updated 10/7/2009 11:25:16 AM ET 2009-10-07T15:25:16

Guests: Lawrence O‘Donnell, Wendell Potter, Joe Trippi, Devin Gordon, Lewis Black

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KEITH OLBERMANN, HOST (voice-over):  Which of these stories will you be talking about tomorrow?

The insurance cartel demands more.  Higher penalties for people who are mandated to buy insurance but don‘t.  If the higher penalties aren‘t granted, threatening to raise everybody‘s premiums.

The speaker again cuts to the chase.

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REP. NANCY PELOSI (D), SPEAKER OF THE HOUSE:  We will bring a bill to the floor in the House of Representatives that has a public option in it.

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OLBERMANN:  Speeding that up in the Senate, slightly, Mr. Baucus now says the Congressional Budget Office will be done pricing out his bill tomorrow—meaning: any more delaying, he will have to do himself.

Sarah Palin, campaign tool for the Democrats.  For the first time, a Democrat uses her against an incumbent.  Pennsylvania Democratic Congressman Joe Sestak‘s bludgeon against Arlen Specter after Specter stopped being a Republican, he still said McCain and Palin were the better choice.

David Letterman, Zen, and the art of career maintenance: crisis management in action as Letterman continues to win the P.R. war.

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DAVID LETTERMAN, TV TALK SHOW HOST:  This is phase one of the scandal.

(LAUGHTER)

LETTERMAN:  Phase two, next week, I go on “Oprah” and sob.

(LAUGHTER)

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OLBERMANN:  Also, is letting everyone else make fun of him the wisest strategy?  Even his employees.

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CRAIG FERGUSON, TV HOST:  My job is to, you know, take the number one news story of the day and have a bit of fun with it.

(LAUGHTER)

FERGUSON:  So this is my last show.

(LAUGHTER)

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OLBERMANN:  “Worsts”: The other shoe finally falls in the infamous “New York Post” Obama “dead chimpanzee” cartoon.  “The Post” editor who most openly attacked the paper‘s racism, she just got fired.

And the politics of—pistachios?  Sarah Palin‘s ex-future son-in-law Levi Johnston in a barely intelligible commercial for something.

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(INAUDIBLE)

NARRATOR:  Now Levi Johnston does it with protection.

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OLBERMANN:  All will be explained by our special guest, starring in his newest film “Stark Raving Black,” Lewis Black.

All of that and more—now on COUNTDOWN.

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LEWIS BLACK, COMEDIAN:  Oh, that‘s wonderful.

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OLBERMANN:  Good evening from New York.

It is an industry so rapacious, so intoxicated by profit, that it is now lobbying to increase the punishment of anybody who might in the future fail to buy its product.  An industry so evil that—as “The New York Times” reported today—it ostensibly kept two brothers, the Waddingtons, from donating a kidney to their own father under the threat that if they tested positive for the same disease that was costing their father his kidney, they would likely be denied insurance for the rest of their lives because of a pre-existing condition.

Our fifth story—and tonight, America‘s insurance cartel is now complaining to Senator Max Baucus that he hasn‘t done enough for them.

Senator Baucus is the chairman of the finance committee, says today that he expects the Congressional Budget Office to be done scoring his health reform bill by tomorrow.  Mr. Baucus did not say, however, when he might be staging a vote on his bill.  That bill is set to deliver millions of new paying customers subsidized by the federal government to the private insurance industry with no public option to provide pesky competition.

The insurance industry is now claiming that last week, when the finance committee dropped the penalty for not buying coverage to $1,500 per family from an original $3,800, it left the fines so weak it is practically begging to be ignored.

After the bill leaves the Senate Finance Committee, it would need to be joined with the other Senate bill, the Senate and House bills it is hoped eventually to be merged together as well, “Roll Call” reporting that the White House is to be represented in the negotiations by Chief of Staff Rahm Emanuel, among others.  The newspaper reporting that Senate aides are letting it be known that the White House would have to lead on all of the issues around which Democrats have been unable to find consensus, issues like the public option.

Speaker Pelosi, again, is saying that the final bill will have a robust public option in it, at least in the House.

Meanwhile, back in the Senate, no word yet on how the final health care vote might survive a filibuster.  Senator Ben Nelson of Nebraska is telling TalkingPointsMemo.com that the Democratic leadership has not discussed overcoming a key cloture vote with him on any issue.  As for the Republicans, Congressman Alan Grayson clarifying his comments in which he said the Republican health plan is, “Don‘t get sick, and if you do get sick, die quickly,” it‘s not that Republicans want you to die quickly—explained the Florida Democrat on local radio in Orlando—it‘s just that Republicans don‘t care.

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REP. ALAN GRAYSON (D), FLORIDA:  Honestly, the people that I deal with, the people I actually am across the aisle with every day, I don‘t think they care about ordinary people.  I don‘t think that the Republicans in Congress actually have a heart.  I‘ll be honest with you.

UNIDENTIFIED MALE:  Well, Dick Cheney.

GRAYSON:  But that‘s not the same as saying they want you—I mean, let‘s get straight what I said.  I said their health care plan is.

UNIDENTIFIED FEMALE:  Die quickly.

GRAYSON:  . don‘t get sick, and if you do get sick, then die quickly.

UNIDENTIFIED FEMALE:  Die quickly.

GRAYSON:  And what did I mean by that, because if you get sick and those bills are mounting, and you‘re in the hospital and you‘re feeling weaker and weaker, and you got no way to pay for any of this, then what are they going to do from you?  Nothing.

