom in Florida on the morning of September 11th.  It was the infamous “My Pet Goat” moment.  All three of those presidents in front of public students.

Now, let‘s get something straight.  This is money in the bank for the righty talkers.  They don‘t care.  They don‘t care about anybody‘s kids, they hate public education.  They want attention and they want it right now.

You see, this is the best way for them to get attention.  And they hitch their wagon to the Tea party, defer to Hitler indoctrination crowd.  That‘s what they‘re all about.

It is disgraceful that some school districts are playing this like a political shameful game pre-screening the President of the United States to determine if this back to school welcome is appropriate.  What‘s next?

What do you say we have two different sets of textbooks?  We got textbooks for liberal kids and we got textbooks for conservative kids.

And school, I thought, was all about learning about facts and the fact is, the President of the United States won the job.  He got the most votes.  He‘s our commander-in-chief.  Show some respect.

Well, joining me now is journalist and commentator Stephen A. Smith.  Stephen, I think some race plays into this too.  I think that there are some parents out there across America that no matter—come hell or high water, they do not want their child exposed to Barack Obama.  Or am I off-base on that?

STEPHEN A. SMITH, JOURNALIST AND COMMENTATOR:  Well, I‘m not going to say that you‘re off-base, Ed.  But I‘m not going to say that you‘re not completely inaccurate simply because it‘s very difficult to determine what‘s inside somebody‘s mind and in somebody‘s heart.  But clearly, when you look at the way that some of these people are choosing to conduct themselves and then neglect towards the facts, you‘ve got to really wonder what‘s going on here.

The fact is, over 69 million people voted for Barack Obama.  Over 52 percent of American citizens voted for him to be the President of the United States.

When you consider the fact that both Ronald Reagan and George H. Bush spoke to students and George W. Bush did so on the morning of 9/11.  And then all of a sudden there is this up roar about the president who actually is going to put the speech online a day ahead of time so the parents can read it and feel comfortable with knowing what‘s he‘s going to say to their kids is really unnecessary.

SCHULTZ:  But Stephen A., they are accusing the President of the United States trying to brainwash these kids when he speaks to them about goals, motivation, good grades, stay focused.  How do you respond to that?

SMITH:  I respond to that by saying maybe because those same people have been brainwashed themselves by some of the radio pundits and some of the people who are in the media with some of the things that have been disseminated to the masses on the right side.

The fact is that as a registered independent, I‘m not somebody that agrees with everything that our president does.  There‘s no question about that.

But in this particular situation it has escalated beyond the realms of ridiculousness.  There is no reason on earth for people to be in an uproar over such a thing.  He is the President of the United States.

And like I said to you a few weeks ago when we were discussing the Glenn Beck fiasco and some of the things that he had to say about our president, it‘s one thing to be critical of the president in terms of his policies.  But to attack him on a personal level to the point where you‘re accusing him of indoctrinating children with socialism, when in fact you don‘t even know what the man is going to say, it‘s highly disrespectful to the commander-in-chief of our nation.

SCHULTZ:  Here‘s what gets me.  They are too stupid to figure this out.  What if the president did get political?  What if the president did make some kind of statements to recruit them to the Democratic Party or liberal ideology?

He would be politically ruined in this country.  He would have no chance and I think that people would really see it for what it is.  But we have gotten to the point in this country where we are so polarized, everything political.

SMITH: Well, Ed you used the “p” polarized, I would say panic and the reason why I say panic is because again Obama advertised, he campaign on the fact that change was coming to America.  Let‘s face reality; it‘s a change that a lot of people in America simply are not ready for and some really have a problem with.

So because of that, every word that comes out of his mouth, they are hitting the panic button.  And what they don‘t realize, I‘m talking about people on the Republican side, because not all Republicans feel this way.  But some of them who do feel this way about Obama talking to these kids, what they are not realizing is that it adds credence to the argument that again, you are not dealing with fact, you are not with reality.  You‘re being an extremist and that‘s what turns moderates...

SCHULTZ:  Yes.

SMITH:  ...off towards them because they are panicking over something that I believe is relatively innocuous, to say the least.

SCHULTZ:  I think it sends a horrible message...

SMITHZ:  It does...

SCHULTZ:  ...to minorities, to kids in this country.

SMITH:  Not just minorities, though.

SCHULTZ:  Yes.

SMITH:  Not just minorities.

SCHULTZ:  But Stephen A. I‘ve got to tell you, this is the key issue, we can‘t run from this at all I think it sends a terrible message.

I mean, why all of a sudden would this President be inferior in his message?  When academically he‘s one of the most accomplished we‘ve ever had in the Oval Office.

SMITH:  But nobody would question whether he‘s inferior or not because we know better.  I just think again, it points to fear and if you‘re a child of African-American descent, you look up to this man, you admire what he has accomplished.

