updated 10/15/2009 10:39:06 AM ET 2009-10-15T14:39:06

THE ED SHOW

October 14, 2009

THIS IS A RUSH TRANSCRIPT.

THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

Guests: Jim Moran, Chrystia Freeland, Jonathan Alter, Brent Budowsky, Rep. Ron Paul, John Feehery, Chris Kofinis, Robert Greenwald

ED SCHULTZ, MSNBC HOST: Good evening, Americans, great to have you with us tonight on "The Ed Show." I want you to take a look at this. Wall Street over 10,000 today. But then they've got this other number over here, 9.8 percent. Gosh, a couple of high numbers. What does it all mean? Keep in mind you're here to hear tonight there is only one thing, one thing that will decide the Democrats' fate a year from now in the midterm and it ain't health care folks, it's jobs. Where are the numbers? The Republican, they're already on the attack trying to turn the subject away from health care. Here it is.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER ®, OHIO: While Washington continues to focus in on this big government plan, this health care debate, the American people are wondering, where are the jobs?

REP. ERIC CANTOR ®, VIRGINIA: While we in Washington continue to talk about health care, the rest of this country is focused on the economy.

(END VIDEO CLIP)

SCHULTZ: All right. They-we know that they are so transparent, so let's get to the devil of the details. The Dow closed at over 10,000 today for the first time since last October when it was in a free fall. Are you feeling that boost? I'm going to be true to the facts here if you want a report card. Does your town look like it's really on the rebound? Detroit, at 17 percent unemployment. Ft. Myers, Florida, at 13 percent. Las Vegas, Uncle Harry better pay attention to this, 13 percent unemployment. Charlotte, North Carolina, at 12 percent. Louisville, Kentucky, kind of a benign place, 10 percent? Gosh. It's on the East Coast, in the middle of the country and on the West Coast.

Folks, they need a rally. President Obama needs to get these numbers down and he's got to find a way to get it there. These job numbers, right now the market is moving in the right direction. No doubt about that. More than half of young people in this country, the people who helped get the president elected, they can't find a job right now.

Jobs aren't made on Wall Street. They're made on Main Street. Remember those 29.6 million small businesses I was talking about in this country last night? They employ the majority of American workers. Hold it right there. It's-OK, it's like we can't see the forest because of the trees. These businesses need help. They need incentives. They need to incentivize all small business without limitation, OK? Give them a break. Let them go. Get them the cheap money, no interest. Low-interest loans, tax incentives to hire people.

We've got to moving on this gig. Money back for small business owners, what's wrong with all this? Think about it. You can go down the street and buy a car, zero interest for 60 months. In fact, they'll even give you cash back bonus at six grand. That's what I'm talking about. The Obama administration needs to do aggressive stuff like this.

Of course, Republicans are going to be against it. They are so dead set on making the president fail, they'll even oppose tax credits for businesses.

(BEGIN VIDEO CLIP)

CANTOR: Folks in the administration have floated the idea of a job creation tax credit. We don't think that's the right way to go about putting small businesses back into the game of investing and creating jobs.

(END VIDEO CLIP)

SCHULTZ: OK. So that means we should be doing it. The Republicans don't have a problem giving massive tax cuts to Bush and Cheney's oil buddies, did they? They didn't have a problem with that. But look, I want to be very clear here tonight. I'm a fan of the president of the United States and I believe in his administration, but I'm going to point out where I think they are going wrong.

And he has surrounded himself with Wall Streeters and Washington insiders. True to the facts, Tim Geithner worked at the International Monetary Fund and the New York Fed. Larry Summers was chief economist to the World Bank and president of Harvard. Christina Romer, a career economist at UC Berkeley. Austan Goolsbee, a career economist at the University of Chicago. And Jared Bernstein worked at the Economic Policy Institute and the Department of Labor.

Hey, look, these are all smart and good people, but not a whole lot of real-world experience there. I think we need, believe it or not, it's coming out of the mouth of Big Eddie, I believe we need a small business czar. We need somebody in there who's been there, done that, somebody who has engaged in capitalism, someone who has not just read about it, but has been out there doing it, creating jobs, hiring people, writing the check.

You know, somebody who really understands what it's like to wake up in the middle of the night in a cold sweat wondering if the check is going to clear. Yeah, that kind of experience. Small-business owners want to succeed. They have the passion. They want to expand. Right now, money's tight. But you see, they've been left on the sidelines and all the help and all the attention has gone to the Wall Streeters. You know, make small business feel like they're a part of the team, President Obama. Make them part of the deal. Have a massive push to get this thing going. I don't sense it.