UNIDENTIFIED MALE:  All right.  Here‘s my question.

GRAYSON:  They‘re going to do nothing.

(END AUDIO CLIP)

OLBERMANN:  Time now to call in our own Lawrence O‘Donnell, former chief of staff to the Senate Finance Committee, now a “Huffington Post” contributor.

Lawrence, good evening.

LAWRENCE O‘DONNELL, MSNBC POLITICAL ANALYST:  Good to be here, Keith.

OLBERMANN:  I asked this question to Howard Fineman yesterday, but I‘m interested in learning your answer to it as well.  If the CBO comes back tomorrow and says, “Hey, guess what, this bill does add to the deficit, whether it‘s $1 billion or $1,” what happens then?  Where does this process go next?

O‘DONNELL:  Oh, boy.  That puts things into a very sharp U-turn for a while.  There would be an immediate call to the White House—because, remember, the demand that this health care reform reduced the deficit is a Barack Obama demand.  He‘s the one who put that on the table as something the bill has to do.

So, first call has to be, “Mr. President, is this a veto item?  Do you really need this?”

Max Baucus has to decide whether he needs it because he strongly supported the president on that position.  And if they need it, it means they‘re going to have to—basically, to bring the cost of the bill down, you take good things out of the bill.  You take things that do people good out of the bill.  You take benefits out of the bill.  That‘s how you reduce the cost.

OLBERMANN:  Having Mr. Emanuel in the room when the final, single bill is merged, drafted—I mean, he knows the process.  Obviously, he‘s a skilled negotiator.  Obviously, he‘s tough as nails.

If the president really wanted a public option, would not this man, this chief of staff, be the guy to deliver it for him?  Is it all a matter of what the president actually wants?

O‘DONNELL:  Well, you know, presidents want a lot of things and the question in the room is: will the president veto the bill if it doesn‘t have the public option?  Is this a deal breaker for the president?

That‘s the questions of Rahm Emanuel in the room and he has answered that question—he answered that question back in January when he said basically everything‘s on the table.  We will do anything to get a bill.

In this respect, Rahm turned his cards over much too early and much too publicly.  It seemed possibly like a good idea at the time because it was the opposite of the Clinton strategy, but he‘s been very clear about he will take a bill without it, and the president has been pretty clear that he‘ll take a bill without it.

OLBERMANN:  What do they do then?  Do they really believe they can come back and fight this fight again next year or the year after, or at some point in the future to get other things?  Or will they have been so sapped by this process that this will be the end of it?

O‘DONNELL:  That‘s what happens.  These exercises—these crusades are so huge that they take all the energy out of the institutions for any coming back at this for another few years.  And one of the most unfortunate lines I think in the president‘s speech was when he said, “I‘m not the first president to take on health care reform, but I will be the last.”

Now, he said that, unfortunately, knowing that every one of these bills leaves tens of millions of people without health insurance.  None of these bills in any of the committees are universal coverage bills.  So when the best one of these bills is enacted, you‘re still going to see people lose their homes through bankruptcies based on health insurance and the failure of health insurance.

And so, yes, you would have to come back and do a lot of repair work on these kinds—on these bills if any one of them passed.

OLBERMANN:  A new “A.P.” poll is out tonight.  It shows the president‘s approval numbers started to rise again last month, 56 percent in the past week approving of his job performance.  It was 50 percent in September.  Forty-eight percent said they approved of his handling of health care, that‘s up six points from September.

On health care reform, is anything really holding the president back other than the president?

O‘DONNELL:  Well, the CBO‘s holding him back.  He‘s really waiting to see how does this finance committee bill score out?  Does it meet my requirements?  Is there something here that meets all of my requirements, as enunciated in that speech?

So, he‘s waiting for that.

OLBERMANN:  The horrific stories about insurance companies and what they might still be able to do under what is being called reform that really looks like it‘s benefiting them more than anybody else, insurance companies complain that they‘re not being given enough in the current deal.

Was Congressman Grayson wrong, in fact?  Could it not be that the Republicans don‘t care but if they deliver a bad bill reform that doesn‘t reform, is it the Democrats who don‘t care?

O‘DONNELL:  Well, the Democrats definitely have a big heart and they care about the people who don‘t have health insurance.  But what we‘ve seen so far is they don‘t care that much about what‘s in the bill.  They just want a bill.  They want to pass something.

And the trouble with these policies—the individual mandates is a lot of ugly aspects to that policy.  And that‘s true of a bunch of the policies that are in these bills.  And those ugly aspects aren‘t being massaged in a way that makes them more acceptable.

I mean, these bills are very difficult for liberals to watch pass through here because liberals wanted to go with opening up Medicare, a system that we know how it works, we can describe it, it‘s a very successful system.  And so, liberals didn‘t get a chance to open up Medicare, to put that on the table.  And instead they‘re left defending these very complex and, in many cases, very ugly ideas, like the individual mandate that is a huge benefit for insurance companies, is punitive to people with low incomes.

It‘s a tough thing for liberals to watch.  And at some point, the question becomes: is this a bad enough bill that from the left, you should vote against it?  I don‘t know exactly where that line is.

OLBERMANN:  I‘ll amend—agree with your statement but amended only slightly this.  Very difficult things for humans to watch go through, it doesn‘t have anything to do with liberals.

Lawrence O‘Donnell of MSNBC and the “Huffington Post,” formally of the Senate Finance Committee—as always, great thanks.

O‘DONNELL:  Thanks, Keith.