I‘m a grown man.  I‘m 41 years old and I have tremendous pride in what this man has been able to accomplish, even at the process of me disagree with some of the things that he does...

SCHULTZ:  No doubt...

SMITH:  I am proud that he‘s our president.  And I just wish he did some things differently.  But that‘s a story for another day, Ed.

SCHULTZ:  Yes, it is.  You will be on another day.

Stephen A. Smith, great to see you and good to have you with us tonight buddy.  Thank you.

SMITH:  All right, no problem, man.

SCHULTZ:  For more, let‘s bring in our panel tonight: Jeff Santos, radio talk show host in Boston, WWZN; Maria Teresa Kumar who is the executive director of Voto Latino and Michael Medved, nationally syndicated conservative radio talk show host, who I can a conversation with.

Michael, I‘ll start with you tonight.  Are these folks going overboard on this or are they really bringing up some legitimate concerns about the president‘s speaking to school kids?

MICHAEL MEDVED, RADIO SHOW HOST:  I agree with the Department of Education and the White House that a lot of the concerns were legitimate.  And I say that I agree with the White House and Department of Education because they changed the curriculum they sent out with the President‘s speech.

Originally, Ed—and I think you know this—originally they had something in there where they were going to assign kids between kindergarten and sixth grade an assignment where you‘re supposed to write letters to yourself about how I can help President Obama.

Now they changed that because truly the idea that your job, as a school kid is to help President Obama, your job is to succeed in school, it‘s to help your parents, it‘s to help your teachers.  That‘s all fine.

My suggestion, they could have avoided this whole thing.  Have Michelle Obama, she‘s a nonpartisan figure, she also happens to be African-American, let her speak to the school kids and inspire the kids.  None of this reaction would have happened if the First Lady had done this.

SCHULTZ:  Jeff Santos, your thoughts on this entire ordeal?

JEFF SANTOS, RADIO HOST, AM 1510 BOSTON:  I would tell you Ed, you‘re going to have to expand your “Psycho Talk” segment to 30 minutes with this garbage that they‘re throwing out there.  I‘ve got to tell you, it is amazing.

I want to have these right wingers tell the kids in the south side of Chicago who waited in line with their parents to vote Obama, their hero, that they can‘t hear him.  Or the kids that work with Claire McCaskill kids who told her to vote for McCaskill, to vote for Obama instead of Hillary Clinton that they can‘t hear him.  Or the kids in Lawrence Massachusetts who are Latino who couldn‘t do it, it‘s ridiculous.

He should speak to these kids, he should tell them to stay in school and he should tell them that they can have a chance at the American dream if they continue to read, write and do arithmetic like everybody else can.

SCHULTZ:  Maria, let me ask you, as a Latina woman, how do you feel this—if it does and maybe I‘m overplaying it all—does this affect minorities?  I mean is this a special message to kids of color in this country?  What do you think?

MARIA TERESA KUMAR, VOTO LATINO:  We have a huge education gap in this country; close to 51 percent of Latinos and African-Americans drop out by high school.  The fact that we have a strong American—quintessential American who is middle class and went to the Ivy Leagues, is now the President of the United States and also not a C student that you, too, can be president message.

But instead saying that you are strong, this is the kind of message that we need within our president.  And that‘s the type of leadership that kids needs to hear.  And I‘ll tell you Ed, I think the more parents that tell their kids not to watch the president, the more the curiosity kids have on this.  And you know what I kind of want to hear what he says because mom doesn‘t want me to watch it.

SCHULTZ:  Here‘s what bothers me about this because President Obama is an academic guy.  He‘ll read books before he‘ll watch television.  He‘ll read books before he‘ll watch a sporting event.  I know the guy well enough.

I‘ve heard him talk about how he first went into the White House in the Lincoln bedroom and he couldn‘t believe that there was a TV set there.  There should have been books there.  He said that when he was on the stump campaigning.

But here is what I really respect about—he wanted the kids to write the White House to engage in something different, Michael, than video games and watching television or sitting on the couch getting fat or doing whatever, engaging their mind.  And it might aspire them to a higher level.  Their self-esteem—hey, I wrote a letter to the President of the United States.  And, gosh, I got a return back and—you know, what‘s wrong with that.

MEDVED:  Ed, Ed, you‘re misstating the original curriculum.  I got the original curriculum.  It was on the Department of Education Web site.  It was sent out to teachers; I found out about this initially from teachers who complained to me about it.

And the original curriculum didn‘t say write a letter to the White House.  It said, write a letter to yourself with your promises of how you will help President Obama.  Now, it sounds partisan I understand what the intentions for this.  I understand the intentions for this might be very, very positive.