Oh, by the way, JPMorgan Chase reported a third quarter profit of $3.6 billion, in case you missed it today. And it comes as Wall Street is set to reward record pay this year to executives. Investment bankers, hedge fund managers and also stock traders are expecting to earn more this year than they did in 2007, the height of the bubble.

You know, while Main Street is, let's see, can we check that number again? That is 9.8 percent. I am predicting it's going to go above 10 and it may hit 11 because small business is all about an attitude and it's how people feel about what's going on and somebody on that economic team has to start making this country feel good about where we're going.

And I will be very critical in this point. I'm tired of hearing that we're saving jobs. It ain't about saving. It's about creating and, oh, by the way, we're talking about sending 40,000 troops over to Afghanistan and investing more infrastructure over there? What about right here? What about the cities in this country? This is where Obama needs to focus, step two, after health care. And oh, by the way, the Republicans aren't going to help him do that either.

Get your cell phones out. I want to know what you think. Will the Obama administration turn the jobs situation around by next November? Text "A" for yes and "B" for no to 622639. We'll bring you the results later on in the show.

President Obama went to Fairfax, Virginia, today to talk up the stimulus package to point out that it is working.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Our goal is not just to rebound from this recession, but to start building an economy that works for all Americans, where our stock market isn't only rising again but our businesses are hiring again. That's our goal.

The fact is as difficult as these times are and they're profoundly difficult for a whole lot of people all across the country, we are moving in the right direction. Our economy is in better shape today than it was when I took office when we were hemorrhaging 700,000 jobs a month and when our financial system was on the brink of collapse.

(END VIDEO CLIP)

SCHULTZ: OK. I agree with all of that. That's true. He is spot on. But what are we going to do to get to the next level? What are we going to do to get rid of this 9.8 percent? I say it's cheap money, I say it's incentives, I say it's loosen up the reigns and let these small business ponies run. That's what has to happen if we're going to make it in this country and turn the economy around.

So here's what I'm going to do. Just like I have done this with health care, we have done some town hall meetings, we have brought you stories of people who have talked about what has happened to them, how the insurance industry has butchered Americans and how our economy has been hurt with health care.

I want to do the same thing and over the next several months, I'm going to be bringing on this program stories about small business people, people who have been in the trenches, people who have been awake at 3:00 in the morning hoping that check is going to clear so they can make payroll and not have to fire anybody.

Because that's where a lot of businesses are in this country. We need those people to survive. We need to hear their stories. And maybe this economic team over at the White House will get the message and get out in the heartland and start asking questions. OK, what do you need? I'll tell you what, I heard a story today about a guy who went into this program, this government program from the Small Business Administration, you know, five years no interest, payback, all this stuff. Goes into the bank, the guy says, we're not doing that. What? We need a federal program where a small business person walks in to the bank, the bank becomes the facilitator, gets a piece of the action, business development. And it's backed up by the federal government, the same way your tax dollars and my tax dollars helped Wall Street get to over $10,000 today.

They got the break. They got the money. They had access to the capital. They got to do whatever they wanted to do, and by the way, we don't have any regulation yet, do we?

I want some freedom for small businesses, so I'm going to use this show over the next several months to bring people on the air and explain to the American people what's really happening out there. We need a big jobs program, not just a stimulus package.

Joining me now is Virginia Congressman Jim Moran. We thought about who we could bring on to talk about this tonight. Congressman, you're a no BS kind of guy. I know I'll get the truth out of you. You won't give me any smoke. Give me a job assessment right now. What are we doing right? What are we doing wrong? If I'm wrong, congressman, lay it on me, I'm all ears tonight.

REP. JIM MORAN (D), VIRGINIA: You're absolutely right, Ed. But you know, it takes a lot to turn a ship or state around. You're speaking up for the people who always sit back and coach, where most of the attention has been focused on the people who are used to sitting in first class.

You know, during the Bush administration, 94 percent of the income growth went to the wealthiest 10 percent, meaning that there was only 6 percent of income growth left for the bottom 90 percent.

And now we're trying to deal with the consequences of that. The income hasn't been adequately spread over this country. Forty percent of it went to financial services firms just for moving money around. It's not going to be able to be done overnight, even over a year. Hopefully it can be over one presidential term. I think they're doing the right things, but we need to do more of the things you are talking about.

We had a hearing today with small business people. They're telling us, increase the micro-loans so we can get more than $50,000. We need to make SBA loans available and back them up so that banks actively look for people with SBA loans. You're right. It's small businesses that create jobs in this country and they have been ignored. No question about it.

SCHULTZ: If I may steal a bullet point in a different form, what we need to do, what the Obama administration needs to do is get the banker out of the way between who wants to do the hiring and the federal money that's on the way to back up the risk. We have got to get risk takers into the market. And the only way we're going to do that is to give them some security and get the confidence up of the people and turn these numbers around because it's as much between the ears of America as it is anything else. If I'm wrong on that, tell me.