OLBERMANN:  More on the insurance industry complaint about punishing those who don‘t buy, let me welcome back Wendell Potter, former communications director at CIGNA Health Care, now senior fellow on health care at the Center for Media and Democracy.

Thanks, once again, for your time tonight, sir.

WENDELL POTTER, CENTER FOR MEDIA AND DEMOCRACY:  Thank you.

OLBERMANN:  All right.  Now, the insurance industry is complaining that dropping the fine on the insurance mandate from 3,800 to 1,500 bucks leaves the mandate so weak, it‘s practically begging to be ignored.

Why are they saying something like that out loud?  Do they think they never run the risk of ever inciting public umbrage or outrage?

POTTER:  They say it because they can.

OLBERMANN:  Yes.

POTTER:  And they—they know that they‘re so rich and so powerful and so influential that they can say this kind of stuff and get away with it.  What they‘re doing here is complaining because some of their friends in the Senate Finance Committee, apparently, are reneging on the deal they‘ve struck with them to have that high fine.  So, backing away from what they want in their view is not giving them quite enough.

OLBERMANN:  The industry‘s argument seems to be this: the only way they do not increase premiums, especially for sick people, is if everybody is in the pool, especially healthy people for whom they have to pay basically nothing in the way of payouts.  Would that argument be not a little bit more believable if they didn‘t spend so much time kicking sick people out of the pool that currently exists?

POTTER:  Oh, exactly.  If they really cared anything about sick people, we would have seen their behavior being very different over the last 15 years.  They absolutely don‘t care.  They want to try to get rid of sick people because they have to pay money for them.  They have to pay their medical claims.

So, they do want to have everyone in the pool.  They want to have new dollars flowing in, in terms of new revenue.  And they want—they really are lusting after those billions of dollars in subsidies from the federal government.

OLBERMANN:  With the stranglehold that they have on us, and obviously on many of our pivotal politicians, how do we ever liberate ourselves from an insurance cartel that in part runs the government of the United States of America?

POTTER:  Well, you know, if there‘s not a public option, the plan that is passed—if it‘s passed and signed by the president—will not be sustainable.  And it ultimately will be a disaster for the middle-class and ultimately, a disaster for the Democratic Party.  It cannot be sustained.

When you‘ve got the median household income in this country being $50,000, their answer in the way that they‘re going to be doing this to us is to shift us more and more into high-deductible plans and limited benefit plans.  We‘ll be paying a lot more out of other own pocket.  We‘ll have the appearance of being able to afford premiums but we won‘t be able to afford health care.  That cannot be sustained.

OLBERMANN:  So, what do we do about it that does not involve the politicians?  Because, frankly, in this last month, my faith in them in this question is dead and maybe dying, but probably dying and may be dead.

POTTER:  I think there will have to be some private means of monitoring these companies and making sure that they are held accountable in ways that they currently are not.  If the politicians can‘t do it, we‘ve got to figure out a way to do it ourselves.

OLBERMANN:  Well, we can‘t—I mean, it would be a—strike would be the logical solution here, insurance strike.  But you can‘t do that because if you‘re a day late with your premium, they cancel it and everything that‘s wrong with you is a pre-existing condition.  Is there literally anything that we can do as citizen that does not involve rewriting the laws here?  Is there anything to protect ourselves?

POTTER:  There really isn‘t.  I think that the system, as I said before, it cannot be sustained, it ultimately will fail.  And I think that is when we‘ll start seeing some real reform.

OLBERMANN:  Wendell Potter, insurance industry whistle-blower, former head of P.R. for CIGNA—it‘s grim news, but thank you for giving it to us anyway.

POTTER:  Thank you.

OLBERMANN:  Tomorrow at this hour, we will devote the entire program to a “Special Comment”, “Health Care Reform: The Fight Against Death.”  Why there is such hysteria?  The underlying issues we‘re not discussing in this equation and what we may yet be able to do to save this country from the insurance industry‘s war on America.

Maybe it‘s emphasizing how Sarah Palin, a woman of the people, is in the pockets of the insurers and big health care—that tact underscoring a bright line connecting something or somebody to Palin‘s peripeteia, now in use for the first time by a Democrat in a major campaign.  Joe Trippi‘s analysis of this strategy.

And as other politicians like Joe Wilson start yelling at each other, one man might as well complain, “That‘s my turf.  I do the yelling at politicians.  Quit working my side of the street!”  Our special guest tonight: Lewis Black.

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OLBERMANN:  For months, those on the far right have happily trotted out Sarah Palin whenever they need to throw some red meat at their crowd.  For the first time, a Democrat has done the same thing, only she‘s what‘s being thrown at the crowd.  Joe Trippi explains.

More strategy, David Letterman leads the jokes at the expense of David Letterman.

And in “Worsts”: Rupert Murdoch let a “New York Post” editor, critical of the paper‘s racist of Obama‘s stimulus “murdered chimp” cartoon keep her job—until now.

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OLBERMANN:  As we told you yesterday, top McCain/Palin campaign vets predict a political catastrophe or apocalypse, actually a catastro-pocalypse if Sarah Palin were to win the GOP presidential nomination in 2012.  But tonight, we learn, some politicians may not have to wait that long.

Our fourth story: A powerful Democrat, the first to run into the Palin problem.  Meet Pennsylvania Democrat Arlen Specter, formerly Pennsylvania Republican Arlen Specter, formerly Pennsylvania Democrat Arlen Specter.