(CROSS TALK)

SANTOS:  They are not asking for political strategy, they are asking to help the country.

KUMAR:  Exactly and I think...

SANTOS:  What‘s they‘re asking the kids to do is how you can help the country and how you can help yourself.  Not politically strategy on how to beat the Republicans.

MEDVED:  He‘s on TV everyday.

SCHULTZ:  All right Maria, I want your take.  Go ahead, Maria.

KUMAR:  I think you hit the nail on the head.  I think what he‘s basically saying in a generation that keeps growing up or was surrounded by a lot of materialism and say me, me.  The president wants the people to reflect and say well, you could be five years old but how can you help?  How can you make the world in your community a better place?  There‘s nothing wrong with instilling those values in our...

MEDVED:  No instilling the values and say then how you can help the country and not how you help one specific leader.  That‘s why people say that this resembles of a cult of a personality.

SANTOS:  He‘s the President of the United States; they look up to the President.  They don‘t know who their senator is or to somebody...

(CROSS TALK)

SHULTZ:  Ask not what you can do for your country...

MEDVED:  Ask what you can do for your country, I don‘t think so.

SCHULTZ:  ...but what you can do for your country, correct?  I mean, look, I just take it as the president was trying to inspire some kids to do something other than sit down and play a video game.

Panel, great comments tonight, stay with us.

Coming up next, the Governor of Texas could be Kinky Friedman, I‘d be all about that, he‘s barn storming the Lone Star State with my old buddy Willie Nelson.  I say Willie is my old buddy because I love his music and their Democratic buddies.  I‘ll talk to him next in “Playbook” stay with us.

(COMMERCIAL BREAK)

SCULTZ:  Welcome back to THE ED SHOW.

In my “Playbook” tonight, “Kinky” Friedman; he‘s making another run in Texas.  Americas favourite cowboy philosopher ran governor back in 2006 is an independent and lost.  But this week he announced he‘s going to run again in 2010, this time as a Democrat.  It‘s not going to be easy, Texas is turning blue or President Obama did get 44 percent of the Lone Star vote back in November.

But they‘ve still got a long way to go in good old Texas.  Texas Republicans are deep in the heart of crazy, I guess you can say, demanding that the state break away from the union.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  We are aware that stepping of into secession may in fact be a bloody war.  We are aware; we understand that the tree of freedom is occasionally watered with the blood of tyrants and patriots.

UNIDENTIFIED MALE:  We will pick up this banner and we will march it forward in...

(END VIDEO CLIP)

SCHULTZ:  Holy smoke, “Kinky.”  I know her son has got some problems but I bet you a bottle of Tequila no Democratic voters are going to be asking you to secede from the union to get their votes.

Kinky Friedman joins me now live from Austin, Texas.  Kinky, you really want to be governor, don‘t you?  You‘re coming to the Democrats and how do you think this is going to turn out?

KINKY FRIEDMAN, DEMOCRATIC CANDIDATE FOR TEXAS GOVERNOR:  Ed, I‘ve seen the light.  Willy Nelson has a song, “My heroes have always been Cowboys.”  Well, my heroes have always been Democrats and I‘m a man of the people.  And these guys—it‘s really time for Texas to secede from Rick Perry, I think.  I think that‘s what we need to do.

SCHULTZ:  What do you think about all of those conversations about the president should be talking to the school kids next week?  What do you think of that?

FRIEDMAN:  I make of it that—of course he should be speaking to them, I mean the kids will love it.  It‘s what you do and it‘s a very nice thing I think.

SCHULTZ:  Where do you stand on health—“Kinky” where do you stand on health care reform?  Where do you stand on that right now?  Are you with the Democrats?

FRIEDMAN:  Yes, I think whatever we come up with will be better than the Bush health care policy, which was, don‘t get sick.

SCHULTZ:  That‘s exactly what it was.

What would you—would you like to see every Texan covered when it comes to health care in this country?  And would you be willing to pay for it as governor?

FRIEDMAN:  Absolutely, Ed.  We are—you know where Texas ranks in health care coverage?  50th; we‘re the 10th largest economy in the world, we rank 50th in health care coverage and 49th in education.  Do you know this?

And Rick Perry is saying that we are in the black.  The state is in the black.  The people are all in the red.  The people are in the red and we always have plenty of money when we need it.  It‘s not a lack of money.  It‘s a lack of leadership and setting priorities.

SCHULTZ:  And what about protecting the border down there?  Where down stand on that?  What kind of measures could you take as governor that would turn that around or which way would you go with it?

FRIEDMAN:  I think it‘s very simple.  You secure the border.  You offer anyone who wants to work here a criminal background check.  If they pass that, you give them a taxpayer ID card.