MORAN: Of course, you're right. We put more than $1 trillion into bolstering the banks, giving them liquidity and now they're making lots of money again. What we need to be doing is to give it to the people who create most of the jobs in this country and that is small business. The Republicans have been so critical of us for this stimulus package, but you remember last year, they put $700 billion-where did it go? All to the largest banks in this country, the multibillion dollar banks. Not to the commercial banks that make the loans to small businesses.

SCHULTZ: We've got to go to phase two. Congressman, appreciate your time tonight, thanks so much. Jim Moran from Virginia here on "The Ed Show."

Joining us now tonight is Chrystia Freeland, she's a managing-U.S. managing editor of "The Financial Times." And Jonathan Alter, senior editor, "Newsweek" and author of the book "The Defining Moment: FDR's Hundred Days and the Triumph of Hope." Chrystia, what's the answer here?

CHRYSTIA FREELAND, FINANCIAL HOMES: Well, I won't give you an answer, but I will give you unfortunately a constraint. And the constraint is China. What I mean by that is what you're talking about really amounts to a second stimulus, the government spending more money to stimulate the economy. And there a lot of voices are in favor of that.

The difficulty is America is more constrained than it has been in the past because America is dependent on foreign money to fund those big budget deficits. And what we've seeing in recent weeks is the weakening of the dollar which suggests there is fading foreign confidence in the U.S. Now it's OK so far, but a moment could come at which foreign treasuries say, actually, we don't want to hold dollars anymore. If that happens, it becomes really difficult for America to keep on running big deficits.

JONATHAN ALTER, NEWSWEEK: That's a fine sort of long-term concern. But in the short term, the weak dollar is good because it helps our exports which we need now and it will help with recovery.

SCHULTZ: This is the time we should be growing.

ALTER: A weak dollar is actually a good thing in the short term. So I don't think we should worry too much about that. Now there are other kinds of things that can be done. There's a lot about talk about whether there should be a tax credit for hiring new employees.

The problem is, should people be compensated by the government if they were going to hire those employees anyway? Can we afford another $1 trillion in that kind of stimulus? Same thing would apply with some other ideas like a payroll tax holiday, some other things they're kicking around. Clearly we need to do something.

But even before we get to that, Ed, we've got to get this re-regulation of the financial sector right. Now that's coming out into the Congress in the next two weeks. And right now they are caving to the banks. Those lobbyists are all over the Congress. They are buying off members of Congress, and the president needs to call up these bankers and say, look, I bailed you guys out. I saved your bacon. Call off the dogs. Get your lobbyists out of there so we can pass legislation to protect consumers and prevent this thing from happening again. That's not happening.

FREELAND: Are you so sure that's what the Democrats really want? Because I think that part of what might be going on-I mean, the banks also fund Democratic candidates.

ALTER: They do.

FREELAND: And the Democrats are looking for people to bankroll them in 2010.

ALTER: And they rejected Senator Durbin's legislation to allow courts to renegotiate mortgages to prevent foreclosures, so yes, a lot of the Democrats are brought off too. But maybe I'm mad. I don't think Barack Obama is brought off at this point. And I think he needs to put the hammer down and make it clear he knows-there are only a few big banks-and to make it clear to those guys that he has got this new bill for a new agency to protect consumers. They're trying to kill that agency. It is essential that we have it and he needs to make sure we get it.

SCHULTZ: I'm not sure that's connected to job creation, the actual risk of someone going out there saying, I'm going to do this. I'm going to make this. I'm going to invest in this. I'm going to get some money.

They have to get their mitts on capital. They've got to get their hands on capital and Obama can do something about that. He can do something about that. He's got the Treasury and he can move on it.

ALTER: Actually, he can do more about the part that I'm talking about. Unfreezing credit is something he wants to do. But that's easier said than done. This legislation to protect all of us, that's something he can really do something about.

SCHULTZ: Political fallout from both of you if the numbers don't turn around, the job creation, the unemployment numbers, what happens?

FREELAND: I think that it's really serious, very difficult for the Democrats, but I do think the kind of measures you're talking about cost money, and I think there are very intense debates in the White House right now.

Of course they would love for the unemployment numbers to go down, but they are really, really worried about deficits. They're worried about inflation and they're worried about the signal that they're sending. Jonathan is absolutely right. They're not worried about it for this year but they're worried about the median term.

ALTER: It's a worry about inflation right now is just madness. I mean, it reminds me of what I studied with the folks in the '20s and early '30s, when they were worried about balanced budgets and inflation when we're in a deflationary spiral, they have to focus on job creation, unfreezing credit and the things you've been talking about to get the recovery going.