The 79-year-old optimist is running for another six-year term next year as a—yes, let me check my notes here—as a Democrat.  Jumping ship from the Republican primary after former Congressman Pat Toomey said he would challenge Specter for the Republican nomination and polling suggested Toomey would win.

Challenging Specter in the Democratic primary is Congressman Joe Sestak, who just launched a Web site reminding people just how deep Senator Specter‘s Republican roots go.  Some of the painful contents were surely expected, namely: Specter‘s own campaign ads, “Yes, look at me with President Bush.”

But a Sestak original rolls out a new line of attack, trying to tie Specter with a Specter from his past, a candidate he voted for in 2008, reminding voters that both Mr. Toomey and Mr. Specter said this August past that they considered McCain/Palin, in Specter‘s words, “the better choice.”

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CHRIS MATTHEWS, MSNBC HOST:  Last year, you were campaigning with McCain and Palin.  Did you vote for them?

SEN. ARLEN SPECTER (D), PENNSYLVANIA:  Yes, sir.

FMR. REP. PAT TOOMEY ®, PENNSYLVANIA:  I voted for John McCain.

MATTHEWS:  And you voted for Sarah Palin, right?

TOOMEY:  She was on the ticket.  I voted for both of them.

SPECTER:  They were the better choice.

SUBTITLE:  Arlen Specter voted for them and against us.

(END VIDEO CLIP)

OLBERMANN:  In Specter‘s defense he said, “I thought they were the better choice.”  In Specter‘s not defense, when asked doing that interview whether he was comfortable now having voted to put Palin a heartbeat from the presidency, he said, quote, “I didn‘t exactly think my vote would be decisive.”  Maybe next year it will turn out that it was.

Let‘s bring in current and former Democrat, Joe Trippi, strategist and author of “The Revolution Will Not Be Televised: Democracy, the Internet, the Overthrow of Everything.”

Welcome back to the program, sir.

JOE TRIPPI, DEMOCRATIC STRATEGIST:  Great to be with you, Keith.

OLBERMANN:  As we just heard him say, Mr. Specter did not think voting to put Sarah Palin a heartbeat from the presidency would prove decisive.  In another sense, could it?

TRIPPI:  Well, I think it could.  I think it means that the race in Pennsylvania‘s gotten a little bit more fun and that Sestak is not going to be a slouch and an easy pushover for Specter, not in the Senate race up there.

OLBERMANN:  Is Mr. Sestak giving us a campaign preview of things generally next year?  I mean, how much will Sarah Palin be invoked by both sides by next November?

TRIPPI:  Well, I mean, certainly, the Republicans—there will be a lot of Republicans who will use her to raise money.  She‘s still a star on that side, with about half of the—half of the constituents, and the other half don‘t want their guys anywhere near her.  Unfortunately, they all live in the same state or the same district.  So, it‘s going to be a problem on the right.

And Democrats, yes, she‘s going to be a poster child.  And that‘s a problem for Specter because—because he has switched parties.  It‘s clear now, Sestak‘s going to not let him or Democrats in Pennsylvania forget it.

OLBERMANN:  To what extent do you think Palin‘s effectiveness next year—and I mean helping Republicans in particular, but to a lesser degree, helping Democrats run against Republicans—to what degree does that determine whether she winds up in fact running in 2012?

TRIPPI:  Well, I mean, I think a lot of Democrats hope she‘ll be successful next year—successful enough that she does become the nominee in 2012.  I think that‘s who most of us will be rooting for.  I just don‘t see how she puts together—you know, she couldn‘t put two months together, putting 18 months together with the scrutiny that she couldn‘t withstand for that short amount of time last time.  Certainly, people are going to be looking forward to that.

I think she‘s going to be out there raising—she will be used, basically, to raise money for the right.

OLBERMANN:  Do you worry—I always like to tell a story from the baseball Hall of Fame, where annually, they would meet—the veterans committee would meet and discuss who is going to put out courtesy votes to some of the their fellow old-timers would not feel like they had been forgotten.

In one year, they didn‘t have the meeting.  It didn‘t complete.  It used to be one guy would say, “I‘m going to got for player A.”  And somebody else will say, “I‘ll vote for player B,” and they call at the end of the vote and say, “Hey, you got a vote.”  And the other one would say, “Hey, you got a vote.”  And everybody would feel happy and guys who didn‘t belong in the Hall of Fame wouldn‘t get in.

Do you worry when you talk about Sarah Palin actually being the candidate in 2012, that what happened one year in the Hall of Fame vote might actually happen in the electoral vote, where they all voted for the same person as the courtesy and he wound up in the Hall of Fame even though he didn‘t belong there?  I mean, what in God‘s name would happen if Sarah Palin were elected president of the United States?

TRIPPI:  What a country.

OLBERMANN:  Yes.

TRIPPI:  It would be a—it would be a problem.  But I—look, it‘s a long way off.  I just think, right now, a lot of Democrats will be rooting for her to be the nominee.  But we‘ll see how it develops.

OLBERMANN:  Does next year also offer a test of sorts about what the Republican Party itself is going to be by 2012?  In other words, depending on whether the Palin effect helps or hurts Sestak and Specter in Pennsylvania as a first sort of litmus test in that—does that—does that shape what Republicans look like by 2012?

TRIPPI:  Well, I certainly think that‘s exactly what‘s going on here.  Sarah Palin right now is one of the bright star faces of the Republican Party.  Is that the direction this party is going to take?  And if—if it does, I think, you know, most Democrats think it will be a disaster for them.