And at that point, once that‘s set in motion, you go big time after the big employers who are hiring illegals because everybody then should have a taxpayer ID card.  That would probably work.

It is a federal deal but that‘s a simple set of rules that‘s just never—these guys are filthy rich people who fly around in private jets, very well politically connected and they think that they want to be governor.

SCHULTZ:  Yes.

FRIEDMAN:  I‘m a man of the people.

SCHULTZ:  It sounds like it.  How is the Democratic Party in Texas going to receive you?  Are you getting good feelers from them?  Can you throw us any names as to who is going to support you?

FRIEDMAN:  I can tell you that already.  Jim Hightower (ph) is one of our advisers, Abel Dominguez (ph) who ran Victor Morales‘s Senate campaign, Racehorse Hans (ph), the lawyer.  I would say we‘re fighting for the heart of the Democratic Party against the party insiders that have presided over 17 years of losses, Ed, 17 years of failure.  Because they keep coming up with these generic unimaginative kind of establishment—and the Republicans keep winning.

This time you‘ve got the clash of the plastic titans.  You have the battle of the cheerleaders because Rick Perry and Kay Bailey were both cheerleaders and I‘ve said before that they were hall monitors.  And this is going to be ugly.  This is going to be really nasty and it‘s not going to make people proud to be Texans.

And that‘s why Willy and I were raising money, folks.  Go to kinkyfriedman.com and make a reservation for September 16th, the Bloody Mary Morning in Dallas Texas with Willy Nelson.

SCHULTZ:  All right.  “Kinky” great to have you on.  You‘re going to win because you have Willy with you.  I feel confident about that.

FRIEDMAN:  We have a smart president, we need a smart governor.

SCHULTZ:  Thanks so much.  “Kinky” Friedman, he‘s a good old Democrat now in Texas running for governor.

Coming up, there‘s really only one entertainer that can follow “Kinky” Friedman.  It‘s “Daily Show” co-creator Lizz Winstead.  She‘s up next in “Club Ed.”

Stay with us here on THE ED SHOW.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back.  It‘s THE ED SHOW.  It‘s Friday; that means it‘s time for “Club Ed” with comedian Lizz Winstead, co-creator of “The Daily Show” and also the brains behind “Wake Up.”

Lizz, great to see you.

LIZZ WINSTEAD, CO-CREATOR, “THE DAILY SHOW”:  Hi Ed.

SCHULTZ:  Health care rage—you have to help me on this.  Health care rage, it gets worst by the day.  What is happening? 

WINSTEAD:  The hateful blather just keeps going on and on and they keep making less and less sense.  It‘s like this health care plan is just like Nazi Germany.  And then it‘s the health care plan is going to cover illegal immigrants.

Look, you can‘t have both sets of hate.  You have to pick one.  Because I‘m pretty sure the Nazis were not involved in giving health care to illegal immigrants.  Which is it?  Which lie are you going to go with?

SCHULTZ:  What about Michael Steele dissing this lady at a town hall meeting when her mom died of cancer? 

WINSTEAD:  You know, Michael Steele—yet again just more proof that God has no quality control.  At this point, Faust would say, “Hey look, not even I would make a deal with these D-bags.”  It‘s really unbelievable.

SCHULTZ:  And just think what it would have been like when you and I were growing up if the President of the United States had actually spoken to us in the classroom.  We probably would have turned out differently.  What do you make of all of this? 

WINSTEAD:  You know Ed, I don‘t understand.  I‘ve just kind of given with these people who are crazy.  I just feel like at this point, why don‘t you just beam in Glenn Beck then?  Have him stand in front of his stupid chalkboard and then after that, why don‘t you just give home schooling with that Phillip Garrido or whoever that creepy guy is who raised his children in the backyard?

I don‘t know anymore.  It‘s nuts.  I mean, he‘s not going to read from “Das Kapital” to the children.  He just isn‘t.  I‘m pretty sure.

SCHULTZ:  Lizz, it‘s great to see you.  Have a great weekend.

WINSTEAD:  You too, Ed.

SCHULTZ:  Folks you can check out her podcast.  It‘s called “The Broadcast with Lizz Winstead and Darby Wirly (ph).  And you can also find Lizz Winstead at Twitter at twitter.com/Lizzwinstead.

Earlier in the program tonight, I asked you a tough question.  If President Obama scraps the public option, will you change your vote in 2010?  67 percent of you said yes; 33 percent of you said no, you won‘t.

That‘s THE ED SHOW.

I‘m Ed Schultz.  Have a great Labor Day weekend.  Be safe.

We‘ll see you back here on Monday.  We‘ll be broadcasting from Washington D.C. on Tuesday and Wednesday, of course, the president‘s speech next week.

Chris Matthews has got “HARDBALL” next right here on MSNBC, the place for politics. 

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