SCHULTZ: I hope it goes. I think we've got to bring it to light. Chrystia, Jonathan, thanks for joining us tonight. Coming up, one minute, OK? Lindsey Graham says that he's not going to let the Republican Party be the party of angry white guys, and the next time he goes after one of his own. Congressman Ron Paul is going to be joining me tonight right at the bottom of the hour to respond to all of that.

Plus, Limbaugh just lost out on his shot to own the St. Louis Rams. Filmmaker Robert Greenwald helped put the pressure on Rush. He'll join us in our "Playbook" tonight. Stay with us. You're watching "The Ed Show."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D), NEVADA: Rahm Emanuel is in my office as we speak. We're going to work through the process. All four of us are legislators. All four of us understand that legislation is the art of compromise, consensus building. And we're going to do that and, of course, we're-it's obvious that the president, himself, is going to have something to do with what comes through this bill that is brought to the floor.

(END VIDEO CLIP)

SCHULTZ: Oh, it's just so artsy craftsy, isn't it, the art of compromise? Well how about listening to the people? Do the people count anymore? You know, I don't like the sound of that. Neither do progressives across the country. Harry Reid, Max Baucus, Chris Dodd had their first meeting with the White House today to talk about merging the two health care bills in the Senate. Senator Max Baucus was flying pretty high after he picked up one Republican vote yesterday. He was positively giddy before today's meeting.

(BEGIN VIDEO CLIP)

SEN. MAX BAUCUS ®, MONTANA: We're going to get a good, solid bill passed that addresses our objectives, that gets 60 votes and I'll be so happy, the American people I think will be so happy. This is a great day. I'm really excited. We're going to get health care reform passed and this is a step that is going to help make that happen.

(END VIDEO CLIP)

SCHULTZ: And the translation of that is, we're going to continue to cave in until we get 60 votes and those 40 people on the Republican side are eventually going to really have a big say in all of this. The unions aren't smiling. Twenty-seven unions took out a full-page ad in the Washington newspapers today condemning the Baucus plan and demanding a public option in the final bill. And last night on "The Rachel Maddow" show here on MSNBC, Senator Chuck Schumer went to the wall and said that if hey, if there's no public option in the bill, you can hang that one on Harry Reid.

Joining me now is Brent Budowsky who is a columnist for "The Hill" and a former aide to Senator Lloyd Bentsen. Mr. Budowsky, great to have you with us tonight on "The Ed Show." Thank you so much.

BRENT BUDOWSKY, THE HILL: Pleasure to be here.

SCHULTZ: When does the president, in your opinion, engage and at this point, how much weight do you think he'll have in this whole process?

SCHULTZ: Oh, the president will have a lot of weight. I believe he will engage on the public option when he is convinced that enough liberals in the House and Senate will oppose the bill that doesn't have a public option. I'm all for compromise, Ed, but 65 percent of the American people supported the public option in the last poll, and let's have those people represented in the compromise worthy of two-thirds of the American people supporting it.

Now Senator Schumer is fighting to eliminate the antitrust exemption from the insurance industry. I mean, what a rip-off the current law allows price fixing by insurers. All over America, including in Maine, insurance companies are raising premiums on average Americans and I'd like to ask Senator Snowe to join us in supporting the repeal of the antitrust exception. The insurers should not be allowed to do price fixing and collusion and price gouges and they can under current law.

And along with a public option, we should stop that and I give Senator Schumer a tremendous amount of credit for standing up as a leader and fighting for that.

SCHULTZ: Now do you think that this is a late play by the Democrats because this hasn't gotten a lot of conversation in the last six months. And here we are very close. They're merging the bills in both the House and the Senate. We're on the verge of going to the floor for amendments and then, of course, in the conference to get this thing done. Why wasn't this antitrust talk out two months ago?

BUDOWSKY: Well, it should have been, but what's happening right now is that the insurance industry has gotten people angrier than hell with this latest report, where they're saying if the Senate Finance Committee bill is passed, they are promising to be raising peoples' premiums. I mean, what a rip-off. People are angry.

I wrote a column about this, Ed, two weeks ago calling for the repeal of the antitrust exception. And what I will tell you, my phone has been ringing off the hook of people on the Hill, liberals, some Republicans who want to get on board.

So now that we're coming down the homestretch, now that we're making the big fight, the fight of our lifetime for what Ted Kennedy, god bless called the cause of his lifetime, it's time to play hardball, it's time to fight back. It's time to stop the price gouging.

And if we make this fight as Democrats and if the president makes this fight, we will win because the American people are with us on this.