On the other hand, that‘s really the wing of the party right now that‘s sort of taking control and sort of, you know, propping up the different candidacies out there that are—that are, you know, being proposed for 2012.

So, it‘s hard to see who—what moderate in the party is going to emerge, or if there are any left frankly.

OLBERMANN:  What happens with Sestak and Specter in Pennsylvania do you expect?

TRIPPI:  I think that‘s going to be a really tough race.  I would not bet against Sestak by any means.  I think there‘s a real breakdown between elites here in Washington and Democrat rank-and-file in the state who thought—the elites thought, you know—and obviously Specter thought—he could easily do this.  I‘m not sure that‘s the way it‘s going to be on the street.  And I think Sestak‘s figured that out, jump in the race when no one else would, and he‘s going to give Specter a real run for his money.

OLBERMANN:  Democratic strategist Joe Trippi—as I said before, welcome back.  It‘s been a pleasure, sir.

TRIPPI:  It‘s great to be with you.

OLBERMANN:  One of the most honest admissions ever made was by a comedian who pointed out that he turned to humor as a kid because if he made a joke about himself first, any jokes by others would be less damaging.  David Letterman did not say that, but does he seem to be doing it.

Rupert Murdoch—less so.  Only one “New York Post” editor openly protested the paper‘s racist, Obama stimulus “dead chimpanzee” cartoon from last January, and guess what just happened to her.

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OLBERMANN:  “Worsts” ahead.

And, first, it was a covenant to slit wrists.  Now, it‘s beating and bludgeoning people to death.  This is not from filmmaker Rob Zombie.  It‘s from a member of the U.S. House of Representatives.

But, first, on this date on October 6th, 1582 -- it wasn‘t October 6th, 1582, it was October 15th.  That actually happened in Italy, Poland, Portugal and Spain, where they switched from the Julian calendar to the Gregorian calendar and decided to make the correction by jumping directly from October 5th to October 15th—which really screwed up FedEx.

Let‘s play “Oddball.”

We begin in Beaconsfield in Canada where that old, crazy, you know, some of us don‘t hate other people religion, Anglicanism, has now gotten even more inclusive.  The Christ Church of Bopair (ph) took missionary work two steps further this Sunday, opening its doors to the dogs.  They even got a special doggy communion, symbolic of the body of Christ‘s dog. 

The service was held to focus attention on mistreated strays, but the church reported getting calls calling the service blasphemous.  You know, if your dog can read the Bible, I think that‘s the story here, not how you‘re trying to interpret it. 

Berlin, Germany, hello.  Archaeologists have unearthed an early oversized Sarah Palin prototype, so lifelike in its motions as to create the allusion of inter-mental activity.  The giant puppet show was staged Saturday to mark the anniversary of German reunification.  The two separated puppet seeking each other out and then finally reuniting at the famous Brandenburg Gate, reenacting a scene from “The Thunderbirds,” representing unified Germany and then sitting the hell down and not marching anywhere near Poland or France. 

These are my people.  There‘s a German government spokesman named Olbermann.  I know them. 

Finally to Tblisi, in Georgia, where I will be laughed at and run through the streets for my pronunciation of the name of 18-year-old judo champion Jamal Stkishvilishvieli (ph), better known in the states as Jamal, from this moment on, anyway.  Jamal has his heart set on the Guinness Book of World Record the old fashioned way, by inflating rubber water bottles through his nose until they explode or he does.  Jamal‘s current best time for nasal inflation is 13 seconds, handily beating the record of 15.98 seconds, set in April 2006 by American Brian Jackson, who in Georgia is better known as Kshili Krezmvia (ph).

Jamal is still waiting, however, for the people at Guinness to certify his record breaker, and to do a little introspection about including the best time for nasal inflation by a rubber water ball.  They, in turn, are waiting for Jamal to change his name to Bob Bobbington.

Or to make some sort of statement on David Letterman.  That‘s next. 

Then Lewis Black ahead on COUNTDOWN.

(COMMERCIAL BREAK)

OLBERMANN:  He called last night‘s show phase one of his own sex scandal.  Phase two, he joked, I go on Oprah and sob.  But if anyone was curious about what kind of impact the David Letterman saga would have on David Letterman, his guests and fellow comedian Steve Martin offered this observation: “it proves that you‘re a human being, and we weren‘t really that sure before.” 

Our third story on the COUNTDOWN, Letterman goes before the court of public opinion and so far he is winning.  Taping his first show since last Thursday‘s confession, David Letterman greeted with cheers from his studio audience.  After quipping he spent the whole weekend raking hate mail, he quickly put aside fears that his own scandal would prevent him from joking about other people‘s scandals. 

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, “THE LATE SHOW”:  Things are still pretty bad. 

There‘s a possibility that I will be the first talk show host impeached. 

So—

First of all, Bill Clinton said—no. 

Good news for South Carolina Governor Mark Sanford, because he—

How about that Eliot Spitzer?  Would you take a look -- 

(END VIDEO CLIP)

OLBERMANN:  But after the checklist of jokes he can‘t do anymore came the apology, first to his staff for putting them through the ordeal, then thanking them for the support.  And as for his wife, Letterman offered this act of contrition. 

(BEGIN VIDEO CLIP)

LETTERMAN:  Now, the other thing is my wife, Regina, she has been horribly hurt by my behavior.  And when something happens like that, if you hurt a person, then it‘s your responsibility, you try to fix it.  And at that point, there‘s only two things that can happen: either you‘re going to make some progress and get it fixed or you‘re going to fall short and perhaps not get it fixed. 

So let me tell you, folks, I got my work cut out for me. 

(END VIDEO CLIP)

OLBERMANN:  And it turns out the viewers like their Letterman humble and self-deprecating.  Last night‘s “Late Show” bringing in 5.7 million viewers, only 200,000 fewer than the audience for his original confession.  As for the man who follows Letterman with his own late-night talk show on CBS, he finds himself in a somewhat precarious position, like that never happened before. 

The “Late Late Show‘s” Craig Ferguson defending Letterman in his monologue, pointing out that Letterman is, indeed, his boss and telling his audience, I guess by now you have all figured out how I got the job. 

(BEGIN VIDEO CLIP)

CRAIG FERGUSON, “THE LATE LATE SHOW”:  David Letterman, the king of late-night television—unless you believe the NBC press release, the king of late-night television—got himself into a little bit of a situation of which he‘s dealing with.  And he‘s my boss.  And my job is to, you know, take the number one news story of the day and, you know, have a bit of fun with it. 

The person that you work for—the person that you admire and respect is caught in an embarrassing situation.  And your job is to be funny about that, whilst trying to keep your own job. 

So this is my last show. 

If we are now holding late night talk show hosts to the same moral accountability as we hold politicians or clergymen, I‘m out.   

(END VIDEO CLIP)

OLBERMANN:  Always have a job here.  Joining us now, the editor—an editor for Newsweek.com, Devin Gordon.  Thanks for some of your time tonight, sir. 

DEVIN GORDON, NEWSWEEK.COM:  Thanks for having me, Keith. 

OLBERMANN:  Has Letterman averted disaster by kind of proactively poking fun at himself, sort of taking ownership of this entire topic? 

GORDON:  I think poking fun of it was one factor.  I think there are really three factors, Humor, obviously, candor, and controlling the story.  The real master stroke here was getting out ahead of this thing. 

Look, I‘m not really sure this was ever going to be a disaster.  I mean, as you pointed out, look at the ratings.  This is—I think there was a little devil on David Letterman‘s shoulder the moment it became clear that this was going to come out publicly, that he knew this was going to be a big ratings moment for him.  This guy has been in television a long time, and I think they knew what they were doing. 

OLBERMANN:  Yes.  If it‘s going to happen, at least you get whatever benefits—whoever gets the audience—some people are getting audience for watching this on other shows.  You might as well take advantage of it yourself.  But to what degree—they sort of cleared the field for him.  The other non-CBS late-night comedians distanced themselves from this.  Jay Leno mentioned it Friday.  But that‘s really been about it.  Does that hold for very much longer? 

GORDON:  It‘s been interesting to see who has touched this and who hasn‘t.  Jay Leno took a little bit of a shot at it.  There‘s always been this back and forth between Leno and Letterman.  There‘s always been a rivalry there, where Leno‘s been more popular, quote/unquote, but Letterman‘s been the revered one. 

Then the other guys—really who we are talking about here is Conan O‘Brien and Jon Stewart.  These are guys who openly revere Letterman.  I think that‘s part of the reason why they have kept their powder dry so far.  I think it will be interesting to see if Stewart touches it tonight.  This is—we‘re a couple of days removed from it.  They don‘t have a “Daily Show” Friday.  We will see if they get to it tonight. 

But I think they probably missed their moment.  They‘re probably going to let it go—I was going to say unless there‘s another turn of the screw, but I think that would be a bad choice of words given the circumstances. 

OLBERMANN:  And if everybody kept their powder dry, we would never have anything to worry about it.  Is there something instructional in all of this in comedy?  A comedian rips a politician for a sex scandal, and the politician always defends saying, look, there‘s an attempt to judge me; somebody‘s assumed a position of moral superiority.  Obviously, that can‘t be the case for David Letterman now, but people are still laughing at these jokes. 

Could it turn out, ultimately, that the jokes are a lot less about laughing because you‘re up and they‘re down, but just more about jokes being funny to people about other people at certain times? 

GORDON:  Of course, this is his job.  Letterman‘s a comedian.  He‘s an entertainer.  He doesn‘t get evaluated on the same moral standards, as Ferguson put it, as politicians and clergymen.  This is what he does.  I don‘t think that there is any expectation among the audience of David Letterman‘s fans that this guy was an angel. 

Anybody who‘s been watching him for the past 20 years probably knew this guy had some issues and was maybe a difficult guy from time to time.  We watch him because he‘s funny. 

OLBERMANN:  To me, the thing that still amazes me has gotten very little play in this, is the thing that CBS has not answered, whether or not it needs to investigate Joe Halderman, the guy who is accused of doing this.  Flat out, one of its news producers—again the caveat that I once worked with the man—was arrested for taking two million dollars and—and a way you can interpret that is he took the two million dollars allegedly for burying a news story. 

GORDON:  I think right now Joe Halderman‘s got a few bigger problems than whether or not CBS investigates him or not. 

OLBERMANN:  Not him, but doesn‘t CBS have an issue?  Eventually they have to say something about that end of it, as it relates to their news organization? 

GORDON:  Yes, I think there are some questions to be raised.  I mean, CBS has—has already come out and said they‘re not going to investigate Letterman, because they vice president gotten any complaints.  But it does beg the question, what about Halderman?  You know, I‘m a little biased, because it‘s difficult for me to trust anything or not have a little suspicion about anybody who‘s got the name Halderman, even if it‘s spelled differently. 