SCHULTZ: Now another subject you wrote, Mr. Budowsky was talking about President Obama, you said, "It is time for alarm when so many power players believe the president can be rolled." Do you think the president can be rolled on the public option?

BUDOWSKY: I hope not. I fear he might, but what we have to do is to make sure he isn't rolled. You know, Ed, four decades ago, President Lyndon Johnson, inspired by President Jack Kennedy, who passed Medicare, with the fight of his lifetime. The question for Obama is whether inspired by Senator Edward Kennedy, he will wage the kind of fight he has to wage. This is not about getting one Republican to pretend it's bipartisan. This is about protecting the American people from the kind of rip-offs that we're seeing on the credit card issue, even after the credit card bill was passed.

You want to create jobs, lower credit cards rates. You want to create jobs, lower insurance premiums and pass the public option and stop the price fixing and now it's time to fight.

SCHULTZ: Longtime journalist on "The Hill," Brent Budowsky with us here on "The Ed Show." Got to have you back, thanks so much, Brent.

BUDOWSKY: Thank you.

SCHULTZ: Coming up, the National Republican Congressional Committee has really stooped to a new low in targeting Nancy Pelosi. When they're not trying to have their put her in her place, they're calling her a friend of Adolf Hitler. Oh, yeah, it is "Psycho Talk" coming up.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Psycho talk tonight-actually, it's more of a psycho Tweet. On their Twitter feed, the National Republican Congressional Committee posted a link to a clip from a movie about Adolph Hitler. The subtitles had been changed to make it look like Hitler was saying that Nancy Pelosi shares his vision of socialized health care.

(BEGIN VIDEO CLIP)

(INAUDIBLE)

(END VIDEO CLIP)

SCHULTZ: Classy outfit, huh? After a lot of pressure from Democrats, the NRCC removed the link and spokesman John Randall (ph) apologized, saying this, quote, "in 20/20 hindsight, we realize it was in poor taste and pulled it down. I don't want anyone to think we're comparing Democrats to Nazis and Hitler."

Now, why would anybody think that? Maybe because we can't get through a week without some Republican somewhere comparing Democrats to Nazis and President Obama to Hitler. And so just so we're clear, posting a link to a video comparing Pelosi to Hitler, and then saying that we hope we don't create this impression that we're comparing the Democrats to Hitler, it's lying psycho talk.

Coming up, in my playbook tonight, the Drugster's deep belief in the free market-well, it just bit him in the rear end. You know, Rush, this football thing just isn't working out for you, is it, buddy? Whether it be as an announcer, or a potential owner. Robert Greenwald will join me to talk about all of that in my playbook.

Plus, Lindsey Graham says he loves the Republican party so much that he's not going to let it be hijacked by Ron Paul? Well, we'll ask Congressman Paul what he thinks about all of that next on THE ED SHOW. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. More town hall crazies, but this time it's conservative versus Republicans. Republican Senator Lindsey Graham got ambushed by protesters at a town hall meeting in Greenville, South Carolina, on Monday. The protesters were shouting that health care reform and the Federal Reserve are unconstitutional. They accused Senator Graham of compromising. They claim that, quote, "god doesn't compromise and all U.S. lawmakers take an oath to god when they are sworn in."

A good number of them are supporters of former presidential candidate Ron Paul. They didn't like what Graham had to say to him. Here it is.

(BEGIN VIDEO CLIP)

(INAUDIBLE)

UNIDENTIFIED MALE: Yes, right. Ron Paul is rolling.

UNIDENTIFIED MALE: Ron Paul is right. Oh, yes.

UNIDENTIFIED MALE: Ron Paul's a real conservative.

UNIDENTIFIED MALE: Ron Paul is the only conservative.

SEN. LINDSEY GRAHAM ®, SOUTH CAROLINA: He said George Bush was a war criminal.

UNIDENTIFIED MALE: He is.

UNIDENTIFIED MALE: He is. You are, too.

(END VIDEO CLIP)

SCHULTZ: Doesn't seem like too much was accomplished there. Joining me now is Congressman Ron Paul to respond to all of this. Congressman Paul, appreciate your time tonight. I want to know, do you deserve to have a United States senator say he doesn't want the Republican party to be that party of Ron Paul?

REP. RON PAUL ®, TEXAS: Well, I have to admit, I was a little bit surprised that I was on the verge of taking over the Republican party. That's pretty amazing. But, you know, there are some important issues here, because there are some disagreements, just like there are in the Democrat party. You know, you have the liberals and you have the Blue Dogs.

There's a disagreement here, because modern-day control of the Republican party has been taken over by the neo-conservatives, and they don't have a lot to say about limited government. They talk about more war, more Patriot Act, more unlimited detention without counsel, more spending, Tarp funds, bailout funds, cap and trade.