OLBERMANN:  Yes.  This is where I will come to his defense.  He suffered that cross for even the days where I knew him.  He doesn‘t have anything to do with that.  Plus he has a decidedly different hair cut. 

Devin Gordon, editor of Newsweek.com, great thanks for your perspective. 

GORDON:  Thanks for having me. 

OLBERMANN:  Why the heck—what the heck is this guy selling?  Levi Johnston with pistachios, something about him using protection.  Protection on the pistachios?  Lewis Black will decipher it all for us. 

Remember this, remember the “New York Post” editor with a conscience who actually complained about this?  Any guess as to what they just did to her? 

And when Rachel joins you at the top of the hour, inside the world of taking corporate interests and trying to make them look like grassroots movements.  Rachel‘s guest will be the king of astro-turfing, DC lobbyist Rick Berman.  And what a piece of work he is.

(COMMERCIAL BREAK)

OLBERMANN:  Lewis Black on his new film, on politicians stealing his act, specifically shouting at politicians, and on bipartisan flatulence. 

That‘s next, but first time for COUNTDOWN‘s number two story, tonight‘s worst persons in the world.

The bronze to the fabulous disingenuous insurance industry shill Betsy McCaughey.  She‘s the one who fabricated the infamous death panel lie.  Now she has stepped into it neck high again, writing an op-ed which she quotes gloom and doom from Dr. David McCallup (ph), a Florida neurosurgeon and a board member of the Florida Medical Association. 

She left something off Dr. McCallup‘s resume, to other anti-reformers, Dr. McCallup sent out that picture of the president dressed up as a witch doctor and then tried to claim he had no racist intent.  We should note also that Dr. McCallup has also consulted with Georgia Congressman Dr. Paul “take your chronic depression to the ER” Brown. 

Your runner-up, Rupert Murdoch.  In February, his vanity newspaper, the “New York Post,” printed this, a political cartoon showing two cops over the body of a dead chimpanzee they had shot, with one officer saying, “they‘ll have to find someone else to write the next stimulus bill.”

Many Post staffers protested, but nearly alone of them, only Sandra Guzman, the editor of a monthly insert in the Post called “Tempo,” did so publicly and on the record.  Even Murdoch himself at the time noted that, “as the chairman of the ‘New York Post,‘ I‘m ultimately responsible for what is printed in the pages.  The buck stops with me.  Last week, we made a mistake,” matey.  “We ran a cartoon that offended many people.  Today I want to personally apologize to any reader who felt offended,” Jimmy boy, “and even insulted.  We will seek to be more attuned to the sensitivities of our community.”

Now, nearly eight months later, there‘s a new statement about this in-house protester Ms. Guzman.  No spokesman is quoted, but since Mr. Murdoch says the buck stops with him, we will it to him: “Sandra is no longer with the Post because the monthly in-paper insert, ‘tempo,‘ of which she was the editor, has been,”  shimmy me timbers, “discontinued.”

In other words, after it all quieted down, Murdoch eliminated Ms.

Guzman‘s department and fired her.

But our, Congressman Michele Bachmann.  Speaking about how Speaker Pelosi might handle Blue Dog Democrats over health care reform, Bachmann says, “she will either beat them to death, bludgeon them to death, or she‘ll try to buy them off.” 

Yes, don‘t let that out to lunch look behind the eyes fool you.  There‘s some sort of slasher movie obsession going on inside that congresswoman.  This is at least the second time she has applied violent imagery to the public discourse.  Just last month, she had told her fellow Republicans that to stop health care reform, they needed to make “a covenant to slit their wrists.” 

Congresswoman Michelle “I know what you did last summer” Bachmann, today‘s worst person in the world!

(COMMERCIAL BREAK)

OLBERMANN:  For the length of her 15 months of fame, Sarah Palin tried like hell to sell nuts on TV and failed.  But in a new ad for pistachios, her ex-future-son-in-law, Levi Johnston, is selling nuts on TV and actually has a chance to move some products.  In a moment, Lewis Black on Palin, politics and everything else that is in his next feature length stand-up film. 

Before that, though, the nuts.  We first came to know Mr. Johnson as a boyfriend of Bristol Palin and the father of a child with Bristol Palin and the ex-boyfriend of Bristol Palin.  Now he‘s trying to become the next Joey Suzzu (ph).  Stars in a new commercial for a company that sells pistachios.  Johnston and his real life bodyguard—that‘s key—are accosted by paparazzi and an announcer cracks a joke at the expense of Johnston‘s own infant son. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Now, Levi Johnston does it with protection. 

Wonderful pistachios.  Get cracking. 

(END VIDEO CLIP)

OLBERMANN:  Now a real actor.  “Stark Raving Black” opens this Thursday in selected U.S. cities.  It is Lewis Black‘s first concert film, or, as we call it, evidence.  Welcome back. 

LEWIS BLACK, COMEDIAN:  Nice to see you. 

OLBERMANN:  You have a commercial.  I can tell what you‘re selling in that commercial.  What the hell was that? 

BLACK:  He was selling nuts.  I mean, how can you—the levels of—you get involved in that ad, and you start to actually develop asthma.  And it‘s short.  At least it‘s short. 

OLBERMANN:  Is it a pistachio with a condom, or pistachios as condoms? 

What is it supposed to be?  Pistachio pill? 

LEWIS:  He a real-life bodyguard? 

OLBERMANN:  Yes. 

LEWIS:  Seriously, a bodyguard? 

OLBERMANN:  Who do you think he needs protection from?  The former governor of Alaska.  We should all have a body guard.  You talk about her in the movie, don‘t you? 

LEWIS:  Yes, my father—when I called my dad, who‘s 91 --

OLBERMANN:  Yes. 

LEWIS:  -- after the Palin debate to see what he was thinking, and he said, did you see her winking?  How did she know I was watching? 

OLBERMANN:  But the essence of it is—

LEWIS:  Oh, man, he nailed it.  But—and my mother, I just want to tell you, they‘re watching right now.  My mother said, as I‘m getting off the phone, telling her I‘m coming in—she‘s going, good luck.  The world‘s going to hell.

OLBERMANN:  Is that because you‘re coming here or that my show is on or what? 

BLACK:  She was watching your show and just kind of tracking. 

OLBERMANN:  Just generally. 

BLACK:  Generally we‘re going to hell. 

OLBERMANN:  I‘m glad that that message has gotten across.  But it‘s not like it‘s news or anything, is it? 

BLACK:  Not to my mother, no. 

OLBERMANN:  Especially with you.  We have a clip from “Stark Raving Black,” and it‘s about the two-party system and it‘s a very interesting—it‘s an interesting analogy that you made.  I will let you express it on the film here.  Play the clip. 

(BEGIN VIDEO CLIP)

BLACK:  But our two-party system is a bowl of (EXPLETIVE DELETED) looking in the mirror at itself.  Why would I be excited that a Democrat won?  Seriously, over the past eight years, the Democrats didn‘t do (EXPLETIVE DELETED).  Basically, the last eight years, I feel the Republicans stood around farting, and the Democrats went, ooh, let me smell it. 

(END VIDEO CLIP)

OLBERMANN:  Now, I understand you have been awarded a PHD for that—in political science for that observation.  It‘s a pungent truth.  I think it probably has never been more obvious than currently during this health care debate, correct? 

BLACK:  It‘s unbelievable, isn‘t it?  It‘s just unbelievable watching what‘s going on here.  You know, I have never seen—it‘s like, really?  We have—how did we end up in a position with people defending health insurance companies?  What—what—And when I see them do it, I go, what is your health insurance company?  Do you really like it?  It‘s made you feel secure?  Is there any way I can get their number? 

OLBERMANN:  That‘s right. 

BLACK:  I have three, because I‘m in three different unions. 

OLBERMANN:  Right. 

BLACK:  You know—and what they do is they sit around and send notes to each other trying to figure out who it is that‘s supposed to pay the bill.  It took one year—this is no exaggeration—to pay my colonoscopy.  Like I requested it.  Like they had to come—it‘s something we have to have done.  It isn‘t like I called up and said, you know what I want to do with my Friday?  I would like you to bring a submarine—

OLBERMANN:  Speaking of flatulence.  I want to really amplify the idea of flatulence.  It‘s just—it is mind-boggling, because what I always wanted do with these protesters who have said no, everything‘s great, go, what‘s your personal medical history?  And I would bet you that you get 75 percent of them going, never been sick a day in my life, right?  That‘s the only way you can be satisfies.  If you‘re in that—as the Monty Python gag goes, if you‘re in the never claim policy, you love your insurance policy. 

BLACK:  I‘m sure it‘s spectacular. 

OLBERMANN:  Now, you shout at politicians and have done so for a long time.  Did you, in fact, when Joe Wilson yelled to the president say, hey, work your own side of the street, pal? 

BLACK:  That‘s exactly what I felt.  That and Cheney using the bad words, that‘s my job.  That‘s not their job.  I‘m the one who does that.  That‘s my gig. 

OLBERMANN:  Do you feel infringed upon?  Or do you think it‘s just another sign of the deterioration of western civilization? 

BLACK:  I think it‘s that and the fact that I‘m—I‘ve become a mainstream comic. 

OLBERMANN:  Yes.  How the bleep did that happen, Lewis? 

BLACK:  I don‘t know.  But I‘m hosting a USO benefit tomorrow night. 

OLBERMANN:  Amen for that. 

BLACK:  And I‘m very happy to be doing it and proud.  And you must admit, it seems strange that in—in our lifetime, we went from Bob Hope to me. 

OLBERMANN:  I want to tell you—what is it—this movie doesn‘t have Chris Matthews in it.  Do you find that a tough adjustment? 

BLACK:  It‘s hard because his quote was too high.  He wanted so much money, it was unbelievable.  I said no, Chris.  I‘m giving you a per diem, and that‘s it.  And plus, he doesn‘t yell loud enough to be in my movie. 

OLBERMANN:  That‘s right.  You‘re the person who comes ahead of him in the seedings on yelling people.  By the way, on the per diem, asking for too much, welcome to my life.  Lewis Black‘s film is “Stark Raving Black.”  It starts and it‘s out there in selected cities. 

BLACK:  Yes.  Go to the website, the www.StarkRavingBlack.com

OLBERMANN:  Good thing you got that one for us.

BLACK:  Isn‘t that important.

OLBERMANN:  -- before somebody pigeoned it from you. 

BLACK:  Really. 

OLBERMANN:  Thanks for coming in. 

BLACK:  My pleasure. 

OLBERMANN:  That‘s COUNTDOWN for this the 2,350th day since the previous president declared mission accomplished in Iraq. 

This reminder, time tomorrow night, live at 8:00 p.m. Eastern, my special comment for the whole program, “Health Care Reform: The Fight Against Death.”  I‘m Keith Olbermann, good night and good luck.

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

END   

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