That's what they're for, but we're for something different. We're for something different.

SCHULTZ: I agree with you there. I also think it looks like you are becoming a target of the Republican party. How do you feel about that?

PAUL: Well, I look at the positive things, because you might argue that case because one senator attacked me in public. What about the fact that I have every single Republican on the Audit Bill in the House of Representatives? I have 125 Democrats too. I would say I'm working pretty well with both parties.

SCHULTZ: Congressman Paul, I'm with you on that. I am with you. We need to audit the Fed. This is a serious issue. And you've got some Democrats over there. And I want to tell our audience, tonight, that Congressman Grayson, who is the new hero of the progressive movement for all of the aggressive comments that he's been making, he's with you on this, is he not?

PAUL: That's right. He's worked hard and he's helped me get those 125 Democrats.

SCHULTZ: Yes, and we're going to talk about that in future shows. I think it's very important to audit the Fed. I think the American people need to know what's happening. But in your situation, it looks like you're being made out to be a target. I want to talk about these people. You're also being accused of-these are your people that are shouting down this conservative senator, Republican from South Carolina. Is that a fair picture to paint?

PAUL: Oh, I don't think so at all. I'm sure there are people who are very sympathetic with what I've said, and they believe in limited government. But it sounds like I've instructed them; I have control over them, like the Tea Parties. We had the first major modern day Tea Party that was fantastic in the campaign. There are a lot of Tea Parties now. And everybody comes and everybody talks. I have no responsibility for those.

We might have lit a flame a bit and excited people. But for me to be responsible-as a matter of fact, I don't like the noise sometimes.

SCHULTZ: Have you asked any of your supporters to back off at all?

Have you encouraged them to go out there and shout down senators?

PAUL: No, I tell them to use the proper decorum. They know exactly how I feel about it, because-and I also like to not have it personalized. I've been sort of pushed into saying things about Lindsey Graham because the issue comes up. But even when Bush was president and I couldn't stand his foreign policy, I never went after President Bush, after President Bush. I don't do this with Obama.

I do go after bad policy, intervention foreign policy, unnecessary war, Patriot Act, all these things. Those are important. Defending the Constitution by both left, right and progressives would go a long way to solving some of our problems and mellowing this debate out a bit.

SCHULTZ: Congressman from Texas, Ron Paul-Dr. Paul, thanks for joining us tonight. Got to have you back to talk about that audit of the Fed. I appreciate your time.

PAUL: Good idea. Thank you.

SCHULTZ: For more, let's bring in our panel. Democratic strategist, Chris Kofinis is with us and also Republican strategist John Feehery. John, to you first. Why would Lindsey Graham say that? What's the upside of that?

JOHN FEEHERY, REPUBLICAN STRATEGIST: I think what Lindsey Graham was talking about is the people in the crowd that shouting we're for Ron Paul, we're for Ron Paul, interrupting his town hall. The fact of the matter is Lindsey Graham and Ron Paul probably agree on a lot of things.

Ron Paul is actually a libertarian. He wants to get rid of all government. I think Lindsey Graham has been talking in ways that are very sympathetic to the libertarian movement. I think-I'm fairly sympathetic to libertarians. I think they make a lot of sense on a lot of things.

What Ron Paul and Lindsey Graham ought to agree on is when you are having a town hall meeting, you should act with some sense of decorum and not shout out. I think this is for Republicans and Democrats. I think all across the board, we should be always respectful when you're doing a town hall meeting.

SCHULTZ: I don't disagree with that. But I find it very interesting that a longtime senator, Republican leader, Lindsey Graham, in his defense mechanism, decided to attack one of his own. He separates Ron Paul out and makes him the victim in all of this, as if blaming him, because, you know, here's Lindsey Graham trying to work with John Kerry on a number of different issues. I think it's a sad moment in America.

And I want to look at some of these numbers before we go to Chris. If you look at the Daily Kos/Research 2000 poll, overall party favorability, the Democrats aren't bragging. They're at 40 percent. The GOP is at 22. You look at Congress, they're not doing any better. Democrats at 38. Also the GOP at 17 percent.

Chris, may I ask you, is America politically exhausted with all this bickering? What do you think?

CHRIS KOFINIS, DEMOCRATIC STRATEGIST: Well, I think there is a point where people just become kind of-you know, they just tune out. They just hear the bickering back an forth. I think it's one of the reasons why you tend to see candidates run against Washington. It becomes a very powerful message.

What is happening within the Republican party, which I think is more telling-listen, there's always going to be infighting within parties. You see that within the Democratic party, between the Blue Dogs and the more progressive wings. But I think what has happened in the Republican party is much more serious. There's an ideological civil war in the party because they do not know what direction they want to go in, whether they want to go right or even further right.

As a result, you're seeing this break out and radicalized in a lot of different ways.

SCHULTZ: OK. Chris, let me ask you, is it jobs or health care? What does the president have to do to set the table for the midterm?

KOFINIS: Well, I think it's jobs and the economy are going to be the number one issue. I think health care is intertwined with that. I think the president and the White House have made a strong argument as to why that is the case.

At the end of the day, when people go into that voting booth next year, it's going to be pocketbook issues that are going to rule the day. It always does.

SCHULTZ: John Feehery, do you play up the 9.8 percent? Do you go back to calling Obama a failure? How aggressive do the Republicans have to be on this?

FEEHERY: I think what Republicans have to do-first of all, they have to come up with their own plan on trying to deal with unemployment and try to market that plan and do the best job they can to get people back to work.

I think Chris is right, it's all about the economy. People are really hurting out there. They're hurting in Michigan. They're hurting in Indiana. They're hurting across the country. Unemployment rate is 15, 20 percent and that's not sustainable. We need plans that put people back to work. And Republicans need to help come up with those plans.

SCHULTZ: Gentlemen, good to have you with us tonight. Thanks so much.

Elected Republicans might be afraid to stand up to the Drugster, but the NFL sure as heck isn't. Limbaugh's boyhood dream has just turned into a nightmare. Robert Greenwald Will have more on that in my playbook coming up. Stay with us. You're watching THE ED SHOW on MSNBC.

(COMMERCIAL BREAK)

SCHULTZ: Breaking news in the playbook tonight. The Drugster's drive to buy the St. Louis rams, well, he's been sacked. St. Louis Blues owner Dave Checketts just released a statement saying that he is going to drop Rush from their bidding group. Turns out a lifetime of racist comments just is not going to endure you to the NFL. NFL commissioner Roger Goodell, he had these comments.

(BEGIN VIDEO CLIP)

ROGER GOODELL, NFL COMMISSIONER: Divisive comments are not what the NFL is all about. And so, you know, I would not want to see those comments from people who are in a responsible position within the NFL.

(END VIDEO CLIP)

SCHULTZ: Hey, Drugster, this is the free market. This is what you're all about. NFL owners, they don't want you either. Indianapolis Colts Owner said that he wouldn't vote for Limbaugh because of his habit of, quote, demonizing individuals. That tendency of his to demonize folks is showcased in a new video production from the production company Brave New Films.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: Just want to make sure I have this straight. Turns out I am the racist.

UNIDENTIFIED MALE: He once declared slavery built the south. "I'm not saying we should bring it back. I'm just saying it had its merits. For one thing, the streets were safer after dark."

LIMBAUGH: Bull's-eye.

UNIDENTIFIED MALE: In a league that is 70 percent African-American, the NFL cannot have an owner with a history of statements that, to put it bluntly, are stone cold racist.

LIMBAUGH: The NFL all too often looks like a game between the Bloods and Crips without any weapons. There, I said it.

(END VIDEO CLIP)

SCHULTZ: Let me bring in director of Brave New Films, Robert Greenwald. Mr. Greenwald, this happened pretty fast, did it not?

ROBERT GREENWALD, BRAVE NEW FILMS: It certainly did. We were able to work through the night to get the video done. The extraordinary work that the folks at Media Matters did, where, by the way, they have more than 28 different racist comments from Rush. The bloggers in general all were up in arms over this.

I'm thrilled to see the whole progressive community come together fast, hard and playing very tough on this.

SCHULTZ: The NFL's about making friends and selling tickets and getting ratings. They're not about hateful comments. Dave Checketts' statement, no more Rush. He writes that "Rush was to be a limited partner. As such, he would have had no say in the direction of the club, or any directions regarding personnel or operations. However, it has become clear that his involvement in our group has become a complication and a distraction to our intentions, endangering our bid to keep the team in St. Louis. As such, we have decided to move forward without him, and hope it will eventually lead us to a successful conclusion."

You know, this may be a point that a lot of people are going to turn to that you're really going to be held accountable for what you say in this talk television and talk radio culture that is now permeating through our entire society. I want your take on that. Are we really getting into an age of accountability that maybe we didn't see five or 10 or 15 years ago? What do you think, Robert?

GREENWALD: Well, certainly, I think the media landscape is changing. It's a huge revolution. The work many people do online is changing it. Of course, we want to fight to the death for Rush to say anything, as horrible and racist as it is. But we also have the right to fight and say, he should not be owning a sports team the way he tried to do.

SCHULTZ: Is this-

GREENWALD: The other thing that had gotten lost is the-you know, this poor Rush, his hundreds of millions of dollars that he's make that allows him to be an investor, this so-called working man.

SCHULTZ: I find it interesting that the NFL owners is-hey, it's a fraternity. They're all conservatives, and they're all billionaires. And they pretty much can do what they want in America. They've got tremendous influence. And they're kicking out the biggest conservative voice out there. Isn't this a little bit funny?

GREENWALD: Listen, it's a day to celebrate. It's more than a little bit funny. You know, it shows when money-you know, money is the dominant factor. Rush was going to cost them money, because the number of people-look, we had 25,000 people sign the petition in less than eight hours. There's a lot of anger out there on Rush. And this was a way to focus it and channel it.

SCHULTZ: Mr. Greenwald, great work. Good to have you with us tonight. I do want to point out that for years Limbaugh has been saying that the free market doesn't want liberal talk radio. Well, there's a lot of conservative owners that would never even try progressive talk radio or liberal talk radio. Rush, how's that free market working for you tonight, buddy? It's about ownership. I'm glad you found it out.

Coming up, the Dow may have reached 10,000 today, but unemployment is nearing the 10 percent level, right? There's no guarantee that the jobs are coming back. I'll put that to our panel. You're watching THE ED SHOW on MSNBC. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Well, it's a tale of two numbers. The Dow closed over 10,000, but unemployment is still close to 10 percent. President Obama went to Fairfax, Virginia to talk up the stimulus package today. But a lot of Americans are wondering if the president gets it. Does his economic team get it?

Let's bring back in our panel tonight, Chris Kofinis and John Feehery. Chris, let me ask you, does President Obama have the right people around him? Do they understand the dynamics of job creation and small business development? Do you think they do?

KOFINIS: Yes, I think they do. I think the-I think this is the part that becomes very difficult to accept. That is, one, that the fact is the president inherited a terrible economic mess from President Bush. Turning around an economy this size, especially when you have experienced such an economic shock, is difficult at best. It is just the reality of the process.

Now that's very difficult to say to someone or a family struggling with a job loss. I think what you're going to see over the next, you know, probably six months to a year is the economy start turning around. There is a lag effect, as we all know. The question-the reality is that lag effect does not necessarily make it easier for people to accept that. That's the challenge that the White House has, to go out there and communicate to the American people that they're dealing with this, but also make it very clear it's not going to turn around tomorrow.

SCHULTZ: John Feehery, does he have the right people around him? I listed out where these folks have come from. Correct me if I'm wrong. I don't think any of them have run a business or created any jobs in the past. They understand all the academic things that take place in an economy. But I'm starting to get nervous that maybe he doesn't have the right people around him, and they're not aggressive enough on small business, getting money directly to people who want to take the risk. What do you think?

FEEHERY: Ed, I agree with you 1,000 percent for the first time in history. The fact of the matter is he has the wrong team around him. Tim Geithner and his team from Goldman Sachs, the whole thing, they're all very good for Wall Street, but they're not very good for small business. What are they doing to help ease the burden with regulation, litigation, taxation particularly targeted to small business, where the vast majority of new jobs are going to be created?

It's hard to create new jobs if you're a small businessman, if you keep getting hit by regulations from the state, local and federal level. I tell you, I don't know if anyone in the Obama White House really understands that. I think that's a big problem for this White House.

SCHULTZ: Chris, I'm agreeing with John for the first time in my life as well here. So we've got a couple of firsts on THE ED SHOW tonight. The Obama administration's economic team has to come out. And they've got to be visible, and tell the American people they understand how to get money to small businesses, because right now they're losing that battle. They're losing. They have got to do something and get a mechanism on the fast track to make sure that credit is not so damn tight, and money can loosen up.

KOFINIS: You know, the part-I agree with what you're saying. But I'll tell you, there's another piece of this I think is more important. You know, 70 percent of our GDP is consumer spending. That is people waking up buying wants, not needs. That is very difficult to do when there's a lot of anxiety. I think what the White House-this is part of the problem with the focus on health care. You know, what you're going to see, I think, once the health care issue wraps up is a laser-like focus on the economy.

(CROSS TALK)

SCHULTZ: OK. They're going to get some kind of health care legislation. They've got to start being able to pivot and do a few things at once. And they've got to address this on the fast track, in my opinion. Gentlemen, good to have you with us tonight.

Earlier, I asked the audience, will the Obama administration turn the job situation around by next November? Seventy eight percent said yes; 22 percent said no. Town hall meeting coming up. Ed Schultz radio show, November 15th, Seattle town hall. Go to our website at WeGotEd.com. Chris Matthews is next with "HARDBALL" on MSNBC.

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

END